The Conservatives and Liberal Democrats have suffered a double blow as Nigel Farage's UK independence party soared to 17% in the latest Opinium/Observer poll, and a large majority of voters have said they believe coalition economic policies are harming the country.

Following its success in the Eastleigh byelection, where Ukip came second behind the Lib Dems, Farage's anti-EU party is up 4% on a fortnight ago, and now has more than double the support enjoyed by the Lib Dems, who are unchanged on 8%.

Labour has dipped by 2% to 39% – also a likely victim of the Ukip bounce – while the Tories are down by the same amount to 27%, one of their lowest ratings of recent years.

UKIP are only 10 percentage points behind the Conservatives acccording to the latest poll. Photograph: Opinium Research

The personal ratings of the leaders of the three main parties in parliament have all dropped, with David Cameron's having fallen by 8 points in two weeks from -18% to -26%. That of Labour leader Ed Miliband has dropped 5 points in a fortnight to -20% while Nick Clegg's rating has crashed a further 7 points from -46% to an alarming -53%.

But the findings on the economy will reverberate most at Westminster. Just 20% of all voters now believe the government's economic policies have been beneficial to the economy, against 58% who say they have been harmful.

Even among Tory supporters only just over half (55%) think they have been beneficial, with 17% saying they have harmed the economy, and 22% either saying they have been neither harmful nor beneficial, or having no view.

Among Lib Dems only 24% think coalition economic policies have had a positive effect, while 40% think they have been harmful.

• Opinium carried out an online survey of 1,950 adults in Great Britain, aged 18 and over, from 5 March to 7 March 2013. Results have been weighted to nationally representative criteria.