WFH has harmed employee productivity, says Stuart Rose, who was also executive chair of Asda

Unlike tariffs, a new form of protectionism could target climate-wrecking, untaxed corporations and their billionaire owners

Number of homes new to market 11% higher than a year ago, despite uncertainty over interest rates and stamp dutyA record number of new sellers have come on to the UK housing market since Boxing Day, while the average price and the number of sales agreed also increased, pointing to a busier 2025, according to a report.The average price of a property coming to market rose by 1.7%, or 5,992, this month to 366,189, the biggest jump in prices at the start of the year since 2020, the property website Rightmove said in its monthly report. While prices usually bounce back in the new year after a seasonal fall in December, before Christmas, the rise was pronounced this month. Continue reading...

The annual gathering of the globally minded is looking forlorn in the light of Trump 2.0 and trade rowsThis year's week-long gabfest in the Alpine resort of Davos, which kicks off on Monday, will be held under the banner: A Call for Collaboration in the Intelligent Age".Given that it will open as Donald Trump is inaugurated with a promise to jack up import tariffs, trash the Paris climate agreement and put an anti-vaxxer in charge of the US health system, hopes of either collaboration or intelligence being much on display in 2025 appear bleak. Continue reading...

A new paper has found that social capital is the cake, not the icing' of a strong, well functioning economyWindfarms, train lines, science labs - when policymakers think about the ingredients for kickstarting the UK's sagging economy, they tend to imagine tangible bits of infrastructure. But two of the UK's most eminent public economists have banded together to urge Rachel Reeves to reconsider another dimension of the UK's makeup: social capital.Andy Haldane is the former chief economist at the Bank of England, now chief executive of the Royal Society of Arts. David Halpern is the man behind the so-called nudge unit, which brought behavioural economics into the policy mainstream. Continue reading...

Chancellor survives chaos in markets but faces more questions on growth, cuts, public sector pay and fraudRachel Reeves was given a warning this month how the most carefully plotted budget strategy can be blown off track by turmoil in financial markets.Calm has been restored, for the time being, but the lingering effect has been to increase the UK government's cost of borrowing. Continue reading...

The chancellor will seek investment in the UK as the Labour government prepares to reduce the benefits billA drive to reduce the benefits bill will be pursued by the government alongside a charm offensive to attract more companies to invest in Britain, amid nervousness in Labour circles over a new round of spending cuts.The chancellor, Rachel Reeves, will travel to the World Economic Forum's annual meeting in Davos this week in the hope of convincing some of the world's largest companies to invest, with allies saying she will use spending cuts rather than further tax increases to meet her own fiscal rules. Continue reading...

Some analysts fear ballooning federal debt and a bullish stock market means something will surely snap'Donald Trump's return to the White House on Monday has the world economy on tenterhooks. Could the 47th US president govern broadly as he did last time, when his most extreme threats were ultimately softened? Or is this time different?Corporate America's biggest beasts have cosied up to the president-elect, but there are also serious jitters on Wall Street, amid investor fears that Trump's most colourful campaign rhetoric will soon become a reality: risking a fresh inflation shock in the world's largest economy. Continue reading...

Nearly every share on index rose after fall in value of pound helped multinationals listed in LondonThe UK's blue-chip stock index has hit a record high, as hopes of interest rate cuts this year drove down government borrowing costs.Almost every share on the FTSE 100 rose on Friday, the fall in the value of the pound bolstering multinationals listed in London and propelling the index above 8,500 points for the first time. Continue reading...

Rolling coverage of the latest economic and financial news, as Britain's blue chip share index hits new peak of 8533 pointsThe FTSE 100 has hit a record high after a strong start to the year.Since the beginning of January, the index has climbed by 3.75%, adding to the 5.7% it gained during the whole of 2024. Continue reading...

Donald Trump's return to White House and Rachel Reeves's call for regulators to help drive UK growth taken into accountBusiness live - latest updatesThe Bank of England will further delay capital rules meant to prevent another 2008-style crash, as it weighs the impact of Donald Trump's return to the White House and the chancellor Rachel Reeves's call for regulators to help drive UK growth.The Bank's regulatory arm said it was delaying the date by which banks had to implement Basel 3.1 rules by a year, to January 2027. Continue reading...

UK economy predicted to grow by 1.6% this year as fund warns of potentially destabilising effect of Trump policy Business live - latest updatesThe International Monetary Fund has upgraded its forecast for UK growth this year in an update to its biannual assessment of the global economy, while taking a swipe at plans by Donald Trump's incoming US administration for the potentially destabilising effect of large-scale tax cuts, import tariffs and weaker regulations.In a fillip to the Labour government, the Washington-based organisation said it expected the UK economy to grow by 1.6% in 2025, up from an earlier forecast of 1.5%. Continue reading...

John Van Reenen believes he can help Labour solve the peculiar British problem' of chronically weak productivityThe economist John Van Reenen lacks the public status of Gordon Brown's two Eds" - Balls and Miliband - who ranged across Whitehall in New Labour's first term, enforcing the Treasury's will. But ask today's Labour apparatchiks about Rachel Reeves's approach to growth, which she will set out in a speech later this month, and they often point to the chair of her council of economic advisers.Currently on leave from the London School of Economics (LSE), where he ran the Centre for Economic Performance, Van Reenen has spent his professional lifetime probing the weak spots of the UK economy. Continue reading...

Latter part of 2024 recovered remarkably' after stimulus measures, says National Bureau of Statistics

Group led by ministers will include representatives of the judiciary, music industry, BBC and Football AssociationLeading cultural figures will be tasked with working alongside members of the royal family to boost Britain's international influence as part of the government's new soft power council".The group - which will be chaired by the culture secretary, Lisa Nandy, and the foreign secretary, David Lammy - will bring together experts from across culture, sport, the creative industries and geopolitics" to promote Britain globally and provide a boost to the UK economy, according to the Foreign Office. Continue reading...

Labour should ask the Bank of England if it can do more to boost growthRecent days of market turmoil have elicited some extraordinary responses. The fact that investors are demanding higher rates to lend to the UK government apparently puts this Labour government in the same position as Liz Truss in 2022, according to some Labour MPs, or as Denis Healey facing the International Monetary Fund in 1976. Others dub the UK's current position as stagflation, a term redolent of the 1970s, with their stagnant economy and runaway inflation.

Growth weaker than City forecasts but government says it's a step in the right direction'

Stocks extend rally; with inflation easing and sluggish economic growth, a February interest rate cut looks increasingly likely, analysts sayBritain's economy grew for the first time in three months, but eked out just 0.1% growth.The economy grew more slowly than expected in November, giving the Bank of England more room to cut interest rates this year.We know that in net terms growth remained flat for the three months to November therefore we are clearly far off from a state where the economy has reached escape velocity' and grows on a sustained basis.Given the latest inflation reading yesterday, weaker than expected growth could help pave the way for faster rate cuts by the Bank of England. This could be a helpful tailwind to the economy at a time when the international outlook becomes more unpredictable. Continue reading...

Bloc may ward off incoming president's threats by buying more US goods, or impose its own tariffs in retaliationIf there is one thing the EU knows about Donald Trump, it is that he loves tariffs. The incoming president has said tariff" is the most beautiful word in the dictionary" and has threatened to impose them on US allies around the world.On the campaign trail he proposed tariffs of 10-20% on imports from all countries, with a 60% rate reserved for China. Once elected, he tweeted that the EU must buy more US oil and gas otherwise it is TARIFFS all the way!!!" This week, he announced he would create an external revenue service" on the day of his inauguration. Continue reading...

Chancellor calls chiefs for check-in to review plans for industries including road, rail, water, energy and aviation

UK chancellor has had tough week but latest figure sends yield of UK government bonds tumblingRachel Reeves has been handed breathing space after better-than-expected inflation figures raised expectations for a Bank of England rate cut and reduced UK borrowing costs.After a tough week for the government on the economy, official figures showed inflation unexpectedly cooled in December to 2.5%, down from 2.6% in the previous month, meaning prices rose at a slower rate. Continue reading...

Emma Reynolds, who replaces Tulip Siddiq, pressed government over foreign influence rules while at lobbyistNo 10 has been accused of having a revolving door" after it refused to say whether the new Treasury minister Emma Reynolds would recuse herself from policy on China after she lobbied the government on the issue.Reynolds, who worked as managing director for TheCityUK, a lobby group for banks and other financial services companies, had previously pressed the government to make China exempt from the strictest tier of rules on registration of foreign influence. Continue reading...

Unexpected fall last month will help ease Treasury and Bank of England fears after bond market sell-off

Consumer price index rose at annual rate of 2.9% and while Trump promised to cut prices he now says it will be hardInflation ticked up across the US last month, according to the last report on consumer prices under the Biden administration.Donald Trump has promised to bring prices down for millions of Americans. But while price rises have slowed sharply since their post-pandemic peak of 9.1%, the pace of inflation remains higher than the Federal Reserve's target rate of 2% per annum. Continue reading...

Cooling UK inflation paves way for February interest rate cut, economists say; US inflation rises but key core' measure easesIn her response to the inflation figures, Rachel Reeves, the chancellor, vowed to fight every day" to deliver economic growth and put more money in the pockets of working people". She said:There is still work to be done to help families across the country with the cost of living. That's why the government has taken action to protect working people's payslips from higher taxes, frozen fuel duty and boosted the national minimum wage.In our Plan for Change, we were clear that growth is our number one priority to put more money in the pockets of working people. I will fight every day to deliver that growth and improve living standards in every part of the UK. Continue reading...

After week of turbulence in markets, ONS data sends bond yields falling and eases pressure on chancellor

As with US bond yields, the UK economy risks catching cold whenever anywhere else sneezes - but Britain can insulate itself betterThe British government was right to describe the recent bout of market volatility in the UK as having been fuelled principally by global factors" - in particular, a sharp rise in US bond yields. It was also right in touting how well UK markets have coped with the turmoil. But no one should downplay the additional challenges the UK economy will confront in the months ahead, the structural weaknesses that are compounding its vulnerability, or the policy action that is urgently needed.The recent surge in US yields has three main causes: a string of data releases indicating that actual and potential economic growth are outpacing consensus estimates, higher-than-projected inflation (with a meaningful rise in consumers' inflation expectations), and increased market sensitivity to the bond issuance that comes with large deficits and debt. Given that advanced economies compete for funding from global investors, it should be no surprise that higher US yields caused borrowing costs in most other countries to rise as well. Continue reading...

Responses range from conciliation to retaliation, including cutting off electricity and halting the purchase of US liquorCanada's provincial premiers are sharply divided on how to prepare for US trade tariffs, less than a week before Donald Trump takes office with a threat to dramatically reshape the relationship between the two countries.Canadian officials have sought to defuse the crisis with personal appeals to the president-elect, multimillion-dollar advertising sprees and targeted threats, but the country remains gripped by uncertainty over how Trump's tariffs might take effect. On Monday, Bloomberg reported that the incoming US administration is weighing hiking tariffs by 2%-5% a month to avoid spiking inflation. Continue reading...

Keir Starmer offers support to underfire chancellor after bruising start to new yearRachel Reeves will remain as chancellor until the next general election, Keir Starmer has insisted, as he warned the Treasury would be ruthless" over public spending cuts to help meet the government's fiscal rules.The Treasury is looking for billions of pounds of savings from departmental budgets to balance the books at this summer's spending review, after another difficult day for the economy that saw the cost of government borrowing rise and the value of the pound fall. Continue reading...

Downing Street says prime minster has full confidence' in chancellor and will be working with her in role of chancellor' for the whole of this parliamentKeir Starmer is about to deliver his AI speech.Nicola Sturgeon and her husband Peter Murrell have decided to end our marriage", the former first minister of Scotland has said. PA Media says:They have been married since 2010 but, in a post on Instagram, the SNP MSP said to all intents and purposes we have been separated for some time now".She wrote: With a heavy heart I am confirming that Peter and I have decided to end our marriage. Continue reading...

Pippa Crerar and Kiran Stacey look at just how serious warnings about the UK's financial position really are, and what this means for the chancellor, Rachel Reeves. Plus, why the government is hoping AI could be the magic bullet that revives our economyClick here to vote for Politics Weekly UK in the iNHouse Political Podcast Awards' people's choice category. Continue reading...

Business group's chair says government changes could prompt quite an ugly rush' of job losses

Fears over UK growth and political uncertainty in France and Germany making firms reluctant to hire staff

Deloitte and BDO data underlines sharpest fall in employment expectations since Covid pandemicBusiness leaders plan to cut costs and rein in hiring in response to government tax increases set out in the autumn budget, with employment expectations taking the sharpest tumble since the start of the coronavirus pandemic.A net two-thirds of finance directors said they did not expect to increase hiring levels this year, a four-year high, with a net 26% feeling more pessimistic about the prospects for their business than three months ago, the first time sentiment had slipped into negative territory in 18 months, according to the latest survey by the accountancy firm Deloitte. Continue reading...

The chancellor will be monitoring the price of gilts after last week's selloff and data to come on inflation and growthRachel Reeves will be back at her desk in the Treasury on Monday after her trade mission to China as markets reopen after last week's bruising bond selloff and ahead of some key economic data on inflation and growth.Officials will be monitoring closely moves in the price of government bonds, or gilts, after they were sold off sharply last week, pushing the 30-year yield - effectively the interest rate - to its highest level since 1998. Continue reading...

Trade unions body finds 17% have skipped meal in past three months, and as many as 10% do so most daysAs many as one in six workers in Britain are skipping meals to make ends meet as households remain under pressure from the higher cost of groceries, energy and other essentials.Highlighting the impact of the cost of living crisis on working households, figures from the Trades Union Congress (TUC) showed 17% of full- or part-time workers had skipped a meal to reduce their spending in the past three months. Continue reading...

In his first 12 months Javier Milei has imposed drastic economic measures - sparking protests while banking on an IMF bailoutThe first foreign leader to meet Donald Trump after his victory last November was Argentina's president, JavierMilei. The affinity is obvious: both are political outsiders united by extreme-right rhetoric and a penchant for anarchic capitalism. Mr Milei promised a war on bureaucrats, brutal public spending cuts and sweeping deregulation of Latin America's second-largest economy. Predictably, the outcome has been devastating: a recession plunged more than half the country into poverty within the first six months of 2024.Mr Milei did not so much win the last election as the previous government lost it. When voters went to the polls in October 2023, monthly inflation stood at around 8%, fuelling frustration with the established parties and anxiety about the future - sentiments MrMilei skilfully exploited. After his victory, monthly inflation soared to 25% before dropping back to under 3% in November. As a devotee of Milton Friedman, MrMilei might claim his public sector cuts were painful but necessary. This is far from the truth. The reality, as the economist Matias Vernengo notes, is that Mr Milei devalued the peso, triggering a spike in domestic prices while using currency controls to keep a lid on further inflationary pressures. Continue reading...

Plunging temperatures and high demand for gas fired power stations have reduced UK winter gas storage levels, reports Centrica

Pound falls against the dollar and bond yields rise amid concerns over high UK inflation and interest rates

Markets appear to be fretting over sustainability of tax and spending plans and whether UK is heading for stagflation'Rachel Reeves intended to spend January burnishing her reputation on the global stage with trips to Beijing and Davos, and flipping the focus from her 40bn tax-raising budget to Labour's plans to rekindle economic growth.Instead, the chancellor was reduced to watching anxiously, as a sell-off swept through government bond markets, and sterling came under intense pressure as a result. Continue reading...

Economy adds 256,000 jobs in December, with Biden boasting of 16.6m jobs created during presidencyThe US labor market expanded strongly in the last jobs report of the Biden administration, according to new data released on Friday.The number of new jobs added to the economy accelerated to 256,000 in December, up from 227,000 in November, soaring past expectations. The labor market last month was bolstered by new jobs in healthcare, retail and government. Continue reading...

Premier of most populous province says rhetoric clouds trade relationship worth hundreds of billions of dollarsThe United States will feel pain" if Donald Trump doesn't back down from his threat to impose steep tariffs on its northern neighbour, the leader of Canada's most populous province has warned.After a tumultuous week that left Canadian leaders flailing for a coherent national response to Trump's provocations - including the suggestion that the US would annex its closest ally - the Ontario premier, Doug Ford, told the Guardian: We will never be for sale." Continue reading...

Almost 700,000 homeowners face increase when fixed-rate deals end this year

Chancellor could slash departmental spending in spring after ruling out tax increase, officials revealRachel Reeves is considering imposing steeper cuts to public services to repair the government's finances after a bruising week in which investors drove up the cost of UK borrowing and pushed the pound to a 14-month low.Government officials have told the Guardian the chancellor is prepared to reduce departmental spending even more than planned, having ruled out increases to either borrowing or taxes. Any measures to avoid breaking her fiscal rules could be announced at an emergency statement in the spring. Continue reading...

Labour's fiscal rules may limit the chancellor's ability to act, but waiting it out may be the best optionThe UK government has come under pressure from a bond market sell-off and the tumbling pound, heaping pressure on the chancellor, Rachel Reeves, to reassure investors about Britain's economic and financial position.After a challenging first six months in power for the government, the chancellor's options have been limited by Labour's political promises. There are a range of measures, of varying severity, the Treasury and the Bank of England could still take, depending on how market conditions unfold. Continue reading...

In the hospitality sector, where labour costs are a bigger proportion of the overall base, employers have fewer optionsIf one looked solely at this week's trading reports from the world of big retail - the likes of Marks & Spencer, Next and Tesco - you might wonder why Rachel Reeves' increase in employers' national insurance contributions (NICs) has caused such a fuss. It is obvious from the trio's outlook statements that they will cope with the extra costs.At Tesco, which faces a 250m extra from NICs and other budget changes, the chief executive, Ken Murphy, did not rule out price rises but said the group would do its very best" to mitigate them; and, given Tesco's expertise in grinding out efficiency gains, you would bet on it to succeed. In similar style, Stuart Machin at M&S noted the cost headwinds but said there is much within our control". Continue reading...

While age is a factor in how people are affected, the turbulence is not all bad news, experts suggestThe bond market sell-off has revived fears about rising borrowing costs after the crisis that followed Liz Truss's disastrous mini budget in 2022. However, experts are suggesting there is no need to panic. Here is what it may mean for mortgages, pensions and savings. Continue reading...

This blog is now closed, you can read more on this story hereDarren Jones, the chief secretary to the Treasury, is responding to the UQ about borrowing costs.He says there is a long-standing convention that the government does not comment on movements in the financial markets, and that will not change today, he says.The Debt Management Office's gilt sales operations continue to see strong demand, with the latest auction held yesterday receiving three times as many bids as the amount on offer.There should be no doubt of the government's commitment to economic stability and sound public finances. This is why meeting the fiscal rules is non negotiable. Continue reading...

Unlike 2022, bond markets have not been shocked, but the chancellor will know threat of a doom loop is not far awayBorrowing costs at the highest level since 1998, the pound at a 14-month low and some major UK company shares dropping like a stone. For a government that had pledged a return to economic stability, it has been a tough start to 2025 for Rachel Reeves.As the chancellor prepared to fly to China to promote closer economic ties with Beijing, the blow-up in the bond market appeared to ease on Thursday after a rough couple of days. But Reeves is still battling a political fire and comparisons to Liz Truss's ill-fated mini-budget. Continue reading...

The former PM has sent a cease and desist letter to the current one. Will everyone who thinks she was useless get one next?The problem with worrying about megalomaniacs on the web and wildfires in Los Angeles is that we have been distracted from the very real plight of Liz Truss.She is the victim of a very special kind of injustice: people think she was a terrible prime minister, whose doings were disastrous for the economy, resulting in her defenestration by her own party - and what's worse, people keep saying so.Hugh Muir is the Guardian's executive editor, Opinion Continue reading...