Tagged 'austerity'

JWT London’s Q2 Austerity Index charts Britons’ property woes

Austerity Index 2014 Q2

Three out of five Britons believe London is doomed to become “a ghetto for the super-rich.” This is one of several provocative findings that surfaced in JWT London’s sixth Austerity Index report, revealing a boiling pot of anxiety and tensions that are condensing into a hard-line stance on housing market regulation. As competition rises and affordability dips, a backlash is finding its target in immigrants, “transplants” and investors: Over a third of respondents in our study would even make it illegal for non-nationals to own property in the U.K.

Along with tracking the usual metrics to gauge the effect of prolonged austerity on British consumers, the latest survey looks at housing, which is becoming a serious and emotive problem in Britain. As wages have stagnated and mortgage lending criteria have constricted, the outlook for aspiring property buyers seems bleak. JWT London’s survey shows that almost half of those yet to start on the property ladder make a direct link between home ownership and their own self-worth. And while 46 percent of those unable to get onto the property ladder fear for their futures, 48 percent have lost hope that their grandchildren will ever own property in the U.K.

Marie Stafford, Planning Foresight Director at JWT London, explains: “The significance of property in the population’s psyche is somewhat exceptional to the U.K. compared to our neighbours in Europe, where renting is the norm. The divide between the haves and have-nots is getting keener, and nowhere is this felt more strongly than in the property market.”

The full report is available to download at austerityindex.com, along with reports from previous quarters.

JWT London’s Q1 Austerity Index finds Brits seeking solace in edible escapes

Austerity Index 2014 Q1

“Edible escapism” is how Brits are getting themselves through the slow economic recovery, according to JWT London’s latest Austerity Index. In a survey for the fifth Austerity Index report, 69 percent of British respondents acknowledged splurging on treats in the last three months, with 41 percent of these indulgences in the food or drink category. Treating, it seems, is eating. The report identifies foodie treats being used not only as a coping mechanism for therapeutic purposes but also as a social lifeline, a way to share experiences.

2014 marks the fourth year of austerity measures in the U.K.—strict coping behaviors are now ingrained, living standards have declined, and weariness about austerity remains unchanged. But our Austerity Index data reveals pockets of positive uplift, and the U.K.’s splurging habits suggest that these little mood-boosters are fueling optimism, even when household finances are barely surfacing.

“The way to Britain’s heart is surely through its stomach,” says Marie Stafford, Planning Foresight Director at JWT London. “It is a sign of the power of the experience economy, our need for social contact and a marker of how far Britain has come in its relationship with all things epicurean that food and drink should become our chosen indulgence.” However, this throws the country’s polarization into sharp focus: “It seems even more unfair that many households struggle to purchase nutritious food,” says Stafford.

The full report is available to download at austerityindex.com, along with reports from previous quarters.

Photo Credit: JWT London

JWT London sees under-40s as most proactive and positive in face of austerity

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As the U.K. budget is announced, JWT London launches the fourth quarter of its Austerity Index report, marking a full year of data tracking the impact of prolonged economic adversity on British consumers and markets. The report reveals that the younger generation are taking matters into their own hands. Meet the Resilients, aged 18-39, who set themselves apart via a strikingly proactive and entrepreneurial approach to their finances, coupled with a comparatively upbeat attitude. Rather than waiting for rescue from any institution, the Resilients are taking their own measures. They are significantly more likely than any other cohort to have found an extra job or taken on more work (35 percent), bought items specifically to “flip” for profit (20 percent) and even started their own business (11 percent). Their resilience is also in evidence when it comes to a startling willingness to make tough decisions and sacrifices: 4 in 10 regularly skip meals to save money, nearly a third (30 percent) are selling items they actually still need or want, and 18 percent have moved to a cheaper city or town.

Despite being among the hardest hit by the austerity agenda—experiencing higher unemployment and negative earnings growth—the Resilients remain pretty positive. Their Austerity Index measure is 22 points below average, indicating that their assessment of austerity’s impact on their lives is less severe than most. Their positive outlook stretches to their appraisal of others, too: They are more forgiving toward brands and institutions, including the government.

Some of this positivity is likely down to youthful optimism, but we suspect that it’s also due to the generation’s sense of connectedness. This is the cohort that has grown up witnessing and harnessing the power of social networks, so they have greater faith in themselves and their communities to wield influence and to drive change. They may well be more in control than most in the face of austerity.

For details on the ongoing study, see austerityindex.com.

JWT London’s Austerity Index charts austerity era’s widening social disparity

Austerity Index

British Chancellor George Osborne’s Autumn Statement brought positive news for the U.K. economy. The forecast GDP growth for this year improved to 1.4 percent from 0.6 percent and was revised up for 2014, to 2.4 percent. Osborne claims that austerity is working. JWT’s latest Austerity Index suggests this is not the full picture and that many Britons are not seeing evidence of a recovery where it matters most: in their wallets. In fact, almost half of the 800 respondents we polled for our Q3 study reported having somewhere between nothing and £50 in disposable income each month.

At the same time, some have been able to relax the purse strings a little. The “Efforts to Restrict Spending” Index figure has fallen 81 points since Q2. While this is still small-scale movement in the greater scheme of things, it might suggest that consumer confidence is building in places. This suggests a two-speed recovery, one where some find their lives getting back to normal while others continue to struggle. The JWT Austerity Index shows wide disparities in the impact of austerity, with a difference of 251 points between the highest and lowest income groups.

Our finding is supported by recent analysis from Manchester University’s Centre for Research on Socio-Cultural Change, which shows that London and the Southeast have recovered more rapidly than other regions of the U.K. and that higher earners have become more prosperous since the crash compared with middle and low earners. With the U.K.’s first “social supermarket” for those on welfare opening in Yorkshire, it’s poignant to note that 13 percent of parents said they have been obliged to skip meals so their children can eat.

This polarization is not going unnoticed: In our study, 81 percent agreed that austerity has deepened the social divide in our country. And they want businesses to do their part: 65 percent call for brands to help those most affected by austerity. Contrary to Osborne’s assertion, austerity is not working for everyone, and as systems and institutions fail to address the growing chasm, there is a clear opportunity for businesses to seek ways to even out the disparities in economic fortune.

The Austerity Index survey was conducted using SONAR™, JWT’s proprietary online tool. The JWT Austerity Index is a quarterly study that analyzes the impact of prolonged economic adversity on British consumers and markets. The Q3 report is available to download here. The Q1 report is also available for download, here, as is the Q2 report, here.

Photo Credit: JWT London

Austerity Index Q2: Economy driving some Brits to desperate measures

Income-Boosting-Infographic-(SAVEFORWEB)

Britons are pulling out all the stops to keep their household coffers topped up through times of austerity, even to the point of engaging in actions they believe to be wrong. According to JWT London’s latest Austerity Index report, a small percentage of Britons (6 percent) reveal that austerity has forced them to do something they believe to be unethical. This underscores recent reports from charities and police federations noting a rise in desperate crime: people stealing to simply feed themselves or their families.

The most popular method our 600 respondents are employing to raise money is clearing out their attics, wardrobes and cupboards, with 46 percent hawking unwanted goods at car boot sales or online auctions. More poignant is the revelation that a fifth (22 percent) have been obliged to part with things they still wanted or needed to make ends meet. An enterprising 16 percent are resourcefully “flipping” items: buying goods with the intention of selling them at a profit.

Glimpses of an emerging peer-to-peer economy are discernible too: 15 percent of respondents are selling their skills and knowledge to others, and 4 percent are making money from unused assets in their home, like parking spaces, storage space or spare rooms. (Peer Power is one of JWT’s key trends for 2013.) Finally, a substantial number are taking their chances with Lady Luck: 42 percent are trying to win competitions, and 12 percent have started playing the lottery. Tough times are driving the nation to ever-greater levels of resourcefulness.

This Austerity Index survey was conducted in June using SONAR™, JWT’s proprietary online tool. The JWT Austerity Index is a quarterly study that analyzes the impact of prolonged economic adversity on British consumers and markets. The Q2 report is available to download here. The Q1 report is also available for download, here.

Photo Credit: JWT London