June’s Markit/YouGov Household Finance Index (HFI) has reported frayed consumer confidence in the run up to the new government’s emergency budget, current household finances deteriorating and anxiety about future finances deepening.

27% of households reported a deterioration in their household finances in June against 7% that signalled an improvement. The survey also signalled a marked reduction in savings in June.

Households are at their most downbeat about their future finances that at any other time since April 2009. Twice as many households (44%) expect their finances to worsen in the year ahead as those that forecast an improvement (22%).

Households are now much more downbeat about the 12-month outlook than their current financial situation (with the index for current finances posting 39.9 compared to the index for future finances registering 38.8), suggesting that looming austerity measures have led to concerns that the worst could be yet to come for household finances.

Tim Moore, economist at Markit, said: “With the forthcoming Emergency Budget bringing austerity measures closer into focus