ONS revises GDP figure for the third quarter to record 16% but government borrowing surges

Democrats say ‘last-minute’ package, approved by Senate shortly before midnight, falls short of US needs

Analysis: Tighter restrictions for longer will lead to slower growth and higher public borrowing

Rolling live coverage as lorry drivers banned from France because of new coronavirus strain and US agrees stimulus package

Haulage sector sounds alarm over 48-hour block on cargo from UK to France after new strain emerges

Business leaders say fresh restrictions could lead to further job losses without more help

Christmas may be the focus but restrictions will probably be in place well beyond festive season

In his book A Journal of the Plague Year, Daniel Defoe describes 17th-century behavior that is unmistakably familiar today

A new study confirms tax cuts for the rich do not benefit the rest. Recovery from the pandemic is a chance to change courseHow should the huge financial costs of the pandemic be paid for, as well as the other deferred needs of society after this annus horribilis?Related: Jeff Bezos became even richer thanks to Covid-19. But he still won't protect Amazon workers | Robert ReichYou don’t need a doctorate in ethical philosophy to think that now might be a good time to redistribute some of richesRelated: Joe Biden's economic team beats Trump's goon squad – but it faces a steep challenge | Robert ReichRobert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a columnist for Guardian US Continue reading...

The hawks are warning – once again – about the economy overheating. But a vaccine alone will not cause thatThere is always an economist somewhere agonising about inflation. As we head towards Christmas with an inflation rate falling towards zero – it dipped to 0.3% in November – you might think they were mostly keeping their counsel.Not a bit of it. The inflation worriers are out and about, spreading their gloomy message of imminent rising prices as the economy overheats uncontrollably post-Covid, post-Brexit.Consumers, desperate to cheer themselves up, will join the borrowing binge, increasing the pressure on prices Continue reading...

The pandemic and its attendant recession have left millions across the country with little money and little to celebrateThere will be no presents under the Christmas tree this year for Sierra Schauvilegee and her children. Schauvilegee lost her job as a nurse when the residential care facility she worked for permanently closed down at the start of the coronavirus pandemic. Finding new work has proved impossible.“This is the first year my children will not open a single gift, nothing under our tree,” said Schauvilegee, who lives in Ingalls, Kansas. “I used all my savings to survive and I begged my mother to move in until I received rental assistance and food stamps, that is all I literally have.”Related: 'The numbers floored me': hunger in Pennsylvania hits highest level since pandemic's startRelated: 'It's terrible and no one cares': millions at risk of eviction with no stimulus agreed Continue reading...

Rolling coverage of the latest business and markets news, as Brexit jitters and retail data put investors on edge

Coronavirus curbs across country end six-month run of rising salesCoronavirus – latest updatesSee all our coronavirus coverageRetail sales fell by 3.8% in November on the previous month as the coronavirus lockdown in England and restrictions elsewhere in the UK shut much of the high street.Ending a six-month run of rising sales, the figures revealed the impact of the pandemic on the sector as the infection rate increased across the country. Continue reading...

Investors bet Covid vaccines and stimulus measures will propel economy forward in 2021

Chancellor says extra time will help cushion economic blow, with budget set for 3 March

Rate-setting committee says rapid rise in Covid-19 infections will deliver bigger hit to UK economy than forecastThe Bank of England has kept interest rates at the lowest levels on record after warning that rapid growth in coronavirus infections will deliver a bigger hit to the UK economy than expected in the final months of 2020.Threadneedle Street’s monetary policy committee (MPC) voted unanimously to keep the official interest rate on hold at 0.1% while also leaving the Bank’s quantitative easing bond-buying programme unchanged at £895bn after pumping an additional £150bn into the economy last month. Continue reading...

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...

Rolling coverage of the latest economic and financial news

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...

Europe facing post-Covid finance squeeze as indebted businesses crash affecting economy

ONS says consumer prices index fell to 0.3% in November from 0.7% a month earlier

Rolling coverage of the latest economic and financial news

Coronavirus closures will put millions of pounds worth of festive food at risk, firms warn

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...

Sir Michael Marmot says children’s lives could be harmed for ever if deprivation not tackled

Unemployment rate increases to 4.9%, fuelled by job losses in retail and hospitality

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...

ONS survey shows some people faced greater threat to mental health, incomes and life expectancy

Rolling coverage of the latest economic and financial news

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...

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...

Prime minister says both sides are ‘still very far apart on some key things’

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...

From farming to travel, the car industry to academia, the pressure is building on the prime minister to reach an agreement

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...

Severe delays as businesses try to get goods into Britain before a potential no-deal Brexit on 1 January

Rolling coverage of the latest business and markets news, as Brexit fears hit currency and stock markets

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.”

UK economic growth hits a six-month low and European Central Bank launches new stimulus

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...

Brexit uncertainty and business jitters caused by Covid lockdowns will delay investment rebound