Money

On the face of it, the numbers are damning. The Scottish government has released the latest annual edition of Scotland’s public finances. It does not paint a pretty picture. Scotland’s notional deficit has more than doubled from £15.8 billion to £36.3 billion, taking the nation’s fiscal shortfall from 8.8 per cent of GDP to 22.4 per cent. This figure factors in a geographical share of North Sea oil revenue and compares to a UK deficit of 14.2 per cent. That is not only the largest deficit of the devolved era but more than double that seen in the wake of the global financial crisis in 2009/10. If anything, GERS puts

For a government to break a manifesto commitment is a serious matter which, quite rightly, is sure to rebound at the ballot box. But there is one commitment in the Conservatives’ 2019 manifesto which has simply got to go: the promise to maintain the ‘triple lock’ on pensions which sees the basic state pension increased each year by either inflation, average earnings or 2.5 per cent, whichever is the highest.  At the time the party made this promise it could not have foreseen the peculiar circumstances which would result in today’s remarkable ONS figures showing that average earnings are up over the past 12 months by 8.8 per cent. Unless

The debacle in Iraq. The fall of Saigon at the end of the Vietnam War. The failed ‘Bay of Pigs’ invasion of Cuba. You can debate where exactly the collapse of Afghanistan ranks in the list of American military and foreign policy disasters. But one point is surely certain. It is a major setback, and one that will undermine the credibility of the United States for years to come. Here is the real problem, however. It is not going to end there. The economy will be the next major catastrophe of Joe Biden’s increasingly chaotic presidency. Biden has embarked on a drive for a bigger state, with more control over

The UK economy is rebounding at the fastest rate in Europe, and faster even than the United States: that is the general tone of reporting of today’s GDP figures, which show that the UK economy expanded by 4.8 per cent in the second quarter of 2021. That is compared with 0.9 per cent in France, 1.5 per cent in Germany and 1.6 per cent in the US. But hang on, dig a little deeper and there is something a little odd going on with the figures. Compare nominal and real changes in GDP during the second quarter and it produces the following: UK, nominal growth in second quarter: +3.6 per cent;

Tapping out some code in the back garden. Working on a sales presentation while watching the school sports day. Or even better, traveling though a continent or two while still pulling down a ritzy six figure salary.  Over the last year, middle class professionals have bought into the Work From Home Dream – or WFHD as it’s known in HR circles – to create a working life that combines the best of all possible worlds. It is hardly surprising that so many highly-paid workers are happy to stay away from the office on a permanent basis. Forget Zero Covid. The WFH warriors will be aiming for Zero Flu and Zero

If you want to be thanked by a grateful nation, don’t ever buy a failing football club, especially not in a city where the local team has a tribal following. That is the moral of the tale of Mike Ashley, who has just stepped down as chief executive of Sports Direct’s parent company.  Never mind creating, or saving, 20,000 jobs. Never mind fighting price-fixing by rivals determined to rip off impressionable young football fans desperate to own their club’s strip. Never mind being brave enough to invest in High Street stores which almost everyone else thinks are doomed. Ashley’s public reputation was always going to be dependent on the performances

Usually when the Commonwealth Fund releases its ‘Mirror, Mirror’ study of healthcare systems, it makes waves across the UK media. You might not recognise the formal title of the study, but you’ll be familiar with its findings: this outlier research tends to rank the UK National Health Service as one of the best healthcare systems in the developed world. It’s a hallowed report for much of the UK medical community and commentariat, reaffirming their unquestioning devotion to the NHS as a truly unique system and the ‘envy of the world’. While other healthcare assessments – from the OECD, European Health Consumer Index, and World Health Organisation, to name a few

Sharks, vultures, asset-strippers: just a few of the names that have been applied to the likes of Parker Hannifin, the US company which is trying to take over UK aviation company Meggitt. It’s the latest in a spate of takeover attempts of UK engineering firms by US competitors and private equity firms. An alternative name for them would be astute businesses which can see the value in companies that dopey British pension fund managers are unable to spot. If the takeover of UK firms is a problem or a scandal, British institutions are the real villains. They have bid down the values of these firms as they go chasing returns on US tech

Alongside the UK’s latest step in reopening, optimistic forecasts have been rolling in concerning the economy’s timeline for returning to pre-pandemic levels. This morning, we got another positive indication that businesses are resuming normal operations. The latest update on furlough figures shows 1.9 million workers are still on the scheme as of the end of June — the lowest level of people having their wages paid by the state since furlough was first introduced during last year’s spring lockdown. The number of people on the scheme fell by half a million last month, and by roughly three million since March. The continued fall is hardly surprising, as each month since

As the government continues to put forward an extremely cautious narrative about re-opening, more evidence emerged today that the economy is surging ahead. The International Monetary Fund has once again upgraded its forecast for Britain’s growth this year: its April prediction of 5.3 per cent growth in 2021 has now been revised upward to 7 per cent. If correct, the UK could boast one of the fastest growing economies amongst major countries, with a recovery looking to be on par with the United States. Today’s update from the IMF fits a trend. Just this weekend the EY Item Club forecast 7.6 per cent growth this year – the fastest rate

The UK is growing at the fastest pace in 80 years. The United States, fuelled by President Biden’s stimulus programme, is expanding at a breath-taking pace, while Sweden is growing at a rapid rate. Most of the global economy is bouncing back from the Covid recession at remarkable speed. There is, however, one exception. Australia. What has long been one of the most successful economies in the world is heading back not just into lockdown but into recession as well — and giving the world a sharp lesson in the cost of ‘zero Covid’. Over the last year, Australia, along with New Zealand, has been heaped with praise for the

Do we need an officially-sanctioned, government-backed crypto-currency underwritten by sterling — a ‘Britcoin’ — as Rishi Sunak is said to be advocating? At first sight it is hard to see the attraction. Surely, there are two principle reasons why people feel attracted to Bitcoin and other cryptocurrencies. Firstly, if you are a drug dealer, you might hope that it is a way of keeping your stash of wealth beyond the reach of law enforcers. This hasn’t quite proved true, but you can understand why cryptocurrencies have their fans in the criminal world. Secondly, there is the hope of making a quick, speculative profit. The wildly gyrating values of Bitcoin and

For such a radical change to our monetary system, the lack of understanding of quantitative easing (QE) and its impacts is worrying. That is one of the conclusions drawn from this month’s House of Lords economic affairs committee report, ‘Quantitative easing: a dangerous addiction?’ QE involves central banks creating money and using it to buy financial assets (usually government bonds). It is known as an ‘unconventional’ monetary tool, as opposed to the conventional monetary policy of raising and lowering interest rates. But as this new report highlights, the practice has very much become a conventional part of monetary policy. The financial crisis in 2007-08 kicked off rounds of QE in

When Gordon Brown raised National Insurance in 2002 to put more money into the health service, it was seen as a huge political gamble. The Tories — including one Boris Johnson — denounced the move in furious terms. In a sign of how far to the left the country has moved, the Tories are planning to do something very similar to cover the cost of a social care cap and dealing with the NHS backlog. If the Tories do this, it will put Labour in a tricky position. How do they respond when a Tory government raises taxes to put more money into the NHS? If the Tories do this,