Economic optimism up but Lib Dem support falls - poll

Prime Minister David Cameron (L) and Deputy Prime Minister Nick Clegg tour the Rolls Royce engine production facility, in Derby, March 7, 2011.

LONDON (Reuters) - Economic optimism in Britain has risen to its highest level since last July following surprise falls in unemployment and inflation, a poll published on Wednesday showed.

Satisfaction with the government has also improved slightly, although overall support for the Liberal Democrats, the junior partners in the Conservative-led coalition government, has dropped to single figures.

A year ago, more than 30 percent of people said they would vote for the Lib Dems, their pre-election peak, and just over 20 percent actually did so on election day in May. Now just nine percent of those who plan to vote would now choose the party, the April Reuters/Ipsos MORI political monitor shows.

The Lib Dems' popularity has plunged since they entered into coalition with the centre-right Conservatives and dropped many of their flagship policies, notably free university education.

"The Liberal Democrats are struggling to maintain voters' support and the party is suffering from perceptions that the coalition is divided," Ipsos MORI's Helen Cleary said.

"It is seen as dominated by its coalition partners, with two-thirds of the public believing that the Conservatives are making most of the decisions in the government."

The Conservatives and Labour, ousted from government last May after 13 years in power, are neck and neck in support at 40 percent, a rise of three percentage points for the Conservatives compared to last month.

That coincided with a rise in satisfaction with the government to 37 percent, its highest level so far this year, though 55 percent remain dissatisfied.

Economic optimism has also improved in the wake of official figures showing surprise drops in both unemployment and inflation.

Three in 10 of those surveyed think the economy will improve over the next 12 months, the highest level of optimism about Britain's short term economic future since last July.

Two-fifths (42 percent) think that the situation will get worse over the next 12 months, although this is the first month of 2011 in which less than half have been pessimistic about Britain's economic situation.

The public remain sceptical that coalition government is good for Britain, which could spell trouble for those hoping to sway voters in a referendum on voting reform on May 5, the anniversary of last year's general election.

Liberal Democrats, and some Labour politicians, want to see a change that opponents, including the Conservatives, argue would make coalition government more likely. Coalition government is extremely rare in the UK.

The Reuters/Ipsos MORI poll showed most people believe it is a bad thing for the country that no party achieved an overall majority at last year's general election (58 percent), an increase since last May (52 percent).

Technical details:

Ipsos MORI interviewed a representative sample of 1,000 adults aged 18+ across Great Britain. Interviews were conducted by telephone 15-17th April 2011. Data are weighted to match the profile of the population.

(Reporting by Jodie Ginsberg; Editing by Jon Hemming)