Economy

The British steel industry has been staggering from one crisis to another for the whole of this year. Half of the industry has fallen into effective state control, and what’s left is teetering on the edge of collapse. The government has finally come up with a plan to rescue it. In collaboration with the US and EU, it wants to create a ‘ring of steel’ protecting all the major Western industries from cheap Asian imports. It sounds simple enough, but there is just one catch. This plan won’t do anything to fix soaring domestic costs – and that is the real problem.  The government certainly needs to do something to

Barely a month ago, the received wisdom was that the Javier Milei experiment in Argentina had effectively collapsed. The self-styled ‘anarcho-capitalist’ president was elected in December 2023 after a campaign in which he waved a chainsaw at rallies, symbolising his promise to slash public spending and destroy the ‘political caste’. But with the peso on the slide, unions leading effective campaigns against the spending cuts and corruption allegations around his sister, the wiseacres – and polls – suggested that it was all about to cave in around Milei. Milei’s La Libertad Avanza won 40.8 per cent in the midterm elections, widely seen as a referendum on his term so far

Rachel Reeves is reportedly looking at a 2p increase in income tax. The hike to the basic rate – paid on earnings between £12,571 and £50,270  – would take it from 20 per cent to 22 per cent. That’s still quite low by historic standards, despite the overall tax burden heading towards record highs. But it would also mean a clear and significant breach of Labour’s manifesto commitment, made just 14 months ago, not to raise the big three taxes. Would it be enough to get the Chancellor out of her fiscal hole? The Institute for Fiscal Studies recently put the size of that hole – that needs to be

Oh, the horrid injustice of it all! By the skin of their teeth, pensioners on the state pension and with no other income, are going to avoid paying income tax next year. With September’s inflation figures now in, it can be confirmed that, thanks to the Triple Lock, the state pension will be rising to £12,547 next April, bringing it perilously close to the personal tax allowance of £12,570. You can write down in your diary now the day next year when the state pension certainly will tip over into taxable territory. There will be howls of outrage from opposition parties and pressure groups representing pensioners during this week. Prepare

The economy is slowing down. GDP grew 0.3 per cent in the three months to August. As ever, services propped up Britain, growing by 0.4 per cent, while the production sector shrank by 0.3 per cent, according to Office for National Statistics data. We could have news of a stagnating economy confirmed just in time for Rachel Reeves’s Budget That growth over the last three months though was helped by a bumper June with the economy flat over the latest two months. If things don’t improve in the September data, then we could have news of a stagnating economy confirmed just in time for Rachel Reeves’s second Budget. Inflation too,

It is day three of Labour’s latest strategy: to try to blame Nigel Farage for the forthcoming tax rises in the Budget. After Health Secretary Wes Streeting had a go on Monday, Rachel Reeves this morning has made a similar point. The reason she is looking to raise taxes in the Budget, the Chancellor says, is because of Brexit. ‘There is no doubting that the impact of Brexit is severe and long-lasting,’ she said. Next up, apparently, is Keir Starmer, who at one point is going to tell us that Farage is guilty of campaigning for Brexit and then walking away from its implementation. Given that he wasn’t, and never

On Question Time last week, Zack Polanski, the Green Party leader and erstwhile boob-whisperer, declared that there is no evidence that the wealthy leave Britain because of wealth taxes. A bold claim, and a wrong one. It’s also revealing, symptomatic of a growing belief on the populist left that Britain’s problems could be solved if only we shook the ultra-rich’s pockets a little harder. Polanski assured the audience that a wealth tax would only fall on those with more than £10 million in assets – as if this made it both morally tidy and economically painless. Unfortunately, history and basic arithmetic disagree. France tried almost exactly that, with a rate

When Friedrich Hayek won the Nobel Prize, his entire lecture – titled ‘The Pretence of Knowledge’ – was an attack on economics itself. He believed economists were more worried about looking scientific than actually being scientific. The lecture was so controversial that Economica, the LSE journal that had published Hayek’s work since he was a young professor, refused to print the speech unless he made changes. Hayek, of course, refused. But that was the spirit of the Economics Nobel back then. It rewarded rebels. Since, the prize has become a monopoly for the ‘good boys’ of academia; those who publish in the top journals, collect citations and perfect their h-index. Today, the Nobel