The prime minister is aware that the economy will probably deteriorate considerably more by autumn or winter, but the positive news of the summer will not cheer up the jaded populace.
Rishi Sunak’s election-day defiance, which went against earlier forecasts of an autumn or perhaps winter vote, had an economic rationale. The prime minister realised that his chances of being rehabilitated as the mastermind behind Britain’s future wealth were dwindling along with the prospects of a recovery.
The rate of unemployment was only going to grow up. After declining gradually during the previous year, inflation may increase in the autumn. Furthermore, it appeared that interest rates, which are burdensome for both mortgage holders and enterprises with debt, will continue to be persistently high.
With prices remaining flat and the Bank of England able to lower borrowing costs, the economy that had appeared to be strengthening a few months prior would, at best, be a neutral election variable and, at worst, be a stick that Labour could use to beat the government. The odds had changed against Sunak, but a result that would have increased his vote count was still conceivable.
The International Monetary Fund (IMF) and the Organisation for Economic Cooperation and Development (OECD) released less-than-optimistic studies that were crucial to this economic prognosis. They both anticipated that the impetus to propel growth would be absent until at least the following year, following a slight recovery from the recession of the previous year.
