Economics newsletter
If Burnham won’t make cuts, the IMF will do it for him
Even the weather has been playing along with the bizarre 1976 tribute act in which we seem to be trapped. We have had a mid-term change of Labour Prime Minister, a Chancellor called Healey, a government presiding over low growth and lingering inflation. We are back to punitive levels of taxation. Wealthy individuals, like hedge fund billionaire Chris Rokos this week, are fleeing. The unions are flexing their muscles, and on top of that we have had a prolonged heatwave and drought which, just as 50 years ago, burst with downpours over the August bank holiday weekend. Wealthy individuals, like hedge fund billionaire Chris Rokos this week, are fleeing Older readers may recall what came next.
Why Burnham might regret his No.10 North plan
How realistic is Andy Burnham’s plan to make No. 10 North responsible for the government’s ‘growth mission’? The Prime Minister’s argument is that taking that function away from the Treasury and giving it to No. 10 ‘means you’ve got maximum power to unlock the blockages where they exist in the wider Whitehall system’ – and that basing that mission in Manchester rather than Downing Street is part of a ‘huge transfer of power’ out of Whitehall. Burnham also wants to make more use of the Treasury’s Darlington campus, which is still being built and which Rachel Reeves worked from just twice in 2025 when she was chancellor, so it’s quite a low bar to do ‘more’ with that.
The truth about Net Zero
When I was made Energy Secretary in 2023, I asked civil servants what I thought was a simple question: prove to me that renewables are cheap. This was, after all, the entire premise of Conservative energy policy for a decade. After endless meetings and spreadsheets, it dawned on me that the way Government priced renewables made them look cheap in exactly the same way a Ryanair flight looks cheap. While the cost of the flight seems like a great deal, once you’ve paid for a bag, a seat, and a sandwich, you realise you’ve been stung.
Inflation hits Burnham’s cost of living pledge
This week, Andy Burnham, in an article about how much he loves buses, declared that he will lead a ‘cost of living government’. Yet costs are going up, as confirmed by figures released by the Office for National Statistics (ONS), which show that inflation increased to 2.9 per cent in July – up from 2.6 per cent the month before. The rise was driven mostly by the 13 per cent increase in the energy price cap, which saw gas prices increase at their fastest rate in nearly four years. Crude oil and petroleum prices fell for manufacturers but this was not enough to offset the energy costs faced by consumers.
Burnham’s jobs apocalypse
Is the Burnham bounce about to fizzle out? This morning has seen the first shaky set of economic figures since his ascension to Mayor of Great Britain. Figures released by the Office for National Statistics (ONS) show 13,000 jobs disappearing in July, following a fall of 13,000 in June too. In total, just under 100,000 jobs have been lost in the last year and 188,000 have gone since the election. Even more worrying in today’s release, though, is the headline unemployment figure of 4.9 per cent. Though flat, many economists had expected it to plunge. They predicted that because the figure is made up of an average of the previous three months and a large reading in March was due to drop out today, almost certainly sending the headline rate down.
Can Reform really end benefits Britain?
Benefits claimants will be required to carry out 20 hours of community service a week under a Reform government, Robert Jenrick announced today. The party’s Treasury spokesman said those who are fit to work must help clean up high streets and parks and carry out minor repairs to libraries and town halls, or face penalties. The measure is the latest addition to Reform’s welfare blitz, which would strip all foreign nationals, including EU citizens, of access to benefits such as universal credit, housing benefit and pension credit. The party believes its cuts would save taxpayers £21 billion by the fifth year.
Britain’s economy is growing – but not enough
Prime Minister Andy Burnham and his Chancellor John Healey are not having a bad start. Sure, there’s trouble ahead: the Budget is going to be difficult, and Healey is going to have to find a way of making sure all the cheques his boss keeps writing can actually be cashed. But for now, the blitz of 6 a.m. announcements on the cost of living – no matter how trivial they are – appear to have worked and Burnham is experiencing a polling bounce. Britain’s economy has a terrible habit of performing relatively well in the first half of the year before slumping to a halt That good news continued this morning in the form of figures from the Office for National Statistics (ONS), which show that the economy grew by 0.4 per cent in the second quarter of the year – having grown 0.
Bribing Scots to stay in the UK won’t work forever
A country is not a fiscal transfer. It can be many things – a loose federation of diverging cultures, a constitutional shotgun wedding, an unattractive compromise of history – but it cannot be a cash transaction. There is no history in a debit made, no loyalty in a credit received. Peoples are bound together by heritage, creed, shared sacrifice, and common purpose, but not by block grants or spending allocations. Opponents of Scottish independence still cannot grasp this plainest of truths Opponents of Scottish independence still cannot grasp this plainest of truths. Twelve years on from the referendum on secession, they remain in campaigning mode, incapable of offering the electorate anything more than a bribe.
There’s one rip-off Andy Burnham will never crack down on
Trying to pay my taxes via the HMRC website the other week, my bank thought it had sniffed a rat. “Could this be a scam?” it popped up and asked. I went ahead and made the payment anyway, but the honest answer was yes, ‘scam’ is not an unreasonable way of putting it. Every year, my tax bill seems to sneak upwards while I seem to get a little less for my money. Every year, my tax bill seems to sneak upwards while I seem to get a little less for my money I don’t think that is quite what the Prime Minister meant, however, when he wrote a piece in the Guardian today promising to end “the rip-offs that British people hate”. He had more in mind hard-to-cancel subscriptions and shop ‘bargains’ which turn out to be not such a good deal after all.
Could the fat jabs wreck your pension?
Fat jabs are perhaps the largest development in healthcare since statins. Weight-loss drugs – or GLP-1s, as they’re properly known – will reduce the number of people having heart attacks, developing diabetes or getting cancer, and will generally let people live longer. With a population that’s two-thirds overweight or obese, it’s no surprise that already three million British adults are on the jabs. That’s twice as many as last year and the number is expected to double again by the end of 2027, according to consultants at PwC. Reinsurers such as Swiss Re say that weight-loss drugs could decrease all-cause UK mortality by as much as 5 per cent over the next 20 years. A health miracle, then.