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...
The true measure of unemployment depends on who you askJust how healthy is the US jobs market? On Friday, the Bureau of Labor Statistics (BLS) released its latest jobs report, showing that the US added a disappointing 194,000 jobs last month while announcing that the official unemployment rate fell to 4.8%, the lowest it’s been since its frightening climb to 14.7% when the Covid-19 pandemic first struck the US.The figures seem somehow disconnected and, for some, September’s headline figure is woefully misleading, as it is every month. What if the “true” unemployment rate is actually closer to 22%? Continue reading...
Boris Johnson’s slogan is so much hot air: ordinary, working people are still paying for the financial crash of 2008Isn’t it time to call out the complete deception that is being peddled as “levelling up”? (“You can’t level up by raising taxes on the poor, Tories tell PM”, News). We know that Boris Johnson is ace at spewing out slogans and phrases that can sound good. Most are devoid of serious content and serve only as a distraction from what is really needed to give everyone who works, has worked, will work or would like to work a really fair chance in life.“Levelling up” was invented only to persuade rich people who keep the Tory party afloat of the idea that fairness and social justice won’t cost them anything. They were never seriously asked to pay for the disaster that befell the world economy in 2008, even though their wealth was hugely bolstered by the abuses that brought that collapse about in the first place. It was whole populations of ordinary people who had to pay through years of austerity when services were cut to the bone and needs were ignored, so that after 11 years of Tory rule we are now on the brink.
by Richard Partington Economics correspondent on (#5QHZV)
Fund set for a gloomy annual meeting as supply chain issues and inflationary pressures hobble global recoveryWeaker global growth, vaccine protectionism and the spectre of 1970s-style inflation haunting large economies. As the International Monetary Fund prepares for its annual gathering this week, the contrast with the spring could not be more stark.Back in April, at the Washington-based fund’s last virtual bash, there were sharp upgrades for global growth amid a sense of optimism for the road ahead, led by stronger-than-expected recoveries in the US, UK and other advanced economies. Vaccines would pave the way for the swift unlocking of pandemic restrictions, fuelling a rapid recovery from the worst global recession since the 1930s Great Depression. Continue reading...
Britain is short of 100,000 lorry drivers, energy firms are sinking, food items are running scarce and employers are scrambling for staff as multiple crises eruptMany of the problems facing the economy relate to Britain’s shortage of 100,000 lorry drivers – 96% of logistics businesses are having problems recruiting, and businesses are starting to run short of warehouse staff, van drivers, mechanics, technicians, forklift drivers and transport managers, according to Logistics UK. It said that19,000 HGV drivers have left the UK because of the pandemic and Brexit and 45,000 new drivers have not been able to take tests due to Covid. Continue reading...
The PM’s Thatcherite conference speech ignored many realities that will have to be addressed in this month’s budgetBoris Johnson threw a mishmash of wishful economic thinking at the Conservative party conference wall last week and his advisers will spend this weekend hunkered down in No 10 hoping some of it will stick. Early signs are not good. Only hours after the prime minister stepped off the podium, the rightwing Adam Smith Institute thinktank called his rhetoric “bombastic but vacuous and economically illiterate”. It was typical of reaction throughout the business community.According to Johnson-omics, Britain will emerge fitter, happier and more productive once the prime minister’s limits on foreign labour have forced domestic employers to ramp up wages. Never mind that academic research finds little correlation between immigration and average pay. More immediately, he is ignoring the factory owners who are slamming on the brakes in response to shortages of key components, and the building firms downing tools for lack of concrete and steel. And what of concerns that rising gas and food prices are likely to send inflation well above the 4%-4.5% peak expected by the Bank of England? Continue reading...
by Richard Partington Economics correspondent on (#5QGSP)
Accord signed by 136 countries will enable them to raise tax on sales made by multinationals within their bordersAlmost 140 countries have taken a decisive step towards forcing the world’s biggest companies to pay a fair share of tax, with plans for a global minimum corporate tax rate of 15% to be imposed by 2023.The Organisation for Economic Co-operation and Development (OECD) said that 136 countries and jurisdictions had agreed to join an accord to impose a two-pillar global tax reform plan. Continue reading...
by Aubrey Allegretti Political correspondent on (#5QGSQ)
Boris Johnson accused of ‘being optimistic and leaving it up to businesses to pick up the slack’Tory ministers have privately expressed fear that government inaction on the emerging cost of living crisis could leave the country facing “a nightmare” by Christmas.Boris Johnson was accused by one frontbencher of trying to resolve struggling supply chains by “being optimistic and leaving it up to businesses to pick up the slack”, while a second called the response so far “suboptimal”. Continue reading...
Analysis: from retailers to farmers, employers have not taken kindly to being told to stop whingeing about the supply crisisThere was a moment in Boris Johnson’s speech to the Conservative party faithful on Wednesday when he took time off from berating business to heap praise on the private sector’s part in saving lives during the pandemic.“It was capitalism that ensured that we had a vaccine in less than a year, and the answer therefore is not to attack the wealth creators, it is to encourage them because they are responsible for the aggregate increase in the country’s wealth that enables us to … level up everywhere,” the prime minister said.Farming, where ministers have been saying this week that UK agriculture should get round labour shortages by emulating Australia’s capital intensive fruit-picking industry. The National Farmers’ Union’s vice-president, Tom Bradshaw, said: “Farm businesses have done all they can to recruit staff domestically, but even increasingly competitive wages have had little impact because the labour pool is so limited – instead only adding to growing production costs. A solution to this crisis will need the right people with the right skills and training available in rural areas, where many roles are based.”Retailing, where the counterattack was made more potent by being led by the Brexit-supporting Tory peer Lord Simon Wolfson, the chief executive of Next. Noting that there was “a real panic and despondency” in some sectors, Wolfson rejected the idea that business needed a shock to wean it off cheap labour. “That approach leads to queues at petrol stations and pigs being unnecessarily shot,” he said.Hospitality, where another prominent Leave supporter, Tim Martin, chair of the pub chain JD Wetherspoon, said it was “cobblers” that living standards would rise if draconian immigration controls were introduced. “Brexit decided that immigration policy should be decided by those we’ve elected, not what the policy should be.”Manufacturing. The trade body that represents UK industry, Make UK, said it was already a high-skill sector with a good record for training through apprenticeship schemes. While the average annual salary across the economy was £29,000, in manufacturing it was £32,000.Food processing, where pigs are being culled because of a shortage of abattoir workers. The British Meat Processors Association said the industry was short of 15,000 people, including 9,000 butchers, and that there were no unemployed or furloughed meat workers. A spokesperson said: “We need skilled butchers in our plants today. They only way we can possibly do that in the short term is to bring them in from overseas.”London, where Boris Johnson served two terms as mayor between 2008 and 2016. Richard Burge, chief executive of the London Chamber of Commerce and Industry, said: “London’s businesses certainly wish to hear a little less of London being presented almost as a villain in the levelling-up narrative. London is the UK’s world city. It is a key player in a global economy. We need to further ensure that investment into London brings further benefit across this country. Do London down, and that investment may end up leaving these shores altogether, and that benefits no one here.” Continue reading...
by Richard Partington Economics correspondent on (#5QFBS)
Huw Pill says inflationary pressures still likely to be temporary and will fall back after disruptions of Covid and BrexitThe Bank of England’s new chief economist has warned high rates of inflation could last longer than expected, due to severe supply shortages and rising household energy bills.Huw Pill, who replaced Andy Haldane at Threadneedle Street last month, said inflationary pressures were still likely to prove temporary and would fall back over time, as the economy adjusted after disruption caused by Covid and Brexit. Continue reading...
Next boss, thinktanks and unions criticise Boris Johnson, saying ‘shortages cannot be blustered away’Business leaders rounded on Boris Johnson for lacking a coherent economic plan after he delivered a boosterish conference speech that made barely a mention of the supply chain crisis.The address was condemned as “bombastic but vacuous and economically illiterate” by the free market Adam Smith Institute, while the Conservative thinktank Bright Blue issued a stark warning. Continue reading...
Business leaders have hit back at Boris Johnson over claims they allowed Britain to become a low-wage and low-skilled economyBritain’s businesses stand accused of allowing the UK to become a low-wage, low-skilled and low-productivity economy bedevilled by slow growth.The prime minister criticised company bosses for wanting to import cheap workers to fill vacancies rather than improve the skills of young people already in the UK. Only a more skilled workforce could command higher wages and better living standards, Boris Johnson said. Continue reading...