Inflation has hit a 30-year high in the UK, and the British public is certainly feeling its effects. The latest research by Redfield & Wilton Strategies finds more Britons are reporting a deterioration in their financial situation than at any point in the last year, a grim reality that most do not expect to improve any time soon.
This week, 43% of respondents indicate that their financial situation has worsened in the past three months, up from 31% on 3 January 2022. At this time last year, by contrast, 25% said their financial situation had worsened in the previous three months, while 64% said it had stayed the same. Now, 46% say their finances have stayed the same, while just 11% say theirs have improved.
The increased economic strains do not appear to be hitting all age groups equally: 35-to-44-year-olds (48%) and 45-to-54-year-olds (49%) are the most likely to say their financial situation has worsened in the last three months, while those aged 65 and above (33%) are the least likely to give this response. Meanwhile, though a plurality (45%) of 25-to-34-year-olds also indicate that their finances have worsened within this time frame, the age group also sees a notable 20% expressing that their financial situation has improved.
The public’s outlook for the next three months is just as bleak as its reports of the previous three: 47%—a plurality—expect their financial situation to worsen in the next three months. In our poll three weeks ago, 50% held this expectation, the highest proportion we have recorded since we began asking this question in October 2020. As with the previous question, this response has experienced a significant increase in recent months, growing from 32% on 3 January 2022, and from just 22% in September.
31% now say they expect their financial situation to stay the same in the next three months, a position which was consistently selected by a plurality of respondents until the end of January. Only 12% of members of the public think their financial situation will improve in the next three months.
As with the previous question on how respondents’ financial situations have changed, 35-to-44-year-olds (53%) are among the most likely to say they think their financial situation will worsen in the next three months, while the same proportion (53%) of respondents aged 65 and above give this response. 18-to-24-year-olds are conversely the most likely to predict their finances will improve (25%). Still, a majority or plurality of all age groups expect their financial situation will deteriorate in the coming months.
Concerns surrounding the rising cost of living are undoubtedly one of the main factors fuelling these dismal predictions for the future. Britons are well aware of the current situation, with 67% in a 16 February poll saying they had heard or read ‘a significant amount’ about rising prices in the UK—the highest percentage among a number of topical issues.
It was also the development that Britons seemed to care about most: 61% said rising prices in the UK have mattered to them ‘a significant amount.’ Furthermore, a majority (54%) two weeks ago selected the rising cost of living—rather than the pandemic (14%), a potential Russian invasion of Ukraine (14%), climate change (11%), or the Downing Street parties (4%)—as the development they found most concerning at the moment.
More than just causing worry, the inflation the country is experiencing has propelled three-quarters of respondents to adjust their behaviour: in a 9 February poll, 20% said they had ‘significantly changed,’ 29% had ‘moderately changed,’ and 27% had ‘somewhat changed’ their spending habits and behaviour in response to rising prices. The previous week, 45% indicated that they had purposefully reduced their spending on groceries, 44% on restaurant and take-away food, 43% on clothing, and 40% on entertainment and leisure activities.
39% also reported purposefully reducing their spending on heating, while a majority of Britons in the same poll expressed they were ‘very’ (33%) or ‘fairly’ (29%) concerned about their ability to afford their energy bills this year. Such stress is particularly heightened among respondents aged 35 to 44, 50% of whom said they were ‘very’ concerned about their ability to afford their energy bills.
With inflation set to top 7% in April—the same time as National Insurance contributions and the cap on energy bills will increase—the British public seems to be correct in predicting that economic conditions will get worse before they get better. The same is likely true of the Government’s current struggles in the face of the crisis: this week, Chancellor of the Exchequer Rishi Sunak received his lowest-ever net approval rating, while last week, the Government received its lowest-ever net approval rating for its performance on the economy. Public frustration with the Boris Johnson Government therefore appears to be climbing just as quickly as prices are.