Conservatives face bleakest economic backdrop to an election since 1992

RISHI SUNAK is facing the bleakest economic backdrop to any election in more than three decades as businesses and households reel from the cost of living crisis and high interest rates.

The economy is expected to grow by just 0.7pc next year, according to the Office for Budget Responsibility.

This is worse than the 1.6pc growth recorded in 2019, 2.7pc in 2017 and 2.2pc in 2015, when the Conservatives successfully retained the occupancy of 10 Downing Street in general elections.

It is also worse than the 2.2pc growth achieved in 2010 – though Labour was thrown out of government by voters in the wake of the financial crisis, so that apparently healthy rate of growth reflects in part the rebound from the recession. Labour held on to power with growth rates north of 2pc in 2005 and 2001, while the Conservatives lost control in 1997 despite the economy growing by almost 5pc.

One must go back to 1992, when the economy eked out growth of just 0.2pc, to find a worse backdrop to a general election. Gideon Skinner, head of political research at Ipsos, said the economy is the top issue worrying voters going into this general election for the first time since 2010, with few indications that the Government is getting any thanks for the recent drop in the rate of inflation.

“There is very little sign this is feeding into a consumer feelgood factor at the moment,” he said.

“You have still got six in 10 people saying the Government is doing a bad job on the cost of living, and 68pc say the Conservative Government is doing a bad job on the economy. That is the worst we have seen for 25 years, since we started asking the question in 1998.”

When asked about the best policies to deal with the cost of living, voters back Labour by 37pc to 20pc, giving the opposition a 17-point lead on Ipsos’s measure. But when asked about the economy generally, the parties are tied, with Labour on 29pc and the Tories on 30pc. If voters choose based on which party is worse for their personal finances, Mr Sunak is in trouble.

“Half of people think they would be worse off if the Conservatives win the next election; 34pc think they will be worse off if [Sir Keir] Starmer’s Labour Party wins,” said Mr Skinner. Polling from YouGov shows almost three quarters of voters say the Government is handling the economy badly – including more than half of those who voted Conservative in 2019.

Voters do not have huge faith in either party on economic issues, but Labour is clearly ahead. One in three think Sir Keir’s party would be best on living standards, compared to one in six who back the Tories on the subject. Similarly 31pc say the opposition would be best at “providing more jobs”, compared to 16pc for the Conservatives.

“Even areas previously seen to be something Conservatives are better at, like tackling deficit, Labour and Conservatives tie on 22pc and the most populous answer is neither,” said Beth Kühnel Mann at YouGov. “What is really important here, is at the time of the last general election, the Conservatives were ahead on these measures.”

A Treasury spokesman said: “Growth has been stronger than many commentators expected this year, and the IMF says we will grow faster than France and Germany in the longer-term.

“We have halved inflation and are now introducing the biggest package of tax cuts since the 1980s.”