Sunday, May 08, 2005
Election watch - a 66 majority
Posted by David Smith at 11:45 AM
Category: Thoughts and responses

General elections are a useful reminder that life is rarely as straightforward as models suggest. The final GB vote shares of the parties - 36% for Labour, 33% for the Conservatives and 23% for the Liberal Democrats - should have translated into a Labour majority of between 90 and 100.

But the swing was not even across the country. Labour held onto seats it would have expected to lose but lost others that on the basis of a 3% uniform swing it would have expected to hang onto. We wait to see what impact a reduced majority will have on economic policy.

Does it mean tax hikes are more or less likely? Will Labour be able to resist backbench pressure for even higher public spending? What will that mean for interest rates? Watch this space.