Britain's opposition Labor Party is set for a landslide victory in a special election for a Conservative stronghold Thursday in a further blow to the fortunes of Prime Minister Margaret Thatcher.
The Conservative government's new budget failed to impress financial markets and the pound sterling sank to a record low against the West German mark Wednesday, reflecting concern about Britain's political and economic problems.Financial analysts said the budget was not tough enough to curb inflation, currently at 7.7 percent, but Chancellor of the Exchequer John Major said he would raise interest rates again if necessary to bring inflation down.
Interest rates at 15 percent, which are hurting two out of three families who have borrowed money to buy their own homes, and a new "poll" tax championed by Thatcher, are widely regarded as the main reasons behind the government's plunge in the popularity stakes.
The new tax on every adult, which replaces a levy on property, has sparked violent protests across the country.
National opinion polls put Labor around 20 percent ahead of the Conservatives.
A poll in The Times newspaper Thursday shows support for Labor in the by-election at a resounding 55 percent with the Conservatives trailing at 28 percent.
A Labor victory would wipe out a 14,654 majority in the previously safe Conservative seat and would mean the biggest swing in support for Labor for more than half a century.
Labor's deputy leader Roy Hattersley said Wednesday by voting Labor the Mid-Staffordshire electorate could ensure the poll tax was swept away "by Tory (Conservative) panic."