There has been a significant rise in interest rates in the UK, directly affecting the mortgage payments of countless households.
This increase comes when people face substantial financial strain due to the cost of living crisis.
In light of these circumstances, discussions about the possibility of early elections have emerged.
Can Rishi Sunak be victorious in the next election?
Moreover, what are the motivations behind opposition parties’ calls for early elections in the UK?
Consecutive increase in British housing costs
Economists predict that the Bank of England (BoE) may substantially increase the base interest rate to 5.75%. This move aims to curb uncontrollable inflation within the country. Over the past year and a half, the interest rate has already witnessed a staggering surge of 450 basis points, resulting in hundreds of pounds added to people’s monthly housing costs.
Furthermore, contrary to experts’ predictions and the government’s assurance of keeping inflation under control earlier this year, the inflation rate in the UK has exceeded expectations.
Since September, there has been a significant spike in inflation, breaking a four-decade-long stagnation in October. While other European countries have maintained single-digit inflation rates since the beginning of the year, the UK experienced levels around 10% until March, highlighting a significant disparity.
The Risk of economic recession in the UK
According to the latest Office for National Statistics (ONS) data, inflation reached 8.7% in April. Still, this rate is lower than expected by the BoE, the government and economic experts. In this way, the BoE has no choice but to curb inflation by increasing the cost of borrowing; According to experts, continuing this policy can put the country at Risk of economic stagnation.
British Chancellor of the Exchequer Jeremy Hunt stated in an interview that the government supports the increase in the interest rate. Referring to the high inflation rate, he said that this issue is the government’s first challenge, and there is no other option but to increase the interest rate.
International Monetary Fund forecast of the UK economy
International institutions monitoring the world’s economic situation, including the International Monetary Fund (IMF), have predicted that the UK economy will take the lowest place among the world’s economic powers this year and next.
According to the estimate of this international organization, the UK economy will shrink by 0.6% in 2023, contrary to the government’s claim. The UK economy next year (2024) will be smaller than all advanced and emerging economies, even Russia, under sanctions.
Warning about financial disturbances
Economic experts warn about the jump in mortgage payments due to the increase in interest rates. Loan interest rates may reach a level not seen in the past 40 years. In the 1980s, the central bank’s base rate was 10-16%, the worst financial period in the UK.
This is while the average housing price at that time was around 20 thousand pounds, and now it is at least ten times the price. In this way, each percentage unit increase in the interest rate imposes a significant jump in the repayment amount.
The damaging prospect of the fulfilment of Rishi Sunak’s promises
According to British Prime Minister Rishi Sunak, there is an anticipation of a decrease in the interest rate by the end of this year, which would alleviate the financial burden on the public. However, considering the present circumstances and the fact that half of the current year has already passed, it appears doubtful that his promises will come to fruition.
Consequently, several Members of Parliament are speculating that a general election will take place in October, precisely one year after Sunak assumed office following the tumultuous 44-day reign of Liz Truss’s government.
Increasing popularity of the Labour Party in the polls
Opinion polls indicate that the rival party, led by Keir Starmer, has a higher likelihood of winning the upcoming elections. The popularity gap between the Labour Party and the ruling party is approximately 20%, diminishing Sunak’s chances of victory.
Nevertheless, certain members within Sunak’s party perceive that holding early elections before the government’s promises unravelling by year-end could play a pivotal role in determining the outcome of the polls.
Opposition parties demand early elections.
Following the resignation of Boris Johnson, the former Prime Minister of the UK, and some of his confidants from the Parliament due to the scandals related to the Partygate case, the British opposition parties called for early elections.
In Britain, the leader of the opposition Labor Party has called for an early general election after the resignation of former Prime Minister Boris Johnson and two other Conservative Party members.
Keir Starmer’s Criticism of the Conservatives
Labour leader Keir Starmer wrote on Twitter: “This farce must stop. People have had enough of a shambolic Tory government and a weak Prime Minister no one voted for.” Starmer said: “Rishi Sunak must finally find a backbone, call an election, and let the public have their say on 13 years of Tory failure.”
Boris Johnson’s resignation from the UK Parliament
Johnson announced his resignation as a member of Parliament following the so-called Partygate. With this, he prevented the publication of the results of a parliamentary committee’s investigation into the violations of government members during the Covid-19 quarantine.
In recent months, the committee has been investigating whether Johnson lied to the House of Commons about illegal activities at the government headquarters in London’s Downing Street, despite strict quarantine rules at the time.
The resignation of Boris Johnson’s supporters from the UK Parliament
Alongside Johnson, additional MPs considered close confidants of his, namely Nadine Dorries and Nigel Adams, also stepped down from their positions. The resignations have sparked speculation regarding Johnson’s future actions and whether he intends to run for re-election in the upcoming general election.
Notably, Jacob Rees-Mogg, a prominent supporter of Johnson, expressed in an email that the former Tory leader could swiftly come back and secure a parliamentary seat in the next general election. This potential move by Johnson has garnered attention from various media outlets, suggesting that it could lead to divisions within the Conservative Party and pose a new challenge for Prime Minister Rishi Sunak.
The dominoes of the resignation of representatives and the possibility of early elections
Rumours are circulating in London about further resignations among MPs, which could trigger a by-term election. This ongoing wave of resignations is seen as bad news for the Conservative Party, especially considering their weakened position according to recent poll results. Prime Minister Boris Johnson’s resignation added to the unrest, interpreted as an indirect criticism of the current Prime Minister, Rishi Sunak.
Opinions in London vary widely on whether Johnson’s move signifies his descent into political irrelevance or if he is strategically positioning himself potentially to succeed Sunak. By stepping down from Parliament, the former UK Prime Minister has directly challenged Rishi Sunak, the incumbent Prime Minister of the UK.
