The state of the economy has been a hot topic in the past few months, and the news is constantly filled with headlines like “Are We In A Recession Yet?” Recession is more than a strict economic concept; it also reflects how confident consumers feel about the economy, and their attitude toward saving or spending their money. So, knowing if young Europeans think we’re in a recession—or not— is important because it tells us about their level of optimism, which influences their purchasing behavior. Brands also need to know how young consumers feel about the economy to best adapt their marketing strategy.
Last year YPulse started surveying young consumers’ feelings toward the state of the economy by asking them to choose which of three statements they most agree with: “We are going to be in a recession in the near future,” “We are currently in a recession,” and “We’re not going to have a recession.” Here is our latest data on how European Gen Z and Millennials see their economy:
Nearly all young Europeans think we’re in a recession or will be in the near future
High rents, stagnating salaries, and inflation had a spiraling effect on the economy in Western Europe, and as a result, almost nine in ten young Europeans (87%) think we are in a recession or will be in the near future. Historical economic downturns are defining moments for a generation, and YPulse has consistently told you how the Great Recession of 2008 impacted Millennials. Analysts are already debating the extent of the economic downturn younger generations are experiencing, with some experts even predicting the crisis will be the 9/11 of Gen Alpha.
Despite young Europeans’ lack of confidence in the economy, some young consumers in Western Europe are showing signs of optimism. Last August, when we first surveyed European Gen Z and Millennials’ feelings toward the economic downturn, only 9% answered “We’re not going to have a recession,” but now this number is up to 14%, a +5pts increase. A closer look at the data also shows that the situation is not exactly felt the same across all five countries, especially when it comes to those who think we are currently in a recession:
In the U.K., the majority of young consumers think we’re in a recession
British Gen Z and Millennials are feeling the impact of the economic crisis, and the majority think we are currently in a recession (54%), making them the only demographic to have the majority say so among all five countries in Western Europe. Inflation was particularly felt in the U.K. last year, and energy prices were the main driver of inflation: according to the Office for National Statistics, electricity prices in the country went up more than 66% in 2022, and up 129% for gas. Household bills for energy increased so much that it left many consumers having to face the unthinkable “heating or eating” choice in the winter months. To express their despair at the extent of the cost-of-living crisis, young consumers took the situation to social media. Last summer the price of a tub of Lurpark butter went up to £7.25, and young Brits used the #lurpark to make jokes on TikTok—like “have my parents won the lottery?” while taking Lurpark tubs out of the fridge.
Interest rates followed inflation and went up big time in the U.K., putting young consumers’ finances further at risk. Millennials, who took on “disproportionately large debts when interest rates were low,” were particularly vulnerable, and many are now having to move back to their parents due to their inability to pay back their mortgages. To continue buying products despite the cost-of-living crisis, an increasing number of young Brits are turning to buy-now-pay-later options. In response, several businesses in the country have stepped up to help consumers, with brands like Primark promising to freeze the price of some goods. But while young Brits’ confidence in the economy is low, this is not the case in other countries in the continent, such as neighboring-country France.
Only two in five young French consumers think we’re in a recession right now
In France, 40% of Gen Z and Millennials agree with the statement “We’re currently in a recession,” the lowest percentage among the five countries in Western Europe, meaning French young consumers are not feeling the effect of the economic hardship as much. The culture of the “safety net” in France makes many young consumers expect the state to protect them against downturns. YPulse told you how the French government responded actively to the COVID-induced mental health crisis by offering free therapy for all citizens. And now, they’re acting similarly when it comes to tackling inflation: the country put early measures in place to heavily subsidize the economy and cap the soaring energy prices. As a result, France maintained the lowest inflation rate in Western Europe in 2022: last August, the inflation rate was at 5.8%, compared to 9.9% in the U.K.
While these measures undeniably helped young French consumers, it is unlikely that the government will be able to heavily subsidize the economy any longer. In fact, economists agree that the measures only delayed the inflation peak, which is expected to hit the country in the next few months. Moreover, these measures haven’t prevented young people from being harmed by the economic downturn: the country is seeing an increasing number of students going to food banks, and a new study by the French Ministry of Health revealed that a quarter of Gen Z in France is poor. While only 40% say they are currently in a recession, 46% more say they will be soon, meaning the majority are still seeing and feeling the impacts of economic uncertainty.