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(Bloomberg) — An ugly row with the family of a murdered teenager and an on-air bet about deporting asylum-seekers summed up another week to forget for Rishi Sunak as time ticks down to a UK election. Within days, he may be adding a recession, higher inflation and the loss of two Parliament seats to the list.

The setbacks are coming at a critical time for the prime minister, as officials in the Conservative Party grow more concerned about his struggle to establish a winning election campaign narrative. Trailing the Labour Party in the polls, the Tory plan was to spend the opening weeks of 2024 drumming into voters that the economy is turning the corner and that they should stick with Sunak rather than returning to “square one” with opposition leader Keir Starmer.

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“Because economic conditions have improved, because the plan is working, you are starting to see mortgage rates come down and we have been able to cut taxes,” Sunak said, in an interview with The Times published on Friday. “I do believe those pressures are starting to ease and that hopefully over the course of this year we can continue to make even more progress.”

That economic argument may soon hit a bump in the road. Data on Wednesday is predicted to show an uptick in consumer prices which, though not derailing the longer-term downward trend, would serve as a reminder of Britain’s ongoing squeeze on living standards. Then on Thursday, Sunak will learn if Britain fell into a technical recession at the end of last year. Economists see it as a coin toss, but whichever way the numbers fall, they will underscore how Sunak is yet to properly deliver on his core promise to grow the economy.

All of which poses an unappealing backdrop to the week’s major political event: Thursday’s by-elections in two Tory-held English districts, Wellingborough and Kingswood. Labour is widely expected to take both, given the headwinds facing Sunak’s party. But the premier would likely be more worried by a strong performance by the right-wing Reform UK party, which would trigger new calls for him to step down or be ousted, people familiar with the matter said.

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Sunak’s critics on the right of the Conservative Party have flagged the special elections as the next marker in their attempts to remove him before the election, which the prime minister is expected to call in the autumn. Their argument is that Labour’s 20-point poll lead hasn’t shifted for months, and that Downing Street is wasting time it doesn’t have to turn things around.

Doctors’ strikes this month are another looming flash point, a person involved in the plot against Sunak told Bloomberg. A rumored tax cut in the March budget is unlikely to move the polls, the person said, adding that the government’s achievements this year boil down to a ban on disposable vapes.

When asked whether tax cuts would be announced in the spring budget, Sunak told the Times that “none of us ever talk about this stuff before budgets,” adding that: “Other people are. I think they’re over-interpreting. What the chancellor and I have said is that of course our long-term plan is to cut people’s taxes.”

Sunak’s advisers wanted him to enter this tricky period on the back of more positive headlines, after Labour responded to repeated Tory attacks by jettisoning the opposition party’s flagship green spending plan. Instead, the prime minister’s missteps made the week more of a score-draw with Labour — despite Starmer’s U-turn ranking as one of his worst days as party leader.

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“We’ve got a series of self-canceling gaffes,” said Steven Fielding, Emeritus Professor at the University of Nottingham.

Sunak’s decision to shake hands on a £1,000 ($1,260) bet during a TV interview with presenter Piers Morgan, about whether flights deporting asylum-seekers to Rwanda would take off before the election, triggered widespread criticism from opposition politicians. For right-wing Tories, it wasn’t the subject of the bet but rather the circumstances that rang alarm bells. As Sunak’s team hurried to walk it back, they explained the premier was taken by surprise.

Just days later, a similar error played out in the House of Commons — with far more dramatic consequences. Sunak often pokes at Starmer’s stance on gender identity as part of a strategy to bring so-called culture wars into the election campaign. Doing so while Esther Ghey, whose transgender daughter Brianna was murdered last year, was in Parliament triggered a political firestorm. 

“Shameful,” Starmer said, as Sunak faced MPs shouting for an apology.

Behind the scenes, disagreements broke out around Sunak that laid bare the limits of his authority. Some senior aides urged him to stick by his comments and not apologize. Others saw it as a lapse of judgment, and one privately described it as the worst gaffe in Prime Minister’s Questions they’d ever seen. There were recriminations about the quality of work done to prepare Sunak.

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But it also split the Cabinet. As the debate continued over an apology, Sunak’s Business Secretary Kemi Badenoch — seen as having her own leadership ambitions — posted on social media without Downing Street’s sign off. Though she supported Sunak’s comment, aides saw it as a deliberate attempt to force his hand over a culture war issue that right-wing Tories are keen on.

The next day Cabinet minister Penny Mordaunt, whose support base is in the more centrist wing of the Tory party, urged the prime minister to “reflect” on his choice of language — an intervention that also infuriated Sunak’s aides.

The episode has underscored Tory concerns about his political instincts. Even some loyalists said he lacks the ability to react quickly when under pressure, which could cause problems in an election campaign. One aide suggested Downing Street should insulate Sunak from awkward public moments.

There’s also frustration that such unforced errors led to a missed opportunity to take advantage of Labour’s own internal strife.

“It’s a big opportunity cost for the Tories,” said Robert Ford, professor of politics at the University of Manchester.

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The opposition party is holding its own inquest into the fallout from Starmer’s decision to scale back its plan to spend an extra £28 billion a year on green projects to just £4.7 billion. The move, driven by economic conditions and Tory accusations that Labour planned to raise taxes to fund the plan, triggered anger among MPs who want the party to prioritize tackling climate change.

Starmer’s chief of staff, Sue Gray, reacted angrily to the weeks of internal leaks that the party was about to ditch the policy, suggesting shadow cabinet aides were behaving like bickering Tories and urging senior advisers to find who was responsible, according to people familiar with the matter. 

In a sign of the discontent in the shadow cabinet, some privately accused Lucy Powell, an ally of energy spokesman Ed Miliband, of being loose-lipped. She denied the claim. Others suggested fiscal hawks who wanted to scrap the policy leaked it in an attempt to bounce Starmer into reaching a decision sooner.

Miliband’s disappointment has been tempered by a belief that it could be at least in part revived and, should the economic outlook improve in office, more money might be found for the green transition, according to a Labour official who spoke on condition of anonymity. Labour need to keep quiet on any big spending plans and preach fiscal restraint to win the election, before deciding exactly what to do in office, they said.

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Miliband told Channel 4 News on Friday he “absolutely” did not consider resigning over Starmer’s decision.

Still, Labour’s internal discomfort left Tories lamenting a missed opportunity. Instead, some Conservatives said Sunak’s criticism that Labour “doesn’t have a plan” was lost in the furor over the prime minister’s transgender jibe. Worse, according to one official, was that Tory attacks against Labour’s most expensive policy had begun too soon and that by scrapping long before the election, Starmer had nullified the potential threat. 

Still, according to Fielding at the University of Nottingham, mistakes by both parties are “having no impact whatsoever” on voters’ views.

The problem for the Conservatives is that given Labour’s commanding lead in the polls and with time running out before the election, a political stalemate helps Starmer far more than Sunak. And the next week could be far worse.

—With assistance from Nour Al Ali.

(Updates with quotes from Times interview in third and eighth paragraphs.)

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