Money

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 The true benefits figure goes unpublished and is buried in a password protected DWP database.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!”.

What a shame we are not still in the single market, seamlessly exporting our lamb and whisky so it can be enjoyed in the finest restaurants in Paris. Or rather so that it can be burned and poured over the A1 autoroute. French farmers have blockaded roads with tractors and haystacks, set lorries on fire and are now threatening to re-enact the Siege of Paris by cutting off food supplies to the capital. They are protesting against red tape, environmental policies and what they say are cheap imports. And no, it isn’t just UK farmers whom they don’t like exporting food to Britain. Over the past week, they have attacked lorries

As an English teacher and sixth form tutor, I spend a lot of my time at the moment celebrating and comforting students as they hear about their UCAS offers. I try to reassure them when they are disappointed – which many of them were last week in particular, when Cambridge offers came out – that the system is flawed and far from always fair. Many of them this weekend will have realised just how unfair it can be, as a Sunday Times investigation revealed that British universities are paying tens of millions of pounds a year to recruit lucrative overseas students with far lower grades than those required of UK applicants. Up

Should we be bothered that Hinckley C nuclear power station has run even further over budget (the latest estimate is £35 billion, nearly twice that quoted when the project was given the go-ahead in 2016) and that its completion date has been put back yet further, to 2031? After all, the whole point of offering French energy giant EDF a guaranteed ‘strike price’ at the then juicy rate of £92.50 per megawatt-hour (at 2013 prices, rising with inflation) was supposed to be to transfer financial risk to EDF and its financial backers. ‘It is important to say that British consumers won’t pay a penny, with the increased costs met entirely

Are Jeremy Hunt and Rishi Sunak asking the right question as they approach the spring Budget? For the Chancellor and Prime Minister, the key issue is ‘how can we cut taxes in a way that will get us credit with voters?’ But polling by YouGov for today’s Times suggests voters might want them to ask a different question about improving public services, with 62 per cent saying that the government should prioritise spending more on public services rather than cutting taxes. Hunt won that argument, but seems to have forgotten about it now he is Chancellor The curious thing is that Hunt used to make a similar argument when he

Inflation rose to 4 per cent on the year to December, up slightly from 3.9 per cent the previous month. It’s the first time the inflation rate has increased for almost a year – an unexpected uptick, as the consensus was for the rate to slow once more, down to 3.8 per cent.  This is not the update politicians and central bankers were hoping for, but as far as monthly data goes, it’s not the end of the world either. The inflation rate doesn’t come down in a straight line, as evidenced already in the UK’s battle to get prices under control. The jump up to 4 per cent on the year

The jobs market has turned a corner. Vacancies have fallen again to 934,000, down 49,000 in the last three months of the year, the longest continuous fall on record. Wage growth slowed to 6.5 per cent in cash terms – which will please the Bank of England – but luckily for workers inflation is falling faster, meaning those rises translate into real terms pay bumps (of about 1.3 per cent). Employment climbed slightly while unemployment remained flat.  The next inflation figures are out tomorrow but the wage data are a sure sign of the direction of travel. Take out bonuses and average pay rose 6.6 per cent (1.4 in real

Why is Oxfam so concerned about the coming possibility of the world’s first trillionaire? The charity has this week released a report with an apocalyptic warning that one is likely within the next decade. Yet surely people only get that rich by making something that people want. That should be celebrated instead of condemned.  In a report published for the start of Davos, the annual event where very rich people gather at an expensive resort in Switzerland to worry about being rich, Oxfam said the world’s first trillionaire could come soon. Apparently, that showed we are entering a ‘decade of division’. ‘We have the top five billionaires, they have doubled

When will inflation return to the target rate? According to its latest forecasts, the Bank of England isn’t expecting inflation to slow to 2 per cent until 2025. But could this happen much sooner? Several independent forecasters are growing in confidence that inflation could get down to 2 per cent this spring, rather than next spring. Oxford Economics now expects inflation to average 2.1 per cent this year (a full percentage point lower than it expected in November). They also expect the inflation rate to slow to the annual rate of 2 per cent in April, as Ofgem once again lowers the energy price cap and last year’s higher prices

London mayor Sadiq Khan has just given us a foretaste of a Labour government by capitulating to the RMT and averting a tube strike at the last moment by, to borrow Nye Bevan’s phrase, stuffing the rail workers’ mouths with gold. That, at least, is Boris Johnson’s assessment of the 11th-hour agreement to avert the walkouts. Johnson is right, except is it really much different from what has been going on for years under his and other Conservative governments? It wasn’t Labour which gave us train drivers on £65,000 a year – far more, in some cases, when you add on overtime. That puts some train drivers in the top

Are chief executives overpaid? The High Pay Centre thinks so. Every January, it releases data showing the huge inequality between top UK CEOs and average workers. The results are startling: ‘Bosses of Britain’s biggest companies will have made more money in 2024 by lunchtime on Thursday than the typical worker will all year,’ according to the BBC, which wrote up the story showing that top bosses’ average reward amounts to £3.81 million a year. But is this disparity with the £34,963 annual median wage for full-time workers really a surprise? The truth is that this pay gap is an obvious feature of a free market where top pay in business