Commenting on the survey, Maryam Baluch, Economist at S&P Global Market Intelligence, said:

“UK households remained resolutely downbeat in May, though the level of financial pessimism eased compared to April and has now even risen above the survey’s long-run average. Encouragingly, households are feeling secure in their roles for the first time so far this year, perhaps in a sign that concerns over lay-offs relating to higher NI contributions and other wage-related measures reported in last year’s Budget have calmed, now that the higher rates have taken effect.

“The main drag on sentiment instead 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. In fact, households reported a softer deterioration in their current financial well-being and were less downbeat about their financial prospects.

“A change in May is that, on balance, households adopted a dovish view on central bank policy. This marks the first time since February that more households expect interest rate cuts rather than an increase. It is hoped additional easing of monetary policy will stimulate household expenditure and alleviate difficulties in obtaining loans, with many big lenders already aligning their products with the latest policy adjustments.”