Economy

Could the government be preparing itself for a spending cut which would eclipse the ending of the winter fuel payment? In his mini-reshuffle in response to the resignation of Tulip Siddiq, Keir Starmer has appointed the newly-elected MP for Swansea West, Torsten Bell, as pensions minister. It is an interesting choice because, in his former life as director of the Resolution Foundation, Bell was a loud critic of the triple lock, which he called ‘a messy way of achieving the objective of a higher state pension’. He advocated raising the state pension in line with average earnings instead. The Prime Minister quickly moved to scotch suggestions that the triple lock

Rachel Reeves has found brief respite this morning, with the Office for National Statistics confirming that inflation dipped to 2.5 per cent in the 12 months to December, down from 2.6 per cent the month before. This is a smaller rise than had been expected (the consensus was 2.6 per cent) and roughly in line with the Bank of England’s forecast from November, which had predicted a 2.4 per cent increase. It’s welcome news for a Chancellor who is under pressure. Core inflation slowed too, from 3.5 per cent in the year to November, to 3.2 per cent in December. This competes for the best news in the update, as core

Rachel Reeves did her best to keep today’s China visit statement on topic. The Chancellor wanted to talk about ‘cooperation’, ‘competing where our interests differ,’ her efforts to break down market barriers and the £600 million she secured in investment. But other MPs had other ideas.  ‘I know the Chancellor has been away,’ said the Shadow Chancellor Mel Stride. ‘So let me update her on the mess she left behind.’ So began the battle between the Chancellor – to stay on topic – and her opposition to bring up the long list of economic woes that have come to the forefront this week: not just the substantial rise in borrowing

Rachel Reeves, who is now fighting for her political life, was instrumental in helping Labour secure a landslide majority at the general election. If you don’t believe that then you have probably forgotten that her predecessor as shadow chancellor was Anneliese Dodds. All the while that the wild-haired former university lecturer Dodds was in charge of Labour’s economic policy the party lagged well behind on perceived competence on this vital issue. But when the sleek, suited and booted Reeves took over that all changed. City and business sentiment gravitated towards Starmer’s party and the Tories were unable to terrify the electorate any longer about the prospect of Labour being in

The new year may have rustled up some surprise stand-offs for the Labour government (mainly calls from X founder Elon Musk for Keir Starmer to resign), but the rise of new problems does not mean the old problems have disappeared. A harsh reminder has been dished out this morning, as long-term borrowing costs reached a 27-year high, calling into question yet again exactly how the Treasury is going to make good on its spending commitments while sticking to the Chancellor’s own fiscal rules. Thirty-year gilt yields hit 5.21 per cent this morning – a level that surpasses the surge in borrowing costs following Liz Truss’s mini-Budget in 2022. The ten-year

It’s not terribly helpful for Keir Starmer that Elon Musk is creating polls on X, asking his 210 million followers if ‘America should liberate the people of Britain from their tyrannical government’. Nor does the Prime Minister seem very happy about the attacks on his record as chief prosecutor, using the Q&A of his healthcare speech this morning to insist that he used his five years in the role to tackle child exploitation ‘head on’. But the mudslinging back and forth across the pond has buried one of the most worrying indicators for 2025 announced so far: business confidence has sunk to its lowest point since Liz Truss’s infamous mini-Budget.

Are we about to find out the full foolishness of Ed Miliband’s policy of blocking licences for new oil and gas extraction in the North Sea? While it may come as a surprise to some, until New Year’s Eve Europe was still receiving gas supplies from Russia – not through the Nord Stream 1 pipeline which was sabotaged in 2022, but via an unlikely route through Ukraine. These taps have now been turned off, after an agreement for Russia to supply gas to Europe came to an end. That leaves the continent facing a similar situation, if less acute, to that which it faced in 2022. It must look elsewhere

When the British government spent £400 million on the satellite internet start-up OneWeb back in 2020, it was seen as precisely the kind of active, tech-led industrial strategy that could re-boot the British economy. There were hopes the deal would help secure a place for the UK at the heart of the emerging space economy. Then prime minister Boris Johnson saw it as a key part of launching ‘Galactic Britain’. But four years on, the taxpayer is on the hook for a £300 million paper loss after shares in OneWeb’s parent company sank to a record low. The money poured into OneWeb has proved to be remarkably poor value Even

This is hardly how 2024 was supposed to end for Labour. Free from the shackles of ‘14 years of Tory misrule’, the economy was supposed to take off. ‘Growth, growth, growth,’ Keir Starmer told us, a little unconvincingly, were going to be the government’s three main priorities. Indeed, Britain was going to tear away as the fastest-growing economy in the G7 – although he never offered us any explanation as to why this would be the case, still less which of his policies was going to achieve it. This morning’s revised GDP figures from the Office for National Statistics (ONS) reaffirm just how big a failure the government’s economic policies