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Alexander Kolyandr

Has Putin pushed the Russian economy to its limits?

The remarkable resurgence the Russian economy has experienced since Vladimir Putin’s invasion of Ukraine is losing momentum. Where once Putin could boast about 4.3 per cent growth rates for two years in a row – thumbing his nose at Western sanctions with all the aplomb of a man who’d discovered alchemy – the numbers now tell a somewhat different story. The party, as they say, is over – and the time to crank up sanctions against Moscow has come. For two years running, Putin’s propagandists have crowed about Russia’s economic vitality as proof that Western sanctions were about as effective as a chocolate teapot. The economy’s steroid-fuelled growth, pumped up

Spotlight

Featured economics news and data.

Ross Clark Ross Clark

No, Ed Miliband: zonal pricing won’t cut energy bills

Is Ed Miliband going to announce a move towards a zonal electricity market, where wholesale prices would vary between regions of Britain? It would appear to be on cards following the Energy and Climate Secretary’s interview on the Today programme in which he said he was considering the idea. Miliband’s apparent support for the plan follows intense lobbying by Greg Jackson, CEO of Octopus Energy as well as support from the National Energy System Operator (NESO), the new government-owned company which oversees the grid. However, zonal pricing is bitterly opposed by others in the energy industry, including Chris O’Shea, the generously-moustached CEO of Centrica, and Dale Vince, CEO of Electrocity

Wednesday

Ross Clark Ross Clark

Why is the UK economy stalling?

Giving evidence to the Treasury Select Committee this afternoon, Bank of England Governor Andrew Bailey doubled down on a point he has previously made to the committee: the economy is being pulled down by an extraordinary fall in productivity in the public sector. Relative to 2019, he said, productivity across the public sector is now 8 to 9 per cent lower. In the health sector, it is 17 to 18 per cent lower. In what he described as a ‘back of the envelope calculation’ the overall effect has been to reduce GDP by between 1 and 3 per cent. Last year, Bailey added, something extremely unusual happened: UK productivity fell

Matthew Lynn

Europe could pay the price for Germany’s debt shake-up

Germany has finally decided to join the party – but Europe may come to regret it. After two decades of limited borrowing and fiscal restraint, Europe’s biggest economy is finally joining the high-debt club. Incoming chancellor Friedrich Merz will borrow €800 billion (£670 million), and perhaps much more, to pay for extra spending on defence and infrastructure. Sure, Germany needs to spend more on its armed forces and on restructuring its economy. But it will also likely mean the euro-zone no longer has a single solvent member to anchor it. It is hard to see how this situation will end well for Europe. Merz is a centre-right, pro-business leader, but

Monday

Ross Clark Ross Clark

Angela Rayner is exercising her ‘right to switch off’ Britain’s growth

It was reported over the weekend that the government has dropped ‘the right to switch off’ from its Employment Rights Bill. Such a right, it has been widely asserted, had appeared in Labour’s manifesto for last year’s general election, promising that employees would be granted a legal right to ignore their boss’s emails outside their contracted working hours. However, it was left out of the bill as originally published last autumn, and neither has it been introduced as an amendment. But it seems that we were not really paying attention. It is true that Angela Rayner, in an interview with the Financial Times in May, made the suggestion that the

Matthew Lynn

The fatal flaws in Trump’s crypto reserve plan

President Trump was very bullish about his decision over the weekend to create a ‘crypto reserve’. It will legitimise crypto currencies, he said. It will turn the United States into the global hub for trade. And it will build the national wealth. In effect, the American government will build up a stock of Bitcoin and other digital currencies, much like the gold held in Fort Knox. But Trump’s promise is too good to be true: it is a dangerous scam. Trump’s crypto reserve will be wide open to market manipulation by the tech tycoons around him ‘I will make sure the US is the Crypto Capital of the World,’ Trump

Friday

Matthew Lynn

Will Labour MPs scupper a US-UK trade deal?

A UK-US trade deal is on the table. On a surprisingly successful trip to Washington, US President Donald Trump made it clear to the Prime Minister Sir Keir Starmer that a trade agreement with the United States was close. “We could very well end up with a real trade deal where the tariffs won’t be necessary,” Trump said after his meeting with the British delegation. “We’ll see.” Britain’s dire economic performance means that the UK is hardly in a position to turn down a deal With our economy in dire trouble, Britain needs this agreement more than ever. There is just one problem: Sir Keir will have to take on

Thursday

Michael Simmons Michael Simmons

The problem of Britain’s idle generation

The number of young people not doing anything with their lives has hit its highest level in 11 years. Figures released this morning by the Office for National Statistics (ONS) on 16- to 24-year-olds not in education, employment or training – so-called NEETs – show that the number has reached just under one million in the last three months of 2024. Standing at 987,000, the number of NEETs is up by 110,000 since the end of 2023 – equivalent to a town the size of Oldham. The new data means that nearly one in seven Britons aged 16 to 24 are not in education, employment or training. The figures are

Wednesday

Matthew Lynn

Will Trump’s ‘golden visas’ threaten Rachel Reeves’s tax plans?

Fed up with Rachel Reeves’s tax rises, with the calls for wealth and mansion taxes, and the loss of non-dom status? For $5 million (£3.95 million), there is now a very easy escape route. President Trump has just announced a ‘golden visa scheme’, allowing investors an easy path to American citizenship. That is aimed at attracting global entrepreneurs to the US. But it could also pose a real threat to the British economy. The UK depends on a small group of taxpayers to keep its huge state machine financed It is certainly a dramatic move. Golden visas that allow citizenship in return for investment have traditionally been restricted to a

Tuesday

Michael Simmons Michael Simmons

The energy price cap rise heaps more misery on Brits

Average gas and electricity bills will rise by £111 a year in April after the regulator Ofgem announced an increase to the energy price cap. The 6.4 per cent hike means the average dual-fuel household bill will hit £1,849 annually. The rise is more than anticipated, with analysts at Cornwall Insight predicting that bills would rise by just 5 per cent in April. Ofgem blamed inflation and ‘rising global wholesale prices’ for the bigger-than-expected increase. As a result, the cap will be £159 (nearly 10 per cent) higher than for the April to June period last year. The rise in energy prices is why the Bank of England recently forecast

Ross Clark Ross Clark

Why BP is ditching renewables

Among the big, bad oil companies in borstal for environmental offenses, BP has long been the relatively benign one, the class pet. Remember how former chief executive Lord Browne two decades ago promised to take the company ‘Beyond Petroleum’ to a golden future of clean energy? In 2004, in a forerunner of the ESG indices which are commonplace today, Goldman Sachs picked out the company as the most environmentally and socially aware of all oil companies. BP was supposed to be the one which was best-placed to manage a transition to cleaner energy, which, according to Goldman Sachs, would reduce risks for the company and boost returns for shareholders. But

Sunday

Matthew Lynn

How France killed its start-up culture

It would encourage digitally savvy entrepreneurs. It would be a hub for artificial intelligence. And it would encourage a wave of new companies, replacing the ageing giants of French industry. When Emmanuel Macron became president, turning the country into ‘le start-up’ nation was central to his mission to modernise the economy. In fairness, he had some success. And yet with one of the world’s most punishing wealth taxes passed by the National Assembly last week it is about to be killed stone-dead. It was always slightly implausible for a country best known for its long lunches, short working week, endless holidays, and generous early retirement ages, but Macron was determined

Friday

Michael Gove

Starmer’s Scottish headache

11 min listen

‘What does a party get after nearly two decades in office, collapsing public services, an internal civil war and a £2 million police investigation? Re-election again – perhaps with an even bigger majority’, writes James Heale in The Spectator this week. He’s talking about the SNP, whose change in fortunes has less to do with their leader John Swinney and more to do with the collapse of support for Scottish Labour and their leader Anas Sarwar. Who could benefit from the increased fragmentation of voters in Scotland? Will demands for more time, money and attention cause even more issues for Rachel Reeves? As Scottish Labour meets for its conference in Glasgow this

Ross Clark Ross Clark

The online shopping boom is well and truly over

So much for ‘dry’ and ‘no buy’ January. The UK public seems to have thoroughly rebelled against efforts to persuade them to work off the excesses of the festive season. In particular, we seem to have stuffed our faces somewhat. The retail sales figures put out by the Office for National Statistics (ONS) this morning show that the volume of sales in food stores rose by 5.6 per cent in January relative to December. That helped overall retail sales volumes to rise by 1.7 per cent, compared with a 0.6 per cent fall in December. Chancellor Rachel Reeves has good reason to feel relieved. Until a week ago it seemed

Michael Simmons Michael Simmons

Has Rachel Reeves broken her fiscal rules?

Rachel Reeves is having to borrow more money than even the worst estimates expected. Figures on the public finances, published this morning by the Office for National Statistics (ONS), show that in the financial year to January we borrowed over £118 billion. This is £11.6 billion more than at the same point in the last financial year and is the fourth highest borrowing period since comparable records began in 1993. The Office for Budget Responsibility (OBR) had expected borrowing to be some £13 billion lower by this point in the year. This news puts even more pressure on the Chancellor who, reports now suggest, has blown her fiscal headroom and

Ross Clark Ross Clark

The shame of Big Energy’s £3.9 billion profit windfall

It is one of the world’s great mysteries: if wind and solar energy are supposed to be so cheap then why does the UK – which generates a higher proportion of its electricity from wind or solar than virtually any other developed country – have higher electricity prices than any other member of the International Energy Agency? There are several reasons for this, in fact. Wind and solar energy are only cheap if you look at the marginal price of generation, which is very low because the wind blows and the sun shines for free. Add on the cost of back-up and/or energy storage to make up for the gaps

Wednesday

Matthew Lynn

Is X still worth £38 billion? Elon Musk thinks so

When Elon Musk bought Twitter in 2022, his many critics gleefully predicted a catastrophe. We were told that everyone would quit the site for its rivals, such as Bluesky and Mastodon. The rebranding to X made Musk the object of ridicule. Musk was warned that he was unlikely to see a return on the $44 billion (£38.1billion) he had splashed out on the site. But hold on: today brings news that Musk is attempting to raise extra cash for his site at the same valuation as what he bought it for. Musk’s critics will no doubt say he is deluded. But his business acumen speaks for itself: this is a

Freddy Gray Freddy Gray

Was ‘free trade’ really working?

29 min listen

Oren Cass, founder and chief economist of think-tank American Compass, sits down with Freddy Gray at the ARC conference in London. They react to the announcement by President Trump over the weekend of reciprocal tariffs: the decision by the US to match import duties levied by other countries.  What’s the strategy behind Trump’s decision? And what could the consequences be for American companies and for global trade? They also discuss the broad political consensus behind free trade in the US since the 1990s. Given the ‘lived reality’ that faced many American investors and companies – for example competing with Chinese Electric Vehicles – was the free trade really working anyway?

Kate Andrews Kate Andrews

Inflation rises to 3% – should we panic?

Prices are rising. Inflation rose to 3 per cent in the twelve months leading up to January, up from 2.5 per cent in December. It’s a bigger jump than expected, with markets and the Bank of England expecting a rise to 2.8 per cent, driven largely by higher transport costs, as well as higher costs for food and non-alcoholic drinks. Is there reason to panic? While the CPI figures are higher than expected for January, they are not far out of line with the Bank’s latest forecast, which expects inflation to peak closer to 4 per cent this summer, due to rising energy costs. As Capital Economics notes this morning,

Ross Clark Ross Clark

Are 3.1 million Brits really too sick to work?

Is it any wonder that the economy is struggling in spite of an apparently booming jobs market, with employers finding it difficult to hire recruits and average earnings rising by 5.9 per cent in the past year? Here is a shocking statistic which goes a long way to explaining the apparent paradox: there are now 3.1 million people claiming Universal Credit with no requirement to seek work – a number which has doubled in just three years. We have to be careful with the absolute numbers, because as benefit claimants are gradually moved onto Universal Credit the figures are bound to grow. But as the chart from the Department for

Matthew Lynn

Does it matter if Rachel Reeves fibbed on her CV?

Rachel Reeves is in the headlines again, for all the wrong reasons. The Chancellor’s entry in Who’s Who lists her as a contributor to the Journal of Political Economy. The problem? Reeves has, in fact, only published a single article in a far less prestigious publication, the European Journal of Political Economy. At this rate, it is hard to feel confident she is actually called Rachel The latest revelations follow claims that Reeves exaggerated the amount of time she spent working for the Bank of England. Her LinkedIn profile lists her as working at Threadneedle Street for nine months longer than she actually did. Reeves has also previously said she

Sam Meadows

The crypto crash haunting Javier Milei

When Javier Milei took power in Argentina there was one group whose ears pricked up with interest: the global crypto bros. After all, here was a president who seemed perfectly aligned with their values. A lover of economic freedom who harbours a deep hatred for state regulations and government spending. Surely this ‘anarcho-capitalist’ was a fan of cryptocurrencies? Twitter filled with threads about why Milei’s election victory was a ‘big moment for Bitcoin’. Once in power, however, he did not seem all that interested. That is until Friday, when he took to his X account to post about a new crypto coin that was ‘dedicated to boosting the growth of