It's Always the Economy, Stupid




28th May 2024

The government’s performance on the economy has historically helped to make or break the election for the party in Downing Street. But will recent good news on the economy help Rishi Sunak?

Prior to the Prime Minister calling the general election, there were two pieces of positive economic news for the government. First, the UK experienced its highest GDP growth in more than two years, lifting the country out of recession. Secondly, there was a fall in inflation to its lowest rate in almost three years. Some have even gone as far as to suggest this was why the election was called.

Since that rainy announcement on the steps of Downing Street, we have had further good news on energy price rises, but also more troubling indicators in the form of retail sales figures.

Despite all this economic news, public opinion remains negative on both the economy generally and particularly the government’s economic performance. This should not be a surprise. Many people (with some justification) view things like GDP, inflation and particularly retail sales as abstract concepts, with little bearing on their day-to-day financial situation. To use inflation as an example, the recent fall follows a period of (by 21st century standards) very high inflation. If your weekly shop has gone up from £50 to £65, it will now go up by much less, but it won’t go down.

Indeed, the data suggest that the recent growth and inflation figures have not made much of an impression with the public. Only just over a quarter (28%) believe that, when compared to Labour, the Conservatives would be best for the British economy.

In the eyes of the public, the Conservative position on the economy relative to Labour started to decline in October 2021 under Boris Johnson.  Labour began to establish a lead on the economy at the start of 2022 and by September 2022, they were ahead by ten points. During the brief fever dream of Liz Truss’s tenure in Downing Street the lead reached a height of 42 points, before stabilising under Rishi Sunak. As of this week, Labour now has a nineteen point lead (47% v 28%) and that trend has remained essentially unchanged for coming up to a year. Since June 2023, the percentage saying the Conservatives are best on the economy has risen above 33% only once and fallen below 28% only twice. In other words, it is statistically unchanged.

The Budget, the Autumn Statement and all the economic announcements (good and bad) over the last 12 months – none of it has made a significant difference. For those Conservatives paying close attention, it is this one finding that should be terrifying.

When it comes to the public’s overall perceptions of the economy, the data tell a similarly bleak story for the Conservatives. Six in ten (60%) describe the UK’s current economic situation as weak, and less than a third (28%) think it will get better in the next 12 months. Who do the British public blame for the current economic situation? 33% say the war in Ukraine and 42% say COVID, but 42% say the current Conservative government – and the percentages for Ukraine and COVID are falling while the numbers blaming the government are rising.

All this is especially worrying for the Conservatives given that, as is almost always the case, the data point towards the economy being a decisive issue for many voters on July 4th. The cost of living is seen by voters as the most important issue facing the country and the most important issue facing them and their families – in both cases, by some distance.

The position which the Conservatives find themselves in is grim, and there is no historical precedent for escaping it. In fact, no party has ever come from behind on economic management and leadership to win the most seats at a general election. The Conservatives are not just behind on both, they are behind by some distance and have been for some time.

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Joe TwymanAuthor: Joe Twyman