Ross Clark

Do we need an officially-sanctioned, government-backed crypto-currency underwritten by sterling — a ‘Britcoin’ — as Rishi Sunak is said to be advocating? At first sight it is hard to see the attraction. Surely, there are two principle reasons why people feel attracted to Bitcoin and other cryptocurrencies. Firstly, if you are a drug dealer, you might hope that it is a way of keeping your stash of wealth beyond the reach of law enforcers. This hasn’t quite proved true, but you can understand why cryptocurrencies have their fans in the criminal world. Secondly, there is the hope of making a quick, speculative profit.

Should we be pleased that net government borrowing for June came in below expectations, at £22.8 billion – £5.5 billion less than June 2020? Should we see it as a sign that the economy is recovering a little faster than had been hoped? That is the spin being put on the public borrowing figures released this morning. An alternative, and less rosy, view might come from examining two figures in particular. Firstly, while borrowing is down compared with June 2020, public spending is actually up. Over the month the government spent £84.1 billion of our money, £2.5 billion more than in the same month a year earlier. Balancing the budget seems to have become a deeply unfashionable debate in UK politics That is extraordinary.

So is this what the new era of global co-operation looks like? The EU has agreed to delay the introduction of its proposed digital levy until the autumn to allow negotiations for a global minimum corporation tax. Biden had demanded that the digital tax be dropped, seeing it as a direct attack on US tech giants. In other words, the EU appears keen to compromise in the face of US pressure — something that it would have been less likely to do under Donald Trump. The move makes it more likely that a global minimum corporation tax of 15 per cent will now become reality. Is that a cause to cheer? Not if you are Ireland, which has grown wealthy in recent decades by setting a corporation tax rate of 12.

The past 15 months have produced a bizarre economic paradox. In 2020, the economy shrank at the fastest rate recorded in modern times: 9.9 per cent. Yet house prices have not merely weathered the storm, they have risen at the fastest rate since the height of the property boom in the 2000s. According to Nationwide, the average value of a UK home has risen by 13.9 percent in the past 12 months. Halifax puts it a little more modestly at a 9.5 percent annual rise. Yet there is a pretty clear picture of a rising market driven by a lack of stock and a desperation from many people to move home before the stamp duty holiday finishes — as it does tomorrow. How come? On the one hand we are witnessing the inevitable results of financial stimulus.

It is called managing expectations: priming the public for really bad news so that when modestly bad news arrives it comes across as good news. Today’s public finance figures is a case in point. We have become so used to ever-grimmer predictions of the size of the government’s deficit that the latest figures released this morning ended up being reported in the form 'borrowing is much lower than expected'.  In May the government borrowed £24.3 billion which, we are told in a government press release, is a whacking £19.4 billion less than last May. Furthermore, total borrowing for the financial year 2020/21, came in at £299.2 billion — which, we are told by the Office for National Statistics, is £28.