More Britons think economy is worsening than improving

More Britons thinks the economy is worsening rather than improving, new findings from KPMG suggest. 

Four in ten people said they thought the economy was ailing, while a quarter said it was improving, according to KPMG’s latest UK Consumer Pulse survey. 

Revised data from the Office for National Statistics this month showed there was zero growth in the economy between July and September. 

This week, Keir Starmer and Rachel Reeves have written to regulators asking them to come up with ideas for reform that could boost economic growth. 

According to the Confederation of British Industry, the economy is ‘headed for the worst of all worlds’ in 2025, amid a rise in employer national insurance contributions from April. 

The CBI’s latest growth indicator survey found that private sector firms expect to cut down on hiring, reduce output and for prices to increase in the first three months of 2025. 

Pessimism about the state of the economy was highest among people surveyed aged 65 or over, while those in the 25 to 34 year-old age category were the most optimistic, KPMG said. 

While plenty of Britons are feeling jittery about the health of the economy, many households are entering the new year feeling more financially secure, according to the research by KPMG. 

Fifty-seven per cent of around 3,000 people surveyed said they felt financially secure, while 21 per cent feel insecure about their finances. 

Half of the survey’s respondents said they could spend freely, while just three per cent said they could not pay essential bills or were getting into debt to do so. 

Eighty per cent of consumers said they planned to make big ticket purchases next year, with a holiday the most popular option. 

Linda Ellett, head of consumer, retail and leisure at KPMG UK, said: ‘Whether due to confidence in their ability to spend or their ability to manage household bills, it is positive news that the majority of UK households are heading into 2025 feeling financially secure.

‘Despite four in ten people saying the UK economy is worsening, a higher amount than those thinking it is improving, planned spending on big ticket items over the next twelve months looks healthy. 

‘Whether that spend comes to fruition will depend on a range of factors, including continued reduction in interest rates and whether perception about economic worsening becomes a reality in the form of increased job insecurity.’

This week, separate data from Barclays suggested that higher consumer spending on things like shows, concerts and the cinema is expected to continue rising in 2025, while spending on essentials declines. 

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