Ross Clark

It goes without saying that sacking your entire staff via a ten-minute video call while their cheaper, foreign replacements sit outside in buses is a pretty disgusting way to treat people. True, P&O’s cross-Channel operation has been rendered unprofitable as a result of Covid, but this wasn’t a case of a headcount reduction or management urging pay restraint until the company can get back on its feet again. It was a wholesale dismissal of workers, plenty of whom will have had decades of service. No wonder some refused to leave their ships. How ironic, however, that so many of the biggest critics of P&O this week are ardent Remainers.

Remember Neets, the mainly-young people who are ‘not in employment, education or training’? A decade ago they were seen as a group which had grown at alarming speed during the economic crisis on 2008/09. Many older people, by contrast, were continuing to work for longer, possibly as a result of their pensions having diminished in value. Following Covid, however, the profile of the working population has changed sharply again. Your typical Neet now is not a school-leaver who has failed to find anything useful to do with their lives – it is a professional aged 50-70 who has decided to throw in the towel prematurely.

I almost felt a sense of perverse celebration as the meter clocked round to £100 – the first time I have ever spent so large a sum filling my car with diesel. Not so long ago it was costing me closer to £60. After gas and electricity prices, it is suddenly oil prices which are making the news. Some garages have been shown selling the fuel for over £2 a litre. If you live in a rural area and rely on oil to heat your home, you may have experienced an even bigger shock in the past fortnight: the price of domestic heating oil has doubled to around 120 pence a litre – the percentage change is greater than for road fuel because a much lower proportion of the price of a litre of heating oil is tax.

It is one thing for western companies, funds, investment trusts and others to promise to divest from Russian assets. But what if the Russian authorities won’t let you? The Moscow stock market has failed to open for a fifth day running. Prior to its closure, it had already plummeted by a third after the invasion of Ukraine. Russian investments traded on external markets have continued to plummet during the closure: JP Morgan Russian Securities, an investment trust traded on the London Stock Exchange, plunged by another 15 per cent this morning to 101 pence – just one-eighth of what it was trading at last autumn. Is that a bargain? 'Buy on the sound of gunfire', goes the old stock market adage.

I’m no apologist for oligarchs, whether they be from Russia or anywhere else. I have been writing for years about how dirty money was flooding into London’s property market, helping to price out ordinary people who just want a home. The government should have taken action decades ago to prevent kleptocrats from laundering their money through London property and their reputations through our libel courts. These matters could have been addressed quite easily by prohibiting property from being held in the name of overseas private companies and by reforming libel laws to stop the wealthy from threatening journalists and anyone else with eyewatering legal bills. What must it feel like to be an honest Russian business owner in Britain at the moment?

The price of Brent crude exceeded $112 a barrel this morning. There is, as yet, no interruption in supply from Russia, nor any ban on buying their oil (save for in Canada) – but western companies are reported to be exercising a voluntary boycott. Either that, or they are sceptical of whether their orders will actually arrive. Turkey has already closed the Bosporus Straits to warships. Much of the oil exported to Europe takes this route. Even a voluntary refusal to buy Russian oil will have serious repercussions for markets. Russia produces around 12 per cent of the world’s oil – which is a huge chunk to lose. Except, that is, not everyone is refraining from buying it.

As with Covid-19 it will take time for the full consequences of the Russian invasion of Ukraine to become apparent. But one unexpected impact is already becoming clear: that on air freight. Ukraine, it turns out, occupies a niche at the very heavy end of the industry. Ukrainian company Antonov manufactures the world’s largest transport planes in the shape of the An-225 – a six-engined behemoth built by the Soviets in 1985 and capable of a maximum take-off weight of 640 tonnes – and the slightly smaller An-124. By contrast, the freighter version of the Boeing 747-400 has a maximum take off weight of 450 tonnes.

You may never have heard of the Society for Worldwide Interbank Financial Telecommunications — or at least not by its full name. Even if you had you may have mistaken it for a fairly inconsequential trade body that holds rather dull conferences in hotel function rooms in places like Frankfurt.  Yet it finds itself at the centre of the West’s response against Vladimir Putin. Swift, as it is otherwise known, is the system by which banks communicate in order to undertake cross-border financial transactions. This morning the Ukrainian foreign minister pleaded with the West to cut off Russia from the system. Britain would like to do just that, as would some of the smaller EU states.

Don’t be fooled by the pictures that will shortly start to emerge of traders apparently tearing their hair out against of backdrop of red screens. A proper crisis is exactly what Wall Street traders want — to provoke yet another stimulus package, as well as the cancellation of interest rate rises. In the Alice in Wonderland world of bubblenomics, bad news is good, and good news is bad. If we have good economic figures, there is a danger that the Fed, the Bank of England and other central banks will take away the punch bowl. On the other hand, all we need is a sudden crisis that gives the impression, however briefly, that the world is coming to an end — and back will come the bowl, with an even stronger mix than before.

If Bank of England Governor Andrew Bailey was expecting to bat away some gentle questions on monetary policy before the Commons this morning, he hadn’t reckoned on Labour MP Angela Eagle. She was quietly frothing with rage at Bailey’s recent suggestion that workers need to exercise restraint when asking for a pay rise in order to tackle inflation.  Eagle began like the late Bamber Gascoigne with a series of quick-fire questions on the median salary of UK workers and care workers. Alas, salaries turned out not to be Bailey’s specialist subject — not even when Eagle asked him about his own. 'It’s somewhere over £500,000,' Bailey stumbled, before adding 'I don’t carry that around in my head'.

So, Nord Stream 2 will not be plugged into Germany’s gas grid. A little surprisingly, Chancellor Olaf Scholz has been first out of the blocks this morning in the western economic response to Putin’s recognition of breakaway states in eastern Ukraine. The block is not total: what Scholz says is that the certification process for the pipeline will be halted — leaving open the possibility that it might, after all, be connected if Putin starts to behave himself, or Germany becomes especially desperate for gas. Nevertheless, it is a significant move which will have an economic impact on Russia. But it is astonishing that the project was ever allowed to come this far in the first place.

The last time that US inflation hit 7.5 per cent, Ronald Reagan was a recently-elected president. And he, older readers might recall, partly owed his election to inflation. He memorably said during his campaign: 'inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.' But what of Britain? Bank of England chief economist Huw Pill gave a speech this morning in which he revealed that the Monetary Policy Committee (MPC) very nearly raised the bank’s base rate to 0.75 per cent this month rather than to 0.5 per cent — there was only one vote in it. Should this, along with the news from the US, make us suspect that rates are heading higher than we might previously have thought?

Look up this year’s performance of the shares and bonds which make up your pension fund and you will see that BP and Shell are the rare chinks of light. BP is up 15 per cent and Shell up 20 per cent, with both enjoying bumper profits on the back of high oil and gas prices. Cue, then, for Labour and the Lib Dems to demand a windfall tax in order to confiscate some of these profits. The money ought to be used, Eds Miliband and Davey have said this morning, to help people pay their heating bills. In both their minds ‘dividends’ and ‘shareholders’ are rude words – whereas in reality the people with a stake in BP and Shell are in many cases exactly the same people who are struggling to pay their heating bills.

The emergence of Covid provoked a worldwide economic crash. That lasted a mere four weeks. By the time western countries were locking down, a bull market had begun afresh. Through months of lockdowns, soaring case rates and death rates, shares were not just rebounding but marking new highs – firstly involving tech shares and online retailers which had done well from social distancing, but then pretty much anything. The arrival of the first vaccine phase 3 trial results in November 2020 sent shares spinning upwards, yet the emergence of the Alpha and Delta strains didn’t seem to do any harm. And now that economies seem finally to be putting Covid behind them? In Britain, plan B has ended. Denmark has ditched its Covid restrictions entirely.

There would have been times when the news ‘Bank of England doubles interest rates’ would have been met with a shudder. But when the move takes rates merely from 0.25 per cent to 0.5 per cent it hardly ranks as a shock at all. The days when the base rate reached 15 per cent seem as far away as ever. Rates remain far lower than was considered normal before the banking crash of 2008/09. Prior to that, rates had not been below two per cent in 300 years. So, no, the Bank of England is not responding aggressively to rising inflation.