Feeling better about the economy

February 07, 2012, 11:13 AM GMT+0

Latest results show general rise in positivity towards economy but unemployment still major concern for Britons

  • YouGov’s Household Economic Activity Tracker (HEAT) index rose to 92 – the highest level since April 2011
  • Unemployment remains a concern for Brits, with 27% identifying it as a major threat to the economy
  • 33% of government benefit recipients expect payments to increase

YouGov’s HEAT index is a monthly consumer sentiment number based on surveys conducted on a daily basis throughout the month, to gauge how the public is feeling about the country's financial health, as well as their own. Latest research reveals an increase in overall sentiment, as HEAT index rose to 92 in January (figure 1). This is the highest level recorded since a spike in April 2011, and prior to that - mid 2010. The increase in sentiment was driven, almost entirely, by shifts in attitude - away from the negative and into the neutral. Increased positive sentiment did not account for the rise in index score.

Index on scale of 0 to 200, in which 0 indicates entirely negative sentiment, 200 entirely positive sentiment, and 100 a balance of the two positions.

Source: YouGov Household Economic Activity Tracker, January 2012

Note: Based on interviews of 7,145 UK residents conducted from 1-31 January 2012.

Index score is derived from consumer sentiment on 4 metrics (home prices, job security, family financial situation, and business activity) measured retrospectively and prospectively.

Continued fears of unemployment

Worries about national unemployment remain a primary concern for Britons, with just over a quarter (27%) considering it a major threat to the economy, a rise from 16% in early 2011. According to Michael Nardis, Senior Vice President at YouGov: 'Over the course of 2011 we saw unemployment become the paramount concern of Britons, outstripping other major worries about inflation, interest rates and energy prices. Although the start of 2012 has seen sentiment rise generally, fears around unemployment have not yet shown signs of abating.'

Evidence for concern is reflected in particular amongst those who are unemployed but actively seeking work, with 36% thinking it unlikely that they will find employment within the next six months, up from 30% in July 2011. Meanwhile, those who think it likely to find employment have fallen from 41% to 32% over the same period.

Government benefit recipients expect a raise

Of those recipients receiving government benefits as a source of income in January, one third (33%) expect their payments to increase in amount – a rise from 24% in April 2011. Similarly, one third of respondents expect their government benefits to decrease over the next 12 months – down from 41% in April 2011.

Investors taking a hit

Respondents earning investment income expect to see a steady fall in return. Amongst the 12% of Britons who received returns from investment as a source of income in January, one third expects this source of income to decrease over the coming 12 months – sentiment that has risen from a quarter in April 2011. In turn, we have seen a fall in those expecting their investment income to increase in the coming year – from 38% to 23% over the same period.

Further information on YouGov’s Household Economic Activity Tracker here