Funding the Future

The Bank of England says that raising interest rates is necessary to control inflation. What it rarely admits is that its policy is also intended to reduce demand, weaken the economy and, as importantly, increase unemployment.
That is not an accidental side effect. It is how monetary policy is supposed to work.
In this video, I explain what monetary policy is, how the Bank of England uses interest rates, and why its decisions are never politically neutral. Higher interest rates impose greater costs on mortgage holders, tenants, borrowers and businesses. At the same time, banks, wealthy savers and owners of financial assets can gain.
I also explain why interest rates are an extraordinarily blunt tool for controlling inflation. Much recent UK inflation was caused by external shocks, including disrupted energy, food and manufacturing supplies. A policy that deliberately increases unemployment in the UK could never address those issues.
Worse still, higher interest rates can themselves increase prices by raising business costs, rents and finance charges.
The result is a monetary policy that redistributes income upwards, damages investment and conflicts with the government’s stated aim of creating jobs.
Monetary and fiscal policy must be coordinated. The Treasury should determine economic policy, including on interest rates, while the Bank of England should operate and regulate the banking system.
Monetary policy should serve the public interest. At present, it does not.

Oil is back above $100 a barrel. But when does a higher oil price stop being just another headline and become a genuine crisis for the UK economy?
In this video, I explain why the answer isn’t today, but it may not be very far away.
The latest rise in oil prices is not an isolated event. It is the consequence of the continuing conflict in the Middle East, the disruption in the Strait of Hormuz, and growing threats to shipping through the Red Sea and the Suez Canal. These are some of the world’s most important trade routes, and when they are disrupted, the consequences spread rapidly throughout the global economy.
I explain why these problems take time to work their way through global supply chains, why shortages of fuel, industrial gases and key raw materials may emerge over the coming months, why inflation could return, and why recession becomes much more likely if governments fail to prepare.
Most importantly, I ask when the tipping point arrives. Could Britain muddle through the summer? Does the real danger begin in September? Or is October the moment when businesses and households start to feel the full impact of rising oil prices and disrupted international trade?
The issue is not simply the price of petrol or diesel. If shipping routes remain under pressure, transport costs will rise across the economy. Businesses will pay more to move goods, manufacturers will face shortages of essential inputs, and consumers are likely to see higher prices in the shops. This is the sort of external supply shock that interest rate changes cannot solve and that governments need to plan for well before it arrives.
The UK currently has no obvious plans in place to deal with this crisis. Other countries have. They have taken steps to strengthen their energy security. We seem to be waiting for markets to solve the problem. That is not a strategy when markets themselves are already being disrupted by war. Our government needs contingency plans for fuel supplies, essential industries, public transport, healthcare, and the wider economy if it is to minimise the damage, and we need to know what they are. 
This isn’t simply about the oil price. It’s about inflation, energy security, economic resilience and whether the UK government has any credible plan if the Middle East conflict continues to disrupt world trade. If these risks continue to grow, the consequences could affect every household and every business in Britain.

Andy Burnham has now been Prime Minister for a week. That is long enough to begin judging not just what he has done, but how he thinks.
So far, what we have seen is a series of relatively small policy announcements on bus fares, temporary energy bill reductions and business rates for pubs. Those may all be worthwhile gestures in themselves, but they raise a much bigger question. Is this really the agenda of someone who wants to reshape Britain?
In this video, I argue that the role of a Prime Minister is fundamentally different from that of a mayor. Mayors operate within rules set by others. Prime Ministers can change those rules. They can change fiscal policy, tax policy, the role of the Bank of England and the priorities of government itself.
If those opportunities are ignored, government risks becoming little more than a manager of inherited constraints instead of an agent for national transformation.
And that matters. Labour needs a coherent economic strategy for dealing with the serious challenges that may lie ahead, from geopolitical shocks to financial instability and energy insecurity.
The point I make is not just about Andy Burnham. There's a bigger issue about the kind of leadership Britain now needs and whether any of our mainstream political parties are prepared to provide it.
Do you think Britain has a government with a genuine long-term plan, or are we seeing politics reduced to a series of short-term gestures?

Stock markets in the United States and the United Kingdom are flashing increasingly serious warning signs. Share prices are at extreme valuations, confidence is weakening, and the artificial intelligence boom is beginning to look much less convincing than investors expected.
In this video, I explain why these risks are reinforcing each other and why the consequences could extend far beyond those who directly own shares.
Robert Shiller’s cyclically adjusted price-to-earnings ratio, commonly known as the CAPE ratio, is now close to levels previously associated with the Wall Street crash of 1929 and the dot-com bubble of 2000. History does not tell us exactly when markets will fall, but it does tell us that valuations of this kind cannot be assumed to continue indefinitely.
The danger is not confined to the stock market. Banks and shadow banks have lent vast sums against inflated financial assets. A sharp fall in share prices could therefore spread through the financial system, threaten pensions, undermine lending and create a wider economic crisis.
AI may provide the trigger. The technology is expensive, unreliable and taking longer to implement than many forecasts assumed. If expected profits fail to materialise, the companies supporting today’s extraordinary market valuations could fall sharply.
Is Andy Burnham’s government prepared for that possibility? There is little evidence that it is.

John Healey began his first speech as Chancellor by making four big claims.
He said:
fiscal control is the first duty of any Chancellor,
fiscal credibility delivers economic stability,
fiscal credibility creates growth, and
growth delivers national security.
Those ideas sound reassuring, but what if every one of them is wrong?
In this video, I explain why those four assumptions have already failed Britain before and why, if John Healey governs on the basis of them, he is likely to fail as Chancellor as well.
I argue that:
putting fiscal control ahead of outcomes means confusing accounting with economic management.
Stability depends on far more than government finances.
Growth comes from investment, innovation and confidence, not from shrinking the state in pursuit of Treasury orthodoxy.
And national security is created by real capabilities around energy security, infrastructure, education, research, and resilience, and not by assuming defence spending should simply rise with GDP.
Healey did not put forward new ideas. He repeated the same Treasury thinking that has dominated British economic policy for decades. His claims represent the thinking that has delivered weak growth, crumbling public services, underinvestment and stagnant living standards. Repeating those ideas, yet again, will not produce a different result.
If Britain is to prosper, we need a Chancellor who measures success by the outcomes government delivers, not by applying arbitrary fiscal targets. Until that changes, we risk repeating the same mistakes while expecting different results, and Einstein quite correctly once called that a definition of madness. 

The UK government has published a Green Paper that could fundamentally change how political content is discovered on YouTube, Instagram, TikTok and other social media platforms.
The proposal suggests that platforms should give greater prominence to "trusted" news providers. At first glance, that might sound sensible. We all want accurate information.
But who decides who is "trusted"? And what happens to independent journalists, commentators and creators who challenge mainstream opinion? Are they going to be silenced by social media, as a result of government demands?
In this video, I examine what the proposals actually say, why they matter and why many independent creators are deeply concerned.
If implemented, these changes could affect search results, recommendations and audience growth across social media. That would have profound implications for political debate, freedom of expression and media diversity.
This is not simply an issue for people on the political left. Any future government could use the same framework against voices it dislikes.
The consultation is now open, and everyone can respond before the deadline.
Whether you agree with my conclusions or not, I hope this video encourages you to read the proposals for yourself and decide whether they strengthen democracy or risk narrowing public debate.

Why have seven Prime Ministers come and gone in little more than a decade? Is Britain simply producing weaker political leaders, or is something much deeper going wrong?
In this video, I argue that the real story is not about personalities or competence. Instead, I suggest that the United Kingdom has been trying to govern with a political and economic model that effectively collapsed after the financial crisis of 2008.
The banking crisis did not just expose failures in the City of London. It also revealed the limits of an economic system built around finance, tax havens, neoliberalism and the legacy of Britain’s imperial past. Since then, every Prime Minister has inherited impossible political constraints:
promises of growth without investment,
better public services without funding, and
national unity while the four nations of the UK increasingly pursue different political futures.
I also explore why the constitutional settlement is beginning to unravel, why Westminster seems unable to respond, and why simply replacing one Prime Minister with another will not solve Britain’s problems.
If the UK is to thrive again, I argue that we need a new constitutional settlement, an economy that works for people rather than finance, and a new politics built around care and hope.

Andy Burnham has finally become prime minister, but his timing could hardly be worse. On his first day in Downing Street, he faces at least six interconnected crises: war, inflation, recession, bond-market speculation, political grievance and climate change.
None of these crises was created by Burnham. But every one makes the others more difficult to solve, and conventional Labour politics offers no convincing answer to any of them.
The war in the Gulf is disrupting energy supplies and driving inflation.
GDP per person is falling, investment is weak, and austerity has hollowed out public services.
Hedge funds are testing the government in the bond market, while the Treasury’s fiscal rules prevent the investment Britain desperately needs.
Burnham therefore faces a fundamental choice. Will he serve financial markets or voters?
This video argues that Britain’s problems cannot be solved within the neoliberal economic framework that created them. A currency-issuing government is not like a household. Money is not the real constraint: productive capacity, labour, skills, energy and natural resources are.
Fiscal rules must be replaced by investment rules. Wealth and land must be taxed more effectively. Public services must be rebuilt, monetary policy must serve the country and the transition away from fossil fuels must become Britain’s industrial strategy.
Unless Burnham changes Britain’s economic model, he will fail, and the resulting political grievance could threaten Labour and democracy itself.

What is fiscal policy, and why does it matter?
Fiscal policy is one of the government’s most powerful economic tools, yet it is also one of the least understood. Fiscal policy is the process of managing the difference between government spending and its tax revenue for the benefit of society. That means that every debate about taxation, public spending, inflation, public services and economic growth is really a debate about fiscal policy, but few people ever explain what it actually is.
In this video, I explain fiscal policy from first principles. I show what fiscal policy is, how government spending is authorised, why taxation plays a very different role from the one most people imagine, and how fiscal policy shapes employment, inflation, inequality, investment and economic well-being.
I also explain why fiscal policy is about far more than balancing budgets. Good fiscal policy is about using the government’s financial powers to mobilise the real people, skills, and resources available within the economy to achieve the best benefit for society. That means fiscal policy should support full employment, strong public services, economic security, environmental sustainability and rising living standards while keeping inflation under control.
This is the first video in a short series. The next will explain monetary policy before examining how fiscal policy and monetary policy should work together instead of frequently pulling in opposite directions.
If you want to understand how fiscal policy really works, and why it should be at the centre of economic debate, this video is for you.

Why does government exist, and what should it actually seek to achieve?
Political debate usually focuses on whether government should be bigger or smaller, whether taxes should rise or fall, and whether public spending and borrowing are excessive. But those arguments overlook a more fundamental question: what is government for?
In this video, I argue that government exists because some things can only be achieved collectively. Individuals, families, businesses and charities all contribute enormously to society, but none can create a legal framework for everyone, guarantee justice, maintain a common currency, protect shared resources or represent the interests of future generations.
Government should therefore be understood as society’s steward. Its purpose is not economic growth, balanced budgets or satisfying financial markets. Those may sometimes be useful means, but they are not ends in themselves. Government’s real responsibility is to create and protect the conditions in which people can flourish and realise their potential.
That requires justice, education, healthcare, environmental protection, monetary stability and long-term investment. It also requires representative democracy, meaningful local decision-making, accessible public service and proper concern for generations yet to come.
If government acts on behalf of society, what exactly must it steward? The answer leads to the next subject in this Economics of Hope series: capital, understood in its broadest and most important sense.