Family finances being squeezed even further

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Hard-up households' finances are being squeezed even further, according to May's Household Finances Index from Markit.

The index signalled the sharpest deterioration in family finances since January. Around 35 per cent of households reported that their finances had worsened in May with just 8 per cent noting an improvement.

Mortgage holders were hit hardest and saw the steepest drop in cash available to spend after several lenders increased standard variable rates last month. Some 45 per cent noted a decline compared with 7 per cent noting an improvement.

Tim Moore, senior economist at Markit, said: "The UK economy continues to stutter through the second quarter with respondents signalling an overall stagnation of their workplace activity."