LONDON (Reuters) – British households turned more downbeat about their finances in May, according to a survey that hinted at weakness in the consumer economy which has been one of the bright spots for Britain during the Brexit ructions.
IHS Markit, a data firm, said on Monday its Household Finance Index (HFI) fell to 42.5 from 43.8, its lowest level since September 2017 as worries grew about job security, particularly in retail and manufacturing.
Britain’s labour market has remained resilient in the face of Brexit, helping households whose spending has driven an otherwise fragile economy.
However, the jobs boom may reflect how employers have hired workers – who can be laid off in a downturn – rather than commit to longer-term investments while they wait for uncertainty over Britain’s departure from the European Union to lift.
“Despite the latest labour 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,” said Joe Hayes, an economist at survey compiler IHS Markit.
Still, households became a little more optimistic about their finances in the coming year, the survey showed.
Reporting by Andy Bruce; Editing by William Schomberg