Osborne's £23bn from the back of the sofa

  • 25 November 2015
  • From the section Business
Media captionRobert Peston gives his analysis on the chancellor's Spending Review

So how has George Osborne pulled off the magical trick of maintaining spending on the police, imposing smaller than anticipated departmental spending cuts in general, and performing an expensive u-turn on tax-credit reductions, while remaining seemingly on course to turn this year's £74bn deficit into a £10bn surplus in 2020.

Well, it is because the government's forecaster, the Office for Budget Responsibility, has increased its prognosis of how much the Treasury will raise from existing taxes (not new ones) and reduced what it thinks the chancellor will shell out in interest on its massive debts.

In total the OBR thinks the national debt, the aggregate of the annual deficits, will be £23bn lower over the four years to 2020, and just because it is more optimistic about tax revenues and assorted costs.

Or to put it another way, George Osborne is today £23bn better off than he thought in July, and without doing anything at all.

Windfall

Read full article Osborne's £23bn from the back of the sofa

Osborne's big idea

  • 25 November 2015
  • From the section Business
George Osborne Image copyright Reuters

If George Osborne has a big idea, it is to transfer the costs of and responsibility for building a better, fairer Britain from the public sector to the private sector.

We've seen that with the imposition of a higher minimum wage, rebranded as his National Living Wage, and his stumbling attempt to cut state top-ups to the low paid through the tax-credit system.

Read full article Osborne's big idea

How Osborne is bailed out by deflation

  • 23 November 2015
  • From the section Business
George Osborne Image copyright Getty Images

The weakness and current deflationary bent of the global economy plus the deceleration of UK growth aren't all bad for George Osborne, as he agonises over the finishing touches to what may be his most challenging budget or quasi-budget since taking office more than five years ago.

That may puzzle you given that Friday saw publication of government borrowing figures for October which were confirmation that there is no chance of public sector borrowing falling from just over £90bn last year to a target of just under £70bn in the fiscal year ending next April.

Read full article How Osborne is bailed out by deflation

Whither markets? Ask Carney

  • 11 November 2015
  • From the section Business
Mark Carney Image copyright Getty Images

Most of us think financial markets will become ever bigger relative to our economy and really matter. But we have lost confidence that they work in our interest.

Such is the unsurprising result of a Bank of England survey, which forms the background to the Open Forum it is holding today in London, Birmingham and Edinburgh, and which also involves 300 schools.

Read full article Whither markets? Ask Carney

Is Carney hurt by wrong rate steer?

  • 5 November 2015
  • From the section Business
Governor of the Bank of England Mark Carney looks on during a quarterly inflation report press conference Image copyright Getty Images

Mark Carney gave what many would see as a bum steer in July that interest rates would be going up around the turn of the year.

This is what he said. And, to be clear, I gave his remarks prominence here because the Bank of England was wholly unambiguous about the weight we should attach to them.

Read full article Is Carney hurt by wrong rate steer?

No UK growth without services

  • 27 October 2015
  • From the section Business
Shoppers on Oxford Street Image copyright AFP/Getty Images

In the circumstances of a slowing global economy, the 0.5% quarter-on-quarter growth in UK GDP or national income, down from 0.7%, is more than respectable.

And the point is that our giant service sector - which is almost 80% of our economy - continues to power ahead, expanding 0.7% compared with the previous three months.

Read full article No UK growth without services

Bernanke: Governments 'too focused on budget cuts'

  • 26 October 2015
  • From the section Business
Media captionBen Bernanke: 'Governments over-did austerity'

As the chairman of the US Federal Reserve during the crash and Great Recession, Ben Bernanke is the most influential central banker of our age.

So it matters that he says western politicians expected too much of central bankers over the past few years, and that governments were too obsessed with making budget cuts.

Read full article Bernanke: Governments 'too focused on budget cuts'

Can tax credit cuts be made less painful?

  • 26 October 2015
  • From the section Business
George Osborne Image copyright Getty Images

When Gordon Brown and his then adviser Ed Balls embarked on their reshaping of the British welfare state by massively increasing benefits delivered to lower-paid, working people through the tax credit system, one of their aims was cynically political.

The more people who received these credits, and the more generous they became, the more frightened those on average or lower incomes would be of voting Tory.

Read full article Can tax credit cuts be made less painful?

Bank says EU makes UK more dynamic

  • 21 October 2015
  • From the section Business
A British Union Jack flag and a European Union flags Image copyright Getty Images

Membership of the European Union has made the UK a more open and dynamic economy, the Bank of England has concluded in a 100-page review of the impact on it of EU membership.

Being in the EU has drawn investment to the UK, boosted the productivity of workers, and enhanced the ability of our economy to create jobs and new businesses.

Read full article Bank says EU makes UK more dynamic

How Bank of England could help EU out campaign

  • 21 October 2015
  • From the section Business
Bank of england Image copyright AFP

So at four o'clock this afternoon a few dozen hacks will be locked in the Bank of England, where we will be given a 100-page review by the Bank on how and whether leaving the European Union would affect its responsibility to deliver monetary and financial stability.

It all sounds pretty momentous. We'll be briefed for an hour by the deputy governor Sir Jon Cunliffe, and we will not be allowed to leave, email, phone or tweet till six o'clock, when the governor will give a speech about all this in the Cairncross memorial lecture at St Peter's College Oxford.

Read full article How Bank of England could help EU out campaign