Money

Britain may be about to go from one economic extreme to another. This winter the OECD calculated Britain suffered one of the highest levels of economic damage in the developed world, compared with the year before, due to its stringent lockdown. Fast forward to spring and the UK’s trajectory for economic recovery is now being revised, with forecasts only moving in one direction: up. Today alone, two heavy hitters boosted their predictions. This morning EY Item Club revised its 2021 growth forecast from 5 per cent to 6.8 per cent – which, if accurate, would see the UK grow at its fastest rate on record, recovering to pre-pandemic levels months earlier

It was once my job to brief Boris on football. Then he was very much a free marketeer, now it is amazing to see that he wants to play the socialist sports lord, a task that defeated Tony Blair. The briefing took place on a Sunday afternoon in September 1998 when news emerged that Manchester United’s directors were planning to sell the club to Rupert Murdoch’s BSkyB. Boris had decided to devote his column to it. His problem was he did not know anything about the deal, or for that matter much about English football, and as the chief sports news correspondent for the Daily Telegraph, he rang me to

What killed the European Super League? Undoubtedly part of it was the backlash from the fans. But the government’s threats to intervene were clearly a factor too. A super league where the six English clubs couldn’t get work permits for any overseas players would have quickly lost its appeal – and the government and the FA were clearly prepared to go down this route. Brexit had strengthened the government’s hand on this; freedom of movement would have meant that any footballer with an EU passport could have come and played for one of the Super League clubs. Football is clearly a special case. But the government’s willingness to intervene does seem

Over the past few months, each labour market update from the Office for National Statistics has suggested forecasts predicting mass unemployment were wide of the mark. In the three months leading up to February, unemployment was estimated to hover at 4.9 per cent, 0.9 per cent higher than the previous year but down 0.1 per cent from the previous month. Where credit is due is debated – and likely shared. The jobs retention scheme continues to shield five million workers, who cannot yet return to their jobs, from unemployed status. That GDP has not taken anywhere near the same tumble this winter as it did last spring speaks to innovative

Compared with the United States, the UK has so far been relatively cautious about launching stimulus programmes to kick-start the economy. And yet perhaps it doesn’t need to. People are paying off their credit cards, putting some money into the stock market, buying new houses, as well as finally booking a restaurant and getting back to the shops. A lot of money is about to be unleashed on the economy, even if this stimulus is largely invisible now. The interesting question is this: where will all the money go, and which sectors will be the big winners? It may at times seem as if Rishi Sunak is spending like crazy.

UK GDP ever so slightly edged up in February, growing 0.4 per cent according to today’s update from the Office for National Statistics. No surprises here: there were no changes to lockdown restrictions between January and February, which gave the economy little room for manoeuvre. The ONS has revised January’s GDP fall from 2.9 to 2.2 per cent: still a contraction, but another good indicator that businesses have significantly adapted to lockdown rules, which has meant that this winter’s lockdown didn’t plunge GDP down to record levels as it did last spring. Still, February serves as another reminder that – despite spectacular market innovation – there is a ceiling on

The market emphatically endorsed my negative opinion of the Deliveroo share offer, which bombed from its offer price of 390p to close at 282p before Easter. The biggest London IPO since the commodity giant Glencore went public in 2011 now also stands as the most embarrassing flop in living City memory. Goldman Sachs and JP Morgan Cazenove, the deal’s bookrunners, must have known it was in jeopardy when they knocked more than a billion off their first indicative valuation after UK institutional investors lined up to say they wouldn’t touch it. But 70,000 Deliveroo app users, having failed to read that signal, bought into the ‘community offer’ — and have

The message from the budget last month was clear – at some point in the future the Chancellor is going to raise taxes. A lot. The announced increase in corporation tax rate from 19 per cent to 25 per cent from 2023 is a sign of things to come. And yet the overall tax take has already increased substantially since the Thatcher lows of the late 1980s. The amount of tax the government raises is already equivalent to 35 per cent of GDP, the highest level since 1969. And prior that that, as the chart above shows, you have to go back to 1948/9 for years when the tax take was this

‘The reason we have the vaccine success is because of capitalism — because of greed, my friends.’ So Boris Johnson told his backbenchers last week, though he immediately muttered ‘Forget I said that’ while aides tried to explain it as a joke on the chief whip, who was munching a cheese and pickle sandwich at the time. Whatever, the PM’s gaffe makes a neat text for a short Easter sermon. The fact is that ‘capitalism’ — the mustering of vast private-sector resources to bring lab-tested potions to mass production in record time — has indeed delivered a triumph, in combination with university science, a smart Whitehall taskforce, military logistics and

To most of us, cryptocurrencies remain an esoteric world, beloved by nerds and incomprehensible to the rest of us. Does Visa’s announcement this week that it will now process payments directly in a cryptocurrency called USDCoin change that, and hasten us to a day when we will all have cryptocurrency accounts which we use to do our day-to-day shopping? You don’t need to understand the mathematics of cryptocurrencies and blockchain to work out that the prospect of shopping with crypto is rather concerning for two reasons. Firstly, cryptocurrencies are an unregulated Wild West. While the pound in your pocket is backed by the Bank of England and the pound in

Just as the auto industry embraces the electric future I wrote about last month, it hits a new crisis: a shortage of the microchips that power everything under the bonnet. As a parable of globalisation’s perils, this one has all the ingredients from trade war to fire, drought and Covid pestilence. When car production slumped last year, chip-makers switched to meet booming demand for parts for smartphones, tablets and laptops. Now car factories are keen to raise output again, but there aren’t enough chips to go round. The leading source, Taiwan, is entangled in US-China tensions and its factories are afflicted by water shortages; other plants have been stricken by

‘Unloved’ is an adjective often applied to British shares in recent years. A more appropriate description might be ‘abandoned, with half a dozen kids and the rent unpaid’. Since referendum day in June 2016 the FTSE100 index has grown by 10 per cent. Over the same period the Hang Seng is up 42 per cent, the DAX up 44 per cent, the Dow Jones up 88 per cent and the Nasdaq up 184 per cent. The FTSE100’s longstanding underperformance goes back far further, though, than that. It is still lower than it was on the last day of the last century – although there has been substantial growth in the midcap stocks which make up