Economy

Could George Osborne be in line for a genuine windfall? The Chancellor is getting quite good at conjuring fake ones (Post Office pensions, raiding £35 billion from the Bank of England) but he has yet to sell the 4G licenses. This could be more significant than next month’s mini-Budget. The stunning success of Ireland’s 4G auction (here) suggests that the UK auction may yield a lot more than is currently expected. A decade ago, governments world over pocketed massive windfalls auctioning the 3G licenses to mobile operators. This time Ofcom has put a reserve of £1.3 billion. But the Irish government expected to get just €170 million from its licenses.

The Eurozone is now in recession – this, at least, is what is implied by today’s avalanche of dire economic data. Eurostat has not (yet) made this calculation; but Capital Economics has. Take into account the relative size of the Eurozone economies who have declared figures and it suggests a fall of 0.1 per cent for Q3 which, which, coming after the contraction of 0.2 per cent in Q2, would meet the test for recession (two consecutive quarters of negative growth). So, like Britain, a double-dip recession. Greece and Portugal are still in meltdown. The Germans are doing okay, with growth of 0.2 per cent for Q3. This is mainly

With the elections over and Barack Obama returned to the White House for four more years, the attention of US politicians has turned to the so-called ‘fiscal cliff’ — a collection of tax hikes and spending cuts that threaten to send the country back into recession. But what exactly is going on, and why? The Bush tax cuts George W Bush passed two major tax cut packages during the first term of his Presidency: the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003. Together, they lowered federal tax rates on income (for example, the top rate fell from

A large part of the Tory message at the next election will be ‘don’t let Labour ruin the economy again’. One of the things that will help the Tories make this a topic of the campaign is Ed Balls’s constant desire to defend the record of the last Labour government. As Jonathan noted earlier, when Andrew Neil pointed out that Labour was — contrary to Balls’s earlier denials — running a structural deficit in 2007, Balls got into a long-winded attempt to justify both that and his denial of this point last year.

Finally, some good news for the government – the public seems unconcerned by its recent difficulties. In spite of plebgate and George Osborne’s train ticket dominating this weekend’s papers, polling out today shows the Conservatives have managed to reverse their voting share decline in the wake of their party conference. The Populus/Times poll places the Tories on 35 per cent, up five points from September while Labour are down by the same amount. This brings Labour’s lead down to where it was before this year’s budget in March 2012: The Guardian/ICM polling shows a smaller increase, with Labour on 41 per cent and 33 per cent for the Conservatives. This is

Things have come to a pretty pass when the Labour Party is launching a campaign with a deficit clock to expose George Osborne’s shortcomings. But they are about to do today, I understand, highlighting how much extra the government is borrowing over the four days of the Tory conference compared to last year: £277 million, they say. I’ll post the link when it becomes live. Significantly, Labour is shifting from being in a position of deficit denial towards a position where they will (I suspect) sign up to Osborne’s spending plans. As Balls has found out, Osborne’s game is to dress up only-slightly-modified Labour spending plans with Tory language. But

One of the more sombre passages in Ed Miliband’s barnstorming speech this afternoon was when he tackled the thorny issue of what a Labour government would actually do about the cuts. While both the Labour leader and Ed Balls are keen to regain the trust of the British public on the economy, they are also trying to introduce a counter-narrative to the ‘are you ready to trust Labour with your money again?‘ line that Nick Clegg produced last week. Just as George Osborne and colleagues have spent the first two and a half years selling the line that they are ‘clearing up the mess’ of the last Labour government, Miliband

The standard joke is that Sir John Major is the ultimate grey man, as if Charles Pooter had been painted by Wilhelm Hammershoi in particularly pallid light. But the pea-eating caricature of yesteryear was not in evidence on the Andrew Marr Show this morning. There was something calm and old-fashioned about Major during his interview; even his platitudes carried an air of wisdom. The former Disability Minister praised the Olympic and Paralympic Games, revelling in the fact that the games had revived aspects of our national character which he had assumed dead. The conversation was about old times: his father’s career in Music Halls during the early years of the

Much is being made today of reports that George Osborne will drop his fiscal target in his autumn statement on 5 December. Isabel reported earlier that, faced with breaking his own rule, Osborne will abandon it rather than implement more cuts to meet it. All the fuss seems to stem from a note by Citi Reasearch last Friday. You can read the whole thing here, but here’s a summary. Like Gordon Brown, Osborne has two fiscal rules. Neither says anything about eliminating the deficit, or even halving it. The first — called the ‘fiscal mandate’ — is ‘to balance the cyclically-adjusted current budget by the end of a rolling, five-year