[Economics] Five pieces of economic news that could affect UK election result

[-_-Moltres-_-]

 

ishi Sunak’s slim chance of pulling off a victory against the odds in July’s general election depends on voters buying the argument that tough decisions taken since he became prime minister are paying off. That claim will be tested over the next six weeks – with every piece of economic news more closely scrutinised than usual for evidence that the UK’s tentative economic recovery is gaining momentum or has started to falter. There are five key dates – crammed into a 10-day period in the middle of the campaign – to look out for. 11 June: labour market figures This could be one of the trickier pieces of economic news for Sunak to cope with since the last set of official data showed unemployment rising and job vacancies declining. Despite this evidence that the labour market is cooling, earnings growth remained strong, rising at an annual rate of 5.9%. In better news for the prime minister, wages have been rising more strongly than prices for the past 10 months, resulting in rising living standards. The Conservatives will say: four million jobs have been created since 2010 and workers are becoming better off. Labour will say: for the first time in recent history, voters will be worse off at the end of a parliament than they were at the start.One factor behind Sunak’s decision to call an election was the unexpectedly strong growth figures for the first three months of 2024, which showed national output 0.6% higher than in the final three months of 2023 and brought to an end the UK’s short and shallow recession. Paul Dales, the chief UK economist at the consultancy Capital Economics, expects gross domestic product to rise by 02% between March and April, pushing up the quarterly growth rate from 0.6% to 0.8%.This is probably the most important single piece of economic news during the campaign, given Sunak’s claim that the UK’s cost of living problem has now been cracked. The all-items annual inflation rate came down from 3.2% in March to 2.3% in April and is set to fall further in May. In part, that’s because consumer prices rose by 0.7% last May, a hefty increase that is unlikely to be repeated this year. Bruna Skarica, the chief UK economist at Morgan Stanley, sees the headline inflation rate falling to 2% – smack on the government’s target. Services inflation, which is closely watched by the Bank of England, should fall from 5.9% to 5.4%, Skarica says. The Conservatives will say: our tough action has brought stability to the economy. Labour will say: prices are 20% higher than they were at the start of the cost of living crisis and are still going up.

https://www.theguardian.com/business/article/2024/may/24/five-pieces-of-economic-news-that-could-affect-the-uk-election-result#img-1