Economy

Ben Wallace is giving a speech this afternoon in which he will urge Boris Johnson to increase defence spending. The Defence Secretary – who has long been close to Johnson – is making his campaign public, having apparently already secured a nod from the Prime Minister that he will get something. He wants a 20 per cent increase in defence spending in the next five years, and to push Britain’s budget for its armed forces up to 2.5 per cent of GDP, having secured the 2 per cent target. He is speaking at the Royal United Services Institute event alongside the chief of the general staff General Sir Patrick Sanders,

When Boris Johnson was campaigning for Brexit, he placed much importance on World Trade Organisation rules. The WTO, he’d argue, had an internationally-recognised free trade rule book – which was ready and waiting to be used as a substitute to the European Union system. This is why he could face some very difficult questions next week if he decides to extend tariffs on steel imports in a way that some think flout WTO rules. Last year the PM ignored advice from the independent Trade Remedies Authority – a trade watchdog which his government created post-Brexit – which wanted him to ditch some of the tariffs currently in place that, they

It’s a common trap: a Prime Minister is asked whether he or she will fight the next election as leader. To which there are only two answers: to say ‘yes,’ or announce your resignation. But – here’s the trap – saying ‘yes’ can be easily translated into Thatcher-style declaration that you want to “go on and on” – in Boris Johnson’s case, the papers say he wants to last to the 2030s. Not a timescale he mentioned. But he did talk about a “third term” and is blaming his by-election defeats on voters not thinking enough about the future. ‘If you look at the by-elections, people were absolutely fed up

The latest data on the UK’s public finances have provided more ammunition for those arguing that the government cannot afford to cut taxes. However, the economic reality is far more nuanced – especially when it comes to interest payments. The bad news is that the government borrowed another £14 billion in May, £3.7 billion more than forecast by the Office for Budget Responsibility (OBR). This reflected both lower-than-expected tax receipts, despite the increase in National Insurance contributions, and higher spending, including £7.6 billion in debt interest costs. This means that the government has already borrowed £35.9 billion in the first two months of the new fiscal year, or £6.4 billion

As Boris Johnson tries to limit pay rises to bring down inflation, ministers have no explanation for why planned rises in the state pension and benefits would be less inflationary than increasing teachers’ and nurses’ pay. The government is attempting to limit public sector pay to 3 per cent, while allowing pensions and benefits to rise to around 10 per cent.  This is not to argue against protecting the poorest through the standard indexation of pensions and benefits. But it is to say that Mr Johnson’s pay policy is confusing. And he cannot pretend there is no pay policy. Even refusing to engage directly in pay talks with rail workers – despite owning the

Are wages about to spiral out of control? Boris Johnson certainly thinks there’s a risk. Last week he warned that the economy was ‘steering into the wind’ and that the UK could be entering a 1970s-style malaise. With inflation shooting up to 9 per cent – and expected to go higher still – rail workers are embarking on the first of three days of industrial action today, demanding a minimum pay rise of 7 per cent. Network Rail has offered just 2 per cent, with the potential for an extra 1 per cent on top if they can meet productivity targets later this year. Barristers too have voted for a

In the French presidential elections, and now in the legislatives that will close on Sunday evening, the one issue kept under the carpet is finance. Neither the centrist Macronista grouping ‘Ensemble!’, nor the far-left Corbynista-like Nupes coalition of Jean-Luc Mélenchon has updated the electorate on how their manifestos are to be funded. And yet over the last month French finances have deteriorated dramatically. Neither programme has the slightest chance of being implemented without plunging French finances, and thus the eurozone generally, into a new sovereign debt crisis. France is dancing on a debt volcano. The unabashedly ideological Nupes programme calls for nationalisation of the banking and energy sectors, motorways, strategic

The Bank of England has just raised interest rates for the fifth time in the row, warning that inflation is expected to pass 11 per cent by the end of this year. If it had escaped your notice, everything is getting more expensive, and the government is powerless to help. The extent of the Bank’s assistance has been to tell you not to ask for a payrise. Boris Johnson, meanwhile, seems furious that taxes are so high, and will be having stern words with whoever raised them. Even Freddo bars aren’t exempt from the cost of living crisis, shooting up to a frankly outrageous 30p each. Inflation is essentially a problem of