Michael Simmons

Tens of thousands of farmers will descend on Westminster in their tractors tomorrow to protest at inheritance tax changes that could see them pay death duties when they hand down their farms. The government doesn’t understand the fuss. It says they are just targeting wealthy land buyers trying to dodge tax. Meanwhile the farmers argue their way of life risks being wiped out. Who’s right? Two in five farmers are over the age of 60, so it’s not impossible the tax ends up having to be paid soon The government says the changes ‘are expected to affect the wealthiest 500 estates each year with smaller farms not affected’ – and three-quarters of farms that currently claim reliefs would not be hit.

For the first time ever there are seven million migrant workers in Britain’s job market. Figures released by the ONS this morning show that more than one in five jobs in Britain is now filled by someone born overseas – despite a fall in EU workers since Brexit. Overall, that’s an increase of 183,000 – equivalent to a town the size of Warrington or a city the size of Southend – since the election, and up over one million since the first lockdown. The rest of this morning’s ONS release suggest the jobs market could be about to face a slowdown. The ONS stats show employers reducing hiring. Above inflation pay rises for once in demand workers are nearing an end. Unemployment is up from 4 per cent to 4.3 per cent – higher than most economists had expected.

Is Britain finally heading for growth? This week, the Treasury released its collection of short-term forecasts for the economy. The average growth prediction for this year has reached a new high of 1.1 per cent – still unimpressive, but a significant improvement from the 0.4 per cent expected at the beginning of the year. It’s welcome news for the Chancellor. JP Morgan bumped up its forecasts this week as well, predicting 0.4 per cent growth between July and September, which equates to an annual growth rate of 1.5 per cent. Even more good news came from the GfK Consumer Confidence Index, Britain’s longest-running measure of economic sentiment, which held at a three-year high for August, suggesting British shoppers are optimistic about the economy’s direction.

Is America about to enter a recession and take the world with it? Yesterday the pound was on track for its longest losing streak in a year as markets once again began to fear a US recession. The week started with what looked like the bursting of a tech bubble. Japan’s Nikkei dropped by 12 per cent in a day – its largest fall since Black Monday nearly four decades ago. But by Tuesday morning, stocks had recovered 10 per cent and markets looked to be steadying while the jittery hands of investors began to hold firm. Are we out of the woods? Not quite. A leading Wall Street Bank – BNY Melon – this morning warned that global markets would be in turmoil for ‘months’.

British workers have just experienced their highest pay rises for two years. With inflation remaining at the Bank of England's target, the average worker has now seen their real term pay increase between March and May this year by just over 2 per cent – a level not seen since 2022. However, in cash terms there are clear signs that the heat has firmly left the labour market with pay growth beginning to slow. This is good news for the new government and rate setters at the Bank of England who will need to decide next month whether it’s time for the first interest rate cuts. Doubts about a cut were raised earlier this week with services inflation – a core part of Britain’s economy – stickier than expected.

Regardless of who wins the coming election, taxes are going up. Spending plans from both Labour and the Tories suggest the tax burden – already at a post-war high – is going to do nothing but rise. During last night's Sky News debate, Rishi Sunak laid the blame at the two ‘once in a century’ events the country has just emerged from. But the truth is that a huge part of these tax rises is needed to fund an ever-growing welfare bill. Analysis published this morning shows that one in every £44 of state spending will be spent on sickness benefits by the end of the decade. The report, published by the Resolution Foundation, shows that incapacity benefits spending will rise faster than pensions over the next parliament.