Economy

Today’s GDP figures are another sign that the recovery is strengthening. The 0.8 per cent growth in the first quarter is equivalent to more than 3 per cent annual growth. This means that the UK is on course to have the fastest growing economy in the G7 this year. The rapid fire press releases from Osborne, Alexander and Clegg this morning all strive to avoid saying that the job is done. But with the economy having grown 3.1 per cent since this time last year, it is clear that the economy is now on a far healthier trajectory. No one can say that it is bumping along the bottom anymore.

My friend and critic Jonathan Portes obviously took exception to my remarks about Keynesianism having been disproven. His entertaining rebuttal claims to have exposed my misreading of data. That’s not quite how I see it. I agree with him that the appalling build-up of out-of-work benefits happened before 1997. The Tories badly miscalculated incapacity benefit; thinking it would be a one-off way to help those affected by deindustrialization. But, in fact, it created a welfare dependency trap, and the 1992 recession caught too many people in it. John Major had an excuse: a recession. Tony Blair had no such excuse. I wasn’t joking about a quarter of Liverpool and Glasgow

In a speech given at Tilbury Port in Essex, Chancellor George Osborne hailed cuts to business and personal taxes this week as the ‘biggest in two decades’ – and committed to ‘fight for full employment in Britain’. Here’s what he said:- Thank you for coming here to Tilbury Port, this morning. We’re all here at the start of the most important week of changes to our tax system for a generation. These are the biggest cuts to personal and business taxes for two decades, and we’re making our benefit system more affordable and fairer too. Changes which will affect the lives of millions of people. Whether you are working or

Mark Field, MP for Westminster, has set up a brand new campaign group of Tory backbenchers called Managed Migration – as opposed, you might think, to the unmanaged sort we have at present. But he’s not actually in favour of managing migration in the conventional sense; he wants the PM to drop the party’s commitment to containing overall numbers of net migrants to the ‘tens of thousands’ though there seems fat chance of that just now.  Big increases in net migration, he says, are a tribute to the recovering economy. He’s got a point in one sense. As the economy improves, fewer Brits want to leave, which has an effect on net numbers.

George Osborne was on Andrew Marr this morning announcing support for a new garden city at Ebbsfleet in Kent and the extension of Help to Buy on new build homes until 2020. The Tories hope that these policies will show both that they are planning for the long term and that they are supporting aspiration. But what struck me as most significant was Osborne’s response when told by Marr that he was sounding more like a Liberal Democrat than a Conservative. He instantly replied, ‘Conservatives believe in lower taxes, Liberal Democrats want to put taxes up.’ We already know that Osborne believes that the rest of the deficit can be

Another day, another hole blown in Alex Salmond’s case for breaking up Britain. The IFS has today published its estimates (based on the OBR’s) for Scottish oil and gas revenues, and they’re less than half those of the SNP administration in Edinburgh. Salmond forecast oil and gas revenues of between £6.8 billion and £7.9 billion in 2016-17. The IFS puts it at £3.3 billion. Salmond’s best-case scenario for 2017-18 has Scotland with a deficit of 1.0 per cent of GDP; the IFS’s figures suggest that’ll be closer to 3.6 per cent of GDP. A country like Britain can ride out such fluctuations, but Salmond may find he’s swapping rule from

The latest figures showing a big increase in net migration are a blow to the Conservatives, although it obviously reflects on the relative strength of the British economy; at least in relation to the basket cases of southern Europe, from where large numbers have come. It will almost certainly mean more Tory voters joining Nigel Farage’s purple revolution, especially because it illustrates the impossibility of controlling immigration while Britain is inside the EU; the number of EU citizens arriving went up from 149,000 to 209,000 in a year. But that’s part of the curious 80/20 Rule about the immigration debate; Europeans accounted for only a fifth of migration under New

Today’s borrowing figures are, on the surface, not good for the Tories. The surplus on the public finances in January 2014 was lower than for the same month in 2013, at £4.7 billion compared to last year’s £6.0 billion figure (although it’s worth pointing out that the difference could get even smaller with subsequent revisions). That disappointing figure means that over the year, Osborne has borrowed just £4 billion than at the same point last year:- These figures give Labour the opportunity to remind voters that George Osborne has failed to meet his own targets. But there is an easy way to spin this, which is that there is still

Mark Carney has been a very successful Governor of the Bank of England. Since coming to office in June last year, the British economy has gone from strength to strength. Although Mr Carney can’t take all the credit, on his watch unemployment is falling rapidly and business confidence is at a record high. His appointment and policies have been met with general approval by the UK’s business leaders, which is to be welcomed. So it is a shame that yesterday there were reports that the Governor thinks an EU referendum would be ‘bad for the economy’. The claim stems from the Governor’s comments on the Andrew Marr show on Sunday. In response to a