Households' finances 'more upbeat'


Households are the least downbeat about their finances for more than three years, in signs that the economy is strengthening, according to a poll.

Almost 8% of people saw an improvement in their budgets in June while around 26% said that they worsened, according to financial information firm Markit.
People's expectations for their finances in the next 12 months also picked up to their highest levels since March 2010. Finance and business workers were the most confident, followed by IT and telecoms workers. Those working in the construction sector were the most pessimistic.

The overall household finance reading was 40.8 in June, with readings above 50 signalling an improvement to people's finances and ones below 50 indicating a deterioration. While the latest reading is still a negative one, it shows the strongest easing of the squeeze on household budgets seen since February 2010.
Within the findings, mortgage holders were the least downbeat about their finances since the research began more than four years ago. A package of Government measures to kick-start the housing market have resulted in a mortgage price war, with lenders slashing their rates for new borrowers.

There have also been signs of house prices picking up amid confidence returning to the housing market.

Across the survey, levels of workplace activity picked up for the fifth month in a row and households felt at their most confident about job security in three months.

Pay restraints meant that income from employment fell at the fastest pace seen since January, although some of the strain was offset by perceptions of the rise in living costs falling to their weakest levels in three years.

Tim Moore, senior economist at Markit and author of the report, said: "Improving household finance trends are an early indication that the UK economy has continued to strengthen in June.

"Better labour market conditions helped reinforce the upturn in households' financial expectations during June, as rising levels of workplace activity translated into diminishing job insecurities."

© 2013 Press Association
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