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Labour’s Yimby plan could lock the Tories out of power for good

As opposition leader, Sir Keir Starmer long struggled to define what ‘Starmerism’ is, other than ‘not Corbynism’ and ‘not Toryism’. Last Autumn, he belatedly stumbled across a policy theme which he has since tried to make his own: ‘Yimbyism’, a positive ‘Yes In My Back Yard’ attitude to development: the antidote to Nimbyism.  Labour’s rhetoric on housing has been confrontational In her first major speech on economic policy, Chancellor Rachel Reeves picked up this ‘Yimby’ theme in order to bolster her pro-growth credentials. Policy announcements include bringing back mandatory housebuilding targets, removing green belt protection from bits that are clearly not green (the ‘grey belt’), and overturning the ban on onshore wind. 

Spotlight

Featured economics news and data.

Working from home won’t fix Britain’s productivity

Why is Britain’s productivity so stubbornly low? Output per worker increased just 0.1 per cent in the year to April. Across swathes of the economy it is in absolute decline.  One theory, posited by those brave enough to voice unfashionable opinions, is that working from home is dragging down productivity growth. This has been dismissed by unions and the Labour party, who go to great lengths to show flexible working boosts output. Workers, they say, will get more done with fewer breaks, take fewer sick days, and are less likely to change jobs.  Such claims should be taken with a pinch of salt. According to new data from the Office for National Statistics,

Kate Andrews

Britain can’t keep pushing its borrowing limits

Rishi Sunak tends to avoid taking aim at his predecessor. But in last night’s BBC Question Time election special, as he was quizzed by the audience about the Conservative party’s record, he delivered a surprisingly punchy answer. When asked about the Tory party’s record, he talked about how he stood up to Liz Truss’s borrow-and-spend plans during the leadership election in 2022. ‘I was right’, he replied simply, before adding: ‘What Keir Starmer is promising you is the same fantasy that Liz Truss did.’ It gained him his only applause of the evening. Last night’s audience was acutely aware of the fiscal pressure the UK is under. It wasn’t just Sunak, but

Ross Clark

Economic recovery has come too late for Sunak

Today’s retail sales figures, showing that volumes increased by 2.9 per cent in May after a fall of 1.8 per cent in April, provide yet another sign of economic recovery. But there must be a horrible and growing realisation in Downing Street that it is all coming too late – and that it will be an incoming Labour government which benefits from economic recovery. Rishi Sunak is doomed to end up looking a hopeless PM As for the sales figures themselves, they are not as dramatic as they might at first appear. Rather, the plunge in sales in April, followed by the sharp rise in May, shows how volatile these

Kate Andrews

Why the Bank of England isn’t lowering rates yet

The Bank of England has, unsurprisingly, held interest rates at 5.25 per cent for the seventh time in a row. Markets downgraded their expectations for a June rate cut some time ago. Once Rishi Sunak called a general election in late May, the prospect of an early summer rate cut became even more unrealistic. The Monetary Policy Committee notes in its minutes that ‘the timing of the general election on 4 July was not relevant to its decision at this meeting’. Instead, its decision was based solely on ‘what was judged necessary to achieve the 2 per cent inflation target sustainably in the medium term’. Central banks never want to

James Kirkup

A Danish lesson for Labour in how to revive Britain’s economy

The coincidence of the 2024 general election and the Euro 2024 football tournament is a great lesson in the myopia of Westminster and its creatures. Somewhere, deep in our hearts, we do know that the vast majority of people in Britain (OK, England and Scotland) are far more interested in the football than in the ups and downs of the campaign. But does that stop us fixating on the minutiae of that campaign? Not at all: for political nerds, this is our championship, after all, one of those (quite) rare moments when all the stars, all the heroes and villains, are on the pitch together, generally kicking lumps out of each

Kate Andrews

What does Keir Starmer think a ‘working person’ is?

Keir Starmer has promised not to raise taxes on ‘working people’. But who, exactly, is a working person? The definition, it turns out, is not so simple. Or rather, Starmer has particular characteristics in mind that might not line up with how others would interpret that phrase. Speaking on LBC yesterday, Starmer laid out his definition of a working person he would shield from tax rises: ‘people who earn their living,’ he said, who ‘rely on our [public] services and don’t really have the ability to write a cheque when they get into trouble.’  It’s the kind of answer that leads to more questions. In the UK practically everyone (regardless of

Kate Andrews

Why Sunak will struggle to win the credit for falling inflation

After a three-year saga, inflation has finally returned to the Bank of England’s target. The Office for National Statistics reports this morning that the inflation rate slowed to 2 per cent in the 12 months to May 2024: its lowest point since July 2021. The greatest contribution came from another slowdown in food and non-alcoholic beverages: having once peaked at a staggering 19.1 per cent in 2023, prices have now slowed to 1.7 per cent in the year to May, down from 2.9 per cent in the year to April. It’s a painful reminder of what triggered an early election in the first place Clothing and footwear also played a

Kate Andrews

Trussonomics is featuring heavily in the election

Is Trussonomics making a comeback? That’s the suggestion today, as Jeremy Hunt was recorded on the campaign trail telling students that Liz Truss’s goals for the economy were a ‘good thing to aim for’. As Chancellor, he said, he was ‘trying to basically achieve some of the same things’ as Truss, but ‘more gradually’ compared to the former prime minister’s timeline. Is this a gotcha moment? Labour think so, insisting that Hunt’s comments show an ongoing ‘addiction to dangerous Trussonomics’. It’s a stretch, not least because Hunt is credited with undoing almost every part of Truss’s so-called mini-Budget, when he replaced Kwasi Kwarteng as Chancellor just weeks into her premiership. Hunt is

How the Scottish Tories can survive

‘The thing is,’ says one Conservative member of the Scottish parliament, ‘that we wanted rid of him – just not like this.’ Scottish Tory leader Douglas Ross’s decision to stand in next month’s General Election infuriated colleagues. His response to that backlash – to resign his position – has driven some of them positively apoplectic with rage. If Douglas Ross’s successor wishes to see a revival in the political centre-right in Scotland, their first decision should be to abolish the party they lead The Scottish Conservatives, revived from near death by former leader Ruth Davidson, are now heading towards polling day under the stewardship of a man who’s made it

In praise of Nigel Farage’s war on banks

Why did it take Nigel Farage to suggest clawing back some of the super profits pocketed recently by British banks? Why hasn’t Labour thought of stopping the Bank of England paying interest on the deposits of commercial banks? There is, after all, plenty of money for the taking. In 2023, HSBC reported a record net profit of over $30 billion (£24 billion). Lloyds made around £5.5 billion and Barclays trousered £6 billion. The UK banks have never had it so good. They have been coining it because of high interest rates which acts like a reverse ATM machine. The Reform election manifesto, sorry ‘contract’, proposes accessing some of this by getting

Labour shouldn’t squander the chance to fix council tax

In the final election push, the Tories are trying to drag the Labour party into a game of taxation whack-a-mole. The Conservatives seem to think that the threat of tax rises is the one lifeline they have. After bungling their £2,000 per-family line with a row about where the numbers come from, they are now teasing out denials about specific raises from the left. First, it was over Capital Gains Tax, and then council tax, forcing Labour to deny they would re-band, as Welsh Labour have done. A tax levied according to what your property was worth (or, indeed, hypothetically worth) in 1991 feels a bit baffling Starmer and his

Ross Clark

Why the Tories’ tax black hole attack on Labour will backfire

The Conservatives love trying to reduce their estimates for the cost of a Labour government down to a neat per-household figure, which makes it easy for voters to appreciate but comes with the danger that the figure will fall apart on closer examination. That is what happened with Rishi’s Sunak’s claim, made in his ITV two-way debate with Keir Starmer, that Labour is planning tax rises of £2,000 per household. That turned out to be over four years rather than one, as many people might have assumed, and turned out to rely on all kind of assumptions which were made by Conservative party researchers rather than the Treasury officials to

Matthew Lynn

France could pay a heavy price for Macron’s Liz Truss-attack on Le Pen

As Emmanuel Macron heads into a fraught election, France’s president is repeatedly warning voters of the calamitous consequences of electing Marine Le Pen’s National Rally into government. In doing so, he is effectively weaponising the bond market. His allies point to what unfolded under Liz Truss’s government. The message to voters is clear: don’t even think about. The debt crisis is largely of Macron’s own making Throwing a ‘grenade’ at those considering backing National Rally might be smart politics, but it is very dangerous economics – and the consequences may be catastrophic for the country he leads. You can hardly blame Macron for panicking: his decision to call a snap

Michael Simmons

Does Labour have the stomach to tackle welfare reform?

Regardless of who wins the coming election, taxes are going up. Spending plans from both Labour and the Tories suggest the tax burden – already at a post-war high – is going to do nothing but rise. During last night’s Sky News debate, Rishi Sunak laid the blame at the two ‘once in a century’ events the country has just emerged from. But the truth is that a huge part of these tax rises is needed to fund an ever-growing welfare bill. Analysis published this morning shows that one in every £44 of state spending will be spent on sickness benefits by the end of the decade. The report, published by the

Kate Andrews

What wasn’t included in Labour’s manifesto

Keir Starmer has been promising ‘no surprises’ on tax in the Labour manifesto. At first glance, he has – technically – delivered on that. There is nothing new on tax in today’s manifesto: the hikes already announced were included, and the pledge not to raise income tax, National Insurance, VAT or corporation tax were there too. The surprise, then, is what isn’t included. There is lots of commentary on tax (attacks on Tory ‘unfunded tax cuts’, getting better ‘return for taxpayers’). But there is no comment on any other specific tax. In other words: a few tax hikes have been ruled out, and all the others are being left on the table

Martin Vander Weyer

Nigel Farage is right: the City should not kowtow to Shein

Nigel Farage and I agree on one thing: a red-carpet welcome at the London Stock Exchange for Shein, the Chinese online fashion retailer, would be ‘a very bad idea’. Valued at £50 billion, Shein could become London’s biggest-ever initial public offering. Both the departing Chancellor Jeremy Hunt and the shadow business secretary Jonathan Reynolds have met Shein’s chairman, Donald Tang, to encourage that prospect. Both clearly recognise that the City’s global status is weakened by a dearth of LSE debutants and a fad for listing in New York instead – with yet another FTSE 100 company, the £24 billion plant-hire giant Ashtead, reported to be thinking of shifting its listing

Ross Clark

When will the Greens get real?

There is something a little refreshing about the Green party. In contrast to Rishi Sunak, who has no option but to carry on pretending he has the slightest chance of remaining in Downing Street after 4 July, Green party co-leader Adrian Ramsay admitted at his manifesto launch this morning that his party isn’t looking to form the next government. The party’s realistic hope seems to be to double its number of Commons seats, from one to two. Nevertheless, the Greens do have a full manifesto for government, so let’s do it justice by taking it seriously. Mercifully, the Greens seem to have not bought into the fashionable concept of ‘degrowth’

Kate Andrews

The Tories and Labour are both relying on a magic money tree

Ask any main political party how they plan to sustain public services in the medium-term, and their answer will be to grow the economy. Ask the Tories or Labour how they might be more generous in the future – able to offer up more tax cuts, or higher public sector pay settlements – their answer will be to grow the economy. Those parties got a rude awakening this morning, when the Office for National Statistics revealed that there was no economic growth in April. After better-than-expected growth in the first quarter of the year, which lifted the UK out of recession, the economy flatlined at the start of the second

Matthew Lynn

The London Stock Exchange is in serious trouble

It has impeccable green credentials. It is crucial to the country’s power grid. And it is one of the UK’s largest private companies. A floatation of Octopus Energy should have been just the kind of event that would give the London Stock Exchange a much needed boost. And yet it now emerges that it may well choose a rival market to list its shares. If that happens, it will accelerate the City’s decline into global irrelevance – and an incoming Labour government may well finish it off.  It is probably the worst news the London market could have had. The chief executive of the giant Octopus Energy, the largest electricity