Record employment eases pre-referendum pressure on household finances

 
Jake Cordell
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Spending rose at its fastest pace in nearly a year as household confidence returned
Spending rose at its fastest pace in nearly a year as household confidence returned (Source: Getty)

Households' confidence in their own financial situation rebounded this month in the latest sign that uncertainty around the EU referendum does not appear to be weighing on the economy too heavily.

The Markit household finances index, which measures how optimistic or pessimistic UK households feel jumped up from a 22-month low of 42.3 in May to 44.9 in June. Scores above 50 indicate overall confidence whereas scores below show more people feel pessimistic than optimistic.

The numbers are still firmly in the downbeat camp, though are above their average for the year. Moreover, spending increased at its fastest rate in nearly a year, and the number of households saying they were optimistic and pessimistic about the next 12 months was broadly balanced.

Official figures out this morning showed that the unemployment rate has fallen to its lowest level in 11 years as wage growth continued to outpace inflation.

Economists at Markit said that the continued health of the UK labour market had led to "households reporting a relatively subdued financial strain in June".

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