Sunak: Inflation and Elections

✦

Koushik Korampalli

May 19, 2024

Written by Koushik Korampalli

Est read: 1 minute

UK inflation dropped to 2.3% in April, just shy of the 2% target set by the Bank of England
- However, most forecasts, including the BoE itself, predicted inflation at 2.1%
- This cut hopes for an early rate cut in June
- Rates currently sit at 5.25%, a 16 year high
- Core inflation (which strips out volatile food and fuel prices) was at 3.9% which was above the forecast of 3.6%
Many believe this drop in price was due to the 12% cut in the energy price cap
Chancellor Jeremy Hunt claimed that this was a “Soft landing” and that outlooks for the future are positive
Rachel Reeves the shadow chancellor played down the news claiming that families are still struggling
Following the announcement Prime Minister Rishi Sunak called for election on July 4^th, just 6 weeks from now
- Sunak is required by law to call election before January 2025, many expected elections to be called much later in the year
- Many speculate this was due to Sunak not expecting great news later in the year, given the ‘good news’ with inflation he announced election.
- Additionally, the date coincides with when the first Rwandan deportation flights take place (see Edition 14)
- Opinion polls show that Sunak’s Conservative party is unlikely to win at 23.4% vote, compared to Labour’s 44.3%