Money

How much would you pay to park a shiny new Tesla on the driveway? Perhaps fifty thousand pounds? Or seventy thousand? If you were looking at a top-of-the range Model X, which retails in the UK at £81,000, but allows you to look down smugly on all the gas-guzzling SUVs also clogging up the streets of Chelsea, perhaps ninety or a hundred thousand?  Well, here is an odd fact: the stock market is valuing each of those cars at more than a million dollars (£750,000). This is surely the clearest sign yet that the company’s extravagant valuation has reached bubble territory. Does the absurd stock market valuation of Tesla make any sense?

Twelve months after a comprehensive trade deal was signed with the EU, where are we now? How has the UK performed? Even arch Remainer Andrew Adonis admitted last year that ‘the UK government clearly did a better job than the EU in procuring vaccine supplies and putting in place urgent industrial production’. Yet so far we’ve had no financial or employment deregulation, we’ve signed up to a minimum corporation tax (like the EU), and we haven’t reformed our commitment to the European Court of Human Rights. If Brexit were a pupil, what would its 2021 report conclude? Has the UK proven itself a strong independent learner, or should it try

After the pandemic, is energy the next European crisis? Gas prices have hit new records, reaching $180 per barrel in the Netherlands, representing a fivefold increase over the past six months. This is driven by news that Russia has diverged gas flows from its main European pipeline to one that is going east via Poland. Experts are pondering over the reasons, be it geopolitical muscle-flexing or the fact that Russia is hit by a cold front of minus 20 degrees. The results are the same: Vladimir Putin promised more gas for Europe, and it is still not coming. The prospect of a Russian invasion in Ukraine just adds more uncertainty

After growing calls from retail and hospitality for financial support to weather the ‘unofficial lockdown’ plaguing these industries, the Treasury today has responded. After a week of conversations with business leaders, Chancellor Rishi Sunak has announced a £1 billion support package this afternoon, which includes one-off grants worth up to £6,000 for hospitality and leisure businesses in England, as well as government cover of Statutory Sick Pay for workers off with Covid-related illness, which can be claimed by small and medium-sized firms. Sunak’s decision to deliver a support scheme isn’t all that surprising, given the Chancellor’s generous track record with these packages in the past. While businesses legally remain open,

The cabinet will meet this afternoon, with more restrictions and even a new lockdown on the agenda. But have ministers been given the information they need to make an informed decision? There are rumours of briefing documents being sent around over the weekend with a pro-lockdown bias (i.e., heavy on the worst-case scenarios and not much said about potential side-effects). But the Times today reports that this time around the cabinet wants a full discussion — with at least ten ministers demanding a better quality of briefing before decisions are made that affect the lives of millions. The below is a list of questions that ministers need answered: 1. What

The Omicron variant of Covid-19 is rampant. Bars and restaurants are in crisis as thousands of bookings are cancelled. And travel restrictions are back in place, with a full lockdown looming. To make matters worse, so far there is little sign of the Chancellor Rishi Sunak stepping in with any support.  Most businesses probably imagined that the very last thing they would have to cope with right now was a rise in interest rates. As a result, there will be plenty of business owners complaining that the Bank of England’s decision to up rates to 0.25 per cent will be the final blow that will push the economy back into recession. But hold on.

Yet again, inflation has surged past expectations – this time hitting 5.1 per cent in November, a ten-year high, up from 4.2 per cent in October. This threatens a political crisis as well as tough economic times: unless inflation is quelled, next year will be one of declining living standards for most people. Anyone whose pay is not rising by at least five per cent will, in effect, feel like they’ve experienced a pay cut. It was assumed that five per cent would be about as high as inflation would go but all this is proving hard to predict. This has gone past the Bank of England’s peak forecast, which

It wasn’t long ago that we were fearing the end of the furlough scheme might be accompanied by a significant rise in unemployment. According to the latest labour market figures released by the Office of National Statistics (ONS) this morning, that doesn’t appear to have happened. What they do show, however, is that the pandemic has led to growth in a section of the population which generally receives little comment: adults of working age who are economically inactive – i.e. not in work and not seeking work either. Moreover, those who are in work are working fewer hours than they did before the pandemic. The figures cover the period August

Abba have reformed. Nato is working out how to deal with an aggressive Russian president. And there are shortages of everything. There were already plenty of clues, but now it is surely official: the 1970s are back. The United States has recorded its highest inflation rate for 32 years, with a 6.8 per cent rate that far surpassed anything even the most pessimistic forecasters expected. In truth, Joe Biden is about to turn into the new Jimmy Carter, a lame duck Democratic president presiding over a failing economy – and the crisis is entirely of his own making. We already knew the US was witnessing a bout of inflation. Even

The economy is tantalisingly close to returning to pre-pandemic levels, now just 0.5 per cent off recovery. But this last hurdle may be the most difficult to overcome. The economy was more or less at a standstill in October, with GDP climbing by a measly 0.1 per cent. Services output grew by 0.4 per cent, mostly thanks to an uptick in GPs heading back to their surgeries for face-to-face appointments. While services recovered to pre-pandemic levels in October, the underlying figures don’t look so rosy: production output fell 0.6 per cent, while construction took its biggest hit since the first lockdown, falling by almost 2 per cent. These are disappointing

The Turkish lira sank to an all-time low against the dollar last week. The lira shed 30 per cent of its value in November alone, having lost nearly half its value since the start of the year. Inflation in the country is out of control — reaching over 21 per cent last month. Traditional economics tells you to raise interest rates to counter inflation. Higher rates make borrowing more expensive and saving more attractive — in theory reducing the amount of spending on goods and services. Indeed the Bank of England, facing inflation at just over 4 per cent, is hinting that it will raise them in the new year.

Ursula von der Leyen dispensing vaccines, with a halo over her head perhaps? Emmanuel Macron riding a tank to symbolise the continent’s strategic autonomy? Or various commissioners whose names no one can quite remember setting carbon targets, fining Google and Apple, and dishing out grants for roads, bridges and tunnels?  It remains to be seen just what the European Central Bank comes up with for its planned re-design of the euro banknotes. One point is perfectly clear, however: the makeover will reveal the currency’s true colours as a vehicle for European integration rather than an effective instrument of economic policy. In fact, if the ECB really wanted to redesign the

It is called managing expectations: the steady drip of forecasts and scenarios designed to prepare us for bad news, so that when that news does finally arrive it doesn’t seem nearly as bad as it would otherwise have done. So is that what the Bank of England is up to with its deputy governor, Ben Broadbent, telling us that inflation next April could ‘comfortably exceed’ 5 per cent? It is reminiscent of the moment in July when the Bank’s departing chief economist, Andy Haldane, dropped in the suggestion that inflation by the end of 2021 could be closer to four percent than three percent. The MPC is behaving like a Chancellor