|UK Financial Reality
Index – Q1 2013
The overall financial situation facing UK households improved in Q1 but remains weaker than the long term average, according to the latest research from the Alliance Trust Economic Research Centre. Our UK Financial Reality Index increased from 84.4 to 87.9, its highest level since Q4 2009. The index has remained below the critical level of 100 since Q3 2004. The increase in the Financial Reality Index during Q1 was driven primarily by a gain in the Net Wealth Index, rising above the critical level of 100 for the first time since Q2 2010.
There was also an increase in the Economic Background Index, driven by an improvement in GDP growth and a lower level of insolvencies but, despite this, the Economic Background remains the weakest component of the headline index. The Net Wealth Index increased due to improved stock market performance and a gain in house prices. The Household Budget Index fell slightly during Q1, as real earnings and disposable income both declined and as basic costs increased once more.
UK Financial Reality Index – Q1 2013