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April 02, 2013



Electorates are more inclined to vote Labour when the economy is on the up and for the Tories when the economy is in doo-doo.

So even if the Tories claim the recovery is due to them it is unlikely to impress the electorate. Witness the economic recovery that took place under the Major government - following which a landslide Labour govt was elected.

The best Tory tactic, if they want to retain power, is to keep the economy in the doldrums.

Leigh Caldwell

Maybe this is just anecdotal, but I've kept hearing for the last 4 years that (non-financial) companies are hoarding unprecedented amounts of cash. Was this incorrect, or is the new piece of data just that the growth rate of these hoards has ticked up a bit this year?

Of course, I hope you're right. It might even be worth the cost of another Tory government to get out of this stagnation.


@Leigh It's right. Firms' cash holdings have been trending up for years; my chart shows annual growth. For example they grew 10% pa in the 5Y to Dec 2007:
Note that this only shows £ holdings in the UK. Overseas and FX holdings are much bigger. I ignored these because they are less likely to be related to UK economic activity.

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