Economy

With job vacancies falling, and with GDP contracting, the Chancellor Rachel Reeves might have assumed that her final week before Christmas could not get any worse. Unfortunately, she will have been disappointed. We learned today that inflation is now rising sharply again, with the Office For National Statistics reporting that the rate has risen to 2.6 per cent – the highest level for eight months. The real problem, however, is this. It is going to get a lot worse over the next few months – and the Chancellor will only have herself to blame. In response to today’s inflation data, Reeves tried to maintain that the figures were ‘broadly in

Good news for workers: wages are up. According to the latest data, released by the Office for National Statistics this morning, annual pay increased by 5.2 per cent in the three months leading up to October.  Despite inflation returning broadly to the Bank of England’s 2 per cent target, these above-inflation wage increases will be providing relief, still, for workers who are still coping with significantly higher prices as a hangover from the inflation crisis. But a positive story for employees is often more worrying news for Threadneedle Street, which insists that wage increases risk second-round inflationary effects. Today’s news has markets speculating that the Bank may slow its rate-cutting

Is the government going to create a recession out of thin air? This morning’s GDP figures from the Office of National Statistics are dire, showing that the economy contracted by 0.1 percent in October, following a similar fall in September. We are still a long way from a recession being officially called – that would only happen after two quarters of negative growth. Despite today’s figures, the economy still managed to grow by 0.1 per cent in the three months to October, so it wouldn’t be until next spring at the earliest that we could officially fall into recession. Nevertheless, it is remarkable how quickly that confidence has crumbled. A

There are, in fairness, plenty of reasons why the City might be reluctant to embrace the Chinese fast-fashion giant Shein. Its disposable fashion ravages the environment; it encourages rampant consumerism; it has admitted to finding child labour in its supply chain. Here’s the problem, however. The London stock market is in such a dire state that it can no longer afford to be picky – and if it turns this one down it will condemn itself to irrelevance.  According to reports today, the Financial Conduct Authority is taking longer than usual to approve Shein’s IPO in London, and it is looking into its supply chain after an advocacy group for

The economy would crash, the markets would be in open revolt, and he would swiftly be evicted from office by the IMF, and replaced by some ‘grown-ups’. When Argentina elected its chainsaw-wielding, libertarian President Javier Milei a year ago, the economic and political establishment confidently predicted he would only last a few weeks. And yet, not only has Milei managed to stay in power, all the evidence suggests that he is turning Argentina around. The real question now is this? Will a stagnant and moribund Europe pay attention? With inflation running at 25 per cent a month, with the largest IMF loan in history to pay back, and with the

How will the £40 billion additional tax revenue raised in the October Budget be spent? Efficiently, says the Chancellor this morning, who is setting out her plans for a war on waste. Rachel Reeves has informed government departments this morning that there will be a ‘line-by-line review’ of budgets leading up to the Spending Review next spring, while ministers are ‘expected to find savings and efficiencies… in a push to drive out waste in the public sector and ensure all funding is focused on the government’s priorities’ – specifically the priorities laid out in the Prime Minister’s ‘Plan for Change’ last week.  There isn’t more to give – not right

Another day, another flurry of bad news on the fallout from October’s Budget. The BDO Monthly Business Trends indices – which pull together the results of all the main UK business surveys – show that confidence has fallen to the lowest level in almost two years, with output and employment down, and only inflation up. Meanwhile, KPMG and REC have published their UK Report on Jobs, which reveals a sharp fall in permanent recruitment in November. It seems many firms are reassessing their ‘staffing needs’ amid reports of a growing number of redundancies. It is a reminder that Labour’s first Budget was certainly grim. But just as the new government

The very wicked French novelist Michel Houellebecq recently asked: “It should be strange for the British: they voted for Brexit to have no more immigrants and you have more?” Yes Michel, it is strange – and not just for Britain. Migration to the western world has reached record levels, despite popular blowback in nearly every country. Migration demonstrably lowered wages for native workers Even excluding refugees (from Ukraine and elsewhere), permanent migration to the OECD hit a new high in 2023. Over a third of OECD countries registered their highest levels ever, particularly the United Kingdom, but also Canada and France. The unlikely key to this story isn’t politicians but economists. There

In the weeks since Rachel Reeves’s Budget and its shock attack on agricultural property relief, we’ve seen various armchair pundits pontificate on farmers’ lives – a source of mounting exasperation for farmers themselves. The peak of pundit-on-ploughman contempt came, unsurprisingly, from LBC’s James O’Brien First, there have been the panicky announcements from the government – that the threshold for agricultural tax relief is £1 million, or that no, actually, it’s £3 million if you’re under 5’8” and are married to a woman called Susan or…“Ooh, look over there! A bird!”’ We’ve had Owen Jones on Jeremy Vine declare that farmers were overreacting due to ‘inflammatory’ rhetoric from the media, that

Is the OECD doing Labour’s PR for it? I ask only because of its bullish prediction for UK economic growth in its latest economic outlook, published this morning, and the contrast with what it has been saying about Britain over the past few years. An economy that was supposed to be hammered by Brexit has suddenly been transformed into one of which Rachel Reeves is able to say: ‘The OECD upgrade will mean the UK is the fastest growing European economy in the G7 over the next few years.’ The OECD has pencilled in growth of 0.9 per cent in 2024, followed by 1.7 per cent in 2025 and 1.3

The power probably feels good. And it may help her win the presidency eventually. Even so, there is a catch to Marine Le Pen’s decision to bring down Michel Barnier’s government in France, potentially as soon as tomorrow afternoon. If the government goes, the eurozone ay well go down with it. The financial plans of Le Pen’s National Rally’s (NR) party are completely reckless. And even if the chaos that will follow the vote does help win the Élysée Palace for Le Pen, she will inherit a ruined economy – for which she will only have herself to blame.  The NR’s only answer to excessive spending is to spend even

‘Hear me when I say this – no more money without reform.’ That was the Prime Minister’s message to the NHS only in September, when he promised the biggest reform of the health service since its founding.  But that’s not quite how it has panned out. Labour’s first Budget, which raised an additional £40 billion in tax, also announced an additional £22 billion for day-to-day spending within the NHS. Having allocated more than half of the tax rises to the health service, the promise from Keir Starmer and Rachel Reeves was that improvements would be forthcoming. It’s not obvious, however, that the NHS agrees.  There is never a circumstance where

Living and working as a dairy farmer in Shropshire, I’ve witnessed firsthand the fallout from Rachel Reeves’ recent Budget. It has dealt a catastrophic blow to the farming industry, leaving many of us reeling. Just a year ago, the now Environment Minister Steve Reed promised us there would be no changes to agricultural property relief (APR). Now Labour has taken a bulldozer and smashed the policy to smithereens without any consultation with Defra (the Department for Environment, Food and Rural Affairs) or the farming community, leaving us scrambling to process the changes and adapt.  The charges Labour have brought in will reshape British farming and our country’s landscape I come

Russia’s ruble is in trouble. The currency has plunged to its lowest rate against the dollar since the weeks after the outbreak of war against Ukraine. On Wednesday, the ruble hit 110 against the dollar for the first time since 16 March 2022. The currency has recovered slightly, to 108 against the dollar this morning, but in Moscow people are worried. There are no good remedies for the Russian economy’s malaise apart from ending the war Russians who lived through the tumultuous years after the collapse of the Soviet Union know all about the dangers of currency devaluation. While, clearly, things aren’t as bad as they were in the 1990s,

For the first time ever, France’s borrowing costs have risen above those of Greece. As of today, the bond markets have decided that French debt is a riskier bet than Greece, the country that 15 years ago almost crashed the entire euro-zone with its fiscal extravagance and irresponsibility. True, to some degree that reflects an improvement in Greece’s position, as well as the decline of France’s. Yet the harsh reality is this: France is in a sorry state and president Emmanuel Macron will struggle to patch things up. The bond markets have decided that French debt is a riskier bet than Greece This moment of crisis was bound to happen