Without some serious and fast work on the cost of living – the British public’s number one priority – a wholesale polling turnaround looks far, far off.
Yesterday marked fifty years since Edward Heath asked voters “Who governs Britain?” and received the polite but firm reply of “Not you, mate”.
The common expectation is that inflation will fall below the Bank’s target rate of 2 per cent by April. Downing Street will hope rates are falling sooner rather than later, even if that means before the target is met.
And thus we arrive at the most important (and inevitable) of all deflationary trends: demographic change. Retired people tend to consume less than their working age compatriots – thus putting downward pressure on demand as the population ages.
Our nation was hailed by the Economist as the “top-performing economy of 2023” for the second year in a row. That isn’t a turnaround, that’s a miracle – a miracle delivered by common sense.
This week, the Office for National Statistics informed us that the economy grew by 0.3 per cent in November. Not only was that above the 0.2 per cent expansion expected by analysts, but it was a recovery from a 0.3 per cent contraction the previous month.
Fifty years on from Edward Heath, another Conservative Prime Minister faces their premiership being brought even lower by a Middle Eastern energy shock.
We are fed up with being controlled by its incorrect forecasts, and subject to wild policy swings by the Bank of England which did much to give us inflation in the first place.
The danger is that the conflict slowburns into a wider one, with hostilities between Israel and Iran’s proxies accelerating, and knock-on consequences for inflation and Putin’s war in Ukraine.
The longer Number Ten fails to declare, the more cheerfully Labour will pile in – preparing to frame the Prime Minister as a bottler if he waits until after the Budget to rule out a May poll.
We all like lower taxes and backing British business – but that is no excuse for not delivering on getting inflation down and delivering on economic growth.
Monday’s speech and today’s announcement show them choosing their ground for the next election. And since Hunt may find no money for further tax cuts next spring, the option of a May general election is opening up.
In the absence of a convincing change narrative, the Prime Minister fell back yesterday on trying to frighten voters with a Labour government.
Today’s news may be a shaft of light on an otherwise grim day for Number 10. But it really isn’t something they should be proud of.
We should not forget that we are not immune to what happens in global markets, and must remember to take a comparative perspective.