The start of the election campaign proper has seen clear battles lines drawn between the Labour and Conservative parties when it comes to the economy. The Tories point to growing GDP and a promised return to prosperity. Labour talks about fairness and equality.
At the heart of this debate is how voters feel as consumers – are they confident and do they feel their household finances improving as the economy grows again? The latest data from YouGov’s Household Economic Activity Tracker provides encouraging (or discouraging) news for both sides.
The YouGov/Cebr Consumer Confidence Index for March shows that economic optimism is improving. It has increased steadily each month since December and is at its highest level since September last year.
Source: YouGov/Cebr HEAT data, March 2015
Notes: Axis value of 97.1 represents the average YouGov/Cebr Consumer Confidence Index score since the data set began in 2007.100 represents a neutral score.
Allied to this is that people have increasingly optimistic expectations about their household finances. Our data show that currently 27% of consumers expect their household financial situations to improve over the next 12 months. This is the highest it’s been since March 2010.
Significantly, for the first time since YouGov started measuring this metric in early 2009, more people believe their financial situation will be better in 12 months’ time than think it will get worse (27% versus 25%).
Source: YouGov/Cebr HEAT data, March 2015
All of this, when added to the revised growth data from the ONS provides succour to the Conservatives’ economic narrative.
However, they have an Achilles heel that Labour is exploiting – which is a lot of people do not feel better off. Our latest data supports this, with just 11% of people saying they thought their household financial situations improved across the previous month.
So where does all of this leave us? Although a lot of the recent top-line data, such as GDP and wage increases, points to a better situation for consumers, the current improvements in household finances come after years of weak wage growth and squeezed benefits.
One of the biggest battles over the next five weeks will be an argument about whether for consumers “better” means “prosperity”, or simply “less worse”.
Find out more information about the Household Economic Activity Tracker
This article originally appeared in City AM
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