Money

Back in October, World Bank chief economist Carmen Reinhart recommended that countries borrow heavily during the pandemic. ‘First, you worry about fighting the war,’ she said, ‘then you figure out how to pay for it’. As thousands of mask-free demonstrators took to the streets of London this weekend to campaign on issues ranging from Palestine to climate change, you have to wonder: are we still at war? And does anyone care about the economy anymore? It has been apparent for some time — though it may continue to confound psephologists — that issues such as identity, patriotism and culture are more important to the electorate than economic concerns. That the

Are the world’s hardest workers about to get a well-earned break? That seems to be the hope of the Japanese government, which is trying to encourage companies to ease off a bit and allow their exhausted staff the luxury of a four-day working week. It is hoped this will lead to a healthier work-life balance — or at least give workers a chance to retrain. As an idea, it sounds great. Whether it will actually work is another matter entirely. In January, the ruling (always and forever) Liberal Democratic party drafted a proposal that firms should offer staff the option of a three-day weekend. The plan was then included in

Finally the pandemic fog is lifting and the outlines of post-Covid politics are starting to take shape. While the Government is perfectly capable of generating many more unfortunate headlines by mishandling the Covid exit wave – or indeed, in the case of Matt Hancock, ignoring the ‘hands, face, space’ rule – it is clear that one key relationship will largely determine its longer-term fortunes. It is that between off-the-cuff scruff Boris Johnson and his immaculately turned-out Chancellor, Rishi Sunak – the man in the ironed mask. The time is fast approaching when Sunak’s own reputation will be on the line and when simply deferring to the PM’s predilections will no longer

The government is to ban ‘junk food’ adverts before the 9 p.m. watershed as well as restricting online food ads. Boris Johnson seems to have realised that he is overweight and so now we must all be subjected to an ever-growing assortment of gastronomic restrictions.  The first of many problems, however, is that civil servants don’t actually have a definition for ‘junk food’. The category used instead is ‘high in fat, sugar and salt’ (HFSS), a designation that is ridiculously broad. So now certain foods that would normally fall into the category are exempt. Honey, olive oil, avocados and Marmite are among those reportedly saved. If this is a representative sample, it seems that fatty and sugary foods

There’s been a lot of hype around the green light given by the European Commission yesterday to Italy’s recovery plan. But let’s break it down: the final headline numbers are €68.9 billion in EU grants by the year 2026 and €123 billion in loans. If you take the grant component, and divide it over the six-year duration, you arrive at an average of 0.6-0.7 per cent of Italy’s 2019 GDP each year. It is front-loaded, and it’s by no means a modest sum. What’s harder to accept however, is folding in the loan component to arrive at some giant fake headline number. The whole point of this exercise is not

It is called managing expectations: priming the public for really bad news so that when modestly bad news arrives it comes across as good news. Today’s public finance figures is a case in point. We have become so used to ever-grimmer predictions of the size of the government’s deficit that the latest figures released this morning ended up being reported in the form ‘borrowing is much lower than expected’.  In May the government borrowed £24.3 billion which, we are told in a government press release, is a whacking £19.4 billion less than last May. Furthermore, total borrowing for the financial year 2020/21, came in at £299.2 billion — which, we

Chesham and Amersham has fallen. The once uber-Tory Chilterns citadel has been snatched by the Lib Dems, with local campaigners citing planning reform and HS2 as the main drivers for their success. After the ginormous swing — from a 16,000 majority to an 8,000-vote deficit — fears are growing that the Tories’ planning reforms might become a victim to demographic subsidence. Many of the government’s backbenchers are keen to undermine the party’s house-building efforts. They fear Amersham-style retribution from similar voters, eager to punish them for devaluing their most-prized asset and adding congestion to their quaint country lanes. The Nimbyist revolt has been a major political force for yonks Isle of Wight

In the global market for government debt, worth an estimated $92 trillion (£66 trillion), it amounts to little more than a drop in the ocean. The European Union this week issued the first €20 billion (£17 billion) of bonds to pay for its Coronavirus Rescue Fund. The money itself doesn’t amount to very much one way or another. And yet, the Commission’s President Ursula von der Leyen was surely right when she described it as a ‘truly historic day’. Why? Because, the Commission is already using it to seize control of fiscal policy, just as it used vaccine procurement to take control of health policy. Its enthusiasts have already hailed the

The signs were there for all to see — pubs, restaurants, hairdressers and so on all pushing up their prices. Businesses have to make a profit while observing social distancing, dealing with soaring fuel prices and fast-accelerating wages. Yet the latest inflation figures seem to have caught many people by surprise. The Consumer Prices Index (CPI) is back above the Bank of England’s target at 2.1 per cent. Fears that Brexit would lead to a surge in food prices appear to be unfounded Drill down into the figures and you can see that, while the current level of CPI is not in itself a problem, inflationary pressures are building. Producer price inflation —

The latest employment figures, published this morning, confirm a remarkable aspect of the Covid pandemic: that it appears to have caused no more than a little bump in the jobs miracle of the past decade. That is in spite of the economy shrinking by nearly 10 per cent in 2020 — a performance that in the past would have led to millions out of work. In May the unemployment rate fell by 0.3 per cent to 4.7 per cent. By contrast, it reached over 8 per cent during and after the 2008 financial crash. But of course, the unemployment figures don’t tell the whole story — not when we have a