In the rush to go ‘back to normal’, must we sacrifice all the gains that have been made on disability inclusion?

Three main factors are propping up prices but eventually a lack of first-time buyers will slow themWhen house prices started to rise in the summer of 2020 there was an easy explanation. Potential buyers, it was said, had been deterred by the tough lockdown imposed when the Covid crisis began and so there was a burst of pent-up demand as restrictions were eased.When property inflation continued during the autumn and winter it was put down to Rishi Sunak’s stamp duty holiday for all properties up to £500,000. But pent-up demand no longer looks a convincing reason for the house price inflation of 10.9% reported by the Nationwide building society, and anyone trying to take advantage of the chancellor’s tax break would have needed to have had an offer accepted before now. Continue reading...

Experts weigh in on whether limits on social contact should be removed in three weeks’ time

Town on edge of Knowsley – and Liverpool city region’s mayor – use cultural pull to help rebuild area’s economyLevelling up Britain’s unbalanced economy comes in many guises and in Prescot, a town on the edge of Knowsley on Merseyside, it comes in the form of a replica cockpit-in-court theatre.Shakespeare is reported to have connections with Prescot when he was a travelling player in the late 16th century and the idea is to make the new theatre the third side of a cultural triangle along with London and Stratford-upon-Avon.This is not Field of Dreams, a case of build it and they will come; we are building and they have already comeWe need a more diverse economy because we rely on the visitor economy Continue reading...

Bank’s Sir Dave Ramsden says it will ‘guard against’ risk of sustained price pressure from rapid Covid recovery

Thinktank says Brexit and Covid-19 mean Britain could take bigger economic hit over next few years

Pensioners won the 2019 election for the Tories but a focus on improving pay and conditions for workers could swing power Labour’s wayEven before the Covid-19 pandemic Britain was becoming a more unequal country. The crisis of the past 15 months has hit poorer blue-collar workers harder than better off white-collar workers but official figures last week showed that the gap between rich and poor households was already wide.The trend is clear. The Office for National Statistics says the Gini co-efficient – one measure of inequality – has been increasing by 0.2 points a year for the past decade. During that time the incomes of the richest 20% – after tax, benefits and inflation were taken into account – rose by 0.9% a year on average, while those of the poorest 20% fell by 0.3% on average.Related: Why poverty has become the scourge of those in work | Larry ElliottRelated: Workers are again learning the power of collectivism | Torsten Bell Continue reading...

The relationship between PM and adviser did not collapse soon enough to save us from the damage caused by leaving the EUNo, “Eyetest” Cummings is not my new best friend. However convincing his criticisms of the prime minister are, the tragedy is that the fallout between the two came much too late for the good of the country. It is not even good enough for Cummings to say that we Remainers are “reasonable people”.If only this spectacular bust-up had occurred during their all- too-successful Brexit campaign. Alas, it did not, and day by day we receive further news of the disaster. Unfortunately, the general public is, understandably, so concerned about the pandemic that widespread appreciation of the Brexit damage has still to sink in.Frost said the government was going to hire an external adviser to identify 'post-Brexit opportunities'. It seems they were so intent on shutting the door that they hadn’t thought much further Continue reading...

President lays out plans to drive government spending to its highest sustained levels since the second world war

With an unfair, inefficient global rollout, the west is squandering trust and risking its own prosperityThe proper functioning of any interconnected economic system depends on trust. And a global system that has been designed by advanced economies requires a significant level of buy-in from the developing world. Both become even more important as more developing economies, led by China, gain systemic importance.Related: WHO and global faith leaders call for fair access to Covid vaccinesRelated: South-east Asian countries battle Covid resurgence amid lack of vaccines Continue reading...

MPs question the Treasury’s permanent secretary, Tom Scholar, and the chancellor, Rishi Sunak, over Greensill Capital’s failure

Nature’s financial value must be considered to avoid ‘irreversible’ degradation to biodiversity and landThe world needs to quadruple its annual investment in nature if the climate, biodiversity and land degradation crises are to be tackled by the middle of the century, according to a new UN report.Investing just 0.1% of global GDP every year in restorative agriculture, forests, pollution management and protected areas to close a $4.1tn (£2.9tn) financial gap by 2050 could avoid the breakdown of natural ecosystem “services” such as clean water, food and flood protection, the report said.Related: Top scientists warn of 'ghastly future of mass extinction' and climate disruption Continue reading...

Jan Vlieghe says interest rates may still need to go below zero if economy falters in coming months

Both sides emphasised importance of bilateral trade relations and agreed to further negotiationsTop US and Chinese trade negotiators have held “candid” talks, their first under the Biden presidency, as Washington continues to raise concerns over Beijing’s trade practices.In the long-awaited first official engagement between the US trade representative Katherine Tai and the Chinese vice-premier, Liu He, held virtually on Thursday morning (Beijing time), the two sides emphasised the importance of the bilateral trade relations and agreed to further negotiations.Related: China replaces Germany as UK’s biggest import market Continue reading...

Our latest snapshot of key economic indicators finds unemployment falling and business activity growing

Country is on course for a short-term boom this summer, but concern mounts over India Covid variant

After the 2008 crash, hawks worried about debt. Amid this one, they’re fretting about price rises. They were wrong then, and they’re likely to be wrong nowInflation is back. That old foe of central bankers, mugger of pensioners and fashion staple of the 1970s is once again in the news. Its return is being talked about at Threadneedle Street and at the US Federal Reserve. It is creeping into newspaper headlines and on to market-watchers’ worry lists. But some perspective is essential: the price rises of today are nothing like those we saw half a century ago, because the world we live in is nothing like that one. Many of the fears expressed over any sign of rising prices are misplaced.Economists are perhaps not the first people you might want to hear from about fashion, but one guaranteed revival for this spring/summer is: price rises. They will be in the news a great deal over the coming months. Last week’s news of a doubling of the inflation rate is just the beginning. The primary reason for that is mechanical. Last year saw many parts of the economy put in deep freeze to prevent the spread of Covid; with the reopening of pubs, restaurants and clothes shops, and the return of high street spending, prices will tick up. In this sense, inflation is to be welcomed as a sign of economic growth after a record slump. Another factor will not have passed motorists by: fuel prices, both at the petrol pump and to heat homes, are on an upward march. Continue reading...

Trade with EU falls 23% from 2018 as Brexit and Covid disrupt exports from Britain

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National debt pile still climbs to £2.17tn or about 98.5% of GDP, the highest ratio since March 1962Britain’s stronger than expected recovery during the third lockdown limited government borrowing in April to just less than £32bn, an improvement of £16bn on the record high set a year earlier.As parts of the economy reopened and businesses adapted to Covid restrictions, tax receipts improved from a year earlier and government spending on the furlough scheme fell, said the Office for National Statistics (ONS). Continue reading...

Rolling coverage of the latest economic and financial news

Authorities in China say they will take a ‘zero tolerance’ approach to monopoly behaviour and hoardingChina has signalled a crack down on “excessive speculation” that is pushing up the price of raw materials including iron ore and copper, amid mounting concerns over rapid growth in inflation.Against a backdrop of soaring raw material costs as several big economies relax Covid-19 restrictions, China’s National Development and Reform Commission (NDRC) said it would show a “zero tolerance” approach to monopoly behaviour and hoarding by commodities firms.Related: Iron ore price slides as China warns of ‘excessive speculation’ – business live Continue reading...

The bounce-back will be stronger in the US and China, but Europe and Japan face a slower restart

Labour expected to trigger Commons vote to force UK government to support proposalRishi Sunak is facing growing pressure to support US proposals for a global minimum rate of corporation tax in the run-up to the UK hosting a pivotal meeting between G7 leaders in Cornwall next month.Labour is expected to trigger a Commons vote on Monday designed to force the UK government to back the plan put forward by the US president, Joe Biden, which is being negotiated between more than 130 nations with the hope of securing an agreement this autumn. Continue reading...

Some breeders are eager to export more to Britain, but others have their hands full keeping up with domestic demandFourth-generation beef producers Josie and Blair Angus have spent a lifetime developing their own branded product and exporting it around the world.The couple own four properties in Central West Queensland covering 162,000 hectares – an area slightly larger than greater London – and run a 35,000-strong herd of Angus and Belmont Red cattle. They are also in the process of building an export-accredited abattoir handling 50,000 head of cattle a year.Related: Put out to pasture? Britain’s farmers fear surge of imports from Australia Continue reading...

The Treasury understands that shutdowns and reopenings can seriously distort growth and joblessness figuresThere’s a scene in Tom Stoppard’s Arcadia when the clever, media-hungry English don, Bernard, thinks he has got one over on his rival by discovering something new about Lord Byron. He plans to publish his findings in a suitably august academic journal, where he promises the write-up will be “absolutely gloat-free”.Rishi Sunak’s response to the barrage of good news that has been emerging about the UK economy in the past few weeks has also been gloat-free. The chancellor of the exchequer has expressed modest pleasure at official figures showing a pick-up in activity and a fall in the jobless rate, but he certainly hasn’t been banging the drum for boom-boom Britain.Many businesses have little or no working capital; insolvencies have been kept artificially low; the furlough comes to an end in September Continue reading...

Keeping the housing market spinning has become top priority for a government focused on wealth creation based on propertyWhen we consider the likely effects of Boris Johnson’s administration over the next three years, and possibly beyond, it is easy to believe his achievements will be near or less than zero.Looking back to his time as mayor of London, he wasted most of his first term dealing with arguments among his close lieutenants before procrastinating about which of his limited set of manifesto pledges he would implement. Only in his second term did he press ahead with the capital’s cycle superhighways – for many people his only visible achievement. Continue reading...

A trade deal could expose UK agriculture to the economic power of the southern hemisphere’s giant livestock ranchesOn a rain-lashed and windswept day in the Welsh valleys, Jonathan Huntley is almost at the end of the busiest six weeks of the year on his hillside farm. Lambing season is over, following the arrival of 1,400 newborns, and one of his 60 suckling cows is calving.Huntley, 53, farms sheep and cattle in the same 500 acres as his father before him, and he and his wife Tracey hope their 22-year-old son Thomas will take over from them. Continue reading...

If the trade secretary agrees to Canberra’s demands for no tariffs on agriculture, it sets a dangerous precedent for other, bigger dealsFarming is the tail that wags the dog in all trade talks. Agriculture might be worth less than 1% of GDP in the UK and Germany and less than 2% in France and Italy, yet the emotional connection with food makes it a critical subject when negotiators sit down to hammer out a deal.According to the latest World Bank data, the sector contributed only 3.3% to global GDP – and in Australia, which is in controversial and secretive talks with the UK about a free trade agreement (FTA), it made up just 2.1% of GDP in 2018. But Dan Tehan, Australia’s trade minister, has placed agriculture front and centre by insisting that any deal with the UK must be covered by tariff-free and quota-free arrangements.A deal with Australia is not significant in itself: Truss admits it would boost Britain’s economy by just £500m over 15 years, or 0.02% of GDPTruss argues that the UK has a tariff-free deal with the EU and this should be the template. But the UK stands on a level playing field with other EU countries after four decades of convergence Continue reading...

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Analysis: times are changing as IMF says wealth taxes must rise to pay for pandemic costs and Joe Biden says trickle-down economics don’t workThe 2021 Sunday Times Rich List will renew debate over how to prevent Britain’s position as one of the most unequal societies in the developed world from getting worse.Those who argue for a wealth tax would usually face a withering response from the major international bodies that analyse the effects of taxation on economic growth. In previous decades a neoliberal consensus demanded wealth creators be given free rein, while everyone should accept that the extraordinary lifestyles of the super-rich was the price of innovation and decently paid jobs for the rest. In the 1990s the Clinton and Blair administrations felt unable to confront the proselytisers for trickle-down economics.Related: Number of billionaires in UK reached new record during Covid crisis Continue reading...

People may roll their eyes at the concept, but at least it tries to address a problem that won’t go away on its own“Maybe mental health isn’t the problem,” said Mr Z, listening to a news item about mental health on the radio. “Maybe it’s a crisis in late capitalism.”“Funny, that’s what Sinéad O’Connor thinks,” I replied.Zoe Williams is a Guardian columnist Continue reading...

Backing IMF’s $50bn three-point plan is in wealthy nations best interests by supercharging world economy, says Kristalina GeorgievaWealthy nation backing for a $50bn (£35bn) mass global vaccination drive could provide a $9tn boost to the world economy, the head of the International Monetary Fund has said.Putting pressure on the G7 countries ahead of their summit in Cornwall, England, next month, Kristalina Georgieva said richer nations would see the best return on investment in modern times if they dug deeper to help tackle the pandemic in poorer parts of the world.Vaccinating at least 40% of the global population by the end of this year and at least 60% by the first half of 2022. To do so would require extra grants to Covax, the global vaccine initiative, donating surplus doses, and free cross-border flows of raw materials and finished vaccinesPreparing for the possibility that new variants of the virus will require booster shots will demand investment in extra vaccine production capacity by 1bn dosesManaging the interim period where vaccine supply is limited with widespread testing and tracing, therapeutic and public health measures, and, at the same time, ramping up preparations for vaccine deployment together with any approved dose-stretching strategies. Continue reading...

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Manufacturers upbeat as May figures show output grew at fastest rate since December 2018Factory output grew this month at the fastest rate since December 2018 to record the first large increase in UK manufacturing production in almost two years.Chemicals producers, electronic engineering firms and metal factories reported the strongest growth, with output up in 12 of 17 subsectors, according to the CBI’s monthly industrial trends survey. Continue reading...

Covid, Brexit, automation and net-zero carbon all require state intervention, and shouldn’t be entrusted to the rightSometimes political parties hit a sweet spot and their opponents struggle to lay a glove on them. Rapid non-inflationary growth meant Margaret Thatcher was invulnerable at the 1987 election. Tony Blair was unbeatable in the mid-1990s when Britain was bored with a tired, discredited and sleazy Tory government.Boris Johnson has arrived at his own political state of grace this spring. Everything has come together: the NHS has played a blinder with the vaccine programme; record peacetime spending has anaesthetised the pain of lockdown; a weary population is grateful to be allowed to hug and go to the pub again.Larry Elliott is the Guardian’s economics editor Continue reading...

Shadow trade secretary backs US call for patent waiver as party proposes plan to increase production in poorer countries

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Rise in cost of clothing and footwear also contributes to 1.5% figure, says ONS

Analysis: it will not be long before UK inflation is above the official 2% target

Rolling coverage of the latest economic and financial news

Rate fell for third consecutive month in three months to March, according to ONS

Although the Square Mile will remain Europe’s largest money marketplace it will no longer be the continent’s de facto financial centreNearly five years after the Brexit referendum, and in the five months since Brexit itself, there has been little debate about the future of the City, the financial centre of London. Those who voted in June 2016 to leave the EU believe, whatever the evidence to the contrary, that the impact will be minimal, and that the warnings of job losses and business relocation are exaggerated. Remain voters are programmed to think the opposite and, whatever the evidence to the contrary, forecast gloom and doom. What can we learn from what has actually happened?We have to acknowledge, first, that Covid-19 has confused the picture mightily over the last 18 months. People have not found it easy to change location, even if they wanted to. More important, there are some temporary regulatory arrangements that blunt the impact of the UK’s departure from the single financial market. There is a Temporary Permissions Regime in London for some EU-based firms, and the European Commission has allowed euro-denominated instruments to be cleared in London until 2022, to avoid the disruption any sudden change on 31 December 2020, might have brought. So what we are seeing today may not reflect Brexit’s full longer-term impact. Continue reading...

Analysis: furlough has helped shelter Britons from unemployment, and businesses are hiring againTrying to get to the bottom of what is happening to Britain’s labour market is a tricky business. There are three different measures for calculating unemployment, not all of which cover the same period.Even so, some broad themes emerge from the latest blitz of data from the Office for National Statistics. One is that the furlough has done its job in shielding the economy from rising joblessness, with more than 4 million workers taking advantage of wage subsidies at the end of the first quarter.Related: UK unemployment drops as businesses hire amid Covid easing Continue reading...

Thinktank says new strategy needed in face of Covid, Brexit, net zero, automation and demographic changeBritain risks mirroring Italy’s economic woes unless it develops a strategy for tackling the five seismic changes that will shape a decisive decade for the country, a report has warned.A joint project by the Resolution Foundation thinktank and the London School of Economics said the UK was neither used to nor prepared for the challenges posed by the aftermath of Covid-19, Brexit, the net zero transition, automation and a changing population.Covid-19: More home working as a result of the pandemic will mean more lifestyle choices for professionals, but will force lower earners to find new jobs in new places.Brexit: The UK will be able to utilise new policy freedoms but will also have to cope with higher costs of doing business with the EU, its main trading partner.Net zero: Decarbonisation will provide economic opportunities, but action is urgent. The UK needs to go from installing almost zero heat pumps each year, to installing 3,000 every single day by 2030.Technology: The arrival of new technologies will boost but also disrupt living standards, with the Organisation for Economic Cooperation and Development estimating that one in seven jobs could disappear as a result of automation in the next 15-20 years.Demography: The ratio of people under the age of 20 or over 65 to those aged 20-64 is likely to increase from 72 per 100 to 79 per 100 between 2020 and 2030 – a faster projected change than in any other decade in the first half of the 21st century. Continue reading...

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Iain Ramsay and Ian Arnott respond to George Monbiot’s article on cuts to trading standards and the lack of law enforcementGeorge Monbiot is right to draw attention to the absence of enforcement of consumer protection law, and people running into “a wall of unaccountable, opaque bureaucracy” when they attempt to report scams (My friend was the victim of a scam – and cuts mean she can do nothing about it, 12 May). I encountered the same problem when trying to contact trading standards in relation to a national retailer in Canterbury that was continuing to run a “closing down” sale for many months – in my opinion, a breach of relevant consumer protection regulations. I was unable to contact trading standards directly, and could only identify relevant officials by making a freedom of information request to the council for the trading standards annual report.The government has claimed that leaving the European Union will not affect standards of consumer protection in the UK, but even if this claim is correct, laws are of little use if they are not properly enforced.

Experts say recovery at risk amid sharp fall in EU workers and dwindling interest in UK jobs from abroadBritain’s employers are struggling to hire staff as lockdown lifts amid an exodus of overseas workers caused by the Covid pandemic and Brexit, industry figures reveal.According to the Chartered Institute of Personnel and Development (CIPD) and the recruitment firm Adecco, employers plan to hire at the fastest rate in eight years, led by the reopening of the hospitality and retail sectors as pandemic restrictions are relaxed in England and Wales on Monday.Related: EU citizens arriving in UK being locked up and expelled Continue reading...

The effects of the pandemic are still with us, writes Gene Marks, creating a problem of supply and demand. It makes sense to pay workers moreIt’s not news that employers are struggling to fill open positions. There are a lot of different reasons why so many people are staying at home – the lack of childcare options and a continuing fear for health and safety to stimulus payments and expanded federal unemployment benefits. None of this really relevant to small business owners right now. The fact is that, despite a growing economy and increased demand, there’s a serious labor shortage and just about every small business owner I talk to is struggling to find people.Related: Does Biden’s Pro Act contain a nasty surprise for small businesses? | Gene Marks Continue reading...