Money

The OECD expects the UK economy to outperform the eurozone and grow by 1.4 per cent over the year. But there is a downside to the Organisation for Economic Co-operation and Development’s latest figures: the body expects the UK’s inflation problem to persist, ending this year at 3.5 per cent, down just a touch from the 3.8 per cent measured by the ONS (Office for National Statistics) in July and August. It predicts that inflation will be 2.7 per cent at the end of 2026 – still a long away from the Bank of England’s two per cent target. Inflation in Britain is due to be markedly higher than in the

There really is no good news for Rachel Reeves as she prepares her second Budget. This morning’s borrowing figures are not just bad; they hint at a sense of hopelessness, that Britain is sliding inexorably towards a very deep fiscal crisis. This is yet another fiscal black hole for Reeves to fill, along with another about to be created by the OBR In August, the government had to borrow £18 billion, £3.5 billion more than in August 2024. This is in spite of £40 billion worth of tax rises (or rather tax rises which were hoped to raise an extra £40 billion) in last year’s Budget. Government receipts are indeed up

The Bank of England has held interest rates at 4 per cent. Threadneedle Street’s Monetary Policy Committee (MPC) voted seven to two to keep rates where they are. The fact inflation now sits at almost double the Bank’s 2 per cent target outweighed concerns about the slackening jobs market and what its impact on Britain’s lacklustre growth. Two members voted to cut rates to 3.75 per cent, but the overall decision is no surprise. There’s a growing sense that the bulk of committee members feel they perhaps made a mistake in cutting rates last month with inflation still climbing. Markets don’t expect another cut this side of Christmas and the

Are Britons getting sicker and sicker – or is our health improving? There seems to be something of a paradox. According to figures from the Chartered Institute of Personnel and Development (CIPD) the number of sickness absences has increased from an average of 5.9 days per worker in 2019 to 9.4 days in 2024. Interestingly, the sharp increase in the number of sick days has coincided with a rise in working from home Remarkably, it has increased by 1.6 days in a single year – it was 7.8 days in 2023. This is based on a survey of 1,100 employers, which also found that the most common reasons for work

As the Chancellor Rachel Reeves gets to work on her second Budget – to be delivered on 26 November – red lights flash everywhere. Gilt yields were up again as markets lost faith in her ability to balance the books. Reeves or Darren Jones – whoever is really calling the shots – will spend the next few weeks fixated on those yields. The price they land at when the Office for Budget Responsibility (OBR) settles their Budget forecast could make or break the government. I understand that the initial plan was to have a Budget much earlier, but that the decision was taken to put it off for as long

The pound is starting to slide. Gold is punching through record highs, and long-term gilt yields are hitting levels that have not been seen in thirty years. It is not a Liz Truss style crisis, at least not yet, although it is worth noting that the price the government has to pay to borrow money is way above the levels it reached when the former prime minister ‘crashed’ the economy. But it is starting to become painfully apparent that the Labour government is rapidly losing the confidence of the financial markets. It is yet another nervous week for the economy. The yield on 30-year gilts, the best long-term measure of

The theme of my holiday reading has been the insidious ways in which the vanities and fetishes of rulers harm the interests of citizens. I started with 1929, Andrew Ross Sorkin’s new history of the Wall Street crash, which I’ll be reviewing elsewhere ahead of its release in October –my point here being not about whether President Herbert Hoover and the US Federal Reserve mismanaged that market cataclysm and its aftermath, but rather the fact that my zero-value, plain-cover ‘uncorrected proof’ copy of the book was held up by French customs for almost three weeks for want of a ‘commercial tax ID number’ on the packaging label. ‘A common post-Brexit

Quietly, without even a press release let alone a fanfare, Britain over the past 12 months has just passed a grim milestone. The number of people on out of work benefits has surpassed the peak reached in the early 1990s. Indeed, it is higher now than it was at the peak of Covid-19 in 2020. There are now 6.5 million people living on out of work benefits Remember when unemployment of three million used to generate headlines every week, in the early 1980s and then again a decade later? Well, there are now 6.5 million people living on out of work benefits. Yet it hardly causes a ripple in the political

Dante’s Beach, Ravenna News that Italians now enjoy a higher standard of living than the British made me think: my God, life must be truly awful in Britain. Yes, the Italians do have much to feel good about in terms of the quality of their lives thanks to the beauty of their country, the splendour of their history, culture and cuisine, and their impressive defence of the traditional family and way of life from the threats to them of the modern world. When I’m drinking, I buy a superb local Sangiovese for €2.60 a litre dispensed into plastic mineral water bottles from a huge cask in a wine shop in

From Lord Kinnock’s demand for a wealth tax and VAT on private health fees to Gordon Brown pressing for gambling taxes, it is plain that Labour has run out of ideas other than dreaming up new ways to part us from our money. Even so, Kemi Badenoch is ill-advised to go on an all-out attack on council tax reform, as she did in a Mail on Sunday column yesterday. You don’t have to be a socialist or even a Labour supporter to see that council tax is horribly regressive According to the Conservative leader, Rachel Reeves is plotting to do as Labour have done in Wales: to set up an

The Bank of England has cut interest rates to 4 per cent. Threadneedle Street’s Monetary Policy Committee (MPC) has just voted five to four, after a revote, for what is the third cut this year. This takes interest rates back down to levels not seen since the beginning of 2023. Concerns about an increasingly slack labour market seem to have driven the MPC’s decision. A second vote was required – the first since 1998 – because initially four members of the committee voted for a 0.25 per cent cut but one member voted for a larger cut of 0.5 per cent. Markets expect the rate to be cut once more to 3.75 per

The Chancellor’s black hole is getting bigger and tax rises are coming. That’s the judgement of the National Institute of Economic and Social Research (NIESR) whose model of the UK economy has forecast she must find £50 billion of revenue or cuts if she’s to return to the £9.9 billion of fiscal headroom she left herself in the spring.   Some now believe the gap is so large Reeves may have to break Labour’s manifesto pledge not to increase income tax, VAT or employee national insurance Reeves’s self-imposed and ‘ironclad’ fiscal rules require her to abolish the deficit by the end of the Office for Budget Responsibility’s (OBR) five-year forecast. NIESER’s

Maybe Trump doesn’t always chicken out after all. Rapid trade deals with the UK, Japan, the EU and others in recent weeks may have given the impression that the trade war was essentially over. Today, though, comes Trump’s Ardennes offensive, with immediate tariffs of 35 per cent announced for Canada. Other countries have been given a week to prepare for steep increases: India will be subject to 25 per cent tariffs, Taiwan 20 per cent and Switzerland – far from neutral in this particular conflict – 39 per cent. Those who insist Trump has a very clever strategy and is winning tend also to be people who, in any other

Spectator readers will not need me to tell them the meaning of the Latin ‘cura terrae’. Taking care of the Earth was one of central arguments of last week’s front-page feature against private equity. But Cura Terrae also happens to be the name of a business based in Sheffield. This business is an environmental services provider dedicated to helping preserve the world and the natural resources that we all love and cherish. One of its particular strengths is its water services division, where its team of specialists monitor water flow and quality across the UK. By doing so, they help to protect our rivers from the kind of water pollution

The US-EU trade deal has been given a lukewarm reception in Europe. Although the agreement between US president Donald Trump and the president of the European Commission Ursula von der Leyen is merely a framework, rather than a full-trade deal, there are already major concerns on the continent, especially in Germany – a country famously reliant on exports. German chancellor Friedrich Merz did not seem too pleased with the deal, negotiated by his party colleague von der Leyen. ‘I’m not satisfied with the result in the sense that (it was said) this is good as it is,’ Merz stated. ‘Which, in plain terms, means the German economy will suffer significant

In proposing to sell the government’s £5 billion hoard of Bitcoin – accumulated from confiscating the proceeds of crime – Rachel Reeves has earned some keen supporters. But the Chancellor should resist the temptation. It wouldn’t be an error quite on the scale of Gordon Brown’s sale of half of Britain’s gold reserves in 1999 – that occurred right at the bottom of a bear market in gold, while Bitcoin in recent weeks has been trading at record highs. Nevertheless, Reeves would be missing out on the opportunity to build a Strategic Crypto Reserve which could turn out to be many times more valuable in the future. By backing cryptocurrencies rather than disposing