Economy

The Times is being a bit harsh on Cameron in its leader this morning. ‘On the economy’, it says, ‘Cameron has contracted out policy to George Osborne and then followed the usual (although not invariable) practice of postwar prime ministers of supporting his Chancellor’s decisions. But he has not added to this a convincing contribution of his own.’ Yes, Cameron has not done very well articulating his government’s growth policy. I’ve also noticed that he is not much good at describing the Loch Ness Monster and for the same reason. Unconfirmed rumours of its existence whirl around now and again. Grainy photos of something supposed to be a UK growth

Has Mervyn King’s downwards trend in inflation, promised for over a year now, finally arrived? After all, going by today’s figures, inflation has now dropped for two months running. CPI inflation is at 4.8 per cent, and RPI is at 5.2 per cent. What’s more, we can expect them to fall even further once the effect the VAT rise is removed in January: But I wouldn’t get too excited just yet, CoffeeHousers. Sure, most forecasters have inflation going down from here into the foreseeable future — but, don’t forgot, we’re still being subjected to pretty high inflation, with CPI over double its target level. And, crucially, even by the OBR’s

Yet again, the New York Times fact-checkers seem to have taken the day off. The newspaper yesterday printed an editorial about British economic policy which contained basic errors – identical to those made in a blog which Paul Krugman bashed out last week. It’s worth fisking a little, because Krugman appears to be using the newspaper to create an austerity myth. ‘A year and a half ago, Prime Minister David Cameron of Britain came to office promising to slash deficits and energize economic growth through radical fiscal austerity. It failed dismally.’ This is right, insofar as there was no austerity. The below shows current spending, for every month since the

It’s been an eventful , if worrying afternoon in the Middle East. First, the initial Egyptian election results confirm the expectation that Islamist parties would dominate the first round of elections: they’ve taken more than 50 per cent of the vote. Douglas Murray wrote a Spectator cover story two weeks ago on how the Arab Spring is turning to winter; it is required reading. Events in Iran are much more disturbing, though. Iran claims to have shot down an US drone in the east of the country and added further threats about further retaliation for the incursion. The reports have not been confirmed by American agencies as yet; but, following the recent diplomatic

The Euro crisis is terrifying, as Peter Oborne rightly says in today’s Telegraph. But what scares me even more is the paucity of the debate. Right now, the summitry is aimed at saving the euro as if this were an end in itself. Merkel’s logic (‘if the euro fails than Europe fails’) is dangerously simplistic: there are millions out of work, including half of young people in Spain, and they won’t be helped if their dole money is paid in euros. Recovery is needed. Jobs are needed. The euro has always been a project that puts politics first and economics second, with disastrous consequences. It cannot now be solved by

This week has marked something of a watershed in the British economic debate. The story of the strike on Wednesday was not one of paralysis, but of resilience. There was an 85 per cent turnout in NHS staff; Cumbria council kept every office open as so few staff went on strike; Aussies landing at Heathrow cleared passport control in record time, due to the large number of volunteers who were qualified with two days’ notice. As I say in my Daily Telegraph column today, the union leaders went rather quiet afterwards: they misjudged the mood of the country. As has Ed Balls. He is attempting what economists call ‘fiscal illusion’

If I were a teacher, I’d be on strike today. Public sector workers are being asked — in what is now a well-rehearsed soundbite — to work longer, receive less, and pay more. In these austere times, with deficit reduction a necessity,  two of those three aims might be reasonable. But doing all three at once, and conflating the package with the spurious notion that public sector pensions are ‘unsustainable’, justifies the direct action being taken today.   The rise in contribution rates — in effect a three per cent tax rise — will be especially hard to bear for those on modest salaries who are already facing a prolonged