Economy

Do divorces really increase after Christmas?

Now and then Were households allowed to mix at Christmas during the plague? Samuel Pepys’s diary entry for 25 December 1665: ‘To church in the morning, and there saw a wedding… which I have not seen many a day; and the young people so merry one with another, and strange to see what delight we married people have to see these poor fools decoyed into our condition… thence to my Lord Bruncker’s by invitation and dined there…’ Festive fights Do divorces really increase thanks to Christmas? Divorce lawyers often say they’re especially busy after Christmas, as couples seek to untie the knot after a fractious time. But since the HM

Ring out, wild bells: 2021 will be a year of renewal

Save for those old enough to have lived through the second world war and its immediate austere aftermath, it would be hard to remember a Christmas which felt less festive. Or a new year that brings such foreboding. In spite of the severe restraints on our lives, which have been in place for months now, it seems likely that we will see some sort of third coronavirus wave with a third lockdown also on the cards. And at the same time, Britain will be embarking on a Brexit adventure that many people still see as reckless and unwanted. Yet if we look a little beyond the immediate future, things begin

The ideological bankruptcy of modern monetary theory

If you can’t explain something, try an abbreviation. The latest in economics is MMT — Modern Monetary Theory or, in other words, a magic money tree. It’s a simple idea. It costs almost nothing to print money: the cost of printing banknotes is negligible compared with their face value, and even lower when the Bank of England creates money electronically through its so-called ‘quantitative easing’ programme (QE). That money could be given to the public — either directly or indirectly via the government — to enable people to spend more, so raising output and employment. We are all better off. Why didn’t we think of this before? Well, of course

More Brexit talks are the worst possible outcome for the economy

Currency speculators at some of the hedge funds in Mayfair may be feeling quietly pleased. Trade experts will be relieved that their lucrative consultancy gigs will keep on coming. Heck, even financial columnists can safely pontificate about the possible outcome for a while yet, while the FBPE mob on Twitter can carry on predicting the apocalypse every time Nissan adjusts its production schedules. There are a few people for whom today’s agreement between Boris Johnson and European Commission President Ursula von der Leyen to carry on discussing a trade deal will come as a relief. For the wider economy, however, it is little short of a disaster. It is hard

Wealth taxes are not the answer to our financial woes

Today the Wealth Tax Commission, an initiative involving the LSE, has recommended a ‘one-off’ 5 per cent levy on the assets of Britain’s wealthy residents to pay for the costs of the pandemic. Two immediate problems jump out of the proposal. First, to raise the money it would not be a one-off levy, but rather a 1 per cent tax for five years on the total wealth — property, savings, you name it — on households worth more than £1 million (the tax is estimated to hit one in six adults). Second, this five year period is estimated to raise £260 billion — close to the £280 billion the Office for Budget

The government is sending the high street to an early grave

Does it matter that Debenhams and the Arcadia group have gone under this week, taking 25,000 jobs with them and leaving large gaps in the high street? In normal times we would be minded to say no. The failure of businesses — large ones, included — is part of a healthy market economy. It is a routine aspect of the renewal process, whereby good upstart businesses drive out tired and stagnant retailers, to the benefit of consumers and employees alike. If unemployment were as low as it was at the beginning of this year, the redundant staff would not have had to wait long, or search far, for alternative employment.

Sam Leith

The texture of our country is changing before our eyes

On Saturday night we sat around the kitchen table, my family and I, and had a takeaway from the Turkish restaurant on our high street. We opened box after box: chunky tzatziki; calamari in crisp batter; salty ovals of sucuk; flatbread studded with black and yellow sesame seeds; hot homemade falafels, crunchy outside and yielding within, smeared with cool hummus. And, which I’d been missing since lockdown began, lamb ribs: skin salty and crisp from the grill, the meat underneath sweet and chewy, tarring their bed of rice. God it was bliss. But it made me feel melancholy, too. Meze & Shish only opened in the past couple of years

Boris’s tier assessment says nothing new

In an attempt to win tomorrow’s vote on the new tier system — without relying on Labour’s support — Boris Johnson promised to publish analysis of the health, social and economic impact that the new tier system would have on the nation. But potential rebels are unlikely to be satisfied with the resulting document, published earlier this afternoon.  The intention was to show sceptical MPs that the government is seriously weighing up the trade-offs between the effects of Covid and the effects of stopping its spread. But it did not include a rigorous economic analysis of the tier system: in fact, it provided no cost-benefit analysis of any specific restriction. Instead of

It’s make-or-break time for retailers – and the economy

Take a stroll through central London and you’ll be overwhelmed with Christmas cheer. The angels and fairy lights are draped above Piccadilly, the shop windows packed full of evergreen, holly and ornaments. Fortnum & Mason has been transformed into the most decadent Advent calendar imaginable, and Cartier’s building is wrapped up in a giant red bow. Similar festive displays can be spotted all across the UK: Cardiff Castle is now a winter wonderland, the Edinburgh Zoo has unveiled its Arctic adventure, and the Belfast Christmas lights were switched on by domino effect, one part of the city following another. But although the decorations may be displayed in all their glory,

Why next year could bring a 1980s-style spending boom

Most forecasts for the economy are pretty grim: bankruptcies, bad debts, job losses and a massive debt hangover leave little room for optimism. But I’m going to try. I think there is a wodge of money burning a hole in UK consumers’ pockets. And once they can, households will go out and spend it. This wall of money can be seen in the savings ratio — the amount of income that households save. For decades it has wobbled around 10 per cent. But the latest figures from the Office for National Statistics (ONS) show that households are now saving an astonishing 30 per cent of their income. It’s never been

James Forsyth

A vaccine won’t heal the scarring of lockdown

Ever since the pandemic struck, a spectre has haunted Boris Johnson: would Britain ever escape from this? His scientific advisers had given him a terrifying vision. Only 7 per cent of the public had caught Covid in the first wave, they said, meaning 93 per cent were still susceptible. So what was to stop his premiership being a never-ending cycle of lockdowns? Now, he has his answer: not one but three vaccines, two with efficacy rates of 95 per cent. This has transformed his outlook. The war against Covid is not over, but victory looks imminent. The Prime Minister has a weakness for wartime metaphors, but this time they are

Rod Liddle

The public sector delusion

I wonder how much more money we will have to bung the teachers in order to inculcate within them an amenability towards doing a spot of teaching? They still seem terribly averse to the whole idea. During the first lockdown, 60 per cent of young children received no virtual lessons at all from teaching staff, and one in five pupils over 12 was given no work to do, according to the Children’s Commissioner. Virtual lessons shouldn’t have been terribly difficult to arrange, but most of the time there were none. My own daughter had no virtual lessons from March to July (which is why she’s no longer in the state

A vaccine won’t solve all our Covid problems

Today’s Oxford-AstraZeneca vaccine update has raised hopes that life in Britain could start getting back to normal by spring. But cheers in Downing Street didn’t extend to AstraZeneca’s share price, which fell by nearly three per cent in response to the news. Why the dip in the wake of such good news? AstraZeneca vaccine’s effectiveness – recorded at 70 per cent – is notably lower than its Pfizer and Moderna competitors. What’s more, the 70 per cent figure has been reached by averaging results from two groups who received the vaccine in different doses: a smaller group, who were given half a dose at first, recorded a 90 per cent efficiency rate, and

Denial is not a strategy, Prime Minister

The psychodrama in No. 10 is badly timed. The government has used emergency powers to ban meetings, church services and even family visits. A million jobs have gone since the first lockdown, with at least a million more to follow when the furlough money runs out. Children’s education was so badly set back by school closures that there are calls to cancel summer exams because pupils won’t be ready. Millions are facing financial ruin. A country looks to its Prime Minister for leadership. Yet the big announcement, made on the eve of the Brexit deal Boris Johnson was elected to deliver, is that he will ban the sale of new

Britain’s economy has been bouncing back – but there’s a major caveat

Britain’s economy rebounded by a record 15.5 per cent between July and September, reflecting the relaxation of lockdown measures and increased consumer activity over the summer. This is the largest quarterly growth in the UK economy the Office for National Statistics has reported since records began in 1955. Services, manufacturing, production and construction saw big uplifts across the board in Q3, but all remain below their Q4 levels in 2019, reflecting that the economy as a whole has not recovered to its pre-Covid levels: it is still 8.2 per cent smaller than it was at the start of the year. But with this good news comes a major caveat: while the economic bounce

Open and shut case: how did lockdown affect shops?

Shot in the arm Global stock markets reached a new high after pharmaceutical firm Pfizer announced a vaccine it is developing has been found to be 90 per cent effective. What have been the best- and worst-performing FTSE 100 shares over the past 12 months? BEST Scot. Mortgage Investment Trust | +109% Ocado | +94% Fresnillo (gold production) | +86% Flutter Entertainment | +75% Polymetal | +51% WORST Rolls-Royce | -74% Int. Consolidated Airlines | -71% BP | -61% Shell (B shares) | -58% Lloyds Bank | -52% Pharma’s life Who was Mr Pfizer? Charles Pfizer set up a factory with his cousin Charles Erhart in Brooklyn in 1849, initially

Why did economic growth in August fall flat?

August should have been a relative boom for the British economy: restrictions were the most relaxed since the Covid crisis began. Businesses in the hospitality and leisure industries were largely allowed to reopen by this point, and public transport guidance changed to allow non-essential workers to return to the office. On top of these liberalisations, schemes like Eat Out to Help Out were brought in to encourage – even subsidise – more economic activity. Yet growth figures fell flat, increasing by 2.1 per cent – roughly half of what was expected by economists. It appears economic recovery started to stagnate (down from June’s 9.1 per cent and July’s 6.4 per

Rishi Sunak prepares UK economy for ‘permanent adjustment’

The UK economy is no longer hibernating; it is ‘adjusting’. Today’s measures announced by Chancellor Rishi Sunak are designed to help an economy expected to limp through the coming months, quite painfully in certain areas, hopefully on its way to recovery. But are they enough? The role of the government and the employer has switched: the six month jobs support scheme will see the state contribute to workers’ wages if needed, but now the employer will be paying over 50 per cent of the costs, with the government paying 22 per cent. The critical difference is that employees must be working in order to receive the subsidies: a minimum of a third

The true cost of coronavirus on our economy

When future historians look back on 21st-century mortality statistics, they will struggle to find anything out of the ordinary in Britain in 2020. When they look at the economic data they could be forgiven for thinking we were hit by an asteroid. The Office for Budget Responsibility predicts a fall in GDP of around 12 per cent in 2020, the equivalent of having the 2008-09 recession twice in one year. The second quarter saw GDP fall by 20.4 per cent, breaking the record set during the Great Frost of 1709. The economy rallied by 6.6 per cent in July — which sounds impressive until you consider that it only took

Will the economy continue to bounce back?

The UK economy continues to bounce back – but it’s the coming months that could pour cold water on a V-shaped recovery. The economy grew 6.6 per cent in July, according to data from the Office for National Statistics, with the return of pubs, restaurants, hairdressers and more non-essential shops giving us another boost back towards pre-Covid levels. But there’s still a long way to go: despite a record-breaking growth rate between May and July, Britain is still nearly 12 per cent below its GDP level in February 2020, having experienced a record-breaking contraction – the biggest seen in 300 years, and the worst of any major economy during the