Economy

Supermarket shelves are bare. There may not be enough turkeys for Christmas. Wages and prices are rising. And the government is sinking into a pit of sleaze. As if that were not enough, the EU is about to launch a full-scale trade war against the country.  Following the day-to-day news, you could well be forgiven for thinking the British economy was sinking into permanent chaos, doomed to replay the dark days of the 1970s. But hold on. Amidst all this gloom, the world’s biggest and most powerful investment bank, JP Morgan, says now is the time to be buying British.  JP Morgan has not always been a fan of the

So far, the big message from the Glasgow climate conference is the role of finance in decarbonising the global economy. It’s a dangerous development. In his speech to COP26 last week, the Chancellor, Rishi Sunak, pledged action to ‘rewire the entire financial system for Net Zero.’ Finance has taken centre stage in large part because of inadequate government policies. According to the United Nations Environment Programme, around two-thirds of global emissions are linked to private household activity. Reducing them requires major changes in people’s lifestyles, UNEP says. Rather than imposing carbon taxes that really hurt – the Intergovernmental Panel on Climate Change estimates a minimum of $135 a ton, rising

It has been exactly 20 years since the Enron scandal upended the reputation of global accountancy firms, leading to the downfall of both the company – one of the largest in US history up to that point – and Arthur Andersen, one of the ‘Big Eight’ accounting firms. Enron’s collapse provoked an avalanche of regulation, ostensibly to reduce the chances of similar accounting fraud repeating itself. In the United States this effort was spearheaded by the 2002 Sarbanes–Oxley Act, while the European Union’s 2006 Auditing Directive followed scandals like the 2003 collapse of Italian dairy giant Parmalat. In reality, these supposedly stringent regulations were crafted under considerable influence from the

Last week, the Bank of England sent a number of confused messages. One was almost shocking: Andrew Bailey said that it isn’t his job to steer markets on interest rates ‘day by day and week by week’. But as economic commentator Matthew C. Klein dryly noted this is literally his job. It is debatable whether the Bank of England needs to manage the entire yield curve (ie, buying and selling bonds in an attempt to set interest rates years into the future) but the central bank should be in charge of the short end. Those opposing an interest rate rise say that central banks should never shock markets. The Bank

He isn’t Canadian. He doesn’t dominate the Davos circuit with platitudes about climate change. And he isn’t constantly warning that the British economy will turn into a cross between Ethiopia and Argentina now that we have left the European Union. In many ways, the current Governor of the Bank of England Andrew Bailey is an upgrade on his high-profile predecessor Mark Carney. And yet, in the most important respect, he is turning out to be very similar. He is constantly threatening to raise interest rates, and then backing off at the last moment.  An increase in interest rate from the ‘emergency’ level of just 0.1 per cent was not quite

The COP26 summit is unlikely to be an outright flop. There has been no shortage of drama, with speakers seeming to compete with each other to see who could use the most histrionic language. Justin Welby, the Archbishop of Canterbury, went so far as to compare the attending leaders to Nazi appeasers. He later apologised.  Some progress, albeit small, is being made. A hundred countries have been persuaded, some on the promise of sweeteners worth £14 billion, to sign a pledge to end deforestation by 2030. Brazil, the most important of all, is among them. India has agreed, for the first time, to set itself a date for achieving net-zero

Twice a year, every year, the changing of the clocks debate begins. So is it time to finally drop daylight saving and stick to British Summer Time all year round? Boris Johnson thinks so: the future Prime Minister weighed in on the subject back in 2011, claiming BST would ‘expand the economy and cheer everyone up’. Boris is right on both points, not least on the economic case for ditching the old habit of changing the clocks. Dark winter evenings, made longer by daylight saving, make around half of Brits feel more depressed, according to one poll. Other surveys suggesting we’d exercise more were it lighter longer. Perhaps this point should be taken with a

The big tax and spend budget. More Gordon Brown than George Osborne. Sunak’s spending spree. However you wish to describe it, one thing is clear: Rishi Sunak’s budget marks a radical departure from previous Conservative chancellors. And while it might have ruffled the feathers of some Tories, it’s also causing problems for the SNP. In some ways the break from Tory convention is no surprise. Calls by the International Monetary Fund (IMF) in 2020 for rich countries to spend their way out of the pandemic – and then further calls this year to shell out to boost recovery – signalled a new economic orthodoxy that Sunak has tapped into. Austerity is

The amount the state takes out of the economy will rise to the highest level in 70 years. An unreformed public sector will be showered with cash, with the health service allowed to spend whatever it likes. A tax system that was already creaking under the weight of its own complexity has just been made slightly more complicated, and it has been made a lot less competitive. The Chancellor Rishi Sunak with his usual panache sailed through his Budget yesterday. The problem, however, is this. While he might get away with pushing up taxes and spending for now, sooner or later it is going to catch up with him. And

It was a tale of two chancellors at today’s high-spending Budget. Rishi Sunak began by embracing the big-state profligacy pursued by Cameron and May, and maintained by their successors, Boris and Carrie.  The Chancellor reeled off stacks of figures indicating that the economy is roaring back to life. ‘Growth up! Wages up! Employment up!’ he shouted. And he announced that government spending sprees will also surge by £150 billion. He plans to restore the 0.7 per cent spending target for foreign aid by the end of this parliament. And he has ordered civil servants across Whitehall to find more stuff to buy.  ‘A real-terms rise in spending for every single

Rishi Sunak has released photos of his Budget prep, as he prepares to stand up in the House of Commons tomorrow to deliver not just the government’s latest fiscal decisions, but the results of its three-year spending review. (Photos include a shot of his pre-Budget Twix and Sprite snack, which Sunak revealed to Katy Balls on Times Radio over the weekend). As I say in the Telegraph today, this Budget is a difficult balancing act for the Chancellor. On the one hand, he has some big-spenders to please, not least the Prime Minister, who is adamant that the Conservative party’s days of austerity have come to an end. On the