Without AI you will be a weaker and poorer nation', says former UK chancellor two months into job at US firmThe former chancellor George Osborne has said countries that do not embrace the kind of powerful AI systems made by his new employer, OpenAI, risk Fomo" and could be left weaker and poorer.Osborne, who is two months into a job as head of the $500bn San Francisco AI company's for countries" programme, told leaders gathered for the AI Impact summit in Delhi: Don't be left behind." He said that without AI rollouts they could end up with a workforce less willing to stay put" because they might want to seek AI-enabled fortunes elsewhere. Continue reading...

Treasury spokesperson says disability benefits would also be limited under Reform, but Bank of England would stay independentReform UK would restore the two-child benefit cap in full, Robert Jenrick has announced, in a major U-turn for the party that critics said would plunge hundreds of thousands of children into poverty.In his first speech as Reform's Treasury spokesperson, Jenrick said the party had changed tack since Nigel Farage last year said he would scrap the two-child limit and suggested his party wanted to go much further to encourage people to have children". Continue reading...

FTSE 100 hits record high after UK inflation falls to 3% in January, thanks to cheaper petrol and air fares, and a slowdown in food inflationThe chances of an interest rate cut next month have risen this morning, following the news that UK inflation fell to 3% in January.The money markets are now indicating that a quarter-point rate cut is now an 81.5% chance, up from 77% last night - and around 65% last week.Inflation fell sharply in January, providing some relief to UK consumers at the start of the year. Prices are clearly moving in the right direction, with closely watched core and services inflation continuing their downward trend from previous months.Behind the headline figure, motorists were helped as petrol pump prices continued to decline in January to their lowest level since summer 2021. Food inflation also fell after the Christmas period but is still a key area to watch in 2026 as it accounts for a large part of the UK's everyday spending. Industry barometers suggest that weekly supermarket shops are still elevated with fresh produce prices rising over the month.The cost of raw materials for businesses fell over the past year, driven by lower crude oil prices, while the increase in the cost of goods leaving factories slowed." Continue reading...

How do we solve the predicted entrenched disparity arising out of the great wealth transfer? We ask economists for their suggestions

January annual drop is lowest level since March 2025, although still above Bank of England's 2% target

City traders expect cut to UK interest rates next month after jobless rate rises to 5.2%

Programme launched by last Tory government was worked on by Deloitte and IBM but was paused in 2024

ONS figures raise the prospect of a further interest rate cut by Bank of England in the spring

Falls in inflation and interest rates could leave Britain better off this year, but at the cost of high unemployment

Competing domestic priorities, Treasury borrowing limits and already nervous lenders are among the many obstaclesKeir Starmer has few options if he wants to increase annual defence spending by up to 14bn before the end of this parliament.In last summer's spending review, the government set out plans to increase defence spending from 2.3% of national income, or gross domestic product (GDP), in 2024-25 - about 66bn, to 2.6% in 2028-29. Continue reading...

Rolling coverage of the latest economic and financial news, as UK households grow more worried about debtsUK consumer sentiment continued to sink this month, as households grow more worried about debt levels.A poll of consumer confidence from data firm S&P Global has found that morale continued to drop in February, although not as quickly as in January.Consumers signal stronger rise in debt alongside a quicker deterioration in loan availabilityAppetite for major spending recedes to weakest in ten monthsSentiment regarding labour market conditions at lowest since last JuneThe mood among UK households matches the dismal weather seen so far this year across the country. Although the overall degree of gloom has lifted slightly since January, consumer confidence continues to run at one of the lowest levels seen over the past two years.A period of prolonged rain and a dearth of sunshine have no doubt not helped to lift the low spirits seen among households, but there's more going on here than just bad weather. Households are growing increasingly worried about debt in particular, especially as a rising need for credit was met with the steepest decline in availability of loans since August 2024. Continue reading...

Consumer confidence at its lowest level in two years, as young people in particular face money pressures

Union analysis finds consumers lag behind international peers as some rate-setters remain anxious about inflationThe Trades Union Congress is urging the Bank of England to cut interest rates and rekindle economic growth, pointing to analysis showing that cash-strapped consumers are lagging their international peers.The Bank's monetary policy committee voted 5-4 to leave borrowing costs unchanged this month, after six cuts since mid-2024. Continue reading...

In a rapidly changing job market, it's not necessarily good for workers to cling to their current employmentAfter all the employee protests over the past few years - the great resignations", the quiet quittings", the bare-minimum Mondays" and coffee badgings" - we have finally arrived at job hugging".Amid all the economic uncertainty and the rising costs of everything, people aren't feeling as confident as they once were. Instead of slacking off while you hunt for something better, everyone's scared about losing their jobs. With all the news about big corporate layoffs and the ominous and still-undefined threat of AI, it's understandable that people are hugging their jobs. Continue reading...

The dream of greasy overalls is driven by nostalgia and doesn't justify policies that harm US consumersThe exhortations to protect America's industrial muscle have resonated in the US at least since maverick presidential candidate Ross Perot brought up the supposed giant sucking sound" of jobs pulled to Mexico by the Nafta trade agreement back in 1993.They flourished under Donald Trump's first presidency and his promise to restore jobs lost to trade agreements. Joe Biden, too, put rebuilding the backbone of America: manufacturing, unions and the middle class" at the center of his agenda. And in 2024, Trump reheated his old promise that jobs and factories will come roaring back into our country". Continue reading...

Universities, builders and health trusts are feeling the squeeze, as thinktank says effect of zero net migration could be similar to Brexit

Skilled workers facing a tough jobs market and high rents at home reveal how they have built new lives elsewhere, from Vancouver to Dubai

Labour market expert Prof Brian Bell has called for better pay and conditions in key sectors, particularly social careRachel Reeves has appointed a labour market expert who has repeatedly called for better pay and conditions in key sectors, such as social care, to reduce the UK's reliance on migrant workers as her new chief economic adviser.Prof Brian Bell, who chairs the independent Migration Advisory Committee (MAC), which advises the government, has been announced as the new chief economic adviser in the Treasury - a senior civil service role. Continue reading...

Scientists believe we're seeing the largest loss of life since the dinosaurs - and it's a risk to the global economy. Governments and companies need to work together on solutions Don't get Down to Earth delivered to your inbox? Sign up hereIt feels like groundhog day: another week, another warning about the seriousness of the biodiversity crisis. This time it was the financial sector's turn, as on Monday a major report, approved by more than 150 governments, said that many companies face collapse unless they better protect nature.From healthy rivers to productive forests, the natural world underpins almost all economic activity. But human consumption of the Earth's resources is unsustainable, driving what many scientists believe is the largest loss of life since the dinosaurs. And companies are not immune to the consequences.Economics has failed on the climate crisis. This complexity scientist has a mind-blowing plan to fix thatTo live a normal life again, it's a dream come true': UK's first climate evacuees can cast off their homes and traumaWe've lost everything': anger and despair in Sicilian town collapsing after landslideIt sounds apocalyptic': experts warn of impact of UK floods on birds, butterflies and dormiceIndonesia takes action against mining firms after floods devastate population of world's rarest apeWe thought they would ignore us': how humans are changing the way raptors behave Continue reading...

City analysts say financial market investors will be worried if cost is deducted from budget surplusRachel Reeves is under pressure to reassure MPs over the state of the UK's public finances, amid concerns that the rising cost of special educational needs and disabilities (Send) could leave a significant hole in the government's financial buffer.Meg Hillier, the chair of the all-party House of Commons Treasury committee, said the chancellor should make clear her long-term plans for the 6bn-a-year Send bill as uncertainty grows over how it will be accounted for at the end of the decade. Continue reading...

Whether it's the financial crash, the climate emergency or the breakdown of the international order, historian Adam Tooze has become the go-to guide to the radical new world we've enteredBy Robert P Baird. Read by James Sobol Kelly Continue reading...

GDP in last three months of 2025 also hit by weak consumer spending, with little momentum going into this year

Ursula von der Leyen promises action plan to boost and protect sectors including defence, AI and clean techEU leaders agreed to move ahead with a Buy European" policy to protect strategic sectors" of European industry, at a summit on how to secure the continent's future in a more volatile global economy.At a moated castle in the east Belgian countryside, the EU's 27 leaders gathered on Thursday for a brainstorming session on how Europe could regain its economic competitiveness relative to the US and China at a time of economic threats and political turbulence. Continue reading...

World Bank says children born today could earn 51% more over lifetime if their country's human capital improvedDeteriorating health, education and training in many developing countries is dramatically depressing the future earnings of children born today, the World Bank has said.In a report, the World Bank urges policymakers to focus on improving outcomes in three settings: homes, neighbourhoods and workplaces. Continue reading...

Rolling coverage of the UK's new GDP report, showing growth of just 0.1% in October-December and 1.3% across 2025

Consumers and businesses are not yet taking the hint despite six interest rate cuts

Defending European strategic interests must be a priority to level the economic playing field in an increasingly volatile worldGiven the daunting nature of the challenges they face in the era of Donald Trump, it is perhaps understandable that European politicians should wish to get away from it all. This week, in what is being billed as a leaders' retreat", a remote castle in the Belgian countryside has been selected for an EU summit on competitiveness. The pastoral setting may soothe the spirits of attending heads of state; but it belies the urgency of the debate they need to have.Europe in the postwar period has never felt so insecure. Mr Trump's America First administration has made clear its intention to bully the continent economically through tariffs and threats, and the transatlantic alliance can no longer be relied upon for its defence. Hi-tech competition from China threatens to overwhelm European industry's attempts to keep up in key areas, such as the green transition. Across the European Union, support for the far right is on the rise.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...

Two days ago, the Scottish Labour leader said he wanted the prime minister to avoid Scotland during the election campaign because of his deep unpopularity with votersFamilies of nurses and carers have said they fear being torn apart under an immigration crackdown condemned as an act of economic vandalism", Josh Halliday reports.Q: You are here being hosted by UK Finance. But the financial services sector does not like your plans for a windfall tax on banks. Have you dropped your support for that? Continue reading...

Wall Street futures extend gains after the data; unemployment rate dips to 4.3%The oil cartel Opec has stuck to its forecast that world oil demand for crude from the wider Opec-plus producer group, including Russia, will drop by 400,000 barrels per day (bpd) in the second quarter, from the first three months of the year.Global demand for OPEC+ crude will average 42.2m bpd in the second quarter, OPEC said in its monthly report report, down from 42.60 million bpd in the first quarter. Both forecasts were unchanged from last month's report. Continue reading...

As council declares it's no longer bankrupt', people say closure of services have added to social isolation and crimeWhen Birmingham city council announced last week it was no longer bankrupt", after years of budget cuts and asset sales, one retired police officer was left feeling despondent.Wendy Collymore had experienced first-hand the impact of the council's cost-cutting drive on the UK's second largest city when the adult day centre her elderly father attended was forced to close in 2024. Continue reading...

Born of student disquiet after the 2008 crash, the group says it is reshaping economists' educationAs the fallout from the 2008 global financial crash reverberated around the world, a group of students at Harvard University in the US walked out of their introductory economics class complaining it was teaching a specific and limited view" that perpetuated a problematic and inefficient system of economic inequality".A few weeks later, on the other side of the Atlantic, economics students at Manchester University in the UK, unhappy that the rigid mathematical formulas they were being taught in the classroom bore little relation to the tumultuous economic fallout they were living through, set up a post-crash economics society". Continue reading...

Two decades of weak pay growth have left poorer households stuck, Resolution Foundation says, fuelling political uneaseIt would take 137 years for lower-income families in the UK to see their living standards double at the current rate of growth, according to a thinktank.A two-decade stagnation in disposable incomes has created a mood of unease" across the country, the Resolution Foundation says, warning of the risk of further political disruption" unless pay growth accelerates. Continue reading...

Investors reassured by support for PM after fears about effect of a more left-leaning replacement on public finances

Rolling coverage of the latest economic and financial news

Campaigners say industrial issues cannot be solved by watering down climate and environmental policies

Workers and unions condemn ICE operation as horrific' as pressure builds on Susan Collins, facing re-election this yearMaine, the US's whitest state, has been shaken by the Trump administration's immigration crackdown, a crackdown that could threaten Republican control of the Senate in November's crucial midterm elections.Immigration Customs and Enforcement (ICE) agents launched Operation Catch of the Day" in the state on 21 January, targeting the worst of the worst criminal illegal aliens who have terrorized communities", according to the administration. Continue reading...

Prime minister's Liberal Democratic party to be pressed on promised tax cuts and fiscal stimulus plans

Rising GDP continues to mean more carbon emissions and wider damage to the planet. Can the two be decoupled?During Cop30 negotiations in Brazil last year, delegates heard a familiar argument: rising emissions are unavoidable for countries pursuing growth.Since the first Cop in the 1990s, developing nations have had looser reduction targets to reflect the economic gap between them and richer countries, which emitted millions of tonnes of CO as they pulled ahead. The concession comes from the idea that an inevitable cost of prosperity is environmental harm. Continue reading...

Exclusive: Antonio Guterres says world's accounting systems should place true value on the environment

Liam Byrne is echoing Robin Cook's ethical trade policy, warning the UK needs deals more open to scrutiny to prevent future issuesTrade can be a dirty business. Andrew Mountbatten-Windsor was tolerated as a special representative for trade and investment" in the noughties despite allegations that he kept convicted gun smugglers for friends, while Peter Mandelson's ability to schmooze the rich and famous repeatedly overruled concerns about his probity.To close a deal, there are always compromises to be made, and sometimes the terms are unsavoury. Continue reading...

Deregulation alone can't make homes affordable when rising inequality, not zoning, is what is driving prices upDonald Trump has an interesting view of how housing plays in US politics. I don't want to drive housing prices down. I want to drive housing prices up for people that own their homes," he said at a recent cabinet meeting. Unaffordable housing may be front and center of the affordability crisis" pissing off voters. Still, he insists: We're not going to destroy the value of their homes so that somebody that didn't work very hard can buy a home."It can be hard to square some things Trump says with other things Trump says, let alone with reality. One can't help but remember his campaign goal of cutting the cost of a new home in half" by eliminating pesky regulations that raise the cost of construction. Forget that cheap new entry-level homes will weigh on the price of the existing housing stock. Continue reading...

Rolling coverage of the latest economic and financial news

A wartime boom in Russia has given way to sluggish growth, tax hikes and squeezed public services. Will it affect the conflict in Ukraine?Western leaders were bullish when they imposed sanctions on Russia after the invasion of Ukraine in 2022.The Russian economy is on track to be cut in half," said the then US president, Joe Biden, in March, a month into the war. Continue reading...

Data from November 2025 was also revised lower amid a softening in labor market conditions at the end of the yearUS job openings dropped to the lowest level in more than five years in December and data for the prior month was revised lower amid a softening in labor market conditions at the end of 2025.Job openings, a measure of labor demand, decreased by 386,000 to 6.542m by the last day of December, the lowest level since September 2020, the labor department's Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey, or Jolts report, on Thursday. Continue reading...

Bank splits 5-4 on interest rate decision, and hints that cuts are coming, as governor pays tribute to Alistair Darling over Mandelson revelations

Bank indicates anti-inflation measures in Rachel Reeves's budget likely to pave way for rate cuts in months ahead

Rising unemployment and falling inflation made a strong case for a cut but Andrew Bailey opted to wait and see

States and financial bodies using modelling that ignores shocks from extreme weather and climate tipping pointsFlawed economic models mean the accelerating impact of the climate crisis could lead to a global financial crash, experts warn.Recovery would be far harder than after the 2008 financial crash, they said, as we can't bail out the Earth like we did the banks". Continue reading...

Rolling coverage of the latest economic and financial newsBen Barringer, head of technology research at wealth manager Quilter Cheviot,says investors are shunning' the software market due to uncertainty over AI's potential, and the disruption it could cause:All innovation means there is going to be disruption at some point, and we appear to be at a significant point in that journey for software and IT services companies. The launch of the Claude Cowork agent has sent share prices of these companies into a spin, and this is hurting other tech names too.We are not yet at the point where AI agents will destroy software companies, especially given concerns around security, data ownership and use, but this market rout suggests the potential disruption that is on the cards for markets in the coming days, weeks and months. There is a lot of uncertainty around exactly what AI agents can do, and as such investors are choosing to shun the software market altogether, leaving nowhere to hide. Continue reading...

Longest period of job shedding' in 16 years taking place as business activity grows at fastest rate since August Business live - latest updatesCompanies in the UK's services sector cut jobs last month, as they turned to automation" rather than hiring new staff, a closely watched survey showed.The monthly purchasing managers' index showed employment numbers fell more sharply in January compared with December, continuing a trend that started in October 2024. Continue reading...