Matthew Lynn

In his speech in Munich on Saturday, the Prime Minister, Sir Keir Starmer, made it very clear that he was planning to rejoin the European Union’s single market, perhaps as early as this year. The argument in favour of this is that it will boost growth – and it will put Britain at the heart of a defence-fuelled industrial revival. But there is just one problem: joining the single market won't do anything to improve Britain's failing economy and may well make it worse. Sir Keir has gone further than any of his colleagues in embracing the EU. Instead of just joining the European customs union, he now wants to align fully with the single market. Very soon he may well be campaigning to rejoin the bloc completely.

It should have moved ‘Beyond Petroleum’ by now, with wind, solar and hydroelectric power powering its profits. If you rewind twenty years, BP had a clear plan to place itself at the forefront of the green energy transition. It hasn’t worked out as they had hoped. Instead, today the company announced it was suspending share buybacks to shore up its balance sheet, sending its shares tumbling. Its rival Shell is in better shape, but only just. As both of Britain’s oil giants struggle, it is becoming painfully clear that the obsession with net zero has destroyed what was one of our major industries – and it will be very hard for it to recover now. It has turned into yet another dreadful day for BP’s long-suffering shareholders.

As the hype builds for the reported $1.5 trillion (£1 trillion) IPO of Elon Musk’s SpaceX later this year, there will be plenty of critics who argue the company’s marketing has more hot air than one of its rockets. It has been claimed by some that the IPO will be worth more than the top seven companies currently listed on the London Stock Exchange – including century-old giants such as Shell, HSBC and AstraZeneca – combined. And yes, sure, there is probably an element of wishful thinking in these reports, as there often is with Musk. But SpaceX also has the potential to become one of the giants of the 21st-century economy and is very likely to prove its worth. SpaceX's will be the biggest IPO of the year.

Anyone who thought that gold, the world’s oldest form of money, was a safe asset that they could tuck away and forget about has been through a rough few days. It has soared, then plunged, then soared again. Its price has been even more volatile than Bitcoin or one of the overhyped artificial intelligence stocks. Even so, amid all the noise, one point is surely clear: gold’s bull market is not over yet – and it is likely to recover very soon. It has been quite a ride. After surging to an all-time record of $5,580 (£4,085) an ounce last week, gold tumbled by 9 per cent on Friday. It then fell by another 3 per cent as the markets opened on Monday, taking it back down to $4,554 (£3,334).

Has Tesla run out of road? The electric car firm put plenty of spin on its annual results, talking bullishly about the new projects that were coming to fruition. Elon Musk's company plans to go big on robots, pivot to Artificial Intelligence, and develop its self-driving unit. Yet there was no disguising the real message from its figures. With falling revenues, and the decision to scrap its premium S and X models, Musk’s pioneer of EVs is in deep trouble – and it may be too late to rescue the company now. Fourth-quarter revenues slumped three per cent to $24.9 billion Fourth-quarter revenues slumped three per cent to $24.9 billion, Tesla said after US markets closed yesterday – pushing revenues for the year down 3 per cent to $94.8 billion.

Last year might have proved a good time to own shares in the chip-maker Nvidia, along with the booming American tech giants. Or a piece of the defence manufacturers as the world re-arms. Or to hold a position in some of the rapidly growing economies of South America or Asia, or even one of the hyped-up crypto currencies. There were plenty of places investors expected to make money over the past year. As it turned out, however, there was one asset that outpaced them all, even though it generates no income: gold, and to an even greater extent, its junior sibling silver. With government debt soaring out of control, the precious metals are more valuable than ever – and so long as that is true, they will keep on climbing. There is no question it was the stand-out asset of last year.

It has lots of original features. It is close to good schools, and with a few cans of Farrow & Ball it will make the perfect family home. The estate agents already have lots of familiar lines they use to sell a property. From next year, they will have one that will be more crucial than any other: it is priced at £1.95 million, just escaping the new ‘mansion tax’ introduced by the Chancellor Rachel Reeves in her Budget. In effect, we have just introduced a price limit on houses – and it will distort the market even further. The UK has had some spectacular badly designed taxes over the decades. But the new mansion tax looks set to prove one of the worst The UK has had some spectacular badly designed taxes over the decades.

The Budget speech has no doubt been finalised. The red box has been dusted off. And the pie charts are ready to be released. Assuming Chancellor Rachel Reeves doesn’t call in sick tomorrow, the Treasury, along with the rest of us, will be waiting to see how tomorrow’s Budget is received. But do we really need to wait? With the pound falling, the economy stagnant, and house prices sliding, the truth is that this Budget is dead on arrival. After all the leaks and spin we have endured over the past few months, it may seem as if there have already been ten Budgets. A dozen or more major tax changes have been floated, scrapped, then quietly revived in a stripped down form.

Bitcoin is crashing all over again, and it is taking the smaller crypto currencies down with it. It has fallen by a quarter from its highs, and there is little sign that the relentless selling is going to stop anytime soon. Plenty of people will be reheating arguments about how the digital currency is completely worthless and that the bubble was always going to pop one day. But Bitcoin has been through plenty of bear markets and it has always bounced back – and there is little reason to believe this crash will be any different. It is certainly a substantial fall. From a high of $114,000 (£87,300) a coin at the end of last month it has fallen all the way back to $83,000 (£64,000). It has been just as bad for the other crypto currencies, such as Ethereum and Dogecoin.

Bitcoin has lost almost a quarter of its value. The tech-heavy Nasdaq index on Wall Street has started to fall. And even leaders of the industry, such as the Google CEO Sundar Pichai, have started to warn about valuations getting out of control. We already knew that AI was driving a boom in investment. But this week there are worrying signs the market is about to crack. The only real question is whether that turns into a full scale crash. Bitcoin, as so often, is leading the market rout. More than $1 trillion has been wiped off the value of the crypto market over the last six weeks, with Bitcoin itself down by 28 per cent since its peak.

It appears that Rachel Reeves has scrapped her plans for an ‘exit tax’ that would impose a huge levy on entrepreneurs leaving the UK – at least for now. But is anyone actually going to be fooled by that? Once the concept has been leaked, the only rational response is to get out while you still can.  With less than two weeks left before the Budget, no one seems to have any idea what might be in it, including, slightly alarmingly, the Chancellor Rachel Reeves. The briefings change minute by minute. Even so, it appears that plans for an ‘exit tax’ have been quietly shelved. The Treasury has worked out that it will be very difficult to collect, given that it will be very hard to identify what assets might be included, and what they might be worth.

We are all familiar with the different excuses for why we find ourselves stuck at the Spoons in Luton or Stansted airport for hours, trying to avoid the stag party, as we wait for our flight. There is fog over the Channel. The French air traffic controllers are on strike. There are not enough planes. But there may soon be another reason to add to the list: the Chancellor, Rachel Reeves, has increased taxes too often. The boss of easyJet has warned today that if flight levies go up again in the Budget, he will have to take capacity out of the UK market. Just like France, we may be about to tax one of the most vibrant sectors of the British economy into extinction. The rapid expansion of low-cost flying, which has transformed the aviation industry, may be about to come to an end.

As New York’s wealthy elite weigh up the options under their new ‘democratic socialist’ Mayor Zohran Mamdani, many of them are now reported to be considering fleeing to London instead. But will it really offer them the safe harbour they are searching for? The truth is that under the Labour Chancellor Rachel Reeves and Mayor Sadiq Khan, Britain's capital has become an even worse place to be rich than the city they are looking to get out of.  There are plenty of reasons for American billionaires to feel nervous about the Mamdani regime. The new mayor has promised an extra 2 per cent tax on incomes above $1 million (£758,000) as well as higher corporate taxes to fund his plans for free buses and childcare. Of course, it remains to be seen whether he can make that happen.

After yet another dreadful week, the Chancellor Rachel Reeves must be praying the Bank of England helps her out by cutting interest rates tomorrow. It would reduce the huge amount of interest the government has to pay, it would put more money in people’s pockets, and it might even stimulate growth. The trouble is, the Bank’s governor, Andrew Bailey, can’t afford to bail Reeves out of the hole she has dug for herself. If the Bank does, it will be risking its independence. Even the City’s experts have no clear idea what the Bank will decide on interest rates this week. The markets have priced in a one in three chance of a cut, rising to a two in three chance of a cut by the end of the year.

Nigel Farage has shelved massive tax cuts in favour of slashing public spending in a bid to balance the books. The Reform leader said in a speech this morning that 'substantial tax cuts given the dire state of debt and our finances are not realistic at this current moment'. The ‘back-of-a-fag packet’ economics that characterised Reform’s election manifesto last year have been disposed of No doubt a fair few Reform supporters will be disappointed: it means that, if Farage wins power at the next election, the tax burden will remain at a post-war high for at least a couple of years. We won’t be hearing very much about the Laffer Curve during the election campaign. But make no mistake: Farage is right. Bold tax cutting would have turned a Reform administration into Liz Truss 2.

The British steel industry has been staggering from one crisis to another for the whole of this year. Half of the industry has fallen into effective state control, and what’s left is teetering on the edge of collapse. The government has finally come up with a plan to rescue it. In collaboration with the US and EU, it wants to create a ‘ring of steel’ protecting all the major Western industries from cheap Asian imports. It sounds simple enough, but there is just one catch. This plan won’t do anything to fix soaring domestic costs – and that is the real problem.  The government certainly needs to do something to help the steel industry.