Why Sunak and Starmer will put the economy at the heart of the election

The economy has already been thrust to the heart of this election campaign, with both parties staking a claim to the mantle of economic competence.

In his statement announcing the election, Rishi Sunak put his economic achievements front and centre. “I came to office above all to restore economic stability,” he said.

What are his achievements? “Our economy is now growing faster than anyone predicted – outpacing Germany, France and the United States – and this morning, it was confirmed that inflation is back to normal”.

This is all encapsulated in his main election slogan. We’ve heard it again and again and again. No doubt we’ll hear it a few more times: “The plan is working”.

Predictably, Starmer’s line was slightly different. If Labour are elected, he promised to “stop the chaos”.

“A vote for Labour is a vote for stability – economic and political,” he argued.

Both parties clearly think they’ve got a story to tell on the economy. Surely they cannot both be right?

UK General Election 2024: How to sound smart when you talk politics

On one level Sunak is right. The economy grew faster than expected in the first quarter of the year, growing 0.6 per cent on the quarter before. This was quite a bit faster than expected and put the UK ahead of even the fabled US economy in the first quarter.

Inflation meanwhile has fallen to its lowest level in nearly three years, aided by falling energy prices and easing food costs.

These are both pieces of good news. They can be cobbled together to create a narrative of the UK emerging from the undeniably difficult circumstances of the past couple of years in fairly good shape.

Widen the lens however and the picture is less rosy. Since the pandemic, the economy has grown just 1.7 per cent. In contrast, the eurozone has grown 3.4 per cent while the US economy has grown 8.7 per cent.

The impact on living standards has been dramatic. The Office for Budget Responsibility (OBR) forecast that household disposable incomes won’t recover to pre-pandemic levels until 2025-26. 

This means the current parliament is the only parliament in modern history during which living standards have deteriorated.

Of course, much of this results from global shocks which the government could not control, but it still makes for a difficult election pitch.

Going back beyond the start of this parliament, and the record hardly looks any better. Sluggish growth since the financial crisis means poorer households in the UK are now £4,300 worse-off than their French and German counterparts, according to the Resolution Foundation.

Both parties accept that there is an urgent need to lift the UK’s growth rate, demonstrating that not everything is going as well as Sunak would like to admit. Hopefully, we’ll hear more detail over the next six weeks about how both parties actually intend to boost growth.

Related posts

Borthwick vows to push on after England end losing run

Private equity firm snaps up Evelyn Partners accounting arm for £700m

Rightwing MPs push general election petition as it passes one million signatures