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Squeeze On UK Household Finances Moderate In May

British households' current financial pressures softened in May, helped by a combination of lower inflation and higher income from employment this spring, survey by IHS Markit and market research company Ipsos Mori revealed Monday.

The seasonally adjusted Household Finance Index, of HFI, rose to 44.7 in May from 43.4 in April.

The figure signaled a softer budget squeeze, with the latest deterioration being the least marked since the end of 2016.

However, any score below 50 suggests pessimism regarding finances among the U.K. households.

The index reflecting households' financial expectations over the next year reached a 21-month high of 49.1 in May from 47.1 in the previous month.

May data continued to signal improving labor market conditions in the UK and households reported the strongest growth in income from employment since July 2016.

On the price front, inflation perceptions were the weakest registered in 17 months, with the corresponding index falling to 78.2 in May from 78.6 in April.

"Following the accurate prediction by the majority of households of no base rate change in May, the forecast has since remained broadly unchanged," Sam Teague, Economist at IHS Markit, said.

"Over half of all households are expecting a rate hike over the course of 2018, though only one-infour expect to see rates rise by August."

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