Questions being asked over project as 35-acre site stands emptyIn May 2013, Boris Johnson announced a flagship £1.7bn scheme for Chinese investors to transform east London docks into the capital’s third financial district.It was the biggest commercial property deal he had announced during his time as London mayor and he pledged it would be a “beacon for eastern investors”. Continue reading...
Independent panel had chosen Oxford professor Jonathan Michie to be chair of government-funded research bodyThe business secretary, Kwasi Kwarteng, reportedly blocked the appointment of a leading academic to run a £200m economic research body because he was allegedly considered too leftwing.Jonathan Michie, the president of Oxford University’s Kellogg College and a professor of innovation and knowledge exchange, was selected by an independent selection panel to be executive chair of the government-funded Economic and Social Research Council (ESRC), reports the Financial Times. Continue reading...
My wife, Gill Clisham, who has died aged 59 of heart failure, was the secretary of the National Institute of Economic and Social Research (NIESR) from 2001 to 2014. Though not an economist, she worked tirelessly throughout her career to ensure a wider understanding of the discipline and was instrumental in the inception and development of many successful initiatives, most notably the Westminster Economics Forum, a series of conferences she developed in partnership with the ESRC (Economic and Social Research Council).Gill was born in Wigan, the daughter of Marjorie (nee Barton), a health visitor, and Arthur McCaffery, a post office engineer. She arrived in the world following her mother’s previous eight miscarriages, and was valued by her parents as an only child. This prompted Gill to embrace life to the full. Continue reading...
The chancellor has announced a raft of measures to tackle the biggest fall in disposable income for three decades. How will you be impacted?Households are facing the biggest fall in disposable income for three decades, according to the Bank of England, with rising energy prices and other consumer inflation hitting incomes. The government has responded to the cost of living crisis with the announcement of a package of measures. Here we look at the impact on a range of different people. Continue reading...
by Phillip Inman and Richard Partington on (#5VR0S)
Rise aims to combat soaring inflation despite faltering economic recovery and deepening cost of living crisisThe Bank of England has raised interest rates for a second time in three months, to 0.5%, as it warned that surging energy bills would push inflation higher than expected, to more than 7% by April.Warning that families faced the biggest fall in their disposable income for three decades this year, the Bank’s rate-setting monetary policy committee voted by a narrow majority to raise its base rate from 0.25% to tackle soaring inflationary pressures. Continue reading...
A one-off £200 discount and a rebate on council tax bills have been announced by Rishi Sunak in a £9bn package designed to 'take the sting' out of a £700-a-year rise in the average household’s energy bills in April
Report shows temp workers have few protections, even as staffing industry sees explosive growthHaley Hodges was working as a temp at a medical staffing agency in Iowa when she found out there were complications with her pregnancy and she was forced to cancel a few shifts. The cancellations led to her being placed on probation and her wages being slashed.The pandemic has led to a huge surge in temporary hiring, according to a report by the National Employment Law Project (NELP) and Temp Worker Justice that highlights the struggles many of those workers face.36% of workers reported they or their dependents relied on some form of government assistance while they worked through a staffing agency.24% of workers reported experiencing wage theft through a staffing agency, in which they were paid less than minimum wage, not paid overtime, or not paid the proper amount forhours they worked.17% of workers reported suffering an illness or injury on the job, and 41% of those workers said they had to cover the costs of medical care themselves.24% of temp workers said they have never received safety training before beginning a temp position, and 23% said they only sometimes received safety training.80% of workers reported interest in joining a worker organization such as a union to improve working conditions.71% of workers reported experiencing retaliation for raising workplace concerns to their management. Continue reading...
So-called missions to improve people’s lot nationwide require local knowledge and local powers if they are to be fulfilledFor two and a half years, it was like waiting for Godot. But the levelling up white paper is finally here. So was it worth the wait?First, the good points: the plan’s ambitions are clear, and there are things to praise within it. For one, the notable shift of focus to improving living standards rather than simply targeting growth. Legally binding “missions” to improve wellbeing across the country, close the gap in healthy life expectancy, narrow the attainment gap and boost wages and jobs are all a step forward. They show that the government has finally understood that its previous strategy of pursuing growth above all else failed to improve the lives and livelihoods of people in the country that most needed it.Miatta Fahnbulleh is chief executive of the New Economics Foundation
Bank of England to vote on potential rate change while inflation soars to 30-year highBritons are braced for the Bank of England to increase interest rates on Thursday as the central bank seeks to tackle price pressures that have pushed annual inflation to a 30-year high of 5.4%.Most City economists said the majority of members on the Bank’s rate-setting committee would increase the base rate from 0.25% to 0.5%, with the likelihood that at least two more increases would follow during 2022. Continue reading...
Director general to tell ministers they must raise skills, cut red tape and exploit opportunities of green economyBritain risks becoming trapped in a vicious cycle of low growth and high taxation unless the government takes radical steps to boost investment, raise skills, cut red tape and exploit the opportunities of the green economy, a leading business lobby group is warning.Tony Danker, the director general of the CBI, will use a speech on Thursday to criticise ministers for a lack of ambition as he outlines a five-point plan to restore the UK’s underlying growth rate to the levels seen before the financial crisis of 2007-09. Continue reading...
Michael Gold makes the case for membership of the European Economic Area, Simon Price outlines our slow economic decline after leaving the EU, and Dr David Mathieson urges Labour to rethink its policyAnand Menon rightly points out that the disastrous effects of Brexit on trade, tax rises and growth are now becoming apparent (Covid has been an easy scapegoat for economic disruption, but Brexit is biting, 31 January). He’s right, too, to note that Covid has become an easy scapegoat for economic disruption. However, the political realignment also brought about by Brexit seems to offer little chance for reopening the process of rejoining the EU, given that it resulted from a referendum whose legitimacy we all have to accept, however reluctantly.Membership of the European Economic Area could be the answer. Nothing on the referendum voting slip committed us to the hard Brexit to which we find ourselves condemned. Iceland, Liechtenstein and Norway are also outside the EU, but covered by the EEA agreement that guarantees their compliance with EU legislation on the single European market, competition and employment rights. Prof Menon observes that 57% of Britons now think the government is handling Brexit badly, so surely they too will increasingly want to find a way through. EEA membership would allow us to remain outside the EU while regaining some of the practical advantages of EU membership. It would also put us in a stronger position to rejoin the EU if and when the electorate so decided.
Philip Lowe may have the patience of a saint on interest rates but he doesn’t have a mortgage to pay“Patient” is a useful word for the reserve bank governor, Philip Lowe, when it comes to the timing of any interest rate rise. It’s vague and gives few clues as to how much time is left.After Tuesday’s RBA meeting, Lowe said the bank’s board “was prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve”. He echoed the sentiment at Wednesday’s National Press Club address on the year ahead. Continue reading...
Food prices rose 2.7% but the biggest change was in items such as flooring, with prices up 0.9% compared with 0.2% in DecemberShop price inflation almost doubled in January to the highest level for nearly a decade as the cost of furniture and flooring shot up.Annual inflation of goods bought from retailers rose to 1.5% last month from 0.8% in December, according to the latest data from the British Retail Consortium (BRC) trade body and the market research company NielsenIQ, the highest level since December 2012. Continue reading...
Savings built up during pandemic fall by two-thirds and consumer credit rises by £800m over yearConsumers are starting to run down the savings built up during the pandemic in order to sustain spending patterns threatened by higher inflation, Bank of England figures suggest.With the cost of living rising, Threadneedle Street data showed a marked drop in December in the amounts being deposited in savings accounts and national savings. Continue reading...
AG Barr blames rising production costs for price increase as it ups full-year sales and profit estimatesThe company behind Irn-Bru has revealed it is increasing its prices after its packaging, ingredients and energy-linked commodity costs jumped, as it raised its sales and profit estimates.AG Barr said owing to rising costs, which includes fruit and wages, it had put up prices “where appropriate” and signalled further price increases as it pointed to the UK’s inflation rate rising above 5%, the highest in decades. Continue reading...
The unpopular truth is that leaving the EU has not magically transformed Britain, but nor has it been calamitousPlenty of people – on the left as well as the right – believed George Osborne when he conjured up a dystopian vision of Britain after a vote for Brexit during the final weeks of the referendum campaign. The then chancellor said victory for leave would result in a “DIY recession”, the loss of 800,000 jobs, a weaker housing market and a stock market crash. Two years on from our date of departure from the EU, none of it has happened.Unemployment is lower than it was in 2016 and, although this is very much a mixed blessing, house prices are higher. Share prices have risen and until Covid-19 arrived there was no recession. That hasn’t halted the flow of gloomy predictions: Nissan would quit the UK, tens of thousands of City jobs would be lost to Paris, Frankfurt and Amsterdam. More recently, Brexit supply chain problems would mean a turkey-less Christmas and empty high street shelves in December. None of that happened either, and the wait for economic meltdown goes on.Larry Elliott is the Guardian’s economics editor Continue reading...
by Richard Partington Economics correspondent on (#5VKN3)
City economists expect increase from 0.25% to 0.5% on Thursday amid cost of living crisisThe Bank of England is poised to raise interest rates on Thursday amid growing concern over the pressure on households from high inflation in Britain’s cost of living crisis.City economists widely expect the central bank to increase its key rate from 0.25% to 0.5% in response to inflation hitting levels not seen for almost 30 years, with financial markets suggesting a 90% chance of an increase in borrowing costs. Continue reading...
Rising housing and energy costs plus higher taxes mean ministers have to come up with somethingGovernments underestimate the power of celebrity at their peril. First it was Marcus Rashford and his campaign for hungry children. Now it is Jack Monroe pointing out how the official inflation figure bears no relation to the real cost of living increases facing the neediest households.The footballer and the chef have performed an important public service by highlighting, in a way that official statistics and thinktank reports can’t, just how tough life is on or close to the breadline. Continue reading...
by Toby Helm, Phillip Inmanand James Tapper on (#5VJVF)
Observer writers examine whether the claims in the PM’s speech to parliament on 19 January actually hold waterJohnson detailed what he meant by “getting the big calls right” in a Commons speech on 19 January. He listed the decision to focus on the booster campaign in December, not opting to use the European Medicines Agency for vaccine procurement, and investing early in lateral flow tests and “cutting-edge drugs”. He also claimed that the UK had the “fastest booster campaign in Europe” and was “first to emerge from the Omicron wave”. Continue reading...
The economy is booming and corporate profits are huge, but American wages still stagnate. History provides the answerAccording to this week’s release from the commerce department, the US economy has been growing at its fastest pace in almost 40 years. Corporate profits are their highest in 70 years. And the stock market, although gyrating wildly of late, is still scoring record gains.So why do most Americans remain gloomy about the economy? Mainly because their real (inflation-adjusted) wages continue to go nowhere. Continue reading...
The Conservatives will provoke electoral anger in 2024 if the free-spending promises of 2019 are replaced by a new austerityAs the Conservative party plots a way out of “partygate”, with or without its current leader, the path towards re-election in 2023 or 2024 is looking hazardous.In December 2019, flush with an 80-seat majority and a public spending deficit of just 2.6%, the outlook was rosy for a cabinet dominated by Brexiters keen to reward their supporters with one spending initiative after another. Continue reading...
by Kalyeena Makortoff and Jasper Jolly on (#5VJ1T)
The race to fund the lockdown economy ensured speed trumped due diligence, leaving the taxpayer wide open to fraudIn the final days of April 2020, bankers and Treasury officials were huddled over laptops in makeshift home offices across the country, negotiating the terms of what is fast becoming the most controversial of the government’s pandemic rescue schemes.The country was in its sixth week of national lockdown after the Covid outbreak, and the Treasury’s head of banking and credit, David Raw, was leading video calls with more than 20 senior staff from across government and the City – including the big banks HSBC, NatWest, Barclays and Lloyds, Santander, Virgin Money and AIB – to try to push through the chancellor Rishi Sunak’s ambitious plan for a more accessible, 100% government-backed small business loan scheme. Continue reading...
Readers on the ‘Sam Vimes “Boots” theory of socioeconomic unfairness’ about how price rises disproportionally affect those who are worst offThe “Sam Vimes ‘Boots’ theory of socioeconomic unfairness” (Cost-of-living crisis: Jack Monroe hails ONS update of inflation calculations, 26 January) was not invented by Terry Pratchett.Paul Jennings expressed exactly the same idea in his Observer column Oddly Enough in 1954: “You find, for instance, that you have got to have a new pair of shoes, so you rush into a shop and buy some; some cheap ones, and they are worn out in three months. But if you were on one of the inner platforms [Jennings’ term for the rich] you would go calmly into a rather splendid shop and buy the sort of shoes that are bought by men on leave in London from Africa, or down from their Scottish moorland estates. Continue reading...
Housing is increasingly attractive asset for institutional investors due to near zero interest ratesThe rate at which institutional investors, such as private equity and pension funds, are buying up housing is accelerating in major European cities, driving up house prices, research suggests.The volume of purchases in Europe hit €64bn (£53bn) in 2020, with about €150bn worth of housing stock conservatively estimated to be in the hands of such large investors. Continue reading...
Markets in Japan and Korea lose more than 3% on fears of costlier borrowing, with FTSE and Wall Street on course to follow suitStock markets in Asia have tumbled to their lowest in nearly 15 months after America’s central bank chief confirmed widely expected plans to tackle higher inflation with an increase in interest rates this year, beginning in March.With investors also concerned about political tensions between Russia and Ukraine, supply chain problems and rising oil prices, the prospect of sustained increases in the cost of borrowing by the world’s most powerful economy sent a spasm of anxiety through financial markets on Thursday. Continue reading...
Rishi Sunak asked to investigate escape of market sensitive information and warned his policies are inflationaryMPs have expressed “deep concern” over the leaking of price-sensitive information before Rishi Sunak’s budget last year and warned the chancellor his package of measures risked adding to Britain’s already surging inflation rate.The influential all-party Treasury committee called for Sunak to investigate how details of a planned increase in the national living wage to £9.50 an hour were disclosed in the runup to the budget in late October. Continue reading...
Fed chair Jerome Powell said the central bank would make a decision on the rate raise in its March meetingThe Federal Reserve is preparing to raise rates in March for the first time since the coronavirus pandemic struck the US as it attempts to curb rising prices.After its latest two-day meeting the central bank announced that it would leave interest rates close to zero for now but signaled it was preparing to raise them at its next meeting. Continue reading...
President signals more cautious approach to climate crisis and says China must ‘overcome notion of rapid success’China’s ambitious low-carbon goals will not be realised easily and should not come at the expense of energy and food security or the “normal life” of ordinary people, its president, Xi Jinping, has said, signalling a more cautious approach to the climate emergency as the economy slows.China, the world’s biggest source of greenhouse gas emissions, has been under pressure to “enhance ambition” and take more drastic action to tackle global heating. In the past two years, Beijing has also made a number of pledges to show its commitment. Continue reading...
A different Tory leader will not save a failing social security system. We need a new welfare state from the bottom upThe thing about governments in crisis is that they have little time for governing. Boris Johnson – once king of the world, now lame duck – is a prime minister consumed with his own survival. Insiders say Johnson is motivated to hang on to power not to deliver a pressing policy agenda but to beat former Bullingdon Club chum, David Cameron: “He won’t accept the last Etonian PM having survived longer than him.” Meanwhile, in the real world, British families are about to endure the worst cost of living crisis for 30 years, and are left waiting for anyone in power to notice.For many, the money going out is about to soar, causing that coming in to shrink in real terms. Inflation rose to 5.4% last month, driven by pricier food and clothes. Energy tariffs are escalating and tax bills are set to go up too. At the same time, the £20 universal credit uplift has been cut and unemployment benefits are about to hit their lowest real value in more than three decades, a rate that experts call “only slightly more than destitution”. Ministers can claim work is the solution but it is good jobs, not any job, that is a reprieve; the majority of people living in poverty in the UK last year were in working households. The official line may be that the pandemic is over, but this too is still hitting personal finances – just ask the clinically vulnerable pensioner shielding in a cold home. The result of all this is clear enough: simply getting by is increasingly going to become a luxury.Frances Ryan is a Guardian columnist and author of Crippled: Austerity and the Demonisation of Disabled People Continue reading...
by Caitlin Cassidy (now) and Matilda Boseley (earlier on (#5VDH2)
Large crowds gather for Invasion Day protests; NSW marks grim Covid milestone as nation records at least 87 deaths from Covid-19; lockdown call for NT remote communities; Scott Morrison speaks at Australia Day ceremony in Canberra. This blog is now closed
Resolution Foundation report also highlights risk of British firms being undercut by lower cost rivalsGains from a UK trade deal with India could be on a par with those from an agreement with the US but risks exposing the economy to tougher competition, a report says.The Resolution Foundation thinktank said successful talks between London and New Delhi had the potential to gain “first-mover” advantage in India and replicate the success of German manufacturing exporters to China. Continue reading...
Latest public finance data shows government borrowing £13bn less this year than forecast in October budgetPressure is mounting on Rishi Sunak to scrap April’s planned increase in national insurance contributions (NICs) after the latest figures for the public finances showed the government borrowing £13bn less this year than expected in the October budget.With cost of living pressures mounting, thinktanks and City analysts said a faster drop in the UK’s deficit would prompt the chancellor into a rethink of the £12bn tax hike to pay for the NHS and social care. Continue reading...