Economy

The UK economy is rebounding at the fastest rate in Europe, and faster even than the United States: that is the general tone of reporting of today’s GDP figures, which show that the UK economy expanded by 4.8 per cent in the second quarter of 2021. That is compared with 0.9 per cent in France, 1.5 per cent in Germany and 1.6 per cent in the US. But hang on, dig a little deeper and there is something a little odd going on with the figures. Compare nominal and real changes in GDP during the second quarter and it produces the following: UK, nominal growth in second quarter: +3.6 per cent;

The world of coronomics continues to surprise us. Last summer forecasters warned of a wave of redundancies after the biggest economic crash in 300 years. Peak unemployment — spurred on by lockdowns — was expected to near 12 per cent, ushering in a new era of chronic financial pain and instability for millions of workers. But the Treasury’s furlough scheme has kept the headline figure down. Unemployment has hovered around 5 per cent, less than half the original prediction. The problem this summer isn’t mass unemployment but worker absenteeism. Job vacancies are now more than a third above pre-pandemic levels. There is no shortage of available work, only a shortage

Could Italy’s triumph on Sunday result not just in a trophy for the azzuri, but a baby boom for a nation with one of Europe’s lowest fertility rates? The anecdotal evidence would support this theory. Nine months after Iceland beat England in a Euro 2016 match, it experienced an unprecedented increase in births. This was the first time the nation had ever qualified for a major European tournament, and close to 10 per cent of its 300,000 population watched the game in person. Spain’s birth rate also shot up 16 per cent nine months after Barcelona won the 2009 Champions League. Yet a new paper from Luca Fumarco and Francesco

At yesterday’s press conference, Boris Johnson announced that his government was shelving plans for domestic ‘Covid certificates’ (i.e. vaccine passports), at least for the time being, although this won’t stop private businesses or venues from deciding to use them.  We also learned today that it won’t stop the creation of a two-tier system (as Lara Prendergast warned months ago) for the ‘jabs and jab nots’. New policies have been confirmed that will allow for the double-jabbed to skip quarantine if they’ve been in contact with someone who tests positive for Covid-19 (with exemptions granted to under-18s as well). It’s hard to herald ‘freedom day’ when younger people risk being forced back inside by

Finally the pandemic fog is lifting and the outlines of post-Covid politics are starting to take shape. While the Government is perfectly capable of generating many more unfortunate headlines by mishandling the Covid exit wave – or indeed, in the case of Matt Hancock, ignoring the ‘hands, face, space’ rule – it is clear that one key relationship will largely determine its longer-term fortunes. It is that between off-the-cuff scruff Boris Johnson and his immaculately turned-out Chancellor, Rishi Sunak – the man in the ironed mask. The time is fast approaching when Sunak’s own reputation will be on the line and when simply deferring to the PM’s predilections will no longer

Britain’s economy is growing at the fastest rate in 200 years. Job adverts are 29 per cent above their pre-pandemic levels and employers say they can’t reopen because they can’t find staff. Wages are rising at the fastest rate in ten years. But here’s the question: how much more support does the economy need from the Bank of England’s printing press? Should the BoE stick to its pledge to bring QE up to £895 billion or stop £50 billion short? Its members met to discuss this last month and decided (as they always do) to press ahead — by eight votes to one. The dissenting vote — the first time

Post-pandemic economic recovery was on the agenda at Holyrood this week, with Scotland’s finance minister Kate Forbes in full JFK-style ‘ask not what your country can do for you’ visionary mode. ‘Wherever someone works, and in whatever capacity, if they think that they can serve our country as we face the prospect of rebuilding, this is their personal invitation. Our strength is in our united vision to work together — across party lines, sectors and regions — to rebuild,’ declaimed Forbes. A cynic might wonder if ‘serve our country’ will turn out to mean serving the nationalist interest rather than the national one. It would be no surprise if trade

Time is, I fear, running out. Running out, that is, to avoid handing to a small number of multinational corporations our right to buy and sell things. Running out to prevent governments and central banks helping themselves to our savings, by means of negative interest rates. The payments industry is closing in on its target of driving cash out of circulation and instigating cashless payments as the only way of doing business. That, at least, is the conclusion one might reach from reading a report by Worldpay: the Global Payments Report 2021. It claims that cash payments in UK shops in 2020 made up 13.4 per cent of total payments,

‘Consider a temporary cut in executive salaries’ was the Confederation of British Industry’s advice to members at the start of the pandemic. Back then I was gripped by fears of a backlash against capitalism: top pay cuts would indeed be wise, I wrote, not least because ‘sacrifice now is sensible insurance’. Looking at last week’s election results, I needn’t have been concerned about a second coming of socialism. But I’m one of many advocates for responsible capitalism who have long worried about growing disparities between executive and average pay — the key multiple having risen from 50 to 120 over the past two decades — that rarely reflect underlying performance.

New growth figures were released this morning show that the economy contracted 1.5 per cent in Q1 this year and remains 8.7 per cent smaller than it was in Q4 2019 (the last quarter not to be impacted by the pandemic). Alongside this update, the Office for National Statistics also released its latest set of monthly figures, which saw GDP rise by 2.1 per cent in March — the biggest boost since August last year — taking the economy to 5.9 per cent below pre-pandemic levels. That GDP fell by just 1.5 per cent overall once again illustrates the extent to which businesses have developed a resilience to lockdowns. The first

Might the 2020s be the seismic decade in which the post-war consensus, that liberal democracies do not and should not break apart, is broken? Scotland’s First Minister Nicola Sturgeon certainly thinks so. Her lifelong quest to break up Britain must feel closer than ever after winning last week’s Holyrood elections. But there are hurdles yet to be cleared. Sturgeon insists on an exact repeat of the process that took place after Alex Salmond won an SNP majority in 2011 – even though she did not manage to replicate his success, achieving instead another minority administration. As in the 2011 to 2014 period, she wants the referendum booked and in the

It’s been a good week for seeing the vaccine factor at work. We’ve had multiple real-world updates on the Pfizer vaccine’s effectiveness against new variants of Covid-19 (this bodes well for the UK, which was the first country in the world to use the vaccine to protect its most vulnerable residents). And today we’ve had a revised economic forecast from the Bank of England, suggesting the UK’s impressive vaccine rollout could translate into the strongest growth since records began in 1949. The Bank of England now predicts that the economy will expand by more than 7 per cent in 2021, up from its forecast of 5 per cent in February. Its

When the Office for National Statistics released the last antibody survey a fortnight ago, the results were underwhelming. After watching prevalence in the population shoot upwards for months, the figure had plateaued at 55 per cent. There were several reasons suggested for the stall, including the move to giving second doses and difficulties detecting fading antibodies (which the ONS is quick to point out does not necessarily mean a person no longer has immunity). But, regardless, it raised concerns that it might take longer to reach high antibody prevalence rates than previously hoped. Thankfully, today’s update has provided plenty of cheer. In the two weeks following the last update (taking

Britain may be about to go from one economic extreme to another. This winter the OECD calculated Britain suffered one of the highest levels of economic damage in the developed world, compared with the year before, due to its stringent lockdown. Fast forward to spring and the UK’s trajectory for economic recovery is now being revised, with forecasts only moving in one direction: up. Today alone, two heavy hitters boosted their predictions. This morning EY Item Club revised its 2021 growth forecast from 5 per cent to 6.8 per cent – which, if accurate, would see the UK grow at its fastest rate on record, recovering to pre-pandemic levels months earlier