As promised, it’s time to take a wider look at economic optimism again.
The graph above shows four regular monthly trackers of economic optimism. GfK NOP and Ipsos MORI both ask people each month if they think the economy will get better or worse over the next 12 months – these are the net figures of those thinking better minus those thinking worse. TNS ask a similar question for the Nationwide, but asking about the next 6 months. YouGov in the Telegraph polls ask about how people think their own household will fare over the next 12 months.
Since we last looked at the graph in April, you can see the nacent turnaround in economic optimism then has grown into a full scale recovery now. MORI is so far the only company to show net economic optimism in positive territory, but everyone shows the public becoming more and more optimistic about what lays in store for the economy. Note that this doesn’t mean people are optimistic about the economy now – other questions show people still think it’s in a pretty dire state – but they do think things will improve in the next twelve months.
What does this mean politically? It’s harder to say than people think. The naive response is to assume the economy getting better means the government recover support – after all, the economy going down the pan damaged their support, didn’t it? In a fair world it would, and I suspect to some extent it does, since optimism is likely to make people feel warmer towards the fear in charge than despair. However, the Major government notably failed to make any political recovery to match the economic recover at the tail end of the last Conservative government, and a good argument can be made that people thinking the recession is ending will make them less risk adverse and more willing to risk a change of government.
Speculation aside, let’s look at the figures. Here, once again, we have the average of the economic confidence figures, and Labour’s average lead in the polls each month.
Still some relationship there at the early stages – Labour went down at about the same time, recovered a bit at about the same time and so on. The relationship seems to break down entirely though from the start of this year: economic confidence has returned, but doesn’t seem to have done Labour any favours at all. It appears economic troubles dragged the government down, but there’s no sign yet of economic recovery picking them up again.