Friday, August 31, 2007

Is the poor summer weather going to kill off plans for an Autumn Election?

One of the questions I have been asking myself is what impact the dreadful summer weather might have on Gordon Browns premiership and especially any plans he might have been harbouring for an early election.

Initially of course the heavy rain and flooding showed new PM Mr Brown in a very good light; its the kind of calamity that is ideal for politicans to exploit, lots of distressed homeowners who can be promised 'help' but who in fact are likely to be forgotten by the press as soon as the waters recede (so no embarrassing questions later...)

But the real effect of a bad summer run much deeper. Mainly it's the economy that takes a hit - thousands of attractions, restaurants, pubs and hotels took less than they hoped for, shops are crammed with unsold summerwear, garden equipment and outdoor toys - takings are down, profits are hit and belts are tightened.

Grumpy, depressed or financially stressed voters have a habit of taking out their wrath on the Government- so it would be a brave Prime Minister who would go to the country at that moment.

However, in the slightly longer term, the poor summer might have delivered Mr Brown a bit of a silver lining. One reason interests rates have been rising is the concerns the Bank of England have had about consumer spending - if our wet summer has cooled consumers down a bit then there is less pressure on the Bank to raise rates more, and in fact rates can start to fall earlier, quite soon in fact.

And the likliest time for the first signs of interest rates falling? Spring next year, about the same time as the first effects of last years tax cuts hit wage packets.

So if I was a betting man I think I reckon that if there was going to be an early election next Spring looks far more likely than this Autumn.

But what would I know?

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