UK economic confidence stuck in a rut as US recovers

Stephan Shakespeare
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THE September data for YouGov’s HEAT (Household Economic Activity Tracker) is out and I’m afraid to report that it continues to tell the same story that we have seen for the last few months – Britain’s economic confidence is stuck in a rut, neither improving nor worsening.

The Index score is at 93 (out of 200), unchanged from August. This is exactly half way between the 12-month high of 98 recorded in December 2011, and the low seen in March this year at the peak of the spring rally in confidence – it confirms a largely unmoving confidence level.

The nine numbers for this year – 92, 93, 98, 96, 95, 94, 96, 93, 93 – are, that slight spring boost aside, very consistent and paint a picture of a population that now knows what to expect and can’t see that changing.

Delving into the deeper data (the index score is an amalgamation of household economic situation, job security, house value perception and business activity at work) we can see that there are increases in perception of house prices reversing what looks like a temporary downward blip in August with the other variables either stable or falling away slightly.

So no encouraging news in the UK, but signs are a bit more positive in the US.

For the first time in the 18 months the survey has been running there the score has hit 100, meaning that positivity and negativity are essentially equal.

Interestingly, the rise this month is largely driven by an increase in optimism for the next 12 months rather than any change in current situations.

With an election just around the corner and an incumbent president ahead in the polls (49 per cent versus 45 per cent in the latest Economist/YouGov Poll) an increasing feeling of economic optimism can only be positive news for Barack Obama.

Stephan Shakespeare is CEO of YouGov