Make UK report says post-Brexit structural shift in trade is particularly hurting factories in north-west and West MidlandsFactories in England and Wales are seeing a downward trend in the share of their trade going to the EU, an analysis from the manufacturers' trade body shows.Make UK said that between Britain's divorce from the EU in 2020 and 2022, only Scotland and Northern Ireland increased their share of exports to the EU, leaving the majority of English regions and Wales suffering a decline in the proportion of sales going to the bloc. Continue reading...
A new push to offer free school meals across the globe won't end world hunger but it's a very good startDuring the pandemic the Manchester United footballer Marcus Rashford turned food into a hot political issue in the UK with his campaign for every child in a low-income family to be guaranteed a free school meal.Since then, things have moved on. The problems facing low-income families - not just in Britain but everywhere - have worsened owing to rising global food prices. Consumers in the western economies have seen the cost of their weekly shop rise sharply. Food bank use in Britain has surged as a result of a cost-of-living crisis that has seen grocery bills rise by almost a fifth in the past year. Continue reading...
Xi Jinping's 31-point strategy may not be enough to halt the economy's declineRishi Sunak and Keir Starmer are both putting faith in a five-point plan. Never knowingly undersold, China's government announced last week that it's going for a 31-point strategy.Last week, there were alarmed faces in Beijing at the news that its GDP had improved by just 0.8% in the second quarter of 2023, prompting a sense that China's economy needs a rapid boost. For the past few years, the private sector has been a target for high-profile crackdowns by the Chinese Communist party (CCP), worried that companies such as Tencent and Alibaba were enjoying too high a profile. Now, it says it wants to make the atmosphere for entrepreneurs bigger, better, and stronger". Continue reading...
After years opposing the blight of austerity, Starmer is embracing it as he embraced the failed dream of Vote LeaveIn its 13th year of Conservative economic stewardship, the UK has become, in the words of the Resolution Foundation thinktank, stagnation nation". But we should remember the conclusion of Edward Gibbon in his voluminous history of the decline and fall of the Roman empire: All that is human must retrograde if it does not advance."Yes, if there is one thing on which Rishi Sunak and Keir Starmer are agreed, it is that the British economy needs growth. It must advance. Continue reading...
Planned tube strikes next week called off after talks breakthrough; government borrows 18.5bn in June, third-highest June borrowing on recordAfter a small drop yesterday, average mortgage rates have ticked up again, despite a sharp slowdown in UK inflation to 7.9% and expectations that interest rates probably won't have to rise above 6%, as previously feared.The two-year fixed residential mortgage rose to 6.8% today from 6.79% yesterday, while the five-year fix edged up to 6.32% from 6.31%, according to Moneyfacts.I don't think it can end with this apology... It may not end for chief executive Alison Rose, in particular, and for the banking industry. You can't have what is essentially a kind of a fundamental utility type industry deciding who will say what and who's free to give political opinions and who isn't. It kind of strikes at the core of democracy and I don't think it can end here now.I mean, the big issue really is what Alison Rose knew about this, was this decision to de-bank Farage actually run by her personally, was she briefed about it, or was it taken at a lower level?It depends entirely on on how much she knew, and when. And the regulator, the Financial Conduct Authority, will be quite interested in the briefing that went on before the full story broke.Alison Rose's mantra has always been inclusive. Inclusivity is at the heart of our organisation. Continue reading...
Warning from ex-governor adds to concerns about economy with Bank tipped to raise rate above 5%The Bank of England could plunge the UK into a recession by raising rates too far, the former governor Mervyn King has said.In a broadside a fortnight before Bank officials are due to meet to decide the next step for interest rates, Lord King said the signals from the credit markets in 2021 that indicated inflation was about to rocket were now showing that price growth was about to drop sharply. Continue reading...
Moscow criticised as concern grows about impact of climbing agricultural commodity prices on poorer countriesWheat prices have been climbing on global markets, just days after Russia pulled out of an agreement that guaranteed safe passage for ships carrying cereals through the Black Sea, reigniting fears of the impact on poorer, grain-importing countries, as well as on western nations dealing with stubbornly high inflation.Russia has carried out heavy air strikes on Ukraine's grain stores, as well as port infrastructure in the coastal city of Odesa after the Kremlin's decision to terminate the UN-brokered Black Sea grain initiative between Russia and Ukraine. Continue reading...
Small drops in average rates for two- and five-year fixed mortgages follow easing of inflation rate in JuneBorrowers received a glimmer of good news after average rates on new two- and five-year fixed mortgages fell for the first time since May.News of the small falls came 24 hours after it was announced that UK inflation fell further than expected in June, which immediately prompted speculation that the Bank of England would not raise interest rates by as much as previously expected. The pricing of fixed-rate mortgage deals is closely tied to expectations of future interest rate rises. Continue reading...
CMA says stores not stoking food inflation as it looks into competition on key categories such as milk and baby foodSupermarkets must make prices clearer, the UK's competition watchdog has said after finding that confusing labels were preventing shoppers from getting the best deals.Food retailers and their suppliers will be subject to a detailed investigation into competition in 10 product categories including milk, bread, and baby formula as part of efforts to ensure households benefit from competitive prices as cost inflation falls. Continue reading...
Premier Foods reports 21% rise in sales but pledges no more price rises this yearThe maker of Mr Kipling cakes, Oxo cubes and Bisto gravy granules has said it believes recent food cost inflation has peaked, and it is not planning any more price rises for its food products for the rest of the year.The news came as owner Premier Foods reported a 21% increase in sales in the first quarter of the financial year, compared with a year earlier. Continue reading...
Competition regulator tells business committee of significant change' in retailer's fuel pricingAsda's profit margins on fuel have tripled since before the pandemic, according to the competition regulator at a bad-tempered parliamentary hearing where the supermarket chain's co-owner repeatedly refused to explain its pricing strategy.Mohsin Issa declined to answer multiple questions on whether Asda had increased its profit margins on fuel since its takeover in 2021, prompting MPs on the business select committee to become increasingly furious as the retailer insisted it had not changed its strategy. Continue reading...
Rents jump by record 5.1% in a month as rental market struggles to meet demand from priced-out buyersBritain's housing market is expected to avoid a slump triggered by rising interest rates, despite a drop in house price inflation to zero in May, according to analysts.The Office for National Statistics said a decline in month-on-month growth from 0.5% in April to 0% in May meant the annual rate of house price inflation dropped to 1.9%. Continue reading...
This online tool will help you discover what is contributing to your household's cost of living increasesInflation has been soaring in the UK, with people being hit by higher prices for everyday essentials.The latest inflation rate for the 12 months to June 2023 means that goods and services cost more than 7.9% more than they did a year ago - in most cases, surpassing any pay rises workers can expect to receive. Continue reading...
We routinely ignore the cost of events such as the Commonwealth Games or Formula One because of mythical benefits while fixating on the price tag of good social policy
by Richard Partington Economics correspondent on (#6D1ZV)
IPPR report undermines Rishi Sunak's argument that larger wage settlements would be inflationaryHigher pay increases for public sector workers would not be inflationary, a leading thinktank has said.In a report undermining Rishi Sunak's central argument against larger wage settlements, the Institute for Public Policy Research (IPPR) said raising pay by 10% on average for public sector workers would not add significantly to inflation. Continue reading...
Gulf between rich and poor increases risk of climate breakdown as well as entrenches poverty, says letter to UN and World BankFailure to tackle the widening gulf between the world's rich and poor will entrench poverty and increase the risk of climate breakdown, a group of more than 200 leading economists have said.In a letter to the UN secretary general, Antonio Guterres, and the World Bank president, Ajay Banga, the signatories from 67 countries call on the two bodies to do more to reverse the sharpest increase in global inequality since the second world war. Continue reading...
Data shows the economy grew just 0.8% in the June quarter, down from 2.2% in the first three months of 2023China's economy expanded 6.3% in the second quarter from a year ago, falling short of market expectations as export demand remained tepid and sinking property prices sapped consumer confidence.Compared with a year earlier, China's GDP in the April-June period was 6.3% larger, the national bureau of statistics said on Monday, quickening from the 4.5% annual growth pace for the first three months of 2023. Economists had forecast growth to accelerate to 7.3%, according to a Reuters survey. Continue reading...
Critics note government estimates that suggest membership of CPTPP will add just 1.8bn a year to UK economy after 10 yearsThe business secretary, Kemi Badenoch, has signed off UK membership to a large Indo-Pacific trade bloc that the government argues will bring British businesses a step closer to selling to a market of 500 million people with fewer barriers.Badenoch signed the accession protocol for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in New Zealand on Sunday. Continue reading...
Rishi Sunak used just-go-for-it route in Covid crisis but Treasury and Bank of England now play with straightest of batsThe England cricket team are winning friends and admirers after adopting a style of play known as Bazball. Named after the side's coach, Brendon (Baz) McCullum, it is an aggressive, carefree approach to the game in which risks are taken with bat and ball. It doesn't always come off but, win or lose, it has made the England team a lot more fun to watch.Rishi Sunak is a cricket fan and in his early days as Boris Johnson's chancellor he was a strong advocate of an economic form of Bazball. This was early 2020 and, in truth, the Treasury and the Bank of England had no choice but to throw caution to the wind because a global pandemic was raging. Sunak borrowed more than any other peacetime chancellor so that furloughed workers still received wages. The Bank cut interest rates to a record low of 0.1% and pumped billions of pounds into the economy through its bond-buying programme known as quantitative easing. Continue reading...
This week's CPI figures look set to highlight a trend: that prices in the UK seem to rise faster than they do elsewhereThe UK has a longstanding problem with inflation. Since the 2008 banking crash, bouts of inflation felt across the world have sent prices higher in the UK than its G7 rivals.In July 2009, during the recession that followed the banking crisis, UK inflation was 3.1 points above the G7 average. Two years later, when recovery sent oil prices soaring, it stood about 2% above the G7 average. In March this year, however, it stood a full 3.5 points above the G7 level. Continue reading...
The new round of austerity is guided by older voters' insistence on keeping their subsidies and tax breaks - can't they show some generosity?The Tory-voting baby boomer has some tough choices to make over the next year.Fearful that their accumulated wealth is being threatened by one economic shock after another, they could choose to support the government's return to austerity. Or they might consider sharing their lucky gains from the property market and a private occupational pension system that clearly benefits older generations. Continue reading...
by Richard Partington Economics correspondent on (#6CZFG)
ONS finds one in 20 households have run out of food in the past and could not afford moreBritain's cost of living crisis is forcing more people to dip into savings to make ends meet, according to official figures showing renters are at the greatest risk of financial vulnerability.The Office for National Statistics said three in 10 people it surveyed were using savings because of the rising cost of living, an increase from a quarter of adults reporting this in late April. Continue reading...
Firms in Kent uncertain as government's strategy for checks from this autumn remains unclearEvery day, from early morning to late at night, lorries pull up at an inconspicuous-looking warehouse located just off the M20 near Lympne in Kent.Less than half an hour by road from both the Port of Dover and the Eurotunnel terminal at Folkestone, trucks loaded with fresh produce come to a facility run by the logistics company PML to get consignments of goods arriving from overseas inspected, cleared for customs and sent on their way. Continue reading...
by Richard Partington Economics correspondent on (#6CZCM)
Estimated 25 low-income countries spent more than 20% of their revenues on debt servicing last yearAn additional 165 million people have been pushed into extreme poverty in the world's poorest countries after a succession of economic shocks since the Covid pandemic, according to the United Nations.In a report highlighting the human cost of inaction", the UN Development Programme (UNDP) said low-income countries urgently needed breaks from their debt repayments to cushion the blow from soaring borrowing costs. Continue reading...
Prime minister Anthony Albanese says the accomplished economist' with close to four decades of experience at the Reserve Bank of Australia will replace Philip Lowe as the central bank's ninth governor after his seven-year term ends on 17 September. Treasurer Jim Chalmers hails the history-making appointment' and thanks Lowe for his service, saying: Phil Lowe goes with our respect, he goes with our gratitude and he goes with dignity.' The outgoing governor has overseen 12 interest rate rises in the past 14 months aimed at reining in inflation
First-time buyers face high mortgage rates, while soaring rents and bills hinder saving for deposits - no wonder there's a big slowdownInquiries by would-be buyers of homes hit an eight-month low last month, according to the Royal Institution of Chartered Surveyors, which talked about a renewed deterioration in UK home sales". On the same theme, Barratt Developments' trading update on Thursday related a near-halving in reservations from first-time buyers year on year. And the estate agent Winkworth warned this week on profits because of a slump in activity.In other words, the news from the housing market is exactly as you would expect when buyers are adjusting to the new reality of sharply higher mortgage rates. The big slowdown is on, even if Barratt added that demand among existing homeowners was more resilient. A typical two-year fixed deal has risen to 6.66%, a 15-year high on Moneyfacts data. Continue reading...
by Richard Partington and Phillip Inman on (#6CY8K)
Gloomy report says national debt could exceed 300% of GDP within next 50 years Business live - latest updatesThe UK's public finances are in a very risky period" after a series of major shocks that have driven the nation's borrowing costs to rise at the fastest rate in the G7, the Treasury's tax and spending watchdog has said.The independent Office for Budget Responsibility said national debt could surge to more than 300% of gross domestic product by the 2070s, up from about 100% today, and that the government was not taking measures to make big changes in the short term. Continue reading...
International Energy Agency still expects a record high this year, but for growth to be lower than thoughtGlobal oil demand will reach an all-time high this year, but persistent macroeconomic headwinds" mean it will not grow as quickly as had previously been expected, the International Energy Agency (IEA) has said.The Paris-based global energy watchdog said that demand was expected to rise by 2.2m barrels a day in 2023, leading to an average of 102.1m barrels a day. Continue reading...
Soaring interest rates and end of help-to-buy scheme blamed for driving away first-time buyersBritain's largest housebuilder, Barratt Developments, has suffered a double-digit drop in annual profits after a significant slump in demand, as the surge in interest rates and the end of the help-to-buy scheme drove away first-time buyers.Demand from would-be homeowners fell by 49% in the year to June, which dragged on overall sales and accounted for half of the total decline in its home reservations. Continue reading...
by Presented by John Harris with Gaby Hinsliff and Da on (#6CY20)
UK wages have risen at a faster pace than expected but inflation is still worryingly high. The Conservatives seem to be edging back towards austerity and Labour doesn't want to offer false hope' on the economy. Is the politics of hope dead? The Guardian's John Harris is joined by former Tory minister David Gauke and Guardian columnist Gaby Hinsliff Continue reading...