On the first day back after Christmas, Tory MPs were invited for welcome drinks in the Prime Minister’s parliamentary office. Rishi Sunak – a teetotaller – was not there. Instead, his Chief Whip hosted. Simon Hart told those present that drinks would be held fortnightly since ‘we are one big family, not a series of families’. He was referring to Mark Francois’s eyebrow-raising claim last month that groups of MPs (New Conservatives, the European Research Group, etc.) were the ‘five families’ of a Tory mafia.

The Rwanda Bill will return to the Commons next week, so there will be plenty of opportunity for blood feuds to resurface. But despite his gag, Hart didn’t spend much time trying to rally the party around the common aim of stopping the boats. Instead, he used his address to focus on what seems to be No. 10’s main message: that the economy’s fortunes are improving.

As his pledges on immigration and the NHS run into trouble, Sunak is switching to a safety-first approach. This week, at one of the many town hall-style events he plans to hold in the run-up to the election, he said: ‘The choice facing our country is: do we stick with the plan that is starting to deliver the long-term change that our country needs or do we go back to square one?’

New Labour’s landslide proved that economic recoveries do not necessarily win elections

‘Rishi has been chopping and changing strategy for the past few months,’ complains one senior Tory. At the party’s conference he posed as a radical, claiming he would end the ‘30-year political status quo’. Now, he’s Mr Stability, pledging continuity. But Sunak’s close allies insist his message is consistent: ‘He is willing to take difficult decisions – it takes patience and discipline to bring about change,’ says a supporter. ‘Unlike with the boats, it’s much easier to control the narrative,’ says a government source. ‘It’s also his comfort zone.’

The Prime Minister’s hope is that the economy is turning a corner and so, by polling day in the autumn, he will be able to convincingly make the case that the country has made too much progress to risk returning to a Labour government. John Major made the same argument in 1992 and 1997. It worked the first time, when he advised the electorate that ‘you can vote for our opponents and watch them take Britain back to the 1970s’. It didn’t work the second time. New Labour’s landslide proved that economic recoveries do not necessarily win elections for the incumbent, especially if voters see the government as an exhausted rabble.

In 1997, Major could at least point to four years of robust growth and a property market which offered more affordable housing than at any time in recent history. Now, Britain is expected to spend the year teetering on the edge of recession – and houses are pricier in terms of mortgage repayments than ever before. ‘It might sound like nothing now,’ says a government aide. ‘But by the autumn, that could have changed.’

One hope is inflation. The internal Treasury tracker projected inflation to be at 4.6 per cent by the new year. Instead, it’s at 3.9 per cent and may continue to drop more quickly than expected. If it stays lower than wage growth, the recovery in living standards may start a year early. Some banks are predicting that inflation will drop as low as the Bank of England’s official target of 2 per cent by the summer.

Huw Pill, the Bank of England’s chief economist, has used the shape of two mountains, Cape Town’s Table Mountain and the Matterhorn, to explain the two different ways he imagines interest rates might fall.  A Table Mountain model would mean rates stay high for longer – they plateau, followed by a steady and slow descent. The Matterhorn model would mean rates falling steeply – which would be a relief both for government and anyone who has a mortgage to renew. The hope now is that it will be the latter.

Next, tax cuts. The Sunak strategy has been to impose a £45 billion stealth tax by freezing tax thresholds, but then take some of the sting out of it by spending £10 billion cutting National Insurance from 12 to 10 per cent. The net result is still higher tax, so he’s unlikely to get much gratitude from voters. Jeremy Hunt will go further in the Spring Budget, and if the general election isn’t until November, further cuts could come in a second fiscal event. No decisions will be made until nearer the time, but the preference is for a wide tax cut that benefits working people – probably income tax. If the headroom allows, inheritance tax could be cut too. While some Tories baulk at the idea of relief for inherited wealth – inheritance tax is paid by less than 4 per cent of estates – – the Chancellor takes issue with the tax. It’s seen as a defensive strategy to shore up Blue Wall seats such as Hunt’s in Surrey.

Sunak’s final hope is the ongoing uncertainty surrounding Starmer’s economic plan to spend £28 billion on green investment. Starmer and his shadow chancellor Rachel Reeves have already put the scheme on ice, saying it would need to be consistent with borrowing rules. Some Labour figures believe this means the plans will never go ahead. But Starmer is still attached to the scheme, saying he wants to have a ‘fight’ with the Tories on borrowing to invest and that he is committed to reaching net zero on domestic energy within five years. It is an undeniably radical pledge from Labour and the ‘only one that can materially affect the election result’, according to a government aide.

The Tories will fight the election arguing that Starmer’s plans are dangerous and unaffordable, while Sunak offers calm expertise. ‘Stick to the plan, it’s working,’ may sound anodyne, but Sunak thinks caution is his best bet. Which is, in itself, a huge gamble.