On 22 May 2024, the UK’s Prime Minister Rishi Sunak announced an early UK general election, to be held on Thursday 4 July 2024.
This unexpected move to call for a snap election earlier than the previously estimated time in October or November 2024 was announced following a cabinet meeting at Downing Street.
The UK’s parliament will be suspended today (24 May), before it is formally dissolved by King Charles III on 30 May, which means there are only two days to pass any outstanding legislation.
The upcoming general election will be the country’s first in five years and is emerging as a significant contest to tackle high inflation and slow economic growth, coupled with immigration, healthcare, and environment crises.
Following the announcement of the general election, Sunak, leader of the UK’s Conservative Party and Keir Starmer, leader of the Labour Party, started their election campaigning on 23 May.
In the upcoming election, Sunak will face voters for the first time as prime minister.
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By GlobalDataSunak said that the economy was reviving, and he had a plan to tackle illegal immigration.
Sunak also argued that the fall in inflation, along with improvement in the UK’s economy were evidence that the plan and priorities he had outlined were working.
According to the latest data released by the UK’s Office for National Statistics (ONS) on 22 May, the country’s core inflation declined more than expected in April 2024 as energy prices continued to cool, with inflation falling to its lowest level in almost three years.
The headline inflation in the country declined from 3.2% in March 2024 to 2.3% in April 2024.
The decline in inflation within a year exhibits the progress of Sunak’s five pledges announced in January 2023, including reducing inflation, which peaked at 11.1% in October 2022.
Ongoing improvement in the macroeconomic environment is also reflected in the recent increase in monthly real gross domestic product (GDP).
According to the ONS, monthly real GDP grew by 0.4% in March 2024, following growth of 0.2% in February and 0.3% in January 2024.
With inflation back under control and an improvement in the economy, the Bank of England is expected to decline mortgage interest rates in the mid-year period, which will support the residential construction sector in the coming period.
Construction is expected to be a major poll plank in the upcoming elections, with the Labour Party, in particular, pledging to focus on housing and green energy along with the economy, National Health Service (NHS), green energy, crime, education, immigration, defence, and pension.
The party has announced plans to invest $30.2bn in green projects over the next five years.
Moreover, to fast-track priority construction projects, including battery manufacturing, labs and 5G infrastructure, the party promises to reform the planning system and invest more in infrastructure, which is vital for faster economic growth.
Labour wants to decarbonise the power system by 2030, with plans to construct new onshore wind farms, and investment in green technologies.
To tackle the housing shortage in the country, Starmer promises to construct new towns with the help of the private sector if he comes into power, with the commitment to construct 1.5 million new homes across the country over five years.
Moreover, he is committed to supporting developers who construct well-designed, high-quality, sustainable affordable housing and fulfil their obligations.
However, developers who have wriggled out of their responsibilities will face government penalties.
The party has also pledged to remove restrictive laws to allow housing construction on poor-quality green belt land.
Starmer has set a home ownership target of 70% and pledged to launch a new mortgage guarantee scheme to get more people on the housing ladder.
Earlier this month, the Labour Party won several mayoral seats, with the focus on construction and housing being a major poll plank for candidates from both parties.
Labour’s Sadiq Khan won a landmark third successive term as mayor of the UK’s capital, London.
Khan had promised to construct 40,000 council homes over the next five years.
He also outlined a plan to create Land Assembly Zones in a bid to focus resources in areas with substantial potential for growth, coupled with setting up more Mayoral Development Corporations to increase overall housing supply and drive renovation.
Another Labour candidate, Steve Rotheram, won a third term as mayor of the Liverpool City Region.
In the party’s election manifesto, Rotheram had pledged to support the expansion of the Port of Liverpool, create a Liverpool City Region Renewable Energy Company, and develop high-speed rail infrastructure.
Andrew Murray Burnham, also from the Labour Party, won a third term as mayor of Greater Manchester.
He promised to increase the city’s Metrolink tram system and construct a new rail station in Wigan and 10,000 homes by 2028.
Richard Parker, another Labour Party candidate, became the mayor of West Midlands.
He pledged to increase the annual target to 19,000 homes, thereby building 20,000 extra homes by 2031.
The Labour Party’s emphasis on homebuilding in particular is expected to be viewed positively by homeowners, who have been affected by the Conservatives’ 2022 minibudget, which led to an increase in mortgage payments.
The Conservative Party’s failure to resolve the country’s housing crisis despite being in power for the last 13 years has disillusioned youth voters in particular, with homeownership rates having stagnated over the last decade.
Sunak’s premiership has focused on growing the economy, reducing inflation, and bringing down the national debt, coupled with a focus on green energy, education, immigration, and the defence sector.
Sunak had also pledged to slash NHS waiting lists, reduce taxes on working families, abandon EU-era rules, which are blocking 100,000 new homes, remove hurdles to constructing new onshore wind farms, and expand the country’s nuclear power supply.
Despite hailing a decline in inflation, an improvement in the economy, and an increase in defence spending, Sunak is running way behind Starmer in terms of favourability ratings.
Various opinion polls suggest a majority in favour of the Labour Party, with the latter, on average, 20 points ahead of the Conservative Party.
However, Sunak looks set to make economic stability a key pillar for his election campaign, urging voters to give his party another chance.
He also hopes that a shrewd campaign could result in a spectacular upset for the opposition party and extend a period of Conservative rule.
Leading data and analytics company GlobalData believes that a Labour Party win would likely provide a boost to the beleaguered construction sector, which is currently facing a downturn, with the seasonally adjusted construction output in real prices, declining by 0.7% year-over-year and 0.9% quarter-on-quarter.
Provided the Labour Party wins the elections and fulfils the pledges on housebuilding and infrastructure, the construction sector would likely register a turnaround from the second half of 2024.
