Economy

To nobody’s surprise, the Bank of England has hiked its base rate, and, equally unsurprisingly, it has chosen to do so by a relatively modest 0.25 per cent, bringing rates to 1.25 per cent. In 25 years of its existence, the Monetary Policy Committee (MPC) has never raised rates by more than 0.25 per cent at a time. That stands in contrast to the Fed’s decision to raise rates by 0.75 per cent on Wednesday. If the modesty of the rise was supposed to calm markets, however, it doesn’t seem to have worked. The FTSE100, already down nearly 2 per cent on the day, plunged further on the announcement. The

Ukraine’s ability to defend itself against the Russian invasion has surprised almost everyone outside the country, none more so, presumably, than Vladimir Putin. As for the West’s efforts to harm Russia through sanctions on its fossil fuel exports, that is a very different matter. Sanctions have not been entirely useless. According to a report by the think tank Centre for Research on Energy and Clean Air (CREA), they have led to Russia losing over €200 million (£173 million) a day relative to what it was earning at the start of the year: €880 million (£692 million) per day in May compared to €1.1 billion (£951 million) per day in January

First the good news: the Office for National Statistics figures released today show that pay is rising at its fastest rate in two decades, with regular pay up by 4.2 per cent in the three months for February to April compared with a year earlier. Now the bad news: such is inflation that, in real terms, regular pay was actually down 2.2 per cent – lower than at any time in the past two decades except for a brief period in the autumn of 2011. So, yes, it isn’t just an illusion: we really are getting poorer. That is a big problem not just for households trying to make ends

It’s the highest form of flattery, but is Apple really trying to copy Klarna? That’s the allegation made by the Swedish firm, which has led the way with so-called ‘buy now, pay later’ credit. Last week Apple announced that it too would be offering deferred payments via Apple Pay, as well as the option to split repayments over several instalments. It’s something that Klarna has been flogging for over a decade. And it’s already pretty popular: nearly a quarter of British shoppers have used Klarna’s services. Now its founder ​​Sebastian Siemiatkowski has accused Apple of nicking his concept. In reality, Klarna isn’t the only, or even the first, company to

Could Rishi Sunak really have saved the taxpayer £11 billion by insuring against higher interest rates last year? That was the extraordinary claim made by the National Institute of Economic and Social Research (NIESR) and in the Financial Times on Friday. The NIESR claims that the government could have saved the money had the Chancellor taken up the institute’s own suggestion last year and forcibly converted £600 billion worth of reserves held by commercial banks at the Bank of England into two year fixed-rate bonds. By failing to foresee rising inflation and interest rates, the FT asserts, the Chancellor has blown even more money than Gordon Brown did by selling

Has the Financial Times just been sold another pup? Its economics editor Chris Giles (who predicted that the Brexit vote would lead to recession) has written what could be a Labour Party press release today. He reports as fact a claim by the NIESR, a left-leaning economics think tank, that Rishi Sunak could have saved £11 billion had he taken their advice and taken out insurance against rising interest rates. A startling claim, interesting hypothetical and worthy of a report. It might fall down upon further scrutiny: could the Treasury really ordered the Bank of England to force commercial banks to swap reserves for gilts? Would this not have been a massive

As part of his revival (and survival) strategy, Boris Johnson is trying his hardest to convince the public and fellow MPs that he can get the cost of living crisis under control. But did today’s speech help him make that case? His wide-ranging speech in Lancashire covered a vast array of economic, policy and trade topics, which he struggled to pull into a cohesive theme. ‘We do not grow many olives in the UK,’ he pointed out. ‘Why do we have tariffs on bananas?’ Both excellent points when it comes to liberalising trade, but not obviously at the top of people’s priority lists when it comes to tackling energy bills

After Boris Johnson faced a confidence vote by his own MPs, the Prime Minister has come under pressure to bring in changes to his government. This ranges from talk of a reshuffle to shaking up the No. 10 operation yet again. But the issue which has the broadest support among MPs calling for change is a desire for Johnson to cut taxes. MPs from across the party – from the One Nation wing’s Damien Green to the ERG’s Steve Baker – have suggested this ought to be done sooner rather than later. However, it appears they will have to wait a little while longer. This evening Rishi Sunak spoke to

Who could argue with the words of the EU’s internal market commissioner Thierry Breton when he says: ‘a common charger is common sense for the many electronic devices in our daily lives’? No longer, it seems, will we have to fiddle around with several different cables, and curse when we have brought the along the wrong one on holiday. M. Breton has just succeeded in introducing a directive which, from 2024, will oblige the manufacturers of all electronic devices on sale in the EU to use the same model of charger. The directive – yet to be rubber-stamped by the European parliament – will ‘increase convenience and cut waste’, as well