The Tories will be making a big mistake if they allow Labor and its critics to frame the election around the theme that the Tories ruined the economy.
An onslaught has already begun, with the Financial Times insisting that a “feel bad” factor looms over the UK election.
Even Tory-supporting newspapers insist Rishi Sunak chose a July election because the dire state of the public finances would not allow for a third tax cut financial statement in the autumn.
There is an optimistic story to tell and it is much more powerful than the fact that the economy has “turned the corner.”
This is a Britain that is a magnet for foreign investment. Large research universities are producing spin-offs in artificial intelligence, cybersecurity, pharmacy, and many other things that are the envy of the world.
Britain bounces back: The current spate of ‘Britain for sale’ takeovers is down to predators looking to gain access to great British companies.
The current spate of ‘Britain for sale’ takeovers is down to predators looking to gain access to great companies.
Thoma Bravo has seen the fantastic opportunity in Cambridge cybersecurity pioneer Darktrace.
The initial private equity offering for share platform Hargreaves Lansdown speaks to the abilities of the UK’s financial services. Daniel Kretinsky’s unwanted siege of IDS, owner of Royal Mail, is because the ‘Czech sphinx’ sees opportunity in the fast-growing logistics operation GLS.
Private capital and foreign predators want what we have in terms of business skills, technology, science and invention.
The Conservatives were in charge when the economy stagnated and inflation soared during their 14 years at the helm.
Austerity and stagnation were a consequence of Labour’s neglect of financial probity in the run-up to the 2007-09 financial crisis.
He had high regard for the late Alistair Darling when he was Chancellor and the coolness with which he handled the implosion of the financial system.
But Darling was not at all happy when, after a conversation, in which he predicted that difficult times were ahead, this document suggested that we were heading for an era of austerity.
The slow production was due to Labour’s legacy of a huge budget deficit that left his successor, George Osborne, no choice but to reduce public spending.
Covid-19 and Russia’s war against Ukraine were events that escaped the control of any government. The UK’s responses were more or less in line with those of the rest of the rich G7 nations.
Despite all the negativity, inflation has fallen rapidly and Britain is actually emerging from the doldrums faster than its European competitors.
Only the United States, with the weight of the seven magnificent giants (Apple, Amazon, Alphabet, Google’s parent company, Meta Platforms, Microsoft, Nvidia and Tesla), is in a better position.
Liz Truss’s interlude was disturbing. It is often compared to domestic crises, such as the collapse of the banking system in 2007-2008, in terms of aftershocks.
A temporary rise in bond yields was quickly mitigated and the Bank of England’s late battle against inflation led to higher mortgage costs.
Fixed rate renovations have been costly for families but, tough as it may be, there have been very few defaults and no reports of keys to abandoned houses going through estate agents’ letterboxes.
The pain has spread noticeably. Furthermore, the period of falling real incomes, which so delighted the government’s critics, has long since ended as inflation plummeted.
It is a great shame for the Conservatives that Andy Haldane left the Bank of England after the monetary policy committee decided to ignore his advice that the inflation genie was out of the bottle. His view now, he told LBC, is that Bank policy “still has a strangled grip on the economy”.
It would be nice to think that the independent Bank of England would be brave enough to forget that the country is on an election campaign and acted in the interests of growth, jobs and prosperity by cutting the bank rate from the current 5.25 per cent in June . .
That would demonstrate a change in economic fortunes and provide an immediate boost to homeowners, consumers and already growing business confidence.
It is the gift that could change Rishi’s electoral fortunes. That’s probably why rate cuts will be detrimentally delayed.
