Michael Simmons is The Spectator's economics editor. Contact him here.
14 min listen
Rishi Sunak is likely to hit his target of halving inflation by the end of the year, according to the latest Bank of England forecasts. But is that enough to make people feel better off, and will the Tories reap any political benefits for doing it? Cindy Yu speaks to Katy Balls and Michael Simmons. Produced by Cindy Yu and Max Jeffery.
The Tories have avoided total wipeout in last night's triple by-election. Rishi Sunak dodged the embarrassment of becoming the first Prime Minister in 50 years to lose three by-elections in a single day. While the Lib Dems won Somerton and Frome and Labour secured victory in Selby and Ainsty, the Conservative candidate in Uxbridge, Steve Tuckwell, managed to hold onto Boris Johnson’s old seat with a much reduced majority of 495 votes. The result in Selby and Ainsty meanwhile, where Labour candidate Keir Mather took the seat, was the biggest majority the Labour party has ever overturned in a by-election: the Tories had previously held the seat with a majority of over 20,000.
Threadneedle Street will have all the economic limelight this week as the Bank of England sets interest rates tomorrow. With this morning’s grim inflation update, a rate rise looks all but certain. But this morning, the Office for National Statistics (ONS) released an update on Rishi Sunak’s third pledge: to get debt falling. The figures show another target quickly escaping Sunak. Public sector borrowing in the month to May rose to some £20 billion, almost £11 billion more than the same month last year. That makes it the second most expensive May on record. Meanwhile, in the first couple of months of this financial year, the government borrowed just under £43 billion – some £20 billion more than April and May last year and £2.
Wages are slowly closing the gap with inflation, up 7.2 per cent in the year to April versus inflation of 8.7 per cent. It adds up to a real-terms decrease. It's the 18th real-terms fall in a row – though the fastest nominal rise on record outside the pandemic. The new minimum wage (up nearly 10 per cent to £10.42 an hour) was a factor. The economy created 250,000 more jobs with the number in employment rising to 33.1 million. This shows signs of the worker shortage crisis softening a bit – the number of people either in work or looking for it rose to 34.4 million, the highest since October 2020. Meanwhile, the number of vacancies softened to 1.05 million – down a tad from 1.08 million but still almost twice as high at any point in the previous decade.
Is Rishi Sunak stopping the boats? He’d certainly like us to think so. He spent much of yesterday in Dover parading the news revealed on The Spectator data hub last week that small boats crossing the Channel were down a fifth compared with the same time last year. By the end of May, the Ministry of Defence had detected 7,610 migrants crossing the channel in small boats. In the same months last year it was 9,607. A clear success then. But is a 20 per cent reduction really job done? Or is Sunak standing on deck with the mission accomplished banner flying before the war is won? For starters the weather has a lot to do with it. Those at his Dover press conference were quick to point to choppy and windy weather.
One of the UK’s biggest economic problems is having so many people out of work – and the slowest return to pre-pandemic workforce levels in Europe. This is costly and slows growth, as taxpayers foot the bill for benefits while employers struggle to fill vacancies. Today’s figures show that it is getting better – but slowly. The official unemployment count crept up to 3.9 per cent in the latest statistics. This is, ironically, a good sign as it shows more people are actually looking for work (about 12 per cent of the working-age population are on out-of-work benefits, although this is a figure that ministers seldom update and never publicise).
Alex Salmond was one of the first to fall victim to Twitter’s blue tick cull. An account with the same name as his began sending out disparaging tweets about his sub-optimal bowel movements. The account was tweeting shortly after Elon Musk removed 400,000 ‘legacy verified’ blue ticks, little badges that sit next to a user's name, which were originally designed to stop impersonation. Musk’s removal of the verified ticks – previously given to celebs, politicians and journalists to prove they are who they said they are – makes way for a free market approach to verification. Any tweeter can now pay £9.60 a month for the blue tick (provided their email address has been verified).
10 min listen
The arrest of the SNP's treasurer Colin Beattie in relation to the probe into the party's finances has overshadowed Humza Yousaf's relaunch speech scheduled for today. Beattie has been taken into custody two weeks after Peter Murrell, the SNP's chief executive, was questioned by police regarding loans made in June 2021. Can Yousaf distance himself from the chaos in his own party? What does this mean for Scottish Labour's chances at the next election? Michael Simmons speaks to Katy Balls and Stephen Daisley. Produced by Oscar Edmondson.
The UK's labour market is cooling down, slowly. Although unemployment rose from 3.7 per cent to 3.8 per cent, figures published by the Office for National Statistics this morning show that job vacancies have fallen for the ninth consecutive period. They’re now down 47,000 but still stand at over a million. The number of people out of work and not seeking it (economically inactive) fell too, as students started hunting for work. The most startling figures, however, were those for wage growth. They showed that average pay rose 6.6 per cent in the three months to February. Hefty pay raises in normal times – but adjusted for inflation, that’s a real terms fall of 3 per cent: one of the largest falls in wages since comparable records began in 2001.
10 min listen
Today Keir Starmer has doubled down on Labour Party adverts attacking the Conservative's record on crime, and which seemingly accuse Rishi Sunak of not caring about child sex abuse. But is everyone in the party willing to play hardball? Or have the adverts highlighted divisions between senior Labour MPs? Also on the podcast, after Peter Murrell was arrested in connection with an investigation into the SNP's finances, why has a luxury motorhome now been seized by police? James Heale speaks to Fraser Nelson and Michael Simmons. Produced by Oscar Edmondson.
11 min listen
Humza Yousaf has been announced as the new leader of the SNP after a narrow victory over second placed Kate Forbes. What will this mean for the cause of Scottish independence? Katy Balls speaks to Michael Simmons, Stephen Daisley and Fraser Nelson. Produced by Oscar Edmondson.
Humza Yousaf is the new leader of the SNP and in the coming days will be sworn in at the Court of Session in Edinburgh as the county’s sixth first minister. He inherits a bickering party and almost a decade of electoral stalemate over independence. It is far from clear what legacy his predecessor leaves in her wake. She took the SNP Alex Salmond built and cemented it as Scotland’s natural party of government, winning election after election with seemingly little effort. But many would argue she has left the country in no better shape than the day she took over in November 2014. For Yousaf to be a success he surely must look beyond maintaining that nationalist electoral dominance and drag the country forward.
As Nicola Sturgeon prepares to exit stage right, she’s been reeling off her greatest hits. Things she thinks she’s done to leave her mark on Scotland. She was helped this week by a study published in the Lancet. It claimed that her minimum unit pricing policy (where alcohol must be sold for at least 50p per unit) has reduced alcohol-related mortality by 156 deaths per year. That’s a reduction of 13 per cent. Impressive. But is the data really so clear cut? The outgoing First Minister shared a headline about the government funded study which read ‘Minimum pricing averts alcohol deaths’. She was proud: Looking back on my years in [government] this is one of the policies I'm proudest of.
33 min listen
This week:In her cover piece for The Spectator, Harriet Sergeant asks what's happened pupil absence which has increased since the pandemic. She is joined by The Spectator's data editor Michael Simmons to account for the staggering number of children who were failed by the government's Covid response (01:08). Also this week: Owen Matthews, The Spectator's Russia correspondent, looks at the opposition candidate who could usurp President Erdogan in Turkey. He joins the podcast alongside Turkish journalist Ece Temelkuran to discuss whether it really could be the end of Erdogan's two decade long hold over Turkish politics (14:48).
Just how does Rishi Sunak intend to grow the economy? It's the second of his five pledges; last week’s Budget was full of Tory talk about the virtues of getting people off benefits and into work. But the data shows a rather different picture: five million are on benefits while mass immigration – now running at record levels – is once again the only major factor expanding the workforce. The OBR envisages this problem continuing, with immigration running at near-record numbers while Brits claim sickness benefit at the rate of about 5,000 a day. An odd and expensive economic model – some data out today puts it into more perspective. The total on out-of-work benefits – 5.1 million or 13 per cent of the workforce – is not a figure the government likes to talk about.
12 min listen
The SNP has confirmed that its membership has fallen to 72,000 – a loss of over 30,000 since 2021. This has prompted an open letter from leadership candidates Kate Forbes and Ash Regan, calling for transparency when it comes to membership numbers. Why are so many leaving? Also on the podcast, Humza Yousaf has committed yet another public gaffe when he went to visit a group of female Ukrainian refugees. Is he still the firm favourite? Katy Balls speaks to Michael Simmons, Lucy Dunn and Fraser Nelson. Produced by Oscar Edmondson.
Jeremy Hunt has just delivered his second Budget as Chancellor. The top message the Chancellor wants to push is that Britain will avoid recession. But the Office for Budget Responsibility’s report suggests immigration may be the real story. Among the policy announcements were an extension to the energy price guarantee, currently at £2,500, to July (effectively scrapping the price hike), committing £5 billion to fund free childcare for one and two year-olds and abolishing the pension Lifetime Allowance. But what else did we learn from today’s Budget? The Chancellor began with good news: no recession. The UK economy will avoid a technical recession this year. The country's economy will shrink by 0.
Pandemics kill people in two ways, said Chris Whitty at the start of the Covid outbreak: directly and indirectly, via disruption. He was making the case for caution amidst strong public demand for lockdown, stressing the tradeoffs. While Covid deaths were counted daily, the longer-term effects would take years to come through. The only real way of counting this would be to look at ‘excess deaths’, i.e. how many more people die every month (or year) compared to normal. That data is now coming through. Using the most common methodology, Sweden is at the bottom – below Australia and New Zealand, which had plenty of lockdowns but very few Covid deaths. Here are the graphs that we have just published on The Spectator data hub.
14 min listen
It's been an interesting week in the race for the leadership of the SNP. Kate Forbes's campaign has been plunged into fresh doubt by the news that her husband attended a private Tory hustings, whilst Douglas Ross has been forced to apologise after swearing during First Minister's Questions. We also had the first televised hustings, but who came out on top? Michael Simmons speaks to Fraser Nelson, Katy Balls and Stephen Daisley. Produced by Oscar Edmondson.
Kate Forbes has taken an early lead in the race to replace Nicola Sturgeon. The Finance Secretary, who’s currently on maternity leave, has emerged in first place in a poll of Scottish voters. The poll for the Scotsman asked 1,004 people who they’d like to see leading the SNP and settling into Bute House. Forbes leads among SNP voters with 18 per cent. Among all voters she’s also the most popular with 14 per cent of the vote. Angus Robertson – who remains the bookies' favourite – was second in the poll with 14 per cent of SNP voters and 9 per cent of the public backing him. John Swinney, the deputy first minister and Sturgeon’s right-hand man, came in third but has already ruled himself out.
