Money

It should come as no surprise that Jeremy Hunt has signalled in a speech this morning that  he will try to make taxation a central theme of the coming election campaign. The tactic has certainly worked in the past. In 1992, fears that Neil Kinnock and his shadow chancellor John Smith would jack up taxes played a big role in a campaign from which John Major’s Conservatives – unexpectedly in many people’s eyes – emerged triumphantly. Five years later, Blair and Brown did not make the mistake of being cast as the high-tax alternative: they promised not to raise any income tax rate, or VAT. The Conservatives have a very

Are interest rates still heading ‘downwards’ as the Bank of England Governor Andrew Bailey said last week? Homeowners across the country will be hoping so as average two-year mortgages are again approaching 6 per cent. But the latest figures on the UK job market may dampen hopes of a cut coming soon. Britons have continued to receive above inflation pay rises. Figures just released by the Office for National Statistics show that – against expectations – pay growth in cash terms is at 5.7 per cent. Even when you factor in inflation, pay is still going up and has now hit 1.7 per cent – the highest in two years.

The Bank of England’s Monetary Policy Committee has voted to hold interest rates for the sixth time in a row. Members of the MPC voted 7 – 2 to maintain the base rate at 5.25 per cent – with two members voting to cut rates by 0.25 percentage points. This decision will come as no surprise to the markets, which had already factored in a rate hold. The Bank made clear in March that key indicators – including the state of the UK labour market and the risk of inflation rising again – would influence its decision, none of which dramatically changed in the last seven weeks. The Committee repeats from previous

It’s all but certain that the UK’s exit from recession will be confirmed at the end of this week. Preliminary Q1 data, released on Friday, is expected to how slow and steady growth in the first three months of the year. It is also very likely that inflation will return to the government target of 2 per cent this month, due to Ofgem’s changes to the energy price cap last month and higher energy costs falling out of the data. The return to target may not last – which is one of the reasons hopes for a spring rate cut have been dashed. But all this will help cushion what

For over 20 years, Britain effectively gave up on building new nuclear power stations. But that’s changed now Hinkley Point C in Somerset is under construction. When completed it will provide around 7 per cent of the UK’s electricity. Hinkley Point C is set to be the most expensive nuclear power station ever built. In fact, it is more than four times more expensive on a pound-for-megawatt basis than the average nuclear power plant built in South Korea. Even Flamanville 3, a French plant that uses the same reactor (EPR-1750) and built by the same company (EDF), is set to cost at least 25 per cent less. Why has Hinkley Point C

Javier Milei was taking too many risks. Argentina’s president didn’t have enough political support. And his radical version of free market economics didn’t offer any solutions anyway, especially in a world where the state is more crucial than ever. When Milei won the presidency last year there were plenty of predictions that he would fare as well as Britain’s Liz Truss. And yet, there are signs the medicine is starting to work – and that will be globally significant.   Over the past couple of weeks, the data coming out of Argentina has been far better than anyone expected. This month, inflation is forecast to dip below 10 per cent

How bad would it be if Royal Mail’s parent company, International Distributions Services (IDS), were to be taken over by the Czech billionaire Daniel Kretinsky? Our historic postal service is heavily lossmaking, struggling to maintain its universal delivery obligation and at war with its unions: a foreign owner would surely take an axe to it. Kretinsky, who owns almost 28 per cent of stockmarket-listed IDS, has gone back on an assurance that he would not try to take the company private and has tabled a £3.1 billion offer – above the group’s current market value but well below what other shareholders think it is worth. He won’t win with this

Rishi Sunak’s announcement that the government will increase defence spending to 2.5 per cent of GDP has been warmly welcomed, but how much is it really going to transform the UK’s military? Former armed services minister James Heappey was quick to scotch expectations this morning when he said it wouldn’t necessarily be enough to reverse falls in the size of the Army, Navy or Royal Air Force – the money could quite easily disappear simply in upgrading equipment. Nor is there anything particularly novel about the Prime Minister’s announcement: Boris Johnson made the same promise – to raise defence spending to 2.5 per cent of GDP by by 2030 – at the

Britain is putting its defence industry on a ‘war-footing’, the Prime Minister has said, as he vowed to boost spending to 2.5 per cent of GDP by 2030. It was only a matter of time that Rishi Sunak made such an announcement. After all, Russia’s invasion of Ukraine illustrated a simple truth: that the world is more dangerous now than for a generation, and nations will need to increase their defence spending if they want to protect themselves and their interests. Grant Shapps, Penny Mordaunt and Tom Tugendhat had all expounded this view from within government, and now it seems the PM has given his seal of approval. The money

Labour, according to Rachel Reeves, is now the party of low taxes. She has said she won’t raise income tax, National Insurance, capital gains tax and corporation tax, as well as ruling out a wealth tax. But that still leaves a few options for jacking up taxes, as one of Reeves’ advisers, Sir Edward Troup has hinted. Last week, Troup, a former head of HMRC, was appointed by Reeves to look at efforts to reduce tax avoidance. This is a slightly ill-timed initiative given that Labour is simultaneously trying to play down the case of a particular taxpayer who stands accused of failing to pay capital gains tax on a

Interest rate cuts are beginning to look like a mirage: the closer we seem to get to them the more they seem to recede into the distance. Bank of England governor Andrew Bailey may have hinted this week that UK rates could soon be cut regardless of what happens in the United States, where strong jobs data is putting off the Federal Reserve from cutting rates, but this morning’s inflation data will not encourage an early cut. While the Consumer Prices Index (CPI) did fall in March, from 3.4 per cent to 3.2 per cent, this was less than the fall which was expected. The rise in road fuel prices

Britain already has the worst post-pandemic workforce recovery in Europe. New figures out today show the problem is getting even worse. The number of those ‘economically inactive’ (not in work or looking for it) rose by a remarkable 150,000 in the last three months to 9.4 million – equivalent to the adult population of Portsmouth and some 850,000 since the first lockdown. Taken as a share of the working-age population, it’s now at an eight-year high – and significantly worse than it was during Covid or its aftermath. What’s driving the worklessness? The biggest single factor is long-term sickness, also at an all-time high. Is this just economic long-Covid, the

Given that a fair proportion of the UK public seem to want Martin Lewis to be prime minister, the government might well hesitate to dismiss the Money Saving Expert’s latest grumble: that Ofgem’s cap on standing charges is to be jacked up from today – from 53 pence to 60 pence per day in the case of electricity and from 29 pence to 31 pence in the case of gas. This rise comes in spite of the sharp fall in Ofgem’s energy price cap, which should see average annual dual fuel bills fall from £1928 to £1690. Lewis is not the least bit pleased, tweeting that standing charges are ‘an

Members of Labour’s frontbench have recently fallen over themselves to acclaim Margaret Thatcher. Hot on the heels of Rachel Reeves feting the Iron Lady’s determination to reverse Britain’s decline, David Lammy lauded the woman who defeated his party three times as a ‘visionary leader’. But like Mark Antony’s attitude to Julius Caesar, Reeves and Lammy come to bury Thatcher rather than to praise her. This appropriation of a Conservative icon like Thatcher is highly mischievous Labour’s shadow ministers invoke the ‘Iron Lady’ because they know a certain kind of voter, one Labour needs to help it win power, still goes all of a quiver at the mere mention of her