Economy

It will be a charter for fraudsters. It will usher in an open-season mindset for money launderers and criminals. And it will drag down the reputation of the City. There will be plenty of critics of today’s government decision to push forward with a regulated cryptocurrency market in London. In the wake of the FTX scandal, one of the largest in corporate history, many would rather see it banned completely. But crypto is more resilient than that – and the UK, if moves quickly, it can carve out a lucrative space as its leading hub.  No one could accuse Rishi Sunak or Jeremy Hunt of taking any risks with the

Just what is a UK government supposed to do to keep the IMF happy? This morning it has issued a bulletin predicting that the UK will be the only major economy to shrink in 2023 – by 0.6 per cent – and blaming it on ‘tighter fiscal and monetary policies’. This represents an even-bleaker outlook than the IMF foresaw in October, when it pencilled in growth of just 0.3 per cent. Yet this is the same IMF which last September condemned Kwasi Kwarteng’s mini-Budget for slashing taxes, saying 'given elevated inflation pressure in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as

As the UK – and indeed the world – faces the prospect of an economic downturn this year, what exactly can the government do about it? This remains an ongoing debate within the Tory party, as Rishi Sunak continues to emphasise the importance of stability, while Liz Truss’s most loyal supporters keep pressuring the government to revive her focus on economic growth.  This morning a trio of cabinet members showed up in the City to suggest that it doesn’t have to be one or the other. Culture Secretary Michelle Donelan, Business Secretary Grant Shapps and the main act, Chancellor Jeremy Hunt, opened this morning’s conference at Bloomberg by insisting the

Every month, we are bombarded with the Consumer Prices Index (CPI), the main inflation measure. It is currently running at 10.5 per cent, and although this is slightly down over the past two months, it is still far, far above the Bank of England’s target of two per cent. But what about inflation for people who are running businesses? The Office for National Statistics (ONS) also publishes a Producer Price Index (PPI) covering inflation for commercial organisations. If you think living costs for consumers are high, count yourself lucky you are not running a factory: the PPI of input prices (i.e. prices of raw materials and other goods) for December has come

Rishi Sunak ruffled his own party’s feathers last week when – in reference to last autumn’s market turmoil – he told an audience in Lancashire: ‘You’re not idiots, you know what’s happened.’ This was quickly interpreted as the Prime Minister branding the MPs and business leaders calling for immediate tax cuts as ‘idiots’, sparking not only backlash but also another round of debates on a topic that has been dividing the Tory party since last summer. Just how quickly and aggressively can the party start to cut the tax burden down from its 72-year high? Today’s public sector finance update for the month of December certainly doesn’t settle this debate,

I have to tip my hat to Civitas. The ‘Tufton Street’ think tank made quite a splash on Monday, including bagging the front page of the Daily Mail, with two striking claims. One was that more than half of UK households now receive more in benefits from the government than they pay in tax. The other is that the top 10 per cent of earners pay more than half of all income tax. Both headlines are correct, but a bit more analysis is needed to interpret these figures properly. For a start, this is not new information. The Civitas report acknowledges that it is simply repackaging data which was first published by the Office

Davos was back with a bang this week for the first full-scale winter conference since the pandemic. And yet, the occasion marked something more significant than just a week of power breakfasts and champagne receptions. ‘Davos Man’ is back in charge of the global economy – and for better or worse everyone better get used to it. The Davos consensus is typically smug, self-satisfied and complacent as its many critics never tire of pointing out Sir Keir Starmer flew in to pitch his pro-business plans for the government everyone expects him to lead in a couple of years. The German Chancellor Olaf Scholz was there to explain how his country

When Rishi Sunak laid out his five pledges at the start of the year, his first and most prominent one was to halve inflation in 2023. A few weeks on: how’s that going?    This morning’s inflation figures would suggest not so well. Inflation fell in the 12 months leading up to December 2022 to 10.5 per cent, down from 10.7 per cent in November. So prices are moving in the right direction, but at a snail’s pace. Ross Clark has the details here, where he highlights how the rising cost of food and domestic services is cancelling out falling energy prices. Inflation is still projected to fall significantly by the time

Economic optimism is in short supply these days – but has pessimism about the UK’s economy been overegged by the likes of Sadiq Khan? The verdict of chief executives from around the world suggests as much: Britain has been ranked in the top three markets for investment, according to PricewaterhouseCoopers’s (PwC’s) annual Global CEO Survey. Today’s report follows the latest growth update that revealed that the economy did not contract in November as had been widely predicted, but grew slightly by 0.1 per cent. It marks a sharp contrast from the recent warnings of the London mayor, who said that ‘Brexit isn’t working’. The survey, timed to be published as the business