Economic stats can change electoral maps.
Harold Wilson seemed to be cruising to re-election in the summer of 1970, on the back of his claim to have turned the economy round and got Britain ‘back into the black’. Then a week before polling, out came the latest month’s trade figures, showing a surprisingly large deficit. The Tory machine pounced. Labour’s rating sagged. And it lost the election. Legend has it that the stats blew away Wilson’s campaign narrative.
Is there anything lurking in the data undergrowth as we enter the 2015 campaign?
March 31: current account for Q4 and GDP growth for Q4 and Year-on-Year
The trade balance no longer has the sensitivity it did in Wilson’s days. But if the expected deficit is big, Labour can revisit the Chancellor’s widely missed export growth targets. But this doesn’t in itself move votes.
The GDP figures count more. The Chancellor probably knew them when he gave his budget statement so they’re unlikely to contain any surprises. The year on year should stay steady at around 2.6% but if the Q4 figure dips a bit from the Q3 level (0.7%), Labour will raise questions about the sustainability of the recovery. Overall, however, this will be a day for the Tories to trumpet the recovery once again.
April 8: manufacturing production
A possible hiccup for the Tories. The previous month was negative at -0.5% so another negative figure would give Labour a strong story on the doubtful sustainability of the recovery, and the opportunity to talk about its manufacturing strategy. But if the number improves, it’s another rallying opportunity for the Tories.
April 9: interest rate decision and February’s trade balance
It’s unlikely that rates will move, so in all probability, not a significant day. The MPC will be aware of the sensitivity of any move during an election campaign in any case. As a result, there is little opportunity for anyone to make much out of the announcement. The trade balance remains a low key story.
April 10: industrial production, monthly and year-on-year
Possible mileage for one side. The last year on year, at 1.3%, was not spectacular and the last monthly data was just negative at -0.1%. Overall, the data will offer Labour some ground for pointing to weakness, because there is little likelihood of a surge upwards. Exporters are being squeezed a bit by the weakening Euro and that may show up in these monthly figures.
April 14: inflation
This has been a real opportunity for the Conservatives lately, as the numbers have tumbled. Principally, the fall has opened the opportunity to push back against Labour’s cost of living crisis charge. The big drop in inflation – largely down to falling oil prices – has helped pull earnings growth up above price increases. Therein lies the all-important ‘feel good’ factor, perfectly timed from the Coalition’s point of view, albeit late in coming.
However, the recent announcement of a further drop may trigger a debate about the looming spectre of deflation, but in terms of electoral impact, it will most likely just be further manna for the Tories.
April 17: unemployment and earnings
This could be the key data of the campaign. This is likely to be a good day for the government, just two weeks before polling, and only a few days before postal ballots start dropping onto doormats. Expect a further fall in unemployment. The rate of reduction has been slowing lately, but the direction is still downwards. Whatever the fall, expect it to be trumpeted loudly by the Tories. Earnings data should be reasonably good too, the last figures showed growth at 1.6%. It isn’t spectacular, but it’s comfortably ahead of inflation.
This is likely to be penciled in on the Tory high command’s diary as a day to push the economy message harder than ever.
Labour will expect that, and is likely to have a response prepared. Expect a renewed push on ‘worse off with the Tories’ and on the nature of new jobs.
Overall, there will probably be nothing in the figures to offer breakthrough for either side; and it is more likely the last campaign reiteration of the rival economic narratives that are already in play.
But if the figures are good, the Conservatives will have to hope that the Duchess of Cambridge hasn’t given birth the day before!
April 23: public sector borrowing for March
Recent monthly figures have been better than those of a year before, reflecting a boost from higher receipts from business and year-end collections. That’s usually dropped from the picture by March, so the number is likely to be negative. Labour can lever off that their points about deficit targets missed and debts doubled. But there isn’t much voter appetite for this debate.
April 28: provisional estimate for GDP growth for Q1
The last potentially significant data before polling day. Bound to be a positive number, but will it be showing a cooling off or an acceleration of growth? Both sides will be ready for the spin lines which go with either direction. The move in either direction would have to be big though if it’s going to move the dial this late.
There’s plenty of data to come. Campaign messages will be prepared to seize each and every opportunity provided.
In a tight election, with a lot of voters wavering until the last moment, any one set of these data showing anything significant will be pounced on.
As Mr Wilson learned to his cost, it isn’t so much the data; it’s what you can make of it.