Money

Has a full-scale banking crisis been avoided? UBS has announced a takeover of rival Credit Suisse for just over $3 billion – half of its valuation on Friday and a tenth of its valuation just two years ago. The deal, timed to conclude before the Asian markets opened, is intended to stop any domino effect that might have been created had Credit Suisse folded this week and started to call into question the viability of other banks. Reflecting the announcement, UBS shares fell 14 per cent in early trading. Credit Suisse calls it a ‘merger’, UBS calls it a ‘takeover’ but it can also be called a ‘bailout’. The deal

No victory is ever final in politics – and the wrecking-ball of lockdowns now seems to have destroyed almost every success of the 2012-20 welfare reforms. The workless numbers are again as bad as they they were under Labour. People who stopped working during lockdowns never quite got back into it and the UK has done a worse job than almost any other country at rebuilding its post-pandemic workforce. In 2009 I was filling Coffee House with attacks on the Labour government for keeping so many on benefits. And the story now? See below. Remember, this joblessness is not induced by recession and layoffs but incubated by welfare to produce

Jeremy Hunt has announced plans to extend the 30 hours a week of ‘free’ childcare for three and four year olds to include babies as young as nine-months old. This expansion of childcare provision has been hailed by the Chancellor as a measure to allow mothers to return to employment if they want to; it will also, according to Hunt, help boost the economy. But has anyone paused to think about the impact on the children themselves – and families? The truth is that Hunt’s proposed changes aren’t a win for mothers, children, and families as a whole. Why? Because the childcare plans suggest that a mother’s worth comes from

In his Budget speech, Jeremy Hunt made a great play on how Conservatives value work. Tories love talking about this but in fact they have just presided over a catastrophic increase in benefits. Before the pandemic there were 4.2 million on benefits: at the last count, 5.2 million. Given the mass worker shortage, this is quite a scandal. So what is being done to change this? Hunt referred to tighter conditions in welfare conditionality, but the OBR don’t seem to think it will move the dial, with just 10,000 moving back to work. It does think the £20 billion package on childcare will help, broken down as follows: Add to

Is the UK’s labour market cooling down? While unemployment remains unchanged at 3.7 per cent, according to today’s update from the Office for National Statistics, the number of job vacancies ‘fell on the quarter for the eighth consecutive period’, down 51,000. The overall number of vacancies, however, still remains above a million. But the biggest indicator things are changing is wage growth: the rise in average total pay fell to 5.7 per cent between November last year and January this year, down from 5.9 per cent in the previous three months. Adjusting for inflation, this means real wages fall by 3.2 per cent – the biggest fall since the pandemic hit, not

Tech start-ups tend to involve taking big risks on ideas which are untested both in terms of technology and the market place. Yet it isn’t blind faith in new ideas that is threatening to bring down scores of British tech start-ups over the next few days: it is boring old bonds. Many start-ups have relied for financing on Silicon Valley Bank UK, an offshoot of its larger US parent. Over the last few years, the institution has in turn relied on taking bets on government bonds whose value had been inflated by near-zero interest rates. As interest rates have risen, those bets have gone sour. On Friday, the Bank of

Supermarkets are once again back in the firing line. Henry Dimbleby, the Leon co-founder turned government food tsar, has blamed the current food shortages on their ‘weird culture’. When food is scarce UK supermarkets won’t raise their prices, he claimed. It leads to growers selling less here and more in Europe, exacerbating shortages. He wasn’t alone in blaming supermarkets. Last month, in an attempt to absolve the government of blame, food and farming minister Mark Spencer demanded the heads of big chains join him for a discussion on ‘what they are doing to get shelves stocked again.’ In the end, only middle-management showed up.  The average supermarket stocks 20,000 items with around

This morning’s release from the Office for National Statistics shows the UK economy grew by 0.3 per cent in January – an improvement on December 2022 figures, which saw the economy contract by 0.5 per cent. There are no revisions to the last update: the UK still avoids the technical definition of recession, and January’s growth was higher than expected (the consensus was that it would be 0.1 per cent). But overall, the economy remains stagnant: the three months to January produced precisely zero growth. What really sticks out in today’s release is just how dependent the UK economy is these days on one-off interruptions. January’s rebound is largely credited to the return of

Shadow chancellor Rachel Reeves has promised to tackle what businesses tend to fear the most: instability. ‘In recent years, corporation tax has gone up and down like a yo-yo, while the government has papered over the cracks with short-term fixes like the super-deduction,’ Reeves told the manufacturing group Make UK’s annual conference this morning. Under a Labour government, she pledged, there will be a clear ‘roadmap for tax which lasts over a parliament’. Reeves said this would give business leaders a better sense of what to expect, hopefully creating an atmosphere for investment. Promising a review also puts pressure on Reeves to come up with answers to some of the

As tax rates rise in the UK, so do business jitters. The windfall tax on oil and gas companies – raising tax on profits to 75 per cent this year – has energy companies openly discussing plans to divert money elsewhere. The looming hike in corporation tax – from 19 per cent to 25 per cent for the largest companies – also has the businesses talking about future investment strategies.  So far, Chancellor Jeremy Hunt seems unconvinced that investment threats will amount to much. His Budget next week is expected to confirm the corporation tax rise in April. But the backlash is growing: from MPs in his own party who are worried

It would have been bad enough if just one major British company had decided to list its shares in New York rather than London in the space of a single week. But two? First it was the chip-maker Arm, one of the UK’s very few major technology companies. Then came the building materials giant CRH. Shell also said they came very close to shifting their base to the US. The moment has surely arrived for the UK to radically deregulate its listing regime – or else watch the City slowly wither away. At this rate, within a few years there might only be a couple of retailers and a bus

Fulfil your civic duty. Get married. Have children. That was the message from Miriam Cates, the increasingly prominent Conservative backbencher, to guests at a drink reception earlier this week. In what even her fiercest critics would have to concede was an impressively bold speech, Cates suggested that many of her female constituents want to work less and spend more time with their children. She claimed that politicians belonged to a class that had been protected by marriage and family, insulated from family breakdown to such a degree that they fail to realise how important it is. Few politicians can ride out a Twitterstorm without some sort of retraction, and Cates is no

There have been celebrations this morning about a government surplus of £5.4 billion last month, and people are even talking about a ‘windfall’ for Chancellor Jeremy Hunt in next month’s Budget. But all this shows is how conditioned we have become to appalling economic news – and that we will grab at anything which seems to indicate a shaft of light. Nevertheless, any talk of a government ‘surplus’ masks the very real problem the government still has While any surplus is to be welcomed – and last month’s borrowing figures are far better than the Office for Budget Responsibility predicted – we would be in serious trouble if the government had not

Do over-fifties need to get back off the golf course and into work? That’s the narrative that ministers have been pushing recently, with Jeremy Hunt saying later life ‘doesn’t just have to be about going to the golf course’. Work and Pensions Secretary Mel Stride is conducting a review of the factors keeping people out of the workplace in time for next month’s Budget. But a report out today from pensions consultancy LCP suggests ministers might be barking up the wrong tree. LCP’s analysis points out that there are fewer people of working age who are retired now than at the start of the pandemic, and that the missing workers

It was only a few weeks ago that Liz Truss started commenting on domestic policy again, speaking to The Spectator not just about what happened during her time in No. 10, but about what she sees as prescriptions for Britain’s stagnant economy. Today she weighs back in on foreign policy. In Tokyo this morning, the former prime minister made her first international speech since leaving office and it combined her favourite topics: economic freedom and taking a tough stance on China. Truss is calling for world leaders to band together and create an ‘economic Nato’ – which would include agreeing to a tough package of economic sanctions on China, were