Financial confidence at highest level since 2010

Nia Williams

June 17, 2013

The seasonally adjusted household finance index increased to 40.8 in June from 40.4 in May, hitting the highest level since February 2010.

However the index remained below the no-change 50 mark that separates improvement from deterioration.

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.

“However income from employment dipped at the fastest pace for five months, highlighting that pay restraint remains the order of the day.

“With households receiving little in the way of wage rises over recent months, a fall in inflation perceptions to their lowest since mid-2010 was an important factor in alleviating some of the strain on finances during June.”

The survey indicated that both private sector and public sector employees were less downbeat than in the previous month.

Finance/business services employees were the most confident, followed by IT/telecoms, while construction workers were the most pessimistic.

The measure of employees’ perception of workplace activity, job security and income showed improvement for the fifth successive month but to a lesser extent than in May.

The forward-looking element of the survey revealed a further improvement in British household’s financial outlook for the next twelve months.

The corresponding index rose for the fourth straight month and hit the highest level since March 2010.

Sign up to our daily email