Money

Patrick O'Flynn

Rishi Sunak’s manifesto is thin gruel

Rishi Sunak today launched a manifesto that might suffice for a governing party polling at level pegging with the opposition in a country where things have been going well. You will no doubt have spotted the problems with this: he’s more than 20 points behind in the polls largely thanks to losing most of his right flank to an insurgent rival, while the British public overwhelmingly believes their country is heading in the wrong direction. So a technocrat’s bloodless canter through what one of my social media followers aptly described as ‘magnolia gruel’ was never going to cut it. Sunak is more than 20 points behind in the polls Sunak’s

Kate Andrews

The Tories are addressing welfare reform too late

The launch of the Conservative manifesto later this morning will dominate today’s headlines. But it’s worth reflecting, before the full details are released, on how we ended up with an earlier-than-expected election. In addition to ministers’ fear that the small boats figures would rise this summer – and flights to Rwanda would be grounded – there was also growing concern that the economic data wouldn’t tell the good news story they wanted to take into an autumn election. Today’s labour market update complicates that theory.  The Labour market is still cooling, but slowly. Unemployment rose again, to 4.4 per cent between February and April this year: this takes the rate

Matthew Lynn

France can’t afford a Le Pen government

It is possible that President Macon had some clever plan when he called a general election in the wake of catastrophic European election results last night. After all, he has a reputation for always being several moves ahead on the political chessboard. And yet one point is surely clear. France can’t afford a Le Pen government – and its election may well trigger a crisis in the French debt markets.  Le Pen, after all, is a high welfare, big state, economic nationalist It is, perhaps, not quite such a foregone result as Britain’s election a few days earlier. And yet after the second round of voting on 7 July, it looks

Nigel Farage will be disappointed by his BBC debate performance

It had been called the dinner party from hell. A seven-strong convention of the also rans. But only one dinner guest really mattered: Nigel Farage. The populist politician’s last-minute decision to stand as a Reform candidate in Clacton has struck fear into the hearts of Conservative MPs across the country, but especially in the 60 marginal seats that Professor John Curtice says Reform could help the Tories lose on 4 July. The surprise of the night was a new coalition on electoral reform between Farage and the Lib Dems But none of tonight’s participants in the BBC debate were going to allow the debate to turn into the Nigel Farage show. He

Ross Clark

The trouble with the Tories’ ‘Family Home Tax Guarantee’

There is a very big problem with Jeremy Hunt’s Family Home Tax Guarantee, though which he promises a Conservative government would not increase the number of council tax bands, carry out a council tax revaluation, cut council tax discounts, impose capital gains tax on sales of main homes or increase the level of stamp duty. It reminds voters of all the times that the Conservatives have jacked up property taxes in the past 14 years. No-one paid more than 4 per cent on any sale. George Osborne soon changed that When David Cameron become Prime Minister in 2010, stamp duty was levied at 1 per cent on homes sold for between

Fraser Nelson

On Sunak’s maths, Tories will lift taxes by £3,000 per household

My colleague Ross Clark has shown how the Tories cooked up that £2,000 figure. They worked out the total cost of what they think Labour will do, using standard HM Treasury costings. Then, they divided that by the number of in-work households (18.4 million). This is a subset of the 21.4 million total UK households, so no pensioners or workless households. By choosing a smaller denominator, you concentrate the increase and conjure up a scarier figure. Then they quadruple-counted. So they took each year’s estimate for tax rise and then added them together over four years and – presto! – you end up with £2,000. But let’s apply a similar method to

Ross Clark

The truth about Labour’s fiscal black hole

It is small wonder that Treasury officials are unhappy about Conservative claims about Labour tax rises being attributed to them. The civil service is supposed to be neutral, and be seen to be neutral. James Bowler, permanent secretary at the Treasury, who wrote to the Labour party expressing concern that certain figures are being attributed to his officials, will almost certainly find himself having to work with a Labour government in a few weeks’ time.  There is one figure at the heart of the Conservative analysis of Labour’s tax and spending plans which really should be causing concern What the Conservatives have done in making the claim that Labour will

Kate Andrews

Is Labour really plotting a £2,000 tax grab?

Is the Labour party planning a £2,000 tax grab on households? That was Rishi Sunak’s main message last night during the first election debate on ITV – one which he was found by YouGov’s snap poll to have won (just). The Tories will ‘keep cutting taxes’, he said, while Labour will raise them. It took some time for Keir Starmer to hit back at the accusation, and the specific number, which he eventually called ‘absolute garbage’. Starmer said the £2,000 figure was based on ‘dodgy assumptions’ and had ‘glaring mistakes’ Where did the figure come from? And how accurate is it? The document, titled ‘Labour’s tax rises’ was put together

Kate Andrews

A stand-off between Labour and the BMA is coming

Junior doctors will be staging yet another walkout in the week running up to the election: five days in total, from 27 June to 1 July. It is the 11th walkout since March last year, as the union insists they will not settle for less than a 35 per cent pay raise. The dates are no coincidence: there is no moment more politically fueled than the run-up to polling day. This gives more weight to the government’s argument that these strikes have always been political in nature, and certainly resulting in political consequence: the NHS waiting list rose by roughly 500,000 after Rishi Sunak pledged to get the waitlist falling,

Kate Andrews

Will Labour raise taxes?

What is Labour’s tax-and-spend agenda? This is an outstanding question the party needs to answer before polling day – and Labour seems to know it. That is presumably why shadow chancellor Rachel Reeves sat in the BBC One hot seat on the first Sunday of the election campaign. ‘I totally agree I have to show the sums add up’ Reeves told Laura Kuenssberg this morning.  But what will be done to make that possible: higher taxes, more borrowing, or a reduction in spending? Unsurprisingly, Reeves did not want to make firm commitments in most of these areas. The shadow chancellor did commit though once again to not raising certain taxes.

Kate Andrews

How net zero will divide Labour and the Tories

This morning, Ofgem announced another reduction in the energy price cap from July. The new cap on the unit price of energy should see costs fall by another 7 per cent, taking £122 off the average household bill. And it didn’t take long for both the Tories and Labour to try to swing the news in their electoral favour. Only two days into an election campaign, the government will want to claim credit for today’s news: an opportunity to remind voters what successive Conservative prime ministers did to protect people from higher energy costs (of course, the Energy Price Guarantee was a large part of the reason markets rebelled against

Ross Clark

Why is UK retail doing badly?

This morning’s retail sales figures are not what Rishi Sunak will have hoped for as he pitches his case for re-election on economic recovery. They are yet more indication that Britain has fallen out of love with shopping. Sales volumes were 2.3 per cent down in April compared with the previous month, while the March figure was revised downwards from zero to minus 0.2 percent. Some of this might be connected with the timing of Easter: the holiday weekend straddled March and April, so people will have done their food shopping, Easter egg purchases, filled their car with petrol, and everything else, in March rather than April, but the bigger

Matthew Lynn

Will Nvidia stock keep going up?

It more than doubled its sales. It unveiled a new line of microchips. It promised to keep rolling out new products for the next few years. In the end, Nvidia, the chip manufacturer, delivered the kind of blockbuster results that traders and investors had been waiting for. Yesterday’s ‘Nvidia Day’ (as the company’s quarterly results days are now known on Wall Street) turned out to be better than even the most bullish investor could have hoped for. There is just one snag. The company is now powering the bull market. If anything goes wrong with its turbo-charged expansion, it will bring equities down with it. It’s great for the moment

Kate Andrews

The general election has ruined prospects of an early rate cut

Would waiting another few months to call a general election have improved the Conservatives’ prospects? Rishi Sunak didn’t touch upon this in his speech today, announcing a general election for 4 July, but it seems likely that their broad assessment was no.  One of the big reasons for waiting until the autumn was the possibility of another fiscal statement. Jeremy Hunt’s March Budget left plenty to be desired by many Tory MPs, who wanted income tax cuts and changes to inheritance tax. The hope was that the public finances would improve in the spring and summer, offering up another chance to craft a tax-cutting narrative – and to give more

Kate Andrews

Inflation falls close to target, but could interest rate cuts be delayed?

The UK inflation rate has slowed to 2.3 per cent on the year to April, down from 3.2 per cent in March. This marks the lowest headline inflation rate in almost three years, before the unwinding of lockdowns and release of pent-up demand sent prices spiralling. The Spectator‘s Data Hub outlines the inflation saga below: April’s slowdown is largely thanks to Ofgem’s reduction to the energy price cap, as higher energy costs fell out of the data. The lower cap saw bills reduce by around 12 per cent: a reduction of £238 from the average household’s yearly bill. According to the Office for National Statistics, the ‘prices of electricity, gas

The trouble with Labour’s new towns plan

Since last October, when Keir Starmer declared that he was a ‘Yimby’ – a ‘yes in my back yard’ – Labour has tried to position itself as the pro-housing party. We are now finally getting a glimpse of what this might look like in practice.   Deputy leader Angela Rayner has promised a revitalisation of the postwar ‘New Towns’ programme, which, in the quarter-century from 1946 to 1970, delivered hundreds of thousands of new homes.   New Towns are not a panacea This certainly signals the right ambitions, and if done in the right way, New Towns could indeed make a major contribution to solving Britain’s housing crisis. But they are not

Ross Clark

Hunt’s tax attack on Labour is sure to backfire

It should come as no surprise that Jeremy Hunt has signalled in a speech this morning that  he will try to make taxation a central theme of the coming election campaign. The tactic has certainly worked in the past. In 1992, fears that Neil Kinnock and his shadow chancellor John Smith would jack up taxes played a big role in a campaign from which John Major’s Conservatives – unexpectedly in many people’s eyes – emerged triumphantly. Five years later, Blair and Brown did not make the mistake of being cast as the high-tax alternative: they promised not to raise any income tax rate, or VAT. The Conservatives have a very

Michael Simmons

Brits won’t stop getting pay rises

Are interest rates still heading ‘downwards’ as the Bank of England Governor Andrew Bailey said last week? Homeowners across the country will be hoping so as average two-year mortgages are again approaching 6 per cent. But the latest figures on the UK job market may dampen hopes of a cut coming soon. Britons have continued to receive above inflation pay rises. Figures just released by the Office for National Statistics show that – against expectations – pay growth in cash terms is at 5.7 per cent. Even when you factor in inflation, pay is still going up and has now hit 1.7 per cent – the highest in two years.

Kate Andrews

Andrew Bailey paves the way for a summer interest rate cut

The Bank of England’s Monetary Policy Committee has voted to hold interest rates for the sixth time in a row. Members of the MPC voted 7 – 2 to maintain the base rate at 5.25 per cent – with two members voting to cut rates by 0.25 percentage points. This decision will come as no surprise to the markets, which had already factored in a rate hold. The Bank made clear in March that key indicators – including the state of the UK labour market and the risk of inflation rising again – would influence its decision, none of which dramatically changed in the last seven weeks. The Committee repeats from previous

Why the Bank of England must cut interest rates

As the Bank of England’s Monetary Policy Committee (MPC) announces its interest rate decision today it has the chance to reverse the damage caused by its interest rate hikes. Rates have been fixed at 5.25 per cent since last August and the Bank has stubbornly refused to cut them. We’re all paying the price. Those final rate rises were clearly an error The truth is that inflation is lower and has fallen much faster than the Bank used as its justification for raising rates. In August, the Bank’s model indicated that, even with interest rates raised to 5.25 per cent, inflation would be 5 per cent last year. It was