We're Feeling Fine - But Are Unsure About The Economy

British public have optimism over their own futures -- but are less cheery over the country's prospects

Ipsos's eagerly awaited 'Mood of the Nation' report, which measures the level of economic optimism and concern over redundancy, was announced today -- which shows despite interest rate rises and high inflation, the British public are not downhearted.

The Ipsos index has tracked how public opinion has changed month-by-month in terms of their optimism about the economy, and how it will affect them. The results show that using a base level of 100 set in January 1995* the index reached a peak of 138 in March 2005. This has steadily declined, reaching a low of just 108 in September 2005. Since then it has crept back 4 points to 112.

Alistair Whitmore, Director of Ipsos Financial Services, said: "The Mood of the Nation report is an accurate barometer of how people feel about their economic future. It seems that people don't feel too worried about their own prospects into 2007, even though inflation and interest rates are both rising. Maybe this will change when interest rates for mortgage holders on fixed terms see their payments rise as the fixed term comes to an end and the bills for Christmas spending on credit cards land on the doormat".

There is a clear contrast between expectations for the economy as a whole and people's confidence in their own economic prospects. When asked if the general economic condition of the country will improve, just eight per cent said they thought it would.

Some 41% said the economy would stay the same, and 44% felt it would get worse. People remain more optimistic about their personal finances; 23% felt their financial circumstances would improve, 54% said they would stay the same while 20% felt they would get worse.

Redundancy is a fear that British workers appear to have only in the corner of their minds. From a low of 16% of those surveyed saying they were 'very' or 'fairly concerned' in March 2006, this increased sharply to 22% by December. By January 2007 this had dropped back to 17%.

Alistair said: "It appears that people have greater fears for the country as a whole than for themselves."

Technical details

Ipsos interviewed a sample of 1800 people chosen to be representative of the British population, aged 16+ over the period 11-17 January 2007. The Mood of the Nation index combines data on personal economic confidence, general economic confidence, fear of redundancy and the actual level of unemployed to give a single figure: this was set to 100 in January 1995.