Economy

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James Heale James Heale

Antisemitism, Chinese spies & GB’s economic fragility

It’s been a rough week for the government: the row over the collapsed Chinese spy trial has rolled on, all while the Chancellor has been trying to lay the groundwork ahead of next month’s budget. Then, overnight, another issue has emerged as fans of the Maccabi Tel Aviv football team have been banned from attending a football game against Aston Villa next month, leading to accusations of antisemitism. Tim Shipman and Michael Simmons join James Heale to discuss the day’s developments. Tim reveals how the Chinese spy row has been picked up by American legislators, threatening to undermine the Five Eyes security alliance. Meanwhile Michael points out that the news

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Featured economics news and data.

Ryan Shorthouse

Cutting Britain’s giant welfare bill would be an act of kindness

Does having money really matter that much? There are those, usually with quite a bit of it, who want us to care less about materialism. But, unequivocally, money really does matter – not because of any status it supposedly brings, but for the freedom it buys: freedom to choose how we live and how we look after others. Considering this, it seems that the deep disillusionment with mainstream politicians in recent years stems from a protracted and ongoing period of stagnant living standards over which they have presided. But the truth is that the average person has not got poorer since the global financial crisis. They have got a little

Friday

Ross Clark Ross Clark

Reeves’s glum Budget briefings are hurting the economy

Rachel Reeves’s error before last autumn’s Budget might have been written off as the act of a ministerial rookie. She kept making us miserable by telling us about fiscal black holes and telling us that huge tax rises would be required to fix it – with the result that, come Budget day, the outlook for the government’s finances was worse than it should have been. Reeves had helped to stall economic growth by damaging confidence. When you and I bleat on about how bad the economy is, nothing much happens. The same even applies to a shadow chancellor. But when you are in office, making the decisions, you have to

Thursday

William Moore William Moore

The coming crash, a failing foster system & ‘DeathTok’

45 min listen

First: an economic reckoning is looming ‘Britain’s numbers… don’t add up’, says economics editor Michael Simmons. We are ‘an ageing population with too few taxpayers’. ‘If the picture looks bad now,’ he warns, ‘the next few years will be disastrous.’ Governments have consistently spent more than they raised; Britain’s debt costs ‘are the worst in the developed world’, with markets fearful about Rachel Reeves’s Budget plans. A market meltdown, a delayed crash, or prolonged stagnation looms. The third scenario, he warns, would be the bleakest, keeping politicians from confronting Britain’s spendthrift state. We need ‘austerity shock therapy’ – but voters don’t want it. To discuss further, we include an excerpt

Martin Vander Weyer Martin Vander Weyer

Don’t bring back British Rail

The theme of my holiday reading has been the insidious ways in which the vanities and fetishes of rulers harm the interests of citizens. I started with 1929, Andrew Ross Sorkin’s new history of the Wall Street crash, which I’ll be reviewing elsewhere ahead of its release in October –my point here being not about whether President Herbert Hoover and the US Federal Reserve mismanaged that market cataclysm and its aftermath, but rather the fact that my zero-value, plain-cover ‘uncorrected proof’ copy of the book was held up by French customs for almost three weeks for want of a ‘commercial tax ID number’ on the packaging label. ‘A common post-Brexit

Wednesday

James Heale James Heale

Labour goes on the Farage offensive

12 min listen

As James Heale writes online for the Spectator today, ‘two issues continue to plague the government’: how best to attack Nigel Farage. and how to frame an incrementalist approach to policy ‘when the national mood favours radical change’. Nick Thomas-Symonds, the Cabinet Office minister responsible for UK-EU relations, attempted to tackle both today as he came to the Spectator to set out Labour’s Europe strategy. Labour are pursuing ‘pragmatic alignment’ – what they argue is greater co-operation when beneficial to the British interest. But what does this mean? James joins Michael Simmons on the podcast to unpack the speech. And, on a day when Reform have claimed another defector (this

Tuesday

Ross Clark Ross Clark

Record jobless benefits are a national scandal

Quietly, without even a press release let alone a fanfare, Britain over the past 12 months has just passed a grim milestone. The number of people on out of work benefits has surpassed the peak reached in the early 1990s. Indeed, it is higher now than it was at the peak of Covid-19 in 2020. There are now 6.5 million people living on out of work benefits Remember when unemployment of three million used to generate headlines every week, in the early 1980s and then again a decade later? Well, there are now 6.5 million people living on out of work benefits. Yet it hardly causes a ripple in the political

Thursday

Michael Simmons Michael Simmons

Britain is being pulled under by debt

Britain is slowly drowning in debt. Figures just released by the Office for National Statistics (ONS) show that in the financial year to July the state had to borrow £60 billion to tread water. That’s £6.7 billion more than by July last year and the third highest borrowing total for this period of the year since records began 32 years ago. Statisticians also managed to find almost another billion pounds in debt payments that now need to be added to the previous month’s figures.  When the Bank cut interest rates, something alarming happened in the borrowing markets There was better news, though, when looking at the month of July alone, with

Wednesday

Matthew Lynn

Free money is back – but don’t get excited

There is not a lot of good news on the British economy at the moment: prices are rising rapidly, job vacancies are falling and taxes are almost certainly going to be hiked again in the autumn to fill the ‘black hole’ that has opened up in the nation’s finances. But there is this. Free money is back. ‘Real’ interest rates, which are the only ones that matter, have plunged back close to zero. But we shouldn’t celebrate too soon: this is going to be a disaster for the economy – and we will all have to live with the consequences. Today’s inflation data from the Office for National Statistics came

Ross Clark Ross Clark

Rachel Reeves’s ‘mansion tax’ would distort the housing market

Rachel Reeves’s rather crude strategy is becoming painfully clear. Between now and the Budget she intends to float ideas for so many painful tax rises that, come the day, we will all feel pathetically grateful that only a few of them have come to pass. Her latest suggestion – reported from an anonymous briefing, needless to say – is that the capital gains tax (CGT) exemption on the sale of main homes might be removed for higher-value properties. A threshold of £1.5 million has been suggested. Sell a property for more than that and you would become liable to pay CGT at a rate of 24 per cent on the

Michael Simmons Michael Simmons

Is inflation here to stay?

Inflation is up again. CPI climbed to 3.8 per cent last month – up from 3.6 per cent in July, now well above the 2 per cent target that the Bank of England no longer seems all that bothered about missing. It throws fresh doubt on the wisdom of the Bank’s decision to cut rates just a fortnight ago, with prices now climbing to a 19-month high. This morning’s inflation figures, released by the Office for National Statistics (ONS), show that much of the increase in prices was driven by a large jump in plane tickets and petrol. Economists had expected inflation to tick up – but not by this

Tuesday

Matthew Lynn

Does no one care about Britain’s soaring gilts?

The Chancellor Rachel Reeves is threatening a round of tax rises. RMT is on strike over the bank holiday. And something or other is going on with Masterchef. As the summer unfolds, British domestic politics is worrying about all its familiar issues. In the background, however, something far more serious is happening. The country is going quietly broke, and hardly anyone cares.  Very soon the Chancellor will be raising our taxes to pay the interest on our outstanding debt On the bond markets, the yield on the UK’s 30-year gilt rose yesterday to 5.6 per cent, overtaking the equivalent US yield for the first time in a generation, and approaching

Matthew Lynn

Trump may regret investing in Intel microchips

When President Trump unveils a massive investment in the microchip manufacturer Intel on behalf of the American people it will no doubt be accompanied by all the usual hyperbole. No doubt we will hear all about how it will be the ‘deal of the century’, delivered personally by the ‘investor in chief’. But hold on. Sure, we can understand why the President wants to help one of the US’s most strategic companies. But the blunt truth is that Intel is well past its peak – and it will prove to be a terrible deal.  It will be one of the largest industrial investments the White House has ever made. According

Ross Clark Ross Clark

Labour’s grants won’t save the electric car market

Keir Starmer’s government continues to show off its remarkable ability to please absolutely no one. Reintroducing grants for electric cars (EVs) always was an outrage. Why is a government which rails against privilege when it comes to public schools, second homes, etc., splashing out taxpayers’ money to subsidise the second cars of relatively well-off motorists? Most people I know with electric cars also have a petrol or diesel car for longer journeys. Moreover, if you are going to chuck a bung worth thousands of pounds at people who buy a car a little less polluting than a petrol or diesel car, what about people who don’t buy a car at

Maxwell Marlow

The abolition of stamp duty can’t come soon enough

A rare kernel of hopefully good news has been circulating the Treasury. No, we haven’t yet paid off the £2.7 trillion debt, and the state pension is still on path to imploding in a decade’s time. Instead, Britain’s most destructive and ambition-killing tax is for the chop and is to be replaced with a much more sensible system. Property prices have risen by 259 per cent since 1997, with wages only rising by a lowly 68 per cent Stamp Duty Land Tax has its origins in Regency England, and as the name suggests, it originally was levied on stamped documents in order to fund Britain’s war against Napoleon. In 1815, the stamp duty

Monday

Nicholas Farrell

Is Italy really doing better than Britain?

Dante’s Beach, Ravenna News that Italians now enjoy a higher standard of living than the British made me think: my God, life must be truly awful in Britain. Yes, the Italians do have much to feel good about in terms of the quality of their lives thanks to the beauty of their country, the splendour of their history, culture and cuisine, and their impressive defence of the traditional family and way of life from the threats to them of the modern world. When I’m drinking, I buy a superb local Sangiovese for €2.60 a litre dispensed into plastic mineral water bottles from a huge cask in a wine shop in

Matthew Lynn

How long before Rachel Reeves introduces a ‘FTSE tax’?

As figures out today show the salaries at the top of business soaring, there are plenty of good reasons for the chief executives of the FTSE 100 to be paid a lot more – at least if you look at it dispassionately. These companies are catching up with global salaries. They need to attract talent from around the world. And they need to stop businesses from moving to New York. The trouble is, we also have a Labour government that is searching for more tax revenue and backbenchers and party activists determined that the ‘rich’ should pay more. Against that backdrop, paying yourself a couple of million more does not

Friday

Matthew Lynn

Mounjaro won’t be the last drug company to bow to Trump

If you need to lose a few pounds after enjoying the French or Italian food a little too much on your summer holiday, there might soon be a problem. The cost of one of the new weight loss drugs that has become so popular in recent months is about to get a lot more expensive. The American drugs giant Eli Lilly doubling the price of Mounjaro in the UK. The price of one diet pill does not make a great deal of difference. The trouble is, the decision was prompted by President Trump’s determination to make the cost of medicines a lot fairer between the United States and the rest

Alexander Kolyandr

Can Putin extract an economic victory from Trump?

The Alaska summit taking place today isn’t just about war – economics looms equally large. Vladimir Putin, with his forces pressing forward in Ukraine, faces neither military urgency nor economic desperation to halt the fighting. For him, this has never been a territorial grab but an existential struggle against Western hegemony. His challenge is to decouple the war from bilateral cooperation with America: the former proceeds too favourably to abandon, while the latter promises diplomatic triumph and relief from mounting economic pressures. Putin’s delegation tells the story. Finance Minister Anton Siluanov and Kirill Dmitriev, Putin’s special envoy for international investment, signal that sanctions and economic cooperation will be discussed. Putin

Michael Simmons Michael Simmons

GDP growth proves the Bank of England’s mistakes

Yesterday’s stronger-than-expected GDP growth raises questions for the Bank of England. Second quarter growth came in at 0.3 per cent (0.2 per cent per Brit) propped up by a strong 0.7 per cent in June alone. The rest of the national accounts however, paint a worrying picture when it comes to inflation. The GDP deflator – which is a measure of the overall level of prices in the whole economy – came in at 4.1 per cent year-on-year growth. That’s down slightly from the last reading but still more than double the Bank’s 2 per cent target. Nominal domestic demand was growing too, at more than 5 per cent –

Thursday

Michael Simmons Michael Simmons

Rachel Reeves must pull Britain from its doom loop

Britain’s is growing, albeit sluggishly. Figures just released by the Office for National Statistics (ONS) show the economy grew by just 0.3 per cent in the second quarter of the year – a sharp slowdown from the first three months, when growth was 0.7 per cent. ‘The economy was weak across April and May,’ the ONS said, blaming consumers and businesses racing to beat tariffs and stamp duty by bringing activity forward. There was, however, a stronger recovery in June, with the economy expanding by 0.4 per cent. Between April and June as a whole, services drove most of the growth, with particular strength in computer programming, healthcare and vehicle

Martin Vander Weyer Martin Vander Weyer

This is the least business-savvy government in half a century

In this season of scant corporate news – a Ryanair rant against the French here, a new BP oilfield there – it’s hard to know what business leaders are thinking about the cold months to come. Until, that is, you read a survey conducted last month for the Institute of Directors. Given that I’m writing from France this month, I’d call it an absolute croissant-dropper. The nub is that 639 UK businesses, large and small, report ‘optimism in prospects for the UK economy’ at -72, lower even than their darkest pandemic sentiment at -69 in April 2020. Export hopes and investment intentions are down, wage expectations are sharply up and,