Rolling coverage of the latest economic and financial newsBusinesses are still in tough" times, despite the drop in insolvencies in June, cautions David Hudson, restructuring advisory partner at FRP.Hudson says:The slight fall in insolvencies this month offers a glimmer of relief - especially for hospitality and retail businesses, which are now reaping the benefits of record hot weather. However, we're still in tough territory. Consumer confidence remains stubbornly low, growth is stuttering - with GDP dipping again in May. June's unexpected jump in inflation will only serve to continue eroding profit margins and consumer demand.This environment is forcing businesses to fight on multiple fronts. Many will likely only be experiencing breathing space after dramatically paring back costs. Until demand shows a more sustained recovery and input costs ease further, there's a risk that this reprieve is just a pause rather than a turning point." Continue reading...
Political economist and author who promoted ideas such as time banks and community sharingIn his 1989 book Building Futures, David Boyle, who has died aged 67 from complications linked to Parkinson's, argued that mainstream economics was failing cities and a new localism could save them. This emphasis on communities rather than large-scale centralised development tied in with the broad theme that David saw as running through his work: The importance of human-scale institutions over centralised ones, human imagination over dull rationalism, and the human spirit over technocratic reduction."Funny Money: In Search of Alternative Cash (1999) explored local economic systems found mainly on a journey through the US. Exchanging services within community systems run by volunteers can be facilitated through time banks". The idea of the time dollar", representing one hour of help, whether grocery shopping or preparing a tax return, was popularised by the Washington law professor Edgar Cahn. Continue reading...
Pre-tax profits fall 24% despite rise in Sports Direct sales, driven by closures of House of Fraser and Game storesA challenging" luxury market and retreat from gaming have prompted a fall in sales and profits at Mike Ashley's Frasers.The group, which is majority owned by the billionaire former Newcastle United owner, said sales fell by 7.4% to 4.7bn and pre-tax profits slid by 24% to 379.5m as it closed some of its House of Fraser department stores and Game video game shops. Continue reading...
The chancellor's emollient speech to City bosses this week was alarming. There are better ways to revive Britain's fortunesRachel Reeves was in full Iron Lady mode when she delivered her Mansion House speech to the City's finest this week. Regulation was acting like a boot on the neck" of business, choking off enterprise and innovation. Cutting red tape would have a ripple effect" on the whole economy. Regulators should not give way to the temptation of excessive caution" but instead boldly regulate for growth. It could have been any Tory chancellor since Nigel Lawson speaking.If Reeves seriously believes this stuff she is heading for a rude awakening. Chancellors don't need a crystal ball to tell them where financial deregulation leads; they can read the many books detailing what happened last time this was tried. The global financial crisis of 2008 came about because policymakers bowed to the pressure from big finance to sweep away burdensome" regulations, pledging that more funds could be channelled into productive investment as a consequence.Larry Elliott is a Guardian columnist Continue reading...
Crew leaves after investor disquiet over company's lacklustre performance; UK food prices rise most since February 2024 but economists still expect August rate cutThe pound has gained since the inflation figures were released, while yields on UK government bonds have also climbed.The pound is up by 0.2% against the dollar at $1.3410. The FTSE 100 index is steady, up by 0.2%.Is an August rate cut in jeopardy? No, we don't think so. There's enough of a slowdown in GDP and the labour market to warrant a gradual and careful' easing of monetary policy. But the onus now rests on the labour market to shape how far and how fast the MPC can cut this year and next.Today's CPI data spells more pressure for consumers thanks to the surge in food prices, but the overall picture doesn't quite spell the end for any further rate cuts. Core goods and services inflation was broadly contained, and the focus shifts now to the job numbers tomorrow to see if there are further signs of weakness that might keep the Bank of England on course to ease policy in upcoming meetings. Continue reading...
De-dollarisation is not a threat to global stability. Countries are simply questioning the rules of a game long rigged in Washington's favourFor more than eight decades, the US dollar has reigned supreme as the world's reserve currency - a position cemented at the Bretton Woods Conference in 1944 and reinforced by America's postwar industrial power and military dominance.Today, that supremacy is facing growing resistance from multiple directions - from African revolutionary movements to economic recalibrations in Europe, and from the counterbalance efforts of Brics nations to the geopolitical entanglements of Ukraine and Israel. Continue reading...
In today's newsletter: Rachel Reeves has announced the biggest financial regulation reforms in a decade' - but are they enough to spark the economy?Good morning. The chancellor, Rachel Reeves, has vowed to cut back regulation in the UK financial sector in a bid to unlock growth.Reeves has announced a raft of changes in what the Treasury describes as the biggest financial regulation reforms in a decade". Her plans include loosening rules on the financial sector, increasing innovation, and allowing lenders to offer mortgages at more than 4.5 times a buyer's income.Defence | Personal information about more than 33,000 Afghans seeking relocation to the UK after the Taliban takeover was released in error by a defence official - and the Ministry of Defence tried for nearly two years to cover up the leak and its consequences at the cost of 2bn, it can be revealed.UK news | Two men who carried out a moronic mission" to fell one of the most loved and photographed trees in the UK have been jailed. Daniel Graham, 39, and Adam Carruthers, 32, were each given prison sentences of four years and three months for an act of criminal damage that caused the Sycamore Gap tree to crash down in 2023.US politics | Republican lawmakers have moved to block a Democratic effort to force the release of the so-called Epstein files, a near-mythological trove of undisclosed information about the convicted sex offender Jeffrey Epstein at the centre of an internal political war among US conservatives.Television | MasterChef presenter John Torode will not return to the BBC cooking show after producers Banijay UK said his contract would not be renewed. Torode had earlier said he was the subject of an allegation of using racist language that was upheld as part of an inquiry into the behaviour of his former co-presenter Gregg Wallace.Tax and spending | HM Revenue and Customs has been sharply criticised by parliament's spending watchdog for being unable to track how many billionaires pay tax in the UK. Highlighting significant opportunities to collect more revenue", it called on the tax authority to take immediate action. Continue reading...
London stock market hits new peak, Thames Water reports 1.6bn loss, and Rachel Reeves outlines Leeds reforms' for financial servicesThe FTSE 100 has also benefitted from the TACO trade this year - the bet that Trump always chickens out when his policies cause mayhem in the markets.As this chart shows, shares in London slumped in early April after the US president announced high new tariffs on US trading partners. Continue reading...
Events such as the Iberian power blackout have led some to go back to physical money, but others are not convincedIt was while walking to his local Co-op that Ty, a 27-year-old student in Brighton, noticed a strangely long queue for the cashpoint.In the shop, a staff member told Ty the payment systems were down after a cyber-attack. It was cash only. But Ty didn't need to join the queue. Instead, he felt vindicated. It was another instance that justified his recent switch to using physical currency instead of digital payments. Continue reading...
by Kalyeena Makortoff and Heather Stewart on (#6YN4P)
Chancellor to announce raft of deregulation changes as City regulators move to pare back transparency rulesRachel Reeves will claim that cutting red tape for City firms will have trickle-down benefits for households across Britain, as she tries to drum up support for a new financial services strategy.A raft of regulatory reforms are due to be announced by the chancellor on Tuesday, in what the Treasury says will be the biggest financial regulation reforms in a decade". It will come before her Mansion House address to City bosses during a dinner at Guildhall in London on Tuesday evening. Continue reading...
by Richard Partington Senior economics correspondent on (#6YN4R)
Retail body says sales up by 3.1% year on year in June after drop in May, but Barclays finds shoppers are cautiousRetail sales in the UK recovered in June as hot weather drove spending on electric fans, sports and leisure equipment, but households remained under pressure from high living costs.The snapshot from the British Retail Consortium (BRC) showed total sales grew by 3.1% year on year in June, after a sharp drop in May, as record-breaking temperatures and promotional offers encouraged consumers to spend. Continue reading...
Energy secretary says it is not clear if opposition have any net zero policyAs Rowena Mason revealed recently, No 10 has issued guidance that in effect bans civil servants from any level of speaking at events where journalists are present.Today the Times has published a letter signed by almost 30 experts - including former senior officials, thinktank leaders, academics and union leader - saying this policy is a mistake because it is having a chilling effect on public discussion" and that it should be withdrawn. They say:The government's new guidance that prevents public officials from participating properly in public or stakeholder events is a mistake. Effective government relies on public servants, whose salaries are paid by the taxpayer, hearing directly from businesses, charities, academics and citizens to help them make better policy. They should be able to explain government activity to those same groups. Continue reading...
EU trade commissioner says we want to use every minute until 1 August to find a negotiated solution'Donald Trump's threatened 30% tariffs on European goods would eliminate transatlantic trade, the EU's chief negotiator with the US has said, while voicing hope that a deal remained possible.Maro efovi, the EU trade commissioner, said a tariff of 30% or more would have a huge impact, making it almost impossible to continue" current transatlantic trade, which is worth 4.4bn (3.8bn) a day. Continue reading...
Rolling coverage of the latest economic and financial news, as Andrew Bailey insists: I think the path [for interest rates] is down".A Bank of England interest rate cut next month is looking more likely, according to the latest city pricing.The money markets are indicating there's now an 85% chance that the Bank cuts interest rates at its next meeting on 7 August, up from 76% at the end of last week.Friday's disappointing GDP figures, combined with these weak jobs figures boost the case for the Bank of England to cut interest rates in August. The central bank's governor Andrew Bailey told The Times slack' was opening up in the labour market, and he believes the path is downward' for interest rates.All eyes are on Wednesday's inflation report with CPI expected to remain at remain around 3.4% in June, roughly unchanged for the third consecutive month." Continue reading...
The expanding group of emerging powers is building new rules, new tools and a shared industrial future - with or without Donald TrumpThe Brics summit in Brazil last week revealed a loose alliance of emerging powers becoming more complex - and perhaps more consequential. For Brics, heft matters. It now counts 11 member states - including Indonesia, which joined this year - representing half the world's population and 40% of the global economy, outpacing the G7 by $20tn.Yet its size hides its contradictions. The grouping's call for more inclusive global institutions sounds welcome, but there is a preponderance of autocracies within its own ranks. Brics is right that international law should be upheld in Middle Eastern conflicts. But it climbs down from its moral pedestal by condemning Ukraine's strikes on Russian infrastructure - while staying silent on Moscow's relentless attacks on civilians. Continue reading...
With the UK still shaking off the psychological side-effects of Covid, Rachel Reeves might want to broaden her aimsEvery parent who battled their way through home schooling during the long months of lockdown, and every vulnerable person forced to shield themselves away, can have had little doubt that the Covid pandemic was an unhappy time.But research by the non-profit consultancy Pro Bono Economics (PBE), suggests that the nation's wellbeing has never fully recovered from the plunge it took in mid-2020. Continue reading...
by Kalyeena Makortoff and Heather Stewart on (#6YKNH)
Exclusive: Announcement expected as part of series of changes outlined in chancellor's Mansion House speechThe chancellor, Rachel Reeves, is expected to trigger a review of the auto-enrolment pension scheme next week in a move that could ultimately force employers to raise their contributions to staff retirement pots.The announcement could come as early as Monday, forming a key part of the Labour government's pensions review, industry sources told the Guardian. Continue reading...
Experts suspect front loading' of activity may mask deeper impact of tariffs on the US economyThere has been no change to this date, and there will be no change," Donald Trump said on his Truth Social platform this week. All money will be due and payable starting AUGUST 1, 2025 - no extensions will be granted."There had, in fact, been a change. The 90-day pause" on the highest tariffs threatened by Trump on his so-called liberation day" in April elapsed on Wednesday. But with just three trade agreements in place, instead of the 300 once promised, the White House had switched one deadline for another. Continue reading...
Rolling coverage of the latest economic and financial news, as shares in London end the day at a new closing highThe Footsie' is continuing to hit new highs this morning!It's now up almost 1% at 8952 points, up 85 points today. Miners such as Anglo American (+4.6%), Glencore (+3.5%) and Antofagasta (+2.8%) are driving it higher.Cindy is an outstanding and inspirational business leader with extensive experience at some of the world's most recognised companies and a track record of growing large-scale businesses. She has led multi-billion-dollar operations across the UK, EMEA and globally, built enduring client relationships and delivered growth in both enterprise and consumer environments.Cindy has supported the digital transformation of large enterprises around the world - including embracing AI to create new customer experiences, business models and revenue streams. Her expertise in this landscape will be hugely valuable to WPP as the industry navigates fundamental changes and macroeconomic uncertainty. Cindy's appointment follows a thorough selection process that considered both internal and external candidates. As an existing Board member she understands our business and the needs of our clients, and we look forward to working with her in her new role as CEO. Continue reading...
by Presented by Nosheen Iqbal with Arun Advani; produ on (#6YHVM)
After changes to the welfare reform bill failed to save money, the millionaire Dale Vince thinks it's time for people like him to contribute more to the public finances. Arun Advani explains how a wealth tax could work and if it's time for Labour to introduce oneAfter cuts in Labour's proposed welfare reform bill caused uproar, many of the party's supporters insist it's time for a different approach. Rather than cutting the benefits bill or public spending, why not tax the wealthiest more? It's a question Keir Starmer was asked in PMQs, and he replied by saying it wasn't possible to tax our way to growth".The millionaire Dale Vince disagrees. A former new-age traveller who made his money in green energy and has donated to Just Stop Oil, he is part of the Patriotic Millionaires organisation who think it is high time people like them are asked to increase their contributions. There's a whole bunch of us. We're all saying the same thing, that we can afford to pay more tax. Rich people should pay more tax, and we can use that money to reduce inequality in our country." Continue reading...
Latest escalation in trade war is expected to push up costs across key parts of US economyCopper prices hit a record high in the US after Donald Trump announced he would impose a 50% tariff on the industrial metal, in the latest escalation of his trade war.Trump said before a cabinet meeting on Tuesday: Today we're doing copper," proposing a 50% tariff rate for imports. He also threatened to impose a 200% border tax on pharmaceuticals but in a year or a year and a half's time. Continue reading...
Readers respond to Randeep Ramesh's article on the flaws in Labour's approach to the economyRandeep Ramesh certainly tackles a worthwhile and complex modern economic policy conundrum (Labour could find the money it wants without raising taxes. This is austerity by amnesia, 29 June). But his opinion that the Bank of England should simply hand over the cash proceeds from quantitative tightening (QT) and that central bank independence is somehow partly responsible for Britain's economic woes, are misguided.Central bank independence was hard-won and has largely proven a resounding success in the developed world for more than 30 years. Allowing a central bank to hand over substantial moneys from QT revenues to the Treasury would be a recipe for disaster, against the spirit if not the letter of the law, as well as a dangerous precedent. Continue reading...
by Richard Partington Senior economics correspondent on (#6YGHQ)
Future of 100bn UK-France trade relationship in focus amid attempt to show unity in face of Trump tariffsAs Keir Starmer welcomes Emmanuel Macron to Britain for a landmark state visit aimed at building closer ties between London and Paris, the future of the nations' 100bn trading relationship will be drawn sharply into focus.In the three days of talks, concluding with the 37th Franco-British summit on Thursday, much of the attention will be on cross-Channel issues, including migration, amid expectations for a new deal on tackling small boat crossings. However, cooperation on business, trade, defence and security in the shifting global landscape will also feature prominently. Continue reading...
The shifting timeline of Trump's tariffs, the most significant US tariff increase in nearly a century, has roiled global markets and caused widespread confusion
Reports say wealthy elite are leaving over tax changes - prompting a possible rethink by Rachel Reeves - but hard data is tricky to findIn Chester Square, the exclusive London address that was once home to Margaret Thatcher, multimillion-pound stuccoed townhouses are proving a hard sell.More than 20 luxury properties in the Belgravia postcode are on the market, says a buying agent. In nearby Montpelier Square in Knightsbridge, less than a 10-minute walk from Harrods department store, nine houses are on the open market. Continue reading...
There are just two days of talks left before the US president's potentially swingeing tariffs are restoredThe EU is entering a crunch week with only two days of talks left to secure a trade deal with Washinton to avert Donald Trump's threatened 50% tariff on its imports into the US.According to the US treasury secretary, Scott Bessent, on Friday, the negotiations - which continued over the weekend - are focussed on 15 to 18 agreements with important partners, while Trump warned of import tax rates of up to 70% on others. Continue reading...
A jittery No 10 now seeks the market's approval for everything. The result? Cruel cuts and a chronic fear of desperately needed public spendingOn 6 September 2022, Liz Truss entered No 10 with a clear vision for the country; the country asked her to leave less than 50 days later. But nearly three years on, even though all that remains of her premiership at Downing Street is a portrait she didn't stick around long enough to see hung, it is she who really runs Britain.Not through her influence - which has since been reduced to poorly attended speeches at far-right conferences in the US - but through the fear she left behind. Truss may be gone, but what remains is the shadow her failure cast, and the rigid fiscal caution that grew out of it.Max Mosley is a senior economist at the New Economics Foundation Continue reading...
The 2008 crash, Trump, aid budget cuts and a more fragmented world has made debt relief seem a lost cause but there are murmurs of a renaissanceTwenty years ago this weekend, the leaders of the world's most powerful countries, chaired by Tony Blair, gathered at the Scottish golf resort of Gleneagles and made a series of historic promises on debt relief and overseas aid.It was the culmination of a long-running campaign involving charities, churches and celebrities and benefited from the passionate commitment of Gordon Brown, for whom international development is a lifelong cause. Continue reading...