Economy

Close your eyes, and you could have been listening to Gordon Brown in his pomp. Seven billion for schools. Six billion for the NHS. Money for youth centres, the police, and social care with overall spending rising at the fastest rate for fifteen years. If Chancellors were measured simply by their ability to spend more of other people’s money than any of their rivals – and in truth plenty of them see that as their main goal – then Sajid Javid would have already got off to a great start. But will it be enough to win the looming election? Sure, it will help – but he will need to

Ed Conway, Sky News’s economics editor, tweets this morning that sterling has notched up a dubious record – it stands out as the worst-performer of all major currencies over the past 24 hours, month, three months and 12 months. But does that matter? Yes, if you are about to go on a foreign holiday. Take a longer view, however, and you might conclude that a weak pound might be rather a good thing. The most obvious point about a sinking currency is that it makes the country’s exports cheaper in global markets and makes imports more expensive. It thus helps to boost production while simultaneously helping to switch consumers towards

How can a new incumbent of No. 10 survive without a majority and with Brexit to solve? It defies the imagination. Yet if they do survive Brexit, against all odds, there could be an even bigger horror waiting around the corner: global recession. For three years the economy has defied doom-laden predictions by aggrieved remainers. Suddenly, though, the economic news is looking ominous. In May, retail sales fell by 2.7 per cent compared with a year earlier. The manufacturing Purchasing Managers’ Index (PMI), an indicator which runs a month ahead of Office for National Statistics data, plunged from 53.1 in April to 49.4 in May, where any figure below 50 denotes

In what Communities Secretary James Brokenshire described as ‘the biggest change to the private rental sector in a generation’, the government has announced a ban on so-called ‘no-fault evictions’ of tenants by their landlords. ‘By abolishing unfair evictions, every single person living in the private rental sector will be empowered’, Brokenshire claimed. The Prime Minister said that ‘Millions of responsible tenants could still be uprooted by their landlord with little notice, and often little justification […] This important step will not only protect tenants from unethical behaviour, but also give them the long-term certainty and the peace of mind they deserve.’ According to the BBC, this means that ‘Private landlords will no

IN ASSOCIATION WITH The “era of austerity is over,” the Chancellor proudly declared in his Autumn Budget on 29th October 2018. In the increasingly labyrinthine world of British politics, a lot has changed since this bold pronouncement: the Government has been defeated on critical legislative votes by margins of historically significant proportions; the Prime Minister has survived a vote of confidence in her leadership; 16 ministers have resigned; and MPs from both Labour and the Tories have formed the breakaway “Independent Group.” Needless to say, this has all occurred against a backdrop of profound uncertainty over the ultimate outcome of the negotiations over the UK’s departure from the European Union.

IN ASSOCIATION WITH Given the United Kingdom’s forthcoming departure from the European Union, few of us who follow the Chancellor’s Budget announcement closely were expecting 2018’s offering to be anything other than cautious, and so it came as little surprise that, once again, Philip Hammond has steered away from making any grand gestures. The unconventional timing of the speech – it was moved from the usual 12:30 slot on a Wednesday, after PMQs, to 15:30 on a Monday – meant that the day’s stock market session had closed when Hammond finished speaking, and so there is little to say about the reaction of the financial markets. On the basis of

‘Uncertainty is draining investment from the UK, with Brexit having a negative impact on eight in ten businesses,’ says Carolyn Fairbairn of the CBI. OK, let’s pause for a chorus of ‘She would say that, wouldn’t she?’ But even if we shade off for ‘scaremongering’, her survey (of 236 firms) is bleak: ‘44 per cent of businesses with contingency plans intend to stockpile goods… 30 per cent intend to relocate production and services overseas… 15 per cent intend to move jobs…’ And I’ve seen no rival surveys that contradict the gist of it. So what can Monday’s Budget do to make business feel better? Suggestions abound, and Chancellor Hammond is

UK spirits are key to our economy. Take, for instance, Scotch; sold in 200 markets worldwide, it supports 40,000 jobs and is our single biggest food and drink export, with 39 bottles exported each second. Or how about gin? The UK exported half a billion pounds of gin in 2017; a figure that could top £600 million this year, with markets including the USA, Australia, and Europe growing rapidly. The UK accounts for 67 per cent of all gin traded around the world, in what is a booming category. At Pernod Ricard, we employ more than 2,000 Britons, exporting the likes of The Glenlivet, Chivas and Beefeater to 160 countries

Contrary to the impression given by Jason Mitchell, Venezuela does not have a socialist economy (‘Maduro’s madness’, 25 August). It has a ‘mixed’ economy (and therein lies some of its problems; such as food hoarding by private companies hostile to the regime). The private sector is large, and involved in numerous sectors within the economy; food distribution, pharmaceuticals and so on. The US sanctions against Venezuela have always been about regime change, and these sanctions amount to a blockade of the country. US and European banks have refused to handle Venezuelan payments for medical supplies, and pharmaceutical companies have refused to issue export certificates for cancer drugs — therefore stopping

This piece first appeared as the leading article in The Spectator.  Economies run on confidence — as Franklin D. Roosevelt observed when he told Americans, in his first inaugural address during the depths of the Great Depression in 1933, that they had ‘nothing to fear except fear itself’. If that confidence is lost, if people collectively start drawing in their horns, squirrelling money away because they fear turbulent economic times ahead, then recession can all too easily become a self-fulfilling prophecy. No serious economist would dispute this theory. The puzzle is why the UK economy, riddled with Brexit anxieties, is in such good health. The Dutch prime minister said we

Should we place faith in a survey, conducted in June but published this week, that says London is still the world’s pre-eminent financial centre? Yes, in the sense that no one challenges that long-standing claim as of today; no, in the sense that complacency would be a huge mistake while every financial firm operating in the City, the West End and Canary Wharf is busy making contingency plans for a bad Brexit outcome. The gist of the six-monthly Z/Yen ‘Global Financial Centres Index’ — which assesses 92 cities around the world, taking account of everything from telecoms infrastructure to homicide rates — is that London has held its own at

Would a cashless world be a better place, morally or fiscally? Matthew Taylor, in his relatively uncontroversial review of work practices and the ‘gig economy’ published on Tuesday, proposed that the £6 billion ‘cash in hand’ economy of payment for window cleaning, gardening, leaflet distributing and similar simple tasks should be regularised and brought into the tax net through the use of apps and other digital payment platforms. Would that really be a good thing? The first point to be made is that it’s probably going to happen anyway over the next decade — at least if we go the way of Sweden. There, cards and phones are almost universally

The UK economy is not in good shape. We invest a lower proportion of our GDP every year than almost anyone else, which is the main reason why our productivity is almost static. We have deindustrialised to a point where we do not have nearly enough to sell abroad to pay for our imports. We have a chronic balance of payments problem financed by selling assets and borrowing from abroad. As a result, both as individuals and as a nation we are getting deeper and deeper into debt. What growth we have is driven by consumption, financed by asset inflation rather than by exports and investment. On almost every measure,