Money

The chip maker ARM decided against listing its shares in London, despite plenty of arm twisting from the government. The building materials group CRH decided last month that New York was a better place for its equity to be traded, leaving the FTSE for good. The mining giant BHP has moved its listing from London to Sydney, while another materials group, Ferguson, switched from London to New York last year. And now hotel group IHG may make the same journey.  At these rates, no one will need the Prime Minister’s new plan to boost numeracy to count the number of companies still listed on the London market. The fingers of

February was a no-growth month, according to the latest update from the Office for National Statistics, published this morning. A rise in construction was offset by a fall in services, resulting in zero headline growth. The strikes are taking their toll. The biggest contribution to the fall in services came from education and public administration, as striking teachers downed tools. Education fell by 1.7 per cent. Meanwhile public administration fell by 1.1 per cent, as ‘this industry also saw industrial action take place within the civil service during February 2023.’ An optimist might note that while the strikes offset economic activity in other sectors, at least there was some growth to point

Good news – at least for those who hold faith in economic forecasts. The IMF has just eradicated half the recession it forecast, in January, for Britain. At that point, it expected the UK economy to shrink by 0.6 per cent over 2023 – which would have meant Britain uniquely suffering a recession among advanced nations. Today, in its latest World Economic Outlook, the IMF has revised that down to a fall of 0.3 per cent. Moreover, while the outlook for Britain has improved, for a number of other countries it has worsened, most notable for Germany and Japan. Germany is now also forecast to share our recession, with output

Just when we thought inflationary forces were softening, the price of crude oil has shot up sharply today in response to an announcement by Opec that it will try to reduce production. A barrel of Brent crude, which touched $120 last summer before falling back to $75 last month, reached $85 at one point today. Some analysts expect it to hit $100. Given that the benign forecasts for inflation which shaped Jeremy Hunt’s budget were predicated on a falling oil price, has the case for economic recovery now collapsed? Unfortunately, in spite of the US’s drive towards energy independence in recent years, the world remains depressingly reliant on Opec for

Who, or what, is responsible for the UK’s sky-high inflation rate? Not me, says the Bank of England’s governor. Andrew Bailey has pointed the finger at a number of causes: pandemic and lockdowns, Russia’s war against Ukraine and Britain’s tight labour market. But he singled out one group in particular – early retirees – as a contributing factor for the recent inflation spike: ‘If those workers have accumulated enough savings to sustain a desired level of consumption much like the one they had before their early retirement, at least for a while, aggregate demand will not have fallen by as much as aggregate supply…we should expect this to put upward

It could be next month. It might be next week. Or it might well happen over the weekend. But today’s collapse in the share price of Deutsche Bank, and the huge rise in the cost of insuring its debt against default, means it is probably only a matter of time before there’s an intervention. It looks increasingly inevitable that Deutsche will require some form of rescue, led by the German government and the European Central Bank. The trouble is: that will be a threat to the entire eurozone. If you have any money in Germany’s largest bank, the only rational move right now is to get it out To market

There was no easy option for the Bank of England’s Monetary Policy Committee (MPC) this week. Raising interest rates, even by a small amount, could add to financial instability following the collapse of Silicon Valley Bank and takeover of Credit Suisse over the past few weeks. But holding the base rate at 4 per cent might lead to accusations of ignoring double-digit inflation, which rose on the year in February for the first time since the Consumer Prices Index (CPI) peaked last October. Today, the MPC opted for the latter – voting 7-2 in favour of raising the base rate by 0.25 percentage points, from 4 per cent to 4.25

So, things really are different this time. The US Federal Reserve has decided to raise its Federal Funds Rate (its main interest rate) by a quarter-point, to 4.75 per cent – 5 per cent, in spite of a banking crisis that has seen two large banks fail in the past fortnight. For the past two decades, this sort of thing didn’t happen. Under the unwritten laws of the ‘Greenspan put’, the Fed could be relied upon to provide some form of stimulus at the first sign of financial trouble. It began with the collapse of the hedge fund Long Term Capital Management in 1998, when the Fed put together a

For more than a decade, bitcoin bores have been banging on about cryptocurrency as the future of money. The emergence and spectacular growth of digital currencies, according to these evangelists, prove that the financial system upon which we all depend is broken. Bitcoin was after all created in 2009, after the great meltdown of 2008, as a revolutionary concept to fight the corrosive global power of central banking. Bitcoin was pitched as the new digital gold. It was limited in supply and could not be centrally controlled – its value couldn’t be distorted by quantitative easing and morally bankrupt governments hooked on debt. Bitcoin wasn’t just for buying illegal stuff

Another Sunday, another banking takeover swiftly arranged before markets open on Monday morning. This time Credit Suisse has agreed to be bought by fellow Swiss bank UBS for 0.5 Swiss Francs a share – less than a third of its closing price on Friday and less than a tenth of what the bank was worth a year ago. A banking collapse which was beginning to look inevitable in spite of a 50 billion Swiss Franc bailout by the Swiss central bank on Friday has been averted, market turmoil has been avoided, or postponed, jobs have been saved (although many are expected to be lost in London as Credit Suisse’s investment banking

No victory is ever final in politics – and the wrecking-ball of lockdowns now seems to have destroyed almost every success of the 2012-20 welfare reforms. The workless numbers are again as bad as they they were under Labour. People who stopped working during lockdowns never quite got back into it and the UK has done a worse job than almost any other country at rebuilding its post-pandemic workforce. In 2009 I was filling Coffee House with attacks on the Labour government for keeping so many on benefits. And the story now? See below. Remember, this joblessness is not induced by recession and layoffs but incubated by welfare to produce

Jeremy Hunt has announced plans to extend the 30 hours a week of ‘free’ childcare for three and four year olds to include babies as young as nine-months old. This expansion of childcare provision has been hailed by the Chancellor as a measure to allow mothers to return to employment if they want to; it will also, according to Hunt, help boost the economy. But has anyone paused to think about the impact on the children themselves – and families? The truth is that Hunt’s proposed changes aren’t a win for mothers, children, and families as a whole. Why? Because the childcare plans suggest that a mother’s worth comes from

In his Budget speech, Jeremy Hunt made a great play on how Conservatives value work. Tories love talking about this but in fact they have just presided over a catastrophic increase in benefits. Before the pandemic there were 4.2 million on benefits: at the last count, 5.2 million. Given the mass worker shortage, this is quite a scandal. So what is being done to change this? Hunt referred to tighter conditions in welfare conditionality, but the OBR don’t seem to think it will move the dial, with just 10,000 moving back to work. It does think the £20 billion package on childcare will help, broken down as follows: Add to