Money

A curious attack from Labour in the Commons this afternoon: shadow work and pensions secretary Liz Kendall used her slot at the regular departmental questions to ask how a policy that the government doesn’t yet have would work. She referred to the statements made by the Chancellor and the Prime Minister about their ambition over the long term to scrap National Insurance as a ‘double taxation’, pointing out: Labour obviously thinks that talk of abolishing national insurance is a way into the pensioner vote ‘Your NICs record helps determine your entitlement to the state pension. So if that’s scrapped, how will people know what pension they will get?’  Work and

It’s official: weight-loss wonder drug Wegovy (also marketed as Ozempic) makes US celebrities shrink but makes the Danish economy grow. This week, the most amusing Oscars clickbait featured not the typical best- and worst-dressed actors, but instead celebrities who have experienced recent miraculous weight loss. The Daily Mail helpfully split this award category between those confirmed to have taken Wegovy, and others who have merely inexplicably and rapidly shrunk. Their collective weight loss is Denmark’s economic gain: this week, Denmark’s statistics agency confirmed the Danish economy grew 1.8 per cent in 2023 – but without the contribution of Wegovy’s owner, Novo Nordisk, it would instead have shrunk 0.1 per cent. Free market

Is the UK already out of recession? It’s a question that won’t be confirmed for months, but this morning’s update from the Office for National Statistics offers a positive hint that Britain’s economic contraction will be confined to 2023. According to the ONS, the economy grew by 0.2 per cent in January – thanks largely to improved services output, which rose by 0.2 per cent, and a bounceback in wholesale and retail trade. Construction output also turned a corner, growing by 1.1 per cent after three consecutive months of contractions. Is this the spectacular economic turnaround that Britain has been waiting for? GDP still fell 0.1 per cent in the

Inflation and the cost-of-living crisis dominates the agenda in Turkey, ahead of local elections at the end of March. Year-on-year inflation reached 67 per cent in February, according to the Turkish Statistical Institute, breaking a 15-month record and puncturing hopes that high interest rates would put a lid on rapidly increasing prices. For years, president Recep Tayyip Erdogan was a bitter opponent of high interest rates. ‘Interest rates are the reasons, inflation is the result,’ he roared regularly at political rallies, defying traditional economists. He cites Islamic traditions whereby high interest rates amount to usury, to justify his unorthodox monetary policies. Erdogan was a bitter opponent of high interest rates

Whilst Jeremy Hunt’s cut to National Insurance may grab the headlines, the real story of today’s Budget was hidden in the official forecasts accompanying it. These forecasts point to a disaster for Britain’s labour force. The UK already had one of the worst post-lockdown workforce recoveries in the world, with a record 2.8 million people off work due to long-term sickness. But today the OBR said things are only going to get worse. Spending on welfare now makes up the second biggest portion of your tax bill –  narrowly pipped to the post by our NHS The OBR gave the Chancellor credit for expanding childcare provision, attempting to reform welfare

Slashing Whitehall waste is a pledge that brings to mind Augustine’s prayer for the Lord to make him virtuous – but not yet. It is something repeatedly promised by governments, but rarely delivered. Here we are again, days out from the final Budget before voters go to the polls in a general election, and Jeremy Hunt is announcing a crackdown on bureaucracy in the public sector. He intends to reduce the civil service headcount by 66,000, returning it to pre-pandemic levels. Do we need a Department for Culture, Media and Sport? Voters are likely to feel cynical. Britain’s public sector is riddled with entitlement and waste at levels described by the Chancellor as

Here’s a good wheeze: prod every last inch of your own country, open the taps and become the world’s largest producer of fossil fuels. Then, when other countries start to try to develop their own resources, tell them they mustn’t, for the good of the planet. In other words, make them all dependent on you. That is pretty well what John Kerry, the outgoing US special envoy on climate change, suggested on the BBC’s Today programme this morning.  The US is shamelessly using climate change to promote its own industries ‘We do need gas to keep our economies moving but we don’t need to open a whole raft of new

We’re not cutting interest rates because we think the recession may already be over and we’re not even sure we are in recession anyway. That was the gist of Governor of the Bank of England’s evidence to the House of Commons Treasury Select Committee this morning. Bailey fell back on the traditional excuse of CEOs who get it wrong and send their businesses into a downwards spiral: the weather Andrew Bailey reminded the committee of what happened ten years ago when Britain seemed to be on the verge of a triple dip recession. In the end, revisions of the GDP figures revealed that we had never even entered a double

The government had been facing two economic challenges this week, ahead of the by-elections in Kingswood and Wellingborough: the publication of the latest inflation figures and the economic growth figures for the last quarter of 2023. It has just about survived the first challenge. This morning’s update from the Office for National Statistics shows the inflation rate sticking at 4 per cent on the year in January, unchanged from December. This is still double the Bank of England’s inflation target, but it is better than expected news, as economists were predicting an uptick to 4.2 per cent. A combination of factors – including the January sales for home goods and furniture and

Britain’s worklessness crisis is getting worse. This morning the ONS released figures showing that 1.3 million are on unemployment. But that figure masks a welfare crisis that politicians are doing little to address. Unemployment only covers those actually looking for a job – the real problem is how few are. The true benefits figure goes unpublished and is buried in a password protected DWP database. Every three months the database is updated and we track the results on The Spectator data hub. It was updated this morning and shows the number claiming out-of-work benefits has hit some 5.6 million people. The increase is being driven by those in the Universal Credit (workless) category

What will Labour’s flagship promise be going into the next election? There’s a policy vacancy, now that the party plans to ditch its pledge to spend £28 billion a year on green investment.  This is not your average U-turn. This has been Labour’s big offering for more than two years. Yet today, Keir Starmer will ditch the headline figure for good – though his party still plans to usher in other parts of their proposed ‘Green Prosperity Plan’.  By abandoning the £28 billion promise, Stamer is putting to rest what had become a contentious topic within his own party. The spending promise – which shadow chancellor Rachel Reeves first committed to

Who cares about economic forecasts, which have proven to be about as useful as sticking a pin in a chart, blindfolded? But given their prominence when they foresee the UK economy performing less well than the EU, it provides a little balance to note when it is the other way around. A little over a year ago the OECD, like the IMF, was pessimistic about the UK economy, predicting that it would shrink by 0.4 per cent in 2023, and just about creep back into growth in 2024. ‘UK faces worst downturn of any advanced economy, OECD says’ was how the BBC reported it. The only bright spot was that,

I was on BBC1’s Question Time with Kate Forbes in Glasgow last week in which she was oddly loyal to the SNP government. She seems to have been the only member of Nicola Sturgeon’s government not to be deleting her WhatsApp during Covid and I suspect she’s appalled at the way Sturgeon & co placed secrecy at the heart of their Covid response. She said on Question Time that the way to grow Scotland’s economy was to attract people to come and work there. I put to her that having the highest tax rates in the UK (as Humza Yousaf has chosen to do) didn’t exactly scream “come to Scotland!”.