Squeeze on family finances showing signs of easing...

THE squeeze on household finances is starting to weaken, according to Markit’s survey of 1,500 people, which shows the least gloomy domestic financial situation for three years.

But responses show family budgets are still suffering, with 26 per cent suggesting that their finances have worsened into June, versus eight per cent reporting an improvement.

Though the household finance index is still negative, it is the best result since February 2010.

The index registered 40.8, up from 40.4 in May. A number under 50 indicates that the average response is downbeat.

Perceptions of inflation also hit a three-year low, indicating that households are not feeling price rises as acutely this year.

Despite the general improvement, income from employment appeared fragile. Survey respondents indicated falling incomes this month, with the lowest reading for five months.