Economy

Istanbul, Turkey On Saturday mornings, Istanbul’s markets and greengrocers are packed with housewives in search of a bargain. Anxious women compare cabbages while chefs haggle over bunches of parsley, passing across thick wads of ten Lira notes – equivalent to about £5 a decade ago, now worth just 50 pence. The rising cost of food has become a national obsession in Turkey. Menemen, a staple breakfast dish of scrambled eggs with tomato, onion and fried green peppers, has seen the cost of its basic ingredients shoot up by 132 per cent in a year. Some shops in the big cities have invested in digital price tags – those little grey electronic

If you believe the media coverage of the latest consumer confidence surveys, household spending is set to collapse under the weight of the cost of living crisis, dragging the UK economy into a deep recession. But how reliable are these signals? As always, it is worth digging past the headlines. The GfK measure of consumer confidence did indeed fall to a record low in May. But people were less pessimistic about their own finances than they were about the economy as a whole. This distinction is crucial. It is no surprise that people are worried about the general economic situation: we are constantly being told that the country is going

‘Forecasting is a mug’s game’ is a truism attributed to everyone from fantasy author Douglas Adams to former Bank of England governor Mervyn King. It reminds us that commentators should never be smug when they call the near future right, or quick to crow at others who turned out to be wrong. I may have been a step or two ahead of the pack this season on inflation and recession risks and I’ve always said crypto, which we’ll come to in a moment, was the road to perdition. But I confess my record on property trends is frankly lamentable. Way back in the ‘negative equity’ era of the mid-1990s, I

Some £500 billion was printed by the Bank of England during the pandemic – a staggering sum that caused very little public debate. Those sceptical about so-called ‘quantitative easing’ argue that it causes inflation – and with today’s news that inflation rose 9 per cent on the year in April, is anyone linking the two? Step forward Mervyn King, former governor of the Bank of England, who was surprisingly critical when speaking to Andrew Marr on LBC last night. One of the major problems, Lord King said, was that the Bank went too hard and too fast with its money printing. ‘Governments stepped in and put in a lot of

For the first time ever, the number of UK job vacancies – now almost 1.3 million – has overtaken the unemployment count. Normally, this would lead to people in work feeling much better off, and lead to pay hikes and bonuses as employers compete to recruit and retain employees. But in fact, regular pay in real terms (that is, after inflation and before bonuses) is down 1.2 per cent – fuelling the cost-of-living crisis that is now the central fact of British politics. What’s going on? In short, today’s ONS labour market overview is yet another example of how inflation can ruin otherwise good news. Total salaries are up 7

This afternoon the Bank of England’s governor Andrew Bailey appeared, as he has done many times before, in front of the Treasury Select Committee to answer questions about its recent decision-making. Yet the tone of the Committee was radically different to other sessions. Its chair Mel Stride opened by asking Bailey if he and the Monetary Policy Committee – made up of nine members who vote to set interest rates – had been ‘asleep at the wheel’ as prices soared throughout the country. It was arguably one of the easier questions put to him during today’s session: from then on, Bailey and the MPC members who joined him were pit

Sanctions are the West’s key weapon in the fight against Putin, but there are signs that Russia’s economy and financial system is weathering the storm better than expected. The rouble has already bounced back and Russia has been able to continue to service its debts, with only minor hiccups. A closer look however reveals that sanctions are biting hard – and that Russia is losing the economic as well as military war. Take the rouble’s resurgence, which is not what it seems. The ability of Russia’s currency to bounce back reflects the fact that Russian imports have fallen by more than the country’s exports, as local consumers and businesses have cut spending. This means there

It’s been a terrible few weeks for that guy you know. Bitcoin dropped to a ten-month low (apparently thanks to something called ‘stablecoins’), while $1 trillion has been wiped off the largest tech companies on the stock markets. ‘Retail investors’ – non-professionals with little more than an internet connection – are struggling. You might expect many of them to put their heads in their hands and log off. But that would be to misunderstand the nihilism of online culture. Losing is the same as winning, only better. The thing to do is to post evidence of your catastrophic losses. It’s called ‘loss porn’ and if you look at the ‘WallStreetBets’ page on

First, the good news: US inflation is down. Now the bad news: US inflation isn’t down by as much as a lot of people were expecting. Cue quite a lot of confusion on the markets. First, the S&P 500 plunged by 0.5 per cent, then it rose by 1 per cent, then it was more or less back to where it started the day. The FTSE100 has performed a similar gyration: first erasing its daily gain and then regaining it, to finish nearly 1.5 per cent up on the day. So, is it positive or negative news that US consumer inflation has fallen from 8.5 per cent in March to