AWEEK from today, George Osborne will deliver his post-election Budget. It will be just over five years since he stood at the despatch box and delivered his first financial statement when he stated one of the aims was to “give confidence to our economy.” But has the chancellor succeeded?
In simplistic terms, he has. The YouGov/Cebr Consumer Confidence Index shows that economic optimism is higher than it was in June 2010. It has increased solidly since the start of 2013 and now stands at its highest level since before the financial crisis.
However, the recovery in confidence has been patchy across Britain. The latest figures from our Household Economic Activity Tracker show that consumers in the south-east had the greatest economic optimism (6.5 points ahead of the national average), closely followed by London (5.7 points above the national average). In comparison, Wales and the north-east had the lowest levels of consumer confidence.
To show how far back they are, the last time economic optimism in the south-east was at the level currently experienced in the north-east was March 2013 – 23 months ago.
In his statement, it is likely that the chancellor will seek to remedy the situation by pushing investment towards the so-called “Northern Powerhouse.” In terms of boosting economic optimism, he needs to. The combined consumer confidence levels of the north-west and Yorkshire & Humber are currently at a level last seen in London and the south-east in August 2013.
Five years ago the chancellor set out a plan to bring confidence back to the economy. He has only partially achieved this, with London and its commuter belt being the main driver of economic optimism, leaving areas of the north lagging years behind. The challenge of the next five years is to increase confidence across the board. Our data suggest that with the south’s current power Osborne has his work cut out.
Stephan Shakespeare is chief executive of YouGov