ronib
We can’t foresee what the electorate will think in 2029. But don’t the markets take over? Isn’t it the Bank of England who will decide whether Starmer stays or goes?
Neither 'the markets' nor the Bank of England have any say in who is PM. It ultimately comes down to the party which chose that person as its leader.
Both can make life difficult for the PM, mostly because the electorate and the media believe the 'household economy' myth. The Bank of England is particularly pernicious because it is keeping inflation high (fuelling the cost of living crisis experienced by an increasing no of people) by keeping interest rates high. And it's keeping interest rates high because of its blinkered and completely foolish belief that there is only one way to control inflation.
But high interest rates only work if the inflation is caused by too much money in the economy chasing too few goods to buy. Higher interest rates then take money out of the economy, damping down demand and restoring the balance between spending and provision of goods and services.
Our current inflation isn't caused by this. Far from there being too much money circulating in the economy there isn't enough. Consumers aren't spending as much because their income is going on the basics. When people aren't spending, businesses struggle or fail, with all the knock on effects of job losses and higher demands on welfare.
But our current inflation is caused by a shortage of supply, notably energy in the form of oil imprisoned in the Persian Gulf. Historically this has tended to be the primary cause of inflation since the 1970s. This being so, no amount of raising or retaining high interest rates is going to make any difference to inflation.
The Bank of England is nominally independent, though it belongs to the state. But ultimately it is bound by legislation to act on the instructions of the government. it did this in the GFC when it carried out Quantitative Easing (QE) to prevent banks failing (and us losing the money in our accounts) and again to cover the cost of the covid crisis.
There is nothing, apart from convention, to stop the government telling the BoE to reduce interest rates. But it won't because it doesn't understand the causes of inflation and the Treasury, which doesn't seem to understand them either, is both very powerful and is led by an incompetent Chancellor.