Brits' gloomy economic outlook

Chris PolechonskiSenior Research Executive Digital, Media and Technology
April 24, 2013, 1:13 PM UTC

Nearly half of Britons expect a further drop in living standards by the next general election in 2015.

A new poll, conducted as part of a wider study on “2015 - the living standards election” by YouGov for the Resolution Foundation, found that almost half (46%) of the British public believe their living standards will fall over the next two years. Only one in five (19%) think they will improve, while just over a quarter (28%) expect no change. The figures come a day before the release of official estimates of Britain’s GDP in the first quarter of 2013, which – if they show negative growth – would mean the country has entered a ‘triple dip’ recession.

In the new Resolution Foundation poll, Labour supporters, older voters and people on lower incomes are most pessimistic about their prospects.

Among Labour supporters, 58% say they will be worse off in two years’ time, compared to 32% of Conservatives and just 20% of Liberal Democrat supporters. While 33% of Lib Dems believe things will improve, this was matched by only 22% of Conservatives and 17% of Labour supporters.

People who voted in 2010 for one of the Coalition parties are gloomier about their prospects than those who say they support the parties today. Of those who voted Conservative in 2010, 43% say they will be worse off by the time of the election, compared with 32 % of people who now say they will vote Conservative. Among Liberal Democrats, the corresponding figures are 37% and 20%.

Pessimism is also widespread among older Britons and less pronounced among the young. Six in ten (61%) of those aged 60 and over expect to be worse off in 2015, compared to a quarter of 18 to 24-year-olds (25%), a little over a third (36%) aged 25-39, and half (50%) of those aged between 40 and 59.

People from lower-income households (with a gross annual income below £20,000) are also gloomier about their economic outlook - more than half (52%) anticipate a fall in living standards – compared to fewer than one in three (31%) in households where income tops £70,000. In households on incomes of £20,000 to £40,000, almost half (46%) expect to be worse off, while this is true of four in ten (41%) of people in households where income is between £40,000 and £70,000.

Electorate expecting slow growth

Potential voters are also very gloomy when asked to say how long it will be before Britain’s economy fully recovers from recession – an overwhelming majority think there is no prospect of this in the short term.  More than a third (36%), believe this will happen in four-to-five years but almost as many (29%) think it will take longer still - between six and ten years. Another one in ten (11%) think full recovery will take longer than a decade, while 4% believe it will never happen. Only 7% believe the economy can fully recover in as little as two or three years.

As well as pessimism about the short-term future, the findings also show that a majority (53%) of the public feel their family’s living standards have declined since 2010. 14% think things have improved while 30% say their standard of living has remained about the same.

Gavin Kelly, chief executive of the Resolution Foundation, said: “There’s a gloomy mood among large parts of the electorate which suggests that, whether the GDP figures this week are slightly positive or slightly negative, people see the economy as stagnant. They think that the downturn that began back in 2008 still has some years to run - only a minority of the electorate sense a strong improvement around the corner. All of this reflects the enormous pressures on household incomes over recent years – from flat wages, rising prices and reduced support through tax credits.

“If the question hanging over the polling booth at the next election is ‘are you better off than you were 5 years ago?’ then we know that for most people this is unlikely to be the case. But many people will be voting based on their future prospects rather than the recent past, and this poll shows us that as things stand many people are down-beat about how long it will take the economy to fully recover.  How this pessimism plays out in terms of party support will play a key role in determining the next election.”

Resolution Foundation is currently carrying out a new polling project to examine what the British public think politicians can and cannot achieve on the economy and in relation to living standards at the 2015 general election.

See for the full YouGov/Resolution Foundation poll results