Mon, Jul 04, 2011 - Page 10 News List

Britons think economy in decline

CONSUMING NO MORE:The poll showed that 78% of respondents had stopped buying luxury items, a figure which rose to 90% among those aged between 18 to 44

Reuters, LONDON

Two-thirds of Britons think the economy is getting worse and most are cutting back drastically on their spending to make ends meet in the face of rising food, fuel and energy prices, according to a poll yesterday.

The findings follow a string of retail failures in recent months as shoppers cut back on non--essentials while Britain’s economic recovery remains sluggish.

The ICM poll for the News of the World newspaper appeared to indicate that many agreed with the opposition Labour party’s view that deep government spending cuts were happening too fast.

In total, 82 percent believed the Conservative-led coalition’s -austerity measures were inevitable with Britain’s budget deficit running at about 10 percent of GDP, and 58 percent of those polled said they were necessary.

TOO QUICK

However, two-thirds of those who supported the measures felt they were being brought in too quickly.

The survey also found that 52 percent thought British Prime Minister David Cameron and British Chancellor of the Exchequer George Osborne, both from the Conservative party, were not doing a good job of running the economy. Overall, only 23 percent thought the economy was getting better.

However, more Britons — 41 percent — would still prefer to have the Conservatives in charge than Labour (25 percent).

Labour has called for an emergency reduction in the sales tax until the economy improves and argue that the austerity measures are stifling growth.

However, the government says it needs to stick with the policy of deep cuts to virtually eliminate the deficit by 2015 and maintain the confidence of the money markets.

Official data last week showed that Britain’s economy grew by just 0.5 percent in the first three months of last year, a muted bounce from a dismal 0.5 percent contraction in the fourth quarter of 2009.

CUTBACKS

Figures also showed the biggest fall in households’ disposable income in more than 30 years, hit by rising taxes and inflation.

The ICM poll of 1,001 adults found more than two-thirds said they were making cutbacks with almost one in three going without basics such as food or heating.

Seventy-eight percent had stopped buying perceived luxury items, such as new furniture and cars, a figure which rose to 90 percent among those aged between 18 to 44.

The downturn in consumer spending has led to the recent collapse of retailers, including wine seller Oddbins, home improvement firm Focus DIY, home furnishings retailer Habitat UK, Moben Kitchens owner Homeform and fashion retailer Jane Norman.

Others such as mother and baby products firm Mothercare, chocolatier Thorntons and electrical firm Comet are closing hundreds of stores between them.

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