56% of Britons think the economy’s heading south over the next year. And it gets worse—57% reckon Rachel Reeves’ upcoming Budget will directly hit their wallets.
Labour swept into power with one big promise: economic growth. But fresh polling from City AM/Freshwater Strategy suggests voters aren’t buying it. Three in four Brits have lost faith in the government’s growth plans, and older voters are particularly spooked about pension raids and property taxes.
So what’s driving this pessimism, and why has trust collapsed so quickly?
The Numbers: Voter Confidence Has Cratered
Let’s break down the damage. The latest poll of 1,250 voters paints a pretty grim picture:
- 56% expect the economy to worsen in the next year
- 74% lack confidence in Labour’s growth mission
- 57% believe the Budget will harm their personal finances
- 80% of over-55s think they’ll be worse off
That last figure? Brutal. Just one in 100 older voters think the Budget will improve their situation. When you’re polling worse than a dodgy kebab shop, you’ve got problems.
Why Older Voters Are Panicking
The sky-high pessimism among over-55s isn’t random. There’s growing fear that Labour will target pension pots and property—potentially through changes to lump sum allowances or tax relief on pension contributions. These moves could raise billions for the Treasury, but they’d also wallop retirees who thought they’d planned ahead.
And let’s be honest: when 80% of a demographic thinks you’re coming for their savings, you’ve got a messaging problem at best.
Living Standards: The Autumn Budget Hangover Lingers
Remember when Labour promised things would get better? Voters don’t.
Nearly half of respondents (48%) say their living standards have worsened over the past 12 months. Only 16% reckon they’ve improved. That’s not a ringing endorsement after a year in office.
And the gloom isn’t lifting. 43% expect their household finances to deteriorate over the next year. That kind of sustained pessimism doesn’t just hurt polling numbers—it crushes consumer confidence and economic activity.
Trust Is Crumbling Fast
Labour still leads on healthcare and house building, but even that support has dropped by eight points since September. And here’s the kicker: neither of those issues ranks as a voter priority right now.
What do people care about? Reducing immigration and easing the cost of living—the two topics dominating kitchen table conversations across the UK.
Rachel Reeves’ Inflation Gamble
Chancellor Rachel Reeves has staked her reputation on one thing: bringing down inflation. Currently sitting at 3.8%, getting that number down is critical—not just for voters, but for the government’s borrowing costs.
Here’s the problem: markets predict interest rates will stay at 4% for the rest of the year unless inflation drops faster. And economists are warning that any move to slap VAT on more goods could trigger another price rise, making Bank of England policymakers even less likely to cut rates.
The VAT Question Everyone’s Avoiding
Government officials insist their manifesto commitment not to raise VAT “stands.” Notice the quotation marks? That’s political speak for “we’re keeping our options open.”
With a fiscal hole estimated at around £30bn, a VAT hike looks tempting. But it’s also politically toxic—and could backfire spectacularly if it drives inflation higher and keeps interest rates elevated.
Conclusion
Labour’s growth mission is facing a serious credibility crisis. Most Brits expect the economy to worsen and their finances to take a hit—trust between the government and taxpayers is breaking down fast. The upcoming Budget isn’t just about balancing books, it’s about proving Labour can deliver on its core promise.
Can Rachel Reeves pull off a turnaround? We’ll find out soon enough. Stay ahead of UK economic policy shifts by following Budget updates and tracking key economic indicators.
FAQ
Q1: Why are older voters so pessimistic about the Budget?
A: Over-55s fear Labour will raid pension pots and target property through tax changes on lump sums and pension contribution relief. These moves could raise billions but would hit retirees hardest—hence the 80% pessimism rate.
Q2: What’s Labour’s main economic priority right now?
A: Getting inflation down from 3.8% to reduce borrowing costs and allow interest rate cuts. Chancellor Rachel Reeves has made this her central focus ahead of the Budget.
Q3: Could VAT rates actually rise despite Labour’s manifesto promise?
A: Government officials say the commitment “stands,” but that careful wording leaves wiggle room. With a £30bn fiscal hole, expanding VAT to more goods remains a tempting—if politically risky—option.
Q4: What do voters care most about right now?
A: Reducing immigration and easing the cost of living top the list. Healthcare and house building—where Labour polls best—aren’t current priorities for most Brits.
Q5: How bad is voter confidence in Labour’s growth plans?
A: 74% of Brits lack confidence in the government’s growth mission after one year in office. Only 16% say their living standards have improved since Labour took power.
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Effective Date: 15th July 2025
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