Money

If Boris Johnson manages to cling on to his job, he’ll have much more than the parties of lockdowns past to worry about. Britain’s cost of living crisis is worsening still, with CPI inflation rising by 5.4 per cent in the 12 months leading up to December last year. This has, once again, outpaced consensus, surging even further past the Bank of England’s most recent official forecast. There’s little doubt left that heavy government spending is playing a significant role in the inflation we’re experiencing now Inflation is now at a 30-year high. And it’s still rising. Capital Economics now estimates a peak of 7 per cent around April, and there

Nadine Dorries came out fighting over the weekend to declare it was time to discuss new ways to fund and sell the ‘great British content’ produced by the BBC. But it turned out she had little in the way of ammunition once she reached the Commons yesterday. There will be a two-year freeze in the £159 fee — a measure that will represent a real-terms cut in the corporation’s funding, but hardly the ‘mortal threat’ some alarmists have declared. In 2019–20, the BBC generated total income of £4.94 billion, of which £3.52 billion was public funding from the licence fee. The Department for Culture, Media and Sport said the BBC

Nearly two years after the UK experienced its biggest economic collapse in 300 years, the economy has returned to pre-pandemic levels. GDP is estimated by the ONS to have grown by 0.9 per cent in November, almost twice what had been expected – making it 0.7 per cent larger than it was in February 2020. The US and Sweden managed to pass pre-pandemic levels last spring. China took just a few months. But Britain, whose economy fell further than almost any developed country in 2020, is catching up. Britain, whose economy fell further than almost any developed country in 2020, is catching up The below chart shows how UK growth

A nudge on interest rates from the Federal Reserve. A gradual winding down of quantitative easing. No more stimulus cheques flying out of the White House window. And rising energy prices dropping out of the annualised headline rate. This was meant to be the month when the spurt of inflation in the United States turned out – as president Joe Biden and his officials insisted it would – to be mostly transitory. We were told that it would die down over the course of this year. For Biden and the US economy, there is now no easy way back But, whoops, if that was the plan, it has already gone

Is it time for a windfall tax on energy companies? Judging by a poll during the first lockdown – which found more than half of the UK public would welcome an additional tax on businesses that had thrived because of the extraordinary circumstances of the pandemic – it would be a popular measure. A windfall is typically something you get for free, after all. Energy policy has become increasingly muddled in recent years Advocates often reference Chancellor Gordon Brown’s windfall tax on privatised utilities in 1997, which raised £5.2bn over a number of years and was justified on the grounds that corporate profits had risen due to failed government policy.

When the whole opioid crisis blew up, the Sackler family — whose fortune was substantially built on getting thousands of Americans debilitatingly addicted to OxyContin — withdrew for a period from their charitable giving. It was reported yesterday, though, that they’re back in the philanthropy business, and last year gave £3.5 million to various British causes — among them the Oxford Philharmonic Orchestra, the Watermill Theatre, King’s College, London, the homelessness charity Amber Foundation, various churches, academies and conservation projects. ‘The return of the Sacklers to philanthropy in the UK,’ the report stated confidently, ‘will cause outrage’. Really? I remember being similarly perplexed when green campaigners were protesting about the National

Many of the thorniest problems of politics come down to the same thing: timeframes. Big problems generally require solutions that take a long time to develop and implement. But the decision to do this must be made by politicians who work to much shorter timetables: news cycles measured in days and weeks, ministerial appointments that last months, and elections that are never more than a few years off. The approaching pain of rising energy prices is a case in point. It may well be surprising and new that European wholesale gas prices rose by 800 per cent last year. It is neither surprising nor new that the UK depends for

For once, yesterday’s Downing Street press conference included a worthwhile question, and not of the ‘why aren’t you locking us down?’ variety. In fact, it had nothing to do with Covid at all. Harry Cole of the Sun asked why, given that the Prime Minister had once cited the ability to remove VAT from fuel bills as a tangible benefit of leaving the EU, he was not now taking advantage of his new-found freedom, especially as bills are heading sharply upwards. Boris Johnson mumbled something about not wanting to help people who could easily afford their energy bills and that the government might consider more targeted help instead. The VAT

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,