ECONOMIC TIMING IS JUST RIGHT
The Prime Minister could not have chosen a better moment in economic terms to call an election. Despite constant sniping from critics who almost sound as though they’d like to see the country fail (to prove they were right to vote Remain), Britain will enter the election campaign firing on all economic cylinders.
By happy coincidence, the International Monetary Fund last night commended Britain’s resilience – and ate humble pie over its negative forecasts ahead of last year’s eU referendum. (Similarly, many of those who jumped on the bandwagon of Project Fear have been made to look foolish thus far.)
The IMF upped its forecast for the increase in total output of the British economy this year by half a point to 2 per cent. That would make Britain the second fastest-growing nation among the richest Group of Seven countries, topped only by the US, whose stock market has rocketed since Donald Trump was elected.
Another area of economic success Mrs May can point towards in the coming weeks is a hugely buoyant job market. In short, Britain is working. Unemployment in this country is 4.7 per cent, down from 5.6 per cent at the 2015 election, and 7.9 per cent in 2010, when Labour bequeathed a near-bankrupt economy. Notably, the current rate is half that of eurozone countries which Remainers in Labour and the Lib Dems hold in such high regard.
The number of people in work is now 31.84million – one of the great achievements of the past two Tory-led governments.
Opposition parties and trades unions seek to undermine this success with complaints about so-called ‘zero hours’ contracts, part-time working and self-employment. But it is the essence of a free market economy that people have the choice to work flexibly and be part of a more entrepreneurial society, where everyone has the chance to climb the prosperity ladder.
If there is a shadow on the horizon, it is the possibility inflation will continue to climb, which could mean in real terms wage growth is limited. That might be considered a good reason to go to the country while people still feel secure in their spending.
Moreover, global commodity prices, which feed into everything we buy in the shops, are subdued. Low prices from competitive firms such as Aldi and Lidl in the grocery market, Uber taxis on the roads, and Amazon and other enterprises online, mean people can still shop cheaply.
So I’m hopeful the predicted household squeeze caused by rising prices will not be as severe as some have predicted.
Of course the achievements in growth and jobs would not be possible without the foundations of fiscal and financial stability. Admittedly, it has taken far longer to eliminate the toxic Labour legacy of deficits and debt. But the annual budget deficit has been cut by two-thirds to around £50billion and the nation should be paying its way with a budget surplus by the early 2020s.
eliminating some of the nearly £2trillion of debt will take a great deal longer. But what we can be sure of is that Labour’s promised spending splurges would only destroy the confidence currently keeping the financial markets in rude health.
Britain has the economic strength to weather any Brexit storms and come out stronger. So this is a propitious moment for Britain in economic terms, and sensible voters should understand it is Conservatives that have turned around a tanker that Labour was steering into the rocks.