Three quarters of Brits think UK ‘heading in wrong direction’ as Budget looms
The UK is heading in the wrong direction, most Brits believe, in the latest sign of rising gloom about the state of the country’s economy.
A Morning Wire/Freshwater Strategy poll has shown that 76 per cent of voters are pessimistic about the future of the country, the highest level of pessimism recorded since our polling began in January this year.
Fewer than one in five people (19 per cent) said the UK was heading in the “right direction”.
Fresh research has uncovered the pervasive despondency across the UK as unemployment surged to a post-pandemic high, borrowing costs remain elevated and fears spread that the government will hike taxes on workers.
The poll also showed that, compared to results in September, a higher number of Brits believed the UK economy would worsen.
Around 59 per cent of people said they expected the UK economy to deteriorate, a rise of three percentage points on polling released in early October.
This was the second highest recording this year after April when households will have seen regulated prices increase in energy and water bills.
Employers will also have seen payroll costs increase as a result of a hike to national insurance during the month, which was dubbed “Awful April”.
UK’s cost of living problem
More than twice the number of Brits expected household finances to deteriorate (48 per cent) than those who expected them to improve (20 per cent).
Over half of respondents in the same nationally representative poll of voters said they expected living standards to worsen in the next year (53 per cent), a higher proportion than recorded last month.
The polling reflects Britons’ sense of anxiety before a difficult Autumn Budget where families, savers and pensioners are expected to be hit with higher taxes.
It showed that more people across the country were concerned about the higher cost of living, making it the most concerning issue of all for voters.
Rachel Reeves has said curbing inflation would be one of the main priorities of the upcoming Budget amid rumours that VAT could be stripped from household energy bills and other measures could be introduced to lower the cost of living.
Influential think tanks are also rolling out a set of proposals for Reeves to consider in a fortnight.
The Institute for Public Policy Research (IPPR), a left-leaning think tank with links to Labour officials, has called on the government to add pro-consumer regulation to tackle “shrinkflation”, whereby firms make products smaller without changing price levels.
Its report said the government should make companies add labels on products to “shame companies” misleading consumers.
It also said smaller convenience supermarkets should be forced to stock cheaper non-brand items. The government should also subsidise electricity costs, according to researchers.
Business leaders have meanwhile argued that higher costs have squeezed budgets across companies in the UK.
Jane Gratton, deputy director of public policy at the British Chambers of Commerce, said “sky-high employment costs” had squeezed profits after the Office for National Statistics (ONS) said wage growth remained high at 4.6 per cent growth excluding bonuses.