THE LATEST YouGov HEAT (Household Economic Activity Tracker) report reveals that the public felt more confident about the economy in the first month of 2012 than in any month of 2011 except for April. The HEAT Index rose to 92 (on a scale of 0-200), which, apart from that April spike, is the highest level since mid-2010.
An interesting twist behind these top line figures is that the bump has been driven by a shift from negative to neutral sentiment, with no increase in the numbers of people feeling positive. We are not yet ready to feel optimistic about the economic future but worries have eased slightly.
While overall confidence in the economy is higher, the threat that we face from unemployment has become an increasing worry. Last year it outstripped inflation, interest rates and energy prices as an area for concern and is now considered a major threat to the economy by 27 per cent of the population (up from 16 per cent in early 2011). This concern is reflected in the views of those who are unemployed and seeking work. In July, 41 per cent thought it likely they would find work in the next six months, compared to 30 per cent who thought it unlikely. And today, more people expect to still be out of work in six months than think they’ll be back in a job with those numbers now 32 per cent likely and 36 per cent unlikely.
Rising economic confidence offers some positive signs for the economy, but that rise has been prompted by a movement to neutral sentiment. And as unemployment fears show, there are still major areas for concern. For now, we can call the mood improving but fragile. Stephan Shakespeare is the chief executive of YouGov
