What UK Economy (Average Earnings) Predicts for General Election Results 2019
ElectionOracle / General Election 2019 Dec 10, 2019 - 12:16 PM GMTBy: Nadeem_Walayat
It's the economy stupid! The party in government tends to lose elections to the opposition on the basis of where the economy stands at the time of the general election. So whilst Boris Johnson's "Get Brexit Done" headline grabbing mantra sounds like it could deliver the Tories enough votes to win. However, if the economy is on the slide then all slogans and promises will be ignored, much as was the case for Theresa May's 2017 all about getting Brexit done election campaign.
So the focus of this analysis is where the economy stands and it's direction of travel relative to where economy stood in the run up to the June 2017 General Election as one of the 9 key election forecasting lessons learned from the outcome of the 2017 general election.
UK General Election Forecast Analysis
The aim of this series of analysis is to further fine tune my core election forecast based on the single most accurate predictor of UK general elections, house prices momentum that concluded in a forecast of 322 seats first made available to Patrons who support my work on the 24th of November 2019.
- UK House Prices Momentum General Election Forecast
- Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast
- What the UK Economy Predicts for General Election 2019
- Marginal Seats Analysis Election Predictor
- Social Mood and Momentum Election Impact
- Opinion Polls and Betting Markets, UK General Election Forecast Conclusion.
My last analysis on the Manifestos pushed the seats forecast in favour of the Labour party, putting the Tory seats tally stands at xxx ahead of my final forecast that I aim to complete several days before polling day (12th December).
What the Economy Predicts for the UK General Election
- UK Economy - GDP Growth
- UK INFLATION - CPI / RPI / REAL
- UK Fake Unemployment Statistics
- REAL TERMS AVERAGE EARNINGS
- UK General Election Tory Seats Projections
REAL TERMS AVERAGE EARNINGS
And last but not least is the second most accurate predictor of UK general elections after house prices - Real Terms Average Earnings, that in 2017 correctly predicted that the Conservatives instead of gaining seats were actually set to lose seats!
Basically real terms average earnings condenses ALL of the economic data down into a single prescient indicator that answers are average workers / voters richer or poorer than they were a year earlier. If poorer than they are unlikely to vote for more of the same! If richer than they will tend to be content with the status quo and vote for the party in government,
The real terms average earnings NET of RPI more accurately reflects the real terms pay increase experienced after inflation of most workers.
2010 -4%
A -4% in the wake of financial collapse ensured that Labour had no chance of getting re-elected.
2015 +3.2%
Net average earnings of +3.2% was SCREAMING that the Tories were heading for a majority government, something that ALL of the pollsters and pundits missed! Hats off to George Osbourne and David Cameron for either having the intellect or luck to engineer peak earnings growth for the 2015 general election that I am sure they had planned towards for several years.
2017 -2.2%
Theresa May, the worst Prime Minister in British history conceivably picked just about the worst time to hold a general election in recent years, that she would have been far wiser to have held some 6-9 months earlier, at least then she would not have lost the Tories their majority.
2019 +1.1%
Which brings us to the present. Data to September 2019 converts into a +1.1% real terms earnings score for Boris Johnson. Which implies to roughly expect BJ to achieve roughly the half way point between David Cameron's 330 seats and where the Tories currently stand on 315 i.e. 322. Which is PRECISELY the same as what UK House Prices are forecasting!
What the UK Economy Predicts for the Election
The economy is weak but growing, inflation is low and falling, official unemployment is low so good for propaganda purposes. And average earnings are bullish for Tory prospects. All of which resolves in the Economy projecting 324 Tory seats.
UK General Election Tory Seats Projections:
Recap of my seats projections analysis to date ( including first made available to Patrons) :
- UK House Prices 322 (UK House Prices Momentum General Election Core Forecast)
- Manifestos Bribes 311 (Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast)
- Economy 324 (What the UK Economy Predicts for General Election 2019)
- Marginal Seats xxx (UK General Election Tory and Labour Marginal Seats Analysis, Implied Forecast 2019)
- Social Mood xxx (Social Mood and Leaders Impact on General Election Forecast 2019)
- Opinion Polls, Betting Markets and Final Forecast Conclusion
So my analysis to date is still not resolving an outright majority for the Tories, unlike the pollsters such as Yougov projecting 359 seats, though in reality the Tories only need 322 seats to govern on their own.
My remaining piece of in-depth analysis in this series is -
- Opinion Polls and Betting Markets, UK General Election Forecast Conclusion
That I aim to complete on the 10th of December. Beyond which will be analysis of Gold and the Dow.
So for immediate First Access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.
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Nadeem Walayat
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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
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