Economic confidence dives as 25% fear crisis wil last more than a year

Economic confidence falls to RECORD low as a quarter of the public fear the country will not return to ‘normal’ for at least a year or NEVER

  • ONS analysis shows expectations for economy lower than in the Credit Crunch 
  • A quarter of the public believes the UK won’t return to normal within a year 
  • Proportion who expect the crisis to pass in less than six months has plunged 
  • Here’s how to help people impacted by Covid-19

Optimism about the economy has fallen to a record low with a quarter of Britons now convinced life will not return to ‘normal’ for at least a year – if ever.

The public’s expectations for UK plc are worse than at the height of the financial crisis, while unemployment fears also spiked last month.

Meanwhile, 24.6 per cent now say ‘normalisation’ from coronavirus will take a year, if it happens at all.

The grim picture emerged in an analysis of wellbeing by the Office for National Statistics (ONS).  

The research found that while levels of anxiety have decreased from the height of lockdown, levels of life satisfaction have also reduced.

There are also signs of growing economic inequality as the pandemic has affected some more than others.

The public’s expectations for UK plc over the coming 12 months are worse than at the height of the financial crisis, while unemployment fears also spiked last month

An estimated 12.5million people say their households have been affected financially by coronavirus, a similar share compared with the start of lockdown, the report found.

Expectations for the economy fell particularly sharply in March and April, and then dropped further in May.

A measure produced by the Europbarometer consumer survey put economic confidence at minus 51.5 as of last month, the lowest on record and below the minus 50.1 in the credit crunch.

Unemployment fears stood at 49.4, the highest in eight years. 

The proportion of people who believe the UK will return to ‘normal’ within six months has dived since April, according to the ONS survey.

It stood at 51 per cent when people were questioned between April 9 and 19. But in the latest figures from June 4 to 7 it was just 30 per cent. 

But in a sign of the disconnect between perceptions of what to come, people were still slightly more optimistic about their personal financial situation than in 2008.

There was evidence the crisis is fuelling inequality. Some 26 per cent of those on lower personal incomes, between £10,000 and £20,000, have experienced a worsening in finances, and were less able to save for the year ahead than those on higher incomes.

People on personal incomes of £40,000-plus saw fewer impacts and were much more able to cover unexpected expenses than they were earlier in lockdown, the report found.

Parents, the self-employed, people on lower incomes, the lonely and those who felt unsafe in the home reported the biggest impacts in terms of their personal and economic wellbeing.

Parents were worse hit than adults without children in the house, according to the findings.

The proportion of people who believe the UK will return to ‘normal’ within six months has dived since April, according to the ONS survey

They were around twice as likely to report reduced income or to have been furloughed, and fewer than half were able to cover a necessary expense as more than 20 per cent of them found childcare had an impact on their work.

Home schooling was found to negatively affect lower income families’ wellbeing.

In terms of anxiety levels, there have been some improvements, the ONS said.

Anxiety has reduced from a peak of 5.2 out of 10 in the week ending March 30 to 3.9 in the week ending June 7.

Some measures, such as furloughing and mortgage relief, as well as increased community support and clapping for the NHS, carers and other key workers may have helped to stabilise anxiety levels, the report said.

But people’s assessments of their life satisfaction and the feeling that what they do is worthwhile have continued to fall since March 20 – and are at much lower levels than before the pandemic, the report said.

Source: Read Full Article