Julian Jessop, CapX

Julian Jessop


United Kingdom

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  • CapX
  • i newspaper
  • IEA
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Recent articles by Julian:

Is Liz Truss on the right track on ‘Covid debt’?

Liz Truss has pledged to put Covid debt on a ‘longer-term footing’ as part of her bid to become the next Prime Minister. The details are sketchy, but the proposal seems to be to extend the maturity of £311 billion of pandemic-related borrowing to lock in low interest rates, and to slow the pace of […] → Read More

Is the OBR right to warn the new Chancellor against tax cuts?

On Thursday the Office for Budget Responsibility (OBR), the Government’s independent fiscal watchdog, published its latest annual report on the long-term sustainability of the public finances and the fiscal risks facing the UK. This made for grim reading, as these reports always do. But this time, the report has been widely interpreted as a warning against […] → Read More

The latest inflation data shouldn't let the Bank of England off the hook

Perhaps this says a lot about the mess we are in, but May’s UK inflation data were almost a relief. Some are even arguing that they ease the pressure on the Bank of England’s Monetary Policy Committee (MPC) to raise interest rates more aggressively. The bad news is that the headline CPI measure hit a new 40-year […] → Read More

The trials and tribulations of a four-day week

This week has marked the start of a six-month UK trial of a four-day working week. Employees at around 70 businesses will receive 100% of their usual pay in return for just 80% of their usual hours. This concept is (of course!) hugely popular with the general public, and has been lapped up in the media. […] → Read More

It's nonsense to blame Brexit for the cost of living crisis

So it’s official: the UK is teetering on the brink of another recession. If you believe some of the commentary, this is mainly the fault of an uncaring Tory government, or Brexit, or both. The reality is that the problems are just as acute in the rest of Europe. The suffering of others is, of […] → Read More

No, BP’s latest results don’t justify a windfall tax

BP’s first quarter results have predictably fuelled more calls for a ‘one-off’ windfall tax on the profits of North Sea oil and gas companies. But the numbers actually illustrate some of the arguments against rather neatly. For a start, BP reported a huge loss of $20.4bn (£16.3 bn) in the first quarter, due to the writedown of […] → Read More

It's the money supply, stupid

The experience of the last couple of years has demonstrated, once again, that if you continue to pump huge amounts of practically free money into economies which are already running close to capacity, the result is likely to be much higher inflation. Indeed, the further rise in the UK CPI measure, to 7% in March, is […] → Read More

No, debt interest doesn't cost more than defence

This week’s Spring Statement included some big, bold announcements, with obvious voter appeal. But the windfall from higher-than-expected tax receipts and the downside risks to economic growth mean that the Chancellor could, and probably should, have done much more. It is worth repeating that the public finances are in better shape than anticipated. Government borrowing […] → Read More

Rishi Sunak's Spring Statement plans could turn a temporary squeeze into a full-blown recession

Doing more now could actually secure a stronger economic recovery → Read More

It's too soon to write off the UK's economic recovery

Spare a thought for the staff of the Office for Budget Responsibility (OBR), beavering away on a new set of economic and fiscal forecasts for the Chancellor’s Spring Statement on March 23. The fallout from the Russian invasion of Ukraine has made an already difficult task almost impossible. It makes sense to present a range of […] → Read More

Billions of PPE losses are a painful but inevitable result of panicked pandemic spending

ITV’s Robert Peston has understandably made a lot of audit reports showing ‘£8.7 bn of losses on PPE [personal protective equipment] in government accounts’. There is plenty more ammunition here too for those claiming that there was a ‘pandemic of waste and fraud’, ‘contracts for mates’, and ‘Tory sleaze’. The reality, though, is a little […] → Read More

In the NICs of time – Sunak has the ideal excuse to scrap the National Insurance rise

The case for scrapping the increase in National Insurance contributions (NICs) planned for April is now so overwhelming that it’s hard to find good arguments in favour of keeping it. I’ve seen a few, but they are easy to knock down. Nick MacPherson, formerly the top civil servant at the Treasury, has tweeted that ‘National Insurance […] → Read More

Calm down about the 'overnight cost of living crisis'

Most commentators were complacent about the risks of higher inflation in 2021 and seem determined not to be caught out again this year. But some of the rhetoric is now running well ahead of reality. Take the warnings that UK families are facing an ‘overnight cost of living catastrophe’. It is true that many are […] → Read More

As inflation bites, the Bank of England is running out of opportunities to restore credibility

It’s not often I agree with the International Monetary Fund (IMF), but their latest warnings on the risks of inaction from the Bank of England could not have been more timely. The jump in consumer price inflation to 5.1% in November has already taken it well above the figure of 4.5% that the Bank was predicting as recently as […] → Read More

It's way too soon for 'Plan B'

If the latest rumours are correct, the UK government will soon announce new restrictions in response to the spread of the Omicron variant. Throughout the pandemic my instinct has been to give the policymakers and their advisors the benefit of the doubt. But clamping down now would make little sense. Starting with the economics, the […] → Read More

Omicronomics – how will the new Covid variant affect the economy?

Here are some first thoughts on ‘Omicronomics’, or the economic impact of the new Covid restrictions announced for England over the weekend. The main short-term risk to the UK economy comes from the tightening of the self-isolation rules: contacts of those testing positive for the Omicron variant will have to stay at home for up […] → Read More

The EU has more to worry about than Britain in the run-up to Christmas

Most of the coverage of the latest UK GDP figures has been downbeat. Two headlines sum up the responses: ‘the best of the recovery is behind us’, and ‘the UK economy has reclaimed its status as the G7’s laggard’. ‘Stagflation’ is back on the agenda again too. I would rather focus on the positives, but let’s begin […] → Read More

Rishi's reasons to be cheerful

The Treasury is keeping busy, but hopefully not too busy. On the same day as the Prime Minister unveiled the ‘health and social care levy’, the Chancellor revealed last week that we will only have to wait another 50 days for the Autumn Budget, due on October 27. The focus next month will probably be on […] → Read More

The politics will pay off, but the economics of this new tax stinks

Today’s announcements on tax, health and social care are a triumph of political spin over economic substance. But worse than that, they are a missed opportunity for a fundamental rethink of the role of the state in looking after the elderly and vulnerable. The politics at least was clever. The package is clearly a big […] → Read More

Will supply shortages choke the economic recovery?

Brexit is still as polarising as ever. Many Remainers have seized on the ongoing disruption to UK supply chains as proof that ‘Project Fear’ was right after all. At the other extreme, some Leavers have argued that the end of free movement is a ‘good thing’, because it will boost the pay of UK workers. […] → Read More