Recession

The Big Tent just got a little bit bigger with the appointment of Stephen Green as trade minister. As most of the papers point out, landing the HSBC boss is something of a coup for the coalition. David Cameron was struggling to fill the role, but he’s ended up with someone who is widely credited with steering his bank through the worst of the financial storm. Even HSBC’s purchase of a dodgy sub-prime company in 2003 has done little to tarnish Green’s reputation. Now that he’s in government, though, it’s worth pointing out that he is yet another minister who has warned of a double-dip recession. Here’s how the FT

As compliments go, there’s something slightly backhanded about Vince Cable’s claim that, “Having worked with [the Tories] at close quarters, I’ve been pleasantly surprised that they’re not as I’d envisaged them.” And that’s just one of the little nuggets embedded within his interview with Decca Aitkenhead this morning. The Business Secretary touches on everything from what he thinks of George Osborne (“he’s clearly able”) to his own ability to craft a joke (“I’m actually quite good at one-liners”). If you want a sense of where Cable is at, then Aitkenhead’s piece is worth a quick read. But if you’re stuck for time, then – as George Eaton notes over the

There has been some speculation, most of it idle, that Boris Johnson will not stand for re-election as London Mayor in 2012. Speaking to the Today programme about the necessity of protecting the Olympics budget, Boris commented on his putative re-election campaign. He said: ‘If things are still going well I would be totally crackers not to have another go at it then. But I’m going to be making an announcement later on.’ Many would describe his tenure so far as a comedy of inertia. I don’t: Johnson battled hard to shield the City from puerile political indignation at the height of the financial crisis. It showed a seriousness and

Asks Iain Martin, and I suspect he’s back in Rentoul territory. It is, nonetheless, a question that merits more than a cursory no in reply. For all his egregiousness, you know where Balls stands: in the crude but distinctive colours of the old left. He is convinced that any approach to spending cuts other than his own will precipitate a double-dip recession. As Iain puts it: ‘Balls is also calculating that the second half of a double-dip recession is on the way and is staking out ground on which he can be the one to proclaim to the country: I told you so.’   In terms of Britain’s economic debate,

Recent events in the Eurozone have led a number of commentators to suggest that we are nearing some repeat of the financial crisis that followed the nationalisation of Fannie Mae and Freddie Mac in August 2008 and the subsequent (and consequent) bankruptcy of Lehman’s. In my view, the current situation is rather different from that in 2008, but matters could turn out much worse. Our situation is not like 2008 (yet) because: – not such a high proportion of AAA securities has been reduced to junk status – there are now slightly more robust resolution regimes in place for banks – banks have a bit more liquidity – US and

By rights, Gordon Brown should fear this debate on the economy more than any other. Here are ten questions I would like to hear him answer:   1. You told Gillian Duffy yesterday that you have a “deficit plan to cut the debt in half over four years.” This was a lie, wasn’t it? Our debt is £771bn now. Your deficit plan ­- ie, to run huge deficits for years – will actually double it to £1,406 billion within four years according to the Treasury. The debt for which Mrs Duffy and other taxpayers are liable would double under your plans ­- yet you told her it would halve. How

Today’s new economic data gives a handy piece of ammo to the Conservatives.  It is untrue that, as Gordon Brown says, this recession was somehow milder than others. The economy contracted by 6.3 percent this time – it was 3.8 percent in the 1980s recession and just 2.4 percent in the early 1990s recession. I feel confident that the Conservatives will get this point across clearly, next time that Brown boasts that this recession has been somehow milder, thanks to his decision to “intervene” (ie, double our national debt). The increase in unemployment has also been worse than the 1990s, but not quite as bad as the 1980s (perhaps because

Sorry is the hardest word and Gordon Brown stil hasn’t said it. But, everyday brings surprises. His ‘admission’ about his errors is the first time I’ve ever agreed with his economic analysis. In short, even Brown knows he’s not what he’s cracked up to be. Making such an admission at this stage of the election cycle is extraordinary. The intention may have been to make Brown look human. In which case, he’s succeeded, but to his detriment. Brown looks Biblically fallible. Labour’s campaign rests on one deduction. Gordon Brown built an era of prosperity; then Gordon Brown saved the country from a recession that originated in America; therefore Gordon Brown

One of the Brownie’s we’ve been hearing recently from the Dear Leader is that it is in some way ambitious to “halve the deficit by 2014”. It’s a Brownie because it is technically accurate, yet designed to mislead the voter. Two years ago, he forecast no deficit at all by 2014. Now he’s projecting one of 5 percent of GDP – simply mammoth – and still makes out that this is something to be proud of. It’s a confidence trick: the voter is supposed to think ‘I don’t know about the figures, but if he’s boasting about it then it must be good’. When Brown told the Economist that his deficit

The City’s elopement with New Labour has ended violently. A poll of leading financiers, conducted by City AM, reveals that 73 percent think that a Tory majority would be best for the economy; a mere 10 percent support Labour. But the City has little enthusiasm for George Osborne: 23 percent believe he has the mettle to be Chancellor, 13 percent behind Ken Clarke. So where is it going wrong for Osborne? James Kirkup observes that the Tories recent collapse in the polls coincided with Osborne and Cameron obscuring their economic message. But the City’s antipathy to Osborne is long established. Disquiet reigned even when Osborne and the Tories were storming

If the Tories win power (still a big “if” these days), William Hague will walk into King Charles Street, be greeted by the FCO’s Permanent Secretary Peter Ricketts, meet his new staff and be briefed on the Office he will lead and the foreign challenges Britain faces. There will be plenty on his plate. Calls from foreign dignitaries, preparations for forthcoming summits, a discussion of key priorities, and suggestions for how to reorganise the machinery of government. There will also be a need to prepare the FCO’s contribution to a cost-cutting exercise.      But there ought to be an early discussion about how the world is changing and the

A striking passage from Peter Mandelson’s speech at Mansion House last night: “Starting in the 1980s we allowed the diversity of the British economy – or lack of it – to approach the limits of what was prudent. Sometimes there was an economic fatalism about manufacturing decline and falling British goods exports, rather than seeing them as something that policy and private enterprise should address. Our economy, and certainly our corporate tax base, became too dependent on the City. We were also carrying a huge hidden insurance liability for a sector that was taking badly understood and inadequately policed risks.” Yes, I know Mandelson takes things back to the 1980s