Industry bosses complain they can’t hire drivers but workers say they’re underpaid and treated ‘like trash’Tim Clemons has driven nearly 3m miles around the US in his 30 years as a truck driver. “This used to be a great job,” said Clemons. “I provide a valuable service to this country. It would be nice if we weren’t looked down upon like trash.”While the industry says there is a national shortage of drivers and complains regulation is holding back hiring, Florida-based Clemons has another theory: working conditions have deteriorated since he started driving, he said. It’s more difficult to find parking and access to bathrooms. Dispatchers and brokers are pushing harder to deliver loads in a certain amount of time or else drivers face fines or deductions. Drivers earn less. Continue reading...

Soaring inflation, rising interest rates and further supply chain disruption will fuel volatility, economists sayFinancial markets are poised for a bumpy ride in 2022 in the face of soaring inflationary pressure, rising interest rates and ongoing disruption to international supply chains caused by the Omicron variant of coronavirus, experts have said.Analysts and financial investors said Omicron’s emergence had raised the prospect of a stagflationary start to the new year, with weaker levels of economic growth despite intensifying price pressures in already stretched supply chains. The winter energy crisis will also weigh on Europe’s economies. Continue reading...

Roosevelt built back better after the depression by taxing the rich, introducing capital controls and altering the balance between labour and capitalChristmas 1941 was grim. Japan had attacked Pearl Harbor earlier in the month and its armies were advancing across the Pacific. Hitler’s advance into the Soviet Union had taken the Wehrmacht to the gates of Moscow. Britain had become used to short rations and long nights of the Blitz. Optimism for the year ahead was in short supply.Yet by the end of 1942 the mood had changed. The Germans were bogged down at Stalingrad and being pushed back in North Africa. America, mobilising its full economic power, had turned the tide in the Pacific. The publication of the Beveridge report in December 1942 came at just the right time: when confidence was growing not just that the second world war would be won but that it would be a catalyst for building back better. Continue reading...

The years from 2007-2022 are forecast to be the worst on record for household incomes. It’s not hard to see whyIn the good old days, the fields were green, we’d never heard of Covid and pay packets grew. The last point sounds like a fairytale because stagnant wages have defined the UK’s post-financial crisis economy. Pre-pandemic, we’d only just got earnings back to where they were 12 years before. This living standards austerity means that the 15 years from 2007 to 2022 are forecast to be the worst on record for household incomes: up just 9%, compared with a pre-financial crisis average of almost 50% per 15 years.Some think the lesson from this catastrophe is that we shouldn’t care about economic growth because it has stopped feeding through to workers’ wages. When I’m in a good mood, I think that take is confused. Most of the time, I think it’s dangerous and idiotic. Continue reading...

Events in the run-up to Christmas have conspired like twists in a novel to reveal the true character of Tory BrexitersThere was a moment last year when Boris Johnson was reported to have gone awol (absent without leave) from governing the country in order to work on a book about Shakespeare.At the time, many commentators blamed his absence for a crucial delay in decision-making which contributed to thousands of avoidable, Covid-related deaths. Be that as it may, or was, he returned to the helm of state, brushed off many a criticism, and managed to persuade gullible members of the media and electorate that he possessed Teflon qualities and was invincible. Continue reading...

The economic forecaster was once thrown into Zimbabwe’s hyperinflation crisis. Now he faces another fast-moving challengeRichard Hughes has one of the best views in London. From his open-plan office on the 14th floor of the Ministry of Justice building, he can see Buckingham Palace in one direction and parliament in the other.As well as compiling the government’s economic and financial forecasts, Hughes has become something of an amateur meteorologist. “You can look out of the window and say, ‘It is going to rain in 15 minutes’ time.’” Continue reading...

Rolling coverage of the latest economic and financial news

Rolling coverage of the latest economic and financial news

Uneven inflation has hurt poor households and redistributed wealth to the richAmericans have paid higher prices for everything from utilities to groceries in 2021. But as the specter of inflation haunts the US economy for the first time in decades, it has been the poorer members of society who have suffered the most, a phenomenon economists are calling “inflation inequality”.The US inflation rate rose to 6.8% since last November, according to labor department data, the highest annual increase in nearly 40 years. Those price increases have been largely driven by essential goods and services: transportation, energy, housing and food.Motor fuel cost went up by an astounding 58% from a year ago.Transportation (+16.5%) and utility costs (+33%) increased dramatically in the past year.The cost of food overall went up by 6.1%, driven by the rising price of meats, poultry and fish (+13.1%). Continue reading...

Nurses, care home staff and police officers have had real pay cuts since 2010 as wages lag behind pricesNurses, care home staff and police officers working on Christmas Day will be thousands of pounds worse off than they were a decade ago as a result of wages failing to keep pace with prices, Trades Union Congress analysis has shown.Urging the government to raise the minimum wage to £10 an hour, the TUC said the key workers expected to keep Britain going on 25 December had taken real pay cuts since 2010. Continue reading...

Rolling coverage of the latest economic and financial news

Officials confident draft law will secure unanimity, despite concerns from Hungary and EstoniaThe EU has taken a first step in setting a 15% minimum corporate tax for multinationals, in line with a global agreement struck earlier this year, as the White House has hit a hurdle in its efforts to turn the pact into law.Announcing the launch of a new EU tax directive, Paolo Gentiloni, commissioner for the economy, said he expected the 27 member states to agree on the fine details within six months despite concerns held in some European capitals. Continue reading...

Analysis: The UK’s revised-down Q3 figures should come as no surprise given business has been in second gear since 2016

GDP at 1.1% between July and September compared with the 1.3% initial estimate, says ONSBritain’s economy grew at a slower pace than first thought between July and September amid a poorer performance from health, hairdressers and lower trade volumes after Brexit, according to official figures.Revealing the growth rate was worse than initially calculated even before the Omicron coronavirus variant hit, the Office for National Statistics said gross domestic product (GDP) rose by 1.1% in the three months to September, down from an initial estimate of 1.3%. Continue reading...

Climbing consumer sales, worker shortages and a slowdown of transportation hubs created a supply chain crisis, leading to container-clogged dockyardsThe holiday season at the ports of Long Beach and Los Angeles, America’s busiest shipping complex, has always been hectic. But 2021 is a year unlike any other.A pandemic-induced buying boom and supply chain crisis led to an unprecedented backlog of ships lingering offshore and towering stacks of colorful containers clogging the entirety of the dockyard. Inside the port, thousands of workers are laboring around the clock to unload these containers one by one, sending the televisions, bicycles, medical supplies and more that they contain out to trains and waiting truckers, whose rigs stretch into nearby residential neighborhoods. The goods eventually make their way to warehouses and stores and into the arms of eager consumers. Continue reading...

Resolution Foundation says biggest rise for decade of 4.1% will coincide with higher taxes, rising inflation and soaring energy billsAlmost 5 million families in social housing in England are facing the biggest rent hike for a decade from April amid a mounting cost of living squeeze, according to a report.The Resolution Foundation thinktank said 4.75 million families would see rent on their local authority or housing association home rise by up to 4.1%, adding to the pressure on living costs by an average £202 extra a year. Continue reading...

Rolling live coverage of business, economics and financial markets as US and European stock markets rose following the previous session’s falls, despite investor fears about the spread of the Omicron variant

Figure of £17.4bn for November is down on last year but more than forecast by economistsThe UK government borrowed £17.4bn in November, outstripping economists’ predictions and suggesting debt could far overshoot officials’ forecasts if the Omicron coronavirus variant slows the economy as expected.It was the highest November borrowing since comparable records began 30 years ago, barring last year. During the furlough scheme in 2020, the Treasury under Rishi Sunak set successive peacetime records for monthly borrowing as it covered the costs of 80% of salaries for millions of people as well as support schemes for businesses. Continue reading...

Survey confirms ‘chilling effect’ of Omicron variant in the run-up to Christmas, says CBIHigh street hopes of a bumper Christmas have been dashed by the arrival in the UK of the Omicron variant, the latest snapshot of consumer activity has confirmed.The CBI’s monthly distributive trades survey reported a marked slowdown in activity after the government’s decision to trigger plan B measures as part of its response to the pandemic. Continue reading...

Economic panic about the birthrate is drowning out the voices of those who matter most in this debateThe birthrate is declining across the west. It has been doing so for some time, but the recent drop appears to have been exacerbated by the pandemic. I’ve been following the discussion for years now, amused at the discrepancy between statistics and experience (at one point in 2020, almost everyone I knew seemed to be pregnant or caring for a newborn, my peers having reached the “shit or get off the pot” stage of in their reproductive biology), but also irritated by the tone of the coverage. Whenever I read about the falling birthrate, it is reported alongside a (usually male) economist or politician talking about the catastrophic economic effects of what is being called a “baby shortage”. As though babies are a resource, which of course to some they are.I have come to dislike these men intensely. They make me feel like a brood mare who must reproduce for the good of the nation. The latest report on declining birthrates comes from Italy, where it has fallen to the lowest level since 1861. An article on the study in the Times quotes two men, one talking about labour shortages and house prices, no women mentioned or spoken to at all, except passively.Rhiannon Lucy Cosslett is a Guardian columnist Continue reading...

Annual meeting of world leaders, billionaires and business chiefs had been scheduled for January

The questions which will determine whether families feel the pinch this Christmas and beyond are all up to the chancellorEconomic commentators and investors all have their eyes on inflation, and the unexpected decision by the Bank of England to raise interest rates, for the first time in three years, to 0.25% – in spite of the disruption and uncertainty of Omicron. But behind the headlines and the focus on the Bank, the biggest macroeconomic questions facing the UK – which will determine whether families feel the pinch this Christmas and beyond – are all up to the chancellor.Inflation has reached its highest level in a decade, at 5.1%. Yet this isn’t inflation of the 1970s kind, still raised as an economic bogeyman to stoke fear of “wage-price spirals”. The governor of the Bank of England has said there is little risk of this. Inflation is, in fact, outstripping pay rises – so average pay packets are shrinking in real terms.Carys Roberts is executive director of the Institute for Public Policy Research Continue reading...

Visits to retailers over last weekend before holiday fail to fulfil hope of windfall after pandemic strugglesShoppers have pulled back from UK high streets in the crucial final weekend of shopping before Christmas, figures reveal, as the retail and hospitality sectors continue to struggle amid fears over the spread of the Omicron coronavirus variant.The latest data from retail intelligence firm Springboard showed that visits to retailers around the UK on Saturday and Sunday were up just 0.8% and down 1.8%, respectively, compared with a week earlier, reversing the usual trend for footfall to soar ahead of the big day. Continue reading...

As the value of the lira plummets and inflation soars, Turkish citizens are struggling to adapt and surviveIn a jewellery shop close to Istanbul’s Taksim Square, Seda unzips an elegant black leather pouch and piles her gold jewellery on the counter to discuss selling it all. The shop owner gently places gold chains, rings and a pendant on a small scale, before immediately calling a trader to discuss the latest rates.“I used to look at the price of gold once a week. Now I look roughly 50 times a day,” says the owner, who asks that his name is withheld. He advises Seda to wait – perhaps the price will stabilise. Continue reading...

Boris Johnson’s cabinet is caught once more between doing the right thing and doing the ideological thingIt’s shaping up to be all too familiar. A worsening outlook in the pandemic, a government slow to react, and confidence fading fast among businesses and households.In many ways Christmas couldn’t come soon enough for Boris Johnson’s government, amid a storm of bad news as the prime minister’s Teflon ability to survive political scandal appears to be deserting him at last. But rather than acting as a distraction, the festive period merely highlights the serious problems facing the British economy that could make matters worse. Continue reading...

It makes no sense to switch from caution to abruptly increasing borrowing costs when Omicron endangers the economyAfter months of hand-wringing and flip-flopping, the Bank of England has settled on a plan. Following a whopping eight-to-one vote in favour at a meeting last week, the monetary policy committee decided the pandemic was over and now was the time to begin pushing interest rates back to pre-Covid levels.The decision to become the first major central bank to raise interest rates since Covid-19 struck in 2020 was greeted with a whiff of derision in some parts of the City. Continue reading...

As some bottlenecks ease others are just starting, meaning the post-pandemic economy ‘won’t return to normal any time soon’In Britain it’s alcohol, in Canada it’s maple syrup, while in Australia it’s a crucial additive for diesel trucks, and in New Zealand it’s brown sugar. These are just some of the many shortages affecting consumers and businesses around the world as industry experts warn that the supply chain crisis prompted by the coronavirus pandemic could last for many more months and even up to two years.Although there are signs that some bottlenecks are easing, the onset of the Omicron Covid variant could lead to new shutdowns, sending another disruptive spasm through the global system. Continue reading...

Omicron fears and earlier Christmas shopping dampen festive mood for retailers as some stores bring forward Boxing Day salesVisits to high streets and shopping centres have fallen ahead of what is traditionally the biggest shopping weekend of the calendar, with a 20% fall in central London footfall on Thursday prompting forecasts of a “muted” end to a turbulent year.Retailers including Harrods and Halfords have brought forward Christmas sales in a bid to entice shoppers, but outlets hoping for a last-minute spending frenzy look set to be out of luck, as fears over the Omicron coronavirus variant keep many at home in the final run-up to Christmas. Continue reading...

The UK house price boom is likely to end next year, while retail sales were boosted by Black Friday and early Christmas shopping

Analysis: In purely economic terms the first post-Brexit trade deal negotiated from scratch will save each UK household £1 a yearCheaper Jacob’s Creek and Hardys wines, Tim Tams and surfboards for Britain, cut-price Scotch, cars and clothing for Australia. While things might not be going so well for the England cricket team in Australia, the UK government is talking up Anglo-Aussie relations.Almost six months on from an agreement in principle, the UK and Australia have signed a free trade deal described as “historic” for its status as the first negotiated from scratch since leaving the EU. Continue reading...

Industry welcomes decision not to raise fares above July’s RPI inflation rate as some had fearedRail fares in England are to rise by 3.8% in March, the government has confirmed, in line with July’s RPI inflation rate and the biggest increase in nine years.The latest increase – revealed in the Guardian after a leak this month – is less than some feared after fares went up above the RPI inflation rate in March of this year. Continue reading...

Figures reveal impact of Brexit and pandemic, with £2.7bn fall blamed largely on 24% drop in sales to blocUK food and drink exports fell by 16% in the first nine months of 2021, according to industry figures that revealed the devastating impact of Brexit and the pandemic on the value of trade.The Food and Drink Federation (FDF) said the sector’s exports declined by £2.7bn between January and September compared with pre-pandemic levels, a drop it blamed largely on a 24% decrease in sales to EU countries. Continue reading...

Turkey’s president to hike minimum wage by 50% with other measures to come in attempt to stabilise currencyTurkey’s president, Recep Tayyip Erdoğan, has vowed to take on the currency markets after a fresh cut in his country’s interest rates sent the lira plunging to its lowest ever level against the US dollar.Erdoğan said Turkey’s destiny would not be determined by the level of borrowing costs or by foreign exchange speculators despite signs his unorthodox approach to running the economy was leading to rapidly rising inflation. Continue reading...

Rolling coverage of the latest economic and financial news

Flash estimate of activity since Covid variant’s arrival reveals a marked impact on service sector

Analysis: on this occasion the MPC has decided the threat of inflation becoming embedded is greater than the risk to growthThe Bank of England is making a habit of pulling surprises. In November, financial markets were taken aback when Threadneedle Street kept interest rates on hold at 0.1%. This time they were caught on the hop by the decision to raise them to 0.25%.It’s not hard to see why traders in the City have been left scratching their heads given that the explanation for doing nothing in November – uncertainty about the real state of the economy – seems to apply just as much to today’s circumstances. Continue reading...

The lowdown on how the Bank of England decision will affect borrowers and saversThe Bank of England has increased interest rates to 0.25% from the historical low of 0.1% in an attempt to tackle rising inflation in the UK, but what does that mean for the public? Continue reading...

Inflation spike prompts MPC to vote for increase despite fears for UK economy from surge in Omicron casesThe Bank of England has unexpectedly raised interest rates for the first time in three years amid growing concerns over inflation, despite the rapid spread of the coronavirus Omicron variant.Threadneedle Street’s monetary policy committee (MPC) voted by a majority of eight to one to raise rates from the historic low of 0.1% to 0.25%, judging that pressure on households from surging living costs outweighed the risks to the economy from the new variant. Continue reading...

Shares plunge as ‘exceptionally high’ rate of customer returns linked to renewed popularity of dresses dents salesThe fast fashion group Boohoo has warned that full-year profits and sales will be lower than expected after being hit by more customers returning clothes, delivery disruptions and surging costs.Shares in the online clothing retailer plunged 15% in response to its second warning in four months, despite its insistence that the current difficulties facing the business were mostly related to the pandemic and therefore “transient in nature”. Continue reading...

Colourful kokina heralds the holiday season – and a financial lifeline for those facing runaway inflation and discriminationWhen flower vendors put out the red and green kokina on the streets, holiday season has arrived in Istanbul.Widely believed to have begun as a Christmas tradition of Turkey’s Greek community, kokina is made by tying together two different plants that grow in the wild, and looks like a picture-perfect version of holly. Its name comes from the Greek for red. Continue reading...

Central bank will double rate at which it cuts spending on government bonds and expects to raise borrowing costs next yearThe US Federal Reserve has announced that it will accelerate an end to the central bank’s pandemic-era support of the US economy in a major shift that will also see a series of interest rate rises next year.The measures are a signal that US central bankers no longer view rising inflation as a “transitory” nuisance caused by supply chain problems meeting pent-up consumer demand, but an issue that now requires firm management to avert lasting damage to the US economy. Continue reading...

Rolling coverage of the latest economic and financial news

NIESR’s management offered an increase worth 2% while latest data shows cost of living is up 5.1%Asking workers to stomach a below-inflation pay rise is never popular. Asking them to do so when their day job is forecasting the cost of living is really asking for trouble.And so it has proved at the National Institute for Economic and Social Research. A strike ballot opened on Wednesday for members of the Unite union after the NIESR’s management offered a basic pay deal worth 2%. It comes after wages were frozen last year. Continue reading...

Analysis: Bank of England faces tough call as apple prices rise by 25% and Omicron cases increase

As inflation rises to its highest rate in a decade, we look at the implications for consumers, savers and interest rates

Increase to 5.1% in November puts further pressure on Bank of England to raise interest rates

House prices, sales and construction all fell in November as Shimao Group shares plunge and Beijing assesses what to do with EvergrandeChina’s giant housing market has continued to decline in the past month and another major developer showed signs of financial distress as state-owned enterprises began carving up the carcass of the failing property giant Evergrande.House prices, sales, investment and construction data released on Wednesday all showed renewed signs of the crisis in the market, which accounts up to 30% of the country’s output and which appears certain to drag on the world’s second biggest economy. Continue reading...

People investing in the cryptocurrency should be aware of risks, central bank saysThe Bank of England has said that bitcoin could be “worthless” and people investing in the digital currency should be prepared to lose everything.In a warning over the potential risks for investors, the central bank questioned whether there was any inherent worth in the most prominent digital currency, which has soared in value this year to close to $50,000 (£37,786) a piece. Continue reading...

Rolling coverage of the latest economic and financial news

Exclusive: Chancellor said to not have opposed jab regime but warned of spending cuts or tax rises to pay for it