Economy

An American in London, I frequently have occasion to return to my hometown of Los Angeles. In my latest trip this week, I changed my drink of choice because of President Trump. I passed over a French champagne in favour of a California red, and, in effect, became a case study on the transformative might of Trump’s policies. When I dumbfoundedly showed my US-based drinking mates the bar menu, they too marvelled at the exorbitant prices Fortune found me settling into a bar in Beverly Hills, in a swanky five-star hotel in one of the country’s poshest neighbourhoods, for a nip of drinks with former colleagues. Thinking to celebrate our

The economy is slowing down. GDP grew 0.3 per cent in the three months to August. As ever, services propped up Britain, growing by 0.4 per cent, while the production sector shrank by 0.3 per cent, according to Office for National Statistics data. We could have news of a stagnating economy confirmed just in time for Rachel Reeves’s Budget That growth over the last three months though was helped by a bumper June with the economy flat over the latest two months. If things don’t improve in the September data, then we could have news of a stagnating economy confirmed just in time for Rachel Reeves’s second Budget. Inflation too,

It is day three of Labour’s latest strategy: to try to blame Nigel Farage for the forthcoming tax rises in the Budget. After Health Secretary Wes Streeting had a go on Monday, Rachel Reeves this morning has made a similar point. The reason she is looking to raise taxes in the Budget, the Chancellor says, is because of Brexit. ‘There is no doubting that the impact of Brexit is severe and long-lasting,’ she said. Next up, apparently, is Keir Starmer, who at one point is going to tell us that Farage is guilty of campaigning for Brexit and then walking away from its implementation. Given that he wasn’t, and never

On Question Time last week, Zack Polanski, the Green Party leader and erstwhile boob-whisperer, declared that there is no evidence that the wealthy leave Britain because of wealth taxes. A bold claim, and a wrong one. It’s also revealing, symptomatic of a growing belief on the populist left that Britain’s problems could be solved if only we shook the ultra-rich’s pockets a little harder. Polanski assured the audience that a wealth tax would only fall on those with more than £10 million in assets – as if this made it both morally tidy and economically painless. Unfortunately, history and basic arithmetic disagree. France tried almost exactly that, with a rate

When Friedrich Hayek won the Nobel Prize, his entire lecture – titled ‘The Pretence of Knowledge’ – was an attack on economics itself. He believed economists were more worried about looking scientific than actually being scientific. The lecture was so controversial that Economica, the LSE journal that had published Hayek’s work since he was a young professor, refused to print the speech unless he made changes. Hayek, of course, refused. But that was the spirit of the Economics Nobel back then. It rewarded rebels. Since, the prize has become a monopoly for the ‘good boys’ of academia; those who publish in the top journals, collect citations and perfect their h-index. Today, the Nobel

Stock exchanges around the world compete with each other to entice the most exciting companies to sell their shares on their markets, via Initial Public Offerings (IPOs). London was once the financial capital of the world, and a leader in IPOs. Now it has fallen to number 23 in the global IPO rankings, having been surpassed by the likes of Mexico and Indonesia. In 2006, at its fundraising peak, $51 billion was raised on the London Stock Exchange, with companies such as Unilever and Vodafone making London their home. This year, London IPOs raised just $250 million. Even companies already listed on the London exchange, such as AstraZeneca, are shunning it

Rachel Reeves is trapped in an economic ‘doom loop’: high debt, low growth and higher debt again. But, as pessimists’ eyes turn to the Chancellor’s Budget next month, there is a way she can turn that loop into a ‘virtuous circle’. The doom loop theory of Reeves’s economy has so far gone like this: Following a fiscal event, tax receipts come in lower than expected, growth forecasts are downgraded, inflation forecasts rise – and a fiscal ‘black hole’ emerges. To fill in the hole, the Chancellor hikes taxes because her backbenchers won’t let her make cuts. The tax hikes further hamper growth, weighing down employment as companies struggle under the

Between news bulletins of the Manchester synagogue attack last week, I popped into my local Co-op for some groceries. When the public address system said something indistinct about ‘solidarity’, I paused to listen: it was an advert for Sun & Stone lager, produced in Scotland in collaboration with Taybeh, a Palestinian microbrewery, and with a slice of any profits going to the Disaster Emergency Committee’s Gaza appeal. The Co-op is a benign beacon of alternative capitalism, owned by its members and valued by millions of customers. At their annual meeting in June, those members voted to ‘cease all trading with Israel’, as the Co-op has also done with the likes

It already faced tariffs in the United States, and it has been struggling to cope with some of the highest industrial energy prices in the world. Now what remains of the British steel industry faces what could well be a terminal blow. The European Union is about to impose tariffs of 50 per cent on steel imported from the UK. Labour ministers will no doubt start cobbling together rescue packages, and trying to devise a new strategy to rescue the industry. But perhaps it would be best just to be honest – and let the industry die.  The EU has set out plans to cut the amount of steel imported

When Linden Kemkaran (formerly of The Spectator) was elected leader of Kent County Council, she presented herself as the poster-child for Reform in power. ‘The electorate,’ she said in June, ‘are looking to judge whether they can put their trust in a Reform government at the next election.’ Her administration set up ‘Dolge’, a ‘department of local government efficiency’, modelled on Elon Musk’s original, and instructed it to cut wasteful spending and find cash-saving efficiencies. After just five months, however, its efforts appear to have faltered. The council is already ‘down to the bare bones’, Diane Morton, Reform’s cabinet member for adult social care in Kent, told the Financial Times yesterday. Reform has

The message the Tories want you to leave their conference with is that they are the party of prudence. The party of fiscal responsibility who will make the first ‘serious down payments’ on the size of the state, as shadow chancellor Mel Stride explained at a Spectator drinks reception last night. Today, he will set out his plan to achieve that. Stride will ‘recommit’ his party to ‘fiscal prudence’ by announcing £47 billion in savings for the public purse. Those measures include: Welfare reforms that will include stopping claims from people with ‘low level mental health problems’ and foreigners and reversing any lifting of the two-child benefit cap to bring

We will wage the war in Ukraine for longer and make you pay more for it. That was the message the Kremlin sent its subjects following the Russian government’s presentation of next year’s budget and the accompanying economic outlook. The budget, which reached parliament for rubber-stamping on Monday, outlines the Kremlin’s vision ahead of the war enterring its fifth year next February: the war will continue at the expense of the economy and people’s incomes. Higher taxes are expected to keep the budget deficit at 1.6 per cent of GDP next year. For three years, rising fiscal spending stimulated both economic growth and climbing incomes. The downside of this amphetamine-fuelled

He wasn’t able to announce the £300 off household energy bills that was promised during the election campaign. Nor could he unveil any massive new solar farms or wind turbines. Still, the Energy and Climate Change Secretary Ed Miliband did have one message to cheer the party faithful in his conference speech today: he is going to ban shale oil and gas for all time. ‘Let’s ban fracking and send the frackers packing,’ he thundered. But can Miliband really do that and outlaw fracking forever? Only a fool would pretend that he can. Right now, there is a moratorium on extracting shale oil and gas in the UK, which could,