UK households braced for difficult times
A survey by Markit Economics and YouGov has today cast light on a very difficult environment in UK amid concerns that UK household incomes will be impacted in the short to medium term. The survey shows that 43% of those questioned believed their finances will be worse in 12 months time, a figure which is the highest since the depths of the recession in April 2009.
The survey also confirmed that 57% of UK households believe that spending cuts to be announced this week will have a direct impact upon their lives and their standard of living. While in many ways this was to be expected after the euphoria of the election, there is concern that a pessimistic consumer outlook could spread into the business arena and drag the UK economy back into recession. This would be a nightmare scenario for David Cameron and his coalition government because quite literally there is "no money left" and we are set to see cuts in the short-term rather than investment in the UK economy.
This is the first sign of a potential change in the attitude of UK households and if mismanaged in any way by the government could turn out to be a near impossible situation to control. Consumer confidence is a vital element of any economic recovery and this must be nurtured and protected.
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