Consumers are feeling more bullish about the state of the economy but rising unemployment remains a major concern, research showed today.
Nationwide Building Society said people's confidence in the current employment situation remained at its lowest level since it first began collecting data in May 2004.
It said just 48 per cent of people currently felt positive about the number of jobs that were available, while 28 per cent felt negative.
But at the same time there was an increase in the number of people who thought the economy would improve over the next six months, with 18 per cent saying they expected it to be better, up from 14 per cent the previous month.
Despite some people's more upbeat outlook, 30 per cent still expect the economy to get worse during the coming six months, and ten per cent are worried that their household income will be lower.
The group's purchasing index also fell during the month as the number of people who thought it was not a good time to make major household purchases, such as white good or furniture, increased.
It was the first fall in spending confidence for three months, and put the index at the same level it was in May last year. But consumers are slightly more optimistic about the property market, expecting house prices to increase by 2.8 per cent in the coming six months, compared with a rise of 2.3 per cent in April.
Nationwide's executive director Stuart Bernau said: "May saw continuing uncertainty with further talk of job cuts and the Monetary Policy Committee signalling for the first time this year that rates might have to rise.
"This has already pushed up money market interest rates and therefore mortgage costs for new borrowers.
"With consumers already burdened by high levels of debt, rising levels of individual insolvencies and high energy prices, it is no surprise that consumer confidence remains low."
But he added that if England were successful in the World Cup this could help lift spirits and give consumer confidence a much needed boost.
n Annual take-home pay growth rose to four per cent in the three months to May from 3.3 per cent in the prior three months, a survey showed yesterday.
That was the first rise in the Voca take home pay index, a measure based on actual salary payments made to employees, after four months of decline from a peak of 5.8 per cent in the three months to December. Voca said the overall rise was a result of increases in both the industry and services sectors.
The industry index recorded a 3.1 per cent increase in take-home pay in the three months to May from 1.7 per cent in the the three months to April.
Pay growth in the services sector, meanwhile, picked up to 4.7 per cent from 4.5 per cent in the three months to April.