Leap to 3.2% from July’s 2% is largest increase in annual rate from one month to next since records began

In survey, 19% of US adults 65 and over reported using their savings during pandemic – the highest percentage of 11 wealthy countriesOlder Americans were more likely to suffer pandemic-related economic difficulties compared with older citizens of other wealthy countries, according to a new survey from the Commonwealth Fund.In a survey taken by adults 65 and older in 11 of the world’s wealthiest nations, 19% of US adults reported using up all or most of their savings or losing sources of income during the pandemic – the highest percentage of any country. The percentage is nearly seven times higher than Germany, where 3% of older adults reported economic difficulties. Continue reading...

The government’s plan to fix the ailing social care system passed into law this week. But who will benefit most and who will pick up the bill?Last week Boris Johnson outlined what Downing Street is billing as a once-in-a-generation shake-up of adult social care and how it is funded. It is an attempt to tackle one of the thorniest issues in modern politics – how to meet the spiralling costs of an ageing population who are living longer with complex conditions and to do it in a way that people feel is fair.Rachel Humphreys met one woman, Lesley, who knows only too well the complexity and expense of England’s social care system. She has helped her 90-year-old mother to sell her home to pay for her continuing residential care. It’s a story that will be familiar to families across the country who have had to grapple with a labyrinthine system that can quickly burn through a lifetime’s savings. Continue reading...

Rolling coverage of the latest economic and financial news

Hotels, pubs and restaurants among those with biggest problems recruiting staffEmployers scrambling to hire staff amid widespread labour shortages after lockdown helped to return the number of workers on company payrolls to pre-pandemic levels in August, official figures show.The Office for National Statistics said the number of payroll employees increased by 241,000 to 29.1 million in August, lifting employment in all regions of the UK to pre-Covid levels except in London, Scotland and south-east England. Continue reading...

Rolling coverage of the latest economic and financial news

If the demand is stronger than forecast, UK will face reduced tax revenue and greater congestionIt all seems so simple. By the end of this decade the government will ban the sale of petrol and diesel vehicles. Cars will be greener and cleaner, making it easier to achieve the goal of a net carbon zero future.Boris Johnson will no doubt impress on fellow world leaders the rapidity of Britain’s transport revolution when he hosts the Cop26 meeting in early November. Rishi Sunak may even be persuaded to announce measures to speed up the transition in the budget in October, carefully timed for the week before the international gathering in Glasgow. Continue reading...

With a slew of bigger household bills approaching, Sunak is hampering growth and the green transition by being hawkishThere are plenty of nasty bills looming for the average British household that could persuade many to keep their savings firmly on deposit and prevent the economy from flourishing.Anyone looking for a secondhand car will pay 15% more this year than last – that is, if they can find one that suits their needs. Paying monthly energy bills is no fun since world prices rocketed. And the cost of essential services such as childcare are only increasing over time. Continue reading...

The most vulnerable people will bear the cost of sanctions, as services and the economy collapseWatching Afghanistan’s unfolding trauma, I’ve thought a lot about Mumtaz Ahmed, a young teacher I met a few years ago. Her family fled Kabul during Taliban rule in the late 1990s.Raised as a refugee in Pakistan, Ahmed had defied the odds and made it to university. Now, she was back in Afghanistan teaching maths in a rural girls’ school. “I came back because I believe in education and I love my country,” she told me. “These girls have a right to learn – without education, Afghanistan has no future.” Continue reading...

Readers react to the suspension of the triple lock on pensions and rise in national insuranceAnalysis: If NI must fund social care, at least make it fairIn what has been dubbed a “mini budget”, the government this week introduced sweeping tax reforms that will mean big changes for pensioners from next year.Designed to pay for the NHS and social care, the tax overhaul will result in about 1.3 million working pensioners over the age of 65 paying national insurance (NI) contributions on their earnings for the first time. Continue reading...

Production was main contributor to July GDP growth, but legal activities fell by 7.3% during the month

Rolling coverage of the latest economic and financial news, as UK economic recovery stalls

All you need to know about who is affected and why it’s the worst supply chain crisis since the 1970sFast food chains are running out of chicken. Hauliers’ wage bills are going through the roof. Crops are rotting in the fields. The scale of Britain’s supply chain meltdown is the worst since the 1970s, when the three-day week, power cuts and industrial disputes saw rubbish pile up in the streets.Fast forward four decades and the shortages in modern Britain stem from Covid-19 disrupting an intricate network of global supply chains where the slightest problem throws the whole system. Brexit has added to the rebooted anarchy in the UK, with years of chronic underinvestment in people and infrastructure, both from government and business, painfully exposed. Continue reading...

ONS figures could signal UK is losing overall competitiveness, say experts

Robert Jenrick’s madcap policy will hand shops over to developers motivated by profit, not communityThe summer of 2021 may be remembered for Covid and the withdrawal from Afghanistan. But another lasting and insidious change took place: the death of the high street. By approving the building of residential homes on ailing shopping streets, planning minister Robert Jenrick effectively allowed any shop, restaurant, cafe or business premise in England to become a house. Since almost everywhere houses make more money, this puts every high street under threat.Although done in the name of creating “thriving town centres”, Jenrick’s policy will strip away the cohesion that still binds many communities together, urban as well as rural. The diversity of English towns and cities has long been protected by planners enforcing classes of use. Restaurants and shops could not simply become houses without planning permission. But as of last month, if any landlord thinks to profit by turning the use of one building into another, it will require no permission to do so. A building need only to have been vacant for three months (after Covid-19, this already applies to one in seven shops, and could easily be achieved by eviction). Hit by lockdown, online shopping and the end of rental holidays, high street shops are struggling to survive. They need time to recover, not Jenrick kicking them in the teeth and sending their landlords cheering to the bank. Continue reading...

A cosmopolitan analysis of what went wrong and how we can avoid it next time – because there will be a next timeEveryone has someone who made them feel inadequate in lockdown, whether it was a neighbour who grew tomatoes in their window box, one of those Twitter people who learned three languages between March and May, or just a friend who didn’t feel the need to get drunk every night. For me, that person was Adam Tooze.While I was struggling to teach long division to my kids and begging editors for deadline extensions, he was – seemingly effortlessly – being a voice of sanity on social media; writing an improbable number of lengthy articles about how Covid-19 was rewiring the world economy; coherently explaining the long-term consequences on multiple podcasts; and sending a regular email newsletter, which discussed China, the EU or Vasily Grossman with equal felicity. As if that wasn’t enough, he was also – it turns out – writing a book. Continue reading...

GDP grew by only 0.1% despite removal of most Covid controls, with supply chain crisis making impact

HMRC figures show need to continue support for hardest-hit sectors such as aviation, says Unite union

Research shows 10 students arriving from outside EU will generate £1m of net economic impact during studiesOne year’s intake of international students at British universities generates economic activity worth £390 for each person in the UK each year, rising to more than £700 for every inhabitant of London, according to a study published today.Overall, 272,000 students from outside the UK who began university courses in 2018-19 would generate close to £26bn in net economic activity once the costs of teaching support and their use of public services had been accounted for. Continue reading...

Rolling coverage of the latest economic and financial news

Andrew Bailey sees evidence of ‘levelling off’ amid supply chain disruption and staff shortagesThe governor of the Bank of England, Andrew Bailey, has warned Britain’s economic recovery from Covid-19 is slowing amid supply chain disruption and staff shortages.Answering questions from MPs on the commons Treasury committee, Bailey said there was evidence of the recovery “levelling off” despite the easing of pandemic restrictions earlier in the summer. Continue reading...

Public attitudes to spending have shifted since austerity, yet the opposition seems to be championing low taxesFor decades, many on the left have hankered for the social democratic political settlement of other European countries. Britain, it has been said, should ditch Thatcherism once and for all, and embrace higher taxes as the means of improving public services.Now it has happened. As a result of the new health and social care levy, taxation will rise to its highest sustained level on record. This is the work not of a party of the left but of one of the right. Rishi Sunak may say he is a fiscal hawk who favours a small state and low taxes, but he is a tax-and-spend chancellor. Sajid Javid may have a picture of the Iron Lady on his office wall, but he is a tax-and-spend health secretary.Larry Elliott is the Guardian’s economics editor Continue reading...

Taxing wealth and scrapping the upper earnings limit on national insurance would address generational inequality

Resale website StubHub’s international arm will be sold to US firm Digital Fuel Capital to meet the CMA’s conditionsThe $4bn (£2.9bn) merger of controversial ticket resale websites Viagogo and StubHub can go ahead after the UK competition regulator approved a plan that will see StubHub’s international operations sold to a new entrant to the market, US investment group Digital Fuel Capital.The Competition and Markets Authority (CMA) had ordered Viagogo to sell StubHub’s operations outside North America, after concluding that the combined entity would have handled about 90% of resold tickets for gigs, sports events and theatre in the UK. Continue reading...

Rolling coverage of the latest economic and financial news

A one-off boost to pensions now isn’t unfair if it means greater security in retirement for generations to comeThe “triple lock” is the most high-profile and contested area of pensions policy. It is also the most misunderstood. The lock, which ensures state pensions rise annually by the highest of average earnings growth, inflation or 2.5%, is almost always discussed in terms of the trade-off between pensioner benefits and working-age benefits. But to frame it simply like this is an error.Thérèse Coffey has today announced the suspension of the triple lock. It will be welcomed by those who believe we need to rebalance public spending from the old to the young. However, despite many arguments to the contrary, young people are in fact among the main beneficiaries of the triple lock. They would actually suffer from its removal.Craig Berry is a reader in political economy at Manchester Metropolitan University and author of Pensions Imperilled: The Political Economy of Private Pensions Provision in the UK Continue reading...

Work and pensions secretary tells MPs temporary move will prevent a hike in payments of 8%

‘Relatively limited’ increase could be needed if inflation is persistent, says member of rate-setting committeeThe Bank of England could be forced into action to raise interest rates next year if inflation remains persistently higher than expected, one of Threadneedle Street’s policymakers has said.Michael Saunders, one of nine members of the Bank’s monetary policy committee, said a rise in borrowing costs could be warranted before the end of 2022 if the UK’s economic recovery from lockdown is maintained and the rate of inflation sticks at elevated levels. Continue reading...

Rolling coverage of the latest economic and financial news, as supply problems hurt builders and hit car sales

Economic cost of climate crisis has cut 37% from global GDP this century, say researchersA return flight from the UK to New York could cost the global economy more than $3,000 (£2,170) in the long run, owing to the effects of the climate crisis, according to a report.Researchers examined the economic cost of the climate crisis and found it would cut about 37% from global GDP this century, more than twice the drop experienced in the Great Depression. Continue reading...

As McDonald’s and others increase wages, some economists say the balance is shifting in favor of workers – but will it last?As the US celebrates Labor Day, many employers are still struggling to find enough workers. McDonald’s, Chipotle, Walmart and many other companies have announced sizable wage increases to attract workers, and some economists argue American workers have the most bargaining power they’ve had in years.Many people, from low-wage workers to White House officials, are cheering this news, but there’s a fierce debate about this increased bargaining power. On Friday, the US released disappointing jobs figures that show the coronavirus is still affecting hiring. And while some argue this new-found worker power will be a longer-lasting phenomenon that yields years of better pay for workers, others believe it’s just a temporary blip. Continue reading...

Lobby group urges action on visas for foreign workers such as drivers, welders, butchers and bricklayers

The gains of the past 20 years in Afghanistan will be lost unless we keep funding social infrastructureAfghanistan is on the brink of economic meltdown. Millions of people are going hungry. Teachers and doctors are going unpaid. The social infrastructure built up over the past 20 years is collapsing, The banks are running out of money. Total collapse could come in days rather than weeks.A catastrophe can still be avoided but only if politicians in the west – and primarily those in Washington and London – accept that they lost and the Taliban won. Unless the international community engages with Afghanistan’s new rulers and finds a way of providing financial support it will be a classic example of self-harm. Continue reading...

The emotional three-word catchphrase ‘get Brexit done’ has been replaced by a new one: ‘supply chain issues’Just how long will it take the electors of this benighted country to realise that they have been conned by the Brexiters?By this I do not mean all the electorate – after all, nearly half those who voted on that fatal June day in 2016 were in favour of remaining in the European Union, and as a proportion of those eligible to vote, the Leave tally was 37%. Continue reading...

Why has it taken Brexit and a pandemic for the profession to begin to get the recognition it merits?Although current shortages have highlighted poor pay and conditions for goods vehicle drivers, it is not a new problem (“Food, beer, toys, medical kit… why are we running out of everything?”, Focus). In the 1990s, after a career in road transport management, I briefly went to live in the US. On returning to Britain, I dusted off my commercial driving licence and signed up with a driver agency.My first experience of being on the other side of the transport office desk was that as a driver you become invisible – spoken over and around and ignored. Major national companies who specify a narrow time slot for their delivery will turn you away if you arrive outside that window but keep you waiting in their yard sometimes for hours once you have checked in, not permitting you to even use their toilet facilities. Continue reading...

Worker shortages and problems with global supply chains together create ‘perfect storm’, say business leadersConsumers have been warned of an autumn rise in living costs from sharp increases in household energy bills and food prices, as Covid and Brexit disruption ripple through the economy.Sounding the alarm for a wide range of products and services going up in price, business leaders said the UK was facing a “perfect storm” of worker shortages and problems with global supply chains that would lead to a burst of inflation within months. Continue reading...

Rolling coverage of the latest economic and financial news

Unemployment rate declines by 0.2 percentage points to 5.2% from 5.4% in July as employers cut back hiring plansThe US economy added just 235,000 jobs in August, a sharp drop from preceding months, as employers cut back hiring plans amid the spread of the Delta variant of the coronavirus virus.The unemployment rate declined by 0.2 percentage points to 5.2% from 5.4% in July and has fallen dramatically from a high of 14.7% in April last year. So far this year, monthly US job growth has averaged 586,000, according to the Bureau of Labor Statistics. Continue reading...

Rolling coverage of the latest economic and financial news

First-half sales fall £2bn, says industry body, as barriers are compounded by staff shortagesExports of food and drink to the EU have suffered a “disastrous” decline in the first half of the year because of Brexit trade barriers, with sales of beef and cheese hit hardest.Food and Drink Federation (FDF) producers lost £2bn in sales, a dent in revenue that could not be compensated for by the increased sales in the same period to non-EU countries including China and Australia. Continue reading...

Rolling coverage of the latest economic and financial news

Domestic tourism helped footfall in August hit highest level since start of Covid pandemic

Domestic tourism helped footfall in August hit highest level since start of Covid pandemic

If you don’t care about workers, a vicious downward cycle works – as long as you can get them. Then one day, you can’tIn the mid-noughties, I was economics producer at the BBC, working with the then economics editor, Evan Davis. He had just begun presenting a new programme called Dragons’ Den, and had noticed something odd about the contestants. They would pitch up with their patter, their shiny prototypes, their occasionally plausible projections for how much cash would be rolling in by year three. And then, when asked how they actually planned to make their goods, they would shrug off this most fundamental of questions with a single word: China.China! Anyone with a trial subscription to the Economist knew what magic could be worked there, even if they didn’t know precisely how. It had factories and shipping containers and, most of all, vast numbers of workers to fill that yawning gap between spreadsheet and reality. The British no longer needed to cast themselves as makers; instead they could focus on the designing and the selling, the dreaming and the bullshitting.Aditya Chakrabortty is a Guardian columnist Continue reading...

If you don’t care about workers, a vicious downward cycle works – as long as you can get them. Then one day, you can’tIn the mid-noughties, I was economics producer at the BBC, working with the then economics editor, Evan Davis. He had just begun presenting a new programme called Dragons’ Den, and had noticed something odd about the contestants. They would pitch up with their patter, their shiny prototypes, their occasionally plausible projections for how much cash would be rolling in by year three. And then, when asked how they actually planned to make their goods, they would shrug off this most fundamental of questions with a single word: China.China! Anyone with a trial subscription to the Economist knew what magic could be worked there, even if they didn’t know precisely how. It had factories and shipping containers and, most of all, vast numbers of workers to fill that yawning gap between spreadsheet and reality. The British no longer needed to cast themselves as makers; instead they could focus on the designing and the selling, the dreaming and the bullshitting.Aditya Chakrabortty is a Guardian columnist Continue reading...

The year 2020 exposed the risks and weaknesses of the market-driven global system like never before. It’s hard to avoid the sense that a turning point has been reachedIf one word could sum up the experience of 2020, it would be disbelief. Between Xi Jinping’s public acknowledgment of the coronavirus outbreak on 20 January 2020, and Joe Biden’s inauguration as the 46th president of the United States precisely a year later, the world was shaken by a disease that in the space of 12 months killed more than 2.2 million people and rendered tens of millions severely ill. Today the official death tolls stands at 4.51 million. The likely figure for excess deaths is more than twice that number. The virus disrupted the daily routine of virtually everyone on the planet, stopped much of public life, closed schools, separated families, interrupted travel and upended the world economy.To contain the fallout, government support for households, businesses and markets took on dimensions not seen outside wartime. It was not just by far the sharpest economic recession experienced since the second world war, it was qualitatively unique. Never before had there been a collective decision, however haphazard and uneven, to shut large parts of the world’s economy down. It was, as the International Monetary Fund (IMF) put it, “a crisis like no other”. Continue reading...

The year 2020 exposed the risks and weaknesses of the market-driven global system like never before. It’s hard to avoid the sense that a turning point has been reachedIf one word could sum up the experience of 2020, it would be disbelief. Between Xi Jinping’s public acknowledgment of the coronavirus outbreak on 20 January 2020, and Joe Biden’s inauguration as the 46th president of the United States precisely a year later, the world was shaken by a disease that in the space of 12 months killed more than 2.2 million people and rendered tens of millions severely ill. Today the official death tolls stands at 4.51 million. The likely figure for excess deaths is more than twice that number. The virus disrupted the daily routine of virtually everyone on the planet, stopped much of public life, closed schools, separated families, interrupted travel and upended the world economy.To contain the fallout, government support for households, businesses and markets took on dimensions not seen outside wartime. It was not just by far the sharpest economic recession experienced since the second world war, it was qualitatively unique. Never before had there been a collective decision, however haphazard and uneven, to shut large parts of the world’s economy down. It was, as the International Monetary Fund (IMF) put it, “a crisis like no other”. Continue reading...

Card payment firm reports more transactions at weekend than on any day since Christmas Eve 2019

Card payment firm reports more transactions at weekend than on any day since Christmas Eve 2019

Retail data shows 0.4% month-on-month increase in August, with 0.6% rise in non-foodUK shop prices rose last month, according to the latest data from the British Retail Consortium, in a sign that driver shortages and the costs of Brexit-induced red tape are beginning to hit household budgets.The latest figures from the BRC and research group NielsenIQ reveal a 0.4% month-on-month rise in August. This was driven by a 0.6% rise in non-food prices, including a sharp increase in the cost of electrical goods caused by shortages of micro-chips and shipping problems. Continue reading...