Exclusive:Cost-of-living overtakes the NHS as the top concern for Scots
Almost 80 per cent of Scots think the economy is in worse shape now than it was a year ago.
The cost-of-living crisis is now the biggest issue for Scots, overtaking the NHS for the first time in three years.
A new tracker survey suggests concerns about the health service have now been displaced by concerns about the cost-of-living and inflation, with 47 per cent of Scots saying it is the most pressing issue.
The Understanding Scotland Economy Tracker by the David Hume Institute and the Diffley Partnership paints an increasingly downbeat picture of the economic mood across Scotland following the Holyrood election earlier this month.
The tracker also found that 77 per cent believe the economy is worse now than it was a year ago, up from 62 per cent in February.
A further 73 per cent expect economic conditions to deteriorate further over the next 12 months.
Despite this, three in 10 Scots think the country is heading in the right direction, up from 22 per cent in November.
The survey also found over half of Scots are having to cut back on leisure activities and reducing non-essential spending due to money worries.
Over two in five Scots also say they are forced to dip into their savings to cope with rising costs.
“Consumer confidence is fundamental to a thriving economy,” said Susan Murray, director of the David Hume Institute.
“When people are cutting back on leisure activities, reducing non-essential spending and dipping into savings to cover everyday costs, that has a direct impact on the wider economy, investment and local communities.
“The challenge for Scotland’s political and business leaders now is to rebuild confidence at a time when public pessimism about the economy, and rising cost-of-living is deepening and expectations for the future are becoming increasingly fragile.”
The economy tracker also identifies early warning signs in the labour market and in housing affordability. Less than half of Scots are confident they could find a new job within three months if they had to, and only six in 10 said they could cope with higher housing costs over the next six months.
A total of 68 per cent agree there is a collective responsibility from the government to ensure there is a safety net available during hard economic times.
Scott Edgar, senior research manager at the Diffley Partnership, said: “Coming just after the Scottish Parliament election, these findings underline the scale of the economic challenge facing the new parliament.
“While there has been a modest improvement in how people feel about the country’s direction, that sits alongside a much more pessimistic view of the economy and living standards.
“The cost-of-living is the defining issue for Scots, overtaking the NHS as the top concern, and shaping how people are managing their day-to-day lives.
“The task now for decision-makers is to rebuild confidence at a time when financial pressures remain entrenched and expectations for the future are increasingly fragile.”
Social Justice Secretary Shirley-Anne Somerville said: “As the First Minister has said, tackling the cost-of-living crisis is top of his agenda.
“That is why we will be taking bold action to help people keep more money in their pockets - including introducing legal price caps on a range of essential food in big supermarkets, expanding support for childcare to all children from nine-months to the end of primary school and introducing a £2 nationwide cap on bus fares to lower the cost of people’s commute.”
A fall in inflation led to a slight improvement in UK consumer confidence this month, according to GfK’s long-running Consumer Confidence Index, which rose by two points in May but is still four points lower than this time last year at minus 23.
Despite confidence in the general economy over the coming year rising five points, it remains five points lower than last May at minus 38, while confidence in personal finances over the next 12 months is up two points to minus two, four points down on a year ago.
The major purchase index, an indicator of confidence in buying big ticket items, dropped two points to minus 20, four points lower than May last year and its lowest level since last January.
Key income groups recorded “more worrying” major purchase scores, with confidence among those earning between £14,500 and £24,999 posting a 19-point drop to minus 33.
Similarly, there was a steep fall within the average household income group earning between £35,000 and £49,999, with a 10-point drop to minus 27.
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