Tuesday, 9 July 2013

Growing Optimism

Optimism in the UK is up whether you're in business or in the Conservative Party. The IMF and recent consumer confidence data is starting to show the start of an economic recovery. Because of this, Labour's woes and the Referendum Bill the Conservatives are also feeling a boost. But should both Tories and the general public feel good about the future?

First to the economy and yes things may be about to start to pick up. Business and Consumer Confidence is at an 8 year high and the IMF has said that 0.9% of growth is coming our way this year which is much better than last year's 0.2%. And this year there has been a bit of help from the government with the 1% decrease in corporation tax and a freeze in capital gains tax. But more importantly in boosting confidence there has been some pretty targeted cuts, where alcohol and petrol is now a lot cheaper than it would have been under Labour.

We are back at pre recession levels with consumer confidence but still a while to go before we reach the point the crash actually happened.

The bad news on the economy front is that the confidence from people isn't based on something totally solid. There hasn't been as many tax cuts by the Government as I have would have liked to see. This isn't the case with the Coalition Government which seem to be relying on positive words and a feel good factor, explaining the for the longevity not of recession of going nowhere and then a sudden pick up. The repetition of 'Aspiration Nation' is not necessarily a bad per se but if things go badly or not as good as the small amount of confidence predicts then the economy will be flat again. But then again most economies have a problem like this.

Overall however the economy has made the Conservatives moderately happy and rightly so because it is because of them putting pressure on George Osborne to add these specific tax cuts that we are seeing some sort of change in the economy. The Conservative Party has been on a roll recently to dictating the amount of spending that will happen in the next parliament to pushing the issue of a referendum on Europe.

What does the opposition think at the moment? Well nothing useful as Labour says it wants to match spend the same but wants to borrow more and will not back the basic principles democracy. What's even worse for Labour is they screwing up massively in Falkirk and day by every single constituency in the UK seems to have Labour candidates selected by Unite in a way that is bordering/maybe illegal. The Conservatives are united and aiding a recovery whilst Labour is anything but. No wonder the poll ratings show a decrease in support for Labour.

The Conservatives are really uniting around the EU Referendum Bill.

So all in all good times. But hold on, the Tories should be weary just like the public. The economy is yet to be confirmed to be definitely on the up, the 1st quarter of this year saw only 0.3% of economic growth. Divisions on Europe are unlikely to come back with the Referendum Bill but if it fails tensions may creep up again. Also what if Ed Miliband suddenly supports it? Falkirk could go two ways now. Ed could look strong and shun the Unions to help Labour or look weak and want their money, although either way it is not good for him really.

Labour is still more popular than its leader will ever be.

In general things are looking better though. Red Ed is too dithering to decide whether he should have jam or butter on his toast and things getting worse for the Government seems a distant prospect now. The only major worry is not to make everyone too over confident. The austerity isn't over yet.

One thing we can rely on is the Red Ed will still be weak.

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