Economy

BlackRock’s UK chief investment strategist, Vivek Paul, has warned this week that pre-election promises of large tax cuts or spending increases could unsettle the bond markets again. There are clear echoes here of the turmoil that followed the Liz Truss and Kwasi Kwarteng mini-Budget back in 2022. How worried should we be? These warnings should not be dismissed lightly. BlackRock is a huge global player, with more assets under management than any other firm. Sentiment can be fickle and market selloffs are often self-reinforcing. The mini-Budget backfired in part because of mistakes that no-one is now likely to repeat, such as sidelining OBR There are also some reasons to think

London mayor Sadiq Khan has just given us a foretaste of a Labour government by capitulating to the RMT and averting a tube strike at the last moment by, to borrow Nye Bevan’s phrase, stuffing the rail workers’ mouths with gold. That, at least, is Boris Johnson’s assessment of the 11th-hour agreement to avert the walkouts. Johnson is right, except is it really much different from what has been going on for years under his and other Conservative governments? It wasn’t Labour which gave us train drivers on £65,000 a year – far more, in some cases, when you add on overtime. That puts some train drivers in the top

Are chief executives overpaid? The High Pay Centre thinks so. Every January, it releases data showing the huge inequality between top UK CEOs and average workers. The results are startling: ‘Bosses of Britain’s biggest companies will have made more money in 2024 by lunchtime on Thursday than the typical worker will all year,’ according to the BBC, which wrote up the story showing that top bosses’ average reward amounts to £3.81 million a year. But is this disparity with the £34,963 annual median wage for full-time workers really a surprise? The truth is that this pay gap is an obvious feature of a free market where top pay in business

The charlatans had been exposed. Its flimsiness had been confirmed. And the bubble had finally burst. Rewind to just over a year ago, and with the collapse of the crypto exchange FTX and the arrest of its billionaire founder Sam Bankman-Fried it seemed as if the legions of skeptics of the digital currency Bitcoin had been proved completely right. But hold on. Over the last few months, its price has soared again. In reality, Bitcoin has made fools of its critics once again.  In the wake of the FTX scandal, Bitcoin, along with its digital imitators, seem headed for history’s dustbin. After all, the collapse seemed to confirm all the

Labour appeared stumped when, earlier this year, the government announced it would be drastically increasing its ‘free’ childcare provision. Given it was a policy that shadow education secretary Bridget Phillipson was rumoured to be considering, her party would now need to find a way to outdo itself. Now, we have a clearer idea what its ‘signature offer’ to voters might entail. At present, all parents of pre-school children over the age of three are entitled to 15 ‘free’ hours with registered providers. From April 2024, this will expand to all over-twos, and from September, to all children over nine months (the point at which Statutory Maternity Pay ends). If the rollout continues

The news that Tim Martin, the founder of JD Wetherspoon, has been given a knighthood in the New Year Honours list caused predictable outrage among the perpetually outraged. The gong was awarded for Sir Tim’s ‘services to hospitality and culture’, but the usual crybabies on social media asked whether it was really because he supported Brexit. The real question is why did it take so long? The first Wetherspoons opened in 1979 (named after a teacher who told him that he would never amount to anything). There are now more than 800 of them. His services to hospitality and culture are indisputable, but Wetherspoons is more than a successful business.

Finally it seems to be dawning on many Conservative MPs that abolishing – or seriously cutting – inheritance tax at the same time as jacking up income tax for millions of low earners is not a great way to tackle a strong Labour lead in the polls. Several backbenchers have written to the Prime Minister in response to reports that he is considering taking the axe to inheritance tax in the Budget on 6 March. They have suggested that the government should be cutting income tax instead, or at least raising the thresholds which have been frozen until 2028. At a time of elevated inflation, that is dragging millions more into

In the old days, when the Conservatives were chalking up opinion poll ratings in the forties, their strategists knew they needed robust offers on four key subjects in order to secure their electoral base. These were Europe, law and order, immigration and taxation. Brexit has largely removed the need for the first, on the second the Tories are not taken seriously – having just scrapped short jail terms and presided over a collapse in everyday policing – while the least said about their catastrophic record on the third the better. This just leaves tax cuts. Having presided over record taxation, it will be difficult to sell the idea that the

A few weeks ago, I chaired a debate in Westminster about the falling birth rate and its implications. It was organised by the Centre for Social Justice, which I’ve long been proudly involved with. Miriam Cates, a Tory MP, was on the panel as was Rosie Duffield, a Labour MP. But when I arrived, Duffield had pulled out: she had taken so much abuse and threats from those furious that she would attend this debate that she felt she could not continue. The debate, quite plainly, is one many people would rather never took place and I look at it in my Daily Telegraph column today. While populists have embraced this argument,

Anyone for more tax cuts in the spring budget? You might as well hand out free beer. For many Conservatives, tax cuts provide the last tiny chink of light before the door closes on their electoral prospects for good. This month’s government borrowing figures might just provide some encouragement, too. Net borrowing in November was £0.9 billion lower than it was in November 2022. The great bulge in the deficit which came with Covid seems finally to be subsiding. With inflation falling sharply, too, the outlook for the public finances begins to look a little brighter. The UK government has an unusually large slice of its debt in index-linked debt,