A little economic cheer
Memo to Conservative MPs: Rishi Sunak is not the reason you are doing terribly in the polls.
There are certainly criticisms to be made of the Prime Minister, and it is possible that (yet) another Tory leader could indeed boost the party’s fortunes. But the explanation for many voters’ unhappiness is fairly simple – they just feel worse off than they were at the last election, and in some cases worse off than when the Tories came to power in 2010.
The surge in inflation squeezed spending power for almost everyone, and rising interest rates have taken a huge toll on mortgage holders and other borrowers. Mr Sunak believes that his best chance of rising in the polls (and getting rebellious MPs off his back) is an improving economy.
So yesterday’s fall in inflation, faster than expected, is good news for him. Lower interest rates could be even better news. No one expects the Bank of England to act at its meeting today, but economists are pencilling in a first rates cut by the end of June. That would pave the way for two or even three by the time of an autumn election.
No wonder some Tories are openly pushing the Bank to cut faster. Jeremy Hunt would never go so far, mindful of the need to show he respects the independence of the rate-setters, but he has nudged about as hard as he can.
But this would be no automatic win for the Government. Even though average living standards are rising again and national insurance has been cut twice, polls suggest voters do not give much credit to ministers.
The risk for Mr Sunak and Mr Hunt is that negative views of the Conservatives become so baked in that economic cheer does not translate into political gains – but does make Labour’s job easier if it takes over at the election.
