The recent announcement of a decrease in inflation to 2.3%, the lowest level in nearly three years, has been cited as one of the motivating factors behind Prime Minister’s decision to call for an election on July 4th. In his first campaign speech, Chancellor of the Exchequer Rishi Sunak declared, “The economy has turned a corner and our plan is working.” This sentiment is echoed by the latest ‘economic optimism index’ for May from Ipsos, which indicates that a significant number of voters share this positive outlook.
According to the poll, 33% of individuals believe that the economy will improve in the next 12 months, a 12-point increase from the previous month. However, 37% remain skeptical and anticipate a downturn. Overall, the national economic mood is on the rise, reaching its highest point since the summer of 2021 when the country emerged from lockdown and celebrated ‘Freedom Day.’
The question remains, will this growing economic optimism translate into electoral success? Past elections have shown a mixed correlation between voters’ economic expectations and the outcome of the election. In 1983, the Thatcher government saw a four-point swing in their favor due to a surge in economic confidence, despite facing a divided opposition. However, in 2010, despite a similar proportion of voters believing in an improving economy, the government of then-Prime Minister Gordon Brown was voted out of office with a five-point swing against them. In 1997, Labour under Tony Blair secured a landslide victory with a 10-point swing, even though voters had a positive outlook on the economy. It is worth noting that at that time, the net economic optimism rating for Prime Minister John Major was significantly better (+13) than the current rating for Rishi Sunak (-4).
The last election in 2019 is a notable exception, with Prime Minister Boris Johnson managing to secure a 4.6-point swing in his favor despite a prevailing mood of economic pessimism (-29). However, the current static support for the Conservative party in the polls, at around 23.2% according to the Sky News poll tracker, paints a different picture. This is nearly 21 points behind the Labour party. So, why is this upswing in economic optimism not translating into electoral gains for the government?
The answer lies in the fact that the electorate is currently in a mood for change and has turned against the government. In the latest polling by Ipsos, 66% of individuals expressed their disagreement with the idea of the current government being re-elected, and 73% voiced their desire for a change. This sentiment is reminiscent of the words of former Labour Prime Minister Jim Callaghan, who famously wrote in his diaries before the 1979 election, “there are times, perhaps once every thirty years, when there is a sea-change in politics. It then does not matter what you say or what you do. There is a shift in what the public wants and what it approves of. I suspect there is now such a sea-change and it is for Mrs. Thatcher.”
The outcome of the 2024 election will ultimately depend on whether this sea-change has indeed occurred in the mood of the electorate and if indications of an economic upturn will be enough to sway their opinions.
