Money

With every passing week it becomes clearer that the British economy is in crisis. Not the ‘here today, gone tomorrow’ sort of crisis that bedevils the financial markets, but rather the deep-seated, slow-burning crisis of a progressive, life-threatening disease. ‘I am totally 100 per cent on it, and it is going to be okay and we are going to get through this,’ the Prime Minister promised last week. If so, he’s got his work cut out. The economic performance of the UK economy has deteriorated sharply over the last decade-and-a-half compared to its performance beforehand. On key measures, such as output per hour worked, the UK was a poor performer even before the

After a bruising week, perhaps Andrew Bailey could take some solace in Rishi Sunak’s interview with Laura Kuenssberg this weekend. For a start, the Prime Minister threw his support behind the Bank of England governor, after senior figures within the Conservative party accused Bailey of being ‘asleep at the wheel’. But it was also a reminder that, no matter how bad things may seem at Threadneedle Street, they’re probably worse in No. 10. When Bailey hits out at wages, it looks like another desperate attempt to deflect blame away from his own institution Sunak is facing demands for proof that his plan for our economic recovery will work at a

The Monetary Policy Committee has voted seven to two to take interest rates to 5 per cent, a 0.5 point increase. Its thirteenth rise in a row takes rates to their highest level in 15 years, and is being described as a ‘shock’ increase, brought in as a response to the rise in core inflation on the year in May, which has hit 7.1 per cent. The horror of inflation is that it gobbles up your income and your savings After this week’s dire inflation update, the question wasn’t whether the Monetary Policy Committee would raise interest rates, but by how much. After last week’s labour market update, which saw nominal wages

The Supreme Court is hearing a case today that, if successful, could mean the end of new fossil fuel projects in the UK on climate grounds.  The justices will decide whether to reverse approval for oil extraction at Horse Hill based on downstream emissions from the use of the oil. Whatever the outcome, this case is a damning indictment of the UK’s absurd climate laws.  This is a long-running affair. Horse Hill was first test drilled in 2012 and permitted by Surrey County Council to expand to a commercial scale in 2019. This is the teeth of opposition from local campaigners, including the Weald Action Group, Friends of the Earth, and

Is Mark Zuckerberg losing his touch? Having just thrown tens of billions at his weird virtual-reality ‘metaverse’, only to see it flop with users, the Meta CEO and co-founder of Facebook appears to be spying another questionable new venture. It’s reportedly called Threads, a cloying techspeak name for what is essentially a rip-off of Twitter. You might think that the last thing the world needs is another Twitter, den of sanctimony and cancellation that it is. But not our Zuck. Threads appears to be an attempt to capitalise on the unease over at Twitter Towers, as advertisers and high-profile users alike have been rattled by Elon Musk’s unpredictable new leadership

The average two-year fixed mortgage now sits at 6 per cent, according to financial data group Moneyfacts – just below the 6.65 per cent reached in December last year, after the fallout from Liz Truss’s mini-Budget. Five-year fixed rates aren’t too far behind, at 5.7 per cent. For many of the 2.4 million homeowners whose mortgages are up for renewal between now and the end of next year, this is, at best, cause for alarm. At worst, it’s an alert to a crisis. Later this week, we’ll get last month’s inflation data – and the next rate update from the Bank of England. Threadneedle Street’s dilemma is only getting worse. Between

There are plenty of reasons for viewing today’s huge merger deal between the UK mobile networks of Vodafone and Three with suspicion. It could reduce choice for consumers. It may lead to job losses. And it is possible that they will downgrade their service even more than they already have, cut back on investment, and squeeze more money out of a captive market. Yet that is not quite the whole story. In fact, done right, the merger could even turn out to be a rare Brexit win.  Today’s tie-up between Vodafone and Three was widely expected. The two companies will combine their British networks, and will have 27 million users

‘There are obviously lessons to be learned,’ said Bank of England Governor Andrew Bailey at today’s House of Lords Economic Affairs Committee. It was a point he repeated many times over, in reference to the inflation crisis that has plagued Britain for close to two years now. ‘We have to learn lessons from the experiences we’ve had, of course we must… We have to work out what those lessons are.’ But despite repeating this sentiment over and over again, Bailey could not meaningfully come up with one good example of such a lesson, nor could he go into much detail on the mistakes the Monetary Policy Committee has made over the

Is the government ready to start cutting taxes? After taking the burden to a post-war high, it seems ministers are preparing to change direction – in one area, anyway. This morning Jeremy Hunt announced that the energy levy on oil and gas companies, known as the ‘windfall tax’, will come to an end in 2028 – a direct response to growing fears that the effective 75 per cent tax on profits was driving business and investment out of the country. Divestment from the North Sea has become a heavily contested topic. Keir Starmer announced that Labour would ban all new production in the North Sea, perhaps putting into perspective for

The UK will narrowly avoid a formal recession this year. That’s the consensus that is emerging based on the current data. This morning’s Economic Outlook from the OECD – which forecasts 0.3 per cent growth in 2023 – reflects similar projections from the IMF’s latest update and the Office for Budget Responsibility, which have revised their figures upwards in recent months. But to what extent will this modest growth actually be felt by Brits? Here the picture is far less positive. Inflation – which remains stubbornly high, in Britain especially – continues to eat away at real wages. The OECD predicts that the UK will continue to suffer from some