Ross Clark

Britain is beset by low productivity and stagnant growth, and things are not getting better. In the public sector, productivity stands at 7.4 per cent lower than it did before the pandemic. Until we can generate more growth in the economy, we cannot grow richer and real wages cannot grow. An uncontroversial statement, you might think – even if opinions vary on what to do about it. But no. There are people who genuinely don’t want economic growth, who think it an evil that must be ended. Take a comment piece published late last year in the normally sober pages of the scientific journal Nature.

Every month, we are bombarded with the Consumer Prices Index (CPI), the main inflation measure. It is currently running at 10.5 per cent, and although this is slightly down over the past two months, it is still far, far above the Bank of England’s target of two per cent. But what about inflation for people who are running businesses? The Office for National Statistics (ONS) also publishes a Producer Price Index (PPI) covering inflation for commercial organisations. If you think living costs for consumers are high, count yourself lucky you are not running a factory: the PPI of input prices (i.e. prices of raw materials and other goods) for December has come in at 16.5 per cent. That is down from November (18.0 per cent) and October (20.

Still resisting installing a smart meter in your home? If so, the National Grid might make you think again – by offering you free electricity. With low temperatures boosting demand for power, and output from wind and solar farms looking a little flaky, the grid needs to cut demand to avoid blackouts. This has prompted it to exercise, for the first time, something called the ‘demand flexibility service’, which offers incentives worth up to £10 or so to customers who are prepared to switch off their appliances for a couple of hours this evening. To take advantage of this offer, you need to have a smart meter and buy your electricity from one of the companies who are signed up to the scheme.

The idea that we face a certain recession has been drummed into our heads for months. The Bank of England recently produced a graph showing recession lasting into 2024. Just yesterday, the International Monetary Fund repeated its assertion that Britain faces an especially gloomy 2023, with recession inevitable – while simultaneously upsetting the House of Commons Treasury select committee by refusing to testify before it.  But could the unthinkable happen? Could Britain now avoid recession altogether? The Office of National Statistics’ (ONS) first estimate for economic growth for November shows that GDP grew by 0.1 per cent – unexciting, but still remarkable given that many economists were expecting negative growth by now.

The best thing that can be said about global economic growth prospects for 2023 is that no-one is expecting very much. On that basis, hopefully, things can only get better. Over the weekend, International Monetary Fund (IMF) managing director Kristalina Georgieva said that she expects a third of the globe to be in recession, including half of the EU. That doesn’t sound too bad on the face of it. If the IMF’s predictions proved to be accurate – and the record of economic forecasting is pretty dire – it would still mean that the economy was still growing in two thirds of world. We might, yet, avert global recession. But then how often does the world as a whole sink into recession?

Unforeseen events which provoke global crises – such as Covid -- have come to be known as ‘black swans’. By the same token, the end of 2022 has just been visited by a great big fluffy white swan.     Over the past 24 hours the main benchmark for European gas futures – the Dutch Title Transfer Facility (TTF), for gas to be delivered in February – has crashed below 80 Euros per MWh, taking it below the level it was on 23 February, the day before Russia invaded Ukraine. This, in the dead of a winter which we have been warned many times could see Europe’s shivering masses rioting in response to blackouts.

We’re finishing the year by republishing our ten most popular articles from 2022. Here’s number eight: Ross Clark’s piece from May on the crypto crash. When Britain voted for Brexit, Macron boasted that Paris would eat the City of London’s lunch. It didn’t quite work out that way, with most league tables continuing to put London as the number one or two financial centre, with not a single EU city in the top ten. Emmanuel Macron's government has now announced that it has invited Binance, a crypto exchange site, to set up a European HQ in Paris. You have to ask: has Macron leapt on a bandwagon which has already started to lose its wheels?