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London - British households were the most upbeat about their finances in over six years in May, but have turned pessimistic about the outlook for the coming 12 months, a monthly survey showed on Wednesday.
The Markit Household Finance Index inched up to 45.8 in May from 45.7 in April, the highest level since the survey started in early 2009. However, the reading remained below the 50 mark which indicates households still feel squeezed.
British workers lost spending power in the years after the financial crisis as their wages failed to keep up with prices, although in recent months’ wages have picked and inflation in April fell below zero.
The Markit survey also showed that a seven-month run of optimism about the next 12 months gave way to a pessimistic reading of 49.1 in May.
Philip Leake, an economist at Markit, said it was not possible to know if the change in mood about the future was linked to the outcome of Britain's national election on May 7 in which Prime Minister David Cameron's Conservative Party won a parliamentary majority, paving the way for more spending cuts.
The survey was conducted between May 13 and May 17.
Less than half the participants surveyed by Markit thought the Bank of England would raise interest rates before May next year, the lowest proportion in a year and a half.
