Fragile growth is not enough to keep Sunak in Downing Street

A mortgage squeeze could dash Tory election hopes, says Sean O’Grady

Rishi Sunak, at PMQs on Wednesday, is pinning his election hopes on being able to shrink inflation (PRU/AFP)

It’s the economy, stupid”, was the slogan coined by the brilliant Democrat strategist James Carville during Bill Clinton’s first run for the White House in 1992. Pinned to the wall of campaign HQ, it was a reminder that elections are usually won and lost on pocketbook issues. As the Bank of England is widely expected to raise interest rates again, the question is whether an improving economy will come to the rescue of a beleaguered Rishi Sunak.

The economy is growing, isn’t it?

It depends which figure you pluck from the tables. Preliminary GDP for May indicates a 0.2 per cent increase in the value of goods and services produced in the UK in April. But it follows a contraction of 0.3 per cent in March. On a rolling quarterly basis, over the three months to April, the economy only expanded by 0.1 per cent, an annualised equivalent of 1.2 per cent. While that’s in line with a range of forecasts that Britain should avoid recession this  year, it means growth remains anaemic. Some growth comparisons with Europe put the UK in a favourable light, but that may be because countries such as Germany rely much more on Russian oil and gas. But Britain is growing, unemployment is low and consumer confidence is recovering.