Ross Clark

So, the doomsters have been proved wrong again – not least the Bank of England, which a year ago forecast recession throughout 2023. GDP figures released by the Office of National Statistics this morning show that the economy grew by 0.2 per cent in August, partially reversing a sharp contraction of 0.6 per cent in July.  Across the three months to August – which is a rather better guide to what is happening than the volatile monthly figures – show growth of 0.3 per cent. It is not possible now – by the usual definition of two consecutive quarters of negative growth – for Britain to suffer a recession in 2023, and neither does it seem all that likely that we will be experiencing one in six months’ time. But no-one should get too excited.

The biggest hinderance for the Conservatives is that they have nothing to offer young voters. The Labour party, however, just might. It seems that Keir Starmer will announce in his conference speech a plan to return to the idea of post-war new town corporations, which were able to compulsory-purchase land at agricultural value. It could – just possibly – mean a sharp fall in the price of new housing, massively expanding the number of first time buyers.  The great shame is that the Conservatives couldn’t bring themselves to introduce a similar policy You don’t have to be a socialist to feel aggrieved at your inability to afford a home, something that you parents and grandparents took for granted. What have the Conservatives done to help you?

To no-one’s surprise, house prices fell again last month. Average prices were down by 0.4 per cent in September, according to Halifax, with the typical property now worth £278,600 compared with the peak of £293,500 in June 2022. Much of this, inevitably, has to do with high interest rates. For three decades until last year the housing market was pumped up by a downwards trend in interest rates, which increased the amount that buyers could borrow. Now that has come to an end, buying power is contracting. There is unlikely to be any rapid recovery. If rates remain high – and gradually it is dawning on markets that this is likely to be the case for far longer than previously expected – then we could be in a housing bear market for years to come.

You can almost sense the agonising among hardcore remainers, the howls of anguish. The Office for National Statistics (ONS) has revised the UK’s economic growth figures since Covid upwards. Instead of still struggling to reach its pre-pandemic high it seems that the UK economy in fact surpassed 2019 levels two years ago.  Previously, the ONS had estimated the economy in the last quarter of 2021 to be 1.2 per cent smaller than pre-pandemic. It now calculates that in fact it was 0.6 per cent larger. The ONS says its initial forecasts were compromised by the difficulties of calculating GDP during the pandemic. Is there a bias which has led to the damage to the UK from Brexit being over-estimated?

When the Commons nodded through Britain’s legally-binding net zero target in 2019 all MPs had to go on was the Climate Change Committee’s estimate that the whole process would cost £1 trillion. MPs failed to probe this figure and the government didn’t even try to calculate one. Indeed, when the Treasury attempted to come up with its own figure in 2021 it gave up, saying it couldn’t be done because there are too many unknowables. Net zero will require technologies, such as hydrogen production via electrolysis of water, which are still in an early stage of development and have not yet been scaled up. Now the think tank Civitas has weighed in with its own analysis. And its conclusion?

It looks like a case of recession postponed – again. Figures from the Office for National Statistics this morning show that retail sales volumes were up 0.4 per cent in August. These figures followed a shock fall of 1.2 per cent in July reported last month (and even this has been revised downwards to a fall of 1.1 per cent). Over the past three months – perhaps a better guide than month on month figures – sales volumes are up 0.3 per cent. Somehow, in spite of wages, which until last month had been falling in real terms, consumers are finding the means, and the will, to carry on spending. Today’s figures are in many ways the mirror image of July’s. Food sales volumes were up 1.2 per cent, compared to a drop of 2.6 per cent in July. Non-food sales were up 0.

Rishi Sunak will reportedly make a speech later this week watering down some of the targets the government has set itself on achieving net zero carbon emissions by 2050, although that target itself will not be touched). The proposed ban on new petrol and diesel cars will be put back by five years to 2035, which would bring Britain in line with the EU. The ban on new oil-fired boilers will be put back from 2026 to 2035, thus relieving the Conservatives of the prospect of mass grumbling in one of their natural constituencies, rural areas. Even in 2035, it seems, the target will be to reduce installations only by 80 per cent, in recognition than many homes are difficult to bring up to the insulation standards required for heat pumps to work effectively.