Michael Simmons

Finally, some good economic news: Britain may have turned a corner on jobs. Figures just released by the Office for National Statistics (ONS) show the unemployment rate remained flat at 5.2 per cent in January. On payrolled jobs there was positive news too: employees on PAYE payrolls in February grew at their fastest rate since October 2024, with 20,000 jobs added. If this really is the turnaround point on jobs, it comes as welcome relief for a Chancellor whose minimum wage hikes and National Insurance raid were to blame for much of the job destruction. Despite today’s welcome increases, we’re still down by over 114,000 jobs since Labour came to power. Whether this would truly have been the end of the job slump has now been made something of a moot point by events in Iran.

Figures just released by the Office for National Statistics (ONS) show the economy ground to a halt in January, with no growth recorded. That was despite economists and businesses reporting a brighter start to the year. Economists had expected January to see growth of 0.2 per cent. Over the three months to January we did see some growth, though just 0.2 per cent. Within that figure, services expanded 0.2 per cent while production grew 1.3 per cent. The positive numbers end there, however, with the construction sector contracting by 2 per cent. It’s unlikely things are going to get much better as the year goes on.

With Donald Trump signalling that he does not want a long war in Iran, markets have started to settle down. Traders are no longer betting on interest rate hikes, the FTSE is in the green and a barrel of oil is hovering around $90. Nevertheless, the pressure on the Chancellor to set out further financial support to tackle the cost of living is on. The average five-year fixed mortgage passed 5 per cent today for the first time since November, prices at the pumps have jumped at their fastest pace in four years, and Morgan Stanley is the latest bank to warn that inflation could hit 5 per cent later this year.  On petrol and diesel, Rachel Reeves is angry with service stations.

A few weeks ago I thought a March interest rates cut was ‘near certain’. Inflation was coming down and Bank of England rate-setters’ concerns about wage growth were being replaced by fears that higher rates were contributing to rising unemployment. In my defence, markets agreed: they priced the chances of a cut at over 80 per cent. But since then, the world – and markets – have changed. The graph below shows something called the ‘overnight index swaps’ curve. Without getting too deep into the mechanics, it can be understood as a proxy for where traders think interest rates are heading. As you can see, the line had been steadily dropping before Donald Trump’s action in Iran sent it shooting back up – implying that a March rate cut has become much less likely.

The Epstein files lift the curtain on how power is exercised and influence traded by our financial elite. It is not a cheering sight. Business and economic gurus like the former US Treasury Secretary Larry Summers asking for dating advice from a convicted paedophile does not build confidence in the masters of the universe. Distasteful as these details are, the most telling insights into the predatory behaviour of the private-jet classes relate to how they exploit all of us, not just the vulnerable young women who catch their eye. Institutional logic does not explain Reeves’s love-in with the banks. They seem to have made a Faustian pact Peter Mandelson may blush at some of the personal details laid bare in his emails to Jeffrey Epstein.