Money

The Biden Bust is here

A wave of government spending would reboot the economy. Fairer taxes would pay for restored infrastructure. Skills would be improved, productivity raised, and new digital champions would emerge. When Joe Biden was elected, he promised the most radical programme of economic reform since Franklin Roosevelt’s New Deal in the 1930s, and, to his army of cheerleaders at least, the American economy was about to be completely transformed. But hold on. Only a year into his term, the reality is very different from the promises. In reality, the Biden Bust has arrived. Donald Trump may have been personally obnoxious, but he bequeathed an economy in perfectly good shape The US GDP figures

Why does the City still use quotas?

It sometimes feels like every regulatory body in Britain today misuses its influence to advance progressive causes. A welcome exception is the Financial Conduct Authority, which last week decided to allow firms to choose whether they use sex or gender as the definition of ‘woman’ for reporting on their representation on corporate boards. It is clearly not the role of a financial services regulator to attempt to define ‘man’ and ‘woman’. Out of 540 responses to a consultation on the matter, all but one said they did not want trans women to be automatically included in the targets and data. As the group Sex Matters has pointed out, there is

I feel sorry for Rishi Sunak

Perhaps I should stress from the get-go that I do not know Rishi Sunak. So far as I know, we’ve only met once, some years ago when he was working at the think-tank Policy Exchange. He showed me to my seat when I arrived late for an event. It is one of those things you must get used to in this life – that the person you last saw helping you into a folding chair will just a few years later be Chancellor of the Exchequer. When I first noticed this tendency, a wise older friend cautioned me against feeling concern about it. Best to accept it as part of

Should the young pay less tax than the old?

In evolutionary terms, it is obvious why we get more conservative with age. Two strong forces, acting in the same direction, lead us not to bet on rank outsiders when we’re nearing the last race of the day. First, older people have more experience to draw on when making decisions: if you already know what you like, the need to experiment is much less. But that’s not all. The elderly also have far less time remaining to benefit from experimentation. If you happen on a new cuisine, band, social circle or holiday destination in your twenties, you have many decades to profit from the discovery. Someone in their sixties might

We will never hear the end of Rishi’s tax cut

The bean-counters squared up in the Commons today. Chancellor Rishi Sunak delivered a terse spring statement which contained three major bombshells. And he was answered by Labour’s shadow chancellor, Rachel Reeves, who unfurled a few surprises of her own. Sunak gave an upbeat assessment of Britain’s economy but warned that our growth is about to be clobbered by Putin’s Ukraine adventure. Sunak expects inflation to peak at 7 per cent, or more. That’s effectively a huge pay-cut for every citizen, not just those in work, and it may nudge us closer to a recession. But he kept the R-word to himself. Sunak seems to enjoy being liked and he was

Rishi Sunak’s spring statement speech in full

Mr Speaker, As I stand here, men, women and children are huddled in basements across Ukraine seeking protection. Soldiers and citizens alike have taken up arms to defend their land and families. The sorrow we feel for their suffering, and admiration for their bravery is only matched by the gratitude we feel for the security in which we live. And what underpins that security is the strength of our economy. It gives us the ability to fund the armed forces we need to maintain our liberty. The resources we need to support our allies. The power to impose sanctions which cause severe economic costs. And the flexibility to support businesses

What to expect at the spring statement

The big story of Wednesday’s spring statement by the Chancellor will be the impact of inflation – which has soared from almost zero just over a year ago to perhaps 10 per cent in coming months – on living standards and the public finances. I expect Rishi Sunak to provide limited protection from the ravages of inflation to those on low and middling incomes, probably by increasing universal credit and the threshold for paying national insurance.  But quite how far the Chancellor inflation-proofs the take home pay of low earners will be the most important question he will answer tomorrow. Inflation that makes all of us poorer will create the

Katy Balls

Rishi Sunak’s popularity test

Rishi Sunak ended 2021 as the most popular politician in the country. A YouGov poll for the final quarter of the year found that 31 per cent of all adults had a positive opinion of the Chancellor compared to 28 per cent for Nicola Sturgeon and 26 per cent for Boris Johnson. However, ending 2022 in the same situation looks rather ambitious.  As the cost of living crisis worsens, Sunak is under pressure both from the public and his own party to step in and ease the burden on households in tomorrow’s Spring Statement. A poll out today suggests he has plenty of work to do to convince voters he has the

The commodity kings: have traders finally discovered a moral compass?

Many people around the world were glued to their screens in horror on 4 March, as they watched Russian shells raining down on Ukrainian cities. On a trading floor in central London, the oil traders at Shell were also glued to their screens – but watching the price of Russian oil. It was becoming a lot cheaper than normal (Brent) oil, due to the understandable reluctance to support Putin. But then again, everyone has their price. The Shell traders watched, and waited, as every minute the price was lowered further– to a $23 a barrel discount, then a $24 discount, then a $25 discount. Finally, at around 4 p.m., the

Our monetary bubble is about to burst

OK, I finally watched Netflix’s Don’t Look Up. Surprisingly, I enjoyed it — especially before its effective subtitle for us thickos, THIS IS A METAPHOR FOR CLIMATE CHANGE, YOU F-ING MORONS. Otherwise, the film might have playfully dramatised the more general phenom of fiddling with celebrity bodices while Rome burns. The comet at which I’m looking up could arrive far more immediately than perilous global warming. Money is in trouble. I’m not only referring to a cost-of-living crisis. Money itself is in trouble. Let’s contemplate, to coin a phrase, a basket of deplorables. US inflation just hit 7.5 per cent, the highest in 40 years. UK inflation, now 5.5 per

The ancient problem of unscrupulous ‘doctors’

Yet again ‘doctors’ with no qualifications have been found advertising dodgy but expensive products and treatments, in this case, injections of unregulated Botox variants to remove wrinkles. Pliny the Elder (d. ad 79) inveighed against such practices 2,000 years ago. Romans had a love-hate relationship with the Greeks, and medicine was no exception. In his massive Naturalis Historia — a 36-book encyclopaedia of the animal, vegetable and mineral world — Pliny acknowledged the enormous influence of Greek medical theory, i.e. that health required a balance between the four bodily liquids (blood, phlegm, yellow bile and black bile) and their many associated ‘powers’ in matching groups of four (e.g. heat, cold,

Letters: The Christian case for cash

Naysayers needed Sir: I was struck by James Forsyth’s observation that in 10 Downing Street, ‘hard truths and hard choices are too often ignored… because the Prime Minister’s top team fear he will find them uncomfortable’ (‘The battle to save Boris’, 22 January). During a working life spent in business, I came to realise that one of the most valuable skills you could master was how to tell someone things they would rather not hear while maintaining good relations with them. If the PM is intent on firing many of his staff, it would be prudent for whoever appoints their replacements to ensure that as many of them as possible

The ONS’s inflation measurement change isn’t ‘new’

The way we measure inflation is changing, and there could hardly be a less crucial time for it to do so. The ONS will be updating the method for collecting individual prices from supermarkets, and will also publish new figures on inflation rates for different types of household. The anti-poverty campaigner Jack Monroe has tweeted that the ONS ‘have just announced that they are going to be changing the way they collect and report on the cost of food prices and inflation to take into consideration a wider range of income levels and household circumstances’. But Monroe, who hope that the new metrics will show that inflation is hitting poorer families harder, will

Why cash is still king to me

I recently set out on a simple mission: to break the £10 note in my purse so I’d have a five to put in the church collection plate on Sunday. My first attempt backfired. The café, where my order was delivered with an eye-roll of metro disdain, no longer accepted cash payments. I sat at one of their pavement tables, drinking the single macchiato I’d neither wanted nor needed, and considered my next move. I’m aware that cash is now regarded as a grubby anachronism. All those hands it passes through! Eww! Of the two churches I attend, one has stayed ahead of this trend and installed payment terminals in

Will someone wake up the Bank of England?

It is called managing expectations: the steady drip of forecasts and scenarios designed to prepare us for bad news, so that when that news does finally arrive it doesn’t seem nearly as bad as it would otherwise have done. So is that what the Bank of England is up to with its deputy governor, Ben Broadbent, telling us that inflation next April could ‘comfortably exceed’ 5 per cent? It is reminiscent of the moment in July when the Bank’s departing chief economist, Andy Haldane, dropped in the suggestion that inflation by the end of 2021 could be closer to four percent than three percent. The MPC is behaving like a Chancellor

Eighteen months of inflation is not ‘transitory’

The big central banks have been insisting for months now that the rise in inflation is temporary, and will fade once the great awakening of the world economy starts to settle down. The Federal Reserve, Bank of England and the European Central Bank have looked on as inflation has overshot their forecasts. But when the opportunity to tame it with an interest rate hike approaches, the banks pass it up, reiterating instead that it is ‘transitory’ — the monetary equivalent of ‘it’ll be fine’. With inflation now at a 30-year high in the United States — 6.2 per cent — it’s starting to look like a pretty big bump. But should

The best podcasts about money

Stories about money are never about money. They are about pain, about family, about atrocity, about luck, about health, about politics. And while we get a kind of vicarious thrill from listening to other people’s financial tales of woe, whether we are morally condemning a millennial for buying a daily flat white when she could be putting that $3 into a savings account that earns zero interest in the hopes that the city she lives in won’t be underwater from rising sea levels by the time she has enough for a deposit or just feeling gratitude that we are better off than the poor shmuck explaining their hundreds of thousands

What is the Bank of England playing at?

Last week, the Bank of England sent a number of confused messages. One was almost shocking: Andrew Bailey said that it isn’t his job to steer markets on interest rates ‘day by day and week by week’. But as economic commentator Matthew C. Klein dryly noted this is literally his job. It is debatable whether the Bank of England needs to manage the entire yield curve (ie, buying and selling bonds in an attempt to set interest rates years into the future) but the central bank should be in charge of the short end. Those opposing an interest rate rise say that central banks should never shock markets. The Bank

Are banking apps luring young people into debt?

Last month, my bicycle got a flat tyre. ‘Both of those tyres are gonna need replacing and you’ve knackered your sprockets,’ huffed the bike man. The bill came to £230. It’s the kind of irritating expense that means I run out of beer money a week before payday. I’ve always assumed I’m a reasonably normal spender. Work pays me, the money gradually disappears over the month, with hopefully a bit left over for my Isa. I’m vaguely aware that something exists called a ‘credit card’, but my parents always made clear to me that if you don’t have the money for something, don’t buy it. Where I differ from older

What’s more expensive – petrol or fizzy drinks?

Filming fatalities The actor Alec Baldwin accidentally shot a cinematographer on set when mistakenly given a gun loaded with real bullets. Others who have died on set: — Martha Mansfield was resting in her car during the filming of a romance set in the US civil war in 1923 when someone flung a match which set her dress alight. — John Jordan fell out of a plane while filming Catch-22 in 1969. — Vic Morrow was decapitated by a low-flying helicopter while filming Twilight Zone: the Movie in 1982. — Jon-Erik Hexum shot himself while fooling around with a gun on the set of the CBS series Cover Up in