Money

Growth has ground to a halt, manufacturing is collapsing, and the government is desperately scratching around for ways to save some money so it can balance the books. There is not much to make anyone feel optimistic about the state of the British economy right now. Except, that is, for the healthy performance of the UK’s traditional, mid-market retailers. Marks & Spencer and Tesco are both in rude health. Now, John Lewis, which has reported a rise in pre-tax profits of 73 per cent to £97 million, is the latest retailer to demonstrate its ability to bounce back.  After years of steep losses under the hapless leadership of the former

Markets are not enjoying Donald Trump’s tariffs. Some 125 days have passed since his second election victory and the S&P 500 is on a clear downward trajectory thanks to Trump’s tariff policies and other poor US economic data. After the same number of days following Biden’s election, the S&P was up 13 per cent; for Obama’s second term it was up nine per cent; and at the same point in Trump’s first presidency it was up 11 per cent. For Trump 2.0 it’s down 3 per cent from election day. Trump has summoned Wall Street bosses to the White House in an attempt to calm nerves, but while US equities

The plunge continues. It’s always a mug’s game trying to call the top of any market, but the plunge on Wall Street does feel as though it has got legs, so it is quite possible that we have indeed seen the peak for US equities.  Since last week the Nasdaq has moved into correction territory – jargon for a 10 per cent or more fall – and on Monday was off another 3 per cent. I rather like the expression ‘correction’ because it implies that the markets have simply made a bit of an error, a ‘terribly sorry, folks, but we all make mistakes, and give us a few weeks

China does not like tariffs, but big money in America likes them even less. If one thing has become clear amid the fog of the past week, it is that what will contain Donald Trump are the financial markets. China’s foreign minister, Wang Yi, attacked Trump on Friday for his imposition of tariffs, adding that major powers ‘should not bully the weak’. While people in Taiwan might find that latter comment a bit rich, his line on tariffs squares with the reaction on Wall Street. The markets do not like it. This week has seen the Nasdaq Composite index of high-technology companies move into a ‘correction’ – a 10 per

Germany has finally decided to join the party – but Europe may come to regret it. After two decades of limited borrowing and fiscal restraint, Europe’s biggest economy is finally joining the high-debt club. Incoming chancellor Friedrich Merz will borrow €800 billion (£670 million), and perhaps much more, to pay for extra spending on defence and infrastructure. Sure, Germany needs to spend more on its armed forces and on restructuring its economy. But it will also likely mean the euro-zone no longer has a single solvent member to anchor it. It is hard to see how this situation will end well for Europe. Merz is a centre-right, pro-business leader, but

It was reported over the weekend that the government has dropped ‘the right to switch off’ from its Employment Rights Bill. Such a right, it has been widely asserted, had appeared in Labour’s manifesto for last year’s general election, promising that employees would be granted a legal right to ignore their boss’s emails outside their contracted working hours. However, it was left out of the bill as originally published last autumn, and neither has it been introduced as an amendment. But it seems that we were not really paying attention. It is true that Angela Rayner, in an interview with the Financial Times in May, made the suggestion that the

Average gas and electricity bills will rise by £111 a year in April after the regulator Ofgem announced an increase to the energy price cap. The 6.4 per cent hike means the average dual-fuel household bill will hit £1,849 annually. The rise is more than anticipated, with analysts at Cornwall Insight predicting that bills would rise by just 5 per cent in April. Ofgem blamed inflation and ‘rising global wholesale prices’ for the bigger-than-expected increase. As a result, the cap will be £159 (nearly 10 per cent) higher than for the April to June period last year. The rise in energy prices is why the Bank of England recently forecast

Kemi Badenoch made a speech today which mentioned the terms ‘liberal’ or ‘liberalism’ seven times before the word ‘conservative’ got a look in. The liberalism she was extolling in her address at the ARC conference in London was not of the leftist kind, but the ‘classic liberalism of free markets, free speech, free enterprise, freedom of religion, the presumption of innocence, the rule of law, and equality under it’. And there is not much to cavil over in that little list. Although when one person’s desired ‘freedom of religion’ impinges on other people’s basic freedom of expression then clearly there are priorities to be ranked. Since the Brexit vote, the

The UK economy grew by 0.1 per cent in the last three months of 2024, according to the Office for National Statistics’s latest report. December, when the economy expanded by 0.4 per cent (the market consensus had been 0.1 per cent), was the saving grace. This helped tip the final quarter of 2024 onto the right side of positive growth. Talk of recession will quiet down, at least for now. But this morning’s update is not going to take anyone in No.10 or the Treasury off high-alert. Monthly growth in December was stronger than expected, mainly thanks to a continued rise in services activity and a recovery in production from

Electricity bills are going up. Netflix is adding a couple of pounds a month to the price of a standard subscription, and council tax is going through the roof. Most of us are probably struggling with the cost of living. There is, however, one piece of good news: the sub four per cent mortgage is back. The only catch is that it won’t be around for long. Santander will this week start offering two- and five-year fixed rate mortgages at just 3.99 per cent, the first time any of the major lenders have been willing to lend money to homeowners for less than four per cent for several months. A

The European Union has hit back against Donald Trump’s decision to impose 25 per cent tariffs on steel imports. “Tariffs are taxes – bad for business, worse for consumers,” the European Commission president Ursula von der Leyen has said, adding that the levy “will not go unanswered”. Yet for all the fire and fury, Europe will not be quite as united as it wishes. The British government has made it quietly clear that it will not be joining the fight. The Daily Mail reports that the Prime Minister is poised to split from the EU by holding off retaliating. The PM right: this is a fight from which Britain has little

Since becoming Conservative leader in November, Kemi Badenoch has taken a restrained approach to saying what she’d do if she wins the next election. Given the slapdash ‘policy by press release’ approach of recent Conservative governments, it’s easy to see why Badenoch has been keen to avoid making careless policy announcements. But four years of silence won’t convince frustrated voters to turn back to the Tories. Announcing policy as Leader of the Opposition is a bit like planning to open a restaurant: you don’t need to reveal the whole menu, but you do need to let people know what cuisine you’ll be serving. The Conservatives have an opportunity to prove

At last, some news of an industry in Britain that is flourishing. Unfortunately, it is one that is helping to suppress growth in every other sector of the economy. I am sure that the lawyers who have brought a case involving 60,000 female workers at Asda think they have won a famous victory after an employment tribunal ruled that most of them were victims of sex discrimination for being paid up to £3.74 per hour less than the company’s warehouse staff. But all they have really achieved, other than lining their own pockets and those of their backers, is to impose vast bills on hard-pressed retailers which, in some cases,

Could Liz Kendall turn out to be the most significant figure of Keir Starmer’s government, and a Chancellor in the making? When I wrote on the Work and Pensions Secretary’s proposed reforms here in November, I was sceptical that Labour really had much intention of pushing through benefits cuts, not least because the party had spent the past 14 years shouting ‘austerity’ every time the Tories so much as proposed to cut a bean from the benefits bill. Starmer himself has accused the previous government of “turning on the poorest in our society” when it proposed to end the temporary £20 weekly bonus added to benefits during Covid. Kendall has gained