Gloom over household budgets eases

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Households are the least downbeat about their finances for more than three years, in signs that the economy is strengthening.

Almost eight per cent of people saw an improvement in their budgets in June, while around 26 per cent said that they worsened, according to financial information firm Markit.

People’s expectations for their finances in the next 12 months also picked up to their highest levels since March 2010. Finance and business workers were the most confident, followed by IT and telecoms workers. Those working in the construction sector were the most pessimistic.

The overall household finance reading was 40.8 in June, with readings above 50 signalling an improvement to people’s finances and ones below 50 indicating a deterioration.

While the latest reading is still negative, it shows the strongest easing of the squeeze on household budgets since February 2010.

Within the findings, mortgage holders were the least downbeat about their finances in the past four years.