While there is evidence of a "Burnham bounce" for Labour in opinion polls and local by-elections, overall support for the party is still low in historical terms. Economic confidence reflects a similar trend, according to Paul Ormerod.
GfK’s Consumer Confidence Index rose to a two-year high last month, but the balance remains negative at -14 points, indicating that many households are more pessimistic than optimistic. Similarly, the CBI’s industrial trends survey in August showed an improvement from the previous month. However, more manufacturers expect a decrease in output over the next three months, with a balance of -7 points.
The financial balance sheet of the private sector is reportedly in its best shape in 25 years, with both companies and households repaying debt. Despite this, private sector confidence in the economy is described as fragile. Households have saved more since the pandemic, with an average of 8.8% of disposable incomes saved in the most recent three years, compared to 5.6% in the three years prior to the Covid crisis.
Paul Ormerod, an Honorary Professor at the Alliance Business School at the University of Manchester, states that confidence is the key factor needed by the private sector. He notes that Chancellor John Healey has helped reduce uncertainty by avoiding leaks and denials regarding tax policy, and his commitment to fiscal discipline is seen as more credible than that of his predecessor.