Guardian UK: Confidence in the (British) economy evaporates

Confidence in the economy evaporates
Larry Elliott, economics editor The Guardian, Friday May 30 2008


Gordon Brown's hopes of recovering from this month's hat-trick of electoral setbacks received a fresh blow today as falling house prices and rising food and energy bills prompted the biggest slump in consumer confidence since the onset of the last UK recession in autumn 1990.

A report by GfK NOP showed that the government's efforts to bounce back from Labour's third place in the local elections, defeat in the London mayoral election and the loss of the Crewe and Nantwich seat are being hampered by a mood of deep gloom that has engulfed voters in the year since Brown became prime minister.

This morning's survey of public opinion followed a report by the Nationwide building society showing that house prices dropped by 2.5% last month, the biggest one-month drop since the property crash of the early 1990s. Meanwhile, the CBI reported a second month of declining spending on the high street.

Adding to the prime minister's woes, an opinion poll published last night showed that his personal rating among voters is now the same as John Major's at his lowest point. The YouGov survey published in the Daily Telegraph shows Labour at 23 points and the Conservatives at 47 - a Tory lead of 24 points. The poll of 2,240 people showed that just 22% believe Labour is likely to run the economy well, compared to 39% who believe that the Conservatives would do a good job.

Rachael Joy at GfK NOP said: "UK consumer confidence continues its decline and we are seeing levels not recorded since 1990. We are a massive 27 points lower than this time last year. Consumers' confidence in the economy over the next year, plus a reluctance to make major purchases, reflect the popular expectation of a recession - both these measures are at the lowest level on record." ..........(more)

The complete piece is at: http://www.guardian.co.uk/politics/2008/may/30/economy.gordonbrown

Their defeat in a new election would rival the worst routs in British electoral history.