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Michael Simmons Michael Simmons

Trump’s tariffs are taming China

Stockholm This week, the fate of the global economy could have been decided over a Mongolian barbecue in a Stockholm tourist trap. On Tuesday, just 50 yards from Sweden’s seat of government, Rosenbad – where the US Treasury Secretary Scott Bessent and the Chinese Vice Premier He Lifeng had been wrangling over trade negotiations – the Chinese delegation suddenly exited the talks and headed for lunch near the Mongolian buffet place, where they had eaten the day before. Its windows were covered up and a sign announced it would be closed for three days for a ‘private event’. The Americans stayed behind, making do with salad. China, still the factory

Spotlight

Featured economics news and data.

Ross Clark Ross Clark

No, Ed Miliband: zonal pricing won’t cut energy bills

Is Ed Miliband going to announce a move towards a zonal electricity market, where wholesale prices would vary between regions of Britain? It would appear to be on cards following the Energy and Climate Secretary’s interview on the Today programme in which he said he was considering the idea. Miliband’s apparent support for the plan follows intense lobbying by Greg Jackson, CEO of Octopus Energy as well as support from the National Energy System Operator (NESO), the new government-owned company which oversees the grid. However, zonal pricing is bitterly opposed by others in the energy industry, including Chris O’Shea, the generously-moustached CEO of Centrica, and Dale Vince, CEO of Electrocity

Tuesday

Michael Simmons Michael Simmons

Labour goes nuclear while Reform turns to coal

17 min listen

Rachel Reeves has pledged a ‘new era of nuclear power’ as the government confirms a £14.2 billion investment in the Sizewell C nuclear plant in Suffolk. This comes on the eve of Labour’s spending review, with the government expected to highlight spending pledges designed to give a positive impression of Labour’s handling of the economy. However, as Michael Simmons tells James Heale and Lucy Dunn, there are signs that the government’s National Insurance hike is starting to bite. Plus – Nigel Farage has made two announcements in as many days. This morning, he unveiled Reform’s new chairman, former MEP Dr David Bull, taking over from the recently returned Zia Yusuf.

Ross Clark Ross Clark

Sizewell C won’t save Ed Miliband

Ed Miliband has suddenly realised that you cannot run an electricity grid on intermittent renewables alone. The Energy Secretary’s announcement this morning of £14.2 billion worth of funding for a new plant at Sizewell C, together with cash for Small Nuclear Reactors (SMRs) and continued research into the holy grail of nuclear fusion, is an admission that energy policy so far has been far too concentrated on wind and solar. Ed Miliband has promised that his green energy policy will reduce our bills by £300 a year by the end of this Parliament But nothing that Miliband has unveiled does anything to help the energy and climate secretary achieve his

Michael Simmons Michael Simmons

Labour’s National Insurance hike is starting to bite

The unemployment rate has risen to 4.6 per cent, the Office for National Statistics has revealed. This morning’s figures mark the first proper reading of the jobs market since April, when the minimum wage was hiked and the £25 billion raid on employer National Insurance started. It’s not just the joblessness rate rising: the number of payrolled employees fell by 55,000 between March and April, and by 115,000 compared to a year earlier. A flash estimate for May (which will be revised) shows an even starker picture: down 109,000 in a single month and 274,000 year-on-year. In other words, a city the size of Southampton has effectively been wiped off

Charles Amos

Rachel Reeves’s winter fuel U turn is indefensible

Rachel Reeves has shown just how spineless this government is by U-turning on her flagship policy of cutting winter fuel allowance. Instead of sensibly offering only the poorest pensioners help during the coldest months, nine million pensioners on total incomes less than £35,000 will receive it. When a government with a majority of 174 seats can’t cut government spending by £1.6 billion, or, less than 0.2 per cent of its budget, there is little hope for sorting out the nation’s finances with impending demographic disaster on the horizon. In U-turning on her flagship policy, Reeves has shown just how spineless this government really is No doubt on the doorstep many

Monday

Michael Simmons Michael Simmons

What’s new in Reeves’s spending review?

When Rachel Reeves last week tried to shift the narrative around her spending review – from one of fiscal restraint to ‘spend, spend, spend’ – she ‘unveiled’ £113 billion in infrastructure investment. But for those in Westminster with more than a short-term memory, they will have felt a distinct sense of déjà vu. That’s because much of what Reeves announced had already appeared on gov.uk more than 18 months ago. These were Conservative plans, shelved for the election, now revived under a different party banner. Last week, Rachel Reeves announced £1.5 billion in funding to improve trams and buses in south Yorkshire. Eighteen months ago, the plans for south Yorkshire stood at

James Heale James Heale

Labour try to silence ‘austerity-lite’ accusations

13 min listen

James Nation, formerly a special adviser to Rishi Sunak and now an MD at Forefront Advisers, joins the Spectator’s deputy political editor James Heale and economics editor Michael Simmons, to talk through the latest on the government’s spending review, which is due to be announced on Wednesday. The last holdout appears to be Home Secretary Yvette Cooper, pushing for more police funding. But, against a tough fiscal landscape, what can we expect? And how much does it matter with the wider public? Plus – former chairman Zia Yusuf returned to Reform just two days after resigning, what’s going on? Produced by Patrick Gibbons.

Matthew Lynn

Will America and China call a truce in their trade war?

High-level talks have started in London today between American and Chinese officials aimed at dialling down the trade tensions between the two largest economies in the world. If they result in a breakthrough, perhaps it will be known as the ‘London accord’. But can President Trump strike a ‘grand bargain’ with China? There is every chance that he might – which would give a huge boost to the global economy. The talks in London follow on from a friendly chat on the phone between President Trump and his counterpart in Beijing, President Xi. Both sides have already stepped back from an all-out trade blockade, with the United States reducing the

Thursday

Iain Dale

From Thatcher to Truss, who’s haunting Mel Stride?

17 min listen

Shadow Chancellor Mel Stride delivered a speech today where he attempted to banish the ghost of Liz Truss and improve the Conservatives’ reputation over fiscal credibility. And he compared leader Kemi Badenoch to Thatcher, saying she too struggled at first and will ‘get better’ at the dispatch box. LBC broadcaster Iain Dale and the Spectator’s economics editor Michael Simmons join deputy political editor James Heale to unpack Stride’s speech, talk about Labour’s latest policy announcement over free school meals and discuss why both the main parties are struggling with fiscal credibility. Plus, Iain talks about his new book Margaret Thatcher and the myths he seeks to dispel. Why does he

Michael Simmons Michael Simmons

The ONS blunders. Again

‘The ONS apologises for any inconvenience caused’ is becoming an all-too-familiar refrain from Britain’s statisticians. The latest mea culpa came after a blunder involving vehicle tax data led the Office for National Statistics to overstate April’s inflation figure. Initially reported as 3.5 per cent, the true figure was 3.4 per cent – only revealed once the Department for Transport corrected its own error on the number of cars subject to increased vehicle taxes. The latest mea culpa came after a blunder led the Office for National Statistics to overstate April’s inflation figure While civil servants at the DfT are to blame, it raises serious questions about the ONS’s quality assurance

Ross Clark Ross Clark

Could the Winter Fuel Payment fiasco bring down Rachel Reeves?

When the Chancellor Rachel Reeves announced that she was withdrawing the Winter Fuel Payment from most pensioners on the same day, last July, when she awarded fat pay rises to many public sector workers she perhaps imagined herself as striking a blow for inter-generational fairness. Working people would get more money – at least if they worked in the public sector – and wealthy retirees a little less. Yet it is fast becoming the an issue which could prove her undoing. The tragedy of the Winter Fuel Payment fiasco is that it leaves the far bigger problem untouched We now learn that the government’s partial U-turn will involve pensioners effectively

Matthew Lynn

Is the London Stock Exchange under threat?

When the fintech giant Wise floated its shares on the London Stock Exchange in 2021 it was widely seen as proof that the City still had a future as a centre for equity trading. This was London’s largest-ever tech listing: it was one of only a handful of new British companies with a global presence and it was hailed as the perfect example of how the London stock market could still be an effective home for growing businesses. Against that backdrop, its decision today to move its primary list to the United States is a crushing blow. Has Wise just killed the London stock market? A stock market needs a

Martin Vander Weyer Martin Vander Weyer

In praise of Michael O’Leary

NatWest has returned to full private-sector ownership 17 years after the £46 billion bailout that took it into state hands – and five years after the name swap which reduced the once globally trumpeted Royal Bank of Scotland to a humble north-of-the-border branch network, while promoting its English subsidiary NatWest to become the parent brand. RBS shareholders who were almost wiped out but hung on to what are now NatWest certificates have seen their shares triple in value since 2023, finally surpassing the bailout price. HM Treasury took a £10.5 billion loss on the whole rescue exercise, which required a decade-long series of placements and buybacks to filter the taxpayers’

Wednesday

Matthew Lynn

Starmer doesn’t have long to save his US trade deal

It has only been a few weeks since the UK agreed to a trade deal with the United States that exempted us from the worst of President Trump’s tariffs. There was a grand, if slightly awkward, ceremony in the White House. The deal was sold as a triumph of negotiation and diplomacy for the Prime Minister Sir Keir Starmer, and even more for our ambassador in Washington, Lord Mandelson. But it seems Starmer may have got ahead of himself, for this deal appears to only have been a temporary truce. Right now there is a real risk that the government may blow the deal – and that would be hugely

Tuesday

Ross Clark Ross Clark

It will take more than 3% to make Britain ‘battle ready’

Does anyone really think that spending 3 per cent of GDP on defence would make Britain ‘battle-ready’, as Keir Starmer claims? (Assuming, that is, that he really did spend all that money rather than merely have an aspiration to do so). Here is the statistic of the day, to remind us of what a wartime economy really looks like. In 2023, according to the World Bank, Ukraine spent 36.7 per cent of its GDP on defence. And no, the reason that percentage is so high is not because Ukraine’s GDP collapsed: on the contrary, Ukraine’s GDP in 2023 was higher than in any year except the Covid rebound year of

Michael Simmons Michael Simmons

Will Rachel Reeves heed the warnings over the UK’s gloomy economic outlook?

Rachel Reeves has been warned again that the slim headroom against her ‘ironclad’ fiscal rule could be wiped out if growth prospects worsen. The Organisation for Economic Co-operation and Development (OECD) said in its latest economic outlook for the UK that ‘very thin fiscal buffers could be insufficient to provide adequate support without breaching the fiscal rules in the event of renewed adverse shocks’. The OECD also downgraded Britain’s growth forecast. It predicted the economy will grow by 1.3 per cent in 2025 and then just 1 per cent next year – a fall from their previous forecast of 1.4 and 1.2 per cent. The OECD said this downgrade was

James Bartholomew

Reform’s risky economic experiment

At last they have found it. Or, at least, they think they have. Sir Keir Starmer and Kemi Badenoch have been hunting around for months trying to find Nigel Farage’s Achilles’ heel. While they have been searching, the popularity of the Reform party has soared ahead of that of their own parties. But now, finally, they reckon to have identified the weak spot. In their shared enthusiasm, they both described Reform’s emerging tax plans as ‘fantasy economics’. Starmer gave the bemused workers at a glass factory a seven-minute harangue about it, declaring Reform’s plans a ‘mad experiment’. Badenoch fumed that ‘Jeremy Corbyn’s “magic money tree” is back’ with a Reform

Monday

Michael Simmons Michael Simmons

Rachel Reeves risks killing off the family business

Changes to how inheritance tax and trusts are treated for non-doms have already put the nation’s finances on shakier ground – something I revealed in a cover story last month. Now, a new report suggests these anti-business Treasury policies may risk killing off Britain’s family firms too. Fresh analysis by the CBI’s economics consultancy, commissioned by Family Business UK, warns that these changes to inheritance tax could jeopardise more than 208,000 full-time jobs over the course of this Parliament. That’s more than the entire construction workforce in London. The report says that as small firms retreat from long-term investment, the wider economic consequences could be severe. The government may have unwittingly damaged

Sunday

James Graham

Why is your pension fund so obsessed with net zero?

Legal & General is Britain’s largest asset manager, with over £1 trillion on its books. Every pound it manages should be dedicated to achieving the highest possible returns. This matters a lot: L&G manages over five million pensions in the UK. But in recent years, the asset manager has been particularly concerned with fashionable causes, instead of being entirely focused on making sure your retirement is secure. Individuals already fund net zero schemes via their taxes. They should not be forced to pay an effective additional tax, via lower returns, to fund net zero with their retirement savings That is why I recently attended their AGM. I wanted to learn

Friday

Andrew Tettenborn

Britain’s Gulf trade deal is not the place for virtue signalling

Rachel Reeves announced that a trade deal with the Gulf Co-operation Council (GCC) – in other words, Saudi Arabia and the Gulf states – was imminent last week. It was then leaked that, even though the deal was with unashamed petrostates with no time for net zero and, in some cases, a distinctly doubtful record on rights, the text imposed no legal duties in respect of human rights, modern slavery or the environment. The trade unions and human rights groups are unhappy. The TUC wants any deal to be conditional on workers’ rights protection; the Trade Justice Movement and other earnest humanitarian activists are demanding binding commitments on human rights

Ross Clark Ross Clark

Starmer’s welfare cuts are nothing like ‘Tory austerity’

Keir Starmer has already folded on the winter fuel payment, promising a partial reversal of the policy by reinstating it for pensioners in receipt of pension credit. How much longer before the proposed £4.8 billion cuts to welfare benefits go the same way? This morning, the Health Foundation think tank has issued a pronouncement that will be a red rag to critics of Labour’s welfare cuts: that the effect of Starmer’s reform of disability benefits will be four times as great as changes proposed by the Conservatives before the election and on a similar scale to George Osborne’s benefits cuts of 2015. Those cuts, announced in Osborne’s July budget of