Money

This column generally takes a sceptical view of financial novelties and gimmicks. So my antennae have twitched in recent days at frequent mentions of Spacs, or ‘Special Purpose Acquisition Companies’, which are the latest plaything of Wall Street and could be about to go large over here. Also known as a ‘blank cheque’ company, a Spac is a stockmarket-listed cash shell that raises money with a view to merging with a real — usually hi-tech, often relatively early-stage — business seeking a fast route to listed status. Hundreds of Spacs have been created in the US since the craze began last year, many with celebrity names — sports stars, astronauts,

Punters have been warning about the over-valuation of tech stocks for so long that great fortunes have been made in the interim. Then again, anyone old enough to remember back 20 years will know that tech stocks are not invincible – they can indeed crash. So is the wobble in tech stocks since the middle of February just that – a wobble – or is it the beginning of something bigger? Has the end of the party finally arrived? Since the middle of February the NASDAQ – the US exchange for tech stocks – has slid by just over eight per cent. Some of the big players – the ‘FAANGs’ —

Buy when there is gunfire on the streets, goes the old adage. But could this be a case of the right time to buy being when there is, well, hardly anything happening on the streets? Few investments have been as hard hit by Covid-19 as commercial property in central London. As shops and restaurants have been closed, and office staff made to work from home, landlords have struggled to collect their rent. In the six months to September, for example, Shaftesbury, which owns 600 buildings in the West End including 1.9 million square foot of retail and office space, managed to collect only 41 per cent of what was due,

There is one certainty for every Budget day: that the chancellor will dream up some novel scheme to prop up the housing market. Rishi Sunak’s idea of providing state guarantees for 95 per cent mortgages taken out by first time buyers isn’t, however, that new. It is really just a reheated version of one branch of the Help to Buy scheme run by George Osborne between 2013 and 2016. This is the story of the property market over the past quarter century: in the long property boom of the late 1990s and early 2000s banks got themselves into huge trouble by advancing high loan-to-value mortgages. They did so in two ways:

Back in November, when Downing Street’s pandemic responses looked daily more incompetent, the announcement of a ban on sales of new petrol and diesel cars by 2030, ten years earlier than originally planned, was largely greeted — along with the rest of the ‘Ten Point Plan for a Green Industrial Revolution’ — as another exercise in Johnsonian distraction and thin-air number-plucking. Auto makers responded defensively, citing the huge costs of re-engineering model ranges in short order and the shameful failure of ministers to encourage investment in plug-in networks for electric vehicles. Meanwhile, Tesla founder Elon Musk announced he would site a battery ‘gigafactory’ in Germany because Brexit made the UK

What an enriching business it is, having a global pandemic. That is the conclusion, at any rate, one might reach from reading, in isolation, the government’s figures on employment and earnings. According to the Office of National Statistics (ONS) the average earnings for employees have risen by 4.7 per cent over the past 12 months – finally lifting the nation from a lost decade of near-static wages. Never mind that the economy tanked by nearly 10 per cent last year, nor that whole sections of the economy are in the deep freeze, we’re in the middle of a pay bonanza the likes of which haven’t been seen in Britain for a decade

No sign of progress towards a workable deal with the EU for financial services, on which news is due next month. Bank of England Governor Andrew Bailey warned in unusually frank terms this week that although the UK has granted ‘equivalence’ to the EU in some financial activities, ‘the EU has not so far done likewise to the UK’ and seems unwilling to do so by reference to a ‘common framework of global standards’. Instead, Brussels is seeking to apply to the UK ‘a standard that the EU holds no other country to’, amounting to ‘rule-taking pure and simple’. Given the importance of financial services to the UK economy, that’s

Bank of England chief economist Andy Haldane last week described the UK economy as a ‘coiled spring’ waiting to rebound just as soon as lockdown restrictions are eased. But is it a spring like the one on which Zebedee from the Magic Roundabout used to bounce around, or is it like a Slinky – the toy you place at the top of the stairs and watch, fixated, as it furls and unfurls itself right down to the bottom? Haldane, it is fair to say, sees it much like the former. He describes the economy as full of ‘pent-up financial energy’. While the bank sees lockdown number three causing output to

The last twelve months have been rather good for Starling Bank. While its flashier rivals have struggled during COVID-19, Starling is now profitable, one of just a handful of FinTechs to achieve this feat. It has also strengthened its claim to be Britain’s best bank, having topped Which?’s latest best and worst banks list. But Starling now finds itself at a crossroads. What path will it take? And can it keep its edge? Anne Boden, Starling’s enigmatic CEO & founder, has talked about wanting to float her bank, but it’s also clear that Starling is on the shopping list of some financial goliaths. Both Lloyds Banking Group, the UK’s biggest

If your local pub ever reopens, don’t be surprised if one thing is missing: the till. The anti-cash lobby is seeking to take advantage of the pandemic to rid us of our banknotes once and for all. When UK Finance — the trade body for the banking and payments industry — pushed the government two weeks ago to increase the limit on contactless card payments to £100 (it was raised from £30 to £45 at the beginning of the pandemic), it was a new offensive in a campaign for a cashless society which has been going on for years. Small shops might fight back — the British Retail Consortium warns

Scottish Widows is committed to net zero alright. For years, the endowment policy I had with it was worth pretty well just what I had paid into it. Although, on second thoughts, maybe Maria Nazarova-Doyle, head of pension investments at Scottish Widows, wasn’t referring to the returns on its policies when she said this week: ‘Moving to net zero will protect savings against climate-related risks and uncertainty and offer longer-term sustainable growth by accessing low-carbon transition opportunities.’ The firm says that as an interim target it wants to halve the emissions from its share portfolio by 2030. What exactly it means by this isn’t clear. I’m not sure my share

There’s something deeply pleasing for fans of cosmic jokes everywhere about the world’s richest man personally taking the time to sell you a pup. Or a pup-related crypto-currency, at least. In between lobbing rockets at the moon, singlehandedly revolutionising the car industry and raising a ten-month old child, Elon Musk has recently been using Twitter to talk up Dogecoin – a joke crypto started in 2013 by geeks for geeks in homage to an internet meme featuring a knowing-looking Shiba Inu dog. Still with me? Every few days, Musk posts a playful tweet referencing the coin to his 46 million followers. ‘Dogecoin is the people’s crypto. No need to be

The Reddit story — in which a ragtag army of small investors have executed a spectacular short squeeze against hedge-fund goliaths — can be interpreted two ways. Some say it’s another populist citadel–storming in the spirit of the moment, but this time an admirable one because its target is ‘Wall Street’, which everyone hates: the so-called ‘stick it to the man’ version. Others see a fever of price-chasing, part-driven by lockdown despair, akin to crypto-mania and the surge in online gambling; in this version, it has nothing to do with serious investment but is a sure signal of more market turmoil ahead. To recap: several million retail investors connected via

Last year, when Rishi Sunak, after some dithering, came up with a scheme to help the self-employed during the pandemic, he made clear that it would come with a quid pro ro: higher taxes for the self-employed in the longer run. With his second Budget coming up on 3 March will he take the initiative and do what governments have been threatening to do for years – and jack up national insurance to bring it in line with the rate paid by employees? The gap between NI contributions – employees generally pay 12 per cent and their employers a further 13.8 per cent, while the self-employed generally pay 9 per cent – is

The anarchic traders of Reddit stunned stock-markets this week, boosting the share price of struggling retailer GameStop by some 400 per cent. It’s the latest stunt from WallStreetBets – an infamous Reddit page for novice millennial traders (which was featured in The Spectator last February). But who are the Redditors behind the great Wall Street coup? Here’s what we know: RoaringKitty The initial interest in GameStop has been credited to YouTuber and Redditor ‘RoaringKitty’ who has been plugging the stock as a value buy since September 2019, just after its shares slumped to an all-time low of $3.32. Having purportedly made 50 per cent on his initial investment of $50,000, RoaringKitty made