Economy

If the 0.6 per cent first-quarter GDP uplift reported by the Office for National Statistics is sustained for the rest of this year, Rishi Sunak will be able to claim – as he waves goodbye – that he and Jeremy Hunt have succeeded against their naysayers in dragging the UK economy from pandemic depths back to the level of ‘trend growth’, around 2.5 per cent per annum, that used to be thought of as normal. That’s spookily in line (as is the path of inflation) with Ken Clarke’s achievement as Tory chancellor in 1996 ahead of the election that swept Blair and Brown to power the following May. How lucky

Are interest rates still heading ‘downwards’ as the Bank of England Governor Andrew Bailey said last week? Homeowners across the country will be hoping so as average two-year mortgages are again approaching 6 per cent. But the latest figures on the UK job market may dampen hopes of a cut coming soon. Britons have continued to receive above inflation pay rises. Figures just released by the Office for National Statistics show that – against expectations – pay growth in cash terms is at 5.7 per cent. Even when you factor in inflation, pay is still going up and has now hit 1.7 per cent – the highest in two years.

Another day, another all time high. As the week closed, the FTSE 100 index hit 8,433 — the highest level it has ever reached — and this is turning into a regular occurrence. The FTSE has now hit 11 all-time-highs over the last month, and it is close to equalling the record set way back in 1984 of 12 all-time-highs within a single four-week period. Add in a mega-bid and better than expected growth figures and it may look as if the UK is booming again. Well, perhaps. In reality, however, all that is happening is that the FTSE 100 is finally recovering from two decades of miserable under-performance —

The Office for National Statistics (ONS) confirmed this morning that the UK confined its technical recession to 2023. The economy grew by 0.6 per cent in the first three months of the year, thanks in large part to stronger-than-expected growth in March, which reached 0.4 per cent. Both numbers were larger than expected (the consensus was for 0.4 per cent and 0.1 per cent respectively), as growth figures for February were also revised upwards, from 0.1 per cent to 0.2 per cent. Services output was the ‘largest contributor’ to the economic bounceback, growing at 0.7 per cent in the first three months of the year. Transportation and storage were the ‘largest positive

The Bank of England’s Monetary Policy Committee has voted to hold interest rates for the sixth time in a row. Members of the MPC voted 7 – 2 to maintain the base rate at 5.25 per cent – with two members voting to cut rates by 0.25 percentage points. This decision will come as no surprise to the markets, which had already factored in a rate hold. The Bank made clear in March that key indicators – including the state of the UK labour market and the risk of inflation rising again – would influence its decision, none of which dramatically changed in the last seven weeks. The Committee repeats from previous

It’s all but certain that the UK’s exit from recession will be confirmed at the end of this week. Preliminary Q1 data, released on Friday, is expected to how slow and steady growth in the first three months of the year. It is also very likely that inflation will return to the government target of 2 per cent this month, due to Ofgem’s changes to the energy price cap last month and higher energy costs falling out of the data. The return to target may not last – which is one of the reasons hopes for a spring rate cut have been dashed. But all this will help cushion what

For over 20 years, Britain effectively gave up on building new nuclear power stations. But that’s changed now Hinkley Point C in Somerset is under construction. When completed it will provide around 7 per cent of the UK’s electricity. Hinkley Point C is set to be the most expensive nuclear power station ever built. In fact, it is more than four times more expensive on a pound-for-megawatt basis than the average nuclear power plant built in South Korea. Even Flamanville 3, a French plant that uses the same reactor (EPR-1750) and built by the same company (EDF), is set to cost at least 25 per cent less. Why has Hinkley Point C

Imagine that for the past 30 years all food entering Britain from EU countries had been subject to stringent sanitary checks and that today, for the first time, the government had decided to abolish those checks. It isn’t hard to guess how the Labour party would react. The government, it would be claiming, was throwing our farming and horticultural industries to the wall in the name of an ideological commitment to deregulation. Britain was being opened up to infection from devastating diseases like swine fever and foot and mouth disease – all so that the government’s friends in the food import industry could trim a few percent off their costs

Labour’s plan to renationalise the railways is not much of a plan at all. Rather, it is a list of goals: to eliminate ‘fragmentation, waste, bureaucracy’, to ‘bring down costs for taxpayers’ and to ‘drive-up standards for passengers’. All lofty ambitions, all lacking a strategy. What little detail we do have points to significantly more bureaucracy. The party plans to set up two more quangos – Great British Railways and the Passenger Standards Authority – which are unlikely to do much to create the more ‘efficient’ system Labour is promising passengers. Still, the announcement has been popular. And it is likely to stay popular until commuters are forced to reckon

How bad would it be if Royal Mail’s parent company, International Distributions Services (IDS), were to be taken over by the Czech billionaire Daniel Kretinsky? Our historic postal service is heavily lossmaking, struggling to maintain its universal delivery obligation and at war with its unions: a foreign owner would surely take an axe to it. Kretinsky, who owns almost 28 per cent of stockmarket-listed IDS, has gone back on an assurance that he would not try to take the company private and has tabled a £3.1 billion offer – above the group’s current market value but well below what other shareholders think it is worth. He won’t win with this