Economy

The economy shrank by 0.1 per cent in January according to figures just published by the Office for National Statistics (ONS). The news will come as a disappointing shock to Rachel Reeves after most economists had predicted the year to have started with growth. In December the economy had grown by 0.4 per cent, but a fall in production of 0.9 per cent and in construction of 0.2 per cent tipped the economy back into contraction. Services were up marginally but not by enough to lead to overall growth. Liz McKeown, the ONS’s director of economic statistics, pointed to a ‘notable slowdown’ in manufacturing compounding a downturn in oil and gas extraction

Listening to Keir Starmer announce this morning that he is going to abolish NHS England can only make the Conservatives wonder at what might have been. It should have been a Conservative prime minister making this sort of speech, declaring the civil service to be ‘flabby’ and cutting out masses of duplication in public administration.     Indeed, the Conservatives made a good start in increasing the efficiency of public services when they returned to office in coalition with the Lib Dems in 2010. Civil service numbers were cut by more than a fifth, from 492,000 in 2010 to 384,000 in 2016. But then something went desperately wrong, and Whitehall was allowed

‘Don’t stress over short-term stock market swings’ is a maxim on which Donald Trump and I might agree, even if he is keen to take credit for upward rallies. The shakedown of the past few days is a natural reaction to the wild six-week ride of Trump’s tariff and foreign policy gambits and the realisation that if he keeps it up, he’s far more likely to harm the US economy than boost it. But with a mad king surrounded by madder courtiers anything can happen, including ever more eccentric reversals. So watch the White House tragicomedy but don’t get hung up on the Dow Jones index. But having said that,

Markets are not enjoying Donald Trump’s tariffs. Some 125 days have passed since his second election victory and the S&P 500 is on a clear downward trajectory thanks to Trump’s tariff policies and other poor US economic data. After the same number of days following Biden’s election, the S&P was up 13 per cent; for Obama’s second term it was up nine per cent; and at the same point in Trump’s first presidency it was up 11 per cent. For Trump 2.0 it’s down 3 per cent from election day. Trump has summoned Wall Street bosses to the White House in an attempt to calm nerves, but while US equities

There ‘could be a recession’, said President Trump over the weekend with the kind of nonchalant shrug that suggested he was not too bothered one way or the other. He was even going to buy a Tesla to help out his ‘first buddy’ Elon Musk as the company’s share price collapsed. The markets had assumed there was a ‘Trump put’ – that is the President would always ride to the rescue to keep the bull market running. But there is no sign of it. Instead Trump seems perfectly relaxed about the huge losses, even encouraging the sell-off. Of course, it might just that he does not know what to do.