Chancellor is urged to get a grip' on country's finances as yield on 30-year bond rises to 5.62%The cost of UK government borrowing has jumped to near a 27-year high, piling pressure on Rachel Reeves to reveal how she will tackle the deficit in the public finances before the autumn budget.The yield, or interest rate, on the UK's 30-year bond rose by eight basis points (0.08 of a percentage point) on Tuesday to 5.62%. Continue reading...
Cook's attorney said the president has no authority' and lacks any factual or legal basis' to fire the Fed governorThe Federal Reserve governor Lisa Cook will sue the Trump administration over its bid to fire her over unconfirmed allegations of mortgage fraud, her attorney has said.Donald Trump announced he was firing Cook on Monday night, in an extraordinary move that marks the latest escalation in the US president's attack on the central bank's independence. Continue reading...
Report finds regenerative approach could yield economic benefits while helping to meet environmental targetsThe degradation of nature in the UK will lop nearly 5% off the country's GDP if the private sector does not make a greater effort to halt the decline, experts have warned.Conversely, investing in nature can produce economic returns for companies in a range of sectors, from manufacturing and construction to food, according to a report from the Green Finance Institute (GFI) and WWF. Continue reading...
Food inflation at 4.2% this month, with prices increasing at fastest pace for 18 months, says British Retail ConsortiumA significant" jump in the cost of grocery staples such as eggs and butter is stoking food inflation, according to data pointing to a renewed cost of living squeeze.The British Retail Consortium (BRC) said prices had risen at their fastest pace for 18 months, with food inflation hitting 4.2% this month. This was up from 4% in July and the highest reading since February 2024, according to its monthly shop price monitor. Continue reading...
Once the country's biggest real estate firm, Evergrande was worth more than $50bn at its peak and helped propel China's rapid economic growthEvergrande, formerly one of China's biggest property developers, has been delisted from the Hong Kong stock exchange, capping the end of a long fall from grace.The company was removed from the exchange on Monday after an 18-month freeze on trading, imposed when the developer - once valued at more than HK$400bn (US$50bn) - was put into liquidation. Continue reading...
The singer CMAT dances around a retail centre in a video for her new album. It is the elegy those of us who grew up in the post-Celtic tiger recession have been cravingYou wouldn't know it to look at the tourist board ads, but the emblem of modern Ireland is probably a shopping centre. And now that emblem has found its bard, in the form of Ciara Mary-Alice Thompson, the Irish pop star and songwriter better known as CMAT. She is a woman wielding a creative energy that is completely her own, but which is also profoundly shaped by her experiences coming of age in a post-Celtic tiger, recession-era Ireland. This has never been clearer than on her new single, Euro-Country, from the forthcoming album of the same name - a project that reminds us that pop culture has the power to illuminate political and social realities that are otherwise being ignored. It is the elegy that we, Ireland's post-recession generation, needed - and it references at least two shopping centres.The Euro-Country album artwork is a send-up of Jean-Leon Gerome's painting Truth Coming Out of Her Well, with CMAT emerging from the fountain in Blanchardstown shopping centre, beside a giant euro coin. In an interview with the Guardian before her spectacular Glastonbury performance in June, Thompson observed that while Ireland is a little more fetishised and trendy than it's ever been", it's also a really hard place to live, a really hard place to grow up, unless you have money, which we didn't. So yeah, magical, beautiful, mystical Ireland: it's a shopping centre - that's what I grew up with." Continue reading...
Bank of England governor tells Jackson Hole summit that ageing population is adding to the squeezeBritain faces an acute challenge" from its weak underlying economic growth and a drop in the number of workers since the pandemic, according to the Bank of England governor, Andrew Bailey.A rise in the number of people defined as long-term sick and a big drop in young people in work - factors that he suggested might be intertwined - added to the squeeze created by an ageing population. Continue reading...
The chancellor seems to be waiting for a clearer economic picture to emerge but that is not how government worksThe cruel summer of speculation is here. Barely a day passes without the chancellor, Rachel Reeves, waking to another newspaper headline about possible tax-raising options for her autumn budget.After the bonanza of June's spending review, Reeves had been warned that uncertainty about the public finances would set tongues wagging. Britain's economy has far from shot the lights out since, the global backdrop remains fairly bleak, borrowing costs are high, and inflationary pressures are building. Continue reading...
National Retail Federation estimates families are budgeting an average of nearly $875 for the year for shoppingSummer is drawing to a close and as parents and children get ready for a new school year, their first lesson will be in economics.Most of Donald Trump's tariffs went into effect at the beginning of August. We are still waiting on a deal with China. But with school supplies so dependent on imports, consumers have been anxiously waiting to see how tariffs will affect the prices they see in stores. Continue reading...
President has pressured Jay Powell to slash rates but central bank is trying to find right balance amid tariff tailspinStocks soared on Friday following the strongest signal yet that US the Federal Reserve is gearing up to start cutting interest rates again this fall. But how long can this celebration last?While Wall Street cheered the biggest headline from the speech by the Fed chair, Jerome Powell, at the annual Jackson Hole symposium in Wyoming, Powell also delivered a reality check on where interest rates could settle in the longer term. Continue reading...
by Joanna Partridge (now) Kalyeena Makortoff (earlier on (#6ZGJH)
Chair of the Federal Reserve says US economy is facing challenging situation' as inflation risks persist and job market coolsUnions are raising concerns about the threat of TikTok layoffs, warning it would put millions of British TikTok users at risk.John Chadfield of the Communication Workers Union (CWU) said:TikTok workers have long been sounding the alarm over the real-world costs of cutting human moderation teams in favour of hastily developed, immature AI alternatives.This has been a constant concern throughout the process of TikTok workers' effort to form a union. Continue reading...
by Lauren Aratani and Callum Jones in New York on (#6ZG27)
Powell - whom Trump has urged to resign - addressed challenging' dichotomy of economic risks, including tariffsThe Federal Reserve is gearing up to resume cuts to interest rates, its chair, Jerome Powell, has signaled, as he warned that Donald Trump's tariffs and immigration crackdown had roiled the global economy and hit the US workforce.For months, Powell has ignored demands from the president to cut interest rates and defied Trump's calls to resign. But as the president ramps up his extraordinary attack on the Fed's independence, Powell suggested on Friday that central bank officials are considering a rate cut. Continue reading...
Troubles at UK statistics body are muddying economic picture for Treasury and spending watchdog, sources warnDeep problems at the UK's statistics agency with the quality of its data are piling pressure on officials in the run-up to the autumn budget, sources have told the Guardian.Staff at the Treasury and its independent spending watchdog are struggling to get a clear picture of the economy because of troubles at the Office for National Statistics (ONS) with producing reliable numbers. Continue reading...
Federal Reserve governor Lisa Cook is latest figure targeted by Trump administration over claims of mortgage fraudThe Trump administration is ratcheting up pressure on the Federal Reserve to remove governor Lisa Cook, after the economist declared she had no intention of being bullied" into stepping down.Cook, who was appointed to the US central bank's powerful board of governors by Joe Biden, has been accused by Donald Trump's officials of committing mortgage fraud. The allegations are unconfirmed. Continue reading...
Government borrowing falls to 1.1bn in July as tax receipts rise, but chancellor remains under pressureThings are also looking up in the eurozone, where new orders increased for the first time in 15 months in August, helping lift business activity.Companies also increased their staffing levels for the sixth month running. Meanwhile, inflationary pressures strengthened, with both input costs and output prices rising at sharper rates in August.Things are getting better. Economic activity has picked up in both manufacturing and services. Overall, we've seen a slight acceleration in growth over the past three months. Despite headwinds like US tariffs and general uncertainty, businesses across the eurozone seem to be coping reasonably well. The EU Single Market is likely playing a helpful role here, especially since most export and tourism revenues are generated within the EU.The European Central Bank might wince a little at the rising cost pressures in the services sector. After all, it's banking on slower wage growth to help bring inflation down in this crucial part of the economy. That said, there's a bit of relief in the fact that inflation in service-sector selling prices has remained more or less steady.Foreign orders in the eurozone manufacturing sector have declined for the second month in a row. Germany had been holding up well, possibly due to pre-emptive purchases from the US, but now it's also seeing a drop in orders. France has climbed out of the deep hole of falling foreign demand over the last months, but incoming orders are still on the decline. Continue reading...
At 100 firms in S&P 500 with lowest median pay, executives' comp increased by average of nearly 35% over five yearsSome of the US's lowest-paying large firms increased their CEOs' compensation by an average of almost 35% over five years, according to new research. Their workers' salaries did not keep up.As executive remuneration ballooned, the average CEO-to-worker pay gap across the 100 companies in the S&P 500 with lowest median worker pay - dubbed the Low-Wage 100 by the Institute for Policy Studies - widened by 12.9% between 2019 and 2024, from 560 to 1 to 632 to 1. Continue reading...
by Richard Partington Senior economics correspondent on (#6ZFCB)
The government is adding an extra year, and an extra 45m, to its scheme in England to help people find workGetting started in the world of work was not easy for Rose Green. Having experienced half a dozen children's homes from the age of 13 while growing up in care in north London, finding a career was the last thing on her mind.Having that corporate parenting, it can be difficult," she says. Sometimes things like completing school, or uni, you're faced with so much trauma that you haven't really got the time to finish all of that. Continue reading...
Lisa Cook, first Black woman to sit on Fed board, responds after allegation by ally of president of mortgage fraudDonald Trump has called on a Federal Reserve governor to immediately resign, renewing his extraordinary attack on the central bank's independence as officials mull next steps on interest rates.A close Trump ally accused Lisa Cook, an appointee of Joe Biden, of potentially committing mortgage fraud" and urged the US Department of Justice to investigate. Continue reading...
Rachel Reeves should shift her focus from global financiers to UK savers, says Colin Hines. Plus letters from Prof Stephen Barber, Dr Michael Symonds, Hugh D Bryant and Keith EvesIf Rachel Reeves is serious about ensuring that Labour's second year in power is all about a stronger economy that rewards working people across the country (In our first year Labour fixed the foundations - now we must build a stronger economy for a renewed Britain, 13 August), she needs to rethink what your editorial called the UK's broken growth model" (6 August). The growth that Britain needs is an increase in economic activity that improves social and environmental infrastructure nationwide. This involves a huge increase in secure, well-paid jobs to rebuild a more resilient future economy.The last thing that is required is Reeves's obsession with more deregulation of the City and pressuring savers into investing in the stock market. What is needed instead is a massive increase in a socially and green-oriented bond market that will provide secure returns for savers. Continue reading...
UK inflation accelerates more than expected to 3.8%, highest since early 2024Some economists now expect interest rates to be on hold this year, while the EY Item Club forecasting group says November is a close call'.Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, said:All told, July's consumer prices report showed headline inflation matching the monetary policy committee's (MPC) forecasts, as outlined in the August monetary policy report (MPR).Services inflation exceeded the MPC's expectations, but that jump in services consumer prices index (CPI) was partly driven by a sharp move in the erratic airfares component, which could unwind in August's data. That said, the doves on the MPC have taken a battering over the past week. July's figures show sticky underlying services inflation and are another blow to those on the MPC that argued hard at the August meeting about the disinflationary process being underway.Base effects mean CPI inflation is likely to edge up further over the next couple of months and peak in September. Subsequently, inflation should cool gradually. The positive contribution from the energy category is expected to fade towards the end of this year and into next. Meanwhile, food price inflation should slowly cool, as the impact of stronger sterling gradually feeds through. Though services inflation is likely to remain sticky in the near-term, it will start to soften next year, as pay growth continues to cool and the impact of businesses passing on this year's increase in employers' National Insurance Contributions (NICs) fades.In the minutes of its August meeting, the MPC sent a clear message that inflation was its priority again. However, there wasn't much in today's release that should add to the committee's concerns, with headline inflation in line with the Bank of England's staff projections and its measure of underlying services inflation softening. November's meeting will be a close call, with the hawkish shift at the August meeting leaving much greater uncertainty around the timing of the MPC's next cut.We have taken the decisions needed to stabilise the public finances, and we're a long way from the double-digit inflation we saw under the previous government, but there's more to do to ease the cost of living.That's why we've raised the minimum wage, extended the 3 bus fare cap, expanded free school meals to over half a million more children, and are rolling out free breakfast clubs for every child in the country. Through our plan for change we're going further and faster to put more money in people's pockets.Once again, the soaring cost of basic essentials like food and water is pushing families to the brink. Workers and their families are struggling to pay excessive bills. Pressure needs to be taken off family budgets by giving workers a pay rise. The time for action is now. Continue reading...
Decision on neighbourhood health centres expected in autumn but approach divides policy expertsLabour is preparing to kick off a new wave of public-private partnerships (PPPs) in England to build the neighbourhood health centres at the heart of its NHS 10-year plan.Ministers will make a final decision in the autumn budget about whether to use the funding approach, which was put on pause eight years ago. Continue reading...
In today's newsletter: The local tax remains based on property values from 1991. Now, with services stretched, ministers face the near-impossible task of rewriting the rulesGood morning. Britain's fiscal outlook is bleak. The chancellor, Rachel Reeves, faces the daunting task of closing a 40bn black hole in the public finances.There is intense speculation over how she intends to, as runs that oft-used phrase, balance the books. This week, my colleagues have reported that the chancellor is considering a new proportional" property tax. It would mark a radical overhaul of stamp duty and council tax.Ukraine | Donald Trump ruled out the deployment of American troops in Ukraine in his first interview after yesterday's White House meeting with the Ukrainian president, Volodymyr Zelenskyy, and European leaders.UK news | Keir Starmer's asylum plans have been plunged into turmoil after a high court ruling blocked people seeking refuge from being housed in an Essex hotel.Gaza | Israel has said it will deliver its response to international mediators by Friday over a new Gaza ceasefire plan accepted by Hamas amid mounting pressure for a truce.UK politics | A Reform UK-led county council has served its residents a plate of chaos" from the start of its leadership, according to its Conservative opposition.Work | Older employees who are disturbed by younger, more boisterous colleagues in the workplace are not victims of age harassment, an employment tribunal has ruled. Continue reading...
Experts say undermining green protections and research funding is against the principles of economicsThree leading US economists are urging their peers around the world to push back against Donald Trump's attack on environmental laws.In what amounts to a call to action to economists, the trio say rollback of environmental regulations is inconsistent or antithetical" to fundamental principles of economics over how to allocate the world's limited resources for the greatest possible value to society.Withdrawal from the Paris climate agreement.Eliminating consideration in federal policy of the well-established effects of climate breakdown on public welfare.Executive orders to drill baby drill" giving priority to fossil fuel energy production.Ending research funding on environment and climate and the collection of environmental data.Reducing investments and regulations designed to tackle lead and forever chemicals in drinking water. Continue reading...
Communities feel powerless because the law gives betting firms the upper hand. But a simple change could transfer power to the people Dawn Butler is MP for Brent EastWalking down their local high streets, people in Britain are increasingly unlikely to come across a local butcher, baker or grocery shop, and more likely to find betting shops, casinos, adult gaming centres (AGC) and so-called bingo venues, where traditional bingo is muscled out by money-sapping slot machines. These establishments are taking over our town centres at an alarming rate. From talking to my constituents in Brent, west London, and residents across the capital, I know that people have had enough.That's why this summer I have launched a campaign for urgent reform of our gambling laws. Ministers must give local authorities and people greater power to tackle this issue and reclaim our high streets. Currently, billionaire-owned overseas corporations have too much power, and local people have none. That needs to change. And it's time to raise the gambling tax. As Gordon Brown, a former Labour chancellor and prime minister, recently pointed out, it is now an under-taxed industry. With a modest increase we could raise 3bn a year.Dawn Butler is MP for Brent East Continue reading...
The UK's plans seem to outsource sovereignty for phantom efficiency. Public services provide the data and power while US tech giants reap the rewardsThere was a time when Britain aspired to be a leader in technology. These days, it seems content to be a willing supplicant - handing over its data, infrastructure and public services to US tech giants in exchange for the promise of a few percentage points of efficiency gains. Worryingly, the artificial intelligence strategy of SirKeir Starmer's government appears long on rhetoric, short on sovereignty and built on techno-utopian assumptions. Last week Peter Kyle, the technology secretary, was promoting the use of AI-generated discharge letters in the NHS. The tech, he said, will process complex conversations between doctors and patients, slashing paperwork and streamlining services. Ministers say that by applying AI across the public sector, the government can save 45bn.But step back and a more familiar pattern emerges. As Cecilia Rikap, a researcher at University College London, told the Politics Theory Other podcast, Britain risks becoming a satellite of the US tech industry - a nation whose public infrastructure serves primarily as a testing ground and data source for American AI models hosted on US-owned cloud computing networks. She warned that the UK should not become a site of extractivism", in which value - whether in the form of knowledge, labour or electricity - is supplied by Britain but monetised in the US.Do 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...
Exclusive: Treasury examines options including tax on homes sold for more than 500,000 as well as overhaul of council taxThe Treasury is considering a new tax on the sale of homes worth more than 500,000 as a step towards a radical overhaul of stamp duty and council tax, the Guardian has been told.As the chancellor, Rachel Reeves, prepares the ground for tax rises in this autumn's budget, senior ministers have tasked officials to study how a new proportional" property tax could be implemented and model its impact before reporting back to ministers, who have been briefed on the proposals. Continue reading...
Companies send letter to business secretary complaining new rules were imposed with 24 hours' noticeUK metals companies have threatened to take legal action against the government over tariffs on raw steel imports from Asia which they claim have caused a tsunami" of problems for the industry.Earlier this summer, the business secretary, Jonathan Reynolds, reduced the amount of raw steel from Vietnam and South Korea that can be imported tariff-free in a move designed to protect UK raw steel makers, which face competition from cheap imports. Continue reading...
Economists doubt US duties will bring about a resurgence of US factory jobs, notably due to Trump's erratic tariff rolloutDonald Trump's hugely disruptive trade war is setting the stage for a manufacturing renaissance in the US, administration officials say. Outside the White House, many economists are skeptical.Global trade experts point to many reasons they believe the president's tariffs will fail to bring about a major resurgence of manufacturing, among them: Trump's erratic, constantly changing policies, his unfocused, across-the-board tariffs, and his replacing Joe Biden's carrot-and-stick approach to brandish sticks at the world. Continue reading...
Manchester is closing the gap on London, with public money having helped to crowd in' a lot of private investmentOver the summer Rachel Reeves has been on a road trip around Britain. From Cornwall and Kent, to Aberdeen, south Wales and Belfast, in search of the solutions for a national economy that is stuck in a rut.Inspired by this tour, the chancellor used a Guardian article last week to set her autumn budget priority: boosting productivity. Tax and spending may dominate news headlines, but this is the real problem facing the country, and no politician of the past two decades has managed to fix it. Continue reading...
Even Republican economists have criticized president's pick of EJ Antoni to lead the Bureau of Labor StatisticsDonald Trump fired Bureau of Labor Statistics (BLS) commissioner Erika McEntarfer, a veteran economist with decades of experience inside the federal government, after claiming without evidence that official jobs data had been rigged" against him.In her place, the US president has lined up an ardent supporter of his agenda accused of regularly misrepresenting and exaggerating statistics, who previously urged Trump's officials to take a chainsaw" to the agency he has been tapped to oversee. Continue reading...
Live, rolling coverage as surprise GDP acceleration in June helps quarterly output beat expectations, while eurozone industrial production slumpsThe second-quarter UK GDP figures count as a major beat", according to Andrew Wishart, senior UK economist at Berenberg, an investment bank. That is economist-speak for data that will prompt a rethink of the narrative around the economy - and he added there may be good news on productivity as well.Wishart wrote in a note to clients:It now looks like the UK economy weathered US tariffs and domestic tax hikes remarkably well in the second quarter.With the economy benefitting from fiscal support and showing little sign of interest rates slowing it down, the strong data support our view that the Bank of England will wait until next year before cutting bank rate again.Improving growth at the same time as the sector cuts staff numbers implies that operators have been able to make significant improvements in productivity. While the hotel and restaurant sector is an extreme example, an economy-wide decline in employment alongside reasonable GDP growth suggests that productivity growth is improving. At the margin, that will give the government's official forecaster, the Office of Budget Responsibility, some confidence that it is right to assume a recovery in productivity growth after a dismal three years. If so, the government will not need to raise taxes by anywhere near as much this autumn as the most pessimistic analysts claim in the press.The optics of a resilient" economy allow for BoE patience as headline inflation bobs around between 3.5% and 4% in the coming months. That said, we think softer underlying details and the likely softening of the growth momentum from here keep a November cut in play.Interest rates are too high for a sustained and broad-based growth uptick. If the government ensures that the autumn budget does not repeat the 2024 slew of inflation-boosting policies, and measured inflation falls through 2026, we think the [Bank's rate-setting monetary policy committee] will acknowledge the need to cut rates amid the ongoing build-up of slack. If that is not the case, we will see more of the same stagflationary dynamics, we think. Continue reading...
Rachel Reeves would do well to drop her boot on the neck' inflammatory language and err on the side of cautionOne reason to worry about the chancellor's plan for deregulation in the financial services sector is the dramatic language in which she pitched it. Rachel Reeves's metaphor in her Mansion House speech last month about regulation in too many areas acting as a boot on the neck of business" felt wildly over the top when you remember why tougher financial rules were needed in the banking sector in the first place. It was because the light-touch regulatory era caused the whole economy to be clobbered in the collapses of 2008-09.In the event, it took until 2019 to implement fully the centrepiece of the clean-up operation: bank ringfencing, which requires UK banks of a certain size to separate their retail and investment banking activities. Now, six years later - no time at all in the grand scheme - the Treasury, lobbied by most of the big banks, is contemplating meaningful" changes to ringfencing in the interests of economic growth. It feels far too soon to try anything radical. Continue reading...
Ministers boast of rising wages. But for low earners, the cost of living crisis endures - with food and rent inflation erasing any pay gainsWhen Sir Keir Starmer told reporters last week that his government's upcoming budget would build on what we've done" by focusing on living standards" and making sure that people feel better off", it was clear that he was trying to shift the political narrative from soulless statistics to lived experience.But if the prime minister is serious, he should look at the latest forecast from the National Institute of Economic and Social Research (NIESR). The thinktank warns that while some households may indeed feel better off", many - particularly the poorest - will not. NIESR says real disposable income for the bottom tenth of households will fall this year. Living standards for the poorest fifth of Britain are well below their pre-pandemic level.Do 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...
US and China extend 90-day tariff truce; UK labour market slows as employers hold off hiringInvestor morale in Germany has worsened markedly, as financial market experts were disappointed by the recent trade deal between the EU and the US, according to a closely watched survey.After increasing for several months, the Centre for European economic research (ZEW)s indicator of economic sentiment in Germany fell by 18 points to 34.7 points. The assessment of the current economic situation also declined, by 9.1 points.The ZEW indicator experiences a substantial decline, also due to the poor performance of the German economy in the second quarter of 2025. The outlook has worsened in particular for the chemical and pharmaceutical industries. The mechanical engineering and metal sectors as well as the automotive industry are also severely affected. Continue reading...
Prices were 2.7% higher last month compared with a year ago, and core inflation went up at a higher pace than what was seen in JuneUS prices continued to rise in July, according to key economic data released on Tuesday, as Donald Trump's international tariffs shakeup started to impact consumer costs.Prices were 2.7% higher last month compared with a year ago, according to the consumer price index (CPI), which measures the prices of a basket of goods and services. Though inflation dipped down in the spring, the annualized inflation rate jumped up 0.4% since April. Continue reading...