Another day, another leg up in Britain’s borrowing costs, with 10-year gilt yields hitting a 19-year high. While the US-Iran war keeps pushing up oil prices, John Healey’s promise of continuity Starmerism doesn’t seem to be reassuring the markets.
Meanwhile, the unions are urging the Chancellor to raise taxes even higher on banks, and use the money to cut household energy bills. Funnily enough, they don’t mention it would also mean more expensive loans and lower returns on savings.
For a very different diagnosis of what Britain’s economy needs, see Liam Halligan’s piece below. The incoming Director of the Centre for Policy Studies argues the fight for a smaller state is more vital than ever – and the first order of business is our out-of-control spending.
Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.
Marc Sidwell
Editor, CapX
Today’s Takes
Fresh thinking from CapX
Labour are a bigger threat to jobs than AI
James Price
‘The only thing more power-hungry than AI is, of course, leftist politicians themselves.’
Economist William Stanley Jevons noticed that making a technology more efficient means people will use it a lot more, rather than less — his example was coal and the steam engine. The same holds for AI. In the US, AI has created a million jobs to the 200,000 job losses it gets blamed for. Britain is an outlier because Labour made hiring more expensive and firing harder. Read More
What Britain gets wrong about Argentina
Dominic Hilton
‘Argentina can adore Britain while believing passionately that Britain occupies part of its national territory. To British minds, these positions may seem incompatible. Argentines appear to manage them without difficulty.’
Javier Milei’s latest assertion of Argentina’s claim to ‘Las Malvinas’, the Falklands, sounds like a sudden escalation to British ears. From Buenos Aires it sounds entirely familiar. Milei has only turned up the volume: the claim itself – and the deep emotion behind it – is part of the fabric of Argentine daily life, alongside an abiding Anglophilia. Read More
Stat of the Day
Best of the Web
How to shrink the state
Liam Halligan, ConservativeHome
‘For quite a few years now, any economic success we have had in Britain has been despite rather than because of government policies.’
For the incoming Director of the Centre for Policy Studies, the size of the state is now imperilling our financial stability. Yet escaping the high-debt, high-tax, low-growth doom loop cannot begin with tax cuts: with debt service costs high and markets fraught, ‘unfunded’ cuts risk a bond crisis. Spending control must come first. Read More
A class unit won't create jobs
Joseph Dinnage, City AM
‘Inviting the white working class to perform in the Olympics of victimhood will do neither them nor the rest of Britain any good.’
Bridget Phillipson is expected to create a new unit that puts social class on the same level as race, sex and disability. Poor outcomes for Britain’s white working classes are real enough. But the Government, having made hiring so expensive, shouldn’t distort the labour market in their favour – it should get out of their way. Read More
Matt Ridley: no one can predict what AI will do
The Capitalist: our debt is a security threat
And if you want more...
– How hard is it to build in Hackney? (Substack)
– 9/11 didn’t change the course of history (Project Syndicate)
– The return of moonshot capitalism (Financial Times 🔒)
Can we make CapX better?
Or reply to this email to let us know your thoughts.
We'll be back tomorrow.