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Ross Clark

Labour’s welfare crackdown is a sham

You can already sense Rachel Reeves’s spin machine whirring into action. It was Donald Trump wot ruined my careful book-keeping, the Chancellor will tell us as once again her fiscal headroom disappears and she ends up banging her scalp painfully on the ceiling. But could it be unrealistic expectations for her welfare reforms which prove her undoing? Tucked away in the government’s own figures is the revelation that Labour’s welfare shake-up could result in 400,000 more people signed off unfit for any work. Britain’s workshy culture has received another boost The contents of the impact assessment on her Spring Statement, published by the Office for Budgetary Responsibility (OBR) last week,

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Featured economics news and data.

What’s the point of foreign aid?

The UK signed up to a UN target of spending 0.7 per cent of GNP on aid way back in 1970, but didn’t hit that level until 2013. In 2020, aid spending was cut to 0.5 per cent and last week Keir Starmer reduced it further to 0.3 per cent. This will save about £4 billion which will instead be allocated to military spending. There were predictable howls of anguish from aid advocates at the news, and the development minister resigned. There was also begrudging praise from Starmer’s Conservative opponents. But few seemed to question what the point of aid is, and whether a spending target, at any level, makes

Gus Carter

Pensioners, it’s your turn to cough up

The welfare state is grotesquely unfair. There are people who receive thousands of pounds from the taxpayer with little government oversight, even when they have no genuine need for the cash. They spend it on things like cars, flat screen TVs and other luxury ephemera. And there is a sense of entitlement among these scroungers, a feeling that they are somehow owed the fruits of other people’s labour. These people are of course pensioners. ‘But, but, but,’ I hear them gargle through Wine Society crémant, ‘I’ve paid into the system all my life, I’ve earnt my pension!’ No you haven’t. You very unwisely handed over your taxes to successive governments

Ross Clark

Starmer is taking a big gamble with his welfare cuts

That the welfare bill needs bringing under control is pretty undeniable. According to projections by the Office for Budgetary Responsibility (OBR) an unchecked welfare bill could rise over the next five years from £64 billion to £100 billion. That is not to mention the effect on the economy of increasing numbers of people being shunted onto sickness benefits and never expected to work ever again. If the case is made properly, and the focus is kept on the public finances, the government should enjoy widespread support for a policy that trims the welfare state. Yet there is still a risk that this could all go horribly wrong for the government. And

Michael Simmons

The OECD’s growth downgrade is yet another headache for Reeves

In more bad news for Rachel Reeves as the Chancellor prepares for next week’s Spring Statement, the OECD has downgraded Britain’s growth prospects. The organisation forecast the UK’s economy to grow 1.4 per cent this year and then just 1.2 per cent next year – compared with the 1.7 per cent and 1. 3 per cent that they’d previously estimated. In fairness, the whole world is seeing slower growth, according to the OECD’s estimates. America’s growth forecasts were also downgraded to 2.2 per cent this year, followed by 1.6 per cent in 2026 compared with the 2.4 per cent and 3.1 per cent that had originally been forecast. The report’s

Ross Clark

Is Rachel Reeves tough enough to cut disability benefits?

There are, as Rachel Reeves keeps telling us, some tough choices to be made. Whether she is personally tough enough to make them is another matter. It seems as if the government is already retreating on proposed plans to freeze Personal Independence Payments (PIP) in the Spring statement in ten days’ time. A putative backbench rebellion has grown in size to a level at which even a government with a majority of 160 cannot be sure of success. There were also rumoured threats of ministerial resignations. It shouldn’t really come as a surprise. Many Labour MPs have it in their heads that they were elected to protect the poor and

It’s been a poor five years from Andrew Bailey

The pound has not collapsed. You can still trade shares, bonds and currencies in the City of London. And inflation, while still high, at least doesn’t come with ‘hyper’ as a prefix, at least not yet. If the Governor of the Bank of England Andrew Bailey wants to celebrate today’s fifth anniversary of taking charge of the UK’s central bank he can at least reflect on a few modest achievements. The trouble is, they are very limited. In reality, Bailey has proved a poor if not catastrophic Governor – and everyone in the City knows it. When Bailey took over, he was the antithesis of his predecessor. The globe-trotting Mark

James Heale

The UK economy is shrinking – how much pressure is Rachel Reeves under?

14 min listen

New figures from the Office for National Statistics show the UK economy unexpectedly shrunk by 0.1% in January. This comes only a few weeks after the Chancellor’s pro-growth speech, and a fortnight ahead of her Spring Statement. Just how much pressure is Rachel Reeves under? And how likely is it that Labour will change their approach? Economics editor Michael Simmons and deputy political editor James Heale join Patrick Gibbons to discuss, as well as a look ahead to next week’s expected announcement on reducing the welfare bill. Produced by Patrick Gibbons.

Michael Simmons

The economy is shrinking. Rachel Reeves must act

The economy shrank by 0.1 per cent in January according to figures just published by the Office for National Statistics (ONS). The news will come as a disappointing shock to Rachel Reeves after most economists had predicted the year to have started with growth. In December the economy had grown by 0.4 per cent, but a fall in production of 0.9 per cent and in construction of 0.2 per cent tipped the economy back into contraction. Services were up marginally but not by enough to lead to overall growth. Liz McKeown, the ONS’s director of economic statistics, pointed to a ‘notable slowdown’ in manufacturing compounding a downturn in oil and gas extraction

Katy Balls

The Miatta Fahnbulleh Edition

37 min listen

Miatta Fahnbulleh was elected as the Labour MP for Peckham at the 2024 general election.  Born in Liberia, her family fled west Africa as the region descended into civil war, eventually settling in north London when she was just 7 years old. Trained as an economist, having studied at Oxford and the LSE, she went on to work in the civil service and at various think-tanks. After serving as the CEO for the New Economics Foundation, she became a senior economic adviser for Labour working with Ed Miliband during his time as leader of the Labour Party. Ed is now her boss again – at the department for energy.  On

Why John Lewis’s profits have soared

Growth has ground to a halt, manufacturing is collapsing, and the government is desperately scratching around for ways to save some money so it can balance the books. There is not much to make anyone feel optimistic about the state of the British economy right now. Except, that is, for the healthy performance of the UK’s traditional, mid-market retailers. Marks & Spencer and Tesco are both in rude health. Now, John Lewis, which has reported a rise in pre-tax profits of 73 per cent to £97 million, is the latest retailer to demonstrate its ability to bounce back.  After years of steep losses under the hapless leadership of the former

Ross Clark

The Tories should have scrapped NHS England

Listening to Keir Starmer announce this morning that he is going to abolish NHS England can only make the Conservatives wonder at what might have been. It should have been a Conservative prime minister making this sort of speech, declaring the civil service to be ‘flabby’ and cutting out masses of duplication in public administration.     Indeed, the Conservatives made a good start in increasing the efficiency of public services when they returned to office in coalition with the Lib Dems in 2010. Civil service numbers were cut by more than a fifth, from 492,000 in 2010 to 384,000 in 2016. But then something went desperately wrong, and Whitehall was allowed

Martin Vander Weyer

Don’t touch Boots!

‘Don’t stress over short-term stock market swings’ is a maxim on which Donald Trump and I might agree, even if he is keen to take credit for upward rallies. The shakedown of the past few days is a natural reaction to the wild six-week ride of Trump’s tariff and foreign policy gambits and the realisation that if he keeps it up, he’s far more likely to harm the US economy than boost it. But with a mad king surrounded by madder courtiers anything can happen, including ever more eccentric reversals. So watch the White House tragicomedy but don’t get hung up on the Dow Jones index. But having said that,

Trump’s Tesla stunt won’t help Musk

Tesla’s share price has halved, sales have slumped, boycotts are being organised and Chinese rivals are ready to steal the market. It has been a rough few weeks for the electric vehicle manufacturer, but Tesla’s CEO Elon Musk has been handed a lifeline by Donald Trump: the US president gave his full-backing to the company by buying one of its cars. Heck, he might even have used his own money. There is just one snag: Trump’s high-profile support will make things worse for Tesla, not better. Outside the White House yesterday, Trump chose from five shiny new Teslas. A day earlier, Trump had posted on his Truth Social feed that

Ross Clark

Who becomes a Labour politician to slash benefits?

If you are an idler sponging off the state, you have every excuse to feel cheated. Throughout his years in opposition, Keir Starmer gave you every impression that he was on your side. During his Labour leadership election campaign in 2020, he promised to end Universal Credit and replace it with something more generous. In 2021, when Boris Johnson’s government proposed to remove the £20-a-week uplift in benefits, which it had introduced at the beginning of the pandemic, Starmer called a vote to oppose the move, accusing the then government of ‘effectively turning on the poorest in our society’. Shortly before last year’s general election, he agreed with the Big

Michael Simmons

Who’s doing well out of the Trump slump?

Markets are not enjoying Donald Trump’s tariffs. Some 125 days have passed since his second election victory and the S&P 500 is on a clear downward trajectory thanks to Trump’s tariff policies and other poor US economic data. After the same number of days following Biden’s election, the S&P was up 13 per cent; for Obama’s second term it was up nine per cent; and at the same point in Trump’s first presidency it was up 11 per cent. For Trump 2.0 it’s down 3 per cent from election day. Trump has summoned Wall Street bosses to the White House in an attempt to calm nerves, but while US equities

Does Trump want a stock market crash?

There ‘could be a recession’, said President Trump over the weekend with the kind of nonchalant shrug that suggested he was not too bothered one way or the other. He was even going to buy a Tesla to help out his ‘first buddy’ Elon Musk as the company’s share price collapsed. The markets had assumed there was a ‘Trump put’ – that is the President would always ride to the rescue to keep the bull market running. But there is no sign of it. Instead Trump seems perfectly relaxed about the huge losses, even encouraging the sell-off. Of course, it might just that he does not know what to do.

The Wall Street plunge isn’t over yet

The plunge continues. It’s always a mug’s game trying to call the top of any market, but the plunge on Wall Street does feel as though it has got legs, so it is quite possible that we have indeed seen the peak for US equities.  Since last week the Nasdaq has moved into correction territory – jargon for a 10 per cent or more fall – and on Monday was off another 3 per cent. I rather like the expression ‘correction’ because it implies that the markets have simply made a bit of an error, a ‘terribly sorry, folks, but we all make mistakes, and give us a few weeks

Michael Simmons

Will Trump cause a recession?

Donald Trump has refused to rule out an American recession. He ‘hates to predict things like this’, he said yesterday. When asked if a downturn was coming this year, the President responded that a ‘period of transition’ was on the cards. On Thursday last week the Atlanta Fed’s GDP ‘nowcast’ model was forecasting that America’s economy would shrink by 2.4 per cent in the first quarter of this year – a slight improvement on the 2.8 per cent contraction it had predicted three days earlier. If this reading for the first three months of 2025 proves to be true, and things don’t pick up shortly, could the USA be heading

Are the markets turning on Trump?

China does not like tariffs, but big money in America likes them even less. If one thing has become clear amid the fog of the past week, it is that what will contain Donald Trump are the financial markets. China’s foreign minister, Wang Yi, attacked Trump on Friday for his imposition of tariffs, adding that major powers ‘should not bully the weak’. While people in Taiwan might find that latter comment a bit rich, his line on tariffs squares with the reaction on Wall Street. The markets do not like it. This week has seen the Nasdaq Composite index of high-technology companies move into a ‘correction’ – a 10 per

Could spending cuts herald a ‘winter of discontent for Labour’s left’?

15 min listen

With reports of ‘billions’ of spending cuts earmarked for the Chancellor’s Spring Statement, taking place later this month, Michael Gove and Kate Andrews join Katy Balls to discuss what exactly Rachel Reeves could cut. With little fiscal headroom and sluggish forecasts of growth, Reeves doesn’t appear to have many options. It’s likely that welfare will be targeted, and there are reports that Labour’s opposition to new North Sea oil & gas licences may be relaxed to stimulate growth. One area that appears off the table is defence – following the Prime Minister’s pledge to cut international aid in order to fund new defence spending.  But if all these reports are