Institute of Chartered Accountants of British survey released in late August, the third quarter of the UK business confidence fell to its lowest level since the economic crisis point, only 21.5%, significantly lower than the second quarter of 25.5%. Although 57% of enterprises believe that the business prospects, but about one-fifth of the opinion that prospects for the future.

At the same time, nearly half of British families with a lack of confidence in economic prospects. Although the August British family financial index rose to 37.9 37.2 the previous month, but very different from 50, and 50 is that the United Kingdom to improve the financial situation of the family’s “watershed.” Particularly disturbing is that nearly half of the family that its financial situation would “deteriorate.”

Confidence seems illusory, grip or touched, but in a modern economy, it has an impact on economic development, an important factor. 20th century 40’s, University of Michigan’s survey research center to study consumer demand impact on the Jingji cycle, for preparation of the consumer confidence index, followed by a number of countries in Europe and the preparation of Ye Xian Hou start building consumer confidence. At present, the household consumption and business confidence index, has become the measure of economists and policy makers an important indicator of economic situation.

After the British economy up to six quarters of a severe recession, the recovery in the fourth quarter of last year. Although last year’s fourth quarter and the first quarter of this year, the chain growth rate is only 0.4% and 0.3%, but the second quarter, the chain grew 1.2%, the fastest in recent years. But at the same time, business confidence and consumer confidence has not improved, but declined, this anomaly is indeed thought-provoking.

In fact, just looking at the UK occurred in the second quarter, several major events, this “abnormal” phenomenon is not difficult to understand. First, on May 12, the British Labour Party will lose the election, the Conservative Party and Liberal Democratic Party set up jointly by the first coalition government after the war, almost total repudiation of the Labor government’s economic policy, established to reduce the fiscal deficit as the core, to substantially reduce Government expenditure as the basic means of economic policy. Second, on June 22, the British Government announced a new emergency budget to reduce welfare spending and raising consumption tax scheme specific.

According to the British government’s emergency budget, to the end of the current government in 2015, will cut 32 billion pounds a year in government expenditure, including government departments, welfare programs, education, health care and other important expenses. At the same time, from early next year to sales tax from the current 17.5% to 20%. This measure is expected to increase annual revenue for the government 11 billion pounds. This is the British government since World War II the largest taken action to reduce expenditure.

Although the long term, the implementation of the policy conducive to the development of the British economy stable, but the overall situation of the poor in the world economy, the UK’s economic recovery is still in the “primary stage” of the moment, the new government to take measures to the appropriateness of the time, the majority of enterprises and Consumers certainly have doubts. Recently in the UK, economic growth will slow down and cut government spending to combat the analysis of low-income families often found in newspapers, the unemployment rate will be cut sharply because of public jobs increased by the endless warnings. All these have become the leading UK business and consumer confidence reasons.

Lack of public confidence has become the new British Government to face the problem. Because of lack of confidence will be bound business investment and household consumption, so that the faltering economy will lose some momentum again.

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