London, United Kingdom. British consumers are more pessimistic about the economy than at any point since records began in 1978, according to an Ipsos survey published on Wednesday amid the impact of the Iran war and rising oil prices.
Record low in Economic Optimism Index
Ipsos said its Economic Optimism Index, which measures the gap between those optimistic and those pessimistic about the economy, fell to a record low of -72 this month. The reading was below the previous low of -68 recorded a year ago when U.S. President Donald Trump imposed trade tariffs on imports from the rest of the world.
Sentiment weaker than past downturns
Ipsos said economic sentiment is now worse than during the global financial crisis of 2008 and the 1980 recession that saw unemployment spiral. The survey presents a negative signal for Prime Minister Keir Starmer’s government ahead of local elections next month.
Shocks cited by consumers and investors
Consumers have faced successive shocks ranging from the COVID-19 pandemic and Brexit to soaring inflation and the Middle East conflict. Investors view Britain’s economy as highly vulnerable to the jump in energy prices linked to the Iran war, although official data show the economy grew strongly in the months immediately before the conflict.
Inflation expectations and election impact
Ipsos said its findings echoed a Citi/YouGov report published last month that showed a record jump in inflation expectations for the year ahead. “Concern about the state of the economy is widespread among all groups,” said Gideon Skinner, senior director of UK politics at Ipsos, who added that this could play a “key role” at the May 7 elections and could add pressure on Starmer.
Survey details
Only 6% of Britons surveyed by Ipsos said they expected the economy to improve over the next 12 months. The survey polled 1,003 adults between April 8 and April 14.
How do you think the record low level of economic optimism could affect voting in the May 7 local elections?
