Ross Clark

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.

There must come a time when even Beth Rigby starts to ask whether she is too fixated on a small staff party which happened nearly two years ago and not quite enough on the highest inflation rate in 30 years and the prospect of a Russian invasion of Ukraine. But to be fair to Sky TV’s political editor – who herself was taken off air for three months last year for attending a party which broke Covid rules – she is hardly the only one. As well as every other media outlet pursuing the same story to the point of absurdity the story is being fed by a number of covens of Conservative MPs who are determined to use this opportunity to oust the Prime Minister.

For once, yesterday’s Downing Street press conference included a worthwhile question, and not of the 'why aren’t you locking us down?' variety. In fact, it had nothing to do with Covid at all. Harry Cole of the Sun asked why, given that the Prime Minister had once cited the ability to remove VAT from fuel bills as a tangible benefit of leaving the EU, he was not now taking advantage of his new-found freedom, especially as bills are heading sharply upwards. Boris Johnson mumbled something about not wanting to help people who could easily afford their energy bills and that the government might consider more targeted help instead.