Money

Cheaper mortgages won’t save Britain from recession

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

Starmer should split from the EU if it hits back at Trump on tariffs

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

Trump’s tariffs could kill Europe’s steel industry

So, it seems that Donald Trump wasn’t bluffing after all. On his way to the Superbowl, the president made time to impose 25 per cent tariffs on steel and aluminium imports into the United States, ramping up a trade war that has been looming ever since he moved into the White House last month. Speaking aboard Air Force One, Trump said he would slap the tariffs on “everybody”. “If they charge us, we charge them,” he said. These measures will hit Australia, Mexico, and East Asian manufacturers hard. But it will deliver a terminal blow to the European steel industry, unless it finally abandons Net Zero targets that were already

Badenoch is leading her party in the right direction on migration

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

Kate Andrews

Why the Bank of England is cutting interest rates

The Bank of England has cut interest rates for the third time since the inflation crisis, taking the base rate to 4.5 per cent. The Monetary Policy Committee voted by seven to two to further reduce rates by 0.25 percentage points – a move that was widely expected by markets, but had been put into doubt after government borrowing costs surged in January and President Donald Trump announced his plans for substantial tariffs last week. Even so, the MPC pushed ahead – interestingly with no one on the committee voting to hold rates at 4.75 per cent (two members voted instead for a 0.5 percentage point cut). It’s clear from the

Ross Clark

Asda and the absurdity of ‘work of equal value’ 

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,

Ross Clark

Liz Kendall’s benefits crusade could make or break Labour’s fortunes

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

Kate Andrews

Will Trump follow through on his tariff threat on Canada and Mexico?

No one can really act surprised if Donald Trump pushes ahead with substantial tariffs on Canada and Mexico tomorrow. ‘Tariff’ is the President’s favourite word, as he said many times on the campaign trail in the lead up to last November’s US election. The only words that could compete for the top slot were ‘love’ and ‘religion’. So, the countdown to 1 February – when a staggering 25 per cent border tax is slapped on the countries north and south of America’s border – isn’t, in theory, some dreaded doomsday for Trump. If anything, it’s more like the countdown to Christmas. Is this really the end game for the President? But

Ross Clark

Is Rachel Reeves right that there is no trade-off between growth and net zero?

Why is it that some lies get endlessly repeated without ever being challenged, even though they are quite obviously wrong? In her pro-growth speech today, the Chancellor Rachel Reeves asserted: ‘There is no trade-off between economic growth and net zero’. Government ministers, advisers and many others have been saying such things for years – and hardly ever do they get properly challenged. To pretend that no such trade-off exists is foolish It is easy to see why, for political reasons, you might want to argue that committing Britain to achieve net zero carbon emissions by 2050 will not make us poorer and indeed might make us wealthier. You want to

Why Britain needs growth

‘Growth’ – the focus of the Chancellor Rachel Reeves’ speech this morning – can be a confusing word. It’s intangible, obscure, hard to visualise. It happens slowly, often imperceptibly, over a political cycle – when it happens at all. The changes needed to achieve it can be tough and involve trade-offs. Often voters feel those changes will not directly benefit them, or may even make their lives worse – whether it’s new housing developments, HS2, a new runway at Heathrow (which Reeves backed) or new nuclear power stations. For anyone who stood on the doorstep during the last election, we know that making and doing more things can be a hard

Rachel Reeves can’t ‘regulate for growth’

The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) are under pressure to reduce red tape in the financial sector. “We’ve told our regulators they need to regulate for growth, not just for risk,” the Chancellor Rachel Reeves has said. But the idea that tweaking regulations will somehow unlock growth is a fallacy. The idea that tweaking regulations will somehow unlock growth is a fallacy The problem is that these ungoverned and rogue regulators are manned by second-rate lawyers and special interest groups who present their ideas as mainstream. They have never facilitated growth and have created a labyrinth of rules that suffocate the UK’s financial services industry, serving

Katy Balls

Will Labour MPs back Rachel Reeves’s growth plan?

It’s ‘growth week’ in government, as the Chancellor Rachel Reeves attempts to convince sceptical business leaders, bankers and voters that she has a plan to get the economy going. After a dismal start to the year in which bond market jitters saw the cost of government borrowing soar, Reeves is hoping to turn things around with a speech on Wednesday setting out the measures and choices the government is willing to make to drive economic growth. Much of the content is already out there with talk of the government supporting a third runway at Heathrow airport amongst other things. Since the reports first emerged, there have been some grumblings among

How DeepSeek can help Britain

Sometimes a new technology comes along that immediately shakes the world. The release this week of the new Chinese artificial intelligence (AI) tool, DeepSeek-R1, is one such moment. Despite Washington’s efforts to restrict Beijing’s development of AI, including an export ban on advanced microchips, researchers in China have created an AI tool that not only exceeds the performance of American AI models like OpenAI’s ChatGPT, but does so at a fraction of the cost. If we are to believe the hype, it took just $6 million (£5 million) to build DeekSeep-R1, compared to more than $100 million (£80 million) for ChatGPT. This is the equivalent of building the fastest Formula

Has DeepSeek popped the AI bubble?

The arrest of Huawei’s chief financial officer Meng Wanzhou in Canada in 2018, and the ensuing United States ban on high-end semiconductor exports to China, transformed Donald Trump’s “trade war” into a “tech war”. At the time, the US clearly felt it had a comparative advantage in technology, and that if it had to fight a battle against China, then picking tech as the battlefield made good sense. In September 2021, US commerce secretary Gina Raimondo, declared that: “If we really want to slow down China’s rate of innovation, we need to work with Europe”. As a result, Europe was roped into a cold war most European businesses – not

Tory Nimbys are walking into Starmer’s trap

The government has yet to formally announce its widely trailed decision to expand Gatwick, Heathrow, and Luton airports. But that hasn’t stopped six MPs from writing to Transport Secretary Heidi Alexander with a pre-emptive attack. The four Green MPs, perhaps, plus a couple of anti-capitalist hard left Labourites? Nope. Four Lib Dems and two Conservatives – one of whom is, astonishingly, Andrew Griffith, the Shadow Business Secretary. The idea of the Shadow Business Secretary campaigning against a core component of economic growth would be funny if it wasn’t so utterly damning Griffith tells Alexander that local residents’ “life is blighted every single day by the noise of take-offs and landings

Ross Clark

Why are so many MPs still clueless about the cost of net zero?

Donald Trump has withdrawn the United States from the Paris Climate Change Agreement for the second time and reiterated his desire that America should ‘drill, baby drill’. The US president’s decision exposes the naivety of MPs in Britain who, in 2019, nodded through a legal commitment to reaching net zero by 2050, with the hope that it would inspire other countries to follow our example. The Climate and Nature Bill risks taking Britain back to the dark ages In fact, Britain is pretty well alone in voluntarily choosing to ‘leave it in the ground’, as anti-fossil fuel activists like to put it. The US has been following an unashamed policy

Rachel Reeves is getting an expensive lesson in economics

It may prove to be just the first of many screeching U-turns. Whilst hobnobbing among the plutocrats in Davos this week, the Chancellor Rachel Reeves has admitted that she may have to tweak her clamp-down on non doms, to make it less punitive for anyone who isn’t British, and happens to have a bit of money, to live in the UK. Sure, it is good that Reeves is learning from her mistakes. The only trouble is it is going to prove a very expensive education for the rest of us.  It is only a couple of months since Reeves’s Budget introduced tough new rules for non doms, but it already

The EU’s decarbonisation plan can’t survive Donald Trump

As in a more delirious version of Bill Murray’s Groundhog Day, Donald Trump withdrew from the Paris Climate Accord on his first day in office, again. In a thinly-veiled attempt to mend Beijing’s relations with Europe, Chinese foreign ministry spokesman commented: “Climate change is a common challenge facing all of humanity. No country can stay out of it, and no country can be immune to it.” Whatever their views on climate change, Europeans and British would do well to realise that decades-long effort to reduce emissions through multilateral deals is over. Continuing on one’s own – after America’s explicit repudiation of the COP framework, and in light of the track record

Ross Clark

Rachel Reeves’ tinkering won’t rescue Britain’s economy

The news just seems to get worse for Rachel Reeves. After the slight relief of last week’s inflation and GDP figures, this morning brings headlines that are even grimmer than economists expected. The government was forced to borrow £17.8 billion in December, more than twice the £6.7 billion which Rishi Sunak’s government borrowed in December 2023. In just one month, taxpayers had to spend £8.3 billion to service the government’s debt. Interest payments are now consuming over 8 per cent of government expenditure – more than is spent on education or defence – and very nearly as much as the welfare bill, which is itself ballooning. The Chancellor’s immediate problem is that

Kate Andrews

Donald Trump has promised the world

‘The golden age begins right now’ said the 47th President of the United States as he began his inauguration speech in the Capitol Rotunda. What followed was a 30-minute speech, during which Donald Trump stayed both on script and on message, reiterating his promise to declare a border crisis, deport foreign criminals, return America’s title of energy independence and to ramp on tariffs on foreign countries to ‘protect American workers and families’.  Trump aides had promised that, eight years on, the President’s second swearing-in speech would be different. Gone were the days of promoting ‘American carnage’. Today, the message was to be one of unity.  Here, the President took baby