Economy

He wasn’t able to announce the £300 off household energy bills that was promised during the election campaign. Nor could he unveil any massive new solar farms or wind turbines. Still, the Energy and Climate Change Secretary Ed Miliband did have one message to cheer the party faithful in his conference speech today: he is going to ban shale oil and gas for all time. ‘Let’s ban fracking and send the frackers packing,’ he thundered. But can Miliband really do that and outlaw fracking forever? Only a fool would pretend that he can. Right now, there is a moratorium on extracting shale oil and gas in the UK, which could,

Discussion of Donald Trump’s peace proposal for Gaza revolves around one question: who is for it and who is against it? Israel is for it, though mostly because it is backed into a corner and has no choice. The Arab states are for it, which is to be expected since they wrote it. The European Union is for it, which is to be expected since the Arabs are for it. Palestinian Islamic Jihad and the Houthis are against it, and Hamas is expected to be too. I don’t know what the UK government has said and, in concert with the rest of the world, I don’t really care. This is

Security, security, security was the message from Chancellor Rachel Reeves as she addressed the Labour party today in Liverpool. A Labour government, she said, would stand for a British economy first. An economy that would put the British worker above all else. That, Reeves proclaimed, was the key difference between a Labour government and a Tory one. In fact, the line ‘don’t let anyone tell you there is no difference between a Labour government and a Conservative government’ was delivered so many times that by the fifth or sixth iteration it received only limp applause. The Conservatives were the main target of Reeves’s speech; they mismanaged the economy and allowed

Donald Trump’s political and legal assault on the Federal Reserve has provoked concern and indignation from the defenders of central banks’ operational independence. Amid the sound and fury, some simple points are being forgotten. Whether or not this distracts central bankers from their main goal of controlling inflation is a matter of debate First, public trust and confidence in central banks is critical if banks are to be operationally independent. That trust was shaken when many central banks lost control of inflation in 2021, erroneously seeing it as ‘transitory’. In the inquest that followed, many central bankers blamed this mistake squarely on their forecasting models. Clearly models had much to answer

Despite having a £30 billion fiscal hole to fill Rachel Reeves might be about to splash the cash. If reports are to be believed, in the coming weeks the lifting of the two-child benefit cap will be announced. The cost is £3bn every year.  The cap was introduced under George Osborne to stop families claiming the child element of UC for three or more children. A committee of ministers and officials are due to make a series of recommendations to tackle child poverty before the November Budget, and it’s now widely expected that this will include scrapping the cap.  But will lifting it do anything to improve child poverty? There

It will at least give the cabbies something to genuinely complain about. Amid all the wheezes that Chancellor Rachel Reeves is plotting to fix the ‘black hole’ in the public finances, she is now considering a ‘taxi tax’. Ahead of November’s Budget, it has been floated that VAT may well be applied on all cab rides. But this plan is likely to end up backfiring badly on Reeves – and the government more broadly.  According to reports this week, the Chancellor is likely to impose a blanket 20 per cent rate of VAT on all taxi rides. Right now, taxi firms outside of London do not have to charge VAT

There really is no good news for Rachel Reeves as she prepares her second Budget. This morning’s borrowing figures are not just bad; they hint at a sense of hopelessness, that Britain is sliding inexorably towards a very deep fiscal crisis. This is yet another fiscal black hole for Reeves to fill, along with another about to be created by the OBR In August, the government had to borrow £18 billion, £3.5 billion more than in August 2024. This is in spite of £40 billion worth of tax rises (or rather tax rises which were hoped to raise an extra £40 billion) in last year’s Budget. Government receipts are indeed up

The Bank of England has held interest rates at 4 per cent. Threadneedle Street’s Monetary Policy Committee (MPC) voted seven to two to keep rates where they are. The fact inflation now sits at almost double the Bank’s 2 per cent target outweighed concerns about the slackening jobs market and what its impact on Britain’s lacklustre growth. Two members voted to cut rates to 3.75 per cent, but the overall decision is no surprise. There’s a growing sense that the bulk of committee members feel they perhaps made a mistake in cutting rates last month with inflation still climbing. Markets don’t expect another cut this side of Christmas and the