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UK Households' Financial Wellbeing Weakens In May

British households' financial wellbeing deteriorated at the fastest pace since September 2017, survey data from IHS Markit showed Monday.

The household finance index, which measures households' overall perception of financial wellbeing, dropped to 42.5 in May from April's three-month high of 43.8.

The score indicated the strongest level of pessimism towards current financial wellbeing among UK households since September 2017.

Nevertheless, the outlook towards future finances was the least downbeat since last November.

Data showed that growth in UK household expenditure continued in May. Households' perceived living expenses increased markedly in May. Meanwhile, inflation expectations moderated to a four-month low.

Further, the survey suggested an increase in the proportion of UK households anticipating the next move by the Bank of England to be a rate hike.

Despite the latest labor market data showing historically-low unemployment and reasonably robust wage growth, weak confidence has acted to undermine these trends and led to belt-tightening at UK households, Joe Hayes, an economist at IHS Markit, said.

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