Economy

The government’s net-zero noose draws tighter. At energy questions in the House of Commons on Tuesday, the Conservative MP Charlie Dewhirst asked the Energy Security and Net Zero Secretary Ed Miliband if the recent report by the National Energy System Operator (Neso) projected higher or lower bills under his policies. Miliband replied that Neso forecast lower overall costs. ‘It is completely logical to say that that will lead to a reduction in bills,’ he said. Logic and historic data point in the opposite direction. Between 2009 and 2020, the average price of electricity sold by the Big Six energy companies rose by 67 per cent from 10.71p per kilowatt hour

Interest rates have been held at 4.75 per cent. The Bank of England’s Monetary Policy Committee voted 6-3 to maintain the base rate, with the minority voting to further reduce rates by 0.25 percentage points. This is an unsurprising move from the Bank of England. Markets weren’t optimistic that another rate cut would follow so soon after last month’s 0.25 percentage point cut. But after this week’s labour market data – showing that wages are up – and inflation data – showing prices up, too – it was highly unlikely a cautious Bank was going to push ahead with another rate cut this month. Today’s minutes reflect these concerns. ‘Services consumer price inflation has remained

Good news for workers: wages are up. According to the latest data, released by the Office for National Statistics this morning, annual pay increased by 5.2 per cent in the three months leading up to October.  Despite inflation returning broadly to the Bank of England’s 2 per cent target, these above-inflation wage increases will be providing relief, still, for workers who are still coping with significantly higher prices as a hangover from the inflation crisis. But a positive story for employees is often more worrying news for Threadneedle Street, which insists that wage increases risk second-round inflationary effects. Today’s news has markets speculating that the Bank may slow its rate-cutting

Is the government going to create a recession out of thin air? This morning’s GDP figures from the Office of National Statistics are dire, showing that the economy contracted by 0.1 percent in October, following a similar fall in September. We are still a long way from a recession being officially called – that would only happen after two quarters of negative growth. Despite today’s figures, the economy still managed to grow by 0.1 per cent in the three months to October, so it wouldn’t be until next spring at the earliest that we could officially fall into recession. Nevertheless, it is remarkable how quickly that confidence has crumbled. A

There are, in fairness, plenty of reasons why the City might be reluctant to embrace the Chinese fast-fashion giant Shein. Its disposable fashion ravages the environment; it encourages rampant consumerism; it has admitted to finding child labour in its supply chain. Here’s the problem, however. The London stock market is in such a dire state that it can no longer afford to be picky – and if it turns this one down it will condemn itself to irrelevance.  According to reports today, the Financial Conduct Authority is taking longer than usual to approve Shein’s IPO in London, and it is looking into its supply chain after an advocacy group for

The economy would crash, the markets would be in open revolt, and he would swiftly be evicted from office by the IMF, and replaced by some ‘grown-ups’. When Argentina elected its chainsaw-wielding, libertarian President Javier Milei a year ago, the economic and political establishment confidently predicted he would only last a few weeks. And yet, not only has Milei managed to stay in power, all the evidence suggests that he is turning Argentina around. The real question now is this? Will a stagnant and moribund Europe pay attention? With inflation running at 25 per cent a month, with the largest IMF loan in history to pay back, and with the

How will the £40 billion additional tax revenue raised in the October Budget be spent? Efficiently, says the Chancellor this morning, who is setting out her plans for a war on waste. Rachel Reeves has informed government departments this morning that there will be a ‘line-by-line review’ of budgets leading up to the Spending Review next spring, while ministers are ‘expected to find savings and efficiencies… in a push to drive out waste in the public sector and ensure all funding is focused on the government’s priorities’ – specifically the priorities laid out in the Prime Minister’s ‘Plan for Change’ last week.  There isn’t more to give – not right

Another day, another flurry of bad news on the fallout from October’s Budget. The BDO Monthly Business Trends indices – which pull together the results of all the main UK business surveys – show that confidence has fallen to the lowest level in almost two years, with output and employment down, and only inflation up. Meanwhile, KPMG and REC have published their UK Report on Jobs, which reveals a sharp fall in permanent recruitment in November. It seems many firms are reassessing their ‘staffing needs’ amid reports of a growing number of redundancies. It is a reminder that Labour’s first Budget was certainly grim. But just as the new government

The very wicked French novelist Michel Houellebecq recently asked: “It should be strange for the British: they voted for Brexit to have no more immigrants and you have more?” Yes Michel, it is strange – and not just for Britain. Migration to the western world has reached record levels, despite popular blowback in nearly every country. Migration demonstrably lowered wages for native workers Even excluding refugees (from Ukraine and elsewhere), permanent migration to the OECD hit a new high in 2023. Over a third of OECD countries registered their highest levels ever, particularly the United Kingdom, but also Canada and France. The unlikely key to this story isn’t politicians but economists. There