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Insider UK
Business
Peter A Walker

Scottish pessimism about the economy remains

Almost nine in 10 Scots think that economic conditions are worse than they were a year ago.

But while two thirds reckon economic conditions will get worse in the next 12 months, this figure has dropped from 81% expressing the same sentiment in November 2022, according to the latest survey from the David Hume Institute and the Diffley Partnership.

On the other hand, 55% of people believe Scotland is heading in the wrong direction - the first time a majority have expressed this opinion since the Understanding Scotland series began.

A quarter of those surveyed are not confident they would be able to pay for an emergency expense of £100 without having to take out a loan or borrowing money.

Seven in 10 reported that they have cut their energy use through methods like switching off lights and not using the oven to cope with rising prices and inflation, with roughly the same amount reducing spending on non-essential purchases.

The survey gathered insights from more than 2,000 members of the Scottish adult population. Fieldwork was conducted the week prior to Nicola Sturgeon’s resignation, with results providing a snapshot of public opinion at the outset of the SNP leadership campaign.

The majority of people (52%) identify healthcare and the NHS as one of the three most important issues facing Scotland today; followed closely by the cost-of-living crisis (45%).

There has been increased interest in education and schools as a key issue - cited by 15% of respondents, compared to 9% in November - correlating with coverage of strike action. Interest in other topics covered in the media, such as gender recognition reforms is limited: only 6% of respondents view this as one of the top three issues facing Scotland.

Additionally, labour market activity continues to be shaped in reaction to rising prices: one in five (20%) of people have changed or looked at changing jobs to earn more money, 12% have taken on more hours or paid work, and 7% have tried - unsuccessfully - to take on more hours/paid work.

However, financial fragility is not felt equally by the population.

While a quarter of Scots are not confident that they could pay an emergency expense, this rises to over a third (36%) of households with children and 46% of households in the most deprived areas.

For an emergency expense of £500, uncertainty in the ability to pay out of pocket rises to 45% of all households, 60% of households with children, and 66% of households in the most deprived areas.

In response to the cost of living crisis, people are being forced to engage in risky financial behaviours, with 42% having taken money out of savings to cover higher costs, 41% admitting to putting less money than usual into savings - with an additional 5% having stopped paying into a pension - all while a similar proportion (43%) have reduced their donations to charity.

With a quarter (25%) of people using credit cards when they otherwise would not have done and almost a fifth (18%) using buy-now-pay-later payment plans, the debt accrued during the cost-of-living crisis could extend its impact on the most financially vulnerable in Scotland.

Nonetheless, just over half (52%) of people have hope that their own financial situation will, at the very least, not worsen in the next year.

Mark Diffley, founder and director of Diffley Partnership, said: “It is clear that the ongoing cost of living crisis is still being felt acutely, and unequally, across Scotland.

“As we have seen in previous surveys, the impacts of the crisis go beyond immediate financial concerns and continue to have impacts on employment, health and levels of anxiety.”

Susan Murray, director of the David Hume Institute, added: “The survey shows a significant number of Scots continue to be unable to cope with the everyday cost of living and are losing sleep over their finances.

“These results should not be taken lightly - if people are too tired or stressed to concentrate at work, the economy as well as individuals suffer.”

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