Money

Ross Clark

Striking consultants aren’t likely to get sympathy

Today and tomorrow’s strike by NHS consultants underlines how industrial action has become the preserve of the well-paid. The consultants appealing for public sympathy were, according to NHS figures, paid a mean basic salary of more than £97,000 in the year to March. On top of this they received mean overtime and bonus payments of close to £30,000, bringing their total mean earnings to more than £127,000. Yet not all of these were working full-time. The mean basic salary for full-time staff was more than £105,000. And of course, on top of this they have been offered a pay rise of 6 per cent – which they have rejected. The

Damian Reilly

Nigel Farage, NatWest, and the sinister rise of corporate ‘purpose’ 

The plot is thickening. If it turns out NatWest CEO Alison Rose was the source for BBC business editor Simon Jack’s scoop that private bank Coutts, part of the NatWest Group, rejected Nigel Farage as a customer not because of his political views but for a supposed lack of funds, then it’s hard to see how she will last in her job to the end of the week. According to the Daily Telegraph, Rose sat next to Jack at a charity dinner the night before he published his story. At the time of writing, neither had responded to questions about what they’d discussed. Certainly, the Coutts dossier that Farage has

Coutts’ reputation committee has destroyed its own reputation 

Nigel Farage has been cancelled by his bank because their reputation risk committee doesn’t approve of his political views and has branded him a ‘chancer’ and ‘grifter’. This matters to him because, having been cancelled by one bank, it is almost impossible to get an account with another – you are obliged upon opening a new account to reveal if you have ever been turned down or thrown out of a bank before.  Reputation risk has become all the rage in recent years as companies, governments and individuals scramble to protect themselves from the fate suffered by trial by media and powerful regulators. PR firms and management consultancies charge high fees to

Kate Andrews

Why Starmer is choosing fiscal discipline, above all else

It’s been more than two days since Keir Starmer told the BBC’s Laura Kuenssberg that Labour would keep the two-child benefit cap, yet the party seems no closer to finding resolution on the issue. The pushback within the party has been intense, with plenty of people (including, reportedly, members of the shadow cabinet) asking how the opposition leader can keep a benefits cap that he once railed against. But Starmer isn’t budging. Speaking on a conference stage with former prime minister Tony Blair this evening, Starmer insisted this wasn’t an issue of changing hearts, but rather a changing set of circumstances. Speaking about spending commitments more generally, Starmer noted that:

Ross Clark

If the Tories scrap inheritance tax, I’m voting Labour

I have been playing a game with myself recently: asking just what would it take for me to vote Labour at the next election? The gossip out of No. 10 has answered it for me: if, as rumoured, the Prime Minister toys with the idea of abolishing inheritance tax – at a time when the government has jacked up tax for many millions of workers through fiscal drag and lowering the 45 pence tax threshold – then suddenly Keir Starmer is going to look a relatively attractive option. Yes, I really would rather have a PM who thinks a woman can have a penis, than I would a party that

Isabel Hardman

Will public sector pay rises stop the strikes?

That Rishi Sunak chose to announce his decision to give public sector workers a 5 to 7 per cent pay rise with a press conference tells you everything you need to know. There is no requirement for him to be anywhere near a pay announcement: indeed, it was chief secretary to the Treasury John Glen who made the statement in the Commons. But Sunak clearly thinks there is a big political win here for him in dealing with the ongoing strikes. Sunak confirmed in his opening statement that ‘we are accepting the headline recommendations of the Pay Review bodies in full but we will not fund them by borrowing more,

Kate Andrews

Rishi’s pledge to grow the economy isn’t going well

The economy contracted by 0.1 per cent in May – down by 0.4 per cent compared to May 2022. But this dip is largely being attributed to the extra bank holiday for the King’s Coronation. This morning’s update from the Office for National Statistics shows some changes in behaviour due to this one-off occasion, including a fall in production of 0.6 per cent (the biggest contributor to the overall dip in GDP) but a 1.8 rise in arts, entertainment and recreation. Other events can be spotted in the data. Health and social work activities saw the biggest bounce back from April – a rise of 1.1 per cent – as

Kate Andrews

Who’s to blame for rising mortgage costs?

Mortgage costs have reached a 15-year high today, with the average two-year fixed deal hitting 6.66 per cent – the highest level since the summer of the 2008 financial crash. But today’s mortgage news is being pegged to far more recent history, as average deals just topped their peak from last autumn, when Liz Truss’s mini-Budget sent interest rate expectations soaring, and mortgage offers along with them. Truss’s premiership came to an end because so many numbers were spiralling upward, including the cost of government borrowing, mortgage repayments, and the number of Tory MPs who – amid all the chaos – were simply not going to take instructions from her

Kate Andrews

Wages are up – but the Bank won’t be happy about it

The labour market continues to show signs of becoming less tight – but this won’t be fast enough for the Bank of England’s liking. The UK unemployment rate rose to 4 per cent – up 0.2 per cent on the quarter. But this relatively small change is indicative of more people moving off the economic inactivity list, which fell by 0.4 per cent between March and May: a change that the Office for National Statistics largely attributes to men in this latest update.  Meanwhile the number of job vacancies in Britain fell for the twelfth time in a row: down 85,000, but still sitting at 1,034,000. Vacancies are now significantly

Ross Clark

Is Jeremy Hunt following in Gordon Brown’s footsteps?

Anyone fancy having a flutter with 5 per cent of their pension fund on unlisted start-ups? It is not necessarily a bad idea – it is only 5 per cent, after all. As part of a portfolio which is balanced by more bread and butter investments it need not be reckless. At best, you might just pick a future Microsoft or Google – and at worst, well, the other 95 per cent of your investments could smother your losses. But it seems that we are not really going to have the choice – at least not those of us who have defined contribution pension funds. The Chancellor, Jeremy Hunt, used

Jeremy Hunt’s City reforms are far too timid

There will be some tweaks to the way that pension funds are allowed to invest their money. There will be some modest rewriting of EU rules on the way investment banks can provide analysis of company performance. And there will be some reduction in the big bundles of paper a company needs to issue before it can sell new shares. And, er, that seems to be about it. The Chancellor Jeremy Hunt may be trying to sell his latest round of City reforms as a significant reduction in red tape that will allow the financial sector to grow again. But, in keeping with his tepid, managerial style, they lack any

Ross Clark

The housing crash we’re heading for might not be the one you think

Are house prices falling? The Halifax house price index, published today, is finally showing a significant year on year fall: average prices are 2.6 per cent down in the 12 months to June. This is the biggest annual fall shown by the index in 12 years. But it is still hard to depict what is happening in the housing market as a bloodbath. The finer print shows that prices are actually up over the last quarter, by 0.3 per cent – with the 12 monthly figure pulled down by what happened by last autumn. As has happens so often in the housing market, predictions of deep gloom (or deep joy, if you

Is this really the best Labour can offer teachers?

Bridget Phillipson was appointed Labour’s shadow education secretary in November 2021. After 18 months in the role, she has now finally unveiled Labour’s ambitious new idea to help tackle the teacher retention and recruitment crisis: use the tax raid on private school fees to fund a £2,400 welcome bonus to every teacher who has completed their two years of training. This is a classic case of copying someone’s homework, except – no surprises – it wasn’t very good the first time round. The Conservatives have already increased the starting salaries of newly-qualified teachers to £30,000. Teaching unions have already overwhelmingly voted to reject a one-off payment. The government has already tried giving bonuses to maths teachers,

Has the Bank of England’s net zero obsession fuelled inflation?

The Bank of England was made independent to take monetary policy away from flighty politicians who are slaves to expediency and fashionable sound bites. Instead, central bankers imbued with objectivity, prudence and, most of all, economic expertise would be in charge. But when it comes to climate change and net zero, the Bank has shown that poor judgment is certainly not exclusive to elected officials. Only a month ago, Andrew Bailey, Governor of the Bank of England was touting net zero as a growth elixir. ‘The transition to net zero is a major structural change that needs substantial investment and can over quite a prolonged transition period help to raise

Kate Andrews

Is Thames Water about to sink?

Thames Water appears to be in trouble. The company, which has billions in debt, is in talks with the Treasury about a possible bailout. We may soon be adding the firm, which serves one in four Brits, to the list of victims of rising interest rates. ‘Victim,’ in this case, is perhaps the wrong word. It’s hard to feel sorry for a company that has been relying on ultra-low rates to keep itself afloat, racking up £14 billion worth of debt and now severely struggling to service it. Financial mismanagement is just one of a series of accusations levelled against the company. Its problems have been in the spotlight for years, especially

How do we fix Britain’s stagnant economy?

With every passing week it becomes clearer that the British economy is in crisis. Not the ‘here today, gone tomorrow’ sort of crisis that bedevils the financial markets, but rather the deep-seated, slow-burning crisis of a progressive, life-threatening disease. ‘I am totally 100 per cent on it, and it is going to be okay and we are going to get through this,’ the Prime Minister promised last week. If so, he’s got his work cut out. The economic performance of the UK economy has deteriorated sharply over the last decade-and-a-half compared to its performance beforehand. On key measures, such as output per hour worked, the UK was a poor performer even before the

The Bank can’t blame wages for out of control inflation

After a bruising week, perhaps Andrew Bailey could take some solace in Rishi Sunak’s interview with Laura Kuenssberg this weekend. For a start, the Prime Minister threw his support behind the Bank of England governor, after senior figures within the Conservative party accused Bailey of being ‘asleep at the wheel’. But it was also a reminder that, no matter how bad things may seem at Threadneedle Street, they’re probably worse in No. 10. When Bailey hits out at wages, it looks like another desperate attempt to deflect blame away from his own institution Sunak is facing demands for proof that his plan for our economic recovery will work at a

John Keiger

Will Macron be forced to break his pledge and raise taxes?

The inevitable is at last beginning to dawn on Emmanuel Macron. The extravagant spending spree initiated after the violent and year-long 2018 ‘gilets jaunes’ protests will have to be reversed. With the coffers empty, France is not only at the mercy of international finance, she is now highly vulnerable to the next social or political crisis Overgenerous Covid and energy subsidies are expected to push the budget deficit to 4.9 per cent of GDP with the French debt to GDP ratio at 114 per cent, the largest absolute debt pile in the EU and one of the largest in the world. Unlike Italy’s debt, most of France’s is foreign-owned, so

Kate Andrews

Shock as interest rates hiked to 5 per cent

The Monetary Policy Committee has voted seven to two to take interest rates to 5 per cent, a 0.5 point increase. Its thirteenth rise in a row takes rates to their highest level in 15 years, and is being described as a ‘shock’ increase, brought in as a response to the rise in core inflation on the year in May, which has hit 7.1 per cent. The horror of inflation is that it gobbles up your income and your savings After this week’s dire inflation update, the question wasn’t whether the Monetary Policy Committee would raise interest rates, but by how much. After last week’s labour market update, which saw nominal wages

Labour must resist jumping on the mortgage bail-out bandwagon

Millions of potential voters in marginal constituencies face punishing rises in their mortgage repayments over the coming months and years. The government is in disarray on the issue and is largely to blame for the mess. Labour has spied an opportunity to hammer the Conservatives: it is talking about a ‘Tory mortgage penalty’ and shadow chancellor Rachel Reeves is jumping on the bandwagon clamouring for mortgage payers to get help. But, if Labour goes too far in its demands, it could pay a heavy price. With inflation stubbornly high, and the Bank of England rapidly losing credibility, mortgage rates are soaring. A two-year fixed rate that cost less than 2