Burnham bounce? Business confidence tells a different story
Labour may be improving in the polls under Andy Burnham, but overall support for the party is still very low. Economic confidence tells a similar story, says Paul Ormerod Both in the opinion polls and in local authority by-elections, there is clear evidence of a “Burnham bounce” for Labour. But in historical terms, support for [...]
The story of Labour's recent performance under Andy Burnham contrasts sharply with the party's overall low support levels, according to Paul Ormerod. While there is evidence of a "Burnham bounce" in opinion polls and local authority by-elections, overall party support remains very low. The same holds true for economic confidence, which is also low despite a recent rise in the GfK Consumer Confidence Index.
Households remain more pessimistic than optimistic, and the corporate sector shows a mixed outlook, with more manufacturers expecting output to decrease than to increase. The private sector's financial balance sheet is better than it has been in 25 years, as households and companies repay debt. However, private sector confidence in the economy remains fragile.
The pandemic has led to a massive accumulation of savings by households, estimated at £180bn, which they are now saving more than before the crisis. Despite the healthier balance sheets, households and companies are hesitant to spend due to uncertainty. The pandemic and geopolitical events have created a high level of uncertainty, which the British government can help alleviate by reducing domestic uncertainty.
The Chancellor, John Healey, has improved fiscal discipline, which carries more credibility than the previous administration's leaks and denials. The large level of public sector debt remains a threat to confidence, but recent signs are still positive.
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