Economy

What’s the most idiotic question ever posed by an interviewer? There was the real-life Sally Jockstrap who asked David Gower whether he considered himself a batsman or a bowler. Or the Radio 1 DJ who asked Marc Almond – at the height of his fame with Soft Cell – whether he was going steady with a girl. But my nomination goes to Anna Foster on the Today programme this morning. In the midst of an interview with economist Mohamed El-Erian about Britain’s dire fiscal state, she suddenly posed: ‘Would raising taxes at this stage, would that help growth?’ I had to listen back on the catch-up facility to check that

‘UK in the drain’, a trader exclaimed earlier today as 30-year gilt yields punched through to their highest level since 1998. London stocks were down and the pound fell too. The message to trading desks was clear: dump Britain. Things have worsened, at least in part, because yesterday’s Downing Street and Treasury reshuffle included no suggestions that the government has emergency plans to fix Britain’s broken fiscal maths and attempt to balance the books. And as I set out in last week’s cover story, markets are not amused. Wherever you look on the yield curve, Britain’s debt is cementing itself as the most expensive in the developed world. Long-term debt – the

Britain has picked a fight with the pharma industry, and it isn’t clear why we think we can win. Not only might NHS costs rise, but we may also lose access to new medications, making our health service increasingly second class and meaning that people die. Health Secretary Wes Streeting’s fight has made headlines and negotiations over costs between pharmaceutical companies and the government have failed. Eli Lilly, for example, has paused British sales of their weight loss drug Mounjaro, and when they resume next month they will do so at almost triple the price. Several threads tie the current problems together. The first is that governments and pharma companies

Financial crises are often linked to a political crisis. On 8 September, the French government will submit itself to a vote of confidence – which, by all accounts, it will lose. At issue is France’s parlous financial state, which a minority French government seeks to address. This week, French 30-year bond yields reached levels unseen since the Greek debt crisis in 2011, while the 10-year yield has surpassed present-day Greece’s.  France’s economy minister was quick to warn that France’s lamentable financial position could leave it facing an IMF bailout. This was intended to frighten MPs ahead of the vote rather than reflect reality. Greece was borrowing at near 30 per

Quietly, without even a press release let alone a fanfare, Britain over the past 12 months has just passed a grim milestone. The number of people on out of work benefits has surpassed the peak reached in the early 1990s. Indeed, it is higher now than it was at the peak of Covid-19 in 2020. There are now 6.5 million people living on out of work benefits Remember when unemployment of three million used to generate headlines every week, in the early 1980s and then again a decade later? Well, there are now 6.5 million people living on out of work benefits. Yet it hardly causes a ripple in the political

Britain is slowly drowning in debt. Figures just released by the Office for National Statistics (ONS) show that in the financial year to July the state had to borrow £60 billion to tread water. That’s £6.7 billion more than by July last year and the third highest borrowing total for this period of the year since records began 32 years ago. Statisticians also managed to find almost another billion pounds in debt payments that now need to be added to the previous month’s figures.  When the Bank cut interest rates, something alarming happened in the borrowing markets There was better news, though, when looking at the month of July alone, with

There is not a lot of good news on the British economy at the moment: prices are rising rapidly, job vacancies are falling and taxes are almost certainly going to be hiked again in the autumn to fill the ‘black hole’ that has opened up in the nation’s finances. But there is this. Free money is back. ‘Real’ interest rates, which are the only ones that matter, have plunged back close to zero. But we shouldn’t celebrate too soon: this is going to be a disaster for the economy – and we will all have to live with the consequences. Today’s inflation data from the Office for National Statistics came

The Chancellor Rachel Reeves is threatening a round of tax rises. RMT is on strike over the bank holiday. And something or other is going on with Masterchef. As the summer unfolds, British domestic politics is worrying about all its familiar issues. In the background, however, something far more serious is happening. The country is going quietly broke, and hardly anyone cares.  Very soon the Chancellor will be raising our taxes to pay the interest on our outstanding debt On the bond markets, the yield on the UK’s 30-year gilt rose yesterday to 5.6 per cent, overtaking the equivalent US yield for the first time in a generation, and approaching