As of today, we now have four years’ worth of GDP figures since the UK first went into recession — and they don’t look pretty. By this point in the 1930s, we’d already fully recovered from the Great Depression. This time, we’re still more than 4 per cent below where we were at the start of 2008: And the international comparison isn’t very flattering either:
This morning brought the economic news that the coalition has been dreading: the country has double dipped. Now, this is based on preliminary figures which may well be revised up. But, as Pete says, the political impact of this story will be huge. The government’s handling of the economy has now been caught up in this whole argument about competence. It provides quite a back-drop to Rupert Murdoch’s testimony today. PMQs today has now taken on a special significance. Ed Miliband has two massive targets to aim at, the Jeremy Hunt revelations from yesterday and these GDP figures. For Cameron it will be his most testing appearance at the despatch
Or at least technically-speaking it did. The figures released this morning suggest that the economy shrank by 0.2 per cent in the first quarter of this year, which is the second quarter of shrinkage in a row after last winter’s 0.3 per cent fall. The numbers are tiny, but the politics is huge. It’s a double dip — and you can expect Ed Miliband to mention that fact again and again in PMQs later, with dread accompaniment from Ed Balls and his hand gestures. There are some caveats, of course. This is only a preliminary estimate, so the Office for National Statistics could revise it upwards at some point. It’s
Holland and Hollande; they’re the non-identical twins that are causing palpitations across Europe today. Holland, because the country’s Prime Minister yesterday resigned after failing to agree a package of cuts for his country’s budget. Hollande, because he’s the socialist candidate set to win the presidential election in France, probably eroding that country’s commitment to fiscal consolidation in the process. The markets quivered in fear at this morning’s headlines — and what they mean for the eurozone — even if they have, in some parts, slightly recovered since. It’s all another reminder that the Eurocrisis just isn’t going away — neither for countries such as France and the Netherlands, nor for
While Mervyn continues to inflate our universe via Quantitative Easing, another Mr King — Stephen, the chief economist of HSBC — has issued a report saying QE is a way for governments to ‘hijack the credit system’. ‘The financial system is being rigged via acts of financial repression as governments look for new ways of funding excessive debts,’ says King in his bluntly worded report. While he doesn’t cite the UK or Sir Merv by name, it’s clear that reference is being made to QEs I and II, the government’s preferred means of stimulating lending through lowering borrowing costs. Financial repression — basically, when governments fund their borrowing through imposing
23rd April, 2012 — mark it down in your calendars, CoffeeHousers. For, after weeks of froth and fury about tax, today’s the day when the government focused on spending cuts again. In a speech to the Institute for Fiscal Studies, Danny Alexander has announced what are, in theory, a couple of new restraints on spending. First, government departments will have to share information about their spending with the Treasury on a monthly basis, and let Osborne & Co. pore over it. And, second, they will also have to find extra capacity in their existing budgets for unforeseen expenditure, rather than just relying on the Treasury’s central reserve. Alexander described these
Every so often, British sportsmen are prevailed upon not to go to certain countries, in protest at some usually-hideous policy. Now it’s the turn of our racing drivers. Yvette Cooper said on Question Time last night that, at the very least, Jenson Button and Lewis Hamilton should pull out of the Formula One race this weekend. Ed Miliband wants the race to be cancelled. What baffles me is that the racing drivers should be seen as so controversial, whereas (so far as I can tell) neither Cooper nor Miliband has had anything to say about the British government approving the sale of arms to Bahrain long after its uprising started
Britain will contribute $15 billion (£10 billion) more to the International Monetary Fund. This means that there will be no need for another parliamentary vote on UK funding of the IMF as it is within the limits set by parliament in its last vote on the matter. This news has emerged in a joint statement by Australia, South Korea, Singapore and the UK; the UK’s $15 billion contribution is in proportion to this country’s voting share in the organisation. In terms of the politics of this decision, it is interesting that the Australian Liberals, the Tories’ sister party Down Under, are going to back the increase in the Australian contribution despite being
Chris Grayling gave a speech today that mirrored his response to the recent work experience brouhaha: punchy, practical and broadly persuasive. Except there were some parts that might cause a few jitters, and which are certainly representative of jitters along Downing Street. First, this passage: ‘It’s easy to hire someone from Eastern Europe with five years’ experience and who has had the get-up-and-go to cross a continent in search for work. But those who look closer to home find gems too. Very often the surly young man in a hoodie who turns up looking unwilling to work can turn into an excited and motivated employee.’ And then this: ‘I personally
Sure, the Economist’s cover story has received heaps of attention these past few days but it’s not the most interesting or even the most important cover story published by a British political magazine last week. Though I would say this, Neil O’Brien’s “Planet London” article for the Spectator is the piece the Scottish National Party should be more interested in. O’Brien makes a compelling case that London is now, more than ever, a place apart. Its triumph is both magnificent and dangerous. Magnificent because London is, in ways scarcely conceivable forty years ago, a global behemoth; dangerous because of the distorting effect this must have on British politics. In significant
Despite the Times’s headline (‘Poll shock as new U-turn looms’), there’s nothing particularly surprising in the toplines of today’s Populus poll. It merely confirms the trends already exposed by other pollsters: a widening Labour lead (Populus has it at nine points, up from four last month) and increasing discontent with the coalition (Populus has the government’s net approval rating at minus 24, down from minus 3 in September). Beneath the toplines though, there are some interesting details. As well as asking respondents how well they think the government’s doing overall, Populus asked how well they think it’s doing on various issues: So, it seems the public thinks the coalition is
In the current issue of The Spectator I interview Sweden’s Anders Borg, perhaps the most successful conservative finance minister in the world — both in his economic track record, and the accompanying electoral success. His response to the crash was a permanent tax cut to speed the recovery. At the time, everyone told him it was madness. But Borg is unusual amongst finance ministers, in that he is a trained economist. To him, madness lay in repeating the formula of the 1970s and expecting different results. Last year, Sweden celebrated the elimination of its deficit. It’s perhaps worth mentioning a few other points which I didn’t fit into the interview.
David Cameron has returned from what was a bit of a war-and-peace tour of East Asia. Taking arms dealers to Indonesia one day, posing with Aung San Suu Kyi the next. In today’s Sunday Telegraph he writes an almost-defensive piece about it all: ‘With the eurozone producing sluggish growth, we simply can’t rely on trade with Europe to generate the jobs and growth we need. We need to look south and east and do a much better job of winning business in places such as China, India, the Gulf, Africa and South America. That’s why I have been leading trade missions to some of the fastest growing parts of the world, including
In his cover piece for this week’s magazine, Neil O’Brien describes the great divide between London and the rest of the UK. One of the main differences he highlights is in their economies. He says: ‘In inner west London, economic output per head is £110,000 a year. In an important sense, these people are not living in the same country as the inhabitants of Gwent or the Wirral, whose output is just a tenth of this.’ In fact, London is set apart not just from those two poorest areas, but every other area in the country. You see, the second richest area — Edinburgh — has an output per head
You certainly don’t need polls to tell you that it’s been a bad couple of weeks for the coalition – but we’ve got them anyway. Pete noted on Sunday that the government’s approval rating was at its lowest since the start of this Parliament, and it’s actually dropped another three points since. Today’s YouGov poll finds just 21 per cent giving the coalition the thumbs up, against 64 per cent who disapprove. That’s almost identical to the 20-64 split YouGov found for Gordon Brown’s Labour government back in January 2010. The below graph shows how public opinion has turned against the coalition over the past two years: Today’s poll also
Flitting through the opinion pages this morning, there’s one headline that stands out far more than any other. It’s on Charles Moore’s column for the Telegraph, and it reads, ‘Even I’m starting to wonder: what do this lot know about anything?’ What follows underneath is effectively a catalogue of the ‘small things’ that may accumulate and cause voters to question both the coalition’s motives and its ability. I’d recommend that you read the article in full, but here is one passage from it that deserves highlighting. It concerns Francis Maude’s jerry can line: ‘But now that I have heard the Conservatives’ private explanation, which is being handed down to constituency
Pasties and jerry cans — who’d have thought that yesterday’s politics would descend into a roaring debate about two such innocuous items? And still the hullabaloo goes on. Most of today’s front pages lead with one or both of the stories, although I’d say it’s the jerry cans that win out overall. Thanks to Francis Maude’s suggestion that ‘a bit of extra fuel in a jerry can in the garage is a sensible precaution to take,’ we’re seeing headlines such as ‘Pumps go dry as ministers provoke panic’. As with the pasty row, which James discussed yesterday evening, the political dangers of this stretch far beyond the actual matter at
The row over the so-called pasty tax is a proxy. It is really a row about whether David Cameron and George Osborne get what it is like to worry about the family budget each week. In truth, I suspect that they don’t. But I think the same probably goes for Ed Miliband, Nick Clegg and the vast majority of journalists. Most of the politics of class in Westminster, as opposed to the country, is the narcissism of small difference. The best thing the coalition could do now is hold its nerve. The Budget did reveal that support for it is shallow. But, as one leading pollster said to
Are pensioners doing their bit for the recovery? The agenda of ‘intergenerational fairness’ has arisen in response to the idea that they are not, and ought to be taxed more. Daniel Knowles has made the case, in our cover story this week. Carol Sarler responds to him. In the leader, we reveal some data hitherto undisclosed: the way the oldies are responding to the recession. They’re working as never before — the below graph shows (stripping out foreign-born workers) the change over the past decade: Between 2001 and 2011, all the employment increase for UK-born people was from pension-aged workers, while working-age employment dropped. This challenges the idea of the
Will George Osborne’s refusal to look again at high levels of state spending become the greatest risk to Britain’s economic stability? There have been plenty of rude comments about the Chancellor’s supposed tactical ineptitude in the weekend press, but he has still managed to keep on borrowing and have almost no one notice. Osborne’s iron commitment is to spending, and a programme of cuts which total just under 1 per cent a year. His commitment to deficit reduction is flexible, as his three Budgets have demonstrated: Osborne spent the election campaign berating Labour for its lack of ambition in halving the deficit in four years. He’s now doing it in
