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Martin Vander Weyer

Was COP28 any more than hot air?

What position should the distant observer take on the COP28 conference in Dubai? That the sight of 70,000 delegates flying into a desert oil state from around the world to discuss human impacts on climate change is beyond satire and that its proceedings are never likely to rise above Greta Thunberg’s encapsulation of all such jamborees as ‘blah blah blah’? Or that the climate problem is now so obvious and urgent that all efforts towards global action, however small, should be uncynically applauded? I leave that choice on the table. But I’m finding it hard to take a positive view of Sultan Al-Jaber, president of the Dubai gathering, who also


Featured economics news and data.

Kate Andrews

Sunak meets first pledge as the rate of inflation halves

Inflation has slowed significantly, according to the latest update from the Office for National Statistics. The headline rate was 4.6 per cent in the year to October, down from 6.7 per cent the previous month. The sharp slowdown is largely attributed to last year’s hikes in energy prices dropping out of the data with the figures now reflecting Ofgem’s price cap reduction.  This major slowdown in the inflation rate allows Rishi Sunak and Jeremy Hunt to say that one of their five pledges for the year has been delivered. In January, the prime minister promised to ‘halve inflation’ by the end of the year. The rate in January was 10.1 per cent

Kate Andrews

Unemployment is up – but can we trust the ONS’s numbers?

The UK’s unemployment rate rose to 4.2 per cent in the three months leading up to August this year, according to new experimental data from the Office for National Statistics (ONS). This is a 0.2 per cent increase compared with the previous quarter (March to May 2023), but not a big change compared to previous data sets. The new numbers tell a familiar story: that the labour market is cooling slightly yet employers remain desperate for workers. For the last five decades, the ONS has relied on its Labour Force Survey – which covers ‘tens of thousands of households across the UK’ – for its employment data. But in a blog explaining changes to

The Renters’ Reform Bill won’t solve the housing crisis

The Renters’ Reform Bill aims to improve tenant security in the private rental sector by scrapping no-fault evictions, but it’s won’t solve Britain’s housing crisis. The Bill, which returns to Parliament this week for a second reading, was originally dreamt up in the dying days of Theresa May’s government. It could still just about make it in time for the next general election, as the government’s main electoral offer to ‘generation rent’. Yet the reality is that it fails to tackle the main cause of our housing woes: a lack of supply. The Bill’s main component is a ban on so-called ‘Section 21‘ or ‘No-Fault Evictions’. At the moment, the most common arrangement in

Michael Simmons

The taxman’s dodgy data

Ten years ago, HMRC unveiled what was billed as ‘the biggest change’ to the tax system since PAYE began in 1944. The taxman mandated employers to report their workers’ pay every time they ran payroll. Introduced to support Universal Credit by providing earnings data in close to real time, it has since been used to support a raft of other public policies too, including Covid furlough. But this change to PAYE Real Time Information (RTI), as HMRC calls it, has been a disaster for households on Universal Credit, taxpayers, public finances and confidence in HMRC and the senior civil service, as the quality of tax data has effectively collapsed. At

Ross Clark

The weather isn’t to blame for Britons shopping less

It was the weather wot did it, wot stopped us spending in the shops. Yet again, the favourite old excuse has been trotted out by retailers trying to explain where their sales have vanished. Retail sales volumes in September, the Office for National Statistics (ONS) reports this morning, plunged by 0.9 per cent in September, with a quarterly fall of 0.8 per cent. Apparently the hot weather in September is to thank for delaying us going down to the high street to try on all the exciting autumn collections (although why we didn’t do this later in the month when temperatures fell they don’t explain). There is, of course, an

Kate Andrews

Pressure is mounting for Jeremy Hunt to find tax cuts 

Timing is a funny thing. The Chancellor received some good news about the public finances this morning, just when everyone is focused on fairly catastrophic election results for the Tories. A few hours after it was announced that strong Conservative majorities were overturned in the ​​Mid-Bedfordshire and Tamworth by-elections (Katy Balls analyses the results here), we also learned that there may be slightly more scope than previously thought for Jeremy Hunt to come up with some pre-election sweeteners, with the pressure on to cut taxes. Public sector net borrowing in September came to £14.3 billion – a staggering sum, yes, but £1.6 billion less than in September last year and far below the

Ross Clark

Why has there still not been a housing crash?

Not for the first time, a widely-predicted – and for many frustrated buyers, hoped-for – house price crash has failed to materialise. The Office for National Statistics’ House Price Index (ONS HPI) shows average prices up 0.3 per cent in the month of August and up 0.2 per cent since August 2022. This is at odds with the Halifax House Price Index, which put house prices in September at 4.7 per cent lower than a year earlier. But it is a more complete data set based on all sales across the UK. The Halifax index, by contrast, is based on mortgage approvals by the Halifax bank – and there is no guarantee that

Martin Vander Weyer

The attack on Israel must lead to an uptick in inflation

A 10 per cent increase in oil prices translates to a 0.15 per cent loss of global GDP and a rise of 0.4 per cent in global inflation, says Gita Gopinath, deputy managing director of the IMF. Before Hamas launched its assault on Israel on 7 October, the Brent Crude barrel price had already moved 20 per cent above its summer level of $75 and pundits were predicting $100, based on prospects of tighter supply from Saudi Arabia and Russia. Natural gas prices have also risen sharply with winter approaching – and no one knows how escalation of the latest Middle East conflict might affect other energy flows and supply chains.

Matthew Lynn

Who would lend money to Humza Yousaf?

It runs a vast budget deficit. It keeps raising taxes way above its neighbour. It spends wildly, it is at war with its major industry, and its former leader has been arrested over an investigation into missing party funds. But, heck, never mind about that. Humza Yousaf, the leader of the Scottish National Party, has just decided the bond markets will now have the privilege of ignoring Switzerland and Norway for a few days and can lend a few billion to Scotland instead. There is just a small problem, however. Why would anyone want to lend money to Humza?  It was certainly an ambitious proposal. In his conference speech, Humza

Kate Andrews

Has inflation stuck?

‘As we have seen across other G7 countries, inflation rarely falls in a straight line,’ said Chancellor Jeremy Hunt this morning in response to UK inflation data for September. We’ve seen this in the UK, too: at the start of the year, the rate of inflation rose from 10.1 per cent on the year in January to 10.4 per cent in February – before finally falling out of the double digits in April. And this morning we’ve seen another break in the line: the rate of inflation stuck at 6.7 per cent on the year in September, the same rate as August. Food and non-alcoholic beverages were the ‘largest downward

Kate Andrews

Say goodbye to tax cuts?

‘We are in a horrible fiscal bind’ says the Institute for Fiscal Studies this morning, as it publishes its Green Budget report ahead of the Autumn Statement. A combination of stagnant growth, stubborn inflation, rising debt interest payments and a tax burden at a postwar high has produced a grim assessment of the UK economy, which the IFS suggests will worsen in the coming years, as ‘huge fiscal pressures’ around the National Health Service and public sector pensions increase (more on that here). The report’s conclusion is that now is not the time to raise taxes. It would make terrifying reading for a Conservative prime minister and chancellor if they weren’t already aware

Michael Simmons

It’s official: we don’t know how many people are unemployed

For perhaps the first time in its history, the Office for National Statistics does not know how many employed, unemployed and economically inactive people there are in the country. This morning, the monthly labour market figures were due to be published. But late last week news slipped out that the employment portion of the release would have to be delayed. The reason: plummeting survey response rates. You simply cannot make decisions about which levers to pull if we do not know how many people are in work Each month, Britain’s statisticians work out how many people there are in the workforce based on responses to a national ‘Labour Force Survey’.

Where did all the boomer bankers go?

There aren’t many Alex types in banking anymore. The popular middle-aged cartoon banker, greyer and greyer since the 1980s, is regularly depicted in the Daily Telegraph gazing sagely over the heads of panicked young traders, safe in the knowledge he’s seen it all before. Older traders like him are few and far between now. Instead, Britain’s banks and investment firms have been left largely in the hands of the youngsters, a generation too used to working in an era of free money. It’s a troubling thought. Since the 2008 financial crisis, expensive and experienced senior bankers have been cast out, replaced by younger, cheaper rivals. Credit Suisse was forced into a desperate rehiring scramble in

Kate Andrews

As oil prices rise, the permacrisis continues

It was a year ago this weekend that Liz Truss sacked her chancellor, Kwasi Kwarteng, over the fallout of their ‘growth plan’. This marked the beginning of the end of Truss’s premiership: she then appointed Jeremy Hunt to the role, and he swiftly dismantled almost every part of her infamous mini-Budget. Since leaving No. 10, Truss has been quick to return to the political spotlight, writing comment pieces for national papers, giving interviews, making speeches and interventions – and launching a Growth Commission through which she continues to take the Office for Budget Responsibility to task. But just as Truss continues to make her views known, so do her critics.

Ross Clark

Britain’s sluggish growth is nothing to celebrate

So, the doomsters have been proved wrong again – not least the Bank of England, which a year ago forecast recession throughout 2023. GDP figures released by the Office of National Statistics this morning show that the economy grew by 0.2 per cent in August, partially reversing a sharp contraction of 0.6 per cent in July.  Across the three months to August – which is a rather better guide to what is happening than the volatile monthly figures – show growth of 0.3 per cent. It is not possible now – by the usual definition of two consecutive quarters of negative growth – for Britain to suffer a recession in 2023, and

Martin Vander Weyer

Metro’s story tells us markets are still fearful of a banking crash

Market sentiment around the possibility of failures in the banking world remains as febrile as ever. Or so we might judge from coverage of Metro Bank – which reports suggested might have been edging towards collapse before finding a new owner over the weekend. Metro was the brashest of the ‘challenger banks’ that sprouted after the 2008 financial crisis and the only one that aimed to build an all-new network of 200 branches. Its American founder, Vernon Hill – whose other interests included a chain of Burger King outlets – declared an urge to ‘make banking fun’ when the first Metro opened in Holborn in 2010, offering free lollipops and

Ross Clark

Starmer’s house-building plan could prove a hit with young voters

The biggest hinderance for the Conservatives is that they have nothing to offer young voters. The Labour party, however, just might. It seems that Keir Starmer will announce in his conference speech a plan to return to the idea of post-war new town corporations, which were able to compulsory-purchase land at agricultural value. It could – just possibly – mean a sharp fall in the price of new housing, massively expanding the number of first time buyers.  The great shame is that the Conservatives couldn’t bring themselves to introduce a similar policy You don’t have to be a socialist to feel aggrieved at your inability to afford a home, something that you

Kate Andrews

Is the IMF right to be this pessimistic about the UK economy?

The International Monetary fund has published its biannual World Economic Outlook report – and it’s more bad news for the UK. While the IMF’s predictions for 2023 fall broadly in line with other forecasts – which show Germany having the most economic trouble this year – the IMF predicts that the UK will be an outlier come 2024. It expects the UK to grow by 0.6 per cent next year: the weakest growth among G7 nations and a downgrade of 0.4 per cent from its previous predictions. But there are reasons to be optimistic. Revisions to UK GDP of late has been more positive. Just last month the Office for National Statistics

Matthew Lynn

Mark Carney is wrong to endorse Rachel Reeves

The timing could hardly have been better. Other Labour leaders and shadow chancellors have had to make do with endorsements from the drummer in a 90s Britpop band, or a runner up for the Booker Prize. Rachel Reeves, however, rounded off her speech to the Labour party conference today with no one other than the former Governor of the Bank of England Mark Carney singing her praises. But hold on. Isn’t Carney starting to abuse his position – and possibly the Bank’s independence as well?  By taking sides so openly Carney is turning the Bank into a political body At least we know who Carney would be voting for if

Katy Balls

Mark Carney’s endorsement of Rachel Reeves will hurt the Tories

Listening to Rachel Reeves’s speech at Labour party conference one could be forgiven for thinking Liz Truss is still in 10 Downing Street. The shadow chancellor referenced the former prime minister more times than Rishi Sunak as she used her moment on the conference stage in Liverpool to try to depict Labour as the less risky choice on the economy. Reeves claimed that ‘Liz Truss might be out of Downing Street but she is still leading the Conservative party’. The shadow chancellor said that only a Labour government could safeguard against Truss’s Tories – and she was cheered when she mentioned her plan to introduce legislation to ensure the Office

Ross Clark

High interest rates aren’t the only reason for the house price slump

To no-one’s surprise, house prices fell again last month. Average prices were down by 0.4 per cent in September, according to Halifax, with the typical property now worth £278,600 compared with the peak of £293,500 in June 2022. Much of this, inevitably, has to do with high interest rates. For three decades until last year the housing market was pumped up by a downwards trend in interest rates, which increased the amount that buyers could borrow. Now that has come to an end, buying power is contracting. There is unlikely to be any rapid recovery. If rates remain high – and gradually it is dawning on markets that this is likely to