Economy

UK spirits are key to our economy. Take, for instance, Scotch; sold in 200 markets worldwide, it supports 40,000 jobs and is our single biggest food and drink export, with 39 bottles exported each second. Or how about gin? The UK exported half a billion pounds of gin in 2017; a figure that could top £600 million this year, with markets including the USA, Australia, and Europe growing rapidly. The UK accounts for 67 per cent of all gin traded around the world, in what is a booming category. At Pernod Ricard, we employ more than 2,000 Britons, exporting the likes of The Glenlivet, Chivas and Beefeater to 160 countries globally, and selling to pubs, bars, restaurants and retailers across the UK.

Contrary to the impression given by Jason Mitchell, Venezuela does not have a socialist economy (‘Maduro’s madness’, 25 August). It has a ‘mixed’ economy (and therein lies some of its problems; such as food hoarding by private companies hostile to the regime). The private sector is large, and involved in numerous sectors within the economy; food distribution, pharmaceuticals and so on. The US sanctions against Venezuela have always been about regime change, and these sanctions amount to a blockade of the country. US and European banks have refused to handle Venezuelan payments for medical supplies, and pharmaceutical companies have refused to issue export certificates for cancer drugs — therefore stopping them being imported into Venezuela.

This piece first appeared as the leading article in The Spectator.  Economies run on confidence — as Franklin D. Roosevelt observed when he told Americans, in his first inaugural address during the depths of the Great Depression in 1933, that they had ‘nothing to fear except fear itself’. If that confidence is lost, if people collectively start drawing in their horns, squirrelling money away because they fear turbulent economic times ahead, then recession can all too easily become a self-fulfilling prophecy. No serious economist would dispute this theory. The puzzle is why the UK economy, riddled with Brexit anxieties, is in such good health. The Dutch prime minister said we were ‘collapsed’.

Should we place faith in a survey, conducted in June but published this week, that says London is still the world’s pre-eminent financial centre? Yes, in the sense that no one challenges that long-standing claim as of today; no, in the sense that complacency would be a huge mistake while every financial firm operating in the City, the West End and Canary Wharf is busy making contingency plans for a bad Brexit outcome.

Would a cashless world be a better place, morally or fiscally? Matthew Taylor, in his relatively uncontroversial review of work practices and the ‘gig economy’ published on Tuesday, proposed that the £6 billion ‘cash in hand’ economy of payment for window cleaning, gardening, leaflet distributing and similar simple tasks should be regularised and brought into the tax net through the use of apps and other digital payment platforms. Would that really be a good thing? The first point to be made is that it’s probably going to happen anyway over the next decade — at least if we go the way of Sweden. There, cards and phones are almost universally used, even for the smallest transactions.

The UK economy is not in good shape. We invest a lower proportion of our GDP every year than almost anyone else, which is the main reason why our productivity is almost static. We have deindustrialised to a point where we do not have nearly enough to sell abroad to pay for our imports. We have a chronic balance of payments problem financed by selling assets and borrowing from abroad. As a result, both as individuals and as a nation we are getting deeper and deeper into debt. What growth we have is driven by consumption, financed by asset inflation rather than by exports and investment. On almost every measure, inequality is growing.

Ah, butter. Salted, unsalted, English, French, garlic, spreadable, straight from the fridge - just thinking about the many forms of butter make me salivate. Then there's what to pair it with - crumpets, teacakes, toast, jacket potatoes. The list goes on and on. So it comes as a blow to learn that butter is selling at record prices. Forget those low fat and faddy diets, butter is now a 'big trend globally'. That's according to Michael Oakes, a dairy farmer and spokesman for the National Farmers' Union. He told Radio 5 live this morning that one major driver is the decision by McDonalds to use butter in it products again, eschewing substitutes like vegetable spread.

‘Fred Goodwin off the hook again,’ declared the Scottish Daily Record. That neatly summed up one strand of sentiment behind the RBS Shareholder Action Group’s battle for compensation for losses incurred in the bank’s £12 billion rights issue in 2008 — preceding its £45 billion taxpayer bailout, in which any remaining shareholder value was largely wiped out. Investors who believe they were misled by RBS’s directors and the rights-issue prospectus have been campaigning for their money back ever since.

There's bad news for households this morning following the news that inflation has soared to its highest level since September 2013. According to the Office for National Statistics (ONS), inflation is now at 2.7 per cent, up from 2.3 per cent in March. This is some way above the Bank of England's stated 2 per cent goal. A number of factors contributed to the rise, but the main driver was higher air fares. This was largely because the timing of Easter pushed up the price of flights. In addition, tax changes in the Budget added to inflation as did rising costs of energy and clothing. Meanwhile, the retail price index (RPI) measure of inflation, which includes council tax and mortgage interest payments, jumped from 3.1 per cent to 3.5 per cent over the same period.

The front page of the Times makes happy reading for the Government this morning with its news that Britain’s economy grew at a faster rate than any other leading economy in the world last year. But while politicians are keen to act as cheerleaders on occasions like this, they are somewhat more reluctant to mention another ‘metric of success: immigration’. So says the Guardian in its editorial in which it argues that foreign workers wanting to come to Britain is a sign of just how healthy our economy is. Theresa May faces a challenge, the paper says, in addressing the worries of workers who want immigration to be controlled, while not ignoring the demands of various sectors for workers from overseas. So what’s the solution?