The first rule of Labour’s EU Club appears to be that ‘you do not talk about rejoining the EU’. Indeed, Andy Burnham’s and Wes Streeting’s not-very-principled position on Brexit seems to be that they want the UK to rejoin the EU but do not want to be too open about this until after either of […]
Rachel Reeves is getting her excuses in early ahead of next month’s Budget, which looks set to be a painful repeat of last October’s ‘one off’. The Chancellor has already blamed ‘external headwinds‘, ‘Tory austerity‘ and ‘the ongoing impact of Liz Truss’s mini-Budget‘. It is no surprise that she has now dropped the ‘B-word’ too. […]
A week on from ‘Liberation Day’, Trump’s tariffs have not landed well in the financial markets, especially with a tit-for-tat trade war now breaking out between the US and China. That much is obvious. But there is still a lot to unpick. The simplest place to start is the stock markets. The US S&P 500 […]
The siren calls for retaliation against the US if Donald Trump imposes new tariffs on the UK remind me of this exchange from ‘Braveheart’… Longshanks: Archers! English Commander: I beg pardon, sire. Won’t we hit our own troops? Longshanks: Yes… but we’ll hit theirs as well. The serious point here is that tariffs hurt people […]
First, the good news. Rachel Reeves’ Spring Statement is unlikely to do any significant harm to business or consumer confidence, and it was largely shrugged off by the financial markets. These days, that is something to celebrate. In particular, the Chancellor wisely resisted the siren calls to relax her fiscal rules to finance more spending […]
The Chancellor’s big growth speech on Wednesday morning was so widely trailed that it contained few surprises. But it was still the clearest and most coherent statement of her economic philosophy and plans so far. Before diving into the detail, it is only fair to welcome the change of tone. It has been refreshing to […]
The latest surge in gilt yields – which represents the cost of new borrowing by the UK government in the bond market – is yet another shock that our already fragile economy could do without. To be fair, this crisis is not entirely the making of Rachel Reeves and her October Budget. Bond yields have […]
The Labour Government’s determination to restrict eligibility for Winter Fuel Payments is the sort of decision that the fictional Sir Humphrey Appleby would describe as ‘courageous’. The House of Commons’ motion calling on the Government to delay the implementation of this change has no real chance of passing. But why on earth are Keir Starmer […]
It is tempting to dismiss Rachel Reeves’ statement to Parliament on the health of the public finances as merely a piece of political theatre. The main purpose was indeed to blame the Conservatives for the consequences of decisions taken by the new Labour government, and to prepare the ground for tax rises in the Autumn. But […]
‘Read my lips: no new taxes’. Older readers may remember US Presidential nominee George H W Bush saying those words at the 1988 Republican National Convention. Of course, this pledge was then broken, playing a large part in Bush’s defeat by Bill Clinton four years later. Labour’s Rachel Reeves may just have made the same […]
The disruption to shipping through the Red Sea – and the possibility of a further escalation of the Middle East crisis – are serious threats to the global economy. Nonetheless, the wider fallout should be limited. UK inflation might sink a little more slowly than it would otherwise have done, but it should continue to […]
An academic study published this week found that people with ‘lower cognitive ability’ were more likely to vote Leave in the 2016 UK referendum on EU membership. This was, of course, seized upon by many Remainers as more evidence that Brexit was a ghastly mistake. But does this stack up, or it is just another […]
In January the Prime Minister outlined his five priorities for 2023. The first pledge was to ‘halve inflation this year to ease the cost of living and give people financial security’. The other targets are more challenging, but this one at least has now been met. The CPI measure of inflation fell to 4.6% in […]
The woman who would be Chancellor made what I think was a good speech at the Labour Party Conference on Monday. It was serious and well delivered. I even liked much of the substance. Unfortunately, the few specific policy proposals she made all had significant flaws. Let’s begin with the ‘good’ bits. There was a […]
The latest UK data on the growth of average earnings, published by the ONS today, could turn out to be the most important for some time. For a start, they will be one of the final pieces of evidence reviewed by the Bank of England’s Monetary Policy Committee (MPC) when they meet to set interest rates […]
No, this isn’t yet another piece having a pop at the Bank of England, and at Governor Bailey in particular. It is fair to say that public confidence in the central bank is low, after a series of policy mistakes, forecast errors and communication blunders. But the Bank has acknowledged most of these faults and […]
True to form, Mark Carney has made another unhelpful intervention in the Brexit debate. This time his remarks have generated more heat than light on the impact that the vote to leave the EU might have had on UK inflation. And by appearing to validate fears that UK interest rates have a lot further to […]
The news that net migration to the UK hit a new record of 606,000 last year has understandably rung alarm bells. As Rakib Ehsan discussed here, there is a broad consensus that such high figures are unsustainable and, in some sense, undesirable. Nonetheless, talk of an immigration ‘crisis’ seems overdone. First, it is not obvious that the public […]
The Bank of England’s Chief Economist, Huw Pill, has caused another public relations disaster by criticising workers for demanding higher pay – and firms for passing on higher costs. Instead, he told a podcast from Columbia Law School, that Brits ‘need to accept’ that they’re worse off. Let’s begin with a recap of what Pill […]
First, the bad news. The lowlight of the latest UK inflation data was that the consumer price (CPI) measure of food price inflation jumped even further in March – to 19.1%. This contributed about 2.2 percentage points to the overall inflation rate of 10.1%. With ‘core’ inflation still stubbornly high (over 6%), food price inflation will have […]
