Economy

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,

Covid provided a revelation of the vulnerabilities of the global supply chain, but now war in Yemen has provided another. Attacks on shipping by Iranian-backed Houthis has reminded the world of how much trade is reliant on free passage through the Bab-al-Mandeb Strait, an 18-mile wide waterway at the southern entrance to the Red Sea. If shipping cannot get through that then it struggles to get through the Suez Canal. In the past month, 15 ships have been attacked in the strait with missiles and drones, and now shipping lines have had enough. They are instead routing their container vessels an extra 3,000 miles around the Cape of Good Hope. That

Argentina has spent most of its 200-year history in deficit; no other country currently owes the International Monetary Fund a greater sum of money. The new finance minister, who entered government with President Javier Milei earlier this month, has been stark in making the point: ‘Out of the last 123 years, Argentina ran a fiscal deficit in 113… we have come to solve the addiction to fiscal deficits.’  Milei’s government is wasting little time carrying out what it calls ‘shock therapy’. The official value of the peso, Argentina’s currency, has been halved against the US dollar. Why might a government want to weaken its own currency, pushing up the price

The Bank of England has held interest rates at 5.25 per cent for the third consecutive time. This was the expected outcome of the Monetary Policy Committee’s latest vote, but it wasn’t unanimous. There were six MPC votes to hold rates but three to raise it to 5.5 per cent. No one voted to cut. This speaks to the biggest challenge the Bank faces right now: how to balance getting the inflation rate back to target without tipping the economy into recession. But markets expect the next movement to be downwards – so much so that mortgage rates are already falling in anticipation. The MPC today urges markets not to get ahead of themselves

So, a deal has been reached. The world has agreed on what Cop 28 president Sultan al-Jaber has called a ‘robust action to keep 1.5 Celsius in reach’. The world is to ‘transition away’ from fossil fuels. And meanwhile, back in the real world? If the world really had just made a meaningful commitment to end the use of fossil fuels, you might have expected shares in oil companies to have crashed this morning. But have they heck. Shell, BP, all are unmoved. It is expansionary business as usual. The UAE has invested $150 billion (£120 billion) to increase oil production by half to five million barrels a day by 2027. In the

The jobs market appears to be slowing down, but can we trust the figures? Vacancies have fallen for the longest continuous period on record, according to data published by the Office for National Statistics (ONS). But there are still just under 950,000 jobs on offer which is well above the pre-lockdown norm. Meanwhile, despite British workers receiving real-terms pay rises in the three months to October, wage growth seems to have peaked. This will please Bank of England rate setters who feared that spiralling wage demands could worsen inflation. Average weekly earnings (including bonuses) fell slightly to 7.2 per cent on the year, down from 8 per cent. Because of

The decision of the European Commission to delay, for three years, tariffs on car exports between Britain and the EU is the harbinger of a more constructive relationship between the two. But is it going to save the European car industry? Probably not. It is net zero targets, not Brexit, which are condemning mass-market car production in Europe to possible extinction. Until this week’s decision, car manufacturers faced a cliff edge. Unless they could show that at least 45 per cent of a vehicle, by value, had been made in Europe, that vehicle would face a 10 per cent tariff if exported from Britain to the EU or vice versa. What might have

What position should the distant observer take on the COP28 conference in Dubai? That the sight of 70,000 delegates flying into a desert oil state from around the world to discuss human impacts on climate change is beyond satire and that its proceedings are never likely to rise above Greta Thunberg’s encapsulation of all such jamborees as ‘blah blah blah’? Or that the climate problem is now so obvious and urgent that all efforts towards global action, however small, should be uncynically applauded? I leave that choice on the table. But I’m finding it hard to take a positive view of Sultan Al-Jaber, president of the Dubai gathering, who also

The UK’s immigration system must be ‘fair, consistent, legal and sustainable’, proclaimed the new Home Secretary as he presented his ‘five-point plan’ to reduce legal migration in parliament. James Cleverly billed these changes as ‘more robust action than any government’ has taken before to reduce the headline net migration figure.  They involve increasing the skilled worker earnings threshold from £26,200 to £38,700 from next spring; increasing the NHS surcharge (paid every time most migrants secure or renew their visa), from £624 to £1,035; ending the 20 per cent salary reduction for shortage occupations (as well as reforming and reducing the list); increasing the minimum salary for a family visa to