Economy

Marks & Spencer was a 20th-century paradigm of better business: a trusted brand and a benign employer that built strong relationships with suppliers and generated handsome returns for shareholders. Then its performance began to fade, as one management team after another failed to keep pace with retail trends in-store and online. By August 2020, when it announced 7,000 job cuts and ‘multi-level consultation [on] further streamlining’, I was moved to predict M&S would end up as no more than ‘a chain of upmarket convenience food stores and a website that’s handy for sending flowers and chocolates’. But I misjudged the residual loyalty of middle-class shoppers. Lately they have been returning

Inflation rose to 4 per cent on the year to December, up slightly from 3.9 per cent the previous month. It’s the first time the inflation rate has increased for almost a year – an unexpected uptick, as the consensus was for the rate to slow once more, down to 3.8 per cent.  This is not the update politicians and central bankers were hoping for, but as far as monthly data goes, it’s not the end of the world either. The inflation rate doesn’t come down in a straight line, as evidenced already in the UK’s battle to get prices under control. The jump up to 4 per cent on the year

The jobs market has turned a corner. Vacancies have fallen again to 934,000, down 49,000 in the last three months of the year, the longest continuous fall on record. Wage growth slowed to 6.5 per cent in cash terms – which will please the Bank of England – but luckily for workers inflation is falling faster, meaning those rises translate into real terms pay bumps (of about 1.3 per cent). Employment climbed slightly while unemployment remained flat.  The next inflation figures are out tomorrow but the wage data are a sure sign of the direction of travel. Take out bonuses and average pay rose 6.6 per cent (1.4 in real

Why is Oxfam so concerned about the coming possibility of the world’s first trillionaire? The charity has this week released a report with an apocalyptic warning that one is likely within the next decade. Yet surely people only get that rich by making something that people want. That should be celebrated instead of condemned.  In a report published for the start of Davos, the annual event where very rich people gather at an expensive resort in Switzerland to worry about being rich, Oxfam said the world’s first trillionaire could come soon. Apparently, that showed we are entering a ‘decade of division’. ‘We have the top five billionaires, they have doubled

November is proving to have been a lucky month in Britain. Inflation slowed significantly: from 4.6 per cent on the year in October down to 3.9 per cent on the year in November (a bigger fall than anyone predicted). Not only that: this morning we learned from the Office for National Statistics that the economy grew by 0.3 per cent, rebounding from an (unrevised) 0.3 per cent contraction in October.  Unfortunately that headline growth rate was largely thanks to a handful of temporary factors. Growth in overall services, up 0.4 per cent, is mainly attributed to a reduction in strikes that month, particularly within the health and transport sectors. Furthermore,

When will inflation return to the target rate? According to its latest forecasts, the Bank of England isn’t expecting inflation to slow to 2 per cent until 2025. But could this happen much sooner? Several independent forecasters are growing in confidence that inflation could get down to 2 per cent this spring, rather than next spring. Oxford Economics now expects inflation to average 2.1 per cent this year (a full percentage point lower than it expected in November). They also expect the inflation rate to slow to the annual rate of 2 per cent in April, as Ofgem once again lowers the energy price cap and last year’s higher prices

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