Reeves has tried to pin £26bn of tax rises on a forecast that is only £6bn worse, to fund new welfare spending that was not in Labour's manifesto, having promised not to raise taxes on working people. Regardless of the merits of the policies, this is dishonest

The bodge-it budget "With the deficit still gaping at 4.5% of GDP, Ms Reeves succumbed to her own worst instincts and those of her backbenchers by increasing borrowing, relative to her previous plans, for four years" My leader and our cover story www.economist.com/leaders/2025...

The UK has the most progressive tax system in the developed world, argues @jburnmurdoch.ft.com As @duncanrobinson.bsky.social wrote for @economist.com, the Tories created "an unbelievably progressive tax system". on.ft.com/3JPv6dP economist.com/britain/2025...

A withering critique of British energy policy by Dieter Helm. "Britain is not going to have cheap energy any time soon – unless there is radical policy action." dieterhelm.co.uk/energy-clima...

The question on everyone’s mind in the market is ‘will the government actually cut spending if it gets a negative fiscal shock’ and the revealed behaviour is that western governments find this extraordinarily hard to do.

In taking a passing shot at my special report, @sjwrenlewis.bsky.social offers a confusing set of opinions. He writes both that "we have a fiscal problem in the US" *and* that talking about the UK facing a fiscal crisis is "silly".

This discussion turned increasingly interesting by every reply~

"Stop worrying about public debt" says @martinsandbu.ft.com, citing US gross federal interest payments / GDP as being in the middle of the historical range. But that measure includes interest the govt pays to itself. Net interest / GDP is near historical highs. And then look at the forecast...

Britain should raise not cut the cash ISA limit. There is no good economic argument for taxing the normal return to savings. To quote the Mirrlees review: "by taxing the normal return to savings, we are not taxing the better-off; we are taxing those who spend their money tomorrow rather than today"

The Labour government is led by technocrats with a working majority of 157 in Parliament. It has forgiving budget rules and as long as four years until the next election. If it cannot put the budget on a sound footing, then who will? www.economist.com/leaders/2025...

I reported this week's Money Talks podcast from the mountain, lake and lodge at Jackson Hole. Featuring Kristin Forbes, @jonsteinsson.bsky.social ‬, Barry Eichengreen and - at 10,000ft - @laura-veldkamp.bsky.social Listen to my Jackson Hole audio diary: www.economist.com/podcasts/202...

While central bankers debated the technicalities of monetary-policy credibility at Jackson Hole, the Trump administration stood ready to bludgeon the idea My column from the conference: www.economist.com/finance-and-...

Absurd laws saying Britain's employers must pay equal amounts to workers doing jobs judges deem to be of "equal value" have made central planners of the judiciary and left rubbish piled high on Birmingham's streets. Scrap them www.economist.com/britain/2025...

Trade deficits just don’t measure what President Trump thinks they do. Why the tariffs are among the most profound and harmful economic policy mistakes of the modern era ⬇️

Could the “major questions doctrine”--a conservative legal theory used to stop Biden's student loan forgiveness--bring down the tariffs? "The pool of potential plaintiffs to take this fight to the courts is vast." www.economist.com/united-state...

The striking thing about American hegemony pre-Trump was how robust it had been while America's share of world GDP declined. Now, because it is burning its alliances, America's power is more likely to fall in line with its share of the global economy.

About three quarters of aid spending goes on something that doesn't work: trying to make poor countries rich by spending money. Only a quarter is humanitarian relief and health funding www.economist.com/finance-and-...

The rupture in the transatlantic alliance would surely justify Labour raising taxes despite its pledges. But the higher defence spending goes the more important it is that taxes are carefully designed to minimise the damage. That means land (ie, council-tax reform) and VAT

Let’s be honest. Does anyone think that this president would honour Article Five? Presence of US military & nuclear sharing still has value to Europe, but its deterrent value is significantly reduced & falling. This is reckless, dangerous behaviour by the Trump administration.

It amazes me that people still argue that Britain's fiscal rules are too exacting. Reeves must balance the current budget. With balance defined as a deficit less than 0.5% of GDP. Only in 29-30. And only with >50% probability (54% at the last forecast). The rules aren't tight. The stance is loose

If the ageing population was the first budget shock for which British politics was unprepared, the next is the loss of the peace dividend:

China's AI models have almost caught up with America's. How Chinese AI stunned the world: www.economist.com/briefing/202...

As President Trump was giving his inaugural address, DeepSeek, a Chinese company, released its latest impressive AI model. How China is catching up with the US and changing the economics of AI ⬇️ economist.com/leaders/2025...

Either you should want no state pension (ie, the same safety net as for the working-age), or you should want a universal state pension. Means-testing it would greatly discourage saving—and private pension saving is already too low. Plus, it's taxed already.

Many of my critics seem unaware that Denmark has already acknowledged Greenland's right to self-determination (and it is on the road to independence as a result). Taking that right seriously would mean letting Greenlanders freely vote on a lucrative offer were America to make one.

America should offer to buy Greenland from Greenlanders, not Denmark. And it would probably be a good deal to make every one a multimillionaire in exchange for the territory. Trump should rescind all threats and instead name a price--my column www.economist.com/finance-and-...

This critique of industrial policy by Scott Sumner is excellent (and not just because it cites lots of The Economist's work...) "Neoliberalism produced the greatest reduction in global poverty ever seen, by far. But people get bored with success" scottsumner.substack.com/p/what-econo...

A rhetoric-reality gap is normal for budgets but yesterday’s was particularly confused. It promised no tax rise for working people while hiking a tax paid in the long run by employees. And it slammed the previous govt for fiscal irresponsibility while borrowing much more

Central banks are happy, but rising government debt could cause them headaches My column from Jackson Hole, featuring hikes, rate cuts and a striking remark by Andrew Bailey on QE: “I’m not saying we’d never do it, but I think it’s tarnished” www.economist.com/finance-and-...

UK fiscal policy debate is in fantasyland. There was a bond crisis in 2022. Any fiscal "headroom" is against a lax target: have the debt-to-GDP ratio fall between years 4+5 of window that rolls foward. Some say borrow to invest, but the govt already borrows more than it invests.

Economists Gerald Auten and David Splinter find essentially *no change* in the share of income, after tax, going to America's top 1% since the 1960s. It's forthcoming in one of the top 5 economics journals (JPE). Ie, one of the ideas behind a lot of 2010s political discourse could be wrong.

My pet theory for the disconnect between US economic data and Biden's ratings is that housing to blame. Mortgages are much more expensive but house prices have not fallen commensurately b/c people people who locked in low rates won't move. The housing market is a big part of life and it's frozen...

Forecast US deficit for fiscal 2023 as of May 2022: $984bn Realised US deficit in 2023: $2trn* Did the US do an accidental 3.7% of GDP fiscal stimulus? *after adjusting for a distortion from the cancelled student-debt cancellation

It is often thought that America's 30-year fixed rate mortgages must be a good deal for households because the government implicitly backstops the loans (via Fannie Mae and Freddie Mac). Yet the 30 year mortgage rate, 7.9%, is hugely above the 30-year Treasury yield, 5.0%. What gives? ⬇️