Michael Simmons is The Spectator's economics editor
Britain’s economic outlook may have been skewed by bad data – and it could be costing billions. Wage data pored over by the Bank of England’s Monetary Policy Committee (MPC) is set to be revised in the coming weeks – and the implications could be serious. The nine economists who decide the country’s interest rates
The Office for National Statistics (ONS) has just confirmed that the economy ‘grew’ by 0.1 per cent in the last three months of 2024. Its final estimate for the last quarter of last year confirms that Britain’s economy continues to float just above recession territory. The very modest growth in the final quarter was driven
Tax rises are almost certainly coming, Britain’s leading fiscal think tank has said. Those taxes are most likely to fall on pensioners and the wealthy, according to Paul Johnson, director of the Institute for Fiscal Studies (IFS). ‘There is a good chance that economic and fiscal forecasts will deteriorate significantly between now and an autumn Budget.
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It’s the morning after the afternoon before, and Rachel Reeves has just finished her broadcast round, where she has faced tough questions and negative splashes in the papers. The Daily Mail brands Reeves ‘deluded’, while the Daily Telegraph warns of ‘five years of record taxes’. The Guardian splashes with ‘Reeves accused of balancing books at expense of the poor’, while the Financial
There is perhaps no document more useful for understanding the state of the nation than the Office for Budget Responsibility’s ‘Economic and Fiscal Outlook’. The 180-page document, released as soon as the Chancellor sits down after a Budget or financial statement, can not only seal the fate of a government but also tell us where
Rachel Reeves didn’t want today’s Spring Statement to be seen as a budget, but a budget it has turned out to be. The Chancellor has had to find £15 billion of spending cuts across welfare and the rest of government. Rising borrowing costs at the start of the year chipped away at her headroom and
Rachel Reeves has wanted to downplay the significance of the Spring Statement this afternoon. But with every leaked proposal and briefing, the statement feels increasingly like a full-blown Budget. Soaring borrowing costs, and a growth forecast set to be slashed in half, have wiped out the Chancellor’s £10 billion headroom against her ‘ironclad’ fiscal rules.
Five years ago this weekend, the nation was plunged into what was expected to be a three-week lockdown. Weeks turned into months and years, lives were upended, and society was reshaped. But with the Covid inquiry rumbling on and the threat of a new pandemic ever present, it is worth reflecting on what happened. That’s
Rachel Reeves is having to borrow more and more money to keep Britain’s show on the road. Figures on the public finances, published this morning by the Office for National Statistics (ONS), show that in the financial year to February we borrowed over £132 billion. That is nearly £15 billion more than at the same
The Bank of England has held interest rates at 4.5 per cent. The Monetary Policy Committee (MPC) voted eight to one to hold the base rate at its current level after reducing it by 0.25 percentage points six weeks ago. Markets and pundits had expected the decision, despite figures last week revealing the economy had
The state is bigger than ever. The number of workers employed in central government has hit 4 million for the first time. Figures just released by the Office for National Statistics (ONS) show employment in the public sector hit 6.14 million in December, up 53,000 in a year. Employment in central government hit a record
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This week: why is economic growth eluding Labour? ‘Growing pains’ declares The Spectator’s cover image this week, as our political editor Katy Balls, our new economics editor Michael Simmons, and George Osborne’s former chief of staff Rupert Harrison analyse the fiscal problems facing the Chancellor. ‘Dominic Cummings may have left Whitehall,’ write Katy and Michael,
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This afternoon we had Liz Kendall’s long-awaited address in the Commons on Labour’s plans for welfare reform. The prospect of £5 billion worth of cuts to welfare has split the party in two, with fears of a rebellion growing over the weekend and into this week. Her announcement was a mixed bag, including: restricting eligibility
In more bad news for Rachel Reeves as the Chancellor prepares for next week’s Spring Statement, the OECD has downgraded Britain’s growth prospects. The organisation forecast the UK’s economy to grow 1.4 per cent this year and then just 1.2 per cent next year – compared with the 1.7 per cent and 1. 3 per
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New figures from the Office for National Statistics show the UK economy unexpectedly shrunk by 0.1% in January. This comes only a few weeks after the Chancellor’s pro-growth speech, and a fortnight ahead of her Spring Statement. Just how much pressure is Rachel Reeves under? And how likely is it that Labour will change their
The economy shrank by 0.1 per cent in January according to figures just published by the Office for National Statistics (ONS). The news will come as a disappointing shock to Rachel Reeves after most economists had predicted the year to have started with growth. In December the economy had grown by 0.4 per cent, but a fall
Markets are not enjoying Donald Trump’s tariffs. Some 125 days have passed since his second election victory and the S&P 500 is on a clear downward trajectory thanks to Trump’s tariff policies and other poor US economic data. After the same number of days following Biden’s election, the S&P was up 13 per cent; for
Donald Trump has refused to rule out an American recession. He ‘hates to predict things like this’, he said yesterday. When asked if a downturn was coming this year, the President responded that a ‘period of transition’ was on the cards. On Thursday last week the Atlanta Fed’s GDP ‘nowcast’ model was forecasting that America’s
The welfare bill currently unsustainably stands at £314 billion. It is forecast to reach nearly £380 billion by the end of the decade. Rumoured Labour cuts, set to be announced as part of the Spring Statement on 26 March, have just been reported by ITV News and include plans for £6 billion of welfare cuts.
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On this week’s Spectator Out Loud: Having returned from Washington D.C., Harry Cole reads his diary for the week (1:16); Zoe Strimpel reports on the Gen Z fliers obsessed with maximalising their air miles (5:37); Michael Simmons argues that Scotland is the worst when it comes to government waste (12:00); reviewing Quentin Skinner’s Liberty as Independence, Nigel