Money

Ross Clark

Net Zero is condemning more Brits to energy poverty

Here’s another great idea from the net zero establishment: only heat your home when it is warm and sunny outdoors. In its Sixth Carbon Budget paper, the government’s Climate Change Committee advises homeowners to turn their heating on in the afternoon, so that they can turn it off again during the evening when demand for electricity is higher. ‘Where homes are sufficiently well-insulated,’ it says, ‘it is possible to pre-heat ahead of peak times, enabling access to cheaper tariffs which reflect the reduced costs associated with running networks and producing power during off-peak times.’ In other words, boil yourself when the outdoor temperature is relatively warm, and with any luck

Ross Clark

House prices are falling. But it’s still terrible for first-time buyers

Hurrah. Housing is now more ‘affordable’ for first-time buyers than it was a year ago. Or so says Halifax, which has produced figures this morning showing that the average home now costs 6.7 times the earnings of the average worker, down from 7.3 times a year ago. This is thanks to two opposing trends. The value of the average home has come down from £293,586 to £286,276. Meanwhile, average earnings have increased by around 7 per cent. Spot the missing factor from this analysis. Yes, that’s right: it’s interest rates Spot the missing factor from this analysis. Yes, that’s right: it’s interest rates. Housing is only more ‘affordable’ now than

Working from home is the new British disease

Over mighty trade unions. Short-termist management that prioritises profits over investment. And an education system that doesn’t produce enough scientists or engineers. There have been many different versions of the ‘British disease’ over the years to explain the consistent under-performance of our economy compared to some of our main rivals. But right now there is a new one: the British don’t want to go back to the office – and that is hitting output hard.  According to a survey by the consultancy AWA published this week, the British are more reluctant to go back to the office than workers in almost any other major developed country. Even as bosses plead

Ross Clark

UK economy grows by 0.5% in June – defying expectations

So the economy has defied the predictions of doom once more. The latest figures released by the Office for National Statistics (ONS) this morning show that the economy grew by 0.5 per cent in June, more than countering a 0.1 per cent fall in May, widely attributed to the extra bank holiday for the coronation. Over the three months to June the economy grew by 0.2 per cent, following a 0.1 per cent expansion in the first quarter. One of the most promising aspects of today’s figures is that all sectors of the economy grew in June, with production (1.8 per cent) and construction (1.6 per cent) outpacing services (0.2

Wilko is just the first zombie company to come a cropper

It will be harder to pick up a last-minute light bulb. You might have to rely on Amazon Prime for a quick delivery of new tea towels. And your local shopping centre will look even more dismally empty than it already does.  There will, in fairness, be some disadvantages to the hardware chain Wilko disappearing. And yet there is no point in pretending that it is any great loss. In reality, it was one of many ‘zombie’ companies, kept alive by artificially low interest rates. Now that capital costs money again, many more will go bust.  Wilko announced today that it was going into administration, and that its 400 stores

Ross Clark

Britain has a productivity problem

First the good news – the fall in living standards may be coming to an end, with wages starting to run ahead of inflation. Now the bad news: it is as much because wages are rising than inflation is falling – which suggests that high inflation is beginning to become embedded in workers’ expectations. Capital Economics is forecasting that next week’s inflation figures will show the Consumer Prices Index (CPI) at 6.8 per cent, down from 7.9 per cent last month. Average earnings figures, it predicts, will simultaneously rise to 7 per cent – up from 6.9 per cent last month and up from 6.1 per cent a year earlier.

Beijing is right to be worried about the Chinese economy

Going by the number of state and Communist party plans to ‘boost consumption’ over the summer, it appears that Beijing is rattled about the Chinese economy.   It is right to be worried. Deep-seated and systemic issues that predate Covid are tearing away at China’s fabled dynamism. These include excessive debt, low productivity, a flawed real estate market, weak income and consumption, poor demographics, a highly regressive tax structure, and a political governance structure that is controlling and generally hostile to entrepreneurship.  Deep-seated and systemic issues that predate Covid are tearing away at China’s fabled dynamism The sudden abandonment of zero-Covid late last year was supposed to lead to a feisty

Ross Clark

Britain might be in a wage-price spiral

The Bank of England has raised the base rate yet again, this time to 5.25 per cent, a high not seen since April 2008. Like a child trapped in the back seat of a sweltering car, the response of many people will be: ‘Are we nearly there?’      Many people seem to think so – that perhaps there will be one or two rises to come before rates peak and perhaps even start to fall modestly next year. Markets seem to think that 5.75 per cent will most likely be the summit.   I wouldn’t be so sure. What stands out most from the Monetary Policy Report that accompanied the interest rate

Britain’s growing army of pensioners should be delivering pizza

Over-50s could deliver pizza. They could try their hand at Uber driving. Or they could put in the occasional shift at the Amazon warehouse. Mel Stride, the work and pensions secretary, won’t have done his political career any favours this week with his suggestion that retired people who are struggling to make ends meet could earn extra cash in the gig economy. But whether voters in the leafy shires like it or not, Stride is spot on: many pensioners can, and should, work part time and they can’t be too fussy about what jobs are available. The Prime Minister Rishi Sunak is probably already wondering how quickly he can fire

Rishi Sunak is right to hedge his bets on oil and gas

It is quite right that the Prime Minister has chosen to approve new licences for oil and gas extraction in the North Sea, in spite of the bitter reaction from climate activists, the Labour party – and some of his own MPs. Chris Skidmore, who just recently completed a review of net zero policies on behalf of the government, said this week that the decision to award new licences ‘is on the wrong side of the future economy that will be founded on renewable and clean industries and not fossil fuels’. Yet the Prime Minister is not retrenching on investment in renewable energy; he is hedging the government’s bets. While

‘Lazy girls’ aren’t what’s hurting the British economy

The current government will do almost anything to avoid reforming welfare or the NHS. Last month, we were informed school leavers might be allowed to train as doctors without a traditional medical degree in an ill-conceived cosplay scheme. And it was reported yesterday that GPs may be encouraged to refer patients to life coaches, rather than issue sick notes, to help people get back into work. Between the starts of 2019 and 2023, the number of economically inactive working adults with depression or anxiety jumped by 40 per cent to hit 1.35 million. There are 400,000 more people on long-term sickness than before the pandemic. Yet rather than hiring more

Steerpike

Coutts gives Nigel Farage his account back

Is Nigel Farage’s war with Coutts finally over? The former Brexit party leader has claimed that the bank – which closed his account over concerns about his political views – has now offered to reinstate his account. The interim chief executive of Coutts, Mohammad Kamal Syed, wrote to Farage to give him the good news. Speaking on his GB News programme, Farage said: ‘He has written to me to say I can keep both my personal and my business accounts. And that’s good and I thank him for it.’ But it seems that might not be the end of the row. Farage said the fallout has caused him ‘enormous harm’

Ross Clark

The collateral damage of lockdowns on children is still emerging

There has been plenty of evidence published over the past three years of the severe effects on children’s education and wellbeing of closing schools during Covid lockdowns, but a new study by the Institute of Fiscal Studies (IFS) and University College London (UCL) has a slightly different emphasis – linking children’s social and emotional development with the employment situation of their parents. Overall, it found that 47 per cent of parents reported that their children’s social and emotional skills had declined during the pandemic – with just a sixth of parents reporting that there had been an improvement. The effect was more severe along younger children – 52 per cent of

Ross Clark

The triumph of oil

If you want a laugh, I recommend an article which appeared in the March 1998 issue of Scientific American, ‘The End of Cheap Oil’. In it, oil geologists Colin J Campbell and Jean H Laherrere used terribly clever models to tell us that global oil production would peak around 2004-05, after which we would be trying to rely on an ever-dwindling, ever more expensive supply of oil, with huge consequences for the global economy. Campbell was so sure of his thesis that three years later he formed the Association for the Study of Peak Oil, coining a new term which would be thrown about over the next couple of decades.

Kate Andrews

The US economy is bouncing back – unlike Europe’s

Every country that imposed a lockdown during the pandemic accepted that there would be an economic price to pay. But governments hoped that, on this measure, their own nation would fare better than others. The objective here was simple: don’t be the ugliest country of the bunch. Now, with some distance between those lockdowns and life today, we’re returning to a more established form of economic competition. Rather than focusing on whose economy looks particularly bad, the emphasis has returned to who is looking good. And on this metric, the United States is putting Europe – and Britain – to shame. The US government reports that its economy grew by

Ross Clark

Tories should never have taken their Ulez challenge to court

Expanding London’s Ultra Low Emission Zone (Ulez) may be a bad policy, a regressive tax which will impact on people of modest means while leaving the not-very-much-less-polluting cars of the wealthy untouched. But that doesn’t mean the High Court is wrong to reject the case brought by Conservative councils against the scheme. On the contrary, anyone who values democracy should be pleased that Ulez has been thrown back into the political arena, where it belongs. It is alarming the way that so many matters of public policy now end up being dragged through the courts under the judicial review process. How we impose motorist taxes, whether we build rail lines, runways

Kate Andrews

Will the NatWest debacle end the ‘debanking’ scandal?

The NatWest saga is fast becoming a textbook example of what some consider to be an ‘establishment’ attack on minority (and often right-leaning) viewpoints. The fast U-turn from the NatWest board which now sees Dame Alison Rose out of a job (Mr Steerpike has the details here) confirms that this was not a nuanced or two-sided debate that the bank originally tried to make it out to be. It’s no surprise, then, that the government has been fairly robust in its growing condemnation of NatWest’s actions. No. 10 insisted last night that it had serious concerns about the bank’s actions, and ministers have been saying it was ‘right’ for Rose to

Patrick O'Flynn

Will the Tories learn from Coutts’ mistake in taking on Nigel Farage?

Not for the first time in his colourful life, the perennial rebel Nigel Farage has the establishment on the run. This time it is the financial establishment and its media allies. The former Ukip leader has already garnered apologies over conduct or coverage from NatWest, which owns Coutts bank, the high-profile podcaster and former BBC man Jon Sopel, the BBC’s business editor Simon Jack and the chief executive of BBC News Deborah Turness. Farage is currently circling NatWest chief executive Dame Alison Rose in the manner of a hungry shark who has scented blood in the water. Not his, but hers. Dame Alison appears to be Farage’s prime suspect in

Elon Musk has launched X to kill Twitter

It will trash the brand. It will alienate its core users. And relaunching and rebranding a failing business almost never works. As Elon Musk drops the Twitter blue bird and swaps it for an X, we will hear plenty of arguments about why the world’s second richest man has made another critical commercial mistake. In fairness, some of them have a point. Yet Musk’s critics are making a mistake by missing the real purpose of the new name. X only exists to kill off Twitter. The rebrand was announced in a typically haphazard way. As of today, Twitter will be known simply as X. It was Musk’s boldest move yet

Ross Clark

Has Britain avoided falling into recession?

Earlier in the week, the stock market responded very positively to news that inflation had come out a little lower than expected (even though, at 7.9 per cent, it is still far ahead of where most forecasters, from the vantage point of the beginning of 2023, would have expected it to be by now). Markets have been left largely unmoved, however, by two pieces of positive news this morning: lower than expected public borrowing in June, and higher retail sales, also in June.  The volume of sales was up 0.7 per cent in June compared with May. While that was, in part, due to the extra bank holiday in May, which