UK economy will enter 'grey gloom' until polling day, economists say

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UK voters will enjoy higher wages but continue to struggle with mortgages and rent ahead of the next election as the cost of living crisis gives way to an uneven 'grey gloom', according to a Financial Times economists survey.

Article originally published by The Financial Times. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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02 Jan 2015

A majority of the 90 respondents to the FT’s annual poll of leading UK-based economists said despite falling inflation voters would feel little improvement in their living standards before the general election expected this year.

With prices remaining far higher than before the inflationary surge, Andrew Oswald, a professor at Warwick university, said a partial catch-up of wages in 2024 would feel like swapping “black gloom” for “grey gloom”.

People on low pay will benefit from a big rise in the minimum wage and pensioners will still enjoy good savings rates, while renters and 1.5mn to 2mn households renewing mortgages will face much higher costs, respondents said.

“The broadly felt cost of living squeeze of the last 18 months will give way to a backdrop in which some households enjoy a recovery... while others