Money

The news just seems to get worse for Rachel Reeves. After the slight relief of last week’s inflation and GDP figures, this morning brings headlines that are even grimmer than economists expected. The government was forced to borrow £17.8 billion in December, more than twice the £6.7 billion which Rishi Sunak’s government borrowed in December 2023. In just one month, taxpayers had to spend £8.3 billion to service the government’s debt. Interest payments are now consuming over 8 per cent of government expenditure – more than is spent on education or defence – and very nearly as much as the welfare bill, which is itself ballooning. The Chancellor’s immediate problem is that

‘The golden age begins right now’ said the 47th President of the United States as he began his inauguration speech in the Capitol Rotunda. What followed was a 30-minute speech, during which Donald Trump stayed both on script and on message, reiterating his promise to declare a border crisis, deport foreign criminals, return America’s title of energy independence and to ramp on tariffs on foreign countries to ‘protect American workers and families’.  Trump aides had promised that, eight years on, the President’s second swearing-in speech would be different. Gone were the days of promoting ‘American carnage’. Today, the message was to be one of unity.  Here, the President took baby

Drill, baby drill. The mood on Net Zero is changing in the Scottish parliament where a majority of MSPs have signed a petition calling for a reversal on the ban on new oil and gas licenses in the North Sea. This sea change in attitudes to the black stuff, if you’ll excuse the pun, could portend a dramatic reversal of the Scottish government’s opposition to fossil fuels in SNP leader John Swinney’s long-delayed energy strategy. The “presumption against offshore drilling” has been the centrepiece of SNP energy policy since Cop26 in 2021, when Nicola Sturgeon posed for selfies with Greta Thunberg. Sturgeon is gone, of course – and her clean

Perhaps you could gather a group of traffic wardens and ask them how to build a racetrack. Or get the leaders of the Salvation Army over to suggest some cool ideas for a cocktail bar. Think up any improbable brainstorming sessions, and it will still be hard to imagine anything more awkward than the gathering of regulators Chancellor Rachel Reeves summoned to Downing Street today to give her some ideas on growth. After all, that is her job, not theirs.  Just the concept of frog-marching regulators into the Chancellor’s office and demanding ‘growth ideas’ is ridiculous It hardly sounds like fun. The chief executives of such august sounding bodies as

Rachel Reeves has found brief respite this morning, with the Office for National Statistics confirming that inflation dipped to 2.5 per cent in the 12 months to December, down from 2.6 per cent the month before. This is a smaller rise than had been expected (the consensus was 2.6 per cent) and roughly in line with the Bank of England’s forecast from November, which had predicted a 2.4 per cent increase. It’s welcome news for a Chancellor who is under pressure. Core inflation slowed too, from 3.5 per cent in the year to November, to 3.2 per cent in December. This competes for the best news in the update, as core

Rachel Reeves did her best to keep today’s China visit statement on topic. The Chancellor wanted to talk about ‘cooperation’, ‘competing where our interests differ,’ her efforts to break down market barriers and the £600 million she secured in investment. But other MPs had other ideas.  ‘I know the Chancellor has been away,’ said the Shadow Chancellor Mel Stride. ‘So let me update her on the mess she left behind.’ So began the battle between the Chancellor – to stay on topic – and her opposition to bring up the long list of economic woes that have come to the forefront this week: not just the substantial rise in borrowing

In politics as in everyday life it is possible to be right at the same time as being terribly, terribly wrong. Look no further than Liz Truss instructing her lawyers to send a ‘cease and desist letter’ to Keir Starmer demanding that he stops accusing her of “crashing the economy”. The claim, she alleges, is not only false but contributed to her losing her South West Norfolk seat in last year’s general election. Truss is right, as it happens – the mini budget delivered by her Chancellor Kwasi Kwarteng during her micro-premiership may have precipitated a run on bond markets, but it had little effect on the economy, and Britain did

The new year may have rustled up some surprise stand-offs for the Labour government (mainly calls from X founder Elon Musk for Keir Starmer to resign), but the rise of new problems does not mean the old problems have disappeared. A harsh reminder has been dished out this morning, as long-term borrowing costs reached a 27-year high, calling into question yet again exactly how the Treasury is going to make good on its spending commitments while sticking to the Chancellor’s own fiscal rules. Thirty-year gilt yields hit 5.21 per cent this morning – a level that surpasses the surge in borrowing costs following Liz Truss’s mini-Budget in 2022. The ten-year

When the British government spent £400 million on the satellite internet start-up OneWeb back in 2020, it was seen as precisely the kind of active, tech-led industrial strategy that could re-boot the British economy. There were hopes the deal would help secure a place for the UK at the heart of the emerging space economy. Then prime minister Boris Johnson saw it as a key part of launching ‘Galactic Britain’. But four years on, the taxpayer is on the hook for a £300 million paper loss after shares in OneWeb’s parent company sank to a record low. The money poured into OneWeb has proved to be remarkably poor value Even