LONDON (Reuters) - British households are at their most downbeat about their finances in six months and the prospect of interest rates finally going up could be feeding the pessimism, a survey showed on Wednesday.
The monthly Household Finance Index, compiled by financial data firm Markit, slipped to 42.1 in July to 42.6 in June as households worried about their savings, debt levels and credit availability.
Low-income households were particularly downbeat, while the wealthiest gave the brightest assessment on record, Markit said.
Jack Kennedy, senior economist at Markit, which compiles the survey, said a slight fall in future expectations could reflect caution about the possibility of the Bank of England raising interest rates in late 2014 from their record low.
However, financial pressures remained less severe than at any time in the five years before 2014, he said.
"Moreover, easing inflation perceptions and strongly rising levels of workplace activity suggest that certain pressures on households may be abating, which could help offset the impact of higher mortgage costs following any action by the Bank of England to hike rates," Kennedy said in a statement.
(Reporting by William Schomberg; Editing by Ruth Pitchford)