Andrew Neil

My monologue on today’s The Times at One with ANDREW NEIL. @TimesRadio Interest rates up, inflation up — in the UK As the rest of the world tries to grapple with the fall out from the US midterm elections — what will two bloody noses for President Trump and a Democratic Congress mean for US foreign policy? — PM Andy Burnham’s contribution is to suggest the world unites around cost of living issues.  Workers of the world unite! You have nothing to lose but high prices.  It is, of course, an absurd proposition. Presumably he’s referring to the need to resolve the conflicts in Ukraine and the Gulf, both of which have pushed up energy prices and added to general inflationary pressures.  But it’s not clear how the midterm results will affect either war — certainly not in ways of which Mr Burnham would approve.  President Trump would have no compunction in selling out Ukraine. That would certainly bring peace of a kind — in the form of a Russian victory. Mr Burnham surely couldn’t approve of that.  In the Gulf there’s a renewed US military build up with Mr Trump indicating, now the midterms are out of the way, more major assaults on Iran.  To what purpose has not been explained and they would likely pave the way to massive Iranian retaliation. So Mr Burnham would surely not approve of that either.  The implication of the PM’s remarks is that, on the cost of living — the most important economic issue facing British people — he is not in control.  That it depends on global factors outside his powers. The Chancellor paved the way for this position when he began his Budget speech by claiming everything he was about to say could be blown away by global events beyond his control.  Mr Burnham has now echoed that.  And, of course, there are global events which can push up prices in Britain and stymie economic growth, about which a British government can do very little.  But ministers are not exactly powerless when it comes to the cost of living, though they like to give that impression.  Take petrol. If it costs you £100 to fill up your tank — and that’s not uncommon these days — be aware that almost half of that is going in taxes.  The tax take in all manner of energy costs is enormous. The government could do something about that, pressing down on inflation. But its so-called breathing space measures barely scratch the surface of living costs.  The Bank of England has just whacked up interest rates by a quarter point to 4%, with the prospect of more to come next year. Some speculate they could be as high as 5% by this time next year, which heralds more misery for those with a mortgage or a small business loan.  Inflation rose to 3.6% in September, propelled by energy costs, and the Bank expects to reach around 5% before next summer — a dramatic rise on previous forecasts. Nobody is sure when it will start to come down again. That may depend on what President Trump has in store in the Gulf.  The official forecast is for the UK economy to grow by 1.2% this year and 1% next. These are hardly stellar rates for a government that promised to put growth left, right and centre of its economic policy.  Now, other than tinkering at the edges, it has become a spectator, hoping that events outside of its control will come to its aid.  But hoping President Trump will somehow do the right thing when it comes to the cost of living isn’t an economic policy, it’s a fool’s errand.  Nevertheless Mr Burnham appears to have set out on one — and it will be of no help to the cost of living this winter.