The cost-of-living crisis has dragged on for more than two years now, so no wonder we’re all down in the dumps. It’ll take time before we remember what optimism feels like. It can’t come fast enough for Prime Minister Rishi Sunak.
This morning we learned that GDP grew by 0.2 percent in January. It’s not much, but at least the UK economy didn’t shrink, like it did in December (although only by 0.1 percent).
The economy has shrunk in five of the last seven months, so we we’re a long way from those sunlit uplands. Yet there are reasons to be positive.
First, thanks to last week’s Budget and November’s Autumn Statement, 27million workers will get on average extra £900 extra this year.
By some calculations, Chancellor Jeremy Hunt’s package of expansionary measures will add 0.5 percent to GDP, mostly by boosting demand.
Pensioners feel left out by the recent budget, but at least they’ll get an inflation-busting 8.5 percent hike to the state pension from April.
That’s on top of last year’s 10.1 percent.
Things will get better in April, when the energy price cap is expected to fall from £1,928 a year to £1,690, saving the average average dual-fuel household £238 a year.
So there’s good news out there but it won’t be enough to rid us of the big wet cloud of gloom that has settled on our island.
Brits are now some of the unhappiest people in the world.
Heaven help the good people of Uzbekistan. They’re the only ones who rank lower than us in a new global wellbeing index, The Mental State of the World in 2023.
Given the depleted state of too many of our boarded-up and half-derelict high streets, it isn’t hard to see why Brits are on a downer.
We’ve in lousy health, collectively, with almost three million of working age saying they aren’t physically or mentally able to hold down a job.
A staggering 9.25 million are now economically inactive and living off benefits.
The economy is sunk, our politicians are useless, taxes have gone through the roof and we’ve just had the fourth wettest winter in history.
We might need a little bit of perspective, here. Apparently, we’re even more unhappy than people in the Yemen and Ukraine, and they’re both at war.
It’ll take more than a fraction of a percentage point of economic growth to shake us out of our misery, and that’s bad news for Sunak.
Yet there are reasons to be cheerful.
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Inflation is proving stubborn but analysts reckon it could drop to two percent by April.
The Bank of England could start cutting interest rates by May, although I suspect June is more likely.
We appear to have avoided a house price crash, with the average property price up 1.7 percent over the last year.
Unemployment is low at just 3.9 percent – most people can find work if their physical and mental health allows.
The pound is bouncing back strongly, making our foreign holidays cheaper.
Others are doing worse than us, with the mighty German economy mired in recession. And while the US economy is booming, President Joe Biden isn’t getting the credit. US voters are miserable, too.
The UK still faces a mass of challenges. This government is worn out, but Labour leader Keir Starmer is hardly an inspiring emissary of hope.
So perhaps we are right to be gloomy, but there’s a danger that it has become a habit and we won’t notice when things do finally get better.
As John Cleese said in his film Clockwise, it’s not the despair, it’s the hope that kills you. That may explain why Brits are so glum right now. Expecting the worst is less painful than hoping for the best.
