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Martin Vander Weyer Martin Vander Weyer

Britain needs a Rearmament Isa

The City’s self-styled ‘cheerleader in chief’, Lord Mayor Alastair King, on a recent visit to Beijing and Shanghai found leading Chinese banks keen to expand in London. What with Chinese diplomats also keen to establish a fortress-embassy at Royal Mint Court on the City’s eastern edge, that may ring alarm bells with those who regard Xi Jinping’s neo-Maoist regime as anything but friendly. But as King also observes, ‘the tectonic plates are shifting’. All geopolitical relationships are up for review – though what follows is my own analysis, not the Lord Mayor’s. A previous British visitor to Shanghai, chancellor George Osborne in 2015, declared an urge to be ‘China’s best

Spotlight

Featured economics news and data.

Alfie Pearce-Higgins

What’s the point of foreign aid?

The UK signed up to a UN target of spending 0.7 per cent of GNP on aid way back in 1970, but didn’t hit that level until 2013. In 2020, aid spending was cut to 0.5 per cent and last week Keir Starmer reduced it further to 0.3 per cent. This will save about £4 billion which will instead be allocated to military spending. There were predictable howls of anguish from aid advocates at the news, and the development minister resigned. There was also begrudging praise from Starmer’s Conservative opponents. But few seemed to question what the point of aid is, and whether a spending target, at any level, makes

Yesterday

Ross Clark Ross Clark

Labour’s welfare crackdown is a sham

You can already sense Rachel Reeves’s spin machine whirring into action. It was Donald Trump wot ruined my careful book-keeping, the Chancellor will tell us as once again her fiscal headroom disappears and she ends up banging her scalp painfully on the ceiling. But could it be unrealistic expectations for her welfare reforms which prove her undoing? Tucked away in the government’s own figures is the revelation that Labour’s welfare shake-up could result in 400,000 more people signed off unfit for any work. Britain’s workshy culture has received another boost The contents of the impact assessment on her Spring Statement, published by the Office for Budget Responsibility (OBR) last week,

Will Prescott

Trump’s tariff plan has been tried before. It failed

Donald Trump thinks ‘tariff’ is the ‘most beautiful word in the dictionary’. Today is ‘Liberation Day’, and the US president is holding true to his campaign trail promise to impose tariffs on imports. Cars, steel and aluminium are expected to be hit with levies of up to 25 per cent. A 10 to 20 per cent universal tariff on all goods imported into the United States is also said to be on the cards. Trump isn’t the first to think tariffs are a secret weapon. A century ago, the British Conservatives’ were obsessed by tariffs. Like Trump, they saw them as an ideal tool to promote industrial revival and lower taxes.

Peter Leahy

Trump’s tariffs could damage the dollar

Donald Trump says his tariffs are about liberation. But his aggressive turn toward protectionism may signal the beginning of a shift away from the foundations that have upheld American prosperity for decades. The US dollar’s status as the world’s reserve currency has long enabled the United States to consume far more than it produces, to run massive deficits without consequence, and to project unparalleled geopolitical power. Trump’s decision to slap tariffs of up to 25 per cent on imports could put that all at risk. When French president Valery Giscard d’Estaing referred to the United States’ ‘privilège exorbitant‘ he was not referring to America’s central position in the post-WW2 world

Tuesday

Matthew Lynn

The minimum wage is too high

Council tax is going up. Train fares are rising. Broadband will cost more, and so will electricity and water. April opens with a blizzard of price rises that will make it far harder for everyone to make ends meet, especially if they are on a low income. The one compensation is that the minimum wage is going up as well. There is just one catch, however. The UK now has one of the highest minimum wages in the world – and very soon it is going to become painfully clear it will start costing jobs. It is the one statistic the government will be boasting about on Tuesday. The National Living

Matthew Lynn

Starmer’s costly failure to get a Trump tariff carve-out

The UK should have been doing everything possible to secure an exemption from Trump’s tariffs. We could have scrapped the digital services tax that is largely levied on the American tech giants. We could have opened our agricultural markets – even to chlorinated chicken. Heck, we could have offered President Trump his own apartment in Buckingham Palace, given how much he loves the royal family. This was the opportunity of the decade – but the Starmer government has already blown it. We will find out the full extent of the tariffs Trump plans to levy on all of America’s main trading partners tomorrow on what he has oddly termed ‘Liberation

Ross Clark Ross Clark

There’ll be no liberty on Trump’s ‘Liberation Day’

Beware the words ‘liberty’ and ‘liberation.’ There are no end of evils committed in their names. Wednesday, according to Donald Trump, will be America’s Liberation Day, as citizens are freed from the yoke of free-ish trade. That is the day that importers who have been showering US consumers with cheap goods will be slapped with punitive tariffs. So far, the only thing that US consumers appear to have been liberated from is their money. Stock markets in the US and around the world have suffered a slide as markets digest the implications. They do not like what they foresee, which is the prospect of the golden years of globalisation going

Michael Simmons Michael Simmons

Welcome to Terrible Tuesday

Britain’s real economic pain starts today. Overnight, the cost of living has jumped once again: energy, water, broadband, public transport, TV licences – all up. So too are council tax bills, capital gains, and vehicle taxes. And that’s before we even get to the slow stealth march of fiscal drag. Last week, the Office for Budget Responsibility warned that inflation will hover close to 4 per cent this year – driven by higher food and energy prices – and won’t fall back to the Bank of England’s 2 per cent target until 2027. One of the biggest culprits? Energy. Ofgem’s latest price cap hike – up 6.4 per cent –

Sunday

Michael Simmons Michael Simmons

Can we trust our economic data anymore?

Britain’s economic outlook may have been skewed by bad data – and it could be costing billions. Wage data pored over by the Bank of England’s Monetary Policy Committee (MPC) is set to be revised in the coming weeks – and the implications could be serious. The nine economists who decide the country’s interest rates – currently at 4.5 per cent – have consistently said they want to see pay rises slow before they can be sure that the inflationary shock brought about by Covid has worked its way out of the system fully. But wage growth remains strong. Private sector wages have gone from below 5 per cent in

Druin Burch

MPs deserve more than a £2,500 pay rise

It looks set to be a happy April for MPs who are in line for a 2.8 per cent pay rise, lifting their salaries to £93,904. Your reaction to that figure likely depends on how much you earn. So does mine – and since I’m about to argue that MPs are underpaid, it’s only fair I give a sense of my own finances. I’ll stay schtum about my books and biotech startup, but I’ll admit – no boasting intended – that this piece will net me, after tax, somewhere in the mid to high two figures. Can it be right that we pay our MPs significantly less than hospital consultants? As

Chris Reiter and Will Wilkes

Can German cars survive Donald Trump?

In 2003, Donald Trump took delivery of a Mercedes-Benz SLR McLaren, a $450,000 German supercar that blended precision engineering with Formula 1 bravado. Photographed grinning over its bodywork in Manhattan, he looked every bit the unabashed playboy flaunting a new toy. Two decades on, he’s threatening to hammer the very firm that built it – and Germany’s car industry as a whole – with a 25 per cent tariff on European auto imports. Germany’s post-Cold War boom was built on a single assumption: that ever-deeper globalisation was here to stay. As we explore in our book Broken Republik and its German sibling Totally Kaputt?, the country’s carmakers made an all-in

Saturday

James Heale James Heale

Michael Heseltine on Thatcher, Boris and Badenoch

30 min listen

An MP for 35 years, Michael Heseltine served as Environment Secretary and then Defence Secretary in Margaret Thatcher’s government. Following his well-publicised resignation in 1986, he returned to government under John Major and was Deputy Prime Minister for the last two years of Major’s premiership. Once seen as a potential successor to Thatcher and Major, he has sat in the Lords since stepping down as an MP in 2001, and in recent years has been an outspoken critic of Brexit. Lord Heseltine sits down with James Heale to discuss his thoughts on the current Labour government, how to fix Britain’s broken economy and why devolution should go further. ‘Deeply depressed’

Matthew Lynn

Give holiday home owners a break

If you have had your eye on a bungalow along the Devon coast, a cottage in the New Forest, or a tastefully painted terrace in one of the sea-facing villages in Norfolk, this could be your moment. Many holiday home owners are choosing to sell up to avoid a hike on council taxes. From next week, local authorities will be allowed to charge double the normal rate for second home owners. Average bills are set to rise from £2,280 to £4,560. This crackdown is likely to be popular. After all, who has sympathy with those who own two homes, when many young people are struggling to get on to the

Friday

Tom Bower

The flight of the millionaires will impoverish Britain

Steel magnate Lakshmi Mittal is considering leaving the UK because of the Labour government’s abolition of the ‘non-dom’ tax regime. This confirms that Keir Starmer’s politics of envy is successfully destroying the British economy. Mittal would join tens of thousands of millionaires and billionaires – British and foreign – who have already abandoned Britain to avoid paying even more tax: all of them ranked among the 1 per cent of British residents, contributing 29 per cent of all the taxes raised by HMRC. These tax exiles had been willing to pay fair taxes, but many baulked at Starmer’s decision not only to tax their offshore income but also their foreign-based

Matthew Lynn

Who’s going to miss WH Smith?

WH Smith is opting for the oldest trick in the corporate playbook. It is changing its name. It might have been better to get some new carpets – or at least to freshen up some of the display counters. As the chain’s high street shops are sold off, they will be rebranded as TG Jones, whoever the heck he was. Sure, a few nostalgics might mourn the passing of one of the oldest names on the British high street. And yet, the blunt truth is that the brand was already dead – and no one will miss it now.  If you want to buy some over-priced water, or pick up

Michael Simmons Michael Simmons

Britain narrowly escapes recession – again

The Office for National Statistics (ONS) has just confirmed that the economy ‘grew’ by 0.1 per cent in the last three months of 2024. Its final estimate for the last quarter of last year confirms that Britain’s economy continues to float just above recession territory. The very modest growth in the final quarter was driven by the services sector, also 0.1 per cent, which outweighed a 0.3 per cent contraction in construction. On a per-head basis, GDP fell by 0.1 per cent. Each quarter from October 2023 to June last year had GDP growth revised upwards by 0.1 percentage points, with the ONS’s Chief Economist, Grant Fitzner, saying: ‘Today’s updated

Ross Clark Ross Clark

What happened to the post-Covid roaring twenties?

It has become customary for Budgets to unravel within 48 hours of being delivered. Rachel Reeves didn’t have much in the way of fiscal announcements to deliver on Wednesday, but even what she did have to say seems to be falling apart. It has since transpired that the Office for Budgetary Responsibility (OBR) did not take into account any risks from a transatlantic trade war when downgrading its growth forecast for 2025 from 2 per cent to 1 per cent. This is an additional risk which is almost certain to erode her newly-clear fiscal headroom and lead to more tax rises in the autumn Budget. If Reeves was hoping for