The IHS Markit UK Household Finance Index, which measures households’ overall perceptions of financial wellbeing, increased to 47.6 in February, a notable rise from January's 44.6 and the highest index reading since the survey began 11 years ago.

While still below the neutral 50.0 mark, and indicative of financial health being what IHS Markit describes as ‘under pressure,’ the rise indicated that conditions faced by UK households has become less challenging so far in 2020.

Looking ahead, IHS Markit also suggested UK households were signalling positive expectations towards their financial health. The Future Household Finance Index – which measures expected change in financial health over the next 12 months – rose to 52.7 in February, from 49.6 in January.

Furthermore, the level of optimism was at its highest since the data was first collected in February 2009, exceeding the previous peak seen in January 2015.

IHS Markit economist, Joe Hayes, commented: “Living cost perceptions suggest that a further slowing of inflation in the UK is on the horizon. Household inflation expectations were also trimmed, which bodes well for near-term consumer spending prospects given that nominal wages are still robust. A key driving force in 2019, a continuation of this trend will be crucial in 2020 as well.

“Housing market data was also upbeat, with current prices perceived to have risen strongly in February and expectations signalling further growth over the coming year. Less concern towards job security, which was heightened by various uncertainties last year, could also help stimulate demand.

“Post-election survey data so far scores a fairly good chance a first quarter GDP pickup following a flat end to 2019.”

Moneyhub CEO, Samantha Seaton, added that it was ‘encouraging’ to see a boost in positive expectations towards people’s financial health.

“Our financial world is changing, and it’s so important that people can at least feel confident in their own finances,” Seaton added.

“As we move towards increasingly complex financial lives, there is a greater need to be able to see and track transactions. Money apps offer customers the tools to budget and save through their everyday transactions, while pivotal technology like open banking makes it easier than ever for individuals to manage their own financial data in real time.

“Having this knowledge at our fingertips will help us all to make better, more informed decisions when it comes to our everyday finances.”

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