Labour is living in a fool’s paradise if it thinks it has plenty of time to turn Britain around | Larry Elliott

Going into 2026, the economy has little forward momentum. And there’s the issue that things may get worse before they get better

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ll governments go through bad patches, when nothing seems to go right and voters turn against them. Often they bounce back from the midterm blues and go on to be comfortably re-elected. That said, Labour’s current unpopularity is in a class of its own. It is not just the scale of its problem, with opinion polls suggesting support for the party has almost halved, from 34% to 18% since the 2024 general election. Nor is it simply the speed at which disillusionment with the government has set in, though that too is unprecedented.

What’s really remarkable is that the public is not normally this negative about a government unless the economy is in the deepest of slumps. If the UK had double-digit unemployment and house prices were crashing, Labour’s political predicament would be a lot easier to explain.

Clearly, 2025 has been a far from vintage year for the economy, but it hasn’t been that bad either. Britain has trundled on in much the same way it has since the global financial crisis of 2008. Economic performance has been mediocre but not disastrous.