Many pundits say we won't, citing the way John Major's government fell, despite the economy recovering from the 1990/2 recession.
To understand why John Major's government fell, you need to go back to 1992 and Black Wedneday. At the time I owned a small flat with a mortgage and was at work, when around 10 a.m. we got news that interest rates had risen from 10% to 12%. Around noon we heard that rates had gone up again to 15%. We were in shock and no one did much work that afternoon. Instead we sat at our desks thinking, S**t, my mortgage payment has increased by 50% and frantically bashed our calculators in a futile attempt to rejig household budgets to accomodate the rise. It was real stomach sinking stuff.
It wasn't until 7 p.m., after the nation had been stewing in fright for a good seven hours, that Lamont announced that Britain had come out of the ERM and rates would remain at 10%. The only other time I've experienced a similar crisis day of the oh-my-god-is-this-really-happening sort, was 11th Sept 2001 (by 7th July 2005, we'd got inured to bombs, especially as ours followed Madrid's).
Rapidly the papers started to dub it "White Wednesday", as outside the ERM, interest rates could continue to fall. The feeling was very much that the markets and George Soros had rescued us from the idiocy of our own government (who prior to this also had the Lawson boom and bust, surging inflation, and the severe recession of Q4 1990 to Q2 1992 to it's charge sheet) by forcing them to see sense. The Tories had spent the '80's claiming that the markets were good and governments were bad - and this too played into the narrative. The good markets had rescued us from our bad Tory government. In other words the markets got all the credit for the recovery. John Major and his government got none and instead were despised as the people who would have tried to force us to bear 15% interest rates in a downturn.
Fast forward to 2008 and the situation is quite different. The markets this time are the villains. The public believes that banks are staffed with idiots who bought US sub-prime paper without realising the risks; that Northern Rock was run by idiots who thought they could finance mortgages through the money markets rather than traditional deposits; that the shareholders of Northern Rock were idiots for not overseeing the Northern Rock management properly.
The narrative this time is, who will protect the good citizen from the heedless foolish markets. Naturally, the public approved when Alistair Darling guaranteed bank deposits. And they approved of Northern Rock being nationalised. (Nationalisation is no longer a dirty word - even the Americans are doing it).
People knew that the Labour government protected the country from the world-downturn of 2001-2005 (though some ignorant Tories persist in claiming that this period - during which the USA, France, germany, Italy and Japan all dipped into recession at some stage - were the "good times"). So naturally they looked to the Labour government to protect them from this crisis too.
So we come to the budget of 2008. This is the point when Labour's ratings start to fall off a cliff. While people agreed with the individual policies that Darling announced, he simply didn't provide the firm and staunch assurance they were looking for (and which Labour had provided in 2001-2005). This got compounded by Brown pointing out that there was a world problem and that we didn't control oil prices for instance. The oil and food price spike is down to global factors not in the control of the government. But voters don't want to hear that their government can't do anything. It makes them feel even more helpless.
The government should simply state that we will do whatever we have to do to protect people, and then firmly announce what they are doing to safeguard people. So far Alistair Darling (who is becoming more confident) has announced intention to increase the deposit guarantee to £50,000 and has revised the rules on banking supervision. The Bank of England's Special Liquidity Scheme, which came into effect in April, has eased things in the money markets. All these are good moves - if only they'd been able to get more publicity for them. Mr Darling is modest, but should seek the limelight more. Mr Brown should stop talking about the rest of the world and cede the limelight to Mr Darling.
We will get through this difficult period, and this time, the markets won't get any credit for the upswing at all. All that belongs to government, as long as government remains firm and steadfast and projects confidence (difficult I know when Brown is being assaulted on all sides for his leadership).