LONDON (Reuters) – British households turned a lot cheerier about their monetary state of affairs this month, in response to a survey on Monday that can hearten Bank of England officers who suppose the economic system’s weak begin to the yr was short-term.
The IHS Markit Household Finance Index (HFI) rose to 44.7 in May from 43.four in April, its highest stage for the reason that finish of 2016 and indicating an easing monetary squeeze for Britons, who have been hit by increased inflation for the reason that 2016 Brexit vote.
“A welcome combination of rising incomes, falling inflation perceptions and fading concerns around job security all contributed to the strongest HFI survey results in nearly a year-and-a-half,” mentioned Sam Teague, an economist at monetary information agency IHS Markit.
Earlier this month the BoE held rates of interest regular and mentioned it needed to make sure the economic system was recovering from a tepid starting to the yr earlier than it raised borrowing prices once more.
BoE Governor Mark Carney, who mentioned he anticipated to see an rate of interest hike earlier than the tip of the yr, talked about the family finance index as one of many gauges of the economic system that the central financial institution appears to be like at.
The newest survey confirmed greater than half of households anticipate rates of interest to rise earlier than the tip of the yr, little modified from the earlier month’s report.
But just one in 4 see a price rise by August, which is when most economists polled by Reuters anticipate charges to go up.
Households’ worries about job safety additionally fell this month to the bottom for the reason that 2008/09 recession, IHS Markit mentioned.
Last week official information confirmed British employers employed many extra staff than economists had anticipated in early 2018, a tentative signal that the economic system’s weak begin to the yr could also be short-term, because the Bank of England hopes.
The IHS Markit survey polled 1,500 folks from May 11-14.
Reporting by Andy Bruce, modifying by David Milliken