Money

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

Will China’s ‘digital yuan’ reinvent money as we know it?

What’s behind China’s latest crackdown on crypto? For some time, Beijing has banned bitcoin and other cryptocurrency exchanges from operating within its borders. Last week, the Chinese Communist party extended the ban to criminalise anyone dealing in crypto. ‘Virtual currency-related business activities are illegal,’ declared the People’s Bank of China. The CCP would ‘resolutely clamp down on virtual currency speculation… to safeguard people’s properties and maintain economic, financial and social order’. China accounts for nearly half of the world’s crypto mining, a process in which high-powered computers are used to generate the digital currencies. Most of China’s crypto mining takes place in the country’s most remote regions, such as Inner

Green bonds offer nothing but virtue-pleasing

Would you touch a ‘green gilt’ issued by the government, with an interest rate of just 0.87 per cent? Some people, apparently, would. The Treasury announced yesterday that it had shifted the first £10 billion tranche of ‘green gilts’ to raise finance for projects such as zero-carbon buses, wind farms and other green things. Indeed, the bond – which matures in 2033 – was ten times oversubscribed. The government had already planned to issue a further £5 billion, and might now be encouraged to issue far more. Green gilts are just more government borrowing, rebranded to make lending to the government look virtuous With the government’s preferred measure of inflation,

Is the inflation panic over? Probably not

So, is the post-Covid inflation panic over? That is how it looked last month, when the government’s preferred inflation index, CPIH, fell to 2.1 per cent from 2.4 per cent a month earlier. We will have the latest news on Wednesday morning, but for the moment it appears that consumer prices inflation hasn’t taken off like we feared. It is a similar story in the US, where inflation fell back from 5.6 per cent in July to 5.3 per cent in August. The fact that house prices have risen so strongly throughout the deepest recession in modern times ought to be a warning sign Yet there are good reasons to suspect that the summer

Three big problems with the government’s planned tax hike

We are in the middle of a once-in-a-generation shift: working from home. There are skill shortages across the economy, supply bottlenecks, and empty supermarket shelves. A couple of million people are still set to come off furlough, back into jobs that may no longer exist. The labour market is in utter chaos. But, hey, here’s a good idea. Let’s whack a tax on jobs. Really? The government’s widely leaked plan to increase National Insurance, a tax on jobs, could not come at a worse possible time.  The government’s widely leaked plan to increase National Insurance, a tax on jobs, could not come at a worse possible time We can all debate whether

The great holiday Covid test rip-off

I holidayed in Malta last month with my partner, having chosen it because it was on the ‘green list’. Foolishly, I assumed this would mean we could waltz back to the UK without any hassle. I was wrong. We needed a test before departing Malta. Within a few minutes of looking on the Malta airport website, I found a provider, headed to their test centre, and €30 later, was given the all clear. But that wasn’t all. To complete my pre-flight passenger form, I needed a ‘Day 2’ test for when I was home. For this, the UK government has a website pointing holidaymakers towards a slew of private firms

The crisis in Lebanon is a warning for the West

 Beirut On the highway into Beirut the other day, we drove past a petrol queue that was more than two miles long. On and on it went, the drivers sweating and swearing in brutal heat. Some had run out of fuel while they waited, having to push their cars when the queue inched forwards. There were people on laptops working from their cars during the day-long wait. Petrol queues are an everyday fact of life in Lebanon, but this was something else. Seeing that I was a foreigner, a frustrated driver gestured at the long line ahead of him and shouted: ‘Lebanon!’ He was summing up the fury and disgust

Ignore the gloomsters, the economy is roaring back

The horror! Yesterday we discovered that UK economic output — as measured by GDP — fell by 1.6 per cent in the first quarter of the year, 0.1 per cent worse than the 1.5 per cent originally reported. This is practically a rounding error. To put it in context, as recently as March the Office for Budget Responsibility, which crunches the numbers for the Chancellor, was forecasting that GDP would fall by 3.8 per cent in Q1. As well as still beating these gloomy expectations, the latest figures are also old news. But if anything, the detail is encouraging. The downward revision to headline GDP was largely due to a bigger decline

Has Covid accelerated the cashless society?

Time is, I fear, running out. Running out, that is, to avoid handing to a small number of multinational corporations our right to buy and sell things. Running out to prevent governments and central banks helping themselves to our savings, by means of negative interest rates. The payments industry is closing in on its target of driving cash out of circulation and instigating cashless payments as the only way of doing business. That, at least, is the conclusion one might reach from reading a report by Worldpay: the Global Payments Report 2021. It claims that cash payments in UK shops in 2020 made up 13.4 per cent of total payments,

Letters: The unfairness of ‘free care for all’

Taking care Sir: I agree completely with Leo McKinstry that care for parents should be paid out of their estate (‘Home economics’, 15 May). The costs of care are what people effectively work for, not for the passing on of wealth paid for by the taxpayer. My mother lived until she was 100, and was in care for almost 14 years. Although she had a property and shares, we funded her care until her cash/share balance was £15,000. After this time she was means-tested and between her pension and the rent from her flat, we were able to pay for some of the care, with the rest paid for by

Comedy gold: the economics of internet irony

If you’re looking for proof we live in a computer simulation, consider the farcical story of dogecoin. Named after an internet meme about a talking dog, the joke currency was created as a parody of bitcoin. Dogecoin has no practical uses, yet online investors have ploughed billions into it. ‘We thought it would just make the viral rounds on social media,’ said founder Jackson Palmer. Last week the valuation passed $68 billion — more than Kraft Heinz and Ford. Palmer is now worth several hundred million dollars. Not bad for a Twitter gag. Although it’s seven years old, dogecoin wasn’t a big deal until a few months ago, when supportive

Martin Vander Weyer

Is Farrow & Ball’s business model flaking?

The happiest thing that happens in May is the coming into leaf of my long beech hedge. The shift from brown to green symbolises, for me, an annual economic revival — of openings, reopenings and entrepreneurial optimism. This year, after April’s frosts on the end of a dismal winter, it was especially welcome. And as revival collides with new fears of ‘the Indian variant’, I’m clinging to optimism while watching for new-season winners and losers. In that spirit, I’ll make this column a collage of consumer themes. First — though I’m not sure what this symbolises — a friend tells me he celebrated relative freedom by driving to Bicester Village