Local elections tell us naff all about the general election tbh. Labour would lose a lot of councilors under Blair only to come back and trounce Howard, Hague and IDS at the GE.
For all the Guardian $#@!ting themselves over the polls the election is still very much Labours to lose. They're not going to poll as low as they did in 2010 and the Conservatives will not poll as high. Likely worst case scenario for Labour is a hung parliament where they are the largest party. Its highly unlikely the Lib Dems will have any say in who the next government are as they have been on around 9-10% since 2010. Labour would probably try and govern as a minority govt or else go back to the electorate Wilson style.
As for UKIP, people are experiencing a cost of living crisis, poor public services and job insecurity mainly as a result of the neo-liiberal economic agenda broadly followed by every govt since 1979. As these policies only benefit the top 10% a lot of people (rightly) feel ignored by the main parties and have turned to an alternative as a result. Immigration and Europe have always been easy targets and that combined with the fact that Farage gets loads of media coverage and doesn't come across as a posh $#@! have helped boost their vote. Trouble is UKIP believe the answer to our problems are less worker protection, less spending on public services and far lower taxes for the rich. A ban on all immigration won't suddenly solve all of our problems and tbh nobody knows what would happen if we left the EU. It might be wonderful, it might be horrendous but any politician who tells you they know for sure is a liar and an issue as complex as this shouldn't be left to a simple in/out referendum. IMHO.