Economy

We’re all familiar with the usual trade union cliches: it’s not about us, it’s about passenger safety; staff morale is low; and strikers are being ‘victimised’. Or, in the words of Aslef general secretary Mick Whelan on ITV’s Good Morning Britain, train drivers are being ‘demonised’. More so than government ministers, who are forever portrayed by union leaders as callous evil-doers?     But it is what Whelan said next that really catches the ear. Asked whether he thought the public should be sympathetic towards train drivers on £60,000 a year turning down an offer which would take their pay to £65,000 a year, he said: ‘It isn’t about what we earn, it

Markets expected another interest rate rise today of 50 basis points. That’s exactly what they got. This afternoon the Bank of England has announced its tenth rate rise in a row, from 3.5 per cent to 4 per cent.  The Monetary Policy Committee (MPC) voted 7-2 to raise rates to 4 per cent; two members voted to hold the bank rate at 3.5 per cent, exposing the dovish leaning that has been a feature of the MPC during the pandemic years. This created a credibility issue for the Bank, as it failed to act on inflation for so long, putting itself in a position of having to play catch-up with

Among Ukrainians, there is little debate about how the war will end. The overwhelming consensus is that it cannot conclude until Russia has been fully repelled, and Ukraine’s borders are returned to the 1991 frontier when independence was declared after the Soviet Union collapsed. This means removing Russian troops from Crimea and the self-proclaimed republics of Luhansk and Donetsk in the Donbas region. Of course this is not an easy mission. But for Ukrainians, the alternative is unthinkable. The mass graves uncovered in Bucha have shown us what Russian occupation means. We have also seen, in the broken promises of the Minsk agreements, what any truce with Vladimir Putin is

Just what is a UK government supposed to do to keep the IMF happy? This morning it has issued a bulletin predicting that the UK will be the only major economy to shrink in 2023 – by 0.6 per cent – and blaming it on ‘tighter fiscal and monetary policies’. This represents an even-bleaker outlook than the IMF foresaw in October, when it pencilled in growth of just 0.3 per cent. Yet this is the same IMF which last September condemned Kwasi Kwarteng’s mini-Budget for slashing taxes, saying 'given elevated inflation pressure in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as

As the UK – and indeed the world – faces the prospect of an economic downturn this year, what exactly can the government do about it? This remains an ongoing debate within the Tory party, as Rishi Sunak continues to emphasise the importance of stability, while Liz Truss’s most loyal supporters keep pressuring the government to revive her focus on economic growth.  This morning a trio of cabinet members showed up in the City to suggest that it doesn’t have to be one or the other. Culture Secretary Michelle Donelan, Business Secretary Grant Shapps and the main act, Chancellor Jeremy Hunt, opened this morning’s conference at Bloomberg by insisting the

Every month, we are bombarded with the Consumer Prices Index (CPI), the main inflation measure. It is currently running at 10.5 per cent, and although this is slightly down over the past two months, it is still far, far above the Bank of England’s target of two per cent. But what about inflation for people who are running businesses? The Office for National Statistics (ONS) also publishes a Producer Price Index (PPI) covering inflation for commercial organisations. If you think living costs for consumers are high, count yourself lucky you are not running a factory: the PPI of input prices (i.e. prices of raw materials and other goods) for December has come

Rishi Sunak ruffled his own party’s feathers last week when – in reference to last autumn’s market turmoil – he told an audience in Lancashire: ‘You’re not idiots, you know what’s happened.’ This was quickly interpreted as the Prime Minister branding the MPs and business leaders calling for immediate tax cuts as ‘idiots’, sparking not only backlash but also another round of debates on a topic that has been dividing the Tory party since last summer. Just how quickly and aggressively can the party start to cut the tax burden down from its 72-year high? Today’s public sector finance update for the month of December certainly doesn’t settle this debate,

I have to tip my hat to Civitas. The ‘Tufton Street’ think tank made quite a splash on Monday, including bagging the front page of the Daily Mail, with two striking claims. One was that more than half of UK households now receive more in benefits from the government than they pay in tax. The other is that the top 10 per cent of earners pay more than half of all income tax. Both headlines are correct, but a bit more analysis is needed to interpret these figures properly. For a start, this is not new information. The Civitas report acknowledges that it is simply repackaging data which was first published by the Office

Davos was back with a bang this week for the first full-scale winter conference since the pandemic. And yet, the occasion marked something more significant than just a week of power breakfasts and champagne receptions. ‘Davos Man’ is back in charge of the global economy – and for better or worse everyone better get used to it. The Davos consensus is typically smug, self-satisfied and complacent as its many critics never tire of pointing out Sir Keir Starmer flew in to pitch his pro-business plans for the government everyone expects him to lead in a couple of years. The German Chancellor Olaf Scholz was there to explain how his country