Rishi Sunak can’t take the credit for falling inflation

Even the best-run companies have occasional leadership crises. But if you asked ChatGPT to come up with a blockbuster boardroom-bloodbath movie scenario, I doubt it would propose anything as extreme as this week’s events in its own San Francisco-based parent company, OpenAI. Chief executive and co-founder Sam Altman was fired last week for failing to be ‘consistently candid’ with OpenAI’s board, though no one was prepared to say what he had not been candid about. By Monday he had a new job leading AI research at Microsoft, OpenAI’s 49 per cent shareholder. One inside source claimed 743 of OpenAI’s 770 staff had signed a letter supporting him and many of

The beauty of mid-range products

Once or twice, when on a crowded overnight flight, I have taken a sneaky stroll through the different cabins for the purpose of comparison. My reaction on first peering into each cabin goes like this. First class: ‘Gosh, this is fabulous. It’s like a restaurant in the air.’ Business class: ‘Ooh, this is nice; they get flat beds and everything.’ Premium economy: ‘Well this is OK; the seats seem comfy and it’s all pretty civilised.’ Economy: ‘It’s the “Raft of the Medusa”.’ Now here’s the thing. In terms of comfort, the biggest gap between two adjacent flight classes is between economy and premium economy. This improvement is simply achieved with

Will the collapse of councils be the next great scandal?

Last month India managed to land a spacecraft on the moon for a third of the price of refurbishing Hammersmith Bridge. This startling fact captures both New Delhi’s efficiency and the staggering incompetence of our local councils. It took two years and £9 million (in real terms) to build the bridge. It is set to cost almost £200 million to spruce it up and the work may not be complete until 2030. Hammersmith Bridge has become the perfect metaphor for what’s gone wrong with government: the carelessness, inertia and lack of concern for public money that is rife across the country. The bill for doing up Croydon council’s headquarters was

Matthew Parris

Britain has an entitlement problem

An Institute for Fiscal Studies paper, published at the end of last month, makes grim reading. Through the prism of the media reports it generated (‘One in 11 workers in England could be NHS staff by 2036,’ said the Guardian; ‘NHS staff will make up 49 per cent of the public sector workforce in 2036,’ said the Times), the most sensational finding was that our health service will be eating up an ever-increasing share of public spending. But, as so often, this particular cuckoo in the nest of public provision is only the most newsworthy of so many indications of Britain’s long, slow slide into insolvency. The gap grows between

Martin Vander Weyer

The economy isn’t as sick as we thought

It would be churlish not to celebrate revisions from the Office for National Statistics that tell us the UK is not, after all, the post-Covid invalid of the G7. Contrary to previous figures suggesting we had struggled to regain pre-pandemic levels of economic output, it turns out that our gross domestic product passed that benchmark in late 2021 and our performance has been in line with France and ahead of Germany. Large sectoral revisions for agriculture and manufacturing tell us that statistical reporting is almost as much of a mug’s game as forecasting. But the brighter overall picture accords with the anecdotal sketch of ‘definite warming’ in consumer spending and

Sunak can’t blame landlords for not stopping illegal immigration

Small companies will face massive fines for not checking the papers of everyone they hire. Landlords will be put out of business for renting rooms to anyone without permission to be in the UK. With its Rwanda policy stalled, and with the numbers of illegal immigrants still at record highs, the government has a big new idea for trying to stem the numbers of people coming into the country. It will get small businesses to police the system. The only trouble is, that will damage the economy, and we will all suffer from that.  The government’s latest big idea for controlling immigration is to make it a lot harder for

Cindy Yu

Does China need a new economic playbook?

41 min listen

At the end of last year, some thought that the Chinese economic recovery after three years of zero Covid could happen just as fast as zero Covid itself ended being government policy. I admit, that included me. And yet, more than halfway into 2023, that recovery looks increasingly elusive. The Chinese economy has failed to shake off its own long Covid while other structural problems have reared their heads. What does the future hold for the Chinese economy? Is this the new normal? And if so, is that really a problem? I’m joined on this episode by the economist Keyu Jin, author of The New China Playbook: Beyond Socialism and

Save our railway ticket offices!

‘Always be cheerful’ – a motto to which I’ll return in the final item – speaks to my natural demeanour. But when asked whether I see grounds for optimism in the UK business scene, I’ve struggled lately to find anything positive in the near-certain advent of a Labour government, the agonisingly slow retreat of inflation and the damage of still-rising interest rates. Nevertheless, let me take a step back. In an ONS survey this month, four times as many respondents (36 per cent) thought their business performance would improve over the next 12 months compared with those who thought it would decline (9 per cent). There were also upticks in

Jonathan Ashworth: ‘We are at risk of a lost generation’

Jonathan Ashworth has started carrying a card in his shirt pocket. It’s the licence his father was given when he got a job in the 1970s at the Playboy casino in Manchester. ‘It’s silly, really. But it’s just a reminder that my dad was able to start a job as a croupier from a very poor working-class background in Salford and that completely changed his life,’ the shadow work and pensions secretary says when we meet in his Commons office. It was at the casino that his father met Ashworth’s mother – a Playboy bunny girl working as a waitress. ‘Every week, the Playboy bunny girls had to queue up

‘We’ve got to hold our nerve’: Rishi Sunak’s BBC interview

As mortgage rates surge and a new Opinium poll finds Labour’s lead has jumped to 18 points, Rishi Sunak appeared on Laura Kuenssberg’s BBC show to insist that his plan is the right one. The interview was pre-recorded in the Downing Street garden yesterday, with Sunak commenting on the – now failed – attempted coup by Russian mercenary leader Yevgeny Prigozhin and previewing his government’s long-term NHS workforce plan. However, the main portion of the at times, scrappy interview was spent on inflation and the consequences for mortgage holders. Despite all the current problems, Sunak insisted that he would win the next election Kuenssberg repeatedly asked Sunak whether he would

Red Rishi: the Prime Minister’s political makeover

What kind of conservative is Rishi Sunak? This time last year, there was a clear answer: he was a fiscal hawk who was worried about how much the government had to borrow to fund the Covid crisis. As chancellor, he was always fighting with the prime minister over high spending. When Sunak tried to raise the national insurance rate, he did so partly to send his party an important message: the borrowing and spending has to stop. Now Sunak is in No. 10 and Boris Johnson isn’t around to demand more spending. There has been a Budget and a list of priorities – and Sunak’s agenda is starting to emerge. It

The scourge of London’s ‘American candy’ stores

Should US regulators ban short-selling of bank stocks? That’s a hot topic as investors refuse to accept reassurance from the Fed chairman Jerome Powell that the recent banking crisis-that-wasn’t is over. Following JPMorgan’s rescue of First Republic, shares in other regional banks such as PacWest in Los Angeles, Western Alliance (Phoenix) and First Horizon (Memphis) have fluctuated wildly and fingers have pointed at short-sellers – who borrow shares they think are about to fall in order to sell, buy back cheaper and pocket a profit. That’s bad, say critics, in the broad sense that it’s a negative form of investment, the reverse of backing companies you believe in; and much

The UK’s treatment of Activision shows it is closed for business

It was, admittedly, not quite as thrilling as an action sequence from Call of Duty. Even so, the statement put out by Bobby Kotick, chief executive of US video game publisher Activision, following the UK’s bizarre decision to block the company’s acquisition by Microsoft was about as bloodthirsty as any ever put out by a major corporation. The ruling ‘contradicts the ambitions of the UK to become an attractive country to build a technology business,’ he argued. Even worse, ‘it does a disservice to UK citizens, who face increasingly dire economic prospects’, and, to cap it all off, it shows that Britain is ‘closed for business’. Of course, it would

What Miriam Cates gets right – and wrong – about declining fertility

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

The £5.4 billion government surplus masks a larger economic issue

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

Government borrowing hits £27.4 billion

Rishi Sunak ruffled his own party’s feathers last week when – in reference to last autumn’s market turmoil – he told an audience in Lancashire: ‘You’re not idiots, you know what’s happened.’ This was quickly interpreted as the Prime Minister branding the MPs and business leaders calling for immediate tax cuts as ‘idiots’, sparking not only backlash but also another round of debates on a topic that has been dividing the Tory party since last summer. Just how quickly and aggressively can the party start to cut the tax burden down from its 72-year high? Today’s public sector finance update for the month of December certainly doesn’t settle this debate,

Is North London’s housing market recession-proof?

Of all the suburbs in Britain none has become quite so politicised as North London. This slightly leafy (and lefty) swathe in and around Islington – with Hampstead Heath marking its northern edge and Regent’s Park its southern boundary – is treated by our recent political leaders as a kind of shorthand for, to borrow a phrase from Suella Braverman, the ‘tofu-eating wokerati’. Liz Truss took a dig at her privileged metropolitan enemies who ‘taxi from North London townhouses to the BBC studio’ to criticise her, ignoring the fact that Islington is not all Upper Street boutiques and multi-million pound homes. Islington is one of London’s most deprived boroughs, and more than

House of cards: why are so many property sales collapsing?

Moving house is said to be one of the most stressful life experiences, right up there with bereavement and divorce. But what about the stress of not moving? Amid the upheavals of the past few months increasing numbers have seen their property ladder dreams collapse around their ears. According to market analyst TwentyCi there has been a ‘sharp increase’ in the number of deals falling through. More than 90,000 agreed sales disintegrated between July and September, an 18 per cent increase on the same period in 2019. Wendy and William Waterton know exactly what it feels like to be on the sharp end of a collapsing sale. In the past

How to spot a looming house price crash

From the man down the pub/on Twitter to major lenders and think-tanks, homebuyers and sellers can barely move for so-called experts dishing out advice on the property market. Rising interest rates and increased mortgage costs have prompted fears of a house price slump, with Capital Economics predicting a 5 per cent drop over the next two years. Credit Suisse is forecasting that prices could fall by as much as 15 per cent if interest rates hit 6 per cent – making it more of crash than slowdown. Buyers don’t want to make a major purchase at the top of the market, and sellers may be hesitant to list if they

Divided they fall: can the Tories save themselves?

Seldom has support for a government fallen so far, so fast. Polls show that 24 per cent of the public would vote for the Conservatives if there was an election now, vs 52 per cent for Labour: figures that make 1997 look like a good result for the Tories. This is not just a one-off rogue poll, but the sustained average of six. It reflects what Tory MPs hear from voters appalled at the disgraceful shambles of the past few weeks. It won’t be forgotten in a hurry. This magazine gave its verdict on the Liz Truss agenda in August: ‘To attempt reform without a proper plan is to guarantee