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People are increasingly worried about how the financial crisis will affect them, the latest YouGov poll for The Sunday Times shows. But the poll, of more than 1,900 people, also shows that the crisis is bringing political benefits for Gordon Brown.

The Conservative lead over Labour has halved from 19% to 10% over the past month. Labour is up seven points to 33%, its best showing since January, while the Tories are down three on 43%. The Liberal Democrats are two points down on 14%.

Brown’s personal rating, while still in negative territory on minus 34%, shows an improvement of 19 points since last month and is the highest since March. By 33% to 27%, people trust him and Alistair Darling more than David Cameron and George Osborne to handle the crisis.

Following last week’s slide in the stock market and the government’s announcement of a £400 billion rescue for the banks, two in five people now fear that they or a close family member could lose their job.

Three-quarters think that house prices will fall over the next 12 months and two-thirds think that the economy will have a “mild” recession. A fifth, however, are much gloomier, fearing a prolonged depression on a par with the 1930s.

By 59% to 32%, people think the government did the right thing with its rescue package for the banks last week, which included part-nationalisation. There is little support, however, for full nationalisation.

Nearly half think the prime minister will use the crisis as a smokescreen for raising taxes. By three to one (62% to 21%) they say any adjustments to the public finances should be via cuts in spending, not higher taxes.

The crisis has led to strong public support for greater regulation of the financial system. Three-quarters say, however, that they still support the market system and only 12% say it is “fundamentally flawed”.

YouGov also asked about Peter Mandelson’s return. By 41% to 17% people said it was a bad move, with 50% saying they still link him to spin and sleaze.

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