British households remain ‘resolutely downbeat’ about the economy, a survey reveals.
Pessimism eased slightly this month but attitudes were in ‘firmly negative territory amid persistent financial worries’.
UK consumers reined in their spending due to ‘limited cash availability’ in May and continued to draw down their savings, the research by S&P Global Market Intelligence found.
However, the prospect of lower borrowing costs after the Bank of England cut rates this month helped to boost optimism.
And workers felt more securein their jobs – a month on from Chancellor Rachel Reeves’s National Insurance hike.
S&P’s UK consumer sentiment index was 45.2 in May, up from 44.5 in April. A score below 50 indicates that households feel pessimistic.
Saving the pennies: UK consumers reined in their spending due to ‘limited cash availability’ in May and continued to draw down their savings, research found
Maryam Baluch, an economist at S&P, said: ‘The main drag on sentiment came from consumer spending behaviour.
‘Households were cautious with their spending due to limited cash availability, which hindered major purchases. Still, rising incomes eased some financial strain.’
She added: ‘A change in May is that, on balance, households adopted a dove-ish view on central bank policy.
‘It is hoped that additional easing of monetary policy will stimulate household expenditure and alleviate difficulties in obtaining loans.’
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Britons remain ‘resolutely downbeat’ on economy – but Bank of England rate cut helps to boost optimism