With crisis in the global stock markets, and the Government’s fiscal watchdog slashing predicted growth figures, fears that the UK economy is tumbling towards a double-dip recession continue to grow. In the ComRes / ITV Cuts Index last week, almost two-thirds (64%) of British adults felt pessimistic about the future state of the UK economy, an increase of 15 percentage points since the Cuts Index began.
Anxiety around economic growth, inflation and unemployment is also spreading throughout Westminster. In the weeks preceding recess, a ComRes poll for the Independent showed that Labour MPs were not alone in their pessimism for the UK’s economic prospects over the next 12 months. Responses from backbench Coalition Members also reveal increasing economic gloom.
While a majority of Liberal Democrat MPs (58%) believe that economic growth will stay the same over the next 12 months, only around a third (32%) think that it will improve. This in harsh contrast to Liberal Democrats’ responses earlier in the summer, when in May 51% of Liberal Democrat Members forecast improvements in economic growth.
Moreover, the proportion of Conservative MPs predicting that economic growth will improve has fallen, from 86% in May to 64% in July 2011. Indeed, more than a third of Conservative MPs (36%) now believe that growth will flat-line or worsen over the next year.
The prognosis for unemployment figures provides little more comfort for the Chancellor. Half of MPs (47%) predict that the jobless figures will rise over the next year and a quarter (26%) believe they will remain constant. Just a quarter of MPs (25%) think that unemployment figures will improve over the next 12 months.
Stock markets are generally seen to anticipate change, falling before a dip in the cycle and rising before a rallying. However, these results show the public and politicians to be even more prescient that the traders in predicting economic stagnation. Whether their fears are a cause or symptom of economic malaise requires further investigation.
Methodology note: ComRes surveyed 158 on its MP Panel between 27th June and 18th July 2011, and 156 MPs between 6th and 24th May 2011. Data was weighted to be representative of the House.