Tax, not credit crisis, vexes Britons

London: Britons emerge as some of the least concerned about the international credit crisis, believing it has not had a big effect on their daily lives, but they are not so confident about the future.

More worrying for the authorities at the Treasury and the Bank of England (BoE) is that if the credit crisis slows the economy seriously, complicating policy trade-offs for governments and central banks, people in the UK have very little faith that wise choices will be made.

In the Financial Times/Harris poll, the British appear more concerned about their own policy makers than are the Germans, Americans, Spanish, French or Italians, but they would not like a change.

Britons are convinced, even though they do not hold the Treasury or the BoE in particularly high regard, that alternatives, particularly European ones, would be worse.

In Britain, 40 per cent of households cited "rising prices of food and energy" as the biggest problem, well above all other categories. Households were also more concerned about "excessive taxes" than people in any other country apart from Italy.

But it was in the performance and trust of those running the economy where Britain really stands out even though the UK's economic performance has been strong internationally. Two-thirds are "not confident at all" in the government's ability to deal with the economic difficulties.

UK respondents also had significantly less faith in the bank's ability to set interest rates than countries in the euro zone had faith in the European Central Bank: 39 per cent said they were not confident at all about the Bank's rate-setting.

Fears about the impact of the global financial crisis vary markedly across Europe, with the Italians, Spaniards and French worrying most, according to the survey. The British, alongside Germans, are much more relaxed.

Just 19 per cent of Germans and only 23 per cent of those polled in Britain expected recent financial market events to have a "major" or "moderate" impact on them, compared with more than half of Italians.

The low figures in the UK and Germany are likely to reflect the strong momentum in both economies and the continued strength of labour markets with high levels of job creation and falling unemployment.

Resilient economy

In Britain, the survey also provides some evidence that the public accept the government's claim that the economy is more resilient than many of its peers. But people do not necessarily think the good times will last.

More than a third think their own financial position will deteriorate over the next year, a proportion that is on a par with Italy, better than France - where almost half think things will get worse - but worse than Spain and Germany where fewer households are pessimistic.

But Mervyn King, BoE governor, has no need to fear losing control of interest rates to the ECB as an even greater percentage, 46 per cent, thought economic performance would be worse if Britain were in the euro zone. Some 44 per cent thought European Union membership was already hurting the economy.

- Financial Times