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Conservative majority sent us on a shopping spree? Pull the other one | Larry Elliott | Business


Tills are ringing merrily in the high streets and it is all down to Boris Johnson. Thanks to the prime minister the dark clouds of uncertainty are now scudding away and a grateful nation feels free to start spending again.

Really? Sure, there was a chunky rise in retail sales in January but in the latest three months – a better guide to the underlying trend – they were up by just 0.8% on the same period a year earlier, the weakest annual growth since 2013.

The “Boris bounce” theory rests on the highly questionable assumption that consumer behaviour is affected by political events rather than by other factors, such as whether they are better off than they were before and whether prices are going up or down.

January is the time consumers traditionally seek out bargains in the sales and – after two dismal months for retailers – there were plenty of them on offer this year. People had more money in their pockets because earnings are rising faster than prices. Put the two together and there’s a plausible reason for the rebound in spending, albeit without such a grabby headline.

Of course, there might be one or two individuals who said to themselves: “I am glad the Conservatives won the election by such a thumping majority and I am now going out and celebrate by buying a new sofa.” Equally, though, there were plenty of voters who wanted to hide under the duvet when they heard the result.

A more likely place for a Boris bounce to show up would be industry, since companies tend to be more sensitive to the political climate. There is ample evidence from the official figures of a mothballing of capital spending as a result of Brexit.

But the latest snapshot of manufacturing from the CBI paints a relatively downbeat picture. Output fell in the three months to February at an only slightly slower pace than in the quarter ending in January, and while the employers’ organisation detected signs of a pick-up it made clear that the rebound was tentative and fragile.

What’s true of manufacturing is true of the economy as a whole. The government would have us believe that Britain is booming and that the prime minister is responsible. Neither is remotely true.

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