Economy

It was the weather wot did it, wot stopped us spending in the shops. Yet again, the favourite old excuse has been trotted out by retailers trying to explain where their sales have vanished. Retail sales volumes in September, the Office for National Statistics (ONS) reports this morning, plunged by 0.9 per cent in September, with a quarterly fall of 0.8 per cent. Apparently the hot weather in September is to thank for delaying us going down to the high street to try on all the exciting autumn collections (although why we didn’t do this later in the month when temperatures fell they don’t explain). There is, of course, an

Not for the first time, a widely-predicted – and for many frustrated buyers, hoped-for – house price crash has failed to materialise. The Office for National Statistics’ House Price Index (ONS HPI) shows average prices up 0.3 per cent in the month of August and up 0.2 per cent since August 2022. This is at odds with the Halifax House Price Index, which put house prices in September at 4.7 per cent lower than a year earlier. But it is a more complete data set based on all sales across the UK. The Halifax index, by contrast, is based on mortgage approvals by the Halifax bank – and there is no guarantee that

‘We are in a horrible fiscal bind’ says the Institute for Fiscal Studies this morning, as it publishes its Green Budget report ahead of the Autumn Statement. A combination of stagnant growth, stubborn inflation, rising debt interest payments and a tax burden at a postwar high has produced a grim assessment of the UK economy, which the IFS suggests will worsen in the coming years, as ‘huge fiscal pressures’ around the National Health Service and public sector pensions increase (more on that here). The report’s conclusion is that now is not the time to raise taxes. It would make terrifying reading for a Conservative prime minister and chancellor if they weren’t already aware

There aren’t many Alex types in banking anymore. The popular middle-aged cartoon banker, greyer and greyer since the 1980s, is regularly depicted in the Daily Telegraph gazing sagely over the heads of panicked young traders, safe in the knowledge he’s seen it all before. Older traders like him are few and far between now. Instead, Britain’s banks and investment firms have been left largely in the hands of the youngsters, a generation too used to working in an era of free money. It’s a troubling thought. Since the 2008 financial crisis, expensive and experienced senior bankers have been cast out, replaced by younger, cheaper rivals. Credit Suisse was forced into a desperate rehiring scramble in

It was a year ago this weekend that Liz Truss sacked her chancellor, Kwasi Kwarteng, over the fallout of their ‘growth plan’. This marked the beginning of the end of Truss’s premiership: she then appointed Jeremy Hunt to the role, and he swiftly dismantled almost every part of her infamous mini-Budget. Since leaving No. 10, Truss has been quick to return to the political spotlight, writing comment pieces for national papers, giving interviews, making speeches and interventions – and launching a Growth Commission through which she continues to take the Office for Budget Responsibility to task. But just as Truss continues to make her views known, so do her critics.

So, the doomsters have been proved wrong again – not least the Bank of England, which a year ago forecast recession throughout 2023. GDP figures released by the Office of National Statistics this morning show that the economy grew by 0.2 per cent in August, partially reversing a sharp contraction of 0.6 per cent in July.  Across the three months to August – which is a rather better guide to what is happening than the volatile monthly figures – show growth of 0.3 per cent. It is not possible now – by the usual definition of two consecutive quarters of negative growth – for Britain to suffer a recession in 2023, and

Market sentiment around the possibility of failures in the banking world remains as febrile as ever. Or so we might judge from coverage of Metro Bank – which reports suggested might have been edging towards collapse before finding a new owner over the weekend. Metro was the brashest of the ‘challenger banks’ that sprouted after the 2008 financial crisis and the only one that aimed to build an all-new network of 200 branches. Its American founder, Vernon Hill – whose other interests included a chain of Burger King outlets – declared an urge to ‘make banking fun’ when the first Metro opened in Holborn in 2010, offering free lollipops and

The biggest hinderance for the Conservatives is that they have nothing to offer young voters. The Labour party, however, just might. It seems that Keir Starmer will announce in his conference speech a plan to return to the idea of post-war new town corporations, which were able to compulsory-purchase land at agricultural value. It could – just possibly – mean a sharp fall in the price of new housing, massively expanding the number of first time buyers.  The great shame is that the Conservatives couldn’t bring themselves to introduce a similar policy You don’t have to be a socialist to feel aggrieved at your inability to afford a home, something that you

The timing could hardly have been better. Other Labour leaders and shadow chancellors have had to make do with endorsements from the drummer in a 90s Britpop band, or a runner up for the Booker Prize. Rachel Reeves, however, rounded off her speech to the Labour party conference today with no one other than the former Governor of the Bank of England Mark Carney singing her praises. But hold on. Isn’t Carney starting to abuse his position – and possibly the Bank’s independence as well?  By taking sides so openly Carney is turning the Bank into a political body At least we know who Carney would be voting for if

To no-one’s surprise, house prices fell again last month. Average prices were down by 0.4 per cent in September, according to Halifax, with the typical property now worth £278,600 compared with the peak of £293,500 in June 2022. Much of this, inevitably, has to do with high interest rates. For three decades until last year the housing market was pumped up by a downwards trend in interest rates, which increased the amount that buyers could borrow. Now that has come to an end, buying power is contracting. There is unlikely to be any rapid recovery. If rates remain high – and gradually it is dawning on markets that this is likely to

In the run-up to the Conservative party conference, Rishi Sunak was promoting himself as a serious politician who wanted workable policies that respect consumer choice. No more war on motorists! No more pie-in-the-sky net zero promises! Here was a practical man in tune with the concerns of ordinary people. Having teed himself up as a pragmatic, back-to-basics Conservative, it was all the more puzzling when, in his keynote speech, he announced a preposterous anti-smoking gimmick borrowed from Jacinda Ardern that no one was asking for. New Zealand is the only country to have taken seriously the idea of increasing the age at which people can buy cigarettes by one year

Speaking at the Centre for Policy Studies fringe event at Conservative party conference this afternoon, Jeremy Hunt reiterated once again that there would be no big tax cuts this year. ‘Debt interest payments have gone up so much in the past six months’, he told CPS director Robert Colvile, taking estimates for debt servicing payments over the £100 billion mark this fiscal year. The Autumn Statement, the Chancellor said, will lay bare just how dire the situation is: ‘It’s likely that our debt interest payments… are going to go up by more than £20bn pounds a year in the Autumn Budget compared to what was predicted in the spring.’ In other

The whispers going around last year’s party conference largely centred on the state of government – how it was deteriorating so quickly. This year’s whispers are about something that is by no means as dramatic, but possibly as existential to the future of the party: the prospect of tax cuts. The official line is simple: no tax cuts this year. Chancellor Jeremy Hunt has spent his summer trying to quell expectations that his Autumn Statement next month will include any major changes to the tax burden, which is set to reach a post-war high by the time of the next election. This morning he said now is ‘not the right