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27 January 2010

What does the economy mean for the election date?

After poor growth figures is the election now set for 22 April?

By George Eaton

So everyone was sure the election was set for 6 May. At least until 9.30 yesterday morning, when the fourth-quarter GDP figures, showing growth of only 0.1 per cent, were released.

There’s now real fear in Labour circles that the next quarterly figures, due out on 23 April, could show Britain falling back into recession. David Blanchflower and others warn that the return of VAT to 17.5 per cent, coupled with the bad weather — hitting retail sales and construction — could lead to a double-dip recession.

For the economy to return to negative growth just 13 days before the election would be humiliating for Gordon Brown and a gift to the Tories. As a result, there is now serious talk of an election on 22 April, the day before the GDP figures are published.

There’s little chance of a March election, as Brown and Darling have confirmed that a Budget will be read. By law there must be at least three months between the pre-Budget report — presented on 9 December — and the Budget. Thus, the earliest possible date for this year’s Budget is 9 March. That is after the last possible date — 1 March — on which Brown could call a March election. But, looking at the latest economic data, Labour strategists may now conclude an April election is the best option.

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After Bob Ainsworth appeared to name 6 May as the day, bookies suspended betting on the date of the general election. I wonder if they’ll reopen it now.

Here are the dates to watch:

9 March Earliest possible date for a Budget

25 March Likely date for a March election if Brown and Darling renege on their pledge to present a Budget

6 May Date of the local elections and probable date of the general election

3 June The latest possible timing for a general election

 

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