Back to the 1970s: Brits know the damage being done to our economy
By late 1978 Britain was in the grip of what became known as the Winter of Discontent. Waves of strike action caused huge economic and social disruption as rubbish piled up on the streets and bodies went unburied.
It was a crisis for the Labour government and a low point in Britain’s recent history. It was also the year when polling company Ipsos began collecting data on public attitudes and sentiment.
Yesterday, Ipsos published its latest findings on Brits’ economic optimism, revealing that the index has sunk to its lowest level since that grim winter nearly 50 years ago.
This is a stark comparison, but we shouldn’t get carried away; life in Britain is unquestionably better now than it was in the late 70s. Nevertheless, we cannot ignore the findings that 78 per cent of the public expect the economy to deteriorate over the next 12 months. An optimistic 12 per cent think things will stay the same while a lunatic fringe of 6 per cent expect things to improve.
The research was conducted during the second week of April, at the height of concerns over the Iran war and its impact on the UK, but it would be wrong to assume that respondents were simply reacting to the week’s grim headlines.
‘Entrenched dissatisfaction’
Net economic optimism has been slumping since mid 2024 with the current gloomy sentiment consistent among all demographics surveyed by Ipsos. As the firm’s Senior Director Gideon Skinner put it: “dissatisfaction with the state of the country has been entrenched for some time.”
It’s well understood that the war in Iran will hit – is hitting – the UK economy, as yesterday’s inflation data makes clear. The labour market is not in good health and we look set to endure another year of little to no growth. While it’s perfectly fair for ministers to bemoan the war’s impact it must also be acknowledged that the troubles from abroad come on top of major policy missteps at home, from record high tax burdens to damaging employment law reforms and a cavalier attitude to the ballooning welfare budget.
Economists are warning of a recession and analysts fear for the fate of the Chancellor’s already thin fiscal headroom. The crisis might not be as obvious as it was in the winter of 1978 but it is no less real, and it will get worse.