Economy

The US entered recession earlier than the UK and Europe, and suffered its inflation surge earlier too, so it was always likely that its economy would recover earlier. But is the US emerging from recession while Europe and the UK are still plunging into theirs? That’s what today’s data from the Bureau of Economic Analysis suggests. Real US GDP grew in the third quarter of the year by 0.3 per cent, making for an annualised rate of 2.9 per cent. The figure was negative for the first two quarters of 2022, shrinking by an annualised rate of 0.6 per cent in the second quarter. By contrast, the UK economy shrank

Andrew Bailey this afternoon showed that those who start fights don’t necessarily finish them. Speaking as the only witness at the House of Lords Economic Affairs Committee today, the Governor of the Bank of England landed some rather extraordinary accusations against Liz Truss and Kwasi Kwarteng, suggesting that he was not informed of the details in September’s mini-Budget and that he ‘does not think it was settled’ even the day before it was announced. According to Bailey, both the Monetary Policy Committee and the Treasury officials who were briefing the Bank were forced to speculate about what was coming: ‘There was speculation that this was going to be quite a

A colourful selection of news items this week seem to have a central thread. Elizabeth Holmes, founder of the Theranos fake blood-test venture once valued at $9 billion, was sentenced to 11 years in prison for fraud. Sam Bankman-Fried, founder of FTX, the collapsed crypto exchange once valued at $32 billion, was holed up in the Bahamas awaiting extradition to face US justice. Despite continuing crypto mayhem, Binance – the Cayman-based rival exchange that declined to rescue FTX – announced the auction of ‘seven animated NFT statues’ celebrating the triumphs of footballer Cristiano Ronaldo. Also still making headlines, Elon Musk appears set on destroying his $44 billion Twitter purchase –

The OECD has marked Britain down as the only G7 country (and the only major country bar Russia) expected to suffer a shrinking economy next year. But how accurate are its predictions? A year ago, it predicted that inflation in the UK would peak at 4.9 per cent in the first half of this year before falling back to 2 per cent by the end of next year. The economy was going to grow by 4.7 per cent this year followed by a further 2.1 per cent in 2023. The government would bite off any hand that offered that now. It can be excused for failing to predict the Russian invasion

A year ago Boris Johnson lost his place in his speech to the CBI annual conference. He started blathering on about Peppa Pig World, after having treated young Wilfred to a day out there the day before. It was excruciating, but at least it was fun. It is hard to say the same about Rishi Sunak’s address to the CBI this morning.  The CBI ought to be a natural habitat for Sunak, yet he didn’t seem entirely comfortable. His voice seemed a tone higher than normal, so his usual enthusiasm sounded something more like a desperate appeal. He wanted us to know that innovation is a good thing which improves

What exactly happened at FTX and its sister company Alameda Research is unclear, and will be for some time. What we do know is that what’s currently unfolding is a sort of economic Jurassic Park; we are being given a brief glimpse of financial life in the 18th century, before centuries of bitter experience coalesced into the financial regulations we love to hate. It’s a common joke that cryptocurrency is gradually learning why all the boring rules and regulations of the traditional financial world exist. It’s also entirely true. The earliest explanation for the sudden crash of FTX was very simple: the exchange had become something like a bank, taking

The teenagers are once again in charge of UK fiscal policy. The teenagers are not the Chancellor and his team, but those who set the tone of the fiscal debate in the media and the financial markets. The reasons the Conservatives are now embracing austerity is the fear that higher interest rates will kill house prices. This is mad The teenage scribbler is usually a young, pro-austerity banker, with no formal education in economics or economic history. The scribbler pretends that whatever happens is happening for the first time. The scribbler was still on the playground when the previous generation of scribblers talked their governments into austerity. That was not

Jeremy Hunt’s Autumn Statement had a curious omission: childcare. The pleas of desperate parents who gathered on Whitehall last month during ‘The March of the Mummies’ appear to have fallen on deaf ears. Demonstrators gathered outside Downing Street banging drums and shouting: ‘Dear Rishi Sunak, we want our choices back.’ So why didn’t the Chancellor listen? Britain’s childcare costs are already among the highest in the world, with the recession and soaring inflation increasing pressures on parents. One way to reduce the burden would be to make nurseries cheaper. For many parents, is cripplingly unaffordable, especially as the current subsidy of 15 hours a week only applies to three and four-year olds.

Britain appears to be enjoying a surge of entrepreneurialism, with more than 200,000 start-ups registered at Companies House between April and June this year alone. However, while many of these are genuine cases of people taking the plunge and embarking on their dream of opening a tea shop, launching a webinar app or whatever, an awful lot are not going to be contributing any cherries to our national pie – and some might well be pilfering a few. Among those unlikely to be contributing are the 36 companies registered last year to a single address in Bristol – not a business park but a small semi-detached house. Or the 95