Money

Michael Simmons

Is this the end of Trump’s tariffs? Don’t count on it

Overnight three federal judges on the United States Court of International Trade ruled that Donald Trump’s worldwide tariffs are unlawful and blocked them from going into effect. A group of businesses had taken the President’s administration to court, successfully arguing that the tariffs announced on ‘Liberation Day’ were beyond the powers of the presidency. The ruling made clear that the US Congress has sole authority on passing legislation affecting cross-border trade. The White House immediately appealed and argued that the court does not have the right to rule on the matter. The effect of the ruling will be to dismantle the entire tariff regime announced on Liberation Day The effect

Michael Simmons

IMF: Britain will need to raise taxes if it wants to keep spending

The International Monetary Fund (IMF) has warned Britain faces ‘difficult fiscal choices’ if it is to meet ever increasing spending pressures. The fund predicted a surge in public spending, driven largely by commitments to welfare, health, and pensions. According to the IMF, these policies will push public spending as a share of GDP up by 8 per cent by 2050. The message is clear: unless revenue is increased – i.e even more tax rises  – the UK will need to confront ‘tough policy decisions’ about the future role of the state and the scale of public services it can afford to deliver. Crucially, the IMF noted that the government’s ability to

Ross Clark

Is Rachel Reeves prepared to raise taxes?

Some of the most infamous words in politics are ‘read my lips, no new taxes’ – uttered by George H.W. Bush as he accepted the nomination as the Republican candidate for the 1988 US presidential election. It helped him win that year but contributed to his downfall in 1992 as he failed to stick to his promise. We can argue how much of Bush’s defeat by Bill Clinton had to do with the broken tax promise and how much was to do with recession, but ‘read my lips, no new taxes’ should certainly have been on Rachel Reeves’s mind in recent months. The tragedy of Starmer’s Labour is that it

Michael Simmons

Britain is not in charge of its energy

As much of Westminster gets up in arms about fish, the major change in Starmer’s EU deal is going under the radar. The deal, announced yesterday, commits Britain and the EU to exploring Britain’s participation in Europe’s energy market. If we go forward with this, it effectively gives up our energy policy to Brussels. It’s a stark giveaway given that on the same morning the Office for National Statistics (ONS) published an analysis on ‘The impact of higher energy costs on UK businesses’. That impact is quite remarkable. Output from energy intensive industries has fallen rapidly since the beginning of 2021 when energy prices began to skyrocket. Paper manufacturing down

What’s the Treasury’s real view on immigration?

This week has seen much talk – again – of the ‘Treasury View’, and how that rarely defined set of values might be influencing this government’s approach to migration. First, let’s kill off some conspiracy theories that exist about the Treasury View. In general terms the Treasury View stands for cautious conservatism (with a small C) surrounding the payback from public spending, a belief in free trade, and in free markets. The Treasury View also extols the virtue of a steady currency, low and stable inflation, and soundly managed public finances. Former Treasury Permanent Secretary, Lord Nick Macpherson, in a speech in 2014, placed these amongst ten propositions for what

The City backlash against Reform has begun

It will be like Liz Truss on roller skates. The next election may still be four years away, and the manifestos still need to be fleshed out. Even so, the City has already started issuing stark warnings of a run on the pound if there is a Reform government led by Nigel Farage as Prime Minister. Of course, it is a measure of how far the party has come that the City is taking it seriously. The trouble is, there is also an element of truth in it. Reform would face a huge backlash in the markets – and the party will have to be ready for it.  The financial

Ross Clark

Is it any surprise junior doctors want more money?

If the government was deliberately trying to encourage union militancy, it could not be making a better job of it. It is reported that junior doctors – or ‘resident doctors’ as we are now supposed to call them for fear of implying that they might be less qualified than consultants who have been doing their jobs for 40 years – could be in line for a pay rise of five per cent this year. This would be on top of the 22 per cent they were awarded last year. Meanwhile, nurses, who had a pay rise of 5.5 per cent last year, appear to be on course for a rise of no

Is Starmer’s Trump trade deal the win he thinks it is?

Keir Starmer says it is a ‘fantastic, historic’ day after signing a trade deal with the United States, but is the agreement really something to celebrate? Ten per cent tariffs, announced last month, still apply to most UK goods entering the US The government is no doubt cock-a-hoop to be the first country to get a trade deal with President Donald Trump over the line, and there are a few wins: tariffs will come down for cars, steel, and potentially for pharmaceuticals, exempting UK exporters from the worst of the tariffs imposed on the oddly-named ‘Liberation Day’. But while, despite the dire warnings of some, we won’t be seeing chlorinated

Michael Simmons

Why Britain is cutting interest rates – and the US isn’t

Interest rates have been cut to 4.25 per cent. The Bank of England’s Monetary Policy Committee (MPC) voted by five to four for what will be the fourth rate reduction since August. The decision breaks with the direction of the US Federal Reserve, which held rates yesterday after refusing to bow to pressure from President Donald Trump who wants to see rates cut. Jerome Powell, the Fed’s chairman, said America’s economy was ‘highly uncertain’ making it difficult to push ahead with a rate reduction. The government will hope that a trade deal will free Britain from the worst effects of the tariff war Back home, analysts are now anticipating the

Michael Simmons

What would a US trade deal mean for the UK?

Later today, Donald Trump is reportedly set to unveil a trade deal with the UK. He’ll make the announcement alongside ‘a big and highly respected country’ which is said to be Britain. If the reports are true then it would make the UK the first country to secure a deal since Trump’s tariff turmoil began.  The announcement will come at 3 p.m. UK time and could be worth billions in what would be an unarguable win for Rachel Reeves and Keir Starmer.  Britain has already been somewhat shielded from the president’s wrath (and tariffs) because our trade in goods with the Americans is pretty much balanced (roughly £59 billion each way).

Michael Simmons

Starmer can’t afford a winter fuel U-turn

Keir Starmer has ruled out a U-turn on the government’s decision to cut the winter fuel payment, with the Prime Minister’s spokesman insisting there ‘will not be a change to the government’s policy’. This came after a report in the Guardian suggesting No.10 was considering softening the £1.4 billion cut, possibly by raising the threshold that defines who qualifies as poor enough to receive it. We can’t keep living in a state totally consumed by propping up its welfare system That a U-turn was even floated reflects two pressures: disquiet among Labour’s backbenchers, and the electoral warning shot fired by Reform UK in last Thursday’s local elections and by-election. In Runcorn, where

Ross Clark

Wes Streeting won’t end the 8am GP appointment scramble

You can say it for Wes Streeting: he doesn’t hang about. Reacting to the heavy loss of council seats in last week’s elections, he is proffering £102 million of money for extra GPs’ appointments – hopefully to end what has been termed the “8am scramble”: a kind of Hunger Games which NHS patients have to go through in order to be seen. The Health Secretary has been pointed in trying to attribute this funding boost to the unpopular rise in employers’ national insurance contributions The Health Secretary has been pointed in trying to attribute this funding boost to the very unpopular rise in employers’ national insurance contributions in last autumn’s

The Motability scheme needs to be put into reverse

Keir Starmer’s government has taken some important first steps to bring the welfare budget under control. But expenditure on disability and incapacity benefits is still set to increase to almost £100 billion by the end of the decade, so more changes are needed. Every aspect of the welfare system must be examined to see if it is actually helping those it was designed to assist. The Motability scheme should be Starmer’s next target. Britain cannot afford a gold-plated scheme providing a subsidised car to many who simply do not need one Introduced in 1977, Motability was set up with admirable intentions: to provide vehicles, scooters and powered wheelchairs to disabled

James Kirkup

Nigel Farage’s left-wing turn looks like a triumph

Nigel Farage declared earlier this year that ‘economics might be bigger than immigration for us at the next election’. Most people at Westminster didn’t take him particularly seriously. After all, Reform UK is all about immigration, right? Westminster didn’t take Farage seriously. After all, Reform UK is all about immigration, right? When Farage based his local election campaign on an overt pitch to working-class Labour voters by talking about trade unions and reindustrialisation, some parts of the political village were still dismissive. How could a Thatcherite public schoolboy and former City trader ever sell left-wing economics to the electorate? The results of those elections, and the by-election in Runcorn, mean that Reform’s economic

Michael Simmons

Can Rachel Reeves woo Trump’s team – without alienating the EU?

The government is on a charm offensive in Washington. Tonight, Britain’s ambassador to the US, Lord Mandelson, will host officials from Donald Trump’s government and American business figures at the British embassy. Tomorrow, the Chancellor will meet her counterpart, Treasury Secretary Scott Bessent. Rachel Reeves is looking to permanently end the punishing 25 per cent tariff on British cars and 10 per levy on other exports. Reeves has given an interview to one of Trump’s favourite channels, Newsmax, in which she was asked about her upcoming meeting with Bessent. In response, Reeves said she believed ‘there was a deal to be done’ and that both Keir Starmer’s and Trump’s governments

Ross Clark

No, Ed Miliband: zonal pricing won’t cut energy bills

Is Ed Miliband going to announce a move towards a zonal electricity market, where wholesale prices would vary between regions of Britain? It would appear to be on cards following the Energy and Climate Secretary’s interview on the Today programme in which he said he was considering the idea. Miliband’s apparent support for the plan follows intense lobbying by Greg Jackson, CEO of Octopus Energy as well as support from the National Energy System Operator (NESO), the new government-owned company which oversees the grid. However, zonal pricing is bitterly opposed by others in the energy industry, including Chris O’Shea, the generously-moustached CEO of Centrica, and Dale Vince, CEO of Electrocity

Michael Simmons

Britain’s borrowing is spiralling out of control

Britain borrowed nearly £152 billion in the financial year to March – almost £21 billion more than at the same point in the last financial year, according to the Office for National Statistics (ONS). The latest public finance figures reveal that borrowing in March was the third highest since records began in 1993. Crucially, it’s also nearly £15 billion more than what the Office for Budget Responsibility (OBR) had expected for this point in the financial year. The £9.9 billion headroom Rachel Reeves left herself at the Spring Statement already looks to be in serious doubt. The current budget deficit, which is borrowing to fund day-to-day spending and the metric

Ross Clark

Is Britain really going to get a trade deal with the US?

Donald Trump loves Britain and loves the King; therefore we can expect a trade deal. That is the gist of J.D. Vance’s interview with UnHerd. Whether that means anything in practice is another matter. Evidently, the President’s love and affection was not enough to spare us from a 10 per cent tariff on exports to the US (and 25 per cent for cars). While Trump changed his mind last week and delayed most tariffs for 90 days there was no delay to the introduction of the 10 per cent tariffs, which will apply to all countries. All that happened as a result of last Thursday’s pullback was that Britain lost

Michael Simmons

China is hitting back with even more tariffs

China has retaliated against Donald Trump by raising duties on all American imports to 125 per cent from 84 per cent, declaring that it has no interest in responding further to what it calls a ‘joke’ policy. The higher rate will come into force from tomorrow. The announcement comes after the White House’s clarification that tariffs on Chinese exports have climbed to 145 per cent this year – a move China’s commerce ministry described as ‘economically meaningless’ and a tool for ‘bullying and coercion’. The world’s two largest economies exchange goods worth around $700 billion annually. Beijing has made it clear that it considers American goods effectively unmarketable within its

The EU is making a big mistake by retaliating against Trump

A Harley-Davidson will cost you a little more in France; Florida orange juice will be more expensive in Germany and American soybeans will go up in price everywhere across Europe. The European Union has decided to start taking the fight back to President Trump with a round of retaliatory tariffs. The trouble is, it is making a big mistake. Sure, we can all understand the desire to stand up to what it sees as bullying. But it is not going to win this battle.  In the wake of President Trump’s decision to impose a 20 per cent tariff on everything the EU sells in the United States, some form of