The finances of one quarter of Britons have deteriorated in the past month, research has shown.
A poll taken by Markit and YouGov found that one in four people say their household finances were worse in May than they were in April, with just 7% saying they were better.
In what is the highest level for just over a year, 43% of people quizzed expect to be worse off in 12 months' time.
The pessimism was felt in particular by public sector workers and among those who are not employed.
Job security also deteriorated at its fastest pace since June last year, with those working in the public sector the most concerned about their jobs, while they also expect lower pay rises going forward.
Around 57% of people thought the looming Government spending cuts would impact on their finances, rising to 62% among public sector workers.
But despite their concerns about the future, households increased their spending for the third month in a row during May, although the rate at which it rose slowed compared with April.
People also focused on repaying their debts for the fourth consecutive month.
Andrew Self, economist at Markit, said: "The May survey showed the reality of impending government spending cuts biting, with job security and the outlook for household finances among public sector workers slumping to the lowest seen since the depth of the recession.
"In contrast, private sector employees reported that they had become less insecure about their jobs than at any time since the survey began in February of last year, and that their incomes rose for the first time since the recession."
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