Matthew Lynn is a financial columnist and author of ‘Bust: Greece, The Euro and The Sovereign Debt Crisis’ and ‘The Long Depression: The Slump of 2008 to 2031’
It could be National Insurance. It could be income tax. Perhaps it could even be a rise in VAT. We don’t yet know what taxes Rishi Sunak and his Chancellor Jeremy Hunt have planned for their fiscal statement later this month. One point is surely clear, however. There will be no point in pretending that
He will control spending, reverse the few remaining tax cuts that are still in the works, and bring in every kind of official body imaginable to check over all the figures. Jeremy Hunt made the best of a very difficult hand of cards in his first outing as Chancellor on Saturday morning. He was calm,
Production will be cut. Supplies to the rest of the world will be curbed. And inflation will rise just a little bit higher. No one ever expected the oil-cartel Opec(+), led by Saudi Arabia, to be friendly to the West, or to help out when it was needed. Even so, its decision this week to
Well, that went well. Kwasi Kwarteng’s decision to axe the 45 per cent top rate of income tax triggered a crash on the financial markets. It then ran into so much opposition from the public and from Conservative MPs fearful for their seats that it had to be scrapped completely. Right now, it seems unlikely that
Massive tax cuts. A huge budget deficit. And a wild dash for growth, stoking a short-lived boom, before it all ends in a spectacular crash. As the new government unveiled the widest ranging tax cuts since the 1980s, along with a huge increase in the budget deficit, City commentators and the wiser sort of newspaper
In the end, it could have been worse. The Federal Reserve might have followed Sweden’s lead, with a whole one point rise in interest rates, or it could have even decided to short-circuit the whole process and go straight for a 1.5 per cent increase. Instead, it opted for the safer course, imposing a 0.75
Critics say that scrapping the cap on bankers’ bonus will encourage a return to excessive risk taking. It will provoke retaliation from the European Union, they warn. And perhaps, worst of all, it could prove fatal politically, rewarding a few rich Tory friends while the rest of the country struggles with the cost-of-living crisis. Chancellor Kwasi
Whacking up the price of black ties given the extra demand. Running advertising campaigns for cut price comfort food to get the nation through a painful few days. Or putting your zero hours workers on call for the whole of Monday just in case they are needed, while rushing out a quick line of over-priced
Oil prices have been falling steeply, reducing prices at the pumps. Wheat prices have dropped as supplies from Ukraine start to hit the world market again. And supply chains are steadily getting back to normal as trade routes recover from the pandemic, with shipping costs back down to their level at the start of the
It will be expensive. It will last far longer than anyone expects. And it will distort the market even more than it already is. Barring a major upset, Liz Truss will move into No. 10 Downing Street later today. Once she’s there, Britain’s new prime minister will have little choice but to take control of soaring energy
There will be a run on sterling. The gilts market will be in freefall. And the FTSE will tumble as global investors take fright and sell off every form of British asset. It might take only a few days, or the government might stagger through until the end of September, but before long Liz Truss
This time it was surely all over. As inflation started to rise towards a 40-year high, as central banks started raising interest rates for the first time in more than a decade, and as the monetary printing presses finally stopped running, the crypto-currencies crashed. What a crash it was. Bitcoin, the best-known crypto, fell all
This time it was surely all over. As inflation started to rise towards a 40-year high, as central banks started raising interest rates for the first time in more than a decade, and as the monetary printing presses finally stopped running, the cryptocurrencies crashed. What a crash it was. Bitcoin, the best-known crypto, fell all
It would be an ‘electoral suicide note’. It would condemn the party to ‘the impotent oblivion of opposition’. And it would push petrol prices up to eight quid a litre, and mean the electricity grid would have to be turned off at eight every evening to preserve power. Okay, okay, I made the last two
It turns out there is nothing like getting your homework marked by a tough new teacher to make everyone concentrate a little harder. Over the last couple of weeks of her campaign to lead the Conservative party, Liz Truss has made one point again and again. The Bank of England has been far too relaxed
Rishi Sunak’s promises on tax are lacklustre. He’s announced a fiddly one-off tax break on energy that will last for just a year which hardly anyone will notice due to inflation. There’s also income tax cuts up to seven years in the future, even though he is hardly likely to be Prime Minister by then (and he seldom
A tweak to the landfill tax perhaps? A minor adjustment to the airport levy? Rishi Sunak no doubt stayed up late into the night sifting through all the most minor tax cuts he could offer before re-launching his campaign with a dramatic u-turn. In the end, he plumped for axing VAT on energy bills, promising
Queues stretching back for several hours. Children going crazy in the back seat. Cars breaking down in the heat, and holidays thrown into chaos by delays at the terminal. Anyone who imagined that they were making their lives easier by avoiding the airports and driving to continental Europe this summer will have had a nasty
A reforming prime minister has been ousted by a fractious, divided parliament. The central bank is raising interest rates to try and stem inflation that is running out of control. Everyone is being urged to use as little electricity as possible as officials scramble around to secure enough energy, and the currency is crumbling as
Wages are rising. The economy is growing. The stock market is on the way up, and exports are booming. As he prepares for a long summer trying to persuade the membership of the Conservative party to make him prime minister, Rishi Sunak probably wishes he could be transported to some parallel universe where he could
