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Updated 2018-10-21 10:16
Brexit is like a Premier League side wanting to be relegated | William Keegan
The man who used to run the WTO says the EU single market, set up by Margaret Thatcher, is ‘the top league’. How right he isThis country is obsessed by football. Many of the people who voted to “leave Europe” follow closely the ups and downs of the teams in the Premier League, teams whose stars and managers are often from, well, “Europe”.It is unimaginable that any football fan would want his or her team to descend from the Premier League to the lowest, just like that. Yet that is not unlike what this country would be doing if the wishes of the Brexit extremists were to be realised.The idea of trying to set up new trade agreements in a world that is going protectionist fast is for the birds Continue reading...
Austerity harms hunt for sexual abuse gangs, says ex-prosecutor
Cuts have ‘come at the wrong time’ after the Rochdale case raised national awareness, says former CPS expert Nazir AfzalPotential victims of grooming gangs are no safer now than when the issue became a national scandal almost a decade ago, according to the Crown Prosecution Service’s former lead on child sexual abuse and violence against women and girls.Speaking after 20 men were found guilty on Friday of belonging to a gang that raped and abused girls as young as 11 in the west Yorkshire town of Huddersfield, Nazir Afzal said the government’s austerity programme had seriously undermined attempts to protect victims.There have been hardly been any cases south of Birmingham. What the hell is going on? Is it because there is no problem? Continue reading...
Firms are partying like it’s 2007. Time the Bank played pooper
The trillions in cheap money that central banks created after the crash have just gone to service old debt or push up property prices. And we know where that could lead …You wish fervently for something then, when it happens, it’s not what you hoped for at all. That is how central bankers must be feeling as they watch corporate debt soar to record highs.They wanted companies to borrow and grow, but not like this. Last week, this concern was visible in the minutes of Bank of England’s financial policy committee. They show that the committee, which overseas bank lending and is chaired by governor Mark Carney, likened a rapid growth in lending to indebted companies around the world to the US sub-prime mortgage market, which triggered the 2008 financial crisis. Continue reading...
China moves quickly in bid to counter sharp slowdown in economy
Vice-premier and central bank governor intervene as GDP grows at lowest rate since 2009Chinese officials have reacted quickly to a sharp slowdown in growth at the world’s second largest economy, promising that it remained strong despite an escalating trade war with the US.The intervention on Friday by the vice-premier, Liu He, and the central bank governor gave China’s leading stock market a brief respite from six months of tumbling shares that have sliced more than a third from the value of Shanghai-listed companies.Related: New Look to pull out of China with closure of 120 stores Continue reading...
Why you should give up power for the social good | Letters
Dr Katharine Sutton highlights the importance of the everyday economyLynsey Hanley is right (We need to make growth work for all, 15 October). The everyday economy in which most of us are pitched is far less glamorous than the high-skill, high-tech ambitions espoused by the economic elite, yet its impact is far wider and the challenge it poses for now and future generations far greater.It’s not only economists, however, who need to focus on foundational activities or the overlooked economy, it is the way services are organised that also must be changed. Society has to provide more efficient services that are renewed and replenished from the ground upwards. This means devolving power downwards, removing lines of management, eradicating paper systems and trusting and valuing the contribution that those working on the frontline of the everyday economy can make. Continue reading...
China growth slowest since financial crisis as trade war looms - as it happened
Economic growth of 6.5% in the third quarter was the weakest since early 2009 and is expected to slow further as the effects of China’s trade war with the US take hold
UK government borrowing target back on track
£800m fall in borrowing on same month last year bolsters chancellor’s budget war chestPhilip Hammond’s plan to bring down the government’s annual borrowing was back on track last month after a blowout in August that knocked the chancellor off course.Public sector net borrowing in September, excluding the nationalised banks, was £4.1bn – £800m less than in the same month last year. The drop had the effect of cutting the level of borrowing since April to £19.9bn, which is £10.7bn less than in the first six months of the 2017 financial year. Continue reading...
Manchester police couldn’t stop the bike muggers. So we stepped in | Helen Pidd
Across the UK, others like us are taking action where a depleted police force cannot. Is this really how we want Britain to be?If I am being perfectly honest, the austerity cuts haven’t affected my life much over the past eight years. I’ve written about them so I know about the resurgence of rough sleepers, the proliferation of food banks, the increase in NHS waiting times and the closure of libraries and youth clubs.But have they hurt me? Not really. My bins got collected a bit less frequently, it took even longer to get answers out of council press offices and everything seemed to grow a bit grubbier. I got angry at what was happening to others, sure. But for me, life essentially continued as before, just with a lower mortgage rate and a larger tax-free allowance from HMRC.Related: The growth of private policing is eroding justice for all | John HarrisRelated: Policing at 'tipping point' over budget cuts, warns police chief Continue reading...
The Fed is ignoring Trump: this is a fight he cannot win | Nils Pratley
The US president has attacked Jerome Powell again, but the central bank is simply dealing with economic realityIn the past month Donald Trump has called the US Federal Reserve “crazy”, “out of control” and “loco”. This week he returned for another bite. The Fed is the “my biggest threat”, said the president, and he is “not happy” with the chairman, Jerome Powell, an official he nominated to office less than a year ago.The upwards adjustments to US interest rates are “too fast”, argued Trump, because inflation is “very low”. Continue reading...
Hundreds join growing list of Britain's ultra-rich
Fortunes of already wealthy people grow much faster than that of general populationThe UK’s ranks of the ultra-rich have swelled by 400 over the last year, taking the number of people with fortunes of more than $50m (£38m) to nearly 5,000.The fortunes of the already very wealthy are growing at a far faster rate than the general population, according to a report by the Swiss bank Credit Suisse published on Thursday. Continue reading...
UK and US pull out of Saudi event over alleged murder of Jamal Khashoggi
UK trade secretary, Liam Fox, and US Treasury secretary, Steven Mnuchin, join others in boycotting economic forum in RiyadhLiam Fox, the UK trade secretary, and the US Treasury secretary, Steven Mnuchin, joined key European partners in pulling out of a major economic forum in Saudi Arabia nicknamed Davos in the desert, in response to the alleged murder of the journalist Jamal Khashoggi.Reports of Khashoggi’s gruesome murder at the hands of a gang of 15 men with links to the Saudi royal court have already led to many western media firms and bankers pulling out, and the political lead from Fox and Mnuchin is likely to accelerate the boycott of the Future Investment Initiative (FII) conference in Riyadh next week.Related: As Trump cozies up to Saudi Arabia, the rule of law collapses further | Richard WolffeRelated: Search for Khashoggi's remains focuses on consul general's houseRelated: Mohammed bin Salman never was a reformer. This has proved it | Dilip Hiro Continue reading...
EU members should be wary of stealing London's super-sized financial sector | Howard Davies
Paris and other cities have put out Brexit welcome mats for the City, but does banking unbalance the wider economy?As the UK’s Brexit negotiations stumble on, other European countries are using the uncertainty about the future regulation of the continent’s financial markets to tempt firms and activities away from London.The French have been particularly active in support of Paris, but Frankfurt, despite lukewarm support from the government in Berlin, has not been far behind. And other cities such as Luxembourg City, Dublin and Amsterdam have laid out their own welcome mats. Bankers have not been so popular for a decade or more.Related: Blockchain isn't about democracy and decentralisation – it's about greed | Nouriel RoubiniThere is a ring of plausibility to the argument that with finance you can have too much of a good thing Continue reading...
When council leaders petition No 10 to end austerity, things are bad | Polly Toynbee
Labour councils have had enough. As another round of devastating cuts looms, the leader of Newcastle council has gone to the sourceWith the budget barely more than a week away, the queue of desperate petitioners would stretch down Whitehall, far out of sight. If austerity is over, who’s first in line? In the battle of crises, whose need is greatest?This morning an actual petition was handed into No 10 by one sector among those that have suffered the worst in the great state shrinkage of the last eight years – local government. Nick Forbes, leader of Newcastle city council, handed in a plea signed by all Labour local government leaders to stop the next round of cuts – a further £1.3bn due to be lopped off in April. If that axe falls again, Theresa May’s “austerity is over” conference message will be exposed as pure deceit.Related: Even Tory councils are now calling on ministers to ease the pain of cuts | Patrick ButlerRelated: Yes we must take back control, not from Brussels – from Whitehall | Simon Jenkins Continue reading...
UK retail sales fall in September as shoppers spend less on food
ONS snapshot shows drop of 0.8%, which is bigger than expected after summer splurgeA strong summer for Britain’s retailers came to an abrupt end in September as weaker demand for food hit supermarkets and dragged down spending overall.The latest spending snapshot from the Office for National Statistics showed the volume of sales for shops and online businesses had dropped by 0.8%, twice the monthly fall analysts had been expecting.Related: Cheaper chocolate and meat drive down UK inflation in September Continue reading...
Fed defies Trump by indicating it will push ahead with rate rises - as it happened
US central bank discussed raising borrowing costs to ‘modestly restrictive’ levels, minutes of last month’s meeting show
Cheaper chocolate and meat drive down UK inflation in September
ONS says consumer price index fell to 2.4% last month from 2.7% in AugustUK inflation dropped further than expected last month as the falling price of meat and chocolate helped reduce some of the pressure on cash-strapped British consumers.The Office for National Statistics (ONS) said the consumer price index (CPI) fell to 2.4% in September from 2.7% the previous month, confounding City analysts’ forecasts for a more modest reduction to 2.6%.Related: UK pay growth rises to 3.1%, the highest in almost a decade Continue reading...
Bank of England raises alarm over surge in high-risk lending
Central bank draws parallels to 2008 financial crisis in warning about leveraged loansThe Bank of England has issued a stark warning over the rapid growth in lending to indebted companies around the world, drawing parallels with the US sub-prime mortgage market that triggered the 2008 financial crisis.Threadneedle Street said Britain was not immune from a global boom in risky lending that had alarmed financial regulators around the world this year, with the US market for such loans more than doubling since 2010 to surpass $1tn (£763bn).Related: Cheaper chocolate and meat drive down UK inflation in September Continue reading...
Britain fell for a neoliberal con trick – even the IMF says so | Aditya Chakrabortty
The fund reports that Britain’s finances are weaker than all other nations except Portugal, and says privatisation is to blameColumnists usually proffer answers, but today I want to ask a question, a big one. What price is paid when a promise is broken? Because for much of my life, and probably yours, the political class has made this pledge: that the best way to run an economy is to hack back the public realm as far as possible and let the private sector run free. That way, services operate better, businesses get the resources they need, and our national finances are healthier.It’s why your tax credits keep dropping, and your mum has to wait half a year to see a hospital consultant – because David Cameron slashed public spending, to stop it “crowding out” private money. It’s why water bills are so high and train services can never be counted on – because both industries have been privatised.Related: We let finance rip and flogged our assets. Austerity was bound to follow | Will HuttonRelated: Just look at housing to see the true cost of privatisation | Dawn Foster Continue reading...
Divided Britain: study finds huge chasm in attitudes
Far-right and anti-Islam ideas taking root in post-industrial towns, says Hope Not HateBritain is hugely divided across cultural, age and education lines, a major study of national attitudes has concluded, warning of a potential rise in far-right and anti-Islam sentiments unless politicians tackle long-standing disaffections behind the Brexit vote.There is a particular chasm between people living in affluent, multicultural cities and those from struggling post-industrial towns, according to the report from Hope Not Hate, based on six years of polling and focus groups. Continue reading...
Britain falls to eighth place in WEF global competitiveness index
UK drops two places as World Economic Forum warns Brexit holds risk of further declineBritain has dropped two places to eighth in an influential global competitiveness index, with the risk of Brexit further damaging its international standing.The World Economic Forum (WEF), which runs the annual Davos gathering of business and political leaders, said that the UK had been overtaken by Hong Kong and Japan on its annual ranking of the world’s 140 most competitive economies.Related: UK economy heading for worst year since crash, say economists Continue reading...
Neoliberalism has caused 'misery and division', Bernie Fraser says
Former RBA governor says Coalition pursues low-tax road to jobs and growth despite lack of evidence to support itNeoliberalism has caused “misery and social polarisation” yet remains in vogue with the Coalition government, according to the economist Bernie Fraser.The former Treasury secretary and Reserve Bank governor has made the comments in a presentation circulated to participants of the Australia Institute’s revenue summit to be held in Canberra on Wednesday.Related: Australia’s housing boom is not heading for a soft landing. How did we get here? | Greg JerichoRelated: More than three million Australians living in poverty, Acoss report revealsRelated: Why are stock markets falling and how far will they go? Continue reading...
UK pay growth rises to 3.1%, the highest in almost a decade
Competition for workers helps push up wages, as unemployment stays at 4%Britain’s workers have started to repair the damage from a lost decade of wage growth after increased competition for workers pushed the government’s preferred measure of pay to its highest level since the UK was deep in recession a decade ago.The latest health check on the labour market from the Office for National Statistics showed that regular pay – which excludes bonuses – was 3.1% higher in the three months ending in August than in the same quarter a year earlier. Continue reading...
Hammond 'would need £19bn a year to meet May's end of cuts vow'
Aim unlikely to be compatible with balancing the books, says IFS in pre-budget viewPhilip Hammond will need £19bn from higher taxes, extra borrowing or faster-than-expected growth if this month’s budget is to fulfil the prime minister’s promises to end austerity and boost NHS spending, according to the UK’s leading experts on the public finances.The Institute for Fiscal Studies said the pledge by Theresa May at this year’s Conservative party conference to end eight years of cuts was “unlikely” to be compatible with the chancellor’s aim of balancing the nation’s books unless some tough decisions were made. Continue reading...
Wall Street closes lower amid fears over trade, oil and rates – as it happened
It’s a very jittery start to the week amid the Khashoggi standoff, US-China trade tensions and concern about US borrowing costs. Follow all the action live
What’s the point of growth if it creates so much misery? | Lynsey Hanley
Forget the ‘high-skill, hi-tech’ obsession: we should invest in everyday services to create a society run for collective goodThe late Prof Mick Moran, who taught politics and government at Manchester University for most of his professional life, had, according to his colleagues, once had “a certain residual respect for our governing elites”. That all changed during the 2008 financial crisis, after which he experienced an epiphany “because it convinced him that the officer class in business and in politics did not know what it was doing”.After his epiphany, Moran formed a collective of academics dedicated to exposing the complacency of finance-worship and to replacing it with an idea of running modern economies focused on maximising social good. They called themselves the Foundational Economy Collective, based on the idea that it’s in the everyday economy where there is most potential for true social regeneration: not top-down cash-splashing, but renewal and replenishment from the ground upwards.It hurts nobody to bring local services back into local authority control and to divest from outsourcing firmsRelated: How to build a fairer city Continue reading...
UK economy heading for worst year since crash, say economists
Forecasting body blames growing risks of no-deal Brexit as it downgrades estimateThe British economy is heading for its worst year in almost a decade amid the growing risks from no-deal Brexit, according to a leading economic forecaster.After official figures revealed zero growth in GDP in August, the EY Item Club said the economy would struggle to recover in the final months of the year owing to the increasing likelihood of Britain crashing out of the EU in less than six months’ time.Related: Frictionless Brexit trade deal would bolster budget – Hammond Continue reading...
Don't believe the World Bank – robots will steal our wages
Automation will bring growth, but history tells us labour’s share of national income will declineThe World Bank has a reassuring message for those fearful of being made obsolete by automation. The robot age is nothing to be worried about. Just like all previous waves of technological advance, the fourth industrial revolution will create rather than destroy jobs, so fears of mass unemployment are largely unfounded.Nor should we be concerned that the arrival of the new machine age is going to widen the gap between rich and poor, because the idea that the world is becoming a less equal place is more perception than reality.Related: Why teach drone pilots about ethics when it’s robots that will kill us? | Andrew BrownRelated: Rise of robots ‘could see workers enjoy four-day weeks’ Continue reading...
Saudi shares tumble after journalist's disappearance
Markets rise in Abu Dhabi and Dubai; Trump issues threats of ‘severe punishment’Saudi Arabia’s stock market tumbled in early Sunday trade on concerns about relations with the international community following the disappearance of the Saudi journalist Jamal Khashoggi.Khashoggi, a prominent critic of Riyadh and a US resident, vanished on 2 October after visiting the Saudi consulate in Turkey. Ankara believes that he was murdered inside the building and his body removed. Continue reading...
Nightmare on Downing Street – cartoon
Behind Theresa May’s assertion that austerity is over lurk the horrors of universal credit, Brexit and the DUP Continue reading...
May could yet leave the Brexit rebels high and dry | Phillip Inman
If the PM can place a concrete deal before MPs, the pressure on hardliners to take it, and avoid chaos, will be intenseWhen the final Brexit deal hits the floor of the Commons, Brexiters who prefer leaving the EU without a deal than agreeing to a Chequers fudge will come under the most intense pressure to lay down their arms.They won’t just feel the water cannon of recession forecasts hosing them down. The international community, in the form of the International Monetary Fund, is weighing in with its own Project Fear, citing a no-deal Brexit as a potentially disastrous hit to global financial stability.If a customs arrangement is part of a Chequers deal, then Labour might need to back it Continue reading...
It's time to abandon the cruelty of meritocracy | Steven Pearlstein
Because of heritability and upbringing, there can never be genuine equality of opportunityNo moral intuition is more hard-wired into Americans’ conception of their country as a just society than equality of opportunity. While some may be rich and others poor, we are willing to accept the market’s judgment about the distribution of income because it rewards talent, hard work and risk-taking rather than some unfair or arbitrary advantage.“We are true to our creed,” declared Barack Obama in his second inaugural address, “when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anyone else, because she is an American.”We have created a meritocratic aristocracyThe luck of parental lottery can never be overcomeSteven Pearlstein is a Pulitzer-prize winning economics columnist at the Washington Post and Robinson Professor of Public Affairs at George Mason University. This essay is drawn from his new book, Can American Capitalism Survive? (St Martin’s Press)
FTSE 100 falls to six-month low as fears grow over US interest rates
Index closes below 7,000 for the first time since March after challenging weekThe FTSE 100 has dropped below 7,000 for the first time in more than six months as stock markets around the world remained under pressure amid the fear of rising US interest rates.The index of UK blue-chip shares closed 11 points lower on Friday, taking it below the 7,000 milestone for the first time since March to finish the week at 6,995.91. After a closing peak of 7,877 in late May, the FTSE has now lost more than 10% of its value – the definition of a market correction.Related: Why are stock markets falling and how far will they go? Continue reading...
Oxfam criticises World Bank for backing deregulated labour markets
World Development Report dismisses concern about growing income inequality, say criticsAid charities and trade unions have denounced a World Bank report that advises some of the poorest countries in the world to accept the demands of multinational corporations to hire and fire workers and remove laws protecting workers’ rights.Oxfam said the report’s main message was that governments should abandon labour market regulation and rely instead on low levels of welfare to prevent workers falling into extreme poverty. Continue reading...
Frictionless Brexit trade deal would bolster budget – Hammond
Chancellor says smooth exit would free up much of £15.4bn reserved in case of ‘no deal’A smooth Brexit that offers frictionless trade with the European Union will give the Treasury a double bonus in the budget, the chancellor has said, allowing him to boost public spending and consider cutting taxes.Philip Hammond said a deal with Brussels offering open trade with the EU would free up much of the £15.4bn he had saved this year to act as a buffer against a no-deal Brexit.Related: EU makes direct appeal to Northern Irish firms on Brexit backstop Continue reading...
We all enjoy a bit of monarchy magic – but do we need so many royals? | David McClure
Princess Eugenie’s had her big day – now it’s time to consider streamlining the working royals“As a father, my wish for my daughters is for them to be modern working young women,” is how Prince Andrew responded two years ago to rumours that Princesses Eugenie and Beatrice wanted to be elevated to the rank of working royals – and perhaps even be given public money to perform official duties.Today Eugenie tied the knot with Jack Brooksbank in a celebrity-packed ceremony at Windsor Castle that suggested she is loath to depart the royal stage for her day job as a director of a Mayfair art gallery. The wedding almost rivalled Harry’s nuptials, with 850 guests, 1,200 ballot-chosen members of the public in the palace grounds and a carriage procession over the cobblestones. Clearly, Theresa May was right: austerity is over.Related: Quoting The Great Gatsby at the royal wedding? It’s no love story | Sam Leith Continue reading...
With ‘food deserts’ everywhere, it’s no wonder so many Brits are obese | Rhiannon Lucy Cosslett
Too many people live too far from shops selling fresh food. There are steps the government could take, but don’t hold your breathIn the past decade there has been a revolution in the British food industry. If you are a comfortably-off urban dweller, it has never been easier to procure a healthy snack. Gone are the days where a soggy sandwich and a packet of crisps were the best you could hope for: now your options include protein pots, prepared mango, chia seed yoghurt, salads containing quinoa. Large supermarkets, too, have cottoned on: if it’s fajita night, a wholemeal wrap is an option. So is reduced-fat cheese. And, if you’re happy to overlook the food miles involved, a larger selection of fresh vegetables than our grandparents could have ever imagined.Yet the food revolution does not benefit everyone. A new study from the Social Market Foundation in collaboration with Kellogg’s has found that more than a million Britons are living in “food deserts” – neighbourhoods where poverty, poor transport and a lack of big supermarkets severely curtails access to affordable fruit and vegetables.Related: More than a million UK residents live in 'food deserts', says study Continue reading...
Why are stock markets falling and how far will they go?
The FTSE 100 has plunged 10% since May and Wall Street suffered its biggest drop in 8 months this week. What’s going on?A volatile week across global stock markets has escalated into a heavy sell-off, with European stock markets plunging to their lowest level in 20 months on Thursday. In the UK, the FTSE 100 entered correction territory – falling 10% from its peak in May - after Wall Street suffered its biggest drop in eight months on Wednesday. Continue reading...
FTSE 100 falls in second day of global market turbulence
Panic selling on Wall St spreads amid concern over trade disputes, inflation and Trump’s clash with FedThe City has felt the full impact of a sell-off in global financial markets with shares in the FTSE 100 index of leading companies now more than 10% below their record peak in May.On a second day of turbulence, aftershocks from panic-selling on Wall Street rippled through Asian and European bourses as dealers took fright at trade tensions, the prospect of higher inflation and Donald Trump’s attempts to put pressure on America’s central bank over interest rates. Continue reading...
Irish cheesemaker stockpiling cheddar in case of no-deal Brexit
Ornua, owner of Kerrygold and Pilgrims Choice brands, says it is preparing for uncertaintyThe Irish dairy company behind well-known brands such as Kerrygold has started stockpiling cheddar in the UK to guard against the risk of a major price hike for Britain’s favourite cheese in the event of a no-deal Brexit.World Trade Organization tariffs on cheddar are as high as 42%, but Irish cheese manufacturers fear sales would plummet in British supermarkets if it passed on the full extra cost to the consumer. Continue reading...
UK's public spending watchdog warns of severe impact of no-deal Brexit
OBR says crashing out of EU would weaken economy and cause stockpiling of foodA chaotic and disorderly Brexit would have damaging consequences for the British economy and might trigger border delays and prevent aircraft landing from the EU, the government’s economic forecaster has warned.The Office for Budget Responsibility said Britain crashing out of the EU without a deal in six months’ time was likely to harm economic growth, could lead to households and businesses stockpiling goods, and spark a sharp fall in the value of the pound. Continue reading...
Women's retirement age rising faster than men's in UK
Women working until 64 on average, reversing 80s and 90s trend of earlier retirementWomen are on average working until the age of 64, in a dramatic reversal of the trend towards early retirement that marked the 1980s and 1990s.Figures from the Department for Work and Pensions show that both men and women are remaining at work for much longer than before, but for women the change has been more rapid.Related: The Guardian view on women and pensions: this generation deserves better | Editorial Continue reading...
IMF boss defends Federal Reserve after Trump calls it 'crazy'
Christine Lagarde says policy of raising US interest rates ‘legitimate and necessary’The boss of the International Monetary Fund has defended the Federal Reserve’s interest rate rises as “legitimate and necessary”, after Donald Trump said the central bank had “gone crazy”.Christine Lagarde made the comments at the IMF’s annual meeting in Bali, against a backdrop of tumbling stock markets and the biggest fall on Wall Street in eight months, which President Trump partly blamed on the Fed’s actions. Continue reading...
Why are markets plunging and which stocks are worst hit?
Rising US interest rates, trade war tensions and uncertainty in Italy provide a volatile mixA volatile week across global stock markets has escalated into a frenzied sell-off, with European stock markets plunging to their lowest level in 20 months on Thursday. In the UK the FTSE 100 fell to a six-month low after Wall Street suffered its biggest drop in eight months, with the Dow Jones losing more than 800 points.Related: World stock markets dive as Trump attacks 'crazy' US rate hikes Continue reading...
World stock markets dive as Trump attacks 'crazy' US rate hikes
Europe suffers heavy losses and sell-off drags FTSE 100 into a correctionA jittery, volatile week on global financial markets has burst into a frenzy of selling, triggered by heavy losses on Wall Street and comments by Donald Trump describing US interest rate rises as “crazy”.Europe suffered heavy losses in morning trading on Thursday. The Stoxx 600 index, which tracks the biggest shares in the region, tumbled by 1.6% to its lowest level since the start of February 2017. The MSCI world stock index hit an eight-month low.Related: Why are markets plunging and which stocks are worst hit?The Australian market has been caught up in the global sell-off amid worries that rising US long-term interest rates will impact economic growth. Keep across the day's news at https://t.co/HBM7UKKl3C #ausbiz pic.twitter.com/rJMmt3qz1V Continue reading...
Climate change will make the next global crash the worst | Larry Elliott
The storm clouds are gathering, but the world’s economies now have far fewer shelters from disaster than they did in 1929Late last month Indonesia was hit by a devastating earthquake and tsunami that left thousands of people dead and missing. This week the International Monetary Fund arrived in the country to hold its annual meeting on the island of Bali. On the day when the IMF issued a warning about trouble ahead for the global economy, the latest report from the UN’s intergovernmental panel on climate change said the world had only a dozen years left to take the steps necessary to prevent a global warming catastrophe. The message is clear for those willing to hear it: get ready for a time when economic failure combines with ecological breakdown to create the perfect storm.Even without the added complication of climate change, the challenge facing the finance ministers and central bank governors gathered in Bali would be significant enough. The IMF has cut its forecast for global growth, but the chances are that next year will be a lot worse than is currently forecast. The risks, the IMF says, are skewed to the downside. You bet they are.Related: World economy at risk of another financial crash, says IMF Continue reading...
Brexit: Tony Blair warns of long-term damage to UK services sector
Former PM’s thinktank predicts impact could be twice that felt by export industries, with Chequers little better than no dealBrexit will inflict long-lasting pain on Britain’s service sector, Tony Blair has warned as a report said Theresa May’s plans will be only marginally better than no-deal on the dominant industry.An analysis carried out for the former prime minister’s Institute for Global Change said that crashing out and trading on World Trade Organisation (WTO) terms would see productivity 4.91% lower in 12 years’ time than if Britain remained in the customs union and single market.Related: May faces Brexit battle as DUP threatens to sabotage government Continue reading...
UK growth flatlines in August but quarterly picture is brighter
Divisions over whether month points to underlying weakness in economy, or was just a blipThe UK economy ground to a halt in August, according to official figures that suggest a slowdown in growth after the World Cup.The Office for National Statistics said the rate of GDP growth in August dropped to 0% from 0.4% in July, missing City economists’ forecasts of 0.1%. Continue reading...
Brexit deal 'a week away' but May must agree on customs union, says Barnier
Deal could be done by next Wednesday but PM must abandon red line, says EU negotiatorMichel Barnier has claimed a Brexit deal could be within reach by next Wednesday but warned the prime minister that only by abandoning a key red line and agreeing to a customs union can impediments on trade between Northern Ireland and the rest of the UK be avoided.The British government would have to give up on its plans for free-trade deals with China and the US under such an agreement, the EU’s chief negotiator insisted, but otherwise a customs and regulatory border within the territory of the UK will have to be erected.Related: Brexit: Barnier says May’s Chequers plan would give UK 'huge competitive edge' over EU – Politics liveRelated: DUP threatens to vote against budget if May crosses Brexit red lines Continue reading...
Acropolis to close in one-day strike over privatisation fears
Union says foreign investment funds are exploiting ancient sites in GreeceStriking trade unionists in Greece are forcing the shutdown of the country’s prime ancient sites, including the Acropolis, in a one-day protest over privatisation fears.The 24-hour walkout on Thursday is expected to close the majority of Greece’s 275 archaeological sites, monuments and museums, which generate about €100m (£87m) in revenue, mostly from ticket sales, every year.Related: Austerity is the wrong prescription for the world's wellbeing | Larry Elliott Continue reading...
IMF warns global economic stability at risk from no-deal Brexit
Annual report says continuing uncertainty could adversely affect market confidenceA no-deal Brexit would send shockwaves through the global financial system and is one of the main risks to economic stability, the International Monetary Fund has said.Echoing concerns from the Bank of England, the Washington-based organisation said the potential for millions of financial contracts between City banks and their counterparts across rest of Europe to collapse in the event of the UK leaving the EU without a deal was a major worry.Related: Bank of England warns EU over Brexit risk to financial stability Continue reading...
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