Ross Clark

First the good news. Unlike the IMF, which predicted in January that the UK economy would have a worse 2023 than even Russia, the OECD’s latest forecast has Britain outperforming Russia. Now the bad news: the OECD still predicts the UK to perform worse than any European country other than Russia.  Forecasts aside, the actual data for the UK economy is a slightly improving story Its latest bulletin, published this morning, sees Britain shrinking by 0.2 per cent in 2023, compared with growth of 0.3 per cent for Germany, 0.7 per cent for France and 0.8 per cent for the Euro area as a whole. The Russian economy, by the way, is expected to shrink by 2.5 per cent.  Why the negative outlook for the UK?

When your largest single shareholder decides that enough is enough, that it is no longer prepared to throw good money after bad to prop up your finances, you really do have a problem. And that is exactly what has happened to Credit Suisse this morning. The Saudi National Bank, which owns a 10 per cent share in the Swiss bank, announced that it is no longer prepared to put up any more capital to prop the bank up. Credit Suisse shares promptly fell by 20 per cent before trading was suspended. Yes, Saudi National Bank has trashed the value of its own holding – but evidently reckoned that that is a better course of action than continuing to throw money at the problem. For a bank, that is the smell of death.

On the face of it, the takeover of the UK arm of Silicon Valley Bank by HSBC is a triumph for the government. Today, we could have been seeing the collapse of dozens of UK tech start-ups. We could have seen staff going unpaid and shares in tech companies plunging to greater depths than they have yet explored during the correction of the past year.  Instead, things are fairly calm in the tech sector. Well before markets opened this morning, the government had brokered a deal which will allow the Silicon Valley Bank’s facilities to continue without a hitch, thanks to a wholesale takeover by one of the largest banking institutions in the world, with all the security that would seem to offer. Even better, not a penny of public money seems to be involved.

Tech start-ups tend to involve taking big risks on ideas which are untested both in terms of technology and the market place. Yet it isn’t blind faith in new ideas that is threatening to bring down scores of British tech start-ups over the next few days: it is boring old bonds. Many start-ups have relied for financing on Silicon Valley Bank UK, an offshoot of its larger US parent. Over the last few years, the institution has in turn relied on taking bets on government bonds whose value had been inflated by near-zero interest rates. As interest rates have risen, those bets have gone sour. On Friday, the Bank of England announced that the bank is to enter insolvency.

There have been celebrations this morning about a government surplus of £5.4 billion last month, and people are even talking about a ‘windfall’ for Chancellor Jeremy Hunt in next month’s Budget. But all this shows is how conditioned we have become to appalling economic news – and that we will grab at anything which seems to indicate a shaft of light. Nevertheless, any talk of a government ‘surplus’ masks the very real problem the government still has While any surplus is to be welcomed – and last month’s borrowing figures are far better than the Office for Budget Responsibility predicted – we would be in serious trouble if the government had not succeeded in running a surplus last month.

They never give up, those Remainers. Like the Japanese soldier found on a Pacific island still fighting the second world war – in 1974, every other day there is another loose shot from the undergrowth. After last week’s Ditchley Park gathering involving Lord Mandelson, David Lammy and others, comes an interview in the Overshoot with Monetary Policy Committee (MPC) member Jonathan Haskel. In it, Haskel makes the claim that Brexit is costing each British household £1,000 a year through lost trade and investment. The beauty of modelling is that you can get it to tell you pretty much anything you want it to Let’s start with the assertion that this is a loss per household.

Does the CBI want higher taxes or lower taxes? This morning its director general, Tony Danker, complained that the rise in corporation tax from 19 per cent to 25 per cent is in danger of killing off economic growth. He also demanded at the very minimum that a ‘super-deduction’ – where businesses can cut their tax bill by 25 pence for every pound invested – be maintained. 'We know the economy can – and must – break out of its low growth trap, but we need action of business investment to achieve it,' he said. 'Firms are seeing the end to super-deduction with nothing to replace it but a big rise in corporation tax. This will have a huge impact on investment and leave the UK falling behind its global competitors.

We’re all familiar with the usual trade union cliches: it’s not about us, it’s about passenger safety; staff morale is low; and strikers are being ‘victimised’. Or, in the words of Aslef general secretary Mick Whelan on ITV’s Good Morning Britain, train drivers are being ‘demonised’. More so than government ministers, who are forever portrayed by union leaders as callous evil-doers?     But it is what Whelan said next that really catches the ear. Asked whether he thought the public should be sympathetic towards train drivers on £60,000 a year turning down an offer which would take their pay to £65,000 a year, he said: 'It isn’t about what we earn, it is about what other people don’t earn.