Economy

It would be churlish not to celebrate revisions from the Office for National Statistics that tell us the UK is not, after all, the post-Covid invalid of the G7. Contrary to previous figures suggesting we had struggled to regain pre-pandemic levels of economic output, it turns out that our gross domestic product passed that benchmark in late 2021 and our performance has been in line with France and ahead of Germany. Large sectoral revisions for agriculture and manufacturing tell us that statistical reporting is almost as much of a mug’s game as forecasting. But the brighter overall picture accords with the anecdotal sketch of ‘definite warming’ in consumer spending and

Ladies and gentlemen, please make sure your seat belt is securely fastened and your seat backs and tray tables are in their full upright position. Richard Branson will this week once again blast his Virgin rocket ship into space. Although not really, because at best his sub-orbital ship will only get to the edge of space, and only for a few moments, before gliding back to Earth. Galactic 03, on 8 September, will be the company’s third commercial flight after a successful mission in August and will carry three as-yet-unnamed passengers who bought their tickets on the company’s space plane back in the 2000s. ‘Space is Virgin territory,’ boasts Branson, who

It’s not often that we see a GDP revision as startling as the one published today. In its Blue Book for 2023 – which includes updated methods for a range of calculations – the Office for National Statistics (ONS) has upgraded the size of the economy in the final quarter of 2021 by 1.7 per cent. This means that by the time the Omicron variant hit, the UK economy was actually 0.6 per cent above its pre-Covid level – not 1.2 per cent below, as previously stated.  This is a staggering difference. It was thought as recently as this summer that GDP still had not returned to its pre-pandemic levels.

The Office for National Statistics reports this morning that public sector net borrowing in July came in at £4.3 billion. This is the fifth-highest July borrowing month since records began, with an additional £3.4 billion being spent to fund the government’s spending pledges compared to July last year. Still, there is fast talk of room for manoeuvre for Chancellor Jeremy Hunt to spend more or cut tax, as cumulative government borrowing continues to undershoot the Office for Budget Responsibility's (OBR) latest forecast for the fiscal year. In July, borrowing reached £56.6 billion, £11.3 billion less than had been expected by this point. In the Chancellor’s response to the figures this morning, the

Following last week’s news of unexpectedly strong economic growth in June of 0.5 per cent, today’s retail sales figures for July come as something of a shock. Across the month, the volume of sales fells by 1.2 per cent compared with June, and was 3.2 per cent lower than in July 2022. The fall occurred across the board, with food stores falling 2.6 per cent month on month, clothing stores 2.2 per cent and department stores – which had seemed to enjoy a revival in recent months – falling 2.9 per cent. The only positive news was on non-store retailing – i.e. the internet – sales were up 2.8 per

When inflation was at 5.5 per cent and rising in January 2022, the BBC’s Faisal Islam adopted a look of amazement when he asked the governor of the Bank of England, Andrew Bailey: ‘So you’re trying to get inside people’s heads and ask them not to ask for too high pay rises?’ ‘Broadly, yes,’ Bailey stepped into the trap, ‘It’s painful, but we need to see that in order to get through this problem more quickly.’ The governor was slated for insensitivity, critics making much of his own half-million package. That 38-second clip did more to make his out-of-touch reputation than any of his other stumbles. But he wasn’t wrong.

Over mighty trade unions. Short-termist management that prioritises profits over investment. And an education system that doesn’t produce enough scientists or engineers. There have been many different versions of the ‘British disease’ over the years to explain the consistent under-performance of our economy compared to some of our main rivals. But right now there is a new one: the British don’t want to go back to the office – and that is hitting output hard.  According to a survey by the consultancy AWA published this week, the British are more reluctant to go back to the office than workers in almost any other major developed country. Even as bosses plead

So the economy has defied the predictions of doom once more. The latest figures released by the Office for National Statistics (ONS) this morning show that the economy grew by 0.5 per cent in June, more than countering a 0.1 per cent fall in May, widely attributed to the extra bank holiday for the coronation. Over the three months to June the economy grew by 0.2 per cent, following a 0.1 per cent expansion in the first quarter. One of the most promising aspects of today’s figures is that all sectors of the economy grew in June, with production (1.8 per cent) and construction (1.6 per cent) outpacing services (0.2

It will be harder to pick up a last-minute light bulb. You might have to rely on Amazon Prime for a quick delivery of new tea towels. And your local shopping centre will look even more dismally empty than it already does.  There will, in fairness, be some disadvantages to the hardware chain Wilko disappearing. And yet there is no point in pretending that it is any great loss. In reality, it was one of many ‘zombie’ companies, kept alive by artificially low interest rates. Now that capital costs money again, many more will go bust.  Wilko announced today that it was going into administration, and that its 400 stores

It’s no great secret that the events of the past few years have delivered a serious economic blow to the UK. But just how many years has the country been set back? This morning the National Institute of Economic and Social Research has published its updated ‘Economic Outlook’ which digs into some of these figures, erring on the pessimistic side of the forecast spectrum. According to the NIESR’s new report, the UK economy is still a year off reaching its pre-pandemic levels. In the last quarterly update, the country’s GDP still sat 0.5 per cent below its level in the last quarter of 2019 – a figure that the Bank of England thinks

The government’s objective to ‘halve inflation’ by the end of the year seems to be back on track – for now. Last week’s interest rate hike was delivered with an updated inflation forecast from the Bank of England, showing the rate slowing to 4.7 per cent by the end of the year, just below Rishi Sunak’s target. The better-than-expected fall in the headline rate last month has forecasters thinking things are finally moving in the right direction. As Ross Clark reports on Coffee House, Capital Economics is expecting another major fall in the rate next week – down to 6.9 per cent on the year – when July’s figures are released.

Small companies will face massive fines for not checking the papers of everyone they hire. Landlords will be put out of business for renting rooms to anyone without permission to be in the UK. With its Rwanda policy stalled, and with the numbers of illegal immigrants still at record highs, the government has a big new idea for trying to stem the numbers of people coming into the country. It will get small businesses to police the system. The only trouble is, that will damage the economy, and we will all suffer from that.  The government’s latest big idea for controlling immigration is to make it a lot harder for