The Autumn mini budget contained a number of surprises. The Chancellor cut National Insurance contributions by 2%. He also made some important changes to business expensing, which should lift growth by 1%.
Most voters won't take any notice of the business expensing. Instead they'll be focused on the national insurance cut. The government is rushing this through so it takes effect on 6th Jan 2024, instead of 6th April.
That suggests they're priming voters so that a feel-good effect takes off before an election. The latest they can call an election is Jan 2025.
A while ago I wrote an article about the Misery Index. This is simply the unemployment rate added to the inflation rate.
As you can see from the article, when the Misery Index is 7.0 or below, the government gets re-elected. When it's above 7, the government loses.
In 1997, unemployment was 7.2% and inflation was 2.1%, giving a misery index of 9.4. John Major's government fell.
In 2010, unemployment was 7.9% and inflation was 2.5%, giving a misery index of 10.4.
As I write this in Nov 2023, unemployment is 4.2% and inflation is 4.6%, giving a misery index of 8.8. This time last year unemployment was 3.9% and inflation was 11%, giving a misery index of 14.9.
So, things have improved dramatically.
If at the time of the next election, unemployment is unchanged and inflation is below 2%, the Conservatives have a good chance of winning.
If it falls sufficiently by March, the election will take place in May to coincide with the London Mayor elections.