Money

It will be better for our careers. We will network more effectively, spark ideas off one another, and learn new things from our colleagues, as well as getting a reminder from time to time of how annoying they are.  Chancellor Rishi Sunak took a break today from his usual occupation of dishing out vast sums of free money to remind us all of how much he learned from working in an office. Sunak is urging us all to get back to the skyscraper, shop, warehouse, or whatever, as quickly as possible. But hold on. Sure, there is nothing wrong with a few warm words to that effect – but we need more

Alongside the UK’s latest step in reopening, optimistic forecasts have been rolling in concerning the economy’s timeline for returning to pre-pandemic levels. This morning, we got another positive indication that businesses are resuming normal operations. The latest update on furlough figures shows 1.9 million workers are still on the scheme as of the end of June — the lowest level of people having their wages paid by the state since furlough was first introduced during last year’s spring lockdown. The number of people on the scheme fell by half a million last month, and by roughly three million since March. The continued fall is hardly surprising, as each month since

As the government continues to put forward an extremely cautious narrative about re-opening, more evidence emerged today that the economy is surging ahead. The International Monetary Fund has once again upgraded its forecast for Britain’s growth this year: its April prediction of 5.3 per cent growth in 2021 has now been revised upward to 7 per cent. If correct, the UK could boast one of the fastest growing economies amongst major countries, with a recovery looking to be on par with the United States. Today’s update from the IMF fits a trend. Just this weekend the EY Item Club forecast 7.6 per cent growth this year – the fastest rate

The UK is growing at the fastest pace in 80 years. The United States, fuelled by President Biden’s stimulus programme, is expanding at a breath-taking pace, while Sweden is growing at a rapid rate. Most of the global economy is bouncing back from the Covid recession at remarkable speed. There is, however, one exception. Australia. What has long been one of the most successful economies in the world is heading back not just into lockdown but into recession as well — and giving the world a sharp lesson in the cost of ‘zero Covid’. Over the last year, Australia, along with New Zealand, has been heaped with praise for the

Do we need an officially-sanctioned, government-backed crypto-currency underwritten by sterling — a ‘Britcoin’ — as Rishi Sunak is said to be advocating? At first sight it is hard to see the attraction. Surely, there are two principle reasons why people feel attracted to Bitcoin and other cryptocurrencies. Firstly, if you are a drug dealer, you might hope that it is a way of keeping your stash of wealth beyond the reach of law enforcers. This hasn’t quite proved true, but you can understand why cryptocurrencies have their fans in the criminal world. Secondly, there is the hope of making a quick, speculative profit. The wildly gyrating values of Bitcoin and

For such a radical change to our monetary system, the lack of understanding of quantitative easing (QE) and its impacts is worrying. That is one of the conclusions drawn from this month’s House of Lords economic affairs committee report, ‘Quantitative easing: a dangerous addiction?’ QE involves central banks creating money and using it to buy financial assets (usually government bonds). It is known as an ‘unconventional’ monetary tool, as opposed to the conventional monetary policy of raising and lowering interest rates. But as this new report highlights, the practice has very much become a conventional part of monetary policy. The financial crisis in 2007-08 kicked off rounds of QE in

When Gordon Brown raised National Insurance in 2002 to put more money into the health service, it was seen as a huge political gamble. The Tories — including one Boris Johnson — denounced the move in furious terms. In a sign of how far to the left the country has moved, the Tories are planning to do something very similar to cover the cost of a social care cap and dealing with the NHS backlog. If the Tories do this, it will put Labour in a tricky position. How do they respond when a Tory government raises taxes to put more money into the NHS? If the Tories do this,

Should we be pleased that net government borrowing for June came in below expectations, at £22.8 billion – £5.5 billion less than June 2020? Should we see it as a sign that the economy is recovering a little faster than had been hoped? That is the spin being put on the public borrowing figures released this morning. An alternative, and less rosy, view might come from examining two figures in particular. Firstly, while borrowing is down compared with June 2020, public spending is actually up. Over the month the government spent £84.1 billion of our money, £2.5 billion more than in the same month a year earlier. Balancing the budget

If a government does not wish to break a manifesto promise it should punt fewer such ‘promises’ into its manifesto. The modern mania for throwing everything possible into a manifesto – the better to proof it against interference from the House of Lords – renders manifestoes nothing more than a job lot of largely spurious pledges. The vision thing is notable for its absence and the vision thing is more important – and more revealing – than a grocery list of promises. Still, if you must break a promise it is no bad thing to start with a large and stupid one. The Conservative commitment not to raise any of

This month’s announcement of a new economic advisory council formed by the Scottish government came with the usual flow of superlatives. The 17-member group will publish a strategy paper later this year to help deliver the ‘transformational change Scotland needs’, according to economy secretary Kate Forbes. We are promised ‘bold ideas’ that will bring ‘new, good and green jobs’. We have been here before. This group replaces a previous Council of Economic Advisers set up by Alex Salmond in 2007. It too had a remit to galvanise the Scottish economy. It provided 14 years of strategic advice (seven of those under Nicola Sturgeon’s leadership) to the SNP administration with no

The European Commission’s Fit-for-55 emission plan, with its extended emission trading scheme and the new carbon border tax, will be fighting an uphill battle. The carbon border tax scheme — the first of its kind in the world — could become Europe’s opening bid to get moving internationally beyond mere discussions. If there is an international agreement in the end, it would have served a purpose. If not, it may only end up creating new battle lines between trading partners. There may be broad consensus on the goal of reducing carbon emissions, but questions remain: who is to shoulder the bill? Europe’s carbon-intensive industries fear a technocratic monster The carbon

What is the point of the National Food Strategy? When Henry Dimbleby was hired as Britain’s ‘food tsar’ several years ago, the idea was to develop some blue sky thinking and to have someone look at the issue with a fresh pair of eyes, but when he produced his first report last year, it contained the same generic, flat-pack, bone-headed, nanny-state recommendations that every other voice of the establishment had been calling for. So predictable were his conclusions that the government had already committed itself to implementing most of them by the time it was published and he resorted to moaning about Percy Pigs to give himself an angle. The