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Matthew Lynn

Raising taxes would be a relief for Rachel Reeves

The Chancellor Rachel Reeves was in far better form when she appeared again in public alongside the Prime Minister Sir Keir Starmer yesterday. The tears have been wiped away and she has a smile, even if a slightly forced one, back on her face. The reason is not hard to work out. She has started preparing the ground for another round of big tax rises in the autumn. And that is the one thing she is good at. Reeves is back in her comfort zone.  In the wake of the backbench rebellion that forced the government to abandon its welfare reforms, and with the U-turn on the winter fuel allowance,

Spotlight

Featured economics news and data.

Ross Clark Ross Clark

No, Ed Miliband: zonal pricing won’t cut energy bills

Is Ed Miliband going to announce a move towards a zonal electricity market, where wholesale prices would vary between regions of Britain? It would appear to be on cards following the Energy and Climate Secretary’s interview on the Today programme in which he said he was considering the idea. Miliband’s apparent support for the plan follows intense lobbying by Greg Jackson, CEO of Octopus Energy as well as support from the National Energy System Operator (NESO), the new government-owned company which oversees the grid. However, zonal pricing is bitterly opposed by others in the energy industry, including Chris O’Shea, the generously-moustached CEO of Centrica, and Dale Vince, CEO of Electrocity

Tuesday

Michael Simmons Michael Simmons

Britain is not in charge of its energy

As much of Westminster gets up in arms about fish, the major change in Starmer’s EU deal is going under the radar. The deal, announced yesterday, commits Britain and the EU to exploring Britain’s participation in Europe’s energy market. If we go forward with this, it effectively gives up our energy policy to Brussels. It’s a stark giveaway given that on the same morning the Office for National Statistics (ONS) published an analysis on ‘The impact of higher energy costs on UK businesses’. That impact is quite remarkable. Output from energy intensive industries has fallen rapidly since the beginning of 2021 when energy prices began to skyrocket. Paper manufacturing down

Monday

Ross Clark Ross Clark

Under Labour, Britain is living beyond its means

The bleak future of the UK’s public finances can be summed up in a few statistics. For the financial year just ended, the Office for National Statistics’ provisional estimate for the government’s deficit – the gap between income and expenditure – is £151.9 billion. The Office for Budget Responsibility’s estimate is that spending on welfare (including the state pension) will rise from £313 billion in 2024/25 to £377 billion in 2029/30 in today’s money – an increase of £64 billion. The government, meanwhile, has proposed changes to the welfare system, reducing Personal Independence Payments (PIPs) which it hopes will save £4.8 billion a year. The electoral winners will be the

Sunday

Matthew Greenwood

Why Reeves should be wary of changing cash ISAs

Shrewd parents extol upon their children the importance of stashing away some cash. Unfortunately, they rarely offer much guidance on what to actually do with that money. As a result, much of it gets squirrelled away in pink, ceramic pigs where inflation eats it up. Many adults make the same mistake as these young savers. The more savvy ones opt to invest, perhaps in an Individual Savings Account (or ISAs), which are tax free savings accounts that let you save up to £20,000 every year, usually in the form of cash or stocks and shares. But it’s widely reported that the Treasury is considering a radical shake up of the

Thursday

Michael Gove

Mixed signals for Labour as GDP rises but the rich leave

13 min listen

The Prime Minister is in Albania today to focus on immigration: the government has announced that the UK is in talks to set up ‘return hubs’ with other countries to send failed asylum seekers abroad.  Unfortunately for the government though, also going abroad are Britain’s millionaires. In the cover article for this week’s Spectator, our economics editor Michael Simmons writes that London lost 11,300 dollar millionaires last year alone. These figures run in stark contrast to today’s news that GDP increased by 0.7% in the first quarter of 2025. This continues a trend of mixed signals for Britain’s economy.  Also on the podcast Spectator editor Michael Gove discusses his interview with justice secretary

Lara Prendergast Lara Prendergast

Britain’s billionaire exodus, Michael Gove interviews Shabana Mahmood & Hampstead’s ‘terf war’

42 min listen

The great escape: why the rich are fleeing Britain Keir Starmer worries about who is coming into Britain but, our economics editor Michael Simmons writes in the magazine this week, he should have ‘sleepless nights’ thinking about those leaving. Since 2016, nearly 30,000 millionaires have left – ‘an outflow unmatched in the developed world’.  Tax changes have made Britain a ‘hostile environment’ for the wealthy, yet we are ‘dangerously dependent’ on our highest earners: the top 0.01 per cent pay 6 per cent of all income tax. If the exodus is ‘half as bad’ as those he has spoken to think, Simmons warns, a 2p hike to income tax looms. 

Michael Simmons Michael Simmons

Is Britain’s strong growth really because of Rachel Reeves?

The UK economy grew faster than expected in the first three months of the year. According to figures just released by the Office for National Statistics, GDP rose by 0.7 per cent in the first quarter – ahead of economists’ forecasts. If this pace were maintained across the rest of the year, Britain would far outperform its G7 peers Growth was broad-based: the services sector expanded by 0.7 per cent, while production surged by 1.1 per cent – a notable bounce after a period of decline. Even on a per capita basis, GDP rose by 0.5 per cent after falling for two consecutive quarters. So, is this a vindication of

Martin Vander Weyer Martin Vander Weyer

Beef farmers have been stitched up

An awkward delay in the unveiling of the Mansion House Accord was, we’re told, nothing more than a Downing Street ‘timetabling issue’. It was perhaps a tenterhooks issue too, as Donald Trump’s Sharpie hovered over the UK-US trade deal which was clearly going to make bigger headlines. But the Accord also had to contend with City discord around the issue of ‘mandation’ of pension funds to invest in unlisted equity that might contribute to future UK growth. In July 2023, 11 institutions inked the first Mansion House ‘compact’, committing 5 per cent of ‘defined contribution’ pension monies to private equity by the end of the decade. Now 17 industry leaders

Wednesday

Simon French

What’s the Treasury’s real view on immigration?

This week has seen much talk – again – of the ‘Treasury View’, and how that rarely defined set of values might be influencing this government’s approach to migration. First, let’s kill off some conspiracy theories that exist about the Treasury View. In general terms the Treasury View stands for cautious conservatism (with a small C) surrounding the payback from public spending, a belief in free trade, and in free markets. The Treasury View also extols the virtue of a steady currency, low and stable inflation, and soundly managed public finances. Former Treasury Permanent Secretary, Lord Nick Macpherson, in a speech in 2014, placed these amongst ten propositions for what

Matthew Lynn

The City backlash against Reform has begun

It will be like Liz Truss on roller skates. The next election may still be four years away, and the manifestos still need to be fleshed out. Even so, the City has already started issuing stark warnings of a run on the pound if there is a Reform government led by Nigel Farage as Prime Minister. Of course, it is a measure of how far the party has come that the City is taking it seriously. The trouble is, there is also an element of truth in it. Reform would face a huge backlash in the markets – and the party will have to be ready for it.  The financial

Ross Clark Ross Clark

Is it any surprise junior doctors want more money?

If the government was deliberately trying to encourage union militancy, it could not be making a better job of it. It is reported that junior doctors – or ‘resident doctors’ as we are now supposed to call them for fear of implying that they might be less qualified than consultants who have been doing their jobs for 40 years – could be in line for a pay rise of five per cent this year. This would be on top of the 22 per cent they were awarded last year. Meanwhile, nurses, who had a pay rise of 5.5 per cent last year, appear to be on course for a rise of no

Tuesday

Alexander Kolyandr

Trump’s trade war is driving Russia further into China’s arms

Trade between Russia and China is no longer booming as it was immediately after Moscow’s full-scale invasion of Ukraine three years ago. In 2024, annual trade between the two was up 1.9 per cent from the previous year to $240 billion (£182 billion). But in the first four months of 2025, it fell 7.5 per cent from the past year to just $71.1 billion (£54 billion), according to Chinese customs data. Chinese exports to Russia are down 5.3 per cent ($30.8 billion or £23 billion), while Russian deliveries to China are down 9.1 per cent ($40.3 billion or £30.5 billion) between January and April.  The drop in Russian exports can

Matthew Lynn

When will the EU do a deal with Trump?

China has wrapped up a pretty good trade deal. The UK has managed to agree to lift some of the US tariffs. With President Trump touring the Gulf states this week, they may soon have an arrangement in place, especially as Qatar took the precaution of gifting the president a new 747. Japan may well have something signed over the next few weeks. There is just one exception. Where is the EU’s deal? President Trump has described the EU as ‘nastier than China’ Despite the panic last month, it looks like the global trading system will soon be back to relative normal. The US and China, the two largest economies

Michael Simmons Michael Simmons

Reeves’s jobs tax is beginning to bite

Figures just released by the Office for National Statistics (ONS) show the UK unemployment rate has risen to 4.5 per cent, the number of people on company payrolls has dropped by 63,000 over the past year, and there are 131,000 fewer job vacancies than at this time last year. Today’s employment data covers the period up to March – before the rise in the minimum wage and the Chancellor’s £25 billion national insurance hike took effect. The fact that the labour market was already faltering beforehand shows how deeply businesses were bracing for impact. It’s now the third consecutive month in which firms have shed jobs, and April’s data could

Monday

Hamish McRae

Donald Trump can be sensible

We’ve learnt three things about the future of world trade from the temporary reprieve over tariffs that the US has given China – and China’s response to it.  One is the markets are now confident that both countries will be sensible. The massively negative reaction they gave to ‘liberation day’ on 2 April signalled their hatred of uncertainty but also of stupidity. Before Donald Trump’s arbitrary jacking up of tariffs to what were really absurd levels, they had assumed that he would ensure that there would be reasonable continuity of world trade. His plans, and China’s robust reaction, led to nagging doubts that their assumption might be wrong, there really

Simon Hunt

Starmer mustn’t let Trump kill the Digital Services Tax

Donald Trump has his eyes on Britain’s Digital Services Tax (DST). The tariff-touting US President insists that the tech firm tax must be scrapped if the UK is to have the ‘deep’ trade deal on technology it desires. So far the government has demurred, but, with Keir Starmer disclosing last week that there are ‘ongoing discussions’ about the tax, it may yet capitulate. I think it would be foolish to do so. Trump thinks the tax is a punitive one aimed directly at the US. It’s true that big US tech firms are the largest payers. But as the shock emergence of Chinese firm DeepSeek proved earlier this year, there’s

Sunday

Michael Simmons Michael Simmons

US and China slash tariffs

The White House has announced a breakthrough in trade negotiations with China following two days of talks in Switzerland. Yesterday, Treasury Secretary Scott Bessent said the two sides had made ‘substantial progress’. This morning, he said that the US would lower tariffs on China to 25 per cent from 145 per cent for 90 days, and that China would lower tariffs on the US to 10 per cent from 125 per cent for 90 days. Trump’s trade chief Jamieson Greer (who gave his first European interview to Unherd last week) said yesterday it had been a ‘very constructive two days’. He added: ‘It’s important to understand how quickly we were able to

Friday

Amy Tinley

Six things to watch out for in Starmer’s US deal

The world of trade is usually reserved for the wonkiest of policy wonks. But after Donald Trump’s ‘Liberation Day’ a month ago, this week the UK announced trade deals with India and the US. Against a woeful economic backdrop, this is a serious boon to the Prime Minister. Becoming the first country in the world to agree a deal with the US President is an achievement not to be shirked at. A UK-US deal could chart a path for other agreements with other countries. Starmer claimed this deal is the national interest. But is it really? But is this deal as good as Number 10 is claiming? As a former

Thursday

Matthew Lynn

Is Starmer’s Trump trade deal the win he thinks it is?

Keir Starmer says it is a ‘fantastic, historic’ day after signing a trade deal with the United States, but is the agreement really something to celebrate? Ten per cent tariffs, announced last month, still apply to most UK goods entering the US The government is no doubt cock-a-hoop to be the first country to get a trade deal with President Donald Trump over the line, and there are a few wins: tariffs will come down for cars, steel, and potentially for pharmaceuticals, exempting UK exporters from the worst of the tariffs imposed on the oddly-named ‘Liberation Day’. But while, despite the dire warnings of some, we won’t be seeing chlorinated

Michael Simmons Michael Simmons

Why Britain is cutting interest rates – and the US isn’t

Interest rates have been cut to 4.25 per cent. The Bank of England’s Monetary Policy Committee (MPC) voted by five to four for what will be the fourth rate reduction since August. The decision breaks with the direction of the US Federal Reserve, which held rates yesterday after refusing to bow to pressure from President Donald Trump who wants to see rates cut. Jerome Powell, the Fed’s chairman, said America’s economy was ‘highly uncertain’ making it difficult to push ahead with a rate reduction. The government will hope that a trade deal will free Britain from the worst effects of the tariff war Back home, analysts are now anticipating the

Michael Simmons Michael Simmons

What would a US trade deal mean for the UK?

Later today, Donald Trump is reportedly set to unveil a trade deal with the UK. He’ll make the announcement alongside ‘a big and highly respected country’ which is said to be Britain. If the reports are true then it would make the UK the first country to secure a deal since Trump’s tariff turmoil began.  The announcement will come at 3 p.m. UK time and could be worth billions in what would be an unarguable win for Rachel Reeves and Keir Starmer.  Britain has already been somewhat shielded from the president’s wrath (and tariffs) because our trade in goods with the Americans is pretty much balanced (roughly £59 billion each way).