UK household confidence boosted by greater job security

Suzie Neuwirth

UK HOUSEHOLDER confidence improved in June, according to data from Markit released today.

The Household Finance Index reached 40.8, up from 40.4 in May and the strongest reading since February 2010. A figure above 50 indicates a rise in confidence.

Greater job security and an improved labour market have contributed to the increase.

However, three times as many households saw their finances worsen in June against those who saw an improvement.

“Improving household finance trends are an early indication that the UK economy has continued to strengthen in June,” said Tim Moore, senior economist at Markit. “Households’ perceptions of financial stability are now at a level unsurpassed over the past four and a half years.

“Better labour market conditions helped reinforce the up turn in households’ financial expectations during June, as rising levels of work place activity translated into diminishing job insecurities.”

However, he added: “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.”