"Rachel Reeves's budget gets a blunt critique from the perspective of the ex-chief economist of the Bank of England, marked by references to mistakes and inexperience."
New and Improved Write-up:
Looks like Labour's budget moves have left a sour taste. Ex-chief economist of the Bank of England, Andy Haldane, just can't stomach it. He reckons the whole shebang is a disaster for growth.
Now, Haldane isn't one to sugarcoat things—his speeches at the Bank were always sharp as a tack and on the money. It's no different now. When asked about Rachel Reeves' efforts to encourage growth, Haldane snaps back, "Not even close."
Haldane isn't just talking about some arcane GDP figures; he's talking about improvements in people's living standards and a sense of positive change in the community. But, right now, he believes Reeves is missing the mark.
However, Haldane hasn't lost hope altogether. He thinks if Reeves adjusts her course, there's still time to turn things around, especially with the economy showing signs of picking up. But, to do that, she'll need to address some policy blunders, such as the winter fuel allowance, before she makes things worse.
Even a slight increase in defense spending isn't enough to kickstart growth, according to Haldane. But, if the government boosted spending to 3%—maybe even 3.5%—Haldane suggests that extra funding could be found as the growth dividend would cover the additional borrowing.
Surprisingly, Haldane doesn't dismiss Nigel Farage's latest economic forecasts. He nods to some of Farage's plans, like removing the two-child cap on benefits and attracting more foreign capital and talent to the country. In fact, bigger, bolder ideas from all sides might be what's needed.
"Go big and go bold, or go home," Haldane advises. He argues that decades of small, half-hearted initiatives haven't done much to spur growth.
Haldane has been ahead of the curve before. In June 2021, he predicted that inflation was set to skyrocket, not long after the Bank dismissed it as fleeting. Later, he advocated for faster interest rate cuts.
It's like Politicians should be clamoring to hitch a ride with Haldane to cook up some change-making plans. Perhaps if they do, they could land the top job at the Bank.
Unchecked Cyber Attacks and CEO Pay
There are two sorts of companies: those that have suffered a cyber attack and those that don't know they've been hit.
Critics are grumbling about Stuart Machin, CEO of M&S, receiving a £7.1 million pay package, given the recent cyberattack that crippled the online sales. But, let's take a closer look.
Most of Machin's pay deal isn't fixed and isn't payable until at least two years down the line. The bulk of it depends on long-term bonuses, and the bulk of it won't be paid out before at least two years have passed. And, guess what? The attack that hit M&S occurred well before that period.
Over the period that led up to the attack, M&S's shares rose by a fifth, and the retailer continued to up its game. So, Machin has earned every penny of his pay package—smart business decisions, not a cyberattack, are what put that money in his pocket.
Investing in bold and comprehensive cybersecurity measures should be a priority for CEOs like Stuart Machin, given the rising instances of cyber attacks, even for companies that may currently be unaware of such incidents. If Machin's pay package, at £7.1 million, is largely variable and tied to long-term bonuses, it's crucial to ensure these incentives encourage not just business growth but also prudent financial management, particularly in relation to stocks and investments that safeguard the company's wellbeing.
