Trade body says 39,000 jobs are at risk as a direct result of restrictions

The US president is right to spend, but shrinking the federal deficit is not the priorityJoe Biden’s first 100 days in office signalled that the future does not have to be a rerun of the past. The US president’s speech to Congress this week made it clear that Trumpism was a warning from history, a reminder that no republic is guaranteed to last. The US remains in danger – its decline accelerated by an iniquitous economic model, and by leaders unable or unwilling to remedy it. It is a relief to find in the White House a president who wants to bridge divisions rather than widen them. Mr Biden should be praised for saying he will stop the rot and recognising the challenge to democracy posed by autocracy. But his response risks being undone by an obsession with containing non-existent fiscal risks.The Biden White House proposes spending $4trn, with about half the money used to rewrite the social contract. The rest will create jobs, with infrastructure investments to repurpose the post-Covid economy for a zero-carbon world. The problem is not that money is being spent to fix a broken society. Neither is it wrong to ask the rich to pay their fair share of tax. The problem is that Mr Biden says spending must be balanced by tax rises or savings from other government programmes. Continue reading...

Rolling coverage of the latest economic and financial news

GDP in the 19 economies sharing the euro shrank by 0.6% between January and March

Jes Staley says bank continues to take ‘cautious view’ of impact of Covid-19 pandemic

Guardian analysis shows rapid progress rolling out vaccine is fuelling boom in consumer spending

Our latest snapshot of key economic indicators finds business activity booming, but borrowing reaching record levels

Rolling coverage of the latest economic and financial news

Analysis: why the president wants to build the US economy from the middle and bottom, not top downCut taxes on the rich. Unleash a wave of entrepreneurship. Growth will pick up and more jobs will be created. Everybody benefits. That, in essence, is trickle down – a theory of economics that Joe Biden wants to consign to the dustbin of history.The US president was a young politician when the idea that cutting taxes on the well-off would be good for the poor first came into vogue in the 1970s. Now he has used his first address to a joint session of Congress to call on the US’s top 1% to pay for his $1.8tn (£1.3tn) American families plan – higher spending in areas such as education, childcare and infrastructure. Continue reading...

Former PM urges G7 leaders to help finance rapid immunisation programme to stem spread of virus

ONS says 83% of businesses are now trading, a rise of six percentage points since late March

We may be seeing the rise of a new authoritarian capitalism shielded from democratic scrutinyThirteen years after the financial crisis put the global economy on life support, neoliberal capitalism is facing an existential crisis. The Covid-19 pandemic has exposed the disastrous consequences of decades of privatisation, deregulation and outsourcing. In order to contain the economic fallout from the pandemic, western countries have ripped up the neoliberal playbook.Market forces have been shunned in favour of regulatory controls and state intervention. Central banks have broken the ultimate economic taboo and are printing money to finance ballooning budget deficits. For the first time in decades, the direction of travel for corporate tax rates is up rather than down. Even the International Monetary Fund (IMF) has thrown its weight behind wealth taxes. As Guardian columnist Larry Elliott recently put it: “the era of small states, low taxes and balanced budgets suddenly looks to be over”. The question remaining is: what is replacing it? In the UK, a number of recent developments provide some clues.Laurie Macfarlane is economics editor at openDemocracy and a fellow at the UCL Institute of Innovation and Public Purpose. He is co-author of Rethinking the Economics of Land and Housing Continue reading...

The Covid-ravaged global economy is at a crossroads: we can commit to greater tax cooperation or risk a tax-driven trade war

Ángel Gurría says international deal is within striking distance and could be signed this summer

Strong sales in furniture and DIY as lockdown eases but clothing, footwear and department stores still struggleBritain’s biggest retailers recorded the sharpest growth in sales since 2018 as consumer confidence was boosted by the easing of lockdown in England and Wales, and progress with the Covid-19 vaccination programme.For the first time in 2021, sales volumes were viewed as good for the time of year, according to the latest monthly snapshot from the CBI lobby group, and sales were expected to remain above normal levels in May after the reopening of non-essential shops in Scotland and Northern Ireland.Related: Footfall in England up by almost 200% as Covid controls ease Continue reading...

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EY Item Club upgrades forecasts for 2021 after businesses adapted better to Covid controls

The UK is beating Covid economic recovery expectations but there should be a degree of warinessAlmost every indicator is pointing in the same direction. Footfall on the high streets is up. Payments by debit and credit card are rising. The strongest business surveys since 2013 suggest that the Brexit hangover was short-lived. Firms are starting to hire. The housing market is red-hot.Growth estimates are being revised up sharply amid signs that consumers didn’t even wait for lockdown restrictions to be lifted before going on a spending spree.Rapid recoveries are what is needed to limit the long-term scarring from the pandemic Continue reading...

Joe Biden is about to shake up US taxation policy. The UK must hope that the chancellor feels a need to emulate himThe differences couldn’t be more stark. Promises to “build back better” from Covid-19 have been made on both sides of the Atlantic. But as lockdown measures are steadily relaxed, President Joe Biden is showing far greater ambition than Boris Johnson’s government when it comes to shaping the post-pandemic recovery.This week, Washington will set out plans for the most comprehensive reforms of American tax policy in half a century, alongside trillions of dollars in funding for investment to tackle deep-rooted inequalities.At the budget, Sunak raised corporation tax, arguing he could because Biden was also increasing taxes on company profits Continue reading...

The government spends more than twice as much on each pensioner as on each working-age BritonOne of the major shifts in government spending over recent years has been away from young people and towards those in retirement. A study due this week from the Intergenerational Foundation thinktank shows that while spending on pensioners and children respectively increased at similar rates before 2010-11, the austerity years to 2019 proved much more generous to the old.The report finds that in 2018-19, the government spent “on average £14,660 on each child, £10,180 on each working-age adult, and £20,790 on each pensioner” and that the gap in per capita spending on children and pensioners more than doubled over the previous 20 years.A pensioner has much more disposable income than a worker on the same money, especially if the latter wants to start a family or buy a home Continue reading...

In March, 495,000 women entered the labor force, but the figures betray the harsher economic situation for Black women and many have dropped out altogetherWomen were hit hardest when the Covid-19 pandemic started taking its terrible toll on the job market. Last month there were promising gains for women in the workforce but it’s still too early to declare the end of the “shecession”.The pandemic’s arrival hit the women-dominated leisure, hospitality and retail industries first and hardest as the nation went into lockdown. As job losses hit record highs the US recorded another sorry first – the first recession in which women lost the most jobs.Related: ‘We don’t get help from anywhere’: Covid exposes inequality in crisis-hit New York neighborhoodThe recovery may not be as complete as for Black workers as it will be for white workers Continue reading...

Figure at highest level since end of second world war but deficit was less than forecast for 2020-21

Keir Starmer sets out scheme to bolster UK economy with secure jobs in clean industries

Rolling coverage of the latest economic and financial news

CBI poll of 288 leading companies finds firms plan to hire at fastest rate in nearly 50 years

Corona, Queens, home to many essential and immigrant workers, has had New York’s highest rates of death and infection – and vaccine uptake remains lowA year after New York City became the center of the global Covid-19 outbreak, the neighborhood considered at the time to be the “epicenter of the epicenter” of the pandemic remains in crisis – laying bare many of the economic fault lines exposed by the coronavirus.Corona, Queens, a welcoming enclave for many of the city’s undocumented immigrants and home to many of the “essential” workers who kept New York running during the pandemic’s worst days, has had the highest number of infections and deaths in the city – and now has one of the lowest percentages of people vaccinated. Continue reading...

From elite football to tech giants, our lives are increasingly governed by ‘free’ markets that turn out to be riggedBack in the days of the Soviet Union, it was common to hear people on the left criticise the Kremlin for pursuing the wrong kind of socialism. There was nothing wrong with the theory, they said, rather the warped form of it conducted behind the iron curtain.Related: Boris Johnson says fans will be at centre of wider review of English footballLarry Elliott is a Guardian columnist Continue reading...

Northern and Midlands towns with major distribution centres record best employment prospectsNorthern and Midlands towns with sprawling warehouse distribution centres have emerged as the places in Britain with the strongest growth in job opportunities as the economy exits lockdown.Reflecting the online shopping boom during the pandemic, data compiled by the jobs website Indeed and the Centre for Cities thinktank showed that Barnsley, Mansfield and Stoke-on-Trent – all strategic locations for distributors such as Amazon, Hermes and Asos - were staging the fastest recovery. Continue reading...

Paschal Donohoe says Dublin will not accept reforms that affect its ability to undercut its rivalsIreland’s finance minister has signalled the country will resist attempts to rebalance the global tax system if they affect Dublin’s ability to undercut its rivals.Under new tax proposals led by the US, Ireland could lose 20% of its tax revenues, according to Paschal Donohoe. Continue reading...

Rolling coverage of the latest economic and financial news, as rising fuel and clothing costs push up the consumer prices index

Consumer prices index rose to 0.7% in March as economy recovers from Covid-19 crisis

The under-35s account for almost 80% of jobs lost in the past year. Three of them tell their story

Tobacco, travel and hospitality stocks lead fallers on the FTSE 100 index, as European markets have worst day this year

Separate figures show 4.7m jobs were furloughed at the end of February

Global economies forecast to pour stimulus money into fossil fuels as part of Covid recovery

Rolling coverage of the latest economic and financial news

Official study finds home workers are less likely to take time off sick – but also earn above average

A new reality check is coming unless the west replicates its ‘whatever-it-takes approach’ to help poorer countries copeDenial. Panic. False dawn. Relief mingled with a decent dollop of euphoria. Britain’s response to Covid-19 has moved through distinct phases, and there are at least two more to come. Despite the success of the vaccine programme, a look around the world – to India, to Chile, to Brazil, to France and Germany – can lead to only one conclusion: this is not over yet.The early stages of the crisis are now easy to document. The denial phase lasted from the first cases of Covid-19 being reported in China towards the end of 2019 until the middle of March 2020. Initially, perhaps, some scepticism was warranted because there had been talk of global pandemics in the past that had not lived up to their horror-show billing.Related: As the grip of Covid eases, the UK looks set for a classic short-lived boom | Larry ElliottRelated: The latest figures are a wake-up call: the global Covid-19 crisis isn't close to over | Adam ToozeRelated: The world needs a patent waiver on Covid vaccines. Why is the UK blocking it? | Gabriel Scally Continue reading...

Our Houdini PM looks poised to win a byelection in a Labour stronghold, even as his signature policy creates crisis after crisisThe recrudescence of corruption and sleaze in a Conservative government ought, traditionally, to be a sign of electoral problems ahead. This was the case in the dying days of the 13 years of Tory rule from 1951 to 1964, and towards the tail end of the Thatcher-Major governments of 1979-97 – 18 years!And here we are, with a Conservative government that has been in office – with temporary help from the Liberal Democrats – for almost 11 years since 2010, steeped in accusations of sleaze and corrupt contracts; yet there is a widespread assumption that they will win the byelection in Hartlepool – once a Labour stronghold. Moreover, there is even speculation that if they do well in the local elections, prime minister Boris Johnson could spring a snap election on the back of such results and his supposed success with the vaccination programme, to say nothing of a “consumer boom” as the economy is released from the clampdown induced by the onset of the Plague.Why show so much respect for the minority of Labour voters who voted Leave at the expense of demeaning the majority who voted to remain? Continue reading...

British Gas engineers with years of service have been dismissed in an aggressive restructuring. These tactics are shamefulAt the beginning of last week, British Gas began retrieving the vans and tools used by hundreds of its gas engineers before one of the largest mass dismissals in recent British history. Days later, between 300 to 400 staff lost their jobs for refusing to sign up to new contract terms imposed by its FTSE 100 parent company.For some engineers, the British Gas kit used to repair and install the boilers and heating systems of millions of customers across the country had been part of their lives for decades. It was the same equipment used to restore warmth to homes during the early weeks of the Covid-19 pandemic, when engineers clad in PPE stood in the frontline of their employer’s pandemic response.British Gas had to act to preserve its financial future, but it did not have to treat its workforce unfairly in doing so Continue reading...

Shares rise by more than 30 points as China reports record economic growth

Sales surge but footfall is still down markedly from pre-Covid pandemic levelShoppers are expected to flood to high streets and shopping centres in England and Wales this weekend after a bumper week, particularly for clothing and homewares sales, as people make the most of the reopening of non-essential stores.Visitors to high streets, retail parks and shopping malls rose by 90% from Monday to Thursday compared with the same days in the previous week, thanks to the reopening of non-essential stores as well as hospitality venues, according to the latest data from analysts at Springboard. However, numbers were still just over a quarter below those seen over the same week in 2019, before the pandemic hit. Continue reading...

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A quarter of companies caught in the recent lockdown have little or no confidence of recoveryWhisper it softly, but things are starting to look up for the UK economy. Evidence is beginning to accumulate that the easing of lockdown restrictions is allowing activity to return to something like normal.Naturally enough, there are plenty of caveats. A new and more virulent strain of the virus could sweep across the country leading to the shutters going down again on businesses that have only just opened. Continue reading...

From trade wars and deglobalisation to ageing populations and populist politics, there’s no shortage of inflationary threats on the horizonThere is a growing debate about whether the inflation that will arise over the next few months will be temporary, reflecting the sharp bounce-back from the Covid-19 recession, or persistent, reflecting demand-pull and cost-push factors.Several arguments point to a persistent secular increase in inflation, which has remained below most central banks’ annual 2% target for more than a decade. The first holds that the US has enacted excessive fiscal stimulus for an economy that already appears to be recovering faster than expected. The additional $1.9tn (£1.4tn) of spending approved in March came on top of a $3tn package last spring and a $900bn stimulus in December, and a $2tn infrastructure bill will soon follow. The US response to the crisis is thus an order of magnitude larger than its response to the 2008 global financial crisis.Related: Why is no one in Europe talking about dangers of rising inflation?Related: Why central banks are not hitting their 2% inflation target | Nouriel Roubini Continue reading...

Analysis: Outgoing Bank of England chief economist was seen as a maverick thinker alongside more cautious colleaguesHad Labour won the 2019 general election, there is a good chance that Andy Haldane would have been made governor of the Bank of England because John McDonnell, the then shadow chancellor, was a big fan.Any hopes that Threadneedle Street’s chief economist had of succeeding Mark Carney disappeared with Boris Johnson’s 80-seat majority, and Haldane is now departing after 32 years to run the RSA – the Royal Society for Arts, Manufactures and Commerce. Continue reading...

Prominent economist to become chief executive of the Royal Society of Arts thinktankAndy Haldane, the Bank of England’s chief economist and one of its most prominent public figures, has quit to become chief executive of the Royal Society for Arts thinktank.One of the UK’s leading economists, Haldane, 53, will step down from Threadneedle Street’s rate-setting monetary policy committee (MPC) after the panel meets in June. He will take up his post at the RSA in September.Related: Andy Haldane: the funnyman central banker who's not great at maths Continue reading...

Rolling coverage of the latest economic and financial news, as the UK economy returns to growth and one of its top central bankers steps down

Government figures showing a bounceback in February rightly come with a health warning