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By-Elections Deliver Double Defeat for Conservative Party

Yesterday delivered a crushing blow to the Conservative party, with the incumbents losing two out of three seats as the electorate cast their votes in the latest by elections. We also look at ULEZ, UK Retail Sales, Consumer Confidence, and the next General Election.

By-Elections Deliver Double Defeat for Conservative Party

 

Yesterday delivered a crushing blow to the Conservative party, with the incumbents losing two out of three seats as the electorate cast their votes in the latest by elections. In Selby and Ainsty, the Labour party gained its greatest lead in a by-election with the party overturning a Tory majority of 20,137 votes and winning it by more than 4,000 votes. The seat is now held by Keir Mather, who now becomes the youngest member of the house of commons, at 25 years old. As the BBC’s Chris Mason states, “Labour managed to win – and win big, really big – in rural North Yorkshire; the kind of spot some distance from usually fertile political territory for them”.

Meanwhile, the liberal democrats took the Somerton and Frome seat with a comfortable margin of 11,000 votes. This represents another crushing blow to the conservatives who previously maintained a majority of 19,000 votes. As such, Sarah Dyke victory represented a dramatic 29.0 percentage point swing. The Lib Dem win also means that Sir Ed has become the first party leader since Paddy Ashdown to win four by-elections.

The Conservatives did however hold on to Boris Johnson’s seat of Uxbridge and South Ruislip, with Steve Tuckwell managing to win by a narrow margin of just 495 votes, following a recount. Labour put considerable effort into trying to take the seat – not least because of the psychological implications that holding the former PMs seat would have and early electoral postmortems appear to all centre on ULEZ.

UK Retail Sales Beat Forecast

UK retail sales rose higher-than-expected this morning having increased 0.7% on a month-on-month basis for June. This beat market expectations of a 0.2% print and came after a 0.1% rise in May, marking the third consecutive month of growth (though March saw a 1.2% fall). The ONS cited warmer weather driving up spending. Food sales also saw a 0.7% rise, following a contraction last month. Reporting on the retail sales, Martin Beck of EY stated that “better performance in the second quarter increases the likelihood that the economy managed to grow in the quarter, despite headwinds from May’s extra bank holiday and ongoing industrial action.” All eyes now turn to UK growth figures and the BoE’s rate decision on 3rd August.

ULEZ: A Salient Issue for Voters?

According to many commentators, ULEZ continued to be one of the most salient issues for voters in Uxbridge and South Ruislip given that it lies within the area earmarked for the ULEZ expansion. ULEZ, or London’s Ultra Low Emission Zone is a scheme whereby the most polluting vehicles are charged a fee (currently £12.50 for cars, motorcycles and vans ≤ 3.5 tonnes) per day for driving in certain areas of London. Labour’s London Mayor Sadiq Khan’s has sought the expansion of ULEZ which according to TfL would reduce road transport nitrogen oxide emissions by 5.4% across London. However, given that in outer London car ownership is as high as 69%, the policy of expansion is controversial given cost implications to households.

Autumn 2024 General Election?

Yahoo News is suggesting that Rishi Sunak will seek a General Election next as the party tires to reduce its gap in the polls following yesterday’s losses. They also suggest that Downing Street are eyeing up this data to give the economy some time to recover as the cost of living continues to bite amongst the UK’s 22 million households.

Of course, Sunak’s accession last October followed a year which saw the departure of two PMs, along with 145 other government resignations and sackings. Hence, while according to the Fixed Term Parliament Act the general election can be held no later than 25th January 2025, many in No.10 feel that an early election may give the party the best odds.

As Downing Street look at engineering an early election, the Chairman of the Conservative Party Greg Hands this morning said that the party must “regain the trust and confidence” of the electorate.

 

 

GfK UK Consumer Confidence Sinks

This morning, GfK consumer confidence sank higher-than-expected, falling to -30pts representing a 6pt decline. Here, one of the directors at GfK stated that “for the first six months of 2023, UK consumer confidence improved despite the headwinds of the cost of living crisis, with double-digit inflation outpacing income growth and rising interest rates impacting both homeowners and renters alike. Suddenly, this resilience has collapsed. There are clear concerns for the coming year.”

 

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