Talks on reducing charges on items such as Scotch whisky follow UK move to drop levy on BoeingThe UK and the United States are hoping to reach an agreement on reducing trade tariffs, according to Robert Lighthizer, the US trade representative in Donald Trump’s outgoing administration.In an interview with the BBC, Lighthizer said he was in talks with the UK’s international trade secretary, Liz Truss, which could remove hefty tariffs imposed by the US on goods including Scotch whisky. Continue reading...
Sustained economic efforts rather than simple repetition of one-off measures are required in four areasAs excited as we all understandably are about the arrival of the first Covid-19 vaccines, the immediate road ahead remains treacherous. The US, in particular, could be on the verge of a horrible scenario in which slippages in each of four areas – public health, the economy, policy and household behaviour – end up making those in the other areas even worse. Over the next few weeks, they risk setting in motion a vicious cycle that, if it materialises, could shatter the lives and livelihoods of many more people, even though vaccines are in sight.Fortunately, through individual and collective action, the US has the means not only to arrest these dynamics but also to transform them into a virtuous cycle. This will require a set of sustained efforts rather than simple repetition of one-off measures.Related: Why the Covid economic crisis has hit poorer nations less deeply than fearedThe Fed's ample and predictable liquidity injections continue to decouple Wall Street from Main Street Continue reading...
by Richard Partington Economic correspondent on (#5BQRE)
Analysis: lower prices may have been welcomed by consumers but also reflect tough periodBritain has often had a problem with inflation. But far from the old enemy of past decades, when galloping price increases served as a pernicious tax on the poorest households, today inflation is worryingly low.The annual rate fell in November to just 0.3%, among the lowest levels since 1989. During the coronavirus pandemic, lower prices will have been gladly welcomed by hard-pressed consumers. But the low inflation rate also reflects a difficult period for the UK economy, and for retailers in particular. Continue reading...
by Jamie Grierson Home affairs correspondent on (#5BP00)
Government advisers say pandemic has highlighted vital economic contribution of migrant workersThe economic recovery from the Covid-driven recession will be hampered by a post-Brexit shortage of key workers including nursing assistants, senior care workers and dental nurses, the UK government’s migration advisers have warned.In its annual report, the Migration Advisory Committee (Mac) said many of the roles with the highest vacancies in the UK, such as veterinary nurses and welders, require a significant level of training, which could cause a delay in filling jobs and “hinder future economic recovery”.Related: While 'low-skilled' migrants are saving us, the government is cracking down on them | Maya Goodfellow Continue reading...
by Richard Partington Economics correspondent on (#5BN8S)
Covid crisis is accelerating change, study by Fabian Society and Community findsMore than half of furloughed jobs in the UK are at the highest risk of automation as the Covid crisis accelerates workplace technology change, driving up redundancies and inequality across the country, according to a report.The two-year commission on workers and technology, chaired by the Labour MP Yvette Cooper, found that workers in sectors hit hardest by the pandemic – such as hospitality, leisure and retail – face a “double whammy” as their jobs are at the most risk of being replaced by machines. Continue reading...
by Lisa O'Carroll Brexit correspondent on (#5BMK7)
Former Siemens chief Juergen Maier says disruption will last at least six months even if trade deal is reachedBrexit will hit the British economy like a “slow puncture”, a leading industrialist has warned, with disruption to business to last at least six months even if a trade deal is reached.Juergen Maier, the former chief executive of German electronics giant Siemens, warned that businesses were starting to shift parts of their operations to other countries in the EU while at the same time decrying the “nationalist” headlines over the weekend claiming Angela Merkel wanted the UK to “walk on broken glass” to secure a Brexit deal.Related: Brexit stockpiling causing 10-mile tailbacks in Calais Continue reading...
by Richard Partington and Larry Elliott on (#5BM07)
Committee says £20 a week increase should stay and ministers need to ‘wake up’ on unemploymentA Lords committee has urged the government to make permanent an increase in the value of universal credit benefits to address poverty and job losses triggered by the coronavirus pandemic.In a report calling for a “new deal” for jobs to prevent a surge in unemployment next year, the Lords economic affairs committee said there was an urgent need to reform the benefits system and make additional plans for job creation. Continue reading...
If global growth resumes in 2021 some developing countries may skate through the crisis. Others won’t be so luckyLast March, when Covid-19 infected the world economy, many observers feared that emerging markets and developing countries would suffer the most, financially and otherwise. Economically, they relied on commodity exports, remittances, and tourism, all of which fell through the floor with the pandemic. There was every reason to expect a tsunami of financial crises and debt defaults.The tsunami never arrived. Just six countries – Argentina, Ecuador, Belize, Lebanon, Suriname, and Zambia – have defaulted on their sovereign debt, and only the first two have restructured their debts.Related: Scotland needs a plan for a new currency if it wants independence | Barry Eichengreen Continue reading...
Pound rallies in early trading in Asia but sterling and equities remain vulnerableCity investors are bracing for a volatile week after Boris Johnson and Ursula von der Leyen stepped back from the brink of a no-deal Brexit.The decision to “go the extra mile” and continue talks beyond the weekend removed the immediate threat of UK-EU trade talks collapsing on Sunday, which hit stocks and the pound hard on Friday.Related: No-deal Brexit: markets brace for big hit to UK company shares and sterlingRelated: Any port in a perfect storm: UK container trade is grinding to a halt Continue reading...
Amid a likely third wave of Covid-19 and a hard Brexit, a new package of employment and social support is needed fastThe third wave is coming. Since the arrival of the coronavirus vaccine, there had been hope that winter would quickly pass and give way to a brighter 2021.After a dark year, the big breakthrough in medical science represented a shot in the arm for both a tired nation and a government running out of road. Now there was a chance everything would be fine by spring.Related: Don't bank on there being roaring 2020s to save the UK economyWhat is universal credit? Continue reading...
Americans across the country say they can’t afford rent and fear losing their home when CDC eviction moratorium ends soonBefore the pandemic hit, 34-year-old Andrew Perry of New Orleans worked in bars and did live sound engineering for shows. But now, with venues closed, Perry has struggled to find another job, even at minimum wage, while his unemployment benefits have been reduced to just $90 per week. He’s worrying about losing his home.Related: Trump under fire for hosting Christmas parties as Covid deaths mountI had to draw a Christmas tree on the wall. How do I explain to my daughter I had nothing to offer? Continue reading...
The Committee on Climate Change has shown that decarbonising is not only affordable but highly desirableFew crises come with a users’ manual. The government’s official climate advisers, the Committee on Climate Change, have come close, however, with a new 1,000-page tome setting out a blueprint for how Britain can decarbonise its economy and cut emissions to virtually zero by 2050.The committee’s green manifesto, published last week, brings to heel the two most pervasive myths that climate deniers have set to stalk Britain’s climate ambitions. The first is a menacing right-wing imagining of economic hardship in which the “eye-watering costs” of green investment collide with a slowdown in productivity and growth. This is a fallacy easily disproved.The plan also deftly tackles any dark mutterings about the way ahead offering just a grim dystopia of personal sacrifice Continue reading...
Innovation and competition are being stifled. But there are signs of optimismWhen the history of our times gets written, historians will shake their heads, wondering why so few remarked on what was going on before their eyes. Rather than allow foreigners and immigrants and the EU to be blamed for the ills of great swathes of our working populations who became prey to the fantasies of a Boris Johnson or a Donald Trump, why did the political classes not identify and correct the real source of the just grievances that drove support for such warped politicians?The US and Britain in particular have created an economic system of organised plunder, resulting in widespread precarious livelihoods. Over the last generation we have witnessed the rise of rentier capitalism, supercharged by new technologies, to establish economic structures in which having and owning has been vastly privileged over doing, creating and risk-taking. The share of profits in national income has risen, the share of wages fallen while work has become organised around short-term contracts. The decline in the incentive to make and innovate has been accompanied by a weakening in the rate of productivity growth.An indulgent government will be forced to allow consolidation of the markets into monopolies Continue reading...
Even Leavers seem to be dimly recognising that the size and reach of the EU made Britain stronger than departing ever will‘The surest recipe for killing a lie is to multiply the witnesses to truth.” This observation by the 18th-century statesman Charles James Fox is quoted by the veteran foreign correspondent – and sometime independent MP – Martin Bell in his memoir War and the Death of News.Bell writes about the distortion of news – a practice made into an art form by Boris Johnson’s friend Donald Trump. The quotation is surely pertinent to the way that the lies about the wonders of Brexit are falling apart as the truth of what the Brexiters have wreaked unfolds in front of our eyes.Membership gave the UK a share in the accumulated sovereignty and bargaining power of the EU in a world dominated by the US and China Continue reading...
by Phillip Inman, Julia Kollewe, Kalyeena Makortoff, on (#5BJMY)
Companies are praying a trade agreement can be struck, but must prepare for talks to fail. Which will be most affected?The scene is set for a showdown, and the future of the UK economy is at stake. Will Britain secure a free trade deal with the EU? Or will the prime minister choose to sail into uncharted waters, not only stepping outside the single market and customs union, as the UK will be even under a deal, but adding the tariffs and border checks that come with a no-deal Brexit?Armed with a determination to end the transition period on 31 December, Boris Johnson is poised to force British businesses to sell their goods and services across the EU without any of the benefits that a deal offers, and with only a few days’ notice. Here we assess the impact on some of the worst-hit industries of securing a deal – albeit a slimmed-down one – compared with the alternative. Continue reading...
The former Australian prime minister Malcolm Turnbull says his country’s trade deal with the EU is ‘not one Britain would want, frankly’As the 31 December deadline for a Brexit trade deal with the EU looms, Boris Johnson has again warned the UK to stand by for the possibility of an “Australia-style” deal. It sounds like something two countries that rely on international trade might reasonably want to embark on, but what would it actually mean?Now is the time for the public and businesses to get ready for the Australian option on January 1st. pic.twitter.com/lLJfmIy9XI“Be careful what you wish for. Australia’s relationship with the EU is not one, from a trade point of view, that Britain would want.”
by Lisa O'Carroll Brexit correspondent on (#5BFQ5)
The UK and EU are still far apart on key issues – will Britain really crash out in three weeks?Boris Johnson and the European commission president, Ursula von der Leyen, met in person over a three-hour scallop and turbot dinner to try to unlock the Brexit trade negotiations deadlock. As expected, both sides agreed to continue talking – but they agreed that the gaps between their positions remain wide. Continue reading...
Analysis: now does not seem a good moment for the PM to plunge Britain into a last-ditch battle with the EUBrexit deal or no Brexit deal, the UK faces a rocky few months as businesses, left dangling until the last minute, find out what kind of relationship the UK is going to have with the EU from 1 January.All eyes are on the last-minute talks between Boris Johnson’s team at No 10 and their counterparts in Brussels. Not much else matters ahead of the climax on Sunday. Continue reading...
GDP grew just 0.4% in October with economy expected to contract again due to November lockdownsBritain’s economic recovery from the first wave of Covid-19 had almost come to a standstill as fresh restrictions affecting the hospitality sector were imposed in the autumn, according to the latest official data.Figures from the Office for National Statistics showed that national output – or gross domestic product – rose by 0.4% in October. Continue reading...
Analysis: While there are similarities with the 2015 clash between Athens and Brussels, there are also key differencesIt was a marathon even by the European Union’s standards. For hours, leaders of countries in the eurozone argued, haggled and shouted at each other. After breaks for refreshment, they argued, haggled and shouted some more. Rumours swirled around the packed media room. Eventually, as Brussels was waking to a new morning, the 17-hour overnight summit staggered to an end.All participants were in agreement that victory had been snatched from the jaws of defeat. Despite the brinkmanship, a deal was eventually done – as seasoned EU watchers had always said it would be, even when all hope seemed lost. Continue reading...
In a holiday shopping season with rampant rates of Covid-19 infection, we must protect frontline workers before it’s too lateThere are few scenes more sordid than the surging wealth gains of the world’s billionaire class during an unprecedented pandemic when millions have lost their lives, health, and livelihoods.As the US heads into another wave of Covid-19 infections, the wealth of 650 American billionaires has increased by over $1tn since mid-March, the beginning of the pandemic lockdowns.The contrast between billionaires making no sacrifice and their workers making the ultimate sacrifice is unethical and corruptRelated: Amazon workers are fighting for their rights. This holiday season, think of them | David Adler and James SchneiderChuck Collins directs the program on inequality at the Institute for Policy Studies, where Omar Ocampo is an inequality researcher. They are co-authors of the report Billionaire Wealth vs Community Health: Protecting Essential Workers from Pandemic Profiteers, which was produced by Bargaining for the Common Good, the Institute for Policy Studies, and United for Respect Continue reading...
The pandemic has worsened existing economic hardships for young adults – and taken a serious toll on mental healthDavid Little of Tampa, Florida, obtained his master’s degree in architecture and was excitedly waiting for his girlfriend to finish her degree before the couple moved to Philadelphia. The coronavirus pandemic halted those plans as they both struggled to find work matching their education.“I have no idea what I’m doing right now. My plans were completely ruined by all of this,” said Little, 26, who was working as a valet before he was laid off in April. “There are no jobs out there even nationwide for entry level architecture grads, there is no real end in sight, and with my girlfriend not having any income because she’s also in architecture, it’s causing tension that wouldn’t normally be there.”Related: Biden pledges '100m shots in 100 days' as he introduces health teamIn the US, the National Suicide Prevention Lifeline is at 800-273-8255 or chat for support. You can also text HOME to 741741 to connect with a crisis text line counselor. In the UK and Ireland, Samaritans can be contacted on 116 123 or email jo@samaritans.org or jo@samaritans.ie. In Australia, the crisis support service Lifeline is 13 11 14. Other international helplines can be found at www.befrienders.org Continue reading...
by Richard Partington Economics correspondent on (#5BDAY)
Tax experts and economists outline ‘fairest, most efficient’ way to repair public finances and quickly raise £260bnThe government has been urged to launch a one-off wealth tax on millionaire households to raise up to £260bn in response to the coronavirus pandemic, as the crisis damages Britain’s public finances and exacerbates inequality.The Wealth Tax Commission – a group of leading tax experts and economists brought together by the London School of Economics and Warwick University to examine the case for a levy on assets – said targeting the richest in society would be the fairest and most efficient way to raise taxes in response to the pandemic.How would a wealth tax work?Related: Make UK super-rich pay one-off wealth tax, says Fabian Society Continue reading...
Relocation to Amsterdam will give better access to European markets ‘regardless of Brexit outcome’Commonwealth Bank of Australia has said it will move its European headquarters from London to Amsterdam in the coming months after Britain’s departure from the EU.The departure comes despite declarations by the UK’s prime minister, Boris Johnson, that the British economy would “thrive” with an “Australian-style” trade deal with the EU, which many describe as a euphemism for a no-deal crash out of the bloc. Continue reading...
by Robert Booth Social affairs correspondent on (#5BB0S)
Dame Louise Casey makes plea as report shows 1 million people in UK struggle for foodFormer government adviser Dame Louise Casey has urged Boris Johnson to deliver a “Beveridge moment” and overhaul welfare, as she launched an urgent appeal for public donations of food and money to get the poorest through winter.Harking back to Sir William Beveridge’s 1942 report that led to the founding of the welfare state, Casey said an equivalent to the Sage expert panel of scientists advising on the response to Covid-19 was needed to tackle sharp rises in poverty and to “work out how the legacy of this pandemic isn’t the quadrupling of food banks”.Related: Firm given free school meals voucher contract despite ‘limited evidence’ of capability Continue reading...
by Richard Partington Economics correspondent on (#5BB0Q)
Business leaders and unions spell out threat to food, farming and manufacturingBusiness leaders and trade unions have urged the government to strike a last-minute Brexit agreement as they warned that the UK economy is ill equipped for a disruptive no-deal scenario.With talks between Boris Johnson’s government and Brussels on a knife-edge, the warnings from leaders in business and industry came as the pound slid on the global currency markets on fears that talks could end this week without a deal. Continue reading...
The UK, US and EU plan to spend to create growth – but they must be realistic about costsEncouraging news about more effective antiviral treatments and promising vaccines is fuelling cautious optimism that rich countries, at least, could tame the Covid-19 pandemic by the end of 2021. For now, though, as a brutal second wave cascades around the world, broad and robust relief remains essential. Governments should allow public debt to rise further to mitigate the catastrophe, even if there are longer-term costs. But where will new growth, already tepid in advanced economies before the pandemic, come from?Macroeconomists of all stripes broadly agree that productive infrastructure spending is welcome after a deep recession. I have long shared that view, at least for genuinely productive projects. Yet infrastructure spending in advanced economies has been declining intermittently for decades. (China, which is at a very different stage of development, is another story entirely.) The US, for example, spent only 2.3% of GDP ($441bn, or £331bn)) on transportation and water infrastructure in 2017, a lower share than at any time since the mid-1950s.Related: Crossrail work to continue after £825m government loan Continue reading...
Millions of self-employed workers are set to lose their benefits after Christmas and lawmakers have yet to find a solutionSuzy Young, an artist in Winterport, Maine, cheered when Congress enacted an innovative program that provided unemployment benefits to artists, freelancers and the self-employed after Covid-19 hit the US. But like many others, Young – whose art sales have plunged in recent months – is angry that this pandemic aid program is due to expire the day after Christmas.Related: Joe Biden's economic team beats Trump's goon squad – but it faces a steep challenge | Robert ReichWe need to help people out here from starving. We need Congress to hear us, we’re in the worst place Continue reading...
Economics | The Guardian