UK households least downbeat about their personal finances in three years

Britain’s households are less gloomy about their personal finances than they were three years ago, according to June’s Household Finance Index from Markit.

The index reached 40.8 – up from 40.4 in May (50 indicates no change, above indicates a rise in confidence). Greater job security and an improved labour market has contributed to a more optimistic sentiment.

Nevertheless, three times as many households saw their finances worsen in June than those who saw an improvement. High inflation and low real wage growth means personal budgets continue to be squeezed.

Meanwhile the householders with the most confidence are property owners and mortgagees, thanks to improving property prices.

Households do expect their finances to improve further over the next year, predicting a climb to 44.4 in June 2014.