Navigating the Cost of Living Crisis

Just as Europe is emerging from the COVID-19 pandemic, the continent is now preparing for a new winter of discontent brought on by an acute cost-of-living crisis which will likely remain at the top of the political agenda for months to come.  

Our new research in the UK, Germany, France and Poland shows that rising prices for food and energy risk destablising the continent and could bring about a new populist surge if this moment is not managed well.  

This is a critical moment for European governments: how they handle the crisis will have lasting effects not just on their own popularity but on trust in the system as a whole. Across all countries we surveyed in late July, people appear to be digging in for a long crisis and most are expecting social unrest and strikes this winter. With public trust already in decline after the pandemic, Europe appears more vulnerable to disruptive, anti-democratic forces who seek to exploit divisions. 

But there is reason to be hopeful: the public broadly understands the reasons for the crisis and wants to see both short term-relief and long-term change, for example on the transition to renewables.  

This research is part of an ongoing project called Navigating Uncertainty. The most recent wave of polling was conducted in late July with YouGov on a total sample of 7,000 people in UK, Germany, France and Poland.

Key findings: 

  • People everywhere are feeling the sting of rising prices. 97% of people in all countries say they are feeling the effects of rising prices and more than 7 in 10 people say they are struggling or just coping. One in five are drawing from their savings and one in ten are skipping meals (with low trust segments more than twice as likely to be skipping meals already). Only a minority expect this crisis to be short lived: about a third think it will last years and another third see no end in sight. Russia is seen as mostly to blame for the crisis, but energy companies and national government are also seen as responsible. Support for the war in Ukraine remains fairly high, although nearly one in three Poles and Germans think their government is doing too much for Ukraine.
  • Trust in governments’ abilities to handle the crisis is low. A perception that governments are not on top of the crisis has set in and will likely only get worse with winter approaching. Most people don’t trust any political party to deal with the crisis but opposition parties are making gains everywhere, including populists and authoritarian parties such as the National Rally, which is seen as most trustworthy in France.
  • Unprecedented inflation could threaten social cohesion in Europe. Coming on the heels of COVID-19, people in all countries are worried about potential social upheaval, fearing protests, strikes and people going hungry over the winter as price increases bite even further. Yellow Vest-type movements may be poised to return (4 in 10 people in France would like to see a return of the Gilets Jaunes).
  • The crisis has not diminished people’s resolve on climate goals, far from it. Policies in favour of renewables – now seen as a way to save money and achieve energy independence - receive clear support from the public, although that may be short lived especially among many low-trust groups who prefer climate commitments be put on hold. The public blame governments’ failure to invest in renewables sooner and agree that delaying commitments to fight climate change would only increase energy bills in the medium and long term.
  • Policies to deal with the crisis must bridge the short and the long term. People are prepared to make sacrifices and pay high prices but they need to see both clear short-term relief and society-wide change to lock in long-term support. Many – particularly among low trust groups - need immediate relief before they can look ahead. Policies that garner the most support combine short term solutions (tax cuts, price caps, taxing windfall profits and providing free alternatives to driving) as well as clear plans for long term investments. 

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