A one-off boost to pensions now isn’t unfair if it means greater security in retirement for generations to comeThe “triple lock” is the most high-profile and contested area of pensions policy. It is also the most misunderstood. The lock, which ensures state pensions rise annually by the highest of average earnings growth, inflation or 2.5%, is almost always discussed in terms of the trade-off between pensioner benefits and working-age benefits. But to frame it simply like this is an error.Thérèse Coffey has today announced the suspension of the triple lock. It will be welcomed by those who believe we need to rebalance public spending from the old to the young. However, despite many arguments to the contrary, young people are in fact among the main beneficiaries of the triple lock. They would actually suffer from its removal.Craig Berry is a reader in political economy at Manchester Metropolitan University and author of Pensions Imperilled: The Political Economy of Private Pensions Provision in the UK Continue reading...

Work and pensions secretary tells MPs temporary move will prevent a hike in payments of 8%

‘Relatively limited’ increase could be needed if inflation is persistent, says member of rate-setting committeeThe Bank of England could be forced into action to raise interest rates next year if inflation remains persistently higher than expected, one of Threadneedle Street’s policymakers has said.Michael Saunders, one of nine members of the Bank’s monetary policy committee, said a rise in borrowing costs could be warranted before the end of 2022 if the UK’s economic recovery from lockdown is maintained and the rate of inflation sticks at elevated levels. Continue reading...

Rolling coverage of the latest economic and financial news, as supply problems hurt builders and hit car sales

Economic cost of climate crisis has cut 37% from global GDP this century, say researchersA return flight from the UK to New York could cost the global economy more than $3,000 (£2,170) in the long run, owing to the effects of the climate crisis, according to a report.Researchers examined the economic cost of the climate crisis and found it would cut about 37% from global GDP this century, more than twice the drop experienced in the Great Depression. Continue reading...

As McDonald’s and others increase wages, some economists say the balance is shifting in favor of workers – but will it last?As the US celebrates Labor Day, many employers are still struggling to find enough workers. McDonald’s, Chipotle, Walmart and many other companies have announced sizable wage increases to attract workers, and some economists argue American workers have the most bargaining power they’ve had in years.Many people, from low-wage workers to White House officials, are cheering this news, but there’s a fierce debate about this increased bargaining power. On Friday, the US released disappointing jobs figures that show the coronavirus is still affecting hiring. And while some argue this new-found worker power will be a longer-lasting phenomenon that yields years of better pay for workers, others believe it’s just a temporary blip. Continue reading...

Lobby group urges action on visas for foreign workers such as drivers, welders, butchers and bricklayers

The gains of the past 20 years in Afghanistan will be lost unless we keep funding social infrastructureAfghanistan is on the brink of economic meltdown. Millions of people are going hungry. Teachers and doctors are going unpaid. The social infrastructure built up over the past 20 years is collapsing, The banks are running out of money. Total collapse could come in days rather than weeks.A catastrophe can still be avoided but only if politicians in the west – and primarily those in Washington and London – accept that they lost and the Taliban won. Unless the international community engages with Afghanistan’s new rulers and finds a way of providing financial support it will be a classic example of self-harm. Continue reading...

The emotional three-word catchphrase ‘get Brexit done’ has been replaced by a new one: ‘supply chain issues’Just how long will it take the electors of this benighted country to realise that they have been conned by the Brexiters?By this I do not mean all the electorate – after all, nearly half those who voted on that fatal June day in 2016 were in favour of remaining in the European Union, and as a proportion of those eligible to vote, the Leave tally was 37%. Continue reading...

Why has it taken Brexit and a pandemic for the profession to begin to get the recognition it merits?Although current shortages have highlighted poor pay and conditions for goods vehicle drivers, it is not a new problem (“Food, beer, toys, medical kit… why are we running out of everything?”, Focus). In the 1990s, after a career in road transport management, I briefly went to live in the US. On returning to Britain, I dusted off my commercial driving licence and signed up with a driver agency.My first experience of being on the other side of the transport office desk was that as a driver you become invisible – spoken over and around and ignored. Major national companies who specify a narrow time slot for their delivery will turn you away if you arrive outside that window but keep you waiting in their yard sometimes for hours once you have checked in, not permitting you to even use their toilet facilities. Continue reading...

Worker shortages and problems with global supply chains together create ‘perfect storm’, say business leadersConsumers have been warned of an autumn rise in living costs from sharp increases in household energy bills and food prices, as Covid and Brexit disruption ripple through the economy.Sounding the alarm for a wide range of products and services going up in price, business leaders said the UK was facing a “perfect storm” of worker shortages and problems with global supply chains that would lead to a burst of inflation within months. Continue reading...

Rolling coverage of the latest economic and financial news

Unemployment rate declines by 0.2 percentage points to 5.2% from 5.4% in July as employers cut back hiring plansThe US economy added just 235,000 jobs in August, a sharp drop from preceding months, as employers cut back hiring plans amid the spread of the Delta variant of the coronavirus virus.The unemployment rate declined by 0.2 percentage points to 5.2% from 5.4% in July and has fallen dramatically from a high of 14.7% in April last year. So far this year, monthly US job growth has averaged 586,000, according to the Bureau of Labor Statistics. Continue reading...

Rolling coverage of the latest economic and financial news

First-half sales fall £2bn, says industry body, as barriers are compounded by staff shortagesExports of food and drink to the EU have suffered a “disastrous” decline in the first half of the year because of Brexit trade barriers, with sales of beef and cheese hit hardest.Food and Drink Federation (FDF) producers lost £2bn in sales, a dent in revenue that could not be compensated for by the increased sales in the same period to non-EU countries including China and Australia. Continue reading...

Rolling coverage of the latest economic and financial news

Domestic tourism helped footfall in August hit highest level since start of Covid pandemic

Domestic tourism helped footfall in August hit highest level since start of Covid pandemic

If you don’t care about workers, a vicious downward cycle works – as long as you can get them. Then one day, you can’tIn the mid-noughties, I was economics producer at the BBC, working with the then economics editor, Evan Davis. He had just begun presenting a new programme called Dragons’ Den, and had noticed something odd about the contestants. They would pitch up with their patter, their shiny prototypes, their occasionally plausible projections for how much cash would be rolling in by year three. And then, when asked how they actually planned to make their goods, they would shrug off this most fundamental of questions with a single word: China.China! Anyone with a trial subscription to the Economist knew what magic could be worked there, even if they didn’t know precisely how. It had factories and shipping containers and, most of all, vast numbers of workers to fill that yawning gap between spreadsheet and reality. The British no longer needed to cast themselves as makers; instead they could focus on the designing and the selling, the dreaming and the bullshitting.Aditya Chakrabortty is a Guardian columnist Continue reading...

If you don’t care about workers, a vicious downward cycle works – as long as you can get them. Then one day, you can’tIn the mid-noughties, I was economics producer at the BBC, working with the then economics editor, Evan Davis. He had just begun presenting a new programme called Dragons’ Den, and had noticed something odd about the contestants. They would pitch up with their patter, their shiny prototypes, their occasionally plausible projections for how much cash would be rolling in by year three. And then, when asked how they actually planned to make their goods, they would shrug off this most fundamental of questions with a single word: China.China! Anyone with a trial subscription to the Economist knew what magic could be worked there, even if they didn’t know precisely how. It had factories and shipping containers and, most of all, vast numbers of workers to fill that yawning gap between spreadsheet and reality. The British no longer needed to cast themselves as makers; instead they could focus on the designing and the selling, the dreaming and the bullshitting.Aditya Chakrabortty is a Guardian columnist Continue reading...

The year 2020 exposed the risks and weaknesses of the market-driven global system like never before. It’s hard to avoid the sense that a turning point has been reachedIf one word could sum up the experience of 2020, it would be disbelief. Between Xi Jinping’s public acknowledgment of the coronavirus outbreak on 20 January 2020, and Joe Biden’s inauguration as the 46th president of the United States precisely a year later, the world was shaken by a disease that in the space of 12 months killed more than 2.2 million people and rendered tens of millions severely ill. Today the official death tolls stands at 4.51 million. The likely figure for excess deaths is more than twice that number. The virus disrupted the daily routine of virtually everyone on the planet, stopped much of public life, closed schools, separated families, interrupted travel and upended the world economy.To contain the fallout, government support for households, businesses and markets took on dimensions not seen outside wartime. It was not just by far the sharpest economic recession experienced since the second world war, it was qualitatively unique. Never before had there been a collective decision, however haphazard and uneven, to shut large parts of the world’s economy down. It was, as the International Monetary Fund (IMF) put it, “a crisis like no other”. Continue reading...

The year 2020 exposed the risks and weaknesses of the market-driven global system like never before. It’s hard to avoid the sense that a turning point has been reachedIf one word could sum up the experience of 2020, it would be disbelief. Between Xi Jinping’s public acknowledgment of the coronavirus outbreak on 20 January 2020, and Joe Biden’s inauguration as the 46th president of the United States precisely a year later, the world was shaken by a disease that in the space of 12 months killed more than 2.2 million people and rendered tens of millions severely ill. Today the official death tolls stands at 4.51 million. The likely figure for excess deaths is more than twice that number. The virus disrupted the daily routine of virtually everyone on the planet, stopped much of public life, closed schools, separated families, interrupted travel and upended the world economy.To contain the fallout, government support for households, businesses and markets took on dimensions not seen outside wartime. It was not just by far the sharpest economic recession experienced since the second world war, it was qualitatively unique. Never before had there been a collective decision, however haphazard and uneven, to shut large parts of the world’s economy down. It was, as the International Monetary Fund (IMF) put it, “a crisis like no other”. Continue reading...

Card payment firm reports more transactions at weekend than on any day since Christmas Eve 2019

Card payment firm reports more transactions at weekend than on any day since Christmas Eve 2019

Retail data shows 0.4% month-on-month increase in August, with 0.6% rise in non-foodUK shop prices rose last month, according to the latest data from the British Retail Consortium, in a sign that driver shortages and the costs of Brexit-induced red tape are beginning to hit household budgets.The latest figures from the BRC and research group NielsenIQ reveal a 0.4% month-on-month rise in August. This was driven by a 0.6% rise in non-food prices, including a sharp increase in the cost of electrical goods caused by shortages of micro-chips and shipping problems. Continue reading...

Retail data shows 0.4% month-on-month increase in August, with 0.6% rise in non-foodUK shop prices rose last month, according to the latest data from the British Retail Consortium, in a sign that driver shortages and the costs of Brexit-induced red tape are beginning to hit household budgets.The latest figures from the BRC and research group NielsenIQ reveal a 0.4% month-on-month rise in August. This was driven by a 0.6% rise in non-food prices, including a sharp increase in the cost of electrical goods caused by shortages of micro-chips and shipping problems. Continue reading...

As job subsidy programme nears its end calls are growing to target help at badly affected sectors such as aviation

As job subsidy programme nears its end calls are growing to target help at badly affected sectors such as aviation

Rolling coverage of the latest economic and financial news

Rolling coverage of the latest economic and financial news

• Letter seeks greater action on climate crisis and racial justice• Trump appointee’s term at Federal Reserve expires in FebruaryThe New York representative Alexandria Ocasio-Cortez and other members of the Democratic party’s progressive caucus have urged Joe Biden to replace Jerome Powell as chairman of the Federal Reserve as part of a top-to-bottom makeover of the US central bank.“As news of the possible reappointment of Federal Reserve Chair Jerome Powell circulates, we urge President Biden to re-imagine a Federal Reserve focused on eliminating climate risk and advancing racial and economic justice,” they said in a statement issued on Tuesday. Continue reading...

Analysis: Rishi Sunak’s scheme has helped hold off mass unemployment, but he now favours targeted action

Tapering of stamp duty holiday in England and Northern Ireland fuels drop in housing market activityUK homeowners made a rare net repayment of mortgage debt in July as the tapering of the stamp duty holiday in England and Northern Ireland fuelled a drop in housing market activity after a record June.The Bank of England said individuals collectively paid back £1.4bn more of mortgage debt than they borrowed, in the first net repayment since the housing market ground to a halt during the first wave of Covid-19 in April 2020. Continue reading...

We’re interested to hear whether workers have seen their wages rise due to labour shortages in the UKAs demand for staff continues to outstrip labour supply in various sectors in the UK, we’re keen to hear whether workers have experienced wage growth in recent months.We’re also interested to hear from workers who, while more than 1.1m jobs in the UK remain unfilled, believe they will be able to demand better conditions in future. Continue reading...

Today’s challenges demand radical action. The old orthodoxy of free markets and hands-off government won’t cut itAs western economies emerge from the pandemic, their governments face a choice: do they seek to address the profound problems that Covid exposed, or try to return to “business as usual” as quickly as possible? Their problem is that many of the issues exacerbated by the pandemic, such as wage stagnation, precarious work and rising inequality are not bugs in an otherwise well-functioning system, but inevitable outcomes of the way that western economies are now organised. So a business-as-usual approach simply won’t work. Much more fundamental change is needed.The US government seems to recognise this. Joe Biden’s economic plans are a radical departure from the era that stretches from Reagan to Obama, when governments sought to keep taxes and public spending low and focused principally on globalised trade and the education and training of the workforce. Unlike his predecessors, Biden is pursuing large-scale public spending and taking advantage of ultra-low interest rates to borrow for infrastructure investment. His stimulus plans target the climate crisis while creating green jobs and expanding health, education and childcare – the “social infrastructure” that is essential to the economy but has often been ignored by mainstream economists.Michael Jacobs is professor of political economy at the University of Sheffield, and managing editor of NewEconomyBrief.net

Greater optimism among companies in August about post-Covid recovery, says Lloyds

Apple, Microsoft, Amazon and Google boost tech-heavy Nasdaq as Dow slows and S&P 500 banking index falls

Decline in exports from Taiwan combines with port closures in China and Japan to hinder growthA recovery in global trade during the summer is beginning to wane, according to some early warning signs pointing to the negative effects of widespread Covid-19 outbreaks in the manufacturing centres of east Asia.A dramatic decline in exports from Taiwan, which makes many of the computer chips used in cars and mobile phones, has combined with temporary port closures and lockdowns in Australia, China and Japan to cut the level of global trade. Continue reading...

For those who are part of Britain’s casualised workforce Brexit isn’t flawed – quite the oppositeThe number of job vacancies has topped the 1m level for the first time. Firms are screaming out for staff. Labour shortages abound. Wage growth is accelerating. There are calls from industry lobby groups for the government to ease the pressure by granting more visas for EU workers.At which point it may be worth taking a second or two to ask a simple question: if labour shortages are driving up the wages of low-paid workers then what is wrong with that? Continue reading...

Poor pay and conditions for HGV drivers and the loss of many thousands of EU workers are plunging the UKs supply chain into crisisGaps on supermarket shelves. Fast food outlets pulling milkshakes and bottled drinks from their menus. Restaurants running out of chicken and closing. Empty vending machines. Online grocery orders full of substitutions. Fruit and vegetables rotting in the fields.These are just some of the most visible signs of Britain’s deepening supply chain crisis, which has seen stocks in shops and warehouses slump to their lowest levels since the Confederation of British Industry began surveying in 1983. Continue reading...

Firms ignored the issue of migrant labour for years, but it is possible to manage without it – at a costWe’re not used to modern capitalism being a mess. For something so incredibly complex, it runs smoothly in normal times. Even those of us who don’t like many of its outcomes – its impact on inequality or the environment, for example – can marvel at how quickly a huge variety of goods and services are made available to us almost instantaneously.Which in part explains the collective trauma as real supply challenges have emerged, with shortages of certain goods (chickens or anything involving a semi-conductor) and workers (HGV drivers) dominating the headlines.Related: Whitehall must act on skills shortages – or see businesses driven into the groundThere is a reason why UK graduates aren’t clamouring for a career in meat packing on the minimum wage Continue reading...

The prime minister’s expansive vision for Britain faces many hurdles, the most awkward of which is his chancellorBoris Johnson must wish he owned a time machine to transport him beyond what is shaping up to be one of the most difficult autumns faced by any prime minister. Events in October and November are about to set the tone for the rest of the parliament and the premiership of our once brazen, and now rather bedraggled, PM.The list of promises that will transform the UK into a 21st-century economic powerhouse are long and costly, and most of them are tied closely to Johnson’s personal ambitions. He has told us that his government will transform the education system, the skills base and the social care system, and “level up” the regions. Backlogs of NHS operations will be cleared and the path to net zero carbon emissions charted.There is an increasing likelihood Johnson will find himself forced to defend high profile cuts, such as the important high speed rail link from Birmingham to Leeds Continue reading...

Rolling coverage of the latest economic and financial news

Head of US central bank had been expected to announce Covid programme would be tapered off

Rolling coverage of the latest economic and financial news

As pinged people stay home, the unpinged may be getting more cautious, suggesting a longer-than-expected recoveryNewspapers call August the silly season because not a lot happens. That’s not always the case, as events in Afghanistan have shown, but it is certainly true of the UK economy this year. And that’s bad news.Each week the Office for National Statistics puts together a digest of the very latest data, everything from restaurant bookings to the number of cars on the road. To be clear, these are not official figures, but they do provide a reasonably good guide to what’s going on. Continue reading...

Covid has made us poorer and increased wealth and educational disparities. Optimism alone cannot fix this

Our latest snapshot of key economic indicators also finds cooling inflation and supply chain chaos

Recruitment firm says strength of recovery has been dramatic as economy bounces back from Covid crisis

Rolling coverage of the latest economic and financial news