Hammond’s good hand

Whatever one may think about the wisdom of Britain leaving the european Union the facts about the performance of the eurozone economies are indisputable.

With the exception of Germany the straitjacket of the single currency has delivered misery across the Continent especially in its southern tier, where unemployment is at unconscionable levels.

By no stretch of the imagination can it be claimed that the euro, as President emmanuel Macron has said, helped europe resist the ‘crises of financial capitalism’.

europe’s weakest banking systems in Italy and Greece are being kept afloat by shortterm funding provided by the european Central Bank (eCB). Deutsche Bank is listing badly. Moreover, in spite of the crack cocaine of €2.5trillion of quantitative easing by the eCB, great swathes of the Continent are trapped in low growth with forward indicators signalling recession.

Indeed, the Bank of england’s latest stability report suggests that europe’s financial system may be less prepared and face bigger risk from Brexit than the UK.

remarkably, in spite of the harm which Brexit uncertainty has done to domestic business confidence Britain’s economy is still working. two indicators historically regarded by the treasury as foretelling the future are particularly useful.

revenues have never been healthier in spite of the cut in the headline corporation tax rate to 19pc. among the first thing to decline during slowdowns or recessions is the tax take. Instead, the Chancellor Philip hammond goes into the March 13 spring statement bolstered by a record £15bn surplus recorded in January.

Britain is close to a full employment economy which is among the reasons that tax revenues are so strong. the puzzle is why, if employment is so healthy, is growth coming down with a bump?

Uncertainty is the key, which is why the Chancellor and Mark Carney, the governor of the Bank of england, think that the economy should bounce on a Brexit deal. there also is some evidence that growth may not be quite on its uppers.

the forward-looking purchasing managers’ index for services, which comprises more than 70pc of national output, rebounded in February to 51.3 from 50.1 in January. the rise in the dominant services sector more than offsets previous setbacks in manufacturing and construction.

the better public finances should give hammond the chance to put money back into taxpayer pockets by ending the practice of freezing thresholds, which pushes citizens into higher tax brackets. But after austerity there is also much which needs to be done for public services. Some £20bn already has been allocated to the NhS.

Investing more in education, training and infrastructure such as commuter railway lines is a case in point. this is the minimum required if low productivity is to be tackled. that in turn will generate robust growth and higher household incomes.

Tech tock

ONe of the great hopes for the City postBrexit is the strength of Britain as a financial technology hub. But there are concerns that regulators at the Financial Conduct authority (FCa) may be cutting start-ups too much slack.

Much the same mistake was made in the run-up to the financial crisis when Northern rock enjoyed light regulation.

the British digital bank revolut has great technology which works well for travellers allowing them to access instant foreign currency, at a market rate. Its reputation, however, is on the line after a multicurrency payment for a business customer went aWOL and revolut allegedly moved unilaterally to close the account.

the Metropolitan Police and the FCa reportedly are looking at the matter. everyone wants fintech to thrive, but soft-touch regulation should not be an option.

Boarding pass

the way in which Flybe directors sold the group’s assets to Connect airways from under the nose of shareholders was not ideal governance.

the bigger players – hosking Partners and former Stobart boss andrew tinkler – had a point when they cried foul. But in crises niceties have to be swept aside and investors must accept shares are risk capital.

It must be good for staff, passengers and, for that matter, travellers everywhere that Flybe planes are in the air, a robust regional network of flights remains in place and the consortium led by virgin and Stobart is there to provide extensive working capital and to support virgin branding.

Phew!