Majorities in Four European Countries and the U.S. Believe Economy will be Worse in 2008

Across the globe, financial markets are fluctuating wildly and both investors and non-investors alike are worried about what the year ahead will hold financially. A new Financial Times/Harris Poll finds that large majorities of the public in Great Britain (61%), Italy (57%), France (55%), the United States (54%), and Spain (54%) believe the economy in their respective countries will be worse in 2008 than it was in 2007. Germany is the country where attitudes are slightly different as just one-third (33%) believe their economy will be worse while just under half (47%) believe it will be neither better nor worse.

These are some of the results of a Financial Times/Harris Poll conducted online by Harris Interactive^® among a total of 6,676 adults aged 16 to 64 within France; Germany, Great Britain, Spain, the United States, and adults aged 18 to 64 in Italy, between January 10 and 21, 2008.

While there is mostly pessimism about the economy of each country, when it comes to personal financial situations in 2008, people are a bit more optimistic. Pluralities of adults in Italy (44%), Great Britain (43%) and the U.S. (41%) believe their personal finances will neither improve nor worsen in 2008. Germans are slightly more likely to believe their personal finances will neither improve nor worsen than they are to believe their finances will get worse in 2008 (38% compared to 36%), while Spaniards are equally divided (38%). France is the only country where a plurality believes their personal finances will worsen (42%).

One reason for this overall lack of optimism may have to do with the prices people pay for things. Overwhelming majorities in each of the six countries (ranging from 87% to 97%) believe that, in the past few months, the prices for food, energy and housing have increased. And, looking forward, they do not expect a change as similar numbers (ranging from 87% to 93%) think that prices for most of the things they buy will increase over the next year.

Adults in these six countries recognize that the economic challenge facing their national governments is a large one. Four in five (79%) French adults say the economic challenges facing their country are extremely or very big. Just under three-quarters of adults in Germany (73%), the United States (73%) and Italy (72%) also think the economic challenges facing their respective countries are extremely or very big. Adults in Great Britain and Spain do not think the challenges are as severe. Just over half in both countries (51% and 54% respectively) say the economic challenges are extremely or very big while 45 percent of British adults and 38 percent of Spaniards each say the challenges are somewhat big.

Adults in these countries recognize the challenges their countries are facing, but do not think the national governments are able to solve them. Two-thirds of Italians (68%), over half of French adults (63%), Americans (59%) and Britons (58%), as well as pluralities of Germans (46%) and Spaniards (44%) all believe the national governments of their countries will not solve the economic challenges facing their country very well. Germans and Spaniards are more likely than the other countries to at least think the governments will solve the problem somewhat well.

As the saying from the 1992 U.S. presidential campaign goes, "it’s the economy, stupid." When economic conditions are good and people have money in their wallets and their 401(k)s and other investments are growing, they are free to focus on other issues – whether it is the environment, health care, immigration or the war in Iraq. When, however, economic conditions are not going that well, this focus becomes more laser-like and singular on the economy. This is what is happening now and, until people perceive things are getting better, they are going to expect their governments to focus on what they are focused on – improving economic conditions.

"Do you think the economy in [the UK, France, Germany, Italy, Spain, the U.S.] will be better or worse in 2008 than in 2007?"

Base: All EU adults in five countries and U.S. adults

Note: Percentages may not add up to 100% due to rounding

"Do you think that your personal finances will improve or worsen in 2008"

Base: All EU adults in five countries and US adults

Note: Percentages may not add up to 100% due to rounding

"In the past few months, would you say that prices for food, energy and housing have increased or decreased?"

Base: All EU adults in five countries and US adults

Note: Percentages may not add up to 100% due to rounding

"How much do you think that prices for most of the things you buy will change over the next year?"

Base: All EU adults in five countries and US adults

Note: Percentages may not add up to 100% due to rounding

* Less than 0.5%

"How big are the economic challenges facing the national governments of [the UK, France, Germany, Italy, Spain, the U.S.]?"

Base: All EU adults in five countries and US adults

Note: Percentages may not add up to 100% due to rounding

"How well do you think that the national governments of [the UK, France, Germany, Italy, Spain, the U.S.] will solve the economic challenges facing the country in 2008?"

Base: All EU adults in five countries and US adults

Note: Percentages may not add up to 100% due to rounding

This FT/Harris Poll was conducted online by Harris Interactive among a total of 6,676 adults (aged 16-64) within France (1,128), Germany (1,135), Great Britain (1,137), Spain (1,114) and the United States (1,015) and adults (aged 18-64) in Italy (1,147) between 10 and 21 January 2008. Figures for age, sex, education, region and Internet usage were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online.

All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Interactive avoids the words "margin of error" as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal.

Respondents for this survey were selected from among those who have agreed to participate in Harris Interactive surveys. The data have been weighted to reflect the composition of the adult populations of the respective countries. Because the sample is based on those who agreed to participate in the Harris Interactive panel, no estimates of theoretical sampling error can be calculated.

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