Economy

Given the perilous condition of Britain’s public finances, perhaps we ought to start taking the IMF and its World Economic Outlook a little more seriously. It is not impossible to foresee Rachel Reeves or her successor having to repeat what one of her Labour predecessors, Denis Healey, had to do in 1976: and beg the IMF for an emergency loan. What the IMF thinks of the prospects for the UK economy will be key to what sort of deal she might be able to secure. The IMF has, at least, ceased to make out that Britain is doomed to suffer a self-inflicted, Brexit-generated recession all of its own. On the

Stockholm, Sweden The United States and China have concluded two days of trade negotiations in Stockholm without reaching an agreement to extend the truce in their ongoing trade war. Shortly after the talks ended, US Treasury Secretary Scott Bessent, who led the American delegation, told reporters that any decision to extend the current 12 August deadline – at which point tariffs would revert to 34 per cent – rests solely with President Trump. A meeting between Trump and President Xi Jinping was not on the agenda. The Chinese delegation said both sides had agreed to ‘push’ for such an extension. Bessent, along with Trump’s trade adviser Jamieson Greer, told me

In proposing to sell the government’s £5 billion hoard of Bitcoin – accumulated from confiscating the proceeds of crime – Rachel Reeves has earned some keen supporters. But the Chancellor should resist the temptation. It wouldn’t be an error quite on the scale of Gordon Brown’s sale of half of Britain’s gold reserves in 1999 – that occurred right at the bottom of a bear market in gold, while Bitcoin in recent weeks has been trading at record highs. Nevertheless, Reeves would be missing out on the opportunity to build a Strategic Crypto Reserve which could turn out to be many times more valuable in the future. By backing cryptocurrencies rather than disposing

Britain is continuing to chuck billions onto our mounting pile of debt. Figures just released by the Office for National Statistics (ONS) show that last month the state had to borrow just under £21 billion. That was £6.6 billion more than in June last year and the second-highest June borrowing total since records began 32 years ago. The ONS confirmed the surge in borrowing was a continuation of the fiscal doom loop this country now finds itself in. ‘The rising costs of providing public services and a jump in the debt interest we have to pay on inflation-linked gilts outweighed increased revenue brought in from tax hikes. Interest due on our debt

This weekend, the Sunday Telegraph reported that Rachel Reeves is eyeing a ‘£5 billion bitcoin sale’ to ease the pressure on the public finances. Some commentators have grasped the wrong end of the stick here – these sales could not be used to fill a ‘black hole’ under the current fiscal rules. Others have argued that it would be foolish to dump cryptoassets that may still increase significantly in value. Unfavourable comparisons are inevitably being drawn with Gordon Brown’s sale of gold reserves starting in 1999. But that may be wide of the mark too. So, what to make of all this? Unlike true ‘safe havens’, the price of bitcoin tends to

Deep fried prawn balls, chicken chow mein, crispy shredded beef and a Ponzi scheme could be about to win the Chancellor a decent chunk of her headroom back. If Reeves does press ‘sell’, she will be accused of ‘pulling a Gordon Brown’ As Rachel Reeves starts sketching out her autumn Budget, most of the focus has been on the tax hikes she’ll need if she’s serious about sticking to the ‘ironclad’ fiscal rules she recommitted to just last week. Economists reckon the wafer-thin £9.9 billion margin she left herself at the Spring Statement has already been wiped out and that she’s now staring down a black hole of over £20

This week the British government introduced subsidies for electric vehicles (EVs). But as they have failed to first adopt sensible trade defence measures, this risks Chinese EVs flooding the UK, bringing job losses and data security risks in their wake. Rather than following the example of the US and the European Union, which have adopted tariffs against Chinese EVs to protect automotive jobs, the UK will roll out subsidies for EVs. Each vehicle that qualifies as having a low enough level of carbon emissions in its production will be granted a subsidy of either £1,500 or £3,750. Ministers have so far refused to publish a list of manufacturers who will be eligible,

Unemployment has hit 4.7 per cent – its highest level for four years after the Chancellor’s taxes on business caused jobs to slump. The figures, published this morning by the Office for National Statistics (ONS), also show payroll jobs down by 178,000 in the 12 months to June and by 41,000 between May and June. The line that Rachel Reeves’ decision – namely her £25 billion employer national insurance tax raid – is hampering the job market is becoming a strong one. Andrew Griffith, shadow business secretary, said: ‘Unemployment is the only thing growing under Labour.’ As Reeves weighs up tax rises likely to fall heavily on businesses to plug

When the history of the next election comes to be written, we may end up asking: was the turning point for its outcome the moment that Keir Starmer’s government backtracked on its welfare reforms in the face of a backbench revolt? The fiasco, which eliminated the government’s hopes of saving £5 billion a year, has made any welfare reform during the current Parliament impossible.   Britain has become the benefits office of the world The cost of that is becoming more evident by the day. Figures revealed this morning show that there are currently 3.6 million people receiving Universal Credit who are under no obligation whatsoever to look for work. They