Britons are becoming less worried about their finances as inflation eases and employers look more prepared to raise wages, surveys showed on Monday, further fuelling hopes that consumers may lend the fragile economy some support this year.

The improvement in the Markit Household Finance Index survey adds to evidence that consumers are slowly regaining confidence, supporting the Bank of England's view that consumption will start growing again this year. Mortgage lending rose and house prices picked up in January.

Households reported the lowest degree of pessimism about future finances since April 2010, survey compiler Markit said.

The measure of current finances, Markit's Household Finance Index, rose to 38.7 in February from 36.4 in January, still well below the 50 mark separating improvement from deterioration but the least downbeat reading since December 2010.

These positive developments meant that debt levels stabilised and households' appetite for major purchases moved back to levels not seen since the VAT (sales tax) rise in January 2011, said Markit economist Tim Moore.

A survey by the Chartered Institute of Personnel and Development (CIPD) provided more hope for households: in the last quarter, employers' pay intentions reached their highest level since spring 2009, though many remained cautious.

While the predicted increases in pay settlements reflects a cautious optimism among members in the private sector that the worst may now be over, uncertainty about how fast the economy will improve is acting to moderate pay forecasts, CIPD rewards advisor Charles Cotton said.

Many Britons cut back spending as soaring costs of living outpaced meagre wage rises while government spending cuts and jobless levels not seen since the mid-1990s weighed on morale.

POSITIVE MINDSET

Markit noted that mortgage holders in particular were much less downbeat about their financial outlook, probably helped by expectations of continued low interest rates. The Bank indicated with its inflation forecasts that interest rates would not rise for quite some time.

Before the financial crisis, rising house prices and generous mortgage lending had provided a major boost to consumer spending, but a sluggish housing market and stricter lending has since been weighing on consumption.

However, the Council of Mortgage Lenders (CML) said gross mortgage lending was up 10 percent on the year in January, and property website Rightmove said asking prices for houses jumped 4.1 percent on the month, posting the biggest rise in a decade.

Both organisations cited special factors driving the rise, but they also noted some general improvement. There are also indications that those who are able to buy but had previously lacked the confidence to take the plunge are of a more positive mindset this year, Rightmove director Miles Shipside said.

The households' less downbeat assessment of their finances follows other surveys that showed an improvement in consumer morale as inflation fell to 3.6 percent in January, down from a three-year peak of 5.2 percent reached in September.

But the Markit survey also highlighted the risks ahead. Wider job market uncertainty is constraining spending even among those seeing their own situation stabilise, Moore said.

(Reporting by Sven Egenter; Editing by Ruth Pitchford)