06 JUNE 2024
Does the chart below help to explain why Rishi Sunak called the General Election several months earlier than expected?
The Citigroup Economic Surprise Index gauges how actual economic data compares to expectations. When the line is rising it means indicators are performing better than expected and vice versa.
It has rebounded strongly since late February, suggesting the UK economy is currently faring better than initially forecast. GDP growth returned to positive territory in Q1, with its fastest rate since 2021, and inflation continues to ease.
It’s possible that the Prime Minister has called the 4th July election on the back of this economic improvement, but it’s unlikely.
Even though recent data points have surprised on the upside, overall economic activity remains weak and above-target inflation is still fuelling a cost-of-living crisis for vast swathes of the electorate.
There is unlikely to be an economic feel good factor amongst a large portion of the voter base, which is why the Conservatives currently trail Labour by over 20 points in the polls.
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