Political turmoil will eventually harm business and the economy

Markets may seem relatively unbothered now, but continued instability will be a different matter, says Phil Thornton

Boris Johnson must act fast if he wants to stay in the top post (PA)

Despite the intense focus on allegations about parties held at No 10, a police investigation, as well as splits across all echelons of the Conservative Party over whether and when Boris Johnson should resign, and anger among the public – the economy has not responded.

According to analysis by Capital Economics, this is not a surprise. Using GDP figures and surveys carried out by the Confederation of British Industry (CBI), it found that growth maintained a stable albeit anaemic path in the wake of the 2010 hung parliament and the Brexit crisis.

Obviously economic data runs with a time lag, but the most recent purchasing managers’ surveys for December showed manufacturer output, new orders and employment all rising. However, it is important to note that the effect of the Omicron variant may not have been reflected in the figures.