Yesterday in my piece on UK consumer borrowing I highlighted the upcoming General Election and the uncertain state of the economy as naturally being a major point of focus
With the UK general election looming in May the economy is going to be a key battleground for all sides and we can expect a big five months ahead where this line of data and others will be scrutinized like never before
and yesterday PM David Cameron opened up the campaign with a new poster proclaiming “Let’s stay on the road to a stronger economy” only to see its claims shot down in flames by The Spectator magazine and others in the media, and of course the opposition Labour Party
Along with the headline the poster lists the Government’s achievements of “1.75 million more people in work”, “760,000 more businesses” and “the deficit halved” but The Spectator points out that the assertion was only true if the deficit – the difference between what the public sector receives and what it spends each year – is measured as a proportion of national income. In cash terms, the deficit has only been reduced by about a third.
UK Tory election poster
But the Tories claim that the deficit had been halved was based on saying that the word “deficit” refers to the ratio of deficit to GDP to which, on The Spectator’s website, the magazine’s editor replies:
I don’t dispute that the ratio is widely accepted and more useful to economists, but a deficit/GDP ratio is different to ‘the deficit’ which is measured in pounds.If you want to talk about the ratio, you need to say so – otherwise the sentence is a porkie.
It’s a relatively small deception … but this poster makes a more important, and more depressing point: the Tory leadership is prepared to use dishonesty as a weapon in this election campaign.
And Labour’s shadow fin min Ed Balls said
Osborne and David Cameron say the election will be about economic competence but there is nothing competent about borrowing over 200 billion pounds more than planned because of your failure to deliver a recovery that is felt by all working people and not just a few at the top
The Beeb has more back story here
I have warned before on these pages that this election is the most significant in many, many, a while and the jury- with five months to go- is well and truly still undecided on the outcome. Yesterday’s trashing of the pound, beyond even my most bearish expectations, was not coincidental and is a stark reminder that traders and investors do not like uncertainty.
Prepare yourselves for a rollercoaster ride into May
Osborne & Cameron – Will the last laugh be on them, or at them, come May?
