Money

Susanne Mundschenk

Turkey’s grain diplomacy

Recep Tayyip Erdogan is once again using Turkey’s geopolitical position for his own ends, this time dictating grain shipments from Ukraine through the Black Sea. Turkish customs authorities detained a Russian cargo ship carrying Ukrainian wheat on Sunday, following a request of Kyiv. The Russian cargo ship Zhibek Zholy left the south-eastern port of Berdyansk over the weekend carrying 7,000 tons of grain, worth about £1.75 million. The Russian-appointed head of the occupied region had hailed it as the first commercial ship to leave a Ukrainian port after months of war. He said this would take desperately-needed supplies to friendly countries, according to Politico. The reality is, of course, that

German industry is grinding to a halt

The Soviet Union had only just collapsed. John Major was still a relatively fresh-faced Prime Minister. And the internet consisted of a few desktop computers linking together a handful of laboratories. The world was a very different place when Germany last posted a trade deficit way back in 1991. But on Monday, the country recorded that imports outstripped exports for more than 30 years. True, other countries are recording huge deficits, not least the UK. For Germany, though, it matters more. Its entire economy has been built around creating an industrial machine that dominates global markets. That machine is now grinding to a halt. By the standards of Britain, the

Kate Andrews

Britain avoids a recession – for now

The UK’s economy grew by 0.8 per cent between January and March this year, according to this morning’s update from the Office for National Statistics. This means real GDP is now just 0.7 per cent above its pre-pandemic levels. On the face of it, it’s fairly grim news. The spectacular growth originally forecast for this year, making up for lost time in lockdown, did not transpire in the first three months of the year. Signs of a weak economy are starting to show. While consumer spending was up by 0.6 per cent in the first quarter, business investment fell by the same amount, down 9.2 per cent overall from its pre-pandemic levels. Signs

Striking GPs need a reality check

GPs have voted to strike if some contract changes, including forcing practices to open on Saturdays, are not withdrawn. The doctor proposing the motion at the British Medical Association’s annual conference in Brighton urged her fellow medics to ‘channel our inner Mick Lynch‘. This analogy – and the meeting’s decision in favour of industrial action – tells us everything we need to know about the political leanings of the BMA who ought to be unbiased. It was particularly distasteful to invoke a comparison with the RMT’s rail strike which caused travel chaos and distress last week for NHS staff and their patients, among other innocent casualties. The main quarrel of the meeting was the demand by

Macron’s Russian oil plan is bound to fail

It will drain Vladimir Putin of funds for his war machine. It will bring down inflation. And it might even be enough to stop the global economy from tipping into recession. As President Macron put forward his wheeze for solving the energy crisis this week, he no doubt had plenty of persuasive arguments. He appears to have brought the rest of the G7 on board for his plan for a global cap on the price of oil. There is just one problem. Like most price controls, it is not going to work. Indeed. It will only make the crisis worse. Of course, everyone can see where Macron is coming from.

Isabel Hardman

Boost defence spending to prepare for Putin, Wallace demands

Ben Wallace is giving a speech this afternoon in which he will urge Boris Johnson to increase defence spending. The Defence Secretary – who has long been close to Johnson – is making his campaign public, having apparently already secured a nod from the Prime Minister that he will get something. He wants a 20 per cent increase in defence spending in the next five years, and to push Britain’s budget for its armed forces up to 2.5 per cent of GDP, having secured the 2 per cent target. He is speaking at the Royal United Services Institute event alongside the chief of the general staff General Sir Patrick Sanders,

Why the Tories struggle to shake off the ‘nasty party’ label

The Conservatives’ brand is being taken to the cleaners. According to Lord Ashcroft’s focus groups, the words and phrases most often associated with the Conservative party right now are ‘untrustworthy’, ‘for themselves’, ‘out of touch’, and ‘for the few’. The Conservatives are at risk of becoming the Nasty Party again. Given all the years spent detoxifying the party’s brand, how has it come to this?  The reputation of every governing party suffers with time, but the Conservatives seem to have a particular knack for being seen as heartless the longer they are in office. At a time when households are struggling, the Conservatives find themselves in a position where despite

Kate Andrews

Could a row over steel blow up the Tory party?

When Boris Johnson was campaigning for Brexit, he placed much importance on World Trade Organisation rules. The WTO, he’d argue, had an internationally-recognised free trade rule book – which was ready and waiting to be used as a substitute to the European Union system. This is why he could face some very difficult questions next week if he decides to extend tariffs on steel imports in a way that some think flout WTO rules. Last year the PM ignored advice from the independent Trade Remedies Authority – a trade watchdog which his government created post-Brexit – which wanted him to ditch some of the tariffs currently in place that, they

The socialist case against the strikes

Socialists like me are supposed to always support industrial action. But reports that doctors, teachers, local government employees and just about everyone in the public sector are considering joining rail workers on strike have failed to gladden my proletarian heart. Why? Because the reality is that none of these workers have much of a case to make for bringing Britain to a halt. Don’t get me wrong: strikes aimed at improving the wages and conditions of low-paid workers are a legitimate way of ensuring demands are met. Socialists should always back workers when they are driven to strike because they are being treated unacceptably. But is this really what is

Fraser Nelson

Where is the Boris agenda?

It’s a common trap: a Prime Minister is asked whether he or she will fight the next election as leader. To which there are only two answers: to say ‘yes,’ or announce your resignation. But – here’s the trap – saying ‘yes’ can be easily translated into Thatcher-style declaration that you want to “go on and on” – in Boris Johnson’s case, the papers say he wants to last to the 2030s. Not a timescale he mentioned. But he did talk about a “third term” and is blaming his by-election defeats on voters not thinking enough about the future. ‘If you look at the by-elections, people were absolutely fed up

James Kirkup

Are we heading towards a British Donald Trump?

The Tiverton and Wakefield by-elections are, of course, shatteringly bad for the Conservatives and Boris Johnson. They should finally destroy any illusions Conservatives hold about the PM’s electoral appeal. As I and several others have often pointed out, Boris is not a Heineken politician and hasn’t been one since the middle of the last decade. Analysis of by-election results is often bad. In the minutes and hours after the result, commentators scramble to explain what local results mean for national politics, in a crowded field where political actors are doing their best to skew the narrative in their own interests. That being so, I’m not going to try to tell

Boris will keep losing until he tackles inflation

The Tories took a serious beating in Thursday’s by-elections. Whilst Boris Johnson and his government refuse to take responsibility for the big issue of the day – inflation – and fail to convey any meaningful central purpose to their government (‘levelling up’ being clearly nothing more than an empty soundbite) they will continue to face huge electoral defeats. It really is as simple as that. When I say the government needs to take responsibility for inflation the immediate question is: ‘So how would you get it down?’ But that is the wrong place to begin. The first thing the government needs to do is to take political and policy responsibility for

Of course we can afford to cut taxes

The latest data on the UK’s public finances have provided more ammunition for those arguing that the government cannot afford to cut taxes. However, the economic reality is far more nuanced – especially when it comes to interest payments. The bad news is that the government borrowed another £14 billion in May, £3.7 billion more than forecast by the Office for Budget Responsibility (OBR). This reflected both lower-than-expected tax receipts, despite the increase in National Insurance contributions, and higher spending, including £7.6 billion in debt interest costs. This means that the government has already borrowed £35.9 billion in the first two months of the new fiscal year, or £6.4 billion

Freddy Gray

Biden’s racial ‘equity’ plan is bound to backfire

‘America is a nation that can be defined in a single word,’ said the proud Commander-in-Chief Joe Biden, standing outside the White House earlier this year. ‘Alsdfnalcaofjlksfa.’ We shouldn’t laugh. The poor man has a speech impediment. Still, that ‘Alsdfnalcaofjlksfa’ word will strike many Americans as an amusingly apt description of their country in 2022. It sums up Joe Biden’s whole administration: nonsense pretending to be clear leadership. America is, as everyone knows, in an inflationary crisis. The cost of petrol has reached such highs that Biden has called on Congress to suspend gas (petrol) tax for three months. That will do nothing to address the energy supply shortage that

Isabel Hardman

Is Boris able to stand up to Sunak?

The latest inflation figures have sent Tory MPs into a tizz again, unsurprisingly. There are a number of things that they’re upset about: the first is the ongoing refrain that their party should be cutting taxes, not imposing the highest tax burdens in living memory. Another is that Universal Credit is largely ‘an unfinished project’, in the words of one Red Wall backbencher who sees the impact of the malfunctioning benefit on his constituents. What both of these complaints have in common is that MPs feel the Treasury is deliberately pursuing the wrong policy: arguing that now isn’t the time to cut taxes and choosing to spend money on grants for

Robert Peston

Where’s Boris’s plan to stop the economic chaos?

Interest payments on the national debt rose 70 per cent last month to £7.6 billion (compared with a year earlier) – largely because of the impact of inflation on income paid to holders of index-linked gilts, which are inflation-protected government bonds. More worryingly, this was 49 per cent more than the official forecast made in March by the Office for Budget Responsibility (OBR). It suggests the OBR’s forecast that the government will have to pay £87.2 billion in interest payments (a colossal sum) may be too low, especially since the ONS is not factoring in the most recent inflation figures in its calculations of the monthly bill. Little wonder Rishi Sunak says ‘rising

Robert Peston

Boris Johnson’s inflation contradiction

As Boris Johnson tries to limit pay rises to bring down inflation, ministers have no explanation for why planned rises in the state pension and benefits would be less inflationary than increasing teachers’ and nurses’ pay. The government is attempting to limit public sector pay to 3 per cent, while allowing pensions and benefits to rise to around 10 per cent.  This is not to argue against protecting the poorest through the standard indexation of pensions and benefits. But it is to say that Mr Johnson’s pay policy is confusing. And he cannot pretend there is no pay policy. Even refusing to engage directly in pay talks with rail workers – despite owning the

Kate Andrews

The Tories are picking inflation winners and losers

Inflation rose to 9.1 per cent on the year in May, taking the UK’s consumer price index to a 40-year-high. Optimists are noting the slowdown in pace, rising by 0.1 per cent between April and May. But I suspect we are in the eye of the storm. This price spiral is nowhere close to over, not least because the next energy price cap review is currently estimated to lift bills by an additional £1,000. The Bank of England’s latest forecast predicts inflation will peak at around 11 per cent, but it must be said that the Bank has consistently underestimated the inflation rate, playing catch-up with its forecasts, as well

Gus Carter

Is Britain heading into a wage-price spiral?

Are wages about to spiral out of control? Boris Johnson certainly thinks there’s a risk. Last week he warned that the economy was ‘steering into the wind’ and that the UK could be entering a 1970s-style malaise. With inflation shooting up to 9 per cent – and expected to go higher still – rail workers are embarking on the first of three days of industrial action today, demanding a minimum pay rise of 7 per cent. Network Rail has offered just 2 per cent, with the potential for an extra 1 per cent on top if they can meet productivity targets later this year. Barristers too have voted for a

John Keiger

France could plunge the eurozone into its next crisis

In the French presidential elections, and now in the legislatives that will close on Sunday evening, the one issue kept under the carpet is finance. Neither the centrist Macronista grouping ‘Ensemble!’, nor the far-left Corbynista-like Nupes coalition of Jean-Luc Mélenchon has updated the electorate on how their manifestos are to be funded. And yet over the last month French finances have deteriorated dramatically. Neither programme has the slightest chance of being implemented without plunging French finances, and thus the eurozone generally, into a new sovereign debt crisis. France is dancing on a debt volcano. The unabashedly ideological Nupes programme calls for nationalisation of the banking and energy sectors, motorways, strategic