It's not just the eurozone that could push the UK back into recession

The NIESR predicts a 70% chance of recession if the eurozone crisis is not solved -- and a 50% chanc

Most of this morning's papers reported on the latest study from the National Institute of Economic and Social Research (NIESR). The figure they've chosen to lead on is that the UK has a 70 per cent chance of recession if policymakers fail to resolve the eurozone crisis. What gained less attention was the prediction that there is around a 50 per cent chance of a recession even if the crisis is successfully resolved.

Interestingly, the focus on the eurozone plays into the government's new emphasis on global factors in the UK's sluggish growth. When confronted with growth of just 0.5 per cent in the last 12 months at PMQs yesterday, Cameron responded that any growth was good amid the "global storm in the world economy". This is an important shift, given that in opposition Cameron slammed Gordon Brown for making the same argument, and that the coalition has repeatedly refused to acknowledge the role of the banking crash in creating the deficit, instead blaming Labour's spending.

The NIESR warned that the economy was in for the slowest recovery in 100 years, and that UK fiscal policy was "too tight" in the short-term. While the eurozone crisis is a concern, the fact that there is a 50 per cent chance of falling back into recession regardless shows that the problem is not just global, but that our leaders are not dealing with it in the right way. If global factors created the crisis, George Osborne's aggressive deficit reduction strategy has ensured we will not be the first out of it.

 

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

Photo: Getty
Show Hide image

Labour will win the London elections – they’ve just lost the spin war

The question is, does that matter? 

Cancel the champagne in Jeremy Corbyn’s office? A new YouGov poll for Queen Mary’s Mile End Institute shows Labour slipping back from the record-breaking heights of 53 per cent in the local elections in London… to the still record-breaking heights of 51 per cent.

There are two things to note first off: the first, of course, is that Labour would still be posting the best result of any party in the capital since 1971, and its best since these boroughs were founded. The second is that as the change is within the margin of error, it could all be noise.

My sense, from talking to the local parties throughout the capital is that there has been a slight fall in Labour support but it is not evenly spread. In Barnet, the party’s ongoing difficulties with antisemitism have turned what looked a certain victory into a knife-edge fight. In Wandsworth, stories in the Standard about the local Momentum group have successfully spooked some residents into fearing that a Labour victory in that borough would imperil the borough’s long history of ultra-low council tax, while the presence of a fairly well-organised campaign from new party Renew is splitting angry pro-Remain vote. But elsewhere, neither Labour nor Tory local activists are reporting any kind of fall.

However, it does show how comprehensively Labour have lost the spin war as far as what a “good” set of local election results would be next week: as I laid out in my analyses of what a good night for the major parties would be, Wandsworth and Westminster councils, both of which would stay blue if this poll is borne out, should not be seen as essential gains for Labour and should properly be seen as disastrous defeats for the Conservatives.

However, CCHQ have done a good job setting out a benchmark for what a good night looks like to the point where holding onto Bexley is probably going to be hailed as a success. Labour haven’t really entered the spin wars. As I noted on our podcast this week, that’s in part because, as one senior member of Team Corbyn noted, there is a belief that whatever you do in the run-up, the BBC will decide that there is merit in both sides’ presentation of how the night has gone, so why bother with the spin war beforehand? We may be about to find out whether that’s true. The bigger question for Labour is if the inability to shape the narrative in the face of a largely hostile press will be a problem come 2022. 

Stephen Bush is special correspondent at the New Statesman and the PSA's Journalist of the Year. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.