Among the biggest concerns for Jeremy Hunt ahead of next week’s autumn statement is that geopolitical storms would unleash a new oil price surge, throwing the battle against inflation off course.

The World Bank forecast that conflagration in the Middle East could lift the price of crude to $157-a-barrel.

It hasn’t quite happened like that. The war which erupted after the atrocities of October 7 largely has been confined to Gaza, and a lesser extent the West Bank.

Fears of a Hezbollah assault across Israel’s northern borders, or war with Iran, retreated with the Americans receiving assurances from Tehran that this is not their direct fight for the moment.

Meanwhile, the San Francisco summit between Joe Biden and China’s Xi Jinping has provided temporary relief from fears that Beijing would see Western distraction by wars in Ukraine and the Mid-East as an opportunity to tighten the noose around Taiwan.

Counting the cost: As the Tories seek to avoid an election meltdown, they are racing against the clock

Counting the cost: As the Tories seek to avoid an election meltdown, they are racing against the clock

As a consequence, in spite of production limits imposed by Saudi Arabia and Russia, crude prices have been tumbling.

Demand for oil also has been weakened by slow to zero growth in much of the G7, with the notable exception of North America.

Contrary to all expectations, prices have tumbled in the six weeks since Israel’s counter offensive in Gaza began.

Prices have dropped 27 per cent and are now 14 per cent below July levels. If the oil majors do the right thing and pass on benefit to drivers then the price of petrol at the pumps should be tumbling.

The latest data from the Office for National Statistics (ONS) shows the price of gas dropped 19 per cent in the last week and that of electricity by 6 per cent.

If there are no further strategic shocks, the progress made on the cost of living in October, with headline inflation falling to 4.6 per cent from 6.7 per cent, should continue. As the Tories seek to avoid an election meltdown, they are racing against the clock.

If the Bank of England moves closer towards its 2 per cent inflation target, then there is the possibility of a feel-good interest rate cut as early as the Spring.

Home owners need to realise that the years of low interest rates, designed to steer the economy out of the great financial crisis and Covid-19, are over.

This has nothing to do with Liz Truss’s blunders. It is a recognition that the era of easy money has ended.

It dragged on for far too long.

Tax bonus

There was much angst on the political Left when the Bank of England lifted the cap on bankers’ bonuses last month.

It is galling that executives at High Street banks, which offer such poor service, are able to boost payouts on the back of rising interest rates.

Savers are never rewarded properly, allowing banks and other financial groups to reap windfall profits.

Yet as the trade body UK Finance reminds us, Britain would be a much poorer country were it not for the banks.

In the financial year to March 2023, banks contributed a whopping £41billion to the Exchequer, or 4.6 per cent of the nation’s total tax receipts. HMRC benefits from corporation tax and the bank levy, plus the amounts raised from income tax on fat-cat pay and bonuses.

The days when bankers sought to avoid paying their fair share by seeking payment in gold bars are gone.

How does the UK compare with its competitors? With an overall tax rate of 45.5 per cent, the UK is a more expensive place for banks than New York where it is just 27.9 per cent.

Tax rates on banks are higher in Frankfurt and Amsterdam than the City.

This will change in 2024 when European banks are freed from the obligation to pay into a rescue fund set up in the wake of the great financial crisis and Greek meltdown.

That will mean some tricky and potentially unpopular decisions for the next occupants of Number 11.

Search fix

Google has been on trial for three months in Washington on anti-trust charges and the case has just wrapped up.

A verdict has been reserved for next spring. The most astonishing disclosure is that Google shelled out £17.3billion in 2021 to ensure makers of devices use its search engine. Apple alone is estimated to have received £15bn. That can’t be anything but a restraint of trade.

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