The ONS presented a healthy picture of employment growth in the year to June 2017. There are 338,000 extra jobs in our economy. Unemployment has fallen by 157,000 on the year. Many of the new jobs are full time jobs.

It also showed a small rise in average weekly pay, though it reported the figure as 2.1% up on a year. This left average earnings behind prices by 0.5%.

However, Figure 9 of the same ONS report provides a graph of average weekly earnings adjusted for price rises by putting the figures into a common 2015 price level. This shows June 2017 at £490.5, a little up on June 2016 at £488.2. This is confirmed by the average weekly pay figures in current prices reported at the top of Section 8. That says “average total pay for employees in GB was £506 a week (June 2017) up from £493 for a year earlier” That is an increase of 2.6%, in line with prices as measured by the CPI.

It is interesting that using June on June produces a different answer from using quarter on quarter which they highlight. It provides some light on why retail sales, consumer spending and jobs have increased when so many forecasters were expecting the opposite.

As some of you have pointed out, it leaves the unanswered question of why did the Treasury forecast big job losses following a pro Brexit vote and an Article 50 letter? It also raises the issue of which of these contrasting portraits in the same official document give the more accurate picture of what is happening?

Yesterday the RPI for July told us that rail fares will go up by 3.6% next year. As I reported yesterday on this site, costs have been mounting at the nationalised Network Rail which supplies the expensive track, stations and train slots. The railways will want this substantial fare rise, which always bears heaviest on commuters. Off peak and leisure travellers can benefit from highly discounted fares designed to try to fill the many empty seats outside peak hours.

Rail travellers paying those fares will not be amused to learn that the losses Network Rail have been making from their derivative dealing continue. According to the last accounts Network Rail lost another £116 m on “movement in the value of cash flow hedge derivatives”, compared to a £232 m loss the previous year. (Accounts page 95) The total fair value of derivatives they hold rose again last year, from £963 m to £1102 million. (Accounts p 97). The liabilities on derivatives rose from £1408 million to £1529 million. The notional amounts were of course much greater, rising from £17,094 m to £17,974 million. (Accounts pp 120-121 Note 19)

I am surprised Network Rail continues to run such large positions in derivative instruments now that its financing is all secured by the government. The present management have inherited both foreign currency borrowing and index linked borrowing. Their predecessors took out various derivative positions in interest rates and currencies with the results I have reported before by quoting their Accounts, now updated for the most recent year.

I continue to ask why do they do this. What benefit is this to taxpayers who supply 70% of the revenue and who own 100% of the shares of this business?

The BBC did its best this morning to talk inflation up, inviting on interviewees prepared to say inflation would rise owing to a weaker pound. They were wrong. Inflation stayed stable, with food prices dipping a little. The rise was sustained by Council taxes and associated housing costs and utility bills contributing. These are largely domestic costs given the switch to renewables and the high UK labour content of utility service and local government.

Network Rail had a disappointing last year. Their accounts for 2016-17, published in July reveal that they were £172 m net or £424m gross below target financially. Their operating costs rose by £124 m or 4.6%, well ahead of wage inflation. Total debt was up by £4.7bn, and debt costs were £370m more in the year. Much of this was the impact of the higher inflation rate on the index linked borrowing they decided to do in past years.

Worse still from the travellers point of view, they had to report cancelled trains in excess of target. Only 87.6% of trains were on time, well below target. Whilst it is good news no staff member was killed on the railway, under general safety they reported 680 injuries which was worse than target.

The railway is spending on increased capacity which drives debt higher, as does the failure to raise productivity and control costs. They are in consultation with the government over how to spend £450m on digital signalling. This could offer a much cheaper and more efficient way of increasing capacity. Lines currently only take 20 trains an hour, leaving the tracks unused for much of the day to allow safe braking. With better signals and controls, given the fact that trains are all going in the same direction on any piece of mainline, it should be possible to run 25% more trains on the same track with new systems. Indeed, with better brakes, lighter trains, better signals and sensible timetabling it may be possible to increase capacity by 50% to 30 trains an hour on any given piece of track.

I look forward to early decisions on how to step up this approach to capacity. I also look forward to the management having better success at raising the quality and curbing the costs of running the railway.

I asked the service provider to protect this site from an excessive number of commercial and automated responses. They have come up with the picture question system which some of you dislike. I also have to go through it each time I moderate and find it works OK. I do not have available another system to keep out so many unwanted responses.

I moderate this site when I have the time. I will repeat again. Long posts, posts with allegations about people and institutions that need checking, and posts referring to electronic sources I do not know may take longer. I leave those until I have more time, which may not be the same day depending on my other duties. Sometimes I just delete them if they look too difficult to understand and check.

I do now sometimes just delete a post from someone who has written multiple posts the same day to cut down my reading time. People who write several shorter posts without material that needs checking may secure more postings as my aim to speed moderate as many as possible may favour them over someone who writes one or two long posts. I am trying to put up a range of views and interesting material from as many as possible, but will tend to err on the side of caution over allegations.

There have been various studies of migration arguing that migrants that come to the UK make a net contribution, paying more in income tax and National Insurance than they receive in benefits. These studies ignore the wider picture and do not look carefully enough at all the budgets involved. They are not based on a very pleasant premise when they imply we only want the migrant if they do “make us a profit”. It is a pity their calculations are also simply wrong.

When we invite someone into our country we wish them well and want them to live to a decent standard of living reflecting the society they have joined. This means they do need adequate housing, their children need school places, the family requires access to an NHS surgery and if necessary an NHS General Hospital. If just one or two migrants arrive there is sufficient slack in the system , but when 250,000 additional people a year turn up the country has to get on and build the extra homes, schools, surgeries and other facilities they need. We also require extra roadspace and railway capacity. I see this in my own constituency where we have had to provide extra schools and surgeries as the new homes are built.

None of these items comes cheaply. A migrant couple will need a flat or house which will cost say £200,000 to build and provide. They may need a school place for two children. That could have a capital cost of £45,000. We are currently spending massive sums on increasing rail capacity in London and on HS2, and are beginning to spend more on road capacity. Some part of this is the result of an expanding population.

The figures calculated on revenue costs are based on the fact that public spending does transfer money from working age people to the elderly in more need of pensions and NHS care. It also transfers money from people without children to those with children at school. Migrants who work here for a few years, have no children and then move away may indeed make a net contribution to the revenue budget, but they will need expensive housing and transport capacity on capital account which needs to be put into the calculation.

It is not easy being the world’s superpower. Mr Trump swept into office on a programme of America First. He envisaged doing good deals for the USA. He did not seem keen on military interventions around the world of the kind favoured by the Clintons and the Bushes, by the State department and the Pentagon. Many people warmed to the idea that the west had intervened too much. Maybe the west had resorted to arms in too many cases where it did not have the political ability and influence to settle things well after its force had dislodged dictators or unsettled evil regimes.

Mr Trump has avoided escalation of military involvement in the Middle East. He has tried rapprochement with Russia, though this has been badly knocked by outraged Democrat opposition seeking to allege that it was all to do with Russian help for his election campaign. Just as it seemed he was turning to the main economic matters which dominated his election statements, the absurd and unpleasant dictator of North Korea decides to provoke and taunt the USA with stories of breakthroughs in weaponry, tests of missile systems, and his usual threatening language.

US policy seemed to be based on the diplomatic playbook. The State department engaged with the UN and the leading powers Russia, China and Japan to back an important UN Resolution. This pledges all to seek diplomatic solutions, whilst imposing much tougher sanctions which seek to block one third of all North Korea’s exports by value. There are also travel bans and other restrictions imposed on 9 senior officials and four institutions of the North Korean state.

It therefore looked as if it came as a surprise to the US establishment when Mr Trump started talking of massive military responses should North Korea threaten the USA and its allies and territories. They soon came into line with their President and pictures emerged of the kind of weaponry the US could deploy from Guam and their carriers if need arose. This builds on the traditional exercises conducted annually with South Korea under previous Presidents to display to North Korea ability to fight and resolve to defend.

Some think Mr Trump was right to speak in the kind of language the No0rth Korea dictator uses. Others think it is unhelpful and gives too much publicity to North Korea. I would be interested in your views.

The latest industrial output figures for the UK are disappointing but not surprising. In part they reflect a general decline in industrial activity, which was more pronounced in France and Germany last month than here.

They also reflect local matters that are longer term and more worrying. A strong domestic car market up to March 2017 has been transformed into a weak one in the four months since by a combination of higher taxes and tougher regulations. The new levels of Vehicle Excise duties for dearer cars has hit that part of the market badly. The new messages against diesels with the longer term threat to both diesels and petrol vehicles has also had an impact. More people are waiting for further clarification, and to see if electric cars are going to become cheaper and easier to use. Meanwhile the Bank of England is tightening the availability of credit to buy or lease a new vehicle. One of the recent successes of the UK economy in increasing car sales and output has just been damaged by a combination of an attack on the idea of the purchase, and tougher controls over innovative ways of financing it.

Those who dislike cars, wrongly seeing them as the source of all the pollution that matters, may be pleased. They usually ignore the pollution coming out of the bus, train and household boiler. Those who fear any kind of borrowing by anyone to do anything may also rejoice. I think it does matter. I see no special dangers in more people leasing a vehicle. All the time they have the income they will make the lease payments and all will be well. If someone loses their job or struggles to meet the payments then the lending institution will take the car back and sell it on to someone else second hand. They will get something for it, and if they have run a sensible business may even get all their money back on that customer. None of this need be bank threatening!

The UK now has a strong car industry with some excellent factories, products and employees. The fact that these are in foreign ownership does not affect the important underlying reality that the factories, jobs, ideas and energy for these businesses are here in the UK. They export a lot to non EU destinations as well despite the absence of EU trade deals with the main markets. Public policy should look after the industry in a sensible way. Working with them to produce greener and better products is fine. Taxing too much and stifling credit is not such a good approach.

The UK government is about to publish a series of position papers on the EU negotiations. It is doing so in part in response to the EU’s tactic of publishing lots of papers about principles and problems, whilst refusing to tackle the issues that matter or to set out the EU wishes.

It is most important as the UK does this that it avoids three mistakes. The first mistake is to give any hint of us negotiating with ourselves. We don’t want options or details over how the UK position may evolve. We certainly don’t want a public exploration of what we might surrender or shift under pressure,as that invites the EU to hang tough and to pocket any offer we make.

The second mistake would be to claim it is all complex or difficult in a way which gives succour to those in the EU who think if they delay and obfuscate enough the UK might weaken or change its mind.

The third mistake would be to ask for too much expecting things that are not obtainable. It is not, for example, in the UK’s power to decide what rights going forward will apply to UK citizens living in the EU after we have left. That will be a matter for them to decide, under international law.

The negotiation can be very straightforward. The UK takes back control of its money, laws and borders,as it is entitled to do. The EU decides whether it wants the comprehensive free trade arrangement we offer, or whether they want to face WTO tariffs.

Most commentators and bankers now accept that big mistakes were made in the middle of the last decade allowing commercial banks and investment banks to borrow too much money, to lend too much money out to people and companies, and to develop too many clever financial products that recycled the debts around the market. The favourite excuse at the time was the globalisation of markets and the creation of mega banks allowed them to run more overall risk, because it was spread over so many different instruments, currencies, jurisdictions and borrowers. Those of us who worried about these things were told we did not understand how good financial markets and banks had become at spreading and managing risk.

As it turned out, the older idea that a bank should keep a decent amount of cash and reserve capital against future losses was a better one. That has now become fashionable again, with banks typically required to keep more than twice as much cash and capital as they did at the peak of the boom relative to their risk assets or loans, with many of them choosing to have rather more than the minimum.

Fewer commentators accept that a second important mistake was made in 2007-9 by the Central banks and government authorities. They decided to raise rates and reduce liquidity in the markets too much, bringing down the over exposed balance sheets by deflating them too quickly. If Central banks withdraw cash from the market, it lowers the value of assets like property and shares. These are the backing for loans banks have advanced. As they fall in value so the solvency of the borrower is put at risk. As interest rates rise, so more people and companies struggle to pay their debt interest. Banks end up with a pile of bad loans and insufficient collateral or backing to meet the losses on the loans.

For a period of unreality in 2007 many were talking about a necessary correction for the masters of the universe in finance who they thought deserved to lose, in the belief that this could occur without harming the “real economy”. As a few of us warned at the time, bringing the excesses of the financial sector down would also bring down the real economy, closing factories, collapsing businesses, costing people their non financial sector jobs. So it proved. The corrections, administered by the authorities in the first instance, soon became self fuelling. The advanced countries affected entered a severe depression.

The Finance Ministers and Central banks awoke to the full dangers early in 2009 and started to make large amounts of cash available to the markets to prevent more banks and other businesses failing. They went on to pioneer programmes of state money creation and government bond buying, as their way of replacing the money destroyed in the commercial banking crunch with public money issued via the Central banks. It was better than nothing. It lifted asset prices, which prevented more bad loans and failed banks.

The Central banks are now discovering that it is easy to distort economies by providing cash to boost asset values, but more difficult to wean an economy off such medicine. The USA is furthest advanced in this cause. It stopped money printing the earliest, and is now planning a gradual reduction in this stimulus as commercial banks take up the slack and as more real activity takes place. The UK has also now stopped QE, though it had an additional programme which was started last summer. The European Central Bank and the Japanese Central Bank still carry on with their Central Bank money creation.

One of the crucial lessons of 2007-9 must be that acting too stridently can cause grave damage. If you have high levels of debt, you need to tread carefully to get them down, in ways which most borrowers and lenders can handle. Any other course causes major dislocation for people who had nothing to do with the excess credit in the first place.