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Ministers may claim that ever-tightening Covid rules are proportionate and reasonable, but if enough members of the public disagree, then the government could have a real problem on its hands. Non-compliance to another lockdown wouldn’t need to be rampant: if even 10 per cent decide not to adhere it could blow a hole in lockdown’s effectiveness. Last month, Professor Chris Whitty expressed concern over ‘behavioural fatigue’. At the weekend, senior behavioural experts questioned the government’s prospects of successfully imposing new measures after ‘party-gate’. One told The Observer that ‘trust has been eroded to a very significant level… If you don’t trust the government, why would you do what [it] asked you

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

The value of cryptocurrencies like Bitcoin, and digital assets more generally, is a controversial topic at the moment. Some dismiss decentralised finance as nothing more than a fad and a bubble, while for others we are on the cusp of a ‘monetary revolution’. For what it’s worth, my own view of crypto is somewhere down the middle. The blockchain technology which underpins crypto could be potentially transformative if used properly. But often this innovation is tarnished by the many dodgy cryptocurrencies that have emerged which have no real usefulness or value. Often issued by shady cryptoexchanges with questionable business practices, these are nothing more than high-risk speculative assets – if

We don’t yet know whether the Omicron variant will drastically accelerate the spread of coronavirus, or whether it will circumvent parts of the immune system. Nor can we be sure that the ‘light’ coronavirus restrictions announced at the weekend will be enough to combat the new strain. We can be certain, however, that these measures will come with an economic cost that politicians are, at least publicly, understating. Face masks are once again compulsory in shops and on public transport in England, and UK arrivals will need to take PCR tests within two days of landing, isolating until they get their result. But the major economic threat stems from the

Given the enthusiasm for tax cuts usually shown by Conservative MPs it is remarkable how few of them have, in public, raised objections to the government’s loose fiscal policy. True, the Prime Minister’s announcement of a hike in National Insurance ostensibly to pay for social care, elicited squeals from the back benches, yet last month’s Budget drew only muted objections. This was in spite of claims by the Resolution Foundation that the Budget will cost an average household £3000 a year – if you take into account the effect of higher prices as businesses seek to pass on their higher tax bills to consumers. Today, however, Mel Stride, former Treasury

Ping! No, not the dreaded Covid app but rather another beseeching email from CCHQ, begging money for Tory funds. Reading through the party-politicking, Mr S was curious to see that among the party’s list of achievements was the claim that ‘we’re delivering what the British people voted for’ by ‘cutting taxes for hardworking people.’  An intriguing boast, given that Rishi Sunak is hiking National Insurance, which applies to all employees including those on minimum wage, by an effective 2.5 per cent – despite the Conservative Party’s pledge in 2019 that ‘we will not raise the rate of income tax, VAT or National Insurance.’ Corporation tax has been raised to 25 per cent from

Boris Johnson’s majority plunged to just 26 last night, following a rebellion over controversial changes to social care plans. Means-tested, state-funded payments will no longer count towards the £86,000 limit on the amount people will have to pay for their care. Those with initial assets worth less than £186,000, and who have received such help, could be worse off as a consequence. Critics have pointed out that this is likely to disproportionately affect residents in the North or the Midlands because of differential house prices. Johnson’s government isn’t the first to tie itself in knots over the issue of social care funding. Successive administrations have failed to bring about reform

Boris Johnson kickstarted the Confederation of British Industry’s annual conference this week with a surprising performance. The plan was to emphasise his government’s commitment to regenerating the economy, post-pandemic, with a green agenda. In practice, it was a confused and muddled speech which even the speech-giver (let alone the audience) found difficult to follow. The highlights were dominated by awkward moments: Johnson asking the room early on who had received their booster shots, only to quickly follow up that everyone looked ‘young and thrusting’ – presumably to cover for an insufficient number of hands in the air. A chunk of the speech was dedicated to the PM reminiscing about what he said

On the surface, the UK’s economic recovery appears to be on track. The Office for National Statistics revealed this morning that retail sales were up 0.8 per cent last month, beating expectations of a 0.5 per cent rise. Consumer confidence and the number of people heading back to the shops continues to rise, with the proportion of online retail sales falling to 27.3 per cent. This is substantially higher, however, than the pre-Covid level of just under 20 per cent. Non-food stores saw the biggest sales increase – 4.2 per cent – boosted, in part, by early Christmas sales. Toys, clothes and sports equipment all saw increases. Again, this is

Inflation is back, and while some people continue to cling to the idea that its resurgence is a temporary phenomenon, today’s figures further stamp out that optimism. Consumer inflation was up to 4.2 per cent in the year to October, a surge from just over 3 per cent the month before. This takes inflation to its highest level since 2011, with prices only set to rise further heading into 2022. Why has the Bank been so insistent about the temporary nature of this round of inflation? Much of the rise is due to increasing energy costs, which were always expected to worsen this winter: global shortages continue to bite as the

Could flexible working hurt women’s careers? That’s the view of the Bank of England’s Catherine Mann, who fears it could open ‘two tracks’ and widen the ‘gender gap’. If that wasn’t bad enough, Scottish Widows tells us that because of lower pay and longer life expectancies young women ‘must save an extra £185,000 to reach the same retirement income as men’. This week, we will inevitably hear the baseless assertion that women are working ‘for free’ until the end of December. This Thursday, we’ll also hear the Fawcett Society make its annual fuss over ‘Equal Pay Day‘. This, of course, is the day when women are, allegedly, no longer earning