Theresa May: What economic progress has been made one year on from her becoming Prime Minister?

Have we moved any closer to Ms May's proclaimed goals of greater social justice and intergenerational fairness? And what has happened to the British economy?

Upon entering Downing Street in July 2016 Ms May promised to assist families who are ‘just about managing’ (Oli Scarff/AFP/Getty Images)

A year ago this week Theresa May succeeded David Cameron as Prime Minister.

In her first statement as PM outside Downing Street, Ms May made a host of bold economic pledges.

She promised to fight social immobility, to tackle intergenerational unfairness and to assist families who are “just about managing”.

“As we leave the European Union, we will forge a bold new positive role for ourselves in the world, and we will make Britain a country that works not for a privileged few, but for every one of us,” she said.

So, 12 months on, what progress, if any, has been made towards those goals?

And what has happened to the British economy?

The economy

On 11 July 2016 the outlook for the UK economy seemed bleak indeed.

On the night of the Brexit referendum on 23 June the pound suffered its biggest intraday fall against the dollar on record as financial traders priced in a dramatically poorer future for the UK outside the European Union,

Many economists were expecting the economy to enter recession.

But a year ago, as Ms May stood on the steps of Downing Street, there was almost no data on the economy yet available.

The first signs were terrible. A set of industrial surveys published later in July pointed to the deepest slump in activity since the financial crisis.

But the surveys bounced back the next month as general confidence returned.

The rapid formation of a Government by Ms May (and the avoidance of a lengthy and uncertain Tory leadership contest) was probably a factor in this.

The Office for National Statistics eventually reported that the economy grew reasonably in the final two quarters of 2016, confounding predictions of a slowdown.

Yet this year things have fallen away. Consumer confidence has dwindled as inflation has spiked to close to 3 per cent.

And GDP growth slipped to just 0.2 per cent in the first quarter of 2017. The inconclusive general election results seems to have dented business confidence again.

The general view is that the Brexit-related slowdown has finally arrived.

The pound

Sterling's fortunes have waxed and waned over the past 12 months with the words of the Prime Minister and traders' varying perceptions of the likelihood of a hard or chaotic Brexit.

The currency hit a low of $1.21 in October 2016 around the time Ms May informed the Tory party conference that she would definitely end the jurisdiction of the European Court of Justice, strongly implying the UK leaving the single market.

After a partial recovery it was driven down to this level again in January when Ms May finally confirmed this decision at her Lancaster House speech.

Sterling started to climb again from April when Ms May called a snap general election, with many traders apparently calculating that a landslide victory would enable her to sideline her hardline Brexiteer backbenchers and enable her to reach a more pragmatic trade deal with the EU.

The currency has gone sideways since the inconclusive election result on 8 June.

Most traders are still pricing in a hard Brexit, but the pound is being supported by the view that the Bank of England may relatively soon raise interest rates to curb inflationary expectation taking hold.

Inter-generational fairness

The boldest move in this direction was in the Conservative manifesto, with the decision not to cap the amounts individuals would have to contribute to their social care bills, going against the specific recommendations of an independent official report headed by Sir Andrew Dilnot.

“We consider it more equitable, within and across the generations, than the proposals following the Dilnot report, which mostly benefited a small number of wealthier people,” the manifesto said.

The document also pledged to “look again” at non-means tested winter fuel payments for the elderly and end the triple lock on pension increases.

But the refusal to cap care costs was dubbed a “dementia tax” by Labour and the media and Ms May was forced to U-turn within days. promising a review.

Despite the reversal, the fiasco has been widely interpreted as a reason why the Conservatives rapidly lost support among many older voters during the election campaign.

And now in the wake of the election, the terms of Ms May's parliamentary support deal with the Democratic Unionist Party has even forced her to leave the triple lock and winter fuel payments alone, despite the fact these universal benefits for the old in effect constitute a transfer from less well-off young taxpayers to an asset-rich older generation .

However, one post-election ray of hope for young people is the suggestion of a review of tuition fees, as the Tories feel the pressure from Jeremy Corbyn's promise that Labour would scrap them altogether.

Inequality

Despite her claims to be concerned with the plight of Britain's “just about managing” classes, Ms May decided to keep the hefty working-age benefit cuts pencilled in by David Cameron and George Osborne.

This was despite the fact that these would bear down most heavily on the working poor and, according to projections by the Institute for Fiscal Studies, would increase UK income inequality sharply by 2020.

IFS

Now, though, there is growing pressure for these welfare cuts to be revisited, especially as higher inflation will accentuate their impact.

On industry, one of Ms May's earliest pledges to help reduce inequality was to force every company to put a worker on their boards. She also said firms would have to publish a pay ratio between chief executives and the average worker in their firm and to hold annual binding shareholder votes on executive remuneration packages.

But, in the face of business lobbying, the workers on boards pledge has been downgraded to merely a worker “representative” and is not to be compulsory. The compulsory annual vote on pay also seems to have been dropped.

However, the pay ratio publication requirement, for now at least, still remains.