Matthew Lynn is a financial columnist and author of ‘Bust: Greece, The Euro and The Sovereign Debt Crisis’ and ‘The Long Depression: The Slump of 2008 to 2031’
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A top rate of 50 percent? A wider range of tax bands? Lower allowances? Or some combination of all three? When it unveils its Budget on Thursday, the Scottish National Party is just about certain to use its power to increase income taxes. The only real debate is about who will take the hit. On
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There have been plenty of reasons to feel optimistic about the British economy over the past year. Employment levels have hit record levels, and are among some of the highest in the world. Leaving the EU doesn’t seem to have dented growth much, and there is still plenty of investment pouring into the country. The
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A high speed rail line from Manchester to Glasgow. Three of the shiny new Elizabeth lines crossing London. Thirty or forty hospitals, almost sixty Manchester City squads, and perhaps a dozen Bitcoins (although it might be only eleven by the time you are reading this). There is still a lot you can get for 40
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We could have given them free Spotify subscriptions. Or Just Eat vouchers. Instead, the government’s pitch to Jezza-loving twenty-somethings was a cut in stamp duty for first-time buyers. The levy on buying a home will be abolished completely up to £300,000, and, for the trainee bankers and tech moguls buying in the better parts of
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Maybe we should blame John Grisham. In his breakthrough best-seller The Firm, the young lawyer Mitch, played by Tom Cruise in the movie, has to make regular trips to the Cayman Islands where the corrupt law firm he works for creates hundreds of shell companies for the assorted cast of money launderers, tax dodgers and
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Windfall taxes imposed overnight. A sweeping programme of nationalisation. A levy on every bank transaction. A campaign on ‘back taxes’ that amounted to little more than hustling money out of corporations. The first couple of years of a government run by Jeremy Corbyn might not be quite as extreme as the all-out assault on private
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The wine bars will be spookily empty. The lap-dancing clubs will be abandoned, and Savills will have to start working out how to sell mansions within an hour’s commute of Frankfurt and Paris instead of London. Just about every day brings another dire prediction about the impact of leaving the EU on the City’s mighty
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The exit bill keeps going higher and higher. No progress has been made on the Irish border, and not much on citizens’ rights. The talks are deadlocked, and you need an extraordinary level of optimism to imagine that Theresa May talking directly to Emmanuel Macron or Angela Merkel is gong to make much difference to
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We have a couple of hundred years of economic history to tell us that some things are just a really, really bad idea. Printing loads of money, for example. State control of industries. Punitive taxes. Subsidies. But of all the really terrible polices a government can put in place, the very worst of all is
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There are some commercial decisions that are intrinsically difficult to defend. The plot of the last Captain America film, for example. Ryanair’s charges for bags that are slightly too big. The price of the new iPhone, and just about anything done by the lovable folks over at Foxtons. Credit cards changes come very close to
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Should the exit bill be €20bn or €40bn? Should the trade deal be the ‘Swiss-plus’ or ‘Canada-lite’? Should our negotiating strategy be the full cliff-edge, or should we opt for the reverse gear? If we had a couple of micro-chip factories for every different version of Brexit on offer, we’d probably be worrying about it
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House prices are in freefall. Unemployment is rising relentlessly. The pound is plunging on the markets, and companies are re-locating to Paris and Frankfurt in droves. In the parallel universe Mark Carney increasingly seems to live in, that is a pretty accurate description of the British economy. In this universe, however, the picture is very
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The labour market would be revolutionised. France would start growing rapidly again, leading the way in Europe. Tech entrepreneurs would flock to Paris, along with the bankers fleeing the City, while companies from around the world would be relocating to newly invigorated industrial hubs in Lyon and Toulouse. That anyway was the script when the
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Fifty billion? Seventy-five? In its wilder moments, the FT might even splash on a hundred billion pounds as the minimum cost of our exit from the European Union. As the negotiations over our departure reach perhaps the thorniest issue of all, the final bill will have to be settled. But what should it be? If
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We will be hopelessly out-witted by wily Brussels negotiators. We are unprepared for the scale of the task. We are about to be humiliated as we discover just how weak our hand is against a unified European Union that is determined to punish us for our foolishness in leaving the world’s largest trading bloc. The
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Labour regulations were going to be swept aside. The euro would be reformed, tech entrepreneurs would flock to Paris, and Brexit-fleeing City bankers, flush with tax-free bonuses, would be quaffing champagne in the bars of the Latin Quarter. When Emmanuel Macron was elected President of France, there was a lot written about how he would
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Output is under pressure. Prices are starting to rise, living standards are getting squeezed, and every day brings fresh stories of one bank or another leasing office space in Frankfurt or Dublin. As the International Monetary Fund downgrades its growth forecast for the UK, whole edging up its predictions for our continental neighbours, Remainers can
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Who has the most over-inflated reputation in British politics? Theresa May’s air of calculating caution is long gone, no one has believed in Boris Johnson’s connection with ordinary voters for a while, and if anyone still thinks the dwindling tribe of hardcore Blairites blathering on about the radical centre know anything about what is going
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As double acts go, it is probably not up there with Eric and Ernie, John and Paul, or even Liam and Noel. Even so, Mark and Phil, the Governor of the Bank of England Mark Carney and the Chancellor of the Exchequer Philip Hammond, certainly looked today as if they were working in tandem to try
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Sterling plunges on the currency markets. Middle Eastern oil money flees London. A Prime Minister resigns in mysterious circumstances, and a government clings on to a vanishing majority. Sound familiar? In fact, it is a description of the run up to the sterling crisis of 1976, which forced the Labour Government to crawl to the
