LONDON (Reuters) - British households felt less worried about their finances in November as concerns about inflation eased to their lowest level in more than five years and earnings continued to recover, a monthly survey showed on Wednesday.
The Markit Household Finance Index rose to 42.7, its highest level in seven months, up from 41.8 in October but still comfortably below the 50-mark, which separates pessimism from optimism.
Income from employment grew for the fourth month in a row, reflecting a slow pick-up in earnings seen in official data.
But households' expectations of their financial wellbeing over the next 12 months slipped slightly from October, underscoring the challenge for Prime Minister David Cameron ahead of a national election in May.
Sixty-five percent of respondents who expressed a view expected the Bank of England to raise interest rates before this time next year, though only 29 percent expected a rise in the next six months.
The BoE said last week that it was in no hurry to raise borrowing costs as inflation was likely to hit its 2 percent target only in about three years' time.
(Reporting by William Schomberg; Editing by Kevin Liffey)