Money

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

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

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

The Bank of England has just raised interest rates for the fifth time in the row, warning that inflation is expected to pass 11 per cent by the end of this year. If it had escaped your notice, everything is getting more expensive, and the government is powerless to help. The extent of the Bank’s assistance has been to tell you not to ask for a payrise. Boris Johnson, meanwhile, seems furious that taxes are so high, and will be having stern words with whoever raised them. Even Freddo bars aren’t exempt from the cost of living crisis, shooting up to a frankly outrageous 30p each. Inflation is essentially a problem of

Stock markets are crashing. Bond yields are soaring. And the cryptos are evaporating. There is so much going on in the financial markets right now it would be hard to miss the most significant event. The eurozone crisis, which almost broke apart the single currency back in 2011 and 2012, is back. And this time around, there is no very obvious way of fixing it. With inflation soaring across the world, the era of plentiful printed money coming to an end and interest rates starting to rise, every kind of financial market is in turmoil. Investors are adjusting to a new set of circumstances, and doing so very quickly. So

First the good news: the Office for National Statistics figures released today show that pay is rising at its fastest rate in two decades, with regular pay up by 4.2 per cent in the three months for February to April compared with a year earlier. Now the bad news: such is inflation that, in real terms, regular pay was actually down 2.2 per cent – lower than at any time in the past two decades except for a brief period in the autumn of 2011. So, yes, it isn’t just an illusion: we really are getting poorer. That is a big problem not just for households trying to make ends

It’s the highest form of flattery, but is Apple really trying to copy Klarna? That’s the allegation made by the Swedish firm, which has led the way with so-called ‘buy now, pay later’ credit. Last week Apple announced that it too would be offering deferred payments via Apple Pay, as well as the option to split repayments over several instalments. It’s something that Klarna has been flogging for over a decade. And it’s already pretty popular: nearly a quarter of British shoppers have used Klarna’s services. Now its founder ​​Sebastian Siemiatkowski has accused Apple of nicking his concept. In reality, Klarna isn’t the only, or even the first, company to

Of all the epithets for Latin America, the most frustrating and demoralising must be the ‘forgotten continent’. Latin America is not so much forgotten as overlooked. Part of the reason for this may lie in its cultural proximity but geographical distance to the West: what Alain Rouquié, the French political scientist, called ‘far-western’. Familiarity, even on these fringes, has bred indifference. Last month, however, Britain remembered its historical ties to Latin America when Boris Johnson welcomed the President of Uruguay, Luis Lacalle Pou, to Downing Street. The invitation had been extended and not sought, which the President was quick to point out to the Uruguayan press. This was a meeting

Has the Financial Times just been sold another pup? Its economics editor Chris Giles (who predicted that the Brexit vote would lead to recession) has written what could be a Labour Party press release today. He reports as fact a claim by the NIESR, a left-leaning economics think tank, that Rishi Sunak could have saved £11 billion had he taken their advice and taken out insurance against rising interest rates. A startling claim, interesting hypothetical and worthy of a report. It might fall down upon further scrutiny: could the Treasury really ordered the Bank of England to force commercial banks to swap reserves for gilts? Would this not have been a massive

As part of his revival (and survival) strategy, Boris Johnson is trying his hardest to convince the public and fellow MPs that he can get the cost of living crisis under control. But did today’s speech help him make that case? His wide-ranging speech in Lancashire covered a vast array of economic, policy and trade topics, which he struggled to pull into a cohesive theme. ‘We do not grow many olives in the UK,’ he pointed out. ‘Why do we have tariffs on bananas?’ Both excellent points when it comes to liberalising trade, but not obviously at the top of people’s priority lists when it comes to tackling energy bills

After an uncomfortably close confidence vote for the Prime Minister on Monday, Boris Johnson’s premiership still hobbles along. But for how much longer? It seems the PM’s latest strategy is to find favour with his party again by promising bread-and-butter Tory policies: mainly tax cuts. Speaking to Tory MPs just hours before this week’s confidence vote, Johnson was making all the right noises: to boost the economy post-pandemic, he said, it was time to ‘drive supply side reform on Conservative principles and to cut taxes and to drive investment in the UK.’ Since the vote, Johnson has continued to harp on about cutting taxes, reportedly telling the Cabinet that cuts

Who could argue with the words of the EU’s internal market commissioner Thierry Breton when he says: ‘a common charger is common sense for the many electronic devices in our daily lives’? No longer, it seems, will we have to fiddle around with several different cables, and curse when we have brought the along the wrong one on holiday. M. Breton has just succeeded in introducing a directive which, from 2024, will oblige the manufacturers of all electronic devices on sale in the EU to use the same model of charger. The directive – yet to be rubber-stamped by the European parliament – will ‘increase convenience and cut waste’, as well

Occasionally I despair of my own profession. Even economists should be able to enjoy a long weekend. Yet some of us are stuck debunking commentary on the economic impact of the Queen’s Platinum Jubilee celebrations – much of which justifies the old tag of the ‘dismal science’. The long Jubilee weekend will indeed mean that economic activity, as usually assessed, is lower than it would otherwise have been. The output and income lost due to the temporary shutdown of most businesses will only partially be offset by increased spending in other areas, or recouped later. We have, of course, been here before. The monthly measure of UK gross domestic product

Last week, I came across a figure so staggering that I was convinced it was wrong: 5.3 million Brits (almost the population of Scotland) are on out-of-work benefits. How could this be, with ministers so regularly boasting that unemployment stands at a 40-year low? How could it be, when a national shortage of workers has been declared – and the aviation industry has been begging the government to relax immigration rules, saying that we’re out of workers? I’ve spent this week looking into it, with the help of my brilliant colleagues in The Spectator data team, and look at this in my Daily Telegraph column today. What is an “out-of-work”

I sincerely hope you’re not reading this on a holiday flight that’s sitting on the tarmac with no indication as to when it might take off – or a sad train home after your flight was suddenly cancelled. Brace for three-hour delays at security, we’re told; don’t even try checking bags in, and at worst, as happened to Tui passengers at Manchester who thought they were going to Kos, watch out for a text after you’ve boarded telling you you’re going nowhere at all. How and why? When the pandemic set in, airlines and airports – thinking, not unreasonably, that their industry was doomed – made mass redundancies rather than