Economic pessimism continues as 76% of Britons describe economy as 'poor' amid ongoing cost-of-living concerns

Ipsos in the UK has released its latest polling results on perceptions of the British economy and the cost of living, revealing significant continued pessimism and an expectation that Labour is likely to increase personal taxes and government borrowing.

Key findings 

• Perceptions of the British economy: Three quarters (76%) of Britons describe the economy as 'poor', with only two in ten (21%) considering it 'good.' This level of pessimism has been fairly entrenched over the last 12 months.
• Contributors to economic challenges:
  • Almost three in five (59%) Britons who think the British economy is in a poor state think decisions made by Keir Starmer and Rachel Reeves have contributed most. This is followed by the impact of the COVID-19 pandemic (49%), Britain leaving the EU (46%, up 5 ppts since April), and the state of the global economy (45%). 42% say that the economic policies of the previous Conservative government are most to blame.  Donald Trump is less blamed now than in April, after he initially announced the imposition of tariffs (down from 41% to 29%).
  • Conversely, those who think the British economy is in a good state are most likely to give credit to decisions made by the Bank of England (48%), the productivity of British workers (44%) and the state of the global economy (40%). 38% cite decisions made by the current Labour government.
• Cost of living concerns:
  • 86% express concern about the national cost of living, with 77% worried on a personal level – with concern as high as it was a year ago. A majority anticipate further rises in costs over the next six months, notably in food shopping (82%) and utilities (79%).
  • Seven in ten (72%) expect the rate of inflation to rise over the next year (little changed from last November), while almost half expect their disposable income to decrease (47%, up 5ppts since last year).
• Government performance: Perceptions of the current government’s effectiveness in handling the cost-of-living crisis are increasingly poor, with 57% rating the Labour administration negatively (up 9ppts since last November), reflecting sentiments similar to those during Rishi Sunak's tenure in October 2023.
• Expectations of Labour: When asked about potential future government actions:
  • 77% believe that the Labour Party is likely to increase personal taxes, while 66% foresee increased government borrowing.
  • The public is split on whether they will increase spending on public services, with 40% believing that they will and 45% believing that they won’t.  Similarly, 43% believe they will increase long-term investment spending.  Even more, 51%, think they will decrease spending on public services.
• Expectations of the Conservatives and Reform UK: Three in five (59%) Britons also think it is likely that if the Conservatives were in government, they would increase taxes they personally pay. Just over half (53%) believe the same about Reform UK.  A majority, although less than under Labour, also believe that the Conservatives (56%) and Reform (52%) would increase borrowing.  However even fewer believe that the Conservatives (29%) or Reform (34%) would increase spending on public services than think it would happen under Labour.
• Labour’s pre-election lead on key issues drops or is lost altogether after over a year in government: The lead that Labour had before the election as the party with the best policies to address many key issues has now seen large cuts or been lost altogether:
  • Managing the economy: Labour had a 6pt lead over the Conservatives in June 2024.  Now it is a near three-way split between themselves (18%), the Conservatives (16%) and Reform (14%).
  • Improving the NHS: Labour’s 23pt lead over the Conservatives pre-election has fallen to an 8pt lead over Reform now.
  • Managing immigration and asylum: Labour’s 6pt lead over Reform in June 2024 is now a clear 16pt lead for Reform over Labour.
  • Reducing the cost of living: Labour’s 13pt lead over the Conservatives during the campaign is now a three-way split between Labour (14%), the Conservatives (14%) and Reform (15%).
  • Setting the right level of tax and spend: Labour’s 10pt lead over the Conservatives pre-election is also now a three-way split between Labour (16%), the Conservatives (15%) and Reform (14%).
  • Dealing with crime and ASB: Labour’s 9pt lead over the Conservatives in June 2024 is now a 6pt lead for Reform over Labour.
  • Furthermore, in each case around a third or more say no party or don’t know who has the best policies.

Commenting on the findings, Gideon Skinner, Senior Director of UK Politics at Ipsos, said:

Our latest polling underscores the entrenched pessimism among the British public regarding the current state of the economy and the cost of living. With 76% perceiving the economy as 'poor' and nearly half expecting cutbacks in their disposable income, it's clear that economic anxiety remains a dominant theme in public discourse. The anticipation that Labour might increase personal taxes and government borrowing – but even so still have to deal with spending cuts - adds another layer of tension ahead of the upcoming Budget, showing a public wariness towards what may be announced at the despatch box (even though people also think that taxes and borrowing would rise, and funding for public services fall, if the Conservatives or Reform were in power too).

We also see further evidence of the cost of governing on public perceptions of Labour since they’ve been in power.  Before the 2024 election, Labour led as the party with the best policies on nearly all the key issues, but now that lead has either been significantly cut back in the case of the NHS and education, been reversed into a lead for Reform on immigration and crime, or is now a three-way fight between Labour, the Conservatives and Reform on economic issues, tax and spend and the cost of living – with none of the parties impressing the public very much (indeed, on many issues “none of the above” is either in or near first place). While this still leaves time for Labour to take back the initiative, they clearly need to do more to address public concerns over their performance and start delivering improvements that people can feel make a difference to their day-to-day lives.

Technical note: 

• Ipsos interviewed a representative sample of 1,091 adults aged 18-75 across Great Britain. Polling was conducted online between the 17th-21st October 2025.
• Data are weighted to match the profile of the population. All polls are subject to a wide range of potential sources of error.