Economy

Would it be worth Trump buying Greenland?

London’s capital market needs a kick in the pants, as I write every week, and ‘activist investors’ are no bad thing if they provoke sharper corporate performance. The assault by the New York hedge funder Boaz Weinstein on seven UK investment trusts – demanding shareholder votes to replace directors with his own people and take the management of the trusts into his own firm, Saba Capital – looks like the kind of intervention that might bring positive change to the UK’s historic investment trust sector, which accounts for a third of FTSE 250 companies but according to critics offers lacklustre returns, with share prices too often stuck at discounts to

Matthew Lynn

Unmade in Britain: we’re becoming a zero-industrial society

The French sociologist Alain Touraine coined the term ‘post-industrial society’ in 1969. By the 1980s it had become shorthand for the kind of services-based, individualistic economies most major developed nations had created. Today, the UK is moving its economy beyond that. We are creating what might be called a ‘zero-industrial society’. Climate change targets, soaring energy prices and rising taxes on employment are killing off Britain’s small and vibrant industrial base. Last week, Ineos closed its ethanol plant in Grangemouth, Scotland, with its chairman Sir Jim Ratcliffe warning of ‘the extinction of our major industries’. The previous month, Airbus announced it was cutting 500 jobs. In October, JCB cut 230

The growing wealth gap between Britain and the US

New year predictions are always rash, but it feels as though one aspect of the story of 2025 can already be written. The gap between the economic fortunes of the US and Europe will continue to widen – and Britain will be trapped very much on the European side of the divide. In three weeks’ time the US will have a new leader, one who will unashamedly put the interests of US business first. Donald Trump’s threat of punitive tariffs may or may not be realised (as in his first term, it could prove to be a negotiating tool to press for the removal of restrictions on US exports and

Portrait of the week: Reform’s rising membership, peerages and an 11lb puffball

Home Nigel Farage, the leader of Reform UK, said that the party now had more members than the Conservatives. On Christmas Day, 451 migrants crossed the Channel; another 1,000 arrived in the next three days but three died off Sangatte. Lord Mandelson, having failed to be elected Chancellor of Oxford University, was appointed ambassador to the United States. Sue Gray, the Prime Minister’s former chief of staff, was made a peer with 29 other Labour nominations; among the six Conservative nominations were Nigel Biggar, a retired Oxford professor who has identified some good aspects of the British Empire, and Toby Young, founder of the Free Speech Union and an associate

My time on Hinge

Back to work, back to school, back to politics: the French call it la rentrée and my own summer idyll in their country must end soon too. Back to the miserabilism of Starmerland – where all news, especially good news, must be seen as bad. What good news is that? I mean that shop prices fell this month by 0.3 per cent, after heavy discounting of non-food goods, for the first time since 2021; overall UK inflation having fallen close to the Bank of England’s 2 per cent target. Which makes autumn interest-rate cuts all the more likely, improving the outlook for mortgage borrowers and increasing the chance that the

Is this Rachel Reeves’s idea of a programme for growth?

It is certainly true that the Labour party has been more than a little devious over the tax rises that are to come. After an election campaign in which it insisted it had no plans – and no need – to increase taxes beyond a few measures such as extending VAT on school fees, mysterious holes started appearing in the public finances as soon as the party achieved office. So acute, apparently, is the lack of funds that Sir Keir Starmer felt the need to warn us this week that October’s Budget will be ‘painful’. It is an old trick, which David Cameron and George Osborne also tried to pull

The myth of Britain’s fleeing non-doms

According to popular imagination, the skies over Britain have been full these past few months of fleets of private jets carrying their non-dom owners to fiscally safer climes. According to your point of view, this has either rid the country of parasites or denied us investment and trickle-down wealth. Two glossy reports pumped out by financial companies in the past month seemed to promote the idea and were immediately leapt upon by those who oppose the abolition of non-dom status. First, there was the UBS Global Wealth Report 2024, which predicted that the number of dollar millionaires living in Britain will plunge by 17 per cent between 2023 and 2028.

Has GDP growth come at the wrong time for Labour? 

11 min listen

The broader story this morning paints a positive picture for the UK economy. While growth in June took a pause, growth in Q2 for this year is estimated to be 0.6 per cent, roughly in line with what markets were predicting, as forecasts for UK growth have been repeatedly revised upwards since the start of the year. Growth was 0.8 per cent in the three months to May, indicating the positive upward trend only paused at the start of the summer. This sounds like great news, but has it come at the right time for Labour?  Today we have also had A Level results and top marks have risen despite

Give us a pubs tsar – but spare us Tim Martin

More than a third of UK universities are in financial doo-doo: staff cuts, cancelled courses, slashed research budgets and possible bankruptcy beckon. Behind this is the fact that domestic students paying £9,250 in fees (way behind inflation since that figure was last raised in 2017) cost £11,750 to teach, representing a collective annual £5 billion loss hitherto made up by international students paying £20,000 each. But the last government’s ban on foreign students bringing dependants with them has provoked dramatic falls in non-EU recruitment: bizarrely, the straw that’s breaking some universities’ backs is a 49 per cent decline in Nigerian students applying for one-year Master’s courses. ‘Anything short of an

Rachel Reeves has proved that strikes pay

Keir Starmer and Rachel Reeves were adamant that economic growth would be their first priority in government. It is hard to square that with the decisions the Chancellor has announced this week. The Chancellor claims to have discovered a £21.9 billion ‘black hole’ in the nation’s finances, yet she has created the largest part of that sum by deciding to spend £9.4 billion on inflation-busting pay settlements for public-sector workers without asking for reforms in return. This, it seems, is the first Reeves doctrine: pay now to avoid strikes later Junior doctors are to receive a rise of more than 20 per cent, spread over two years. But it is

Winter for boomers

-18 min listen

Rachel Reeves wakes to mixed headlines today after she announced a range of spending cuts to part fill a £22 billion ‘shortfall’ in public spending for this year alone.  The most controversial move by Reeves on Monday was her decision to axe the winter fuel benefit for pensioners not eligible for benefits. That saves £1.5 billion but has already been blasted by Martin Lewis and Age UK as a blunt measure that will hurt those on modest pensions who struggle to make ends meet.  Is there more hard medicine to come? Katy Balls speaks to Kate Andrews and John McTernan, former political secretary to Tony Blair.

Labour won’t spend outside fiscal rules, says Reeves

Chancellor Reeves adamant she will ‘make sure the sums add up’ Rachel Reeves gave an interview with Laura Kuenssberg this morning in which she emphasised the ‘mess’ she says the Conservatives have left behind, and restated that Labour would not spend outside of its fiscal rules. Kuenssberg asked the Chancellor whether she would be prepared to ignore the recommendations of the independent pay review bodies, which have called for a public sector pay rise of 5.5 per cent. Reeves would not confirm the government’s position, but accepted that ‘there is a cost to not settling’ public sector pay disputes, implying she might be open to above-inflation pay increases. What is

Kate Andrews

Will Reeves boost public sector pay?

As the dust around the election settles, a question Tory MPs and supporters still grapple with is why Rishi Sunak called the election when he did – not least because economic indicators point to improvements over the summer and autumn, as inflation returns to target and growth starts to pick up. But Rachel Reeves, the new Chancellor, is having none of this narrative. ‘I really don’t buy this idea that somehow we’ve been handed a golden inheritance,’ she told Laura Kuenssberg on the BBC this morning, in her first sit-down interview since she entered No. 11. ‘If the former prime minister and chancellor had thought things were so good, they

Can Labour deliver economic growth?

13 min listen

This morning, Rachel Reeves made her first speech as chancellor. She announced mandatory housing targets, promising 1.5 million homes over the next five years, as well as an end to the onshore wind ban. What else does she have in store, and can Labour deliver the growth the country needs? James Heale discusses with Katy Balls and Kate Andrews.

Portrait of the Week: Farage returns, Abbott reselected and Trump guilty 

Home Nigel Farage took over leadership of the Reform party from Richard Tice and is standing for parliament in Clacton. This came as news on Monday to Tice, and to Reform’s candidate for Clacton, Tony Mack. Outside the Wetherspoons pub where he launched his campaign, Farage had a McDonald’s banana milkshake thrown over him. Farage proposed net-zero immigration. The Conservatives then said they would ask the independent Migration Advisory Committee for a recommended level for an annual cap on visas, and put that to a parliamentary vote. Invasive Asian hornets, which can eat 50 bees a day, were found to have survived a British winter and might stay permanently. Rishi

Life in a changing China

39 min listen

Since 1978, China has changed beyond recognition thanks to its economic boom. 800 million people have been lifted out of poverty as GDP per capita has grown eighty times. Some 60 per cent of the country now live in cities and towns, compared to just 18 per cent before. But you know all this. What’s less talked about is what that does to the people and families who live through these changes. What is it like to have such a different life to your parents before you, and your grandparents before then? How have people made the most of the boom, and what about those who’ve been left behind? A

Life on the margins: how China’s rural deprivation curbs its success

41 min listen

Too often our stories about China are dictated by the urban experience, probably because journalists inside and outside of China are often based in the big cities; Beijing specifically. Those who live in the cities also tend to be more educated, more privileged, and so able to dominate the global attention more.  That’s why I’m particularly keen to hear about the lives of those who still live in the countryside, or at least are still considered ‘rural residents’ by the Chinese government. They make up a sizeable proportion of the population, and you’ll hear that in my first question to my guest today, we discuss just how big this group

My election advice for Starmer? Offer a new Citizen’s Charter

A giveaway Budget in March preceding a general election in May against an improving economic backdrop: that, we’re told, is Downing Street’s favoured scenario. But still the election is Keir Starmer’s to lose, so here’s my start-the-year advice to him. Don’t bang on about Rishi Sunak being too rich; don’t make immigration the issue, because you have no solutions; don’t pretend to admire Margaret Thatcher; but do channel John Major – to whom you bear much closer comparison – and offer a new Citizen’s Charter. What? Isn’t that 1991 exercise in footling managerialism, forever associated with the ‘cones hotline’, remembered as a laughable failure? Maybe, but its intention was good:

Javier Milei’s radical reforms could start to heal Argentina’s economy

Argentina has spent most of its 200-year history in deficit; no other country currently owes the International Monetary Fund a greater sum of money. The new finance minister, who entered government with President Javier Milei earlier this month, has been stark in making the point: ‘Out of the last 123 years, Argentina ran a fiscal deficit in 113… we have come to solve the addiction to fiscal deficits.’  Milei’s government is wasting little time carrying out what it calls ‘shock therapy’. The official value of the peso, Argentina’s currency, has been halved against the US dollar. Why might a government want to weaken its own currency, pushing up the price

Rishi Sunak can’t take the credit for falling inflation

Even the best-run companies have occasional leadership crises. But if you asked ChatGPT to come up with a blockbuster boardroom-bloodbath movie scenario, I doubt it would propose anything as extreme as this week’s events in its own San Francisco-based parent company, OpenAI. Chief executive and co-founder Sam Altman was fired last week for failing to be ‘consistently candid’ with OpenAI’s board, though no one was prepared to say what he had not been candid about. By Monday he had a new job leading AI research at Microsoft, OpenAI’s 49 per cent shareholder. One inside source claimed 743 of OpenAI’s 770 staff had signed a letter supporting him and many of