Confidence among MidBritons bounces back
In this issue of the MidBritain Report, read how MidBritain is divided on the UK's short-term economic future, but a growing contingent predict greenshoots and how the MidBritain Consumer Confidence Index shows their confidence levels being back to early 2008 levels.
Greenshoots of recovery, more of the same, or is the worst still to come?
- MidBritain’s economic outlook for the next 6 months is split fairly evenly three ways. And for the first time in more than a year, there’s a considerable rise in the number of MidBritons who think the economic situation will get better.
- This quarter’s results represent a significant shift in attitudes towards the UK economy going forward. 1 in 3 have indicated that they believe that the worst of the recession is over, by stating that the economic situation will improve – up 19% from 10% to 29%.
- Greater confidence in current stock market performance, signs of a recovering housing market and lower mortgage rates has led to a feeling of greater economic stability. Together these factors have culminated in increasing confidence towards the future economy.
- However the positivity is not universal with opinion still severely divided – 39% state that the economy is likely to stay the same, while a third still believe that we’ve yet to reach the bottom.
Confidence index back to early 2008 levels
- The MidBritain Consumer Confidence Index uses economic indicators of particular importance to this audience, to track their overall confidence in the UK economy.
- Since March 2009, MidBritain’s confidence fell quarter on quarter with an all time low in September 2008. Signs of confidence began to show at the start of 2009. In June 2009, MidBritain’s confidence is back to levels seen over a year ago. This is largely due to their positive predictions for the next 6 months.
Some signs of improvements but current assessment of the economy remains negative
- MidBritons are less likely to be negative about UK economic stability (down 14% from 88% to 74%) and the stock market (down 22% from 83% to 61%). Negativity towards house prices also appear to be moving in the right direction.
- Attitudes towards interest rates remain similar with prosperous MidBritons still feeling the negative effects of low savings rates. This quarter high street prices (clothing and consumer goods) have seen a 6% rise, this is likely to have reflected retailers reluctance to discount before the July sales.
- Quarter-on-quarter living costs are down slightly from 70% to 67%. Living costs (food, household bills and inflation) have been trending downwards since the start of the tracking, in particular those who rated living costs as very bad plummeted from 58% in Q2 08 to 29% in Q2 09.
- The current view of employment remains strongly negative this quarter and it’s seen as the worse aspect of the economy. In Q2 08 those thinking the employment situation was very bad (8%) this has continued to rise each quarter with sharp rises in Q4 08 and Q1 09. MidBritons view the employment market rather grimly however only a minority believe there likely to be directly effected by this.
MidBritain will increase spending as confidence in the UK economy grows
- MidBritons state that living costs, uncertainty about the economic situation, interest rates and high street prices currently have the largest negative impact on spending. This quarter high street prices is having a greater impact on MidBriton spending rising from 43% to 51%. The stock and housing market are having less of an effect on MidBritons spending whilst all other factors remain unchanged.
- Looking forward to the next 6 months MidBritons are expecting that economic situation, stock market, interest rates and house market to improve and have less of a negative impact on spending.
Fears over household outgoings substantially lower than a year ago
- MidBritons are feeling more comfortable across the board about their bills and other household outgoings. Fuel prices, the cost of living, household bills and mortgages/rent have seen the greatest decreases.
- Despite this significant downward trend, MidBritons are still closely monitoring their expenditure, with 2 in 3 stating they are careful with their money on a day to day basis, making it important that brands justify the price of their products and services.
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