Economy

Japan’s Nikkei 225 index registered its biggest ever daily fall on Monday, plummeting by over 12 per cent and continuing the extraordinary collapse that began last Friday. Meanwhile, the Yen, which had been slowly eroding in value for months continued its dramatic resurrection moving from 162 to the dollar to under 140. At the time of writing, a technical rebound seems to be underway – but such volatility is alarming. After years of nothing very interesting happening to the Japanese economy, such upheavals have stunned locals and provoked urgent questions about causes and consequences. As to what has caused this, most are pointing to the Bank of Japan’s surprise interest

For a while it looked as if Keir Starmer and Rachel Reeves were going to be lucky: they had walked into an economic recovery. The anaemic growth and market turmoil of the past few years – which Labour liked to blame entirely on ‘Tory chaos’ and absolutely nothing to do with the pandemic or energy crisis which followed the invasion of Ukraine – were going to be replaced by a period of stability and prosperity. Some governments are fortunate in their timing: Tony Blair walked into a decade of non-inflationary growth thanks to globalisation and the emergence of China as a major economy. But Starmer, it now looks, will not

Today’s stock market plunge is interesting for two main reasons. First, for those of us who have never traded on the Japanese stock exchange, comes the revelation that the colours used to denote changes in stock prices are the inverse of those used on western markets: red means a share has gone up, green means it has gone down. The same, apparently, is true in China. Fortunately, for the sake of foreign drivers neither country inverts the colour of its traffic lights, although ‘go’ in Japan is denoted by something closer to blue than green… Second, UK markets seem to have been dragged down in sympathy with others even though

As Kate Andrews argues here, the Bank of England were never going to cut interest rates during an election campaign for fear of being accused of favouring one side or the other. That ruled out a rate cut in June, while in July there was no meeting of the Monetary Policy Committee. But are those five members who voted for a quarter-point cut today really confident that they have not opened themselves to charges of bias, by cutting rates at the earliest opportunity after the election of a Labour government? For months, the MPC was telling us that it was too early for a rate cut – in spite of rapidly falling inflation

Angela Rayner has announced that the government will aim to build 370,000 new homes, up from the 300,000 a year implied in the party’s manifesto. But if the deputy prime minister really thinks that all she needs to do to achieve that target is to take on Nimbys – as Rayner and chancellor Rachel Reeves have suggested in recent weeks – she needs to take a trip to a slice of the ‘grey belt’ in Essex. There, a 206 acre farm at Harold’s Farm near Epping is to be turned over to rewilding. Why is the cost of encouraging rewilding being lumped on new housing? Some locals have announced themselves

The news that McDonald’s sales have fallen by 1 per cent around the world between April and June might not seem, on the face of it, to be vastly significant. After all, surely there will always be a market for cheap and cheerful hamburgers, chicken nuggets and chips that even Michelin-starred chefs rave about? Apparently not. Ever since the pandemic, when there was a considerable rise in prices, the lustre has gone off the golden arches, and profits have declined by 12 per cent. There have been calls for ‘value added’ innovations, such as the current ‘buy three items for £3’ deal, but, as one McDonald’s executive helpfully put it,

There is one over-arching question hanging over Rachel Reeves’s speech today, in which she claimed that a £21.9 billion hole has opened up in the current political spending for this financial year: why, if there is such a large ‘black hole’ in the public finances, is there suddenly money available for £9.4 billion worth of above-inflation pay rises for public sector workers? Preposterously, those pay rises – which Reeves has chosen to make and which were not committed to by the previous government – are included as one of the unfunded spending items (indeed the single biggest spending item) which has contributed to the ‘black hole’. Reeves justifies this leap of

How much can Rachel Reeves be trusted? A Chancellor’s credibility counts for a lot with the markets, who are asked to lend HM Government tens of billions a year. Reeves claims to be serious, straight and candid in a way her Tory predecessors were not. But now she seems to be channeling Liz Truss and coming up with her own assessment of the public finances while dispensing with the service of the Office for Budget Responsibility (OBR). She intends to declare a £20 billion hole, we’re told, and say she is shocked – shocked! – at what a mess the finances are in. Cue an excuse for tax rises, more

It doesn’t buy anything anymore. It is not enough to put into a charity box, and it just takes up space in your pocket or a purse. On one level, it will save us all a lot of trouble when one penny and two penny coins finally become extinct. The Treasury has told the Royal Mint not to make any new ones this year; and although there are plenty behind a sofa somewhere, this means they could eventually vanish completely. We will miss them when they are gone.  Rachel Reeves, the new chancellor, is keener on increasing government budgets than reducing them. One cut that may well be made, however,