Last TV debate over, election run-in begins

May 1, 2015

Britain's Prime Minister David Cameron gestures as he delivers an election speech at an engineering factory in Birmingham

With most of Europe taking May Day off, the focus is firmly on pre-election Britain.

We will get a flurry of UK economic data, among the last before Britons go to the polls next Thursday.

The latest manufacturing PMI survey plus consumer credit and mortgage lending figures will give a late pre-election snapshot of the economy heading into the second quarter after growth in the first three months of the year slowed to its slowest pace in more than two years.

Despite that, no political party is denying that economic recovery is entrenched. The key area of argument is whether the British public are feeling it – living standards have only just begun to rise after years of falling, and that is because inflation has evaporated rather than hefty wage rises.

Polls show the Conservatives remain well ahead in terms of perceived economic competence and that really should count. But a negative campaign – offering “competence not chaos” etc – may have neutralized that by failing to alight on a strong positive message to vote Conservative.

The main party leaders had their last mass media outing last night, facing questions from a studio audience in turn. A snap poll suggested Prime Minister David Cameron won, with 44 percent of viewers saying he had performed best on the night.

Most of the latest national opinion polls now put the ruling Conservatives narrowly ahead but not by enough to govern alone. However, a poll by YouGov overnight gave the opposition Labour party a one-point lead.

Labour leader Ed Miliband again ruled out a deal with left-wing secessionist Scottish nationalists but they would be likely to support a Labour-led administration nonetheless.

Cameron’s charge, albeit another negative one, that the SNP would prop up a Labour government, pull its strings and drag it to the left while preparing another independence vote, appears to have gained some traction with English voters.

With the SNP poised to gain up to 50 parliamentary seats on May 7, while Liberal Democrats who have ruled in coalition with the Conservatives since 2010 will struggle to get 30, Cameron will have to get 20+ plus more seats than Labour to be confident of remaining prime minister.

SNP leader Nicola Sturgeon repeated her offer to help keep the Conservatives out of power and said the most likely scenario was her party supporting Labour on a case-by-case basis.

Talks between Greek officials and the country’s lenders will continue today and are expected to stretch until Sunday, with Prime Minister Alexis Tsipras willing to step in to speed things up if necessary. In a sign of seriousness, both sides agreed on a news blackout, a euro zone official said.

Greece wants an interim deal by next week, hoping that will allow the European Central Bank to ease liquidity restrictions before a 750 million euro payment to the IMF falls due on May 12, a bill it is not clear Athens can meet without help.

Before that, it also has to repay 200 million euros to the IMF by May 6, although that is expected to be less of a problem.

The reasons to expect an accord before Greece runs out of money are starting to stack up. Tsipras has sidelined his abrasive finance minister from the negotiating process and declared he wants an agreement by May 9.

And concessions from Athens are starting to flow thick and fast. A top government official said Athens was willing to sell a majority stake in its two biggest ports and compromise on value-added tax rates and some pension reforms, in the clearest signal yet that it is ready to back down for a deal.

The official said Athens would consider a flat VAT rate on all goods and services except drugs, foods and books and could adjust supplementary pension payouts, though it insists on not cutting those below 300 euros a month.

Russia’s military may be taking advantage of a recent lull in fighting in eastern Ukraine to lay the groundwork for a new military offensive, NATO’s top commander told the U.S. Congress.

U.S. Air Force General Philip Breedlove said Russian forces had been seeking to “reset and reposition” while protecting battlefield gains, despite a fragile ceasefire agreed in February.

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