Economy

When your largest single shareholder decides that enough is enough, that it is no longer prepared to throw good money after bad to prop up your finances, you really do have a problem. And that is exactly what has happened to Credit Suisse this morning. The Saudi National Bank, which owns a 10 per cent share in the Swiss bank, announced that it is no longer prepared to put up any more capital to prop the bank up. Credit Suisse shares promptly fell by 20 per cent before trading was suspended. Yes, Saudi National Bank has trashed the value of its own holding – but evidently reckoned that that is a

Is the UK’s labour market cooling down? While unemployment remains unchanged at 3.7 per cent, according to today’s update from the Office for National Statistics, the number of job vacancies ‘fell on the quarter for the eighth consecutive period’, down 51,000. The overall number of vacancies, however, still remains above a million. But the biggest indicator things are changing is wage growth: the rise in average total pay fell to 5.7 per cent between November last year and January this year, down from 5.9 per cent in the previous three months. Adjusting for inflation, this means real wages fall by 3.2 per cent – the biggest fall since the pandemic hit, not

On the face of it, the takeover of the UK arm of Silicon Valley Bank by HSBC is a triumph for the government. Today, we could have been seeing the collapse of dozens of UK tech start-ups. We could have seen staff going unpaid and shares in tech companies plunging to greater depths than they have yet explored during the correction of the past year.  Instead, things are fairly calm in the tech sector. Well before markets opened this morning, the government had brokered a deal which will allow the Silicon Valley Bank’s facilities to continue without a hitch, thanks to a wholesale takeover by one of the largest banking institutions in

Tech start-ups tend to involve taking big risks on ideas which are untested both in terms of technology and the market place. Yet it isn’t blind faith in new ideas that is threatening to bring down scores of British tech start-ups over the next few days: it is boring old bonds. Many start-ups have relied for financing on Silicon Valley Bank UK, an offshoot of its larger US parent. Over the last few years, the institution has in turn relied on taking bets on government bonds whose value had been inflated by near-zero interest rates. As interest rates have risen, those bets have gone sour. On Friday, the Bank of

Supermarkets are once again back in the firing line. Henry Dimbleby, the Leon co-founder turned government food tsar, has blamed the current food shortages on their ‘weird culture’. When food is scarce UK supermarkets won’t raise their prices, he claimed. It leads to growers selling less here and more in Europe, exacerbating shortages. He wasn’t alone in blaming supermarkets. Last month, in an attempt to absolve the government of blame, food and farming minister Mark Spencer demanded the heads of big chains join him for a discussion on ‘what they are doing to get shelves stocked again.’ In the end, only middle-management showed up.  The average supermarket stocks 20,000 items with around

This morning’s release from the Office for National Statistics shows the UK economy grew by 0.3 per cent in January – an improvement on December 2022 figures, which saw the economy contract by 0.5 per cent. There are no revisions to the last update: the UK still avoids the technical definition of recession, and January’s growth was higher than expected (the consensus was that it would be 0.1 per cent). But overall, the economy remains stagnant: the three months to January produced precisely zero growth. What really sticks out in today’s release is just how dependent the UK economy is these days on one-off interruptions. January’s rebound is largely credited to the return of

Shadow chancellor Rachel Reeves has promised to tackle what businesses tend to fear the most: instability. ‘In recent years, corporation tax has gone up and down like a yo-yo, while the government has papered over the cracks with short-term fixes like the super-deduction,’ Reeves told the manufacturing group Make UK’s annual conference this morning. Under a Labour government, she pledged, there will be a clear ‘roadmap for tax which lasts over a parliament’. Reeves said this would give business leaders a better sense of what to expect, hopefully creating an atmosphere for investment. Promising a review also puts pressure on Reeves to come up with answers to some of the

As tax rates rise in the UK, so do business jitters. The windfall tax on oil and gas companies – raising tax on profits to 75 per cent this year – has energy companies openly discussing plans to divert money elsewhere. The looming hike in corporation tax – from 19 per cent to 25 per cent for the largest companies – also has the businesses talking about future investment strategies.  So far, Chancellor Jeremy Hunt seems unconvinced that investment threats will amount to much. His Budget next week is expected to confirm the corporation tax rise in April. But the backlash is growing: from MPs in his own party who are worried

It would have been bad enough if just one major British company had decided to list its shares in New York rather than London in the space of a single week. But two? First it was the chip-maker Arm, one of the UK’s very few major technology companies. Then came the building materials giant CRH. Shell also said they came very close to shifting their base to the US. The moment has surely arrived for the UK to radically deregulate its listing regime – or else watch the City slowly wither away. At this rate, within a few years there might only be a couple of retailers and a bus

Last month the Bank of England announced its tenth rate rise in a row, taking interest rates to 4 per cent. At the time it was speculated that the BoE might end there: not only were rates now catching up with market expectations of where they would peak, but there seemed to be more agreement within the Monetary Policy Committee, based on the way its members were voting, that it was time to slow down. Their own report noted that, to keep hiking rates, the Bank would need to see ‘persistent pressures’ contributing to inflation. But the Bank’s governor reminds us once again that nothing is off the table. 'I

The pound rose a cent or two against the dollar in response to the new trade deal for Northern Ireland. The FTSE 100 index rose on Monday but slid back on Tuesday, deterred by the prospect of a stronger pound, while the more domestic FTSE 250 showed a clearer uptrend. Overall, markets were cautiously positive about the Windsor Framework, not so much for its effect on movement of goods through Northern Irish ports as for its signal of calmer UK-EU trade relations ahead on a wider front. And what really matters is whether this change of tone catalyses a new wave of inward investment. The recent claim by economist Jonathan Haskel that

Our growth rate has been miserable. We have not invested enough. And over thirteen years the Conservatives have cut spending too much, damaged our trading relationships with our major neighbours, and made a mess of the tax system. These were Labour leader Sir Keir Starmer’s major criticism of Tory economics today in a speech in which he unveiled his latest plans for the economy.  He summed it all up with one damning statistic. We will, he argued, soon be poorer than Poland. Poland! But hold on. Why does Sir Keir imagine the British have some God-given right to be richer than the Poles? And why doesn’t he take a moment to reflect

Fulfil your civic duty. Get married. Have children. That was the message from Miriam Cates, the increasingly prominent Conservative backbencher, to guests at a drink reception earlier this week. In what even her fiercest critics would have to concede was an impressively bold speech, Cates suggested that many of her female constituents want to work less and spend more time with their children. She claimed that politicians belonged to a class that had been protected by marriage and family, insulated from family breakdown to such a degree that they fail to realise how important it is. Few politicians can ride out a Twitterstorm without some sort of retraction, and Cates is no