Economy

The UK still looks set to get another interest rate cut (or two) by the end of the year, but is that now the main indicator of a healthy labour market? This morning’s update from the Office for National Statistics shows average wage growth slowed to 4 per cent in the three months leading up to July. Wage growth is still outpacing inflation, but it is moving in the right direction – for the Bank of England anyway, which is watching closely to see if its first rate cut is going to have any major impact on wages, risking a secondary round of inflation spikes. Adjusting for inflation, overall wages

You won’t find me mounting the barricades in defence of the winter fuel payment, though I’ll miss the pleasant surprise when it landed in my bank account sometime before Christmas. I do, though, have a bit of a bone to pick with those well-heeled and often still lucratively-employed pensioners who dusted off their metaphorical loud-hailers (in the form of letters to newspapers and social media posts) every autumn to protest that they didn’t need it, that it was a waste of taxpayers’ money, and that they a) gave it to charity, b) spent it on Christmas presents or c) ordered another case of good wine.  Ending the single occupier discount

The leaders of the European Union can give themselves a pat on the back. They have, on the face of it, delivered on a promise made following Vladimir Putin’s invasion of Ukraine to end the export of European goods, machinery and parts critical to Russia’s war effort. Yet things are not quite as straightforward as they seem. Exports from the bloc to Russia in June plummeted to a mere €2.4 billion (£2 billion) – a third of the €7.5 billion (£6.3 billion) shipped during the last peacetime June of 2021 before the war, according to data from the EU’s statistical body Eurostat. The figure for June this year is the lowest

Labour may not have been forthcoming about most of their tax and spend plans during the election. But on one topic the party was crystal clear: a Labour government would beef up the nanny state. Politicians weren’t shy about this. It was Wes Streeting’s idea to adopt New Zealand’s (now abandoned) plans for a generational smoking ban, picked up months later by Rishi Sunak. Keir Starmer kicked off the year embracing the nanny state, saying he was ‘up for that fight’.  It’s no surprise then that health campaigners and groups are flocking towards new government aides to discuss what can be taxed or banned next. According to reports today, an extension of

Housing Secretary Angela Rayner is said to be planning on watering down the right-to-buy scheme which enables council tenants to purchase their homes from local authorities at a significantly reduced price. The policy, famously introduced by Margaret Thatcher in 1980, has helped many thousands of families become home-owners, giving them greater security and a stake in their local communities. But councils are keen to cut the cost of Thatcher’s flagship policy. As a result, Rayner – who once blasted her opponents as Tory ‘scum’ – is considering axing the scheme for newly built council houses and cutting the discount offered to existing tenants. While Downing Street has insisted the policy won’t

The commute is often unreliable, expensive and crowded. It is easy enough to understand why so many of London’s 5 million strong workforce are so reluctant to go back to the office. There is a catch, however. Working from home is costing the British economy a huge amount of lost output. In reality, the UK can’t afford for Londoners to carry on WFH for much longer.  According to a study just published by the Centre for Cities, London is one of the slowest major cities in the world to go back to the office full-time. Of the six cities it studied, London had the second lowest attendance rate, with full-time

Almost everyone is aware of the concept of peak hours pricing. If you buy a train ticket to travel during rush hour it costs more than at other times. Few people object to this. Indeed, most of us think it helps. It means that people who don’t need to travel in that period will pick another time instead, so there’s space on the train for the people that do need to travel then. Peak hours pricing is just one very simple example of what economists call ‘dynamic pricing’ or ‘surge pricing’ – a system in which the prices paid vary according to how much demand there is. Dynamic pricing has

It is not that long ago that the new Prime Minister Sir Keir Starmer announced that his would be the government of ‘growth, growth, growth’. What has he done in that time to try to realise that ambition? It is hard to think of a single measure that will genuinely do anything to improve the fortunes of wealth-creating businesses – other than promised planning reforms which seem destined to fail as they are based on the faulty premise that it is only Nimbys who hold up house-building and other development, and not reams of environmental regulations which Labour has shown no interest in reforming. We have a government which poses

Employees will have the right to ask their employers to compress their hours into four days a week rather than five, but employers will not be forced to agree. Just what is the point of the government’s latest employment reform, as proposed by Baroness Smith of Malvern, the minister for skills? Surely employees already have the right to ask for a four-day week, and always have had. There is no law I know that prohibits an employee knocking on their boss’ door and asking for a four-day week, a day off to go to the races, to bring their pet gerbil into the office or, indeed, anything else. We have

Keir Starmer’s government appears to have softened its stance on oil and gas. Back in June 2023, the Labour leader told an audience in Edinburgh that there would be no new licences for oil and gas exploration in the North Sea. Instead, a Labour government would pursue green energy all the way, slashing our bills (it promised) and taking us ever faster to the nirvana of net zero. But how the responsibilities of government come to bear. A release from the Department for Energy Security and Net Zero (DESNZ) this morning indicates some notable shuffling of ground.  Far from cheering a recent Supreme Court ruling which quashed planning permission for a small oil

It must be the worst kept secret in the country. At almost every opportunity, the Prime Minister Sir Keir Starmer, and his Chancellor Rachel Reeves, keep telling us that the Budget in October will have to be ‘very painful’, that ‘taxes will have to rise’ and that the ‘broadest shoulders will have to bear the heaviest burden’. It now seems inevitable that there will be a big rise in capital gains tax. The trouble is, there is a catch. Almost everyone will have avoided it by then – and all Labour is doing is exposing its hopeless ignorance of how the economy actually works. Neither Starmer nor Reeves have worked