The future is personalised pricing

But this isn't necessarily a bad thing.

On a recent trip to Kenya I found that the amount you get charged for a bus ride depends mostly on how badly you look like you need one. The longer it you've been waiting, the more bags you have, the more irritated the look on your face, the more you'll end up paying.

This is not a great system for commuters, but is one that seems to be  coming in to force online. The Office of Fair Trading is currently looking in to personalised pricing - where retailers use information they've gathered about customers to decide how much to charge them. The information is collected either from previous purchases on the site or bought through a third party - retailers then potentially charging some people higher prices.

Particular worries have been raised about flights and hotel rates. There have been allegations that companies look at your computer brand or area (indications of wealth) to help them decide on hotel price, and that flight prices are changed depending what on other sites you have been looking at. This is very annoying, expecially for customers whose activity indicates that they are a) rich or b) badly need the service.

But as the FT points out, a system of fixed pricing isn't inevitable. It makes sense for retailers to try and squeeze all they can out of each customer, and fixed pricing only came in to fashion for practical reasons - high volumes making it impossible to keep track of individual buyers. But technology is changing this, allowing prices to splinter. Here's FT Alphaville:

We can find ourselves in a situation where we have inflation and deflation simultaneously across society. And not on a product level, but on a demographic level.

In fact it’s not too crazy to imagine an environment where prices get higher quickly for the 1 per cent, but lower for the 99 per cent. The 1 per cent are, after all, already prepared to pay over the pure cost price in many areas. Of course, the situation could be inverted as well.

The results of the change could be huge, but perhaps the Office of Fair Trading should stay out of it. Kenyan bus drivers use personalised pricing because it maximises profits and because they can. It makes a certain amount of sense for other businesses to start doing the same.
For you: best price. Photograph: Getty Images

Martha Gill writes the weekly Irrational Animals column. You can follow her on Twitter here: @Martha_Gill.

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.