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Hello all - I’m back on here, back in economics and after a few weeks wilfully getting lost in transit, am newly on here👇🏾, and shortly on air in a new role as Economics Editor of the BBC..
first take on data, trade wars, Brexit, fiscal gymnastics...👋 bbc.co.uk/news/business-4890…
NEW
UK GDP grew 0.7% in Q3… 1.9% up on same quarter last year.. fastest for more than 2 years, breaking pattern since pandemic of slow growth in second half of year
0.7% in a single quarter is basically what would have been considered normal pre financial crisis growth… and is the joint fastest since 2017, outside of pandemic bounceback numbers
Nvidia shares down 8% in after hours trading after WSJ reports speculating board will move on Jensen Huang
NEW
Milburn confirms to Times his NEETs proposals:
New welfare system for young people
Youth allowance at basic UC level replaces entitlement to universal credit health AND PIP - ie u25s no longer eligible
Savings redeployed to employment support and subsidies especially for SME jobs for young people and other placements
Reforms he says pay for itself in under a decade (but that is longer than OBR forecast window).
EXCLUSIVE:
Young people will be moved off the main sickness and disability benefits under radical plans to overhaul the welfare state and invest billions of pounds more in employment support.
Alan Milburn, who has spent the past year conducting a review into the one million people aged 18-24 who are not in education, employment or training, said he had concluded that the system needed to be rebuilt “from scratch” to stop people being trapped on benefits “in perpetuity”
In an interview with The Times, the former health secretary acknowledged that the plans would not be “pain-free” as some people would lose out on financial support. However, he said reforming the system offered the best chance of young people finding work and building a “good life”
Under Milburn’s plans, young people would no longer be able to claim the two main sickness and disability benefits: the health element of universal credit and the personal independence payment (Pip). They would instead move on to a new “youth allowance”, paid at the same level as the standard rate of universal credit
Many of those who receive Pip, designed to cover additional costs faced by those with a disability, will move on to a new “additional cost allowance”, which will cover day-to-day costs relating to their conditions. Like Pip, it would not be means tested, or linked to whether claimants were in work. Fewer people are likely to be entitled to it
Those with the most profound disabilities who are not capable of working would be given a new benefit, paid at a higher rate
Milburn will recommend investing billions in employment support, including one-to-one personal advisers, work placements and job subsidies, resulting in young people being presented with a “menu of options” to help them find work
“I’m not saying that any of this will be easy, or that it will be pain-free, because it won’t,” Milburn said. “Candidly, it could mean that some people will get less financial support at the beginning of their benefit claim than under the current system. But actually, for young people, there’s a different debate that we’ve got to resolve, which is whether the priority is their longer-term life chances or just their immediate shorter-term finances
“I think what the current system does [is] it prioritises the latter over the former. I believe that’s the wrong choice and it needs to be the other way around
“The approach I’ve taken on this is to try to define what would give young people the best chance of building a good life, not just over a year or two, but over the course of their lifetimes.”
The changes would apply to to both existing and new claimants
In exchange for greater employment support, there would be an element of conditionality — if people did not engage with the system, they could lose some of their benefits
“A deal isn’t a deal unless there are potential consequences,” Milburn said. “Entitlements and responsibilities are two sides of the same coin.”
The plans will require “significant investment” upfront, with savings realised over a decade plus
thetimes.com/article/971613c…
So… rather interesting UK Q3 GDP tomorrow morning.
Average consensus forecast in June for this quarter was 0.13%.
OBR forecast at Budget time suggests 0.3% (but it closed in September).
Economists scrambled to upgrade to 0.6-0.7%, including the Bank of England, which would break pattern of cruel summers since Budget. Could be highest figure for 2 years, possibly 9 years if you strip out pandemic period. Heading for second fastest in G7 behind US in 2026 so far.
Depends on September and any revisions, but could point to better news about UK AI capital expenditure, and resilient consumer (at least until summer) to Iran War pressures.
Every quarter this year has rather considerably outperformed consensus and OBR (below is from its march forecast).
PM says the Ten Year plan is coming this year after a flurry of speculation it was coming next year.
Jensen Huang was entirely public about his advocacy for what he called a “win-win” on US-China, against a “zero sum game” on A.I., and his take that President Trump agreed, as I found out:
What Jensen Huang told me about China, national security and persuading Trump bbc.co.uk/news/articles/c64g…
NEW:
Brent crude oil now $93, lowest since late August.
UK natural gas has fallen 23% from peak on October 23rd, just dipped below £2 a therm.
Still 2.5x pre war price, but some relief for energy prices, pretty sharp drops since mid terms led markets to start to price Gulf deescalation.
The Nvidia story sits at the junction of
Tech/ economics/ geopolitics/ stock markets/ national security…
Here are our Live Page contributions from BBCs network of reporters from Silicon Valley to Beijing, including my conversation with Jensen Huang about China:
bbc.co.uk/news/live/cm78p221…
Jensen Huang to me on BBC News last year, around time bans were being lifted: “And so I think that that that President Trump is very clear eyed about this and and the idea that that these this computing technology, is not a national security concern, it is important, and the reason for that is because any military is smart enough to build their military on top of their own indigenous technology, and not rely on an adversary to build their technology, build their military capability. And then I think that that's very sensible.”
Truly astonishing story as Nvidia’s rock star CEO, truly the absolute epicentre of the AI stock market boom, admits an affair, & board initiates an independent investigation into “national security concerns”
I actually asked Huang a year ago about China…this is what he told me:
Sep 2025:
ME: Jensen, you're one of the few people that can walk into the White House, speak to President Trump, and then, within days, go and speak to Xi Jinping. One of the narratives about this UK us tech partnership is that it helps protect the West, kind of against China. I mean, do you see it like that? Is there a battle between the West in which the UK takes the US side against China's expertise in this area?
Jensen Huang: President Trump is very clear. He wants America to win and and President Xi wants China to win, and it's possible for for both of them too. And the reason for that is because it's not a zero sum game the advance of of human society is not a zero sum game and and so I, I think that for America to win the technology that win the AI race, particularly, it's important that and President Trump sees this clearly. It's important that all AI companies that all AI research is built on the American tech stack. And so if you would like, if you would like America to be the global standard of technology, just as we are the global standard of the of currency, the US dollar, then you're going to need to make sure that that people can access this technology from all over the world, including China. And so I think that that that President Trump is very clear eyed about this and and the idea that that these this computing technology, is not a national security concern, it is important, and the reason for that is because any military is smart enough to build their military on top of their own indigenous technology, and not rely on an adversary to build their technology, build their military capability. And then I think that that's very sensible. And so I think the the conversations will sort itself out. And, and, and I do, I do hope, enabling American tech stack to be accessible throughout the world for American companies still, still have an advantage. I think that balance is achievable.
Truly astonishing story as Nvidia’s rock star CEO, truly the absolute epicentre of the AI stock market boom, admits an affair, & board initiates an independent investigation into “national security concerns”
I actually asked Huang a year ago about China…this is what he told me:
Sep 2025:
ME: Jensen, you're one of the few people that can walk into the White House, speak to President Trump, and then, within days, go and speak to Xi Jinping. One of the narratives about this UK us tech partnership is that it helps protect the West, kind of against China. I mean, do you see it like that? Is there a battle between the West in which the UK takes the US side against China's expertise in this area?
Jensen Huang: President Trump is very clear. He wants America to win and and President Xi wants China to win, and it's possible for for both of them too. And the reason for that is because it's not a zero sum game the advance of of human society is not a zero sum game and and so I, I think that for America to win the technology that win the AI race, particularly, it's important that and President Trump sees this clearly. It's important that all AI companies that all AI research is built on the American tech stack. And so if you would like, if you would like America to be the global standard of technology, just as we are the global standard of the of currency, the US dollar, then you're going to need to make sure that that people can access this technology from all over the world, including China. And so I think that that that President Trump is very clear eyed about this and and the idea that that these this computing technology, is not a national security concern, it is important, and the reason for that is because any military is smart enough to build their military on top of their own indigenous technology, and not rely on an adversary to build their technology, build their military capability. And then I think that that's very sensible. And so I think the the conversations will sort itself out. And, and, and I do, I do hope, enabling American tech stack to be accessible throughout the world for American companies still, still have an advantage. I think that balance is achievable.
Is the midterms AI & data centre backlash turning boom to bust? And will the PM be tempted to follow his Dem allies politics on this, or at the exact moment AI is boosting UK growth and investment, go the other way? From yesterday’s six and ten.
youtu.be/Rqs6IGGRDsw?si=lMbi…
Again because of the salience of the gas prices/ Iran war factor it may have gone under the radar how absolutely central to the Dem blue wave, Ai & big tech-scepticism was… in their speeches (i put in just a few examples in report above) it was just a natural part of the narrative - criticising data centres locally, Big tech billionaires/ trillionaire even in states like Texas which saw a transfer of investment from California, and also as Texas Senator elect Talarico does below, blaming social media algorithms for generating hate anger and division…
Ministers were already wary of what they called “America Brain” in my reporting in September / that the massive scale US data centre debate while having some lessons, has occurred on a totally different scale than in the UK - 120GW vs trying to get to 6GW here… with some major investments already paused.
Since then, AI investments have started showing through in good UK GDP numbers, but Labour also faces political debate on its left flank with Greens and others calling for a moratorium.
At the Budget there was the “data centre covenant” promising eg fast track grid connections and to publish national policy statement - but that is already delayed…
IN DEPTH: data centres.
Even before the questions about the fate of humanity, a backlash against data centres was emerging in the US around the mid term elections was starting to echo around the world, in relation to electricity prices, water use and planning… in the US that spread from Democrats to Republicans… Govt here trying to to get ahead of it, amid some local opposition. There have also been some ministerial fights over AI Growth zones.
It was one thing fast tracking essential national infrastructure essential for the economy and the NHS, but now human existence is being questioned and significant employment impacts floated, will the backlash arrive here?
bbc.co.uk/news/articles/cv98…
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WATCH:
Not just a rate rise. Bank of England v interesting on UK growth strength. Bailey to me on EU rapprochement/ single market for financial services too.
GROWTH:
UK Q3 is coming in at 0.7%., the Bank says. For context, outside the pandemic rebound, the joint fastest quarterly growth since 2017.
Actual data is on Thursday, but absent massive revisions, it has to be 0.6-0.8%. Way above the consensus forecast even a few weeks ago. The OBR at the Budget (forecast closed in September) implied Q3 growth of …. 0.27%.
Bank did quite a detailed study of the strength. AI and consumer. Both obviously now have clouds in Q4, Bank has 0.3% for that.
I asked the Governor about the UK economy performing much better than forecast, he said: “it has, and this is obviously encouraging. We're seeing more resilience in terms of activity in the economy. It's probably quite sectorally concentrated…. For the first time we've been able to say... we think AI is part of that story".
On UK-EU closer relations:
I asked Bailey if the new Burnham push for closer relations would boost growth he said while he does not take a position on Brexit as a public official: “the broader question that underpins that, which you rightly ask, is would the UK being able to trade more openly with its nearest neighbours, to have that trade, to have that market openness, be beneficial for growth in the UK? My view is yes, it would”
And then I further asked him if that would stretch to single market membership for financial services [where in the past as FCA chief, in this area he is chief regulator, he has not embraced “rule-taking”]… he was sounding very neutral on this:
“I think that's very interesting. So, one thing I would say about the last decade, let's go back 10 years from now to the post-referendum period. I mean, people were predicting sort of doom and gloom and the end of the city of London, and that hasn't actually happened. And there's all sorts of reasons why that hasn't happened. But we're not in the single market. That's true, and I'm not taking a position on whether we should be, by the way. But financial services has remained one of the more open markets, actually, and I'm very pleased with that. I mean, we at the Bank of England have been very strongly supportive of that because we believe in open financial markets, and we will go on believing in open financial markets and working closely with our partners in other parts of Europe.”
FULL interview - growth and EU stuff at the end.
When the PM has his conversation on the wider options for a closer relationship, the Banks and the City are going to be very interesting here…
Basically significantly supportive of remain a decade ago, and have lost passporting, which would return in EEA or rejoin. But the Bank and FCA have used a number of post Brexit freedoms here, and some parts of the City did not want financial services to be part of Starmer reset, and it was not. So. Have they now sunk the costs of friction/ setting up in Dublin/ Paris?
Were they just going along with the Theresa May red lines from Lancaster House, and now will respond differently with an open conversation, and not want to get the wrong side of a PM?
Or is it very difficult to generalise now a view on this between insurers, banks, fund managers etc…
Lots of talk about freedom of movement, but this dynamic is very much worth watching.







