Economy

In recent weeks alleged lockdown parties and suitcases full of wine have been the biggest threat to Boris Johnson’s premiership. But throughout the winter months, another threat has been brewing — one that could, in the longer term, determine the government’s fate. Britain’s cost of living crisis has been steadily worsening as price hikes for essential goods and services (food, transport) continue to outpace predictions. But the worst is still to come, with Ofgem’s announcement this morning that energy bills for the average household will be rising by nearly £700, as the energy price cap is lifted by 54 per cent come April. Enter Rishi Sunak with an emergency package

Regional agencies pumping money into research and development. Targets for education and healthcare. Another layer of meddling local government, and possibly a new bus route or two. The government plans for ‘levelling up’ unveiled today are a mixture of 1960s statism, which could have been taken straight from Harold Wilson’s government, mixed up with some wishful thinking. But don’t despair: there is a far better strategy. The Tories should simply offer some meaningful tax breaks and incentives and let the private sector do the hard work for us. That approach can’t be worse than what has been offered up by the government. Even by the recent dismal standards of the Johnson administration the ‘levelling

As the partygate furore rages on, Boris Johnson is retreating towards familiar territory: Brexit. A policy blitz is underway this week and the issue that guided him to power in 2019 has come first, with the announcement of a new Brexit Freedoms Bill. It will be brought forward to mark the two-year anniversary since we parted ways with the European Union. There are two flaws with Boris’s plan, however. First, recent polling found 46 per cent of Leave voters who backed the Tories in 2019 say he should resign, suggesting that Brexit doesn’t resonate in quite the same way as it did before the pandemic. Post-Brexit regulations are not inherently

Boris Johnson and Rishi Sunak’s plan to press on with the new health and social care levy is not a huge surprise. The deal between them last year to get social care reforms over the line boiled down to a simple principle: new spending projects must be fully funded. That remains as important to the Chancellor today as it was back then. With the Prime Minister still opposed to making cuts elsewhere to pay for his plans, the levy, by default, stays with us. As I wrote last week, it was highly unlikely that recent updates to public finance figures – showing lower borrowing and higher tax receipts than expected

Of all the arguments against Bitcoin, one of the most popular these days is that it is bad for the planet. People who know nothing about cryptocurrencies are often heard saying that Bitcoin mining is such an energy-intensive process that it has become a major contributory factor to climate change. This is largely bunkum. Far from being a major polluter, Bitcoin could in fact prove to be an environmental solution. But understanding that requires a little deeper knowledge of what Bitcoin is and how it is mined. So here goes. Spelt with a small “b,” bitcoin is a digital monetary asset. Spelt with a big “B,” Bitcoin is the peer-to-peer network

A new report from Holyrood’s finance and public administration committee is unusually blunt in its assessment. But is the SNP up to the task of dealing with Scotland’s looming fiscal time bomb? It seems unlikely. The Scottish government has given no signal of being serious about facing up to that challenge. Indeed, if anything, the ruling SNP-Green coalition has an incentive to make the budget situation worse. If so, Nicola Sturgeon can’t say she wasn’t warned. In its report scrutinising the Scottish government’s proposed budget for 2022/23, the committee says:  ‘We consider that evidence showing that Scotland is lagging behind almost all other areas of the rest of the UK in

The way we measure inflation is changing, and there could hardly be a less crucial time for it to do so. The ONS will be updating the method for collecting individual prices from supermarkets, and will also publish new figures on inflation rates for different types of household. The anti-poverty campaigner Jack Monroe has tweeted that the ONS ‘have just announced that they are going to be changing the way they collect and report on the cost of food prices and inflation to take into consideration a wider range of income levels and household circumstances’. But Monroe, who hope that the new metrics will show that inflation is hitting poorer families harder, will

After promising not to raise National Insurance in the 2019 manifesto, the Tories are preparing to do just that in April with their new ‘health and social care levy.’ The levy is set to add £200 to the average worker’s tax bill. Why have the Tories broken this manifesto promise? Because there was a pandemic, the government says. There was no choice. Tory MPs are getting antsy. Backbenchers, including former cabinet ministers David Davis and Robert Jenrick, are calling for the National Insurance rise to be postponed or scrapped, as relatively high inflation and the cost-of-living crisis is creating enough of a burden on taxpayers already, even before the new

While the Tories limp from one scandal to the next, an opportunity has opened up for Labour when it comes to courting business. Although it’s unlikely many voters elected Boris Johnson into office because they trusted his moral compass they did at least think he would deliver on his promise of sunlit uplands. But two years and a pandemic later, government spending as a percentage of national income is set to top 45 per cent, we’ve yet to ignite a bonfire of EU regulations, inflation has reached 5.4 per cent (and still rising) and the cost of living crisis is rapidly worsening. Voters are starting to question whether, with the

We would work over Zoom. We would all exercise on our Peletons. We would order in organic vegetable boxes, stream live shows, and network globally from our kitchens. At the height of the pandemic, with most of the major economies locked down, a group of work-and-live-from home companies boomed. And yet, right now that is starting to turn. The headlines might be dominated by stories of a stock market crash. In fact, however, something else is happening. The WFH bubble is bursting. There are a whole series of reasons why the stock market has turned very wobbly this month. Inflation is soaring and central banks, led by the Federal Reserve,

Gas prices are soaring. Europe could be about to witness electricity shortages. Power companies are collapsing by the day, and, on top of all that, the government is set to phase out traditional energy to meet its net zero target.  So might think that a cable to ship in cheap, greener electricity from the other side of the Channel is something of a knight in shining armour. Yet the government blocked the proposal today, and it was absolutely right to do so. Britain may need all the electricity it can get its hands on right now — but the last thing it should do is increase its dependence on Macron and Putin. Britain

If Boris Johnson manages to cling on to his job, he’ll have much more than the parties of lockdowns past to worry about. Britain’s cost of living crisis is worsening still, with CPI inflation rising by 5.4 per cent in the 12 months leading up to December last year. This has, once again, outpaced consensus, surging even further past the Bank of England’s most recent official forecast. There’s little doubt left that heavy government spending is playing a significant role in the inflation we’re experiencing now Inflation is now at a 30-year high. And it’s still rising. Capital Economics now estimates a peak of 7 per cent around April, and there