Cost of a home climbed in every region in 12 months to August, with prices in London rising to £526,000The average cost of a UK home increased by £25,000 in the 12 months to August, official figures show, with rises recorded in all regions.The annual rate of price inflation hit 10.6% during the month, up from 8.5% in July, the Office for National Statistics said, bringing the average price to £264,000. Continue reading...
Supply chain chaos, labour shortages and ‘scourge’ of inflation expected to last years, says food and drink chiefRestaurants and hotels are wrestling with “terrifying” inflation running as high as 18%, bosses have warned, as supply chain disruption and labour shortages wreak havoc in the hospitality sector.Ian Wright, chief executive of industry body the Food and Drink Federation, told MPs on the business, energy and industrial strategy committee that the rate bodes ill for the retail industry. Continue reading...
by Richard Partington Economics correspondent on (#5QVTK)
Resolution Foundation finds household incomes set to fall by about 2% amid cost of living squeezeBritish households will be £1,000 worse off next year from a cost of living squeeze created by rising energy prices and shortages of workers and supplies caused by Covid and Brexit, a leading thinktank has warned.The Resolution Foundation said higher levels of inflation would weigh down workers’ earnings next year, contributing to a hit to the average household income in Britain at a time when the government is cutting benefits and raising taxes. Continue reading...
Expectations jump after Bank governor says action will have to be taken to curb rising inflationExpectations that the Bank of England will raise interest rates as early as next month jumped in the City on Monday after the governor said it would have to act to curb rising inflation.The yield, or interest rate, on the UK’s two-year government bonds jumped to its highest level since May 2019 as traders anticipated a rate rise. Continue reading...
Economy minister tells of ‘significant challenge’ of retaining and attracting talent to support country’s economyThe Welsh government is launching a drive to persuade more young people to remain in their homeland amid growing concerns that the percentage of working-age citizens is dropping to worryingly low levels.Ministers fear that unless the “brain drain” is stopped – and more talented people can be tempted in – within a few decades the country may struggle to pay the bills to look after its ageing population. Continue reading...
GDP grew 4.9% in the quarter to September, the lowest for a year, as the post-pandemic recovery loses steam and Evergrande problems persistChina’s economy grew slower than expected in the third quarter, official data showed on Monday, thanks to power outages, supply bottlenecks, Covid outbreaks, and concerns about the struggling property sector.Although China’s central bank governor said the country is “doing well”, independent economists predicted that the mounting array of headwinds suggest a “deeper downturn” resulting in the country’s weakest growth for more than a decade next year. Continue reading...
Readers respond to a report revealing the highly predicable consequences of savage public service cuts over many years, and the effects of widening inequalityYou report on a study by the University of York into the first five years of the coalition government’s “age of austerity” (Austerity in England linked to more than 50,000 extra deaths in five years, 14 October). The real scandal is that the results were in general foreseeable, and nothing was done nationally to mitigate them.At a local level, the London borough of Lewisham decided to theme its annual public health report for 2011-12 on the effects of the economic downturn and austerity on the health of its population. Continue reading...
Poorer nations were more fragile before Covid-19, had less scope to stimulate economies, and are on the wrong side of the vaccine divideA global pandemic. Rising inflation. The threat posed by climate change. Global policymakers have enough to keep them occupied without a developing country debt crisis adding to their list of problems.That is a real possibility. Both the World Bank and the International Monetary Fund used their annual meetings to stress the pressure poorer countries were under and the need for urgent, collective action. They are right to be worried because debt is at record levels, defences against a crisis are inadequate and the clock is ticking. Continue reading...
Britain’s two great self-inflicted crises of the postwar era point to a conclusion that voters may soon rediscover for themselvesMany countries are experiencing economic problems associated with the pandemic and supply chain shortages, but none is in such a bad position as the UK.This is entirely because of Brexit. Quite apart from the multiplicity of crises associated with the acute shortage of heavy goods vehicle drivers – pigs being culled, but not for eating, farmers pouring milk down the drain, queues for petrol, you name it – the economic self-harm is now showing up in the statistics, with the International Monetary Fund putting the UK bottom of its Group of Seven future growth league. This contrasts with our prime minister’s shallow claims that the UK is currently enjoying the fastest growth in the G7. Continue reading...
From Carlisle Castle to Portsmouth Historic Dockyard, study highlights hefty rises since 2016The cost of visiting some of Britain’s best-known visitor attractions has almost doubled over the last five years, according to researchers who named English Heritage sites as the worst offenders.Overall the cost of family days out has risen by a third, according to the Play Like Mum website, which compared the cost of visiting popular sites five years ago with today’s prices. Continue reading...
From China backtracking on coal to Britain’s ‘chicken king’ calling for a rethink of food production, the virus has accelerated nationalist impulses towards autarkyWhen Xi Jinping promised the world’s movers and shakers in January 2017 that China would champion globalisation, it looked as if the baton of global economic leadership was being picked up seamlessly by Beijing as Donald Trump prepared to usher in an era of American isolationism.Almost five years later a new world order has emerged, but it is not the one China’s president and others gathered in Davos that day seemed to have in mind. Continue reading...
Even though the human cost of a cruel policy has been confirmed, expect another turn of the screw next weekDeaths are what can be counted most easily – bodies can’t be hidden from the statisticians or denied by those responsible for the figures. It was predictable, and predicted, that many more would die when the government of David Cameron, George Osborne and Nick Clegg applied a brutal tourniquet to public spending in 2010. Warnings at the time were shrugged off as shroud-waving and scaremongering.But new research from University of York’s renowned Centre For Health Economics only confirms the inevitable consequence: an extra 57,550 people in England died in the five years from 2010, a level of deaths beyond the statistically normal. Life expectancy improvement slowed, which was directly “attributable to spending constraints in the healthcare and social care sectors”, according to lead researcher Prof Karl Claxton.Polly Toynbee is a Guardian columnist Continue reading...
by Oliver Milman and Joanna Walters in New York and a on (#5QR7S)
White House issues 40-page report and sets out steps for action as ‘climate impacts already affecting’ jobs, homes and businessesJoe Biden’s administration on Friday issued a 40-page report warning that the climate crisis “poses serious and systemic risks to the US economy and financial system” and setting out steps for action as “climate impacts are already affecting American jobs, homes, families’ hard-earned savings, and businesses”.Under the new plan, the federal government will weigh up climate risks for employee benefit and retirement plan investments, incorporate climate disasters into lending and budgeting decisions and revise building standards for homes at risk of flooding. Government-backed mortgages for public housing will factor in the risk of calamitous floods, wildfires and other climate impacts. Continue reading...
Catherine Mann and Silvana Tenreyro speak out against early rate rise amid surging gas prices and materials shortageTwo of the Bank of England’s nine-strong monetary policy committee have said they prefer to wait and see how surging gas prices and shortages of raw materials affect inflation before voting for a rise in borrowing costs.In a message that will be seen as a swipe at more hawkish members of the monetary policy committee (MPC), who have signalled a willingness to raise borrowing costs, the economists said the recovery still remained uncertain. Continue reading...
by Jennifer Rankin and Daniel Boffey in Brussels on (#5QP8F)
‘Bespoke Northern Ireland-specific solution’ includes potential new rules on food, plants and medicinesThe EU’s latest proposals, described as “a new model” for Northern Ireland, are a significant concession from Brussels. Having ruled out renegotiation of the protocol in July, the EU is proposing a “bespoke Northern Ireland-specific solution”. Continue reading...
George Gater, my husband, who has died aged 88 of cardiogenic shock, was an industrial economist, and an amateur art historian. Coming from a privileged background he yet had a determined independence of mind and an egalitarian outlook.The son of Sir George Gater, a civil servant, and Irene (nee Nichols), who ran the National Gallery canteen for Myra Hess’s wartime concerts, he was named Anthony George Richard, and known as Anthony by his family but as George by his friends from boyhood on. Born in London, he was educated at Winchester college and then studied philosophy, politics and economics at New College, Oxford, following national service. Continue reading...
Kristalina Georgieva is likely to survive row over China report but institution’s reputation will sufferIn the past couple of decades managing directors of the International Monetary Fund have fallen into two categories: those that have had personal difficulties and survived and those that have had personal difficulties and stepped down.Kristalina Georgieva, the current IMF boss, is one of the former. The question of whether she instructed for a report to be doctored to put China in a more flattering light when she was vice-president of the World Bank has turned into a saga involving whistleblowers, an external report, lengthy grillings by the IMF board and accusations of a dirty tricks operation mounted by conservative forces in Washington. Continue reading...
Across the country, people are refusing to return to backbreaking or mind-numbing low-wage jobsLast Friday’s jobs report from the US Department of Labor elicited a barrage of gloomy headlines. The New York Times emphasized “weak” jobs growth and fretted that “hiring challenges that have bedeviled employers all year won’t be quickly resolved,” and “rising wages could add to concerns about inflation.” For CNN, it was “another disappointment”. For Bloomberg the “September jobs report misses big for a second straight month”.The media failed to report the big story, which is actually a very good one: American workers are now flexing their muscles for the first time in decades.Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com Continue reading...
Analysis: social unrest is around the corner without further support such as vaccine waivers and debt reliefBritain’s recovery from the pandemic is slowing. So is the bounceback in Europe and the US, where the Biden administration is trying to piece together another major stimulus package to bridge the gap between pre- and post-pandemic job markets.But the loss of momentum across the G7 is small and governments can afford to offset a spike in fuel prices that will dent business profits and household incomes over the winter months, says the International Monetary Fund. Continue reading...
Donald Trump wanting his daughter to have the top job at the World Bank is no great surprise. What intrigues me is the thought of Steven Mnuchin blocking itIt’s no secret that Donald Trump has something of a soft spot for his eldest daughter, Ivanka. He’s constantly tooting her horn and gushing over her talents. Not only does Ivanka have a “very nice figure”, Trump has boasted, but “she’s very good with numbers”. She’s so good at all that numbers stuff that the former president even considered her for the top job at the World Bank in 2019. And that wasn’t just a fleeting fantasy, either; according to a recent report by the Intercept, Ivanka’s nomination for World Bank president “came incredibly close to happening”. The reason it didn’t is that Trump’s treasury secretary, Steven Mnuchin, intervened. Which, by the way is a rather different story from the one Ivanka tells. The former first daughter has said she passed on the job because she was very happy with the high-powered White House position she’d appointed herself to.I can’t say I’m surprised that Ivanka was a stone’s throw away from a(nother) prestigious job she was laughably unqualified for. What does intrigue me is why Mnuchin might have blocked her nomination. Trump has a knack of surrounding himself with sycophants who do his bidding; what could have prompted Mnuchin to break ranks? Could it possibly be that the guy finds brazen nepotism distasteful? Alas, it seems unlikely, considering he’s a product of it himself. Mnuchin’s first job out of Yale was at Goldman Sachs, where his dad just happened to be a general partner. According to a New York magazine profile, Mnuchin’s colleagues at Goldman Sachs didn’t consider him “especially book smart”, but that didn’t stop him becoming partner himself. The same profile notes that his elevation to partner came at the expense of an African American trader from a working-class background who struck one colleague as being “much smarter than Steven” and having “accomplished a lot more”. I don’t know how fair that profile is, but I’d bet both my kidneys that Mnuchin isn’t someone who stays awake at night fretting about nepotism.Arwa Mahdawi is a Guardian columnist Continue reading...
Investors increasingly worried about rising infections and weak recovery in poor countries, report warnsThe emergency support provided by central banks and finance ministries during the Covid-19 pandemic has fuelled speculation and left the world vulnerable to another financial crisis, the International Monetary Fund has warned.Policymakers were faced with a “challenging” trade-off between continuing to support economic activity while preventing unintended consequences and medium-term financial stability risks, the IMF said in its half-yearly Global Financial Stability Review (GFSR). Continue reading...
Forecasts of early increase come as series of indicators show strains on industry and big fall in consumer confidenceTraders are betting that Bank of England policymakers are likely to begin raising interest rates as early as December in response to fuel and food shortages that are expected to push up inflation before Christmas.Financial markets have brought forward their forecasts for interest rate rises, judging a 0.15% increase in the central bank’s base rate a certainty in the days before Christmas. The increase is in addition to two 0.25% rises earmarked for next February and August that will push borrowing rates by the end of 2022 back to the 0.75% level seen before the pandemic. Continue reading...
by Richard Partington Economics correspondent on (#5QKXV)
Chancellor on track to impose a package of manifesto-busting tax increases at this month’s budget, says IFSRishi Sunak is poised to usher in cuts worth £2bn for government departments tasked with meeting the Tories’ flagship “levelling up” agenda, despite planning for the biggest tax raid in a generation.The Institute for Fiscal Studies (IFS) said the chancellor was on track to lift the UK’s tax burden to the highest sustained level in peacetime with a package of manifesto-busting tax increases at this month’s budget and spending review. Continue reading...
Global problems hamper the online retailer after seemingly scooping up Philip Green’s empire in triumphSo much for the idea that lockdown shopping habits had permanently propelled the profits of online specialists into a new stratosphere. Asos, after a knockout year of £194m of pre-exceptional profits, says it will fall back to £110m-£140m next time, several rungs below City forecasts.Nick Beighton, the chief executive, is out. And the share price, down 13% to £24.08 on Monday, stands at less than half its level at the start of this year, which was a moment when Asos had seemingly demonstrated the triumph of the online brigade by scooping up the remnants of Sir Philip Green’s empire. Continue reading...
Kais Saied will technically head administration after paring back powers of PM’s officeTunisia’s president, Kais Saied, has appointed a new government by decree, 11 weeks after firing the last one in a power grab, as the country faces acute economic and political crises.State television broadcast a swearing-in ceremony of the cabinet headed by Najla Bouden, the north African country’s first female prime minister. Continue reading...
Canadian-born academic wins prize with Joshua Angrist and Guido ImbensA labour market expert whose work influenced the introduction of the UK’s minimum wage has been named as a joint winner of the Nobel economics prize.David Card, a Canadian-born economist, was one of three US-based academics given the prestigious award for their work on whether economic theory is supported by real-life situations. Continue reading...
A shorter working week could benefit society, the environment - even the economy. Is it time to reassess our relationship with our jobs?For the last year and a half, most people have fallen into one of three categories: the unemployed, whose jobs disappeared during lockdown; the work from home brigade, who balanced family responsibilities or solo strain with a workday that extended even longer sans commute; and those who were still going to work but under hazardous, sometimes terrifying conditions, whether in healthcare or grocery stores or meatpacking plants. In so many of these cases, much of what made work enjoyable or at least tolerable was stripped away, and we were left with the unpleasant reality of what our jobs actually were: not a fun pastime, but something we have to do. As Amelia Horgan notes in her book Lost in Work, “We, almost always, need a job more than a job needs us. Our entrance into work is unfree, and while we’re there, our time is not our own.”Yet for all its misery, Covid-19 did show us that it was possible to radically change the way we live and work, and to do it quickly. And it’s worth remembering that working life pre-pandemic wasn’t exactly sunshine and rainbows for many people – a UK poll early in the pandemic found only 6% of respondents wanted to return to life as it had been before the virus. Work, as I noted in my book Work Won’t Love You Back, has been getting worse for a while, with many people trapped in a rat race of zero-hours contracts, on-call shifts that never materialise, juggling jobs and gig work, or facing stagnant wages as the rent continues to rise. Yet we are expected to grin and bear it, providing service with a smile or demonstrating our commitment by treating our workplace as a “family”. The world of work, writes Phil Jones in Work Without the Worker, “is stretching into a vast and desolate hinterland of informality, temping, gigs and pseudowork, much of which – like workfare – is created simply for the sake of taming surplus populations”. Continue reading...
Steven Mnuchin said to have stopped move likely to have upset world leaders, which ‘came incredibly close to happening’Only direct intervention from his own treasury secretary stopped Donald Trump nominating his daughter, Ivanka Trump, to lead the World Bank, according to a new report.Citing two anonymous sources, the Intercept said the appointment “came incredibly close to happening” in January 2019, but for Steven Mnuchin’s decision to step in. Continue reading...
Exclusive: chancellor criticised by former Tory international development secretaries for planned use of $27.4bn windfallRishi Sunak is to save billions of pounds by counting as aid financial assistance to poor countries being provided as a result of a windfall Britain has received from the International Monetary Fund (IMF).In a move that has been condemned by former Conservative international development secretaries, the chancellor has chosen not to use the UK’s share of a new $650bn IMF global fighting fund to increase the share of national output spent on aid. Continue reading...
My friend Roger Jeal, who has died aged 72 of cancer, was a business journalist who worked at Reuters for 40 years, including postings in France, Germany, the Netherlands and Hong Kong. Later in his career he taught his trade to young journalists.
Baked beans maker is latest firm to talk of food price rises, as inflationary pressures mountA Bank of England policymaker has warned households to get ready for “significantly earlier” interest rate rises as inflation pressures mount, and Kraft Heinz became the latest company to say that food prices will rise.Michael Saunders, one of the Bank’s nine rate-setters, said investors were right to bet on faster increases in borrowing costs with consumer price inflation on course to rise above 4%, adding to signs Threadneedle Street might become the first major central bank to raise rates since the coronavirus pandemic struck. Continue reading...
Bad things happen in this month and, as IMF prepares for annual meeting, signs of a crisis loomBad things happen in October. It was in this month 13 years ago that the global banking system came close to imploding. There was a stock market bloodbath in October 1987. And it was in October 1929 that the Wall Street Crash triggered the Great Depression.One consequence of the economic horrors of the 1930s was the creation of the International Monetary Fund, with the idea to create a multilateral body that would help countries through short-term problems and prevent systemic crises from developing. Continue reading...