The Brown Government should now be really worried. Until recently the freefall in Labour’s ratings had been mainly about Gordon Brown himself. But yesterday’s stark warnings from Marks & Spencer and Taylor Woodrow symbolise how the credit crunch is now having a much wider impact. And the Organisation for Economic Cooperation and Development has forecast big job losses. Economic reality has caught up with the polls.

Polls have shown a sharp drop in public trust in Labour’s ability to handle economic troubles. But this was largely in anticipation of bad times. Now they have arrived.

Ipsos MORI has a long run of data about voters’ views on the most important issues facing Britain. According to a poll undertaken between June 12 and 17, mentions of inflation and prices have doubled over the past two months to 22 per cent, after never having been higher than 8 per cent between 1993 and last January. This is linked to growing references to the economy, now at 32 per cent (and second in the overall ranking of issues). Apart from April, this is the highest level for 15 years

On the day of renewed protests in London by hauliers, mentions of petrol and fuel prices are now 16 per cent, the highest since December 2000, just after the tanker drivers’ protests.

Moreover, two thirds of the public now think that the general economic condition of the country will get worse over the next 12 months, the highest number since the spring of 1980, in the depths of the worst postwar recession.

Mike Smithson, of politicalbetting.com, has highlighted these trends to argue that the personalities of leaders matter mostly in affecting voters’ confidence in ministers to deal with issues. “So the fact that many don’t warm to Gordon would be less of an issue if prices weren’t soaring.” So it is a double whammy: a fall in confidence in Mr Brown and growing doubts about the economy.

If Sir Stuart Rose is correct, we are faced with two years of economic woes. Even if that is an exaggeration, and there is not a recession as such, ministers still fear that there will be no pickup in confidence, no feelgood factor, by a 2010 general election.

The only hope for Mr Brown, and Labour, is that any downturn will be short-lived and that there will then be a sharp rebound. But the present mood is gloomy.

Times Recommends

• Tear down this wall! And save the planet
• Double click if you want the bin emptied
• Have you got permission to read this?