Economics | The Guardian

Nearly fifth of population struggled with basic needs, it emerges, as charities accuse government of failing poorest

We'd like to hear from people who decided not to take up a job offer because they could not find affordable housing close enough to the workplaceWe're interested to hear from people who have recently opted to turn down a job offer they were interested in because they found housing in the area of the workplace too expensive.Whether you turned down a job because of unaffordable sale or rental prices for property within a reasonable distance to the workplace in question, and whether you chose to pass on the job offer or had no other choice, we'd like to hear from you. Continue reading...

UK central bank faces criticism for keeping Bank Rate at 5.25% after a shock rate cut in Switzerland and a hike in Turkey today

Rates remain at 5.25%, but inflation heading towards 2% all-but guarantees a welcome cut - and relief for Rishi Sunak

Bank's survey finds expectation of 4.5% base rate by end of 2024 amid encouraging signs' on inflationBank of England policymakers signalled at least three interest rates cuts this year after seeing encouraging signs" of falling inflation as they kept interest rates on hold at 5.25% for a fifth time.The financial markets expect three cuts of 0.25 percentage points this year, forecasting the first to take place in June. The Bank said its survey of financial companies found that they expected rates to fall to 4.5% before the end of 2024. Continue reading...

Hawkish rise 10 days before local elections is seen as a signal of independence from politicsTurkey's central bank unexpectedly raised interest rates to 50% on Thursday, citing a deteriorating inflation outlook and pledging to tighten further if it looks like inflation is significantly and persistently worsening.The hawkish move came 10 days before local elections and was seen by analysts as a signal that the central bank was independent from any political constraints and determined to tackle price rises. Continue reading...

Higher than expected figure of 8.4bn in February could derail OBR forecast for 114.1bn deficit for 2023-24

Jeremy Hunt has implied the election will be in October, but even with a boost from falling inflation figures, can Rishi Sunak really hold this zombie government together for the next seven months? And what does Rachel Reeves's Mais lecture tell us about Labour's economic vision in these grim times? John Harris is joined by former No 10 director of communications Sir Craig Oliver and Guardian columnist Gaby Hinsliff Continue reading...

Rates to stay at 25-year high of 5.25% to 5.5% as central bank says inflation has eased over the past year but remains elevated'The Federal Reserve announced on Wednesday that it would leave US interest rates at a 25-year high as it continues to assess their impact on cooling inflation and the wider economy.After a two-day meeting, the Fed announced rates would be unchanged at 5.25% to 5.5%, where they have been since July. But the Fed signaled it still expects to cut rates three times this year. Continue reading...

Promising to reform the planning system, boost investment and improve skills is all very well, but the detail is missingThe pursuit of growth is an obsession for politicians the world over. Olaf Scholz thinks more growth would make him a more popular German chancellor. Xi Jinping sets growth targets in China and they are invariably met. Here in Britain, Rachel Reeves mentioned the word 58 times when she delivered the prestigious Mais lecture this week.The almost fetishistic worship of gross domestic product as a measure of how well a country is doing is curious, because even the statisticians responsible for producing economic data accept it is an incomplete performance measure. GDP rises as a result of cleaning up after oil spills, but takes no account of the benefits of unpaid work. As a yardstick, it is clearly flawed. Continue reading...

UK inflation falls to lowest rate since September 2021, helped by slowdown in rising food prices

From milk to pasta and bicycles to vet bills, how the cost of everyday things varies

Decline in consumer prices index reading to more than two-year low adds to speculation of summer interest rate cut

Prices are still going up but the tide has turned, raising expectations the Bank of England may cut rates in response

Chancellor says date would allow a spending review to be carried out in time for next AprilSir Jacob Rees-Mogg, the Tory MP and former business secretary, has described as barmy" a ruling from Ofcom saying that GB News broke impartiality rules because it allowed him to present news during his show on the channel.Ofcom said GB News had broken these rules on five occasions - two relating to programmes presented by Rees-Mogg, and three relating to programmes presented by Esther McVey, the Cabinet Office minister, and her husband, the Tory MP Philip Davies.This strikes me as completely barmy that reporting, in a programme that lasts for an hour, an event that has happened, where somebody has been stabbed, where does due impartiality come into somebody's being stabbed?I just think this is a really eccentric judgment on that particular issue. It's just a strange thing to say that there's a question of impartiality on a stabbing. Stabbing people is wrong.We recognise the factual nature of the content delivered by Jacob ReesMogg, which did not include any partial comment on, or discussion of, the wider issues involved.However, as set out above, there are additional protections afforded to news because of its fundamental importance in a democratic society.Yes I saw that and I didn't think that that was appropriate.Well, I think in describing objects, in museums and galleries, I think the creator has an important role to look at history to make sure that their objects are understood. But these are matters for those individual institutions.Punch and Judy is seen as traditionally British, but it evolved from the 16th-century Italian street performance commedia dell'arte.Although aimed at a family audience, the original narrative in its Victoria heyday featured domestic violence, hangings and racist caricatures - a jarring and inacceptable combination for modern audiences. Continue reading...

HMRC's self-assessment phone line will be closed between April and September each year and open only to taxpayers with priority queries" between October and March.

The Dalys in Norwich say budget made little difference and they are sticking to cost-saving measuresI think we've got used to it," says Jess Daly with some resignation of the experience of juggling family finances in a cost of living crisis that is now into its third year.The latest UK inflation data for February is due out on Wednesday, with analysts expecting the headline rate to fall to 3.5%. In January the figure remained unchanged at 4%, as rising gas and electricity bills were offset by the first fall in food prices in more than two years and winter sale bargains. Continue reading...

Shadow chancellor to outline plans to shake up department after Labour election victoryThe Treasury under a Labour government would hardwire" raising Britain's growth rate into its budget tax and spending decisions as part of plans to shake up Whitehall's most powerful department, Rachel Reeves is to announce.The shadow chancellor will use a lecture in London on Tuesday to say that a decade of national renewal must start with day one" reform after a Labour election victory to make growth more pivotal to the Treasury's work. Continue reading...

China's Longi looks to slash costs as renewable energy sector faces tough headwinds from inflationThe world's largest solar manufacturer has slashed nearly a third of its workforce after a cost-cutting drive that included telling staff to only print in black and white fell short and as a chill ripples through the renewable energy sector.China's Longi is to cut as much as 30% of its workforce, in an acceleration of cost reductions that began late last year, Bloomberg reported. Continue reading...

Surge in requests for help reported as nearly 30% of 18- to 24-year-olds miss three or more credit or bill paymentsA record 6.7 million people in Britain are in financial difficulty, a campaign group has claimed, as the cost of living crisis pushes more households into debt.A survey for Debt Justice found that 13% of adults had missed three or more credit or bill payments in the last six months, a figure that rose to 29% among 18- to 24-year-olds and a quarter of 25- to 34-year-olds. Continue reading...

High rates only prolong economic stagnation and the farce of big bank profits while Britons can't feed themselvesAs 2021 ended, an article in the Guardian by the economist Isabella Weber went viral. Its online spread was lubricated by heresy. Dr Weber doubted interest rate hikes would bring down inflation. Instead, she argued that post-pandemic prices were rising because corporations were exploiting bottlenecks in supply chains to charge more and scoop windfall profits. Hence, attempts to lower inflation with higher rates, which decrease real wages and reduce employment, would not work.The problem was the pricing power of capital not workers. Dr Weber suggested using price controls, which had been successful in keeping inflation in check after the second world war. She was prescient. When Russia's invasion of Ukraine sent energy prices spiralling in 2022, governments around the world either adopted Dr Weber's advice or sought her help. Critics ate their words. Continue reading...

Big obstacles to rising living standards remain, from populism to protectionism, military conflict to the climate crisis, and China to Wall StreetCentral bankers are feeling smug. The fears of 12 to 18 months ago that the global economy was likely to crash as a result of rising interest rates have proved unfounded. Inflation has subsided without the expected sharp increase in unemployment.Although it hasn't been reflected in Joe Biden's opinion poll ratings, the US's performance has been especially impressive, with growth remaining strong and not even the hint of recession. Other parts of the developed world - such as the UK and the eurozone have performed less well but have demonstrated a degree of resilience not predicted when inflation hit its highest level in 40 years back in 2022. Continue reading...

US small businesses employ almost half of private sector workers, but that number is decreasing due to various reasonsSmall businesses are hiring fewer people. It's a worrying trend given that in the US small businesses employ nearly half (46.4%) of private sector employees.The numbers speak for themselves. According to data from software maker Intuit, employment at US small businesses with one to nine employees decreased by 23,400 in February compared with January, with all of the 12 industrial sectors and regions tracked also reporting declines. The payroll provider Paychex says that once fast-growing sectors such as leisure and hospitality have also seen wage declines, with job growth in the western part of the country falling into negative territory for the first time since 2021. Continue reading...

A deeper recession was avoided only thanks to record immigration, and the MPC is bound to be cautious about cutting interest ratesIt may be too little, and too late, to rescue Rishi Sunak from a thumping election defeat, but there are signs the UK economy is on the turn. After two years of drift, some green shoots of recovery are finally appearing.Last week's growth figures suggest the economy is emerging from a short and shallow recession in the second half of last year. Surveys of consumer and business sentiment have been more upbeat since the beginning of the year. More houses are changing hands and property prices have started to rise. Continue reading...

Britain can't afford the tax cuts announced in the budgetAs the dust settles on the budget, it's time to reflect on the real task facing anyone trying to govern Britain.The tax cuts announced are paid for with big spending cuts to come: unprotected departments (like councils and prisons) face 13% (19bn) cuts by 2028-29. Most people think delivering them is impossible, because they've seen the state of public services. But let's focus on why they would also be terrible for our democracy and politics. Continue reading...

Well-intentioned moves are afoot to overhaul the machinery of government'. But it's the policies that are the problemIt was Dr Johnson, not Boris Johnson, who declared patriotism is a last refuge of the scoundrel". Some years have passed since Johnson, Shirley Williams and I were guests of an institute outside Moscow. We were there to explain what we hoped were the wonders of western democracy - the freedom, the politics and the economic policies - to Russian politicians and academics who were glorying in having shaken off the constraints of the Soviet Union.Alas, the glory days were not to last. Along came the so-called oligarchs, and then Putin. The ancient Greek word oligarkhia meant rule by the few". But in the post-Soviet world it came to denote a group of people who stripped the nation of its prime economic assets and became very rich - more plutocrats than oligarchs. We all know the consequences: the collapse of the Soviet Union evolved into rule by dictatorship, with the plutocrats fleeing abroad from Putin. Continue reading...

How should economists address the climate crisis? By focusing not on growth but on the redistribution of wealthWhatever the policy differences between the government and the opposition, both are committed to economic growth (It's not the economy, stupid: wellbeing is the real vote-winner"). What neither has addressed is how this is consistent with the need for policies that adequately address the climate crisis. Claims that green growth or technological innovation will resolve the problem have been shown to be spurious, or will take too long to stop us exceeding sustainable temperature levels.My generation in the global north has had all the pluses life can offer - free education, full employment, affordable housing, good health, good pensions and no wars. My concern is that we will be considered to have been not just the luckiest but also the most short-sighted and selfish generation in history. Ifgrowth is not the answer, we have to consider how we define the role of economics in creating a sustainable future and this has to include a central role for the redistribution of wealth. As Richard Layard shows in his article, a more equal society is also a happier one.

Shadow chancellor will tell high-profile financial audience that mission-led' governments must take a lead in turbulent timesThe shadow chancellor, Rachel Reeves, will pledge to embark on a decade of renewal" if Labour is returned to power at the next election.Speaking at the annual Mais lecture in London on Tuesday, Reeves will tell an audience of bankers and financial executives that she will create a more secure and stable backdrop for private sector businesses to plan and invest in the UK. Continue reading...

The greater the wait until the election, the more reassurance Labour must provide. And that weakens its future mandateWe're at the fag-end of this government, but it's going to burn for a while longer yet. Those who hoped it might finally be stubbed out of its misery on 2 May were set straight by Rishi Sunak on Thursday, when he killed off speculation that he might add to the clutch of local elections scheduled for that day by calling a general one. The long wait for this government to be flattened under the voters' collective shoe goes on.We've lived through fag-end administrations before, but this one is more toxic. Back in the dog days of the John Major era, it was bonking backbenchers and brown-envelope cash for questions that pointed to the political terminus. This time, the rot is graver.Jonathan Freedland is a Guardian columnistDo you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...

Kristalina Georgieva invokes John Maynard Keynes as she says fostering fairer economy would raise living standards ninefoldThe head of the International Monetary Fund has warned that the only way to boost global economic growth over the next century is by tackling soaring inequality to achieve a ninefold increase in living standards.Kristalina Georgieva said world leaders had a responsibility to future generations to build an economy that dealt with global heating, deployed AI technology responsibly and slashed elevated levels of inequality. Continue reading...

Talks offer huge opportunities' but come at a delicate time after Ankara held up Sweden's accession to NatoThe UK and Turkey have started talks about a post-Brexit free trade agreement targeting the service sector of the economy.The UK government said there were huge opportunities" for British businesses in exporting to Turkey, as one of the fastest-growing economies in the Organisation for Economic Co-operation and Development group of nations, with trade between the two countries worth 26bn in 2022. Continue reading...

There are fears in the City of an exodus of bosses to the US, where they reckon they'll be paid the big bucks they surely deserveEvery now and then, somebody lets the fat cat out of the bag. In January, it was the turn of Chris O'Shea, the chief executive of Centrica (the owners of British Gas), to say the unsayable about executive pay. His 4.5m pay package was impossible to justify", he said, so there's no point in trying to do that". In 2016, there was a Please, sir, I want some less" moment, when the then CEO of the Co-Op Group, Richard Pennycook, sought a 60% cut in his pay package as, he argued, his job had got simpler after a restructuring.But such episodes are unusual, and are often drowned out by the collective tutting and teeth-sucking of the top executive class. These admissions cause embarrassment and are not the story the business elite want to tell.Stefan Stern is co-author of Myths of Management and the former director of the High Pay Centre Continue reading...

Pharmacies, banks and pubs retreat from town and city centres knocked by failure of Wilko last yearAlmost 5,000 more chain stores were left empty last year - a rate of about 14 closures a day - as high streets were hurt by the failure of Wilko and the retreat of banks and pubs.Pharmacies were the biggest loser with 787 chain outlets disappearing - although many of these were Lloyds outlets which were taken over by independents. Continue reading...

Fighting deflation, a sinking property market and weak internal demand, Beijing has set itself a challenging goal in 2024Chinese leaders who have been predicting an end to the country's deflation would have been heartened by official statistics this week showing consumer prices had increased for the first time in six months.The news came as the ruling Communist party used its annual gathering in Beijing to declare the economy would clock up growth of around 5%" in 2024. However in his speech, Premier Li Qiang warned dutiful delegates they should not lose sight of worst-case scenarios and should be well prepared for all risks and challenges". Continue reading...

Chancellor's unfunded proposal would be work of many parliaments' and depended on growth of economyJeremy Hunt has admitted his unfunded proposal to scrap employee national insurance could take more than a decade, after conceding it would require a sharp increase in economic growth to avoid making cuts to public services.With the government under growing pressure to explain how the plan could be afforded, the chancellor told MPs on the Commons Treasury committee: It won't happen in one parliament, but it's a long-term ambition." Continue reading...

Human development report finds the pandemic, conflict, globalisation and populism have combined to disproportionately affect lower-income countriesThe gulf between rich and poor countries continues to grow, according to the UN, furthering the reversal of a 20-year trend where the gap steadily shrank until 2020.The latest human development report found that although each of the 38 OECD (Organisation for Economic Co-operation and Development) countries has recovered from the Covid pandemic, only half of the least-developed countries have done so. Continue reading...

CMA says government may need to step in to protect consumers from rising ground rents; watchdog intervenes to free over 500 households from problematic' ground rent clausesAlso today: UK ministers will publish legislation to quash the convictions of hundreds of post office operators who were prosecuted during the Horizon scandal, marking a significant victory for victims after decades of campaigning.The legislation on Wednesday will automatically overturn convictions of theft, fraud and false accounting that were handed down in connection with Post Office business during that period. It will cover prosecutions brought by the Post Office and the Crown Prosecution Service in England and Wales between 1996 and 2018.Although by far not good enough, 2023 ended better than what I had expected at the beginning of the year. Despite losing a lot of Yeezy revenue and a very conservative sell-in strategy, we managed to have flat revenues.We expected to have a substantial negative operating result, but achieved an operating profit of 268m. With a very disciplined go-to-market and buying process, we reduced our inventories by almost 1.5bn. With the exception of the US, we now have healthy inventories everywhere.Our ambition is to return to strong growth and continue our margin expansion, as reflected in our new mid-term guidance Continue reading...

Jim Chalmers says slide in iron ore prices and uptick in jobless rate mean budget will report a much smaller revenue upgrade than in recent years

Figures may seem positive at first glance but the broader picture for UK plc is still one of relative stagnation

Monthly increase of 0.2% after surge in high street and online spending offers relief for government

We're keen to hear from employers in Britain which job openings they have been having trouble to recruit for, and whyEmployers in the UK have cut back on hiring new staff, pushing the number of advertised vacancies down on the quarter by 43,000 to 908,000, while the unemployment rate rose unexpectedly to 3.9% in January from 3.8% in December, according to the Office for National Statistics.We're interested to hear from UK employers whether there have been vacancies in their companies they have been struggling to hire qualified staff for, and why they think that has been the case. Continue reading...

Independent owners are declining fast in a sector now dominated by big companies and private equity

Consumer price index rose at annual pace of 3.2% in February, up slightly from 3.1% the previous monthInflation ticked higher across the US last month as Joe Biden puts the economy at the heart of his re-election bid.The consumer price index rose at an annual pace of 3.2% in February, up slightly from 3.1% the previous month. Continue reading...

Exclusive: most renters surveyed by Harris Poll say the areas they live in have become so unaffordable they are barely livable'The American dream of owning your own home is dead, according to the majority of renters surveyed in a new poll shared exclusively with the Guardian, and the areas they live in have become so unaffordable they are barely livable".The poll, conducted by the Harris Poll Thought Leadership and Future Practice, asked survey takers to identify themselves as renters or homeowners, along with other demographic information. Those polled were asked their opinion on home ownership in the United States. For many, especially renters, the outlook is bleak. Continue reading...

Most employers are holding on to staff, but more people are either not looking or not available for work

Employers cut back on hiring new staff in three months to January as slowdown bites

Exclusive: Incoming UN summit president calls on governments to stay on track, as majority of global population go to the polls

Countries are placing a higher priority on resilience and security in the wake of the pandemic and as tensions growIn 2012, shortly before becoming China's top leader, Xi Jinping visited the Port of Los Angeles to discuss boosting trade. What then looked like a locus of cooperation has now become another site for suspicion as Sino-American relations remain tense. Last month, the Biden administration announced $20bn of funding for port infrastructure, much of it to replace cargo cranes that have almost all been made by a state-owned Chinese firm. The US is concerned because the sophisticated pieces of equipment manage information about containers and their contents, their origins and their destinations - and can be remotely programmed and controlled. It wants to restart domestic production of the cranes, which have not been made in the US for decades.The move comes amid a much broader economic rethinking: what the EU foreign affairs chief, Josep Borrell, last year described as a paradigm shift from the primacy of open markets to the primacy of security; from just in time' to just in case'". The pandemic was a wake-up call, forcing nations to scrutinise their supply chains, and ask whether they had sacrificed resilience for efficiency. The climate crisis is already affecting logistics: low rainfall in Panama has forced the authorities to limit vessels using the canal. Cyber-attacks by criminal actors are another concern.The Japanese port of Nagoya was put out of action by a ransomware attack last summer. But current conflicts and geopolitical dividesaredrivingthe changes. Continue reading...

Fears grow party is poised for another U-turn akin to ditching of 28bn green pledge as business groups call for pragmatismIn his pre-election budget last Wednesday, Jeremy Hunt rehearsed a new attack line against Labour, alongside familiar arguments on tax and spend: Keir Starmer's party would, the chancellor said, destroy jobs".Remarks fed to newspapers in advance of Hunt's moment in the spotlight talked of the 70 new burdens on employers" that Labour would impose. Continue reading...

Live, rolling coverage of business, economics and financial markets as exchange-traded funds help bitcoin rally above $71,800The biggest European stock markets are all in negative territory (with the smaller exception of Switzerland).The FTSE 100 in London is down by 0.4%, with mining companies the biggest losers.The FCA continues to remind people that cryptoassets are high risk and largely unregulated. Those who invest should be prepared to lose all their money. Continue reading...