It’s a step forward that Uber drivers must now be treated as employees, but there’s still a long road to travelPutting the brakes on the gig economy is a good thing. Bingeing on something commonly makes you feel ill. But in the case of the stratospheric growth in online services and the deleterious effect of this on stressed-out, poorly paid workers, overindulging makes others sick.From Australia to Canada, Chile, Brazil and much of Europe, gig economy firms have faced legal action, government enforcement or both as countries try to improve the rights of their workers.The minister protests that Brexit was never a cloak behind which he would be busily downgrading workers' rights Continue reading...

Figures also appear to confirm that economic recovery will be faster than forecast

Leading industrial nations support a possible $500bn rise in IMF currency reserves to help poorer states cope with Covid crisisThe world’s leading industrial nations have moved a decisive step closer to providing pandemic financial support for developing countries after they backed plans to increase currency reserves provided by the International Monetary Fund.After the US dropped its opposition to a fresh allocation of the IMF’s special drawing rights, extra funds to help developing nations cope with the economic effects of Covid-19 looks certain to be rubber-stamped next month. Continue reading...

Analysis of budget highlights deep cuts to spending for Whitehall departments and local governmentBritain could be headed for a new era of austerity, the leading tax and spending thinktank has warned, after analysis of Rishi Sunak’s budget revealed deep cuts in spending plans for Whitehall departments and local government.The Institute for Fiscal Studies (IFS) said, despite the added pressures caused by Covid-19, areas of spending not singled out for special treatment by the Treasury were facing an 8% reduction in their budgets compared with pre-pandemic plans. Some of the departments now being lined up for fresh spending curbs – such as the Home Office and HMRC – had additional responsibilities as a result of Brexit, the IFS said.Related: Sunak defends budget plans and insists 1% rise for NHS staff is fairRelated: UK's economic recovery may be quicker than forecast – Bank of England Continue reading...

Rolling coverage of the latest economic and financial news

With the economy looking more resilient than expected under Covid, setting committee keeps rate at 0.1%The Bank of England has become less gloomy about unemployment amid signs that budget measures and a more resilient than expected economy will improve the UK’s jobs’ outlook.Announcing the decision of the latest meeting of its nine-strong monetary policy committee (MPC), Threadneedle Street said it was likely its next set of economic forecasts – due out in early May – would forecast a jobless peak below the 7.75% pencilled in last month. Continue reading...

Unctad agency says international cooperation has fallen well short of what is needed given scale of crisis

Rolling coverage of the latest economic and financial news

Fears of rapid rise in inflation after study finds 26% of savings made during lockdown will be spent

Rolling coverage of the latest economic and financial news

Smart watches and tracksuit bottoms also included, with more spent on keeping safe and fit

Governor says rising interest rates reflect growing optimism – but warns new Covid variants could derail progress

The White House is putting government at the heart of the post-Covid economic bounce-back. The implications affect us allDuring the pandemic, the world has been dazzled by the huge sums that governments have been willing to spend propping up their economies. Britain has spent £407bn in support measures, more than 40% of normal government spending in an entire non-Covid year. The European Union has launched an emergency new €750bn (£645bn) coronavirus recovery fund to help its 27 member states. Now the United States has topped them all, passing the $1.9tn (£1.4tn) stimulus package that President Biden signed this week. This takes pandemic-related spending by the US to around $6tn (£4.3tn) – more than it spent fighting the second world war.The Biden package is massive. It puts up to $1,400 into the pockets of low-paid workers and members of their families. It extends a wide range of welfare payments into the autumn, boosts parental tax credits, and maintains special unemployment reliefs and health care subsidies. Much of the support is unconditional. The poorest fifth of US households will see their incomes rise by 20%. Child poverty may be cut in half. Payments began to arrive over the weekend. Continue reading...

Delays and confusion at the UK’s ports threatens to put hundreds of small and medium-sized exporters out of businessThe collapse of Britain’s trade with the EU will continue into the summer after the failure to recruit up to 30,000 customs agents, despite government assurances that normal service has resumed, industry groups have warned.Delays and confusion at the UK’s ports, which have resulted in 40% of trucks crossing the Channel with empty containers, threatens to put hundreds of small and medium exporters out of business and cost the government millions of pounds in lost trade tariffs. Continue reading...

The Bank of England must be clear about its focus on jobs and growth – and that stimulus needn’t spoil anyone’s sleepTearing at the Tory party’s fabric is the thought of spiralling government debt. The subject triggers a cold sweat in some of the most emotionally resilient Conservative backbench MPs, such is the distress it generates.Much as the German centre-right parties have spent the past 90 years fearing a return of hyperinflation, their UK counterparts worry about paying the national mortgage bill, and the possibility it will one day engulf and sink the ship of state.If the past decade has taught us anything, it's that the Bank has done too little to help the economy, not too much Continue reading...

The president’s $1.9tn stimulus package should lift US GDP by up to 4% – and thus buoy up the whole of the global economyUS president Joe Biden did the world a favour last Thursday when he signed a bill handing $1.9 trillion (£1.4tn) of rescue funds to state and federal agencies, millions of students and workers and the US vaccination programme.The money will appear first as cheques landing on household doormats as early as this week, softening the blow of the pandemic for those in work and for the many who remain out of work and under severe financial strain.If anything the US economy needs a bit of inflation after more than 10 years without any Continue reading...

The former head of the Bank of England looks at the danger of putting a price on everything

Businesses cite higher costs, customs delays and paperwork as among the problems they faceThe first couple of weeks in January after Brexit were a disaster for Ronald Scordia’s shellfish exporting business. “The truck was late arriving, then took 48 hours to arrive in France, missed the connection on the Friday, and wasn’t able to be sent on until the Monday. You can imagine the quality of the produce when it got there; we lost a lot of money,” he said.Related: Massive drop in UK trade shows extent of Boris Johnson's Brexit own goal Continue reading...

The timetable for the major new controls that have already been imposed and those that have been delayedThe UK government has made eight major U-turns on its adopted timetable for customs controls on trade with the EU.In early March, ministers prompted a row with Brussels after unilaterally delaying two sets of controls on goods entering Northern Ireland from Britain. On Thursday, after warnings that controls on imports from the EU could lead to empty supermarket shelves in July, the government delayed a further six measures, a tally by the Guardian shows. Ministers set back to January 2022 the opening of a network of more than 30 customs posts, which had been scheduled for 1 July. Continue reading...

Australia’s longtime finance minister to pursue a ‘global’ approach to help countries become carbon-neutral by 2050Mathias Cormann says he cannot wait to start his new role as the head of the Organisation for Economic Co-operation and Development (OECD).Australia’s longest-serving finance minister will take over as secretary general of the Paris-based organisation from outgoing Angel Gurría.Related: Mathias Cormann elected OECD chief despite climate recordRelated: Climate experts in dismay at choice of Mathias Cormann as OECD chief Continue reading...

Former Australian finance minister’s candidacy was dogged by complaints from environmental groupsAustralia’s former finance minister Mathias Cormann has won a hard-fought election to become the new chief of the Organisation for Economic Co-operation and Development (OECD), despite grave concerns voiced by environmental groups over his record on climate change.Cormann narrowly defeated the Swedish former EU trade commissioner Cecilia Malmström in the election to lead the 37-member Paris-based organisation, which gives advice to member governments on economic trends, inequality, fighting corruption and trade and is seen as the world’s leading rulemaker on corporate tax.Related: Climate experts in dismay at choice of Mathias Cormann as OECD chiefRelated: UK warned not to back Mathias Cormann as new OECD head Continue reading...

Critics say election of former Australian finance minister with ‘atrocious record’ sends a dangerous signalClimate experts have expressed dismay at the choice of Mathias Cormann, a former finance minister in an Australian government with a record of strong hostility to climate action, as secretary general of the Organisation for Economic Co-operation and Development (OECD), an international institution that advises rich countries on policy and poor countries on how to become wealthier.Jennifer Morgan, the executive director of Greenpeace International, said: “We have little confidence in Cormann’s ability to ensure the OECD is a leader in tackling the climate crisis, when he has an atrocious record on the issue. If the OECD is to fulfil its mandate, it must confront the climate emergency, arguably the biggest social justice issue of our time.”Related: Mathias Cormann elected OECD chief despite climate record Continue reading...

Rolling coverage of the latest economic and financial news, including January’s UK GDP report

Analysis: trade could be a drag on recovery for years to come rather than the high-octane propellent the government promised

Fall in exports worth £5.6bn comes as UK economy in January suffers deepest drop since first wave of Covid pandemic

British retail, already challenged by digital, has been hammered by Covid. Thousands of jobs could be lostUnder capitalism, shops are one of the places where our society is supposed to feel most alive. Window displays beckon. Products are piled high. Stock changes constantly. Desires are created and never quite satisfied.For most of the past year, shops in Britain – one of the economies most driven by consumerism – have not been like that at all. Even the grandest London department stores were often eerie places during the few months they were open last summer and autumn: customers sparse, staff trying to keep busy, the same goods on the shelves for much longer than normal. In its most physical form, British consumerism has slowed down and frequently ground to a halt.Andy Beckett is a Guardian columnist Continue reading...

Rolling coverage of the latest economic and financial news

Rolling coverage of the latest economic and financial news

Inflation and other uncertainties could take shine off OECD’s strikingly optimistic prediction

Demand for US tech stocks pushes Dow above 32,000 while Stoxx 600 closes at highest in over a yearShare prices in the US and Europe have reached their highest levels since the start of the pandemic as optimism grows that Joe Biden’s $1.9tn stimulus package can reflate a battered global economy without triggering a surge in inflation.Demand for US tech stocks sent the Dow Jones Industrial Average above the 32,000 level for a brief period while the Stoxx 600, a key index of European shares, closed at its highest level since late February last year. Continue reading...

Rolling coverage of the latest economic and financial news

First official snapshot comes after collapse of export volumes in first month of Brexit deal

Thinktank upgrades forecasts for world economy, with US expected to drive recovery

A post-Brexit ‘Big Bang 2.0’ is the last thing finance needs: the rules are what make London an attractive place to do business

Charlie Bean of Office for Budget Responsibility says savings of higher earners more likely to be spent over several years

Support for Australian ex-minister with poor record on climate crisis would send ‘terrible message’The UK has been warned not to send a dreadful message to the rest of the world by backing a controversial Australian former minister with a much-criticised climate change record to run the Organisation for Economic Co-operation and Development.The race to be the next secretary-general of the OECD – the Paris-based economic thinktank that advises governments across the world – has narrowed to Mathias Cormann, the former Australian finance minister, and Cecilia Malmström, the former EU trade commissioner and Swedish centrist politician. The result is due by 15 March.Related: 'Not a suitable candidate': climate groups urge OECD not to appoint Mathias Cormann as next headRelated: Mathias Cormann: the OECD candidate who helped destroy Australia’s carbon-trading scheme Continue reading...

Rolling coverage of the latest economic and financial news

Nature-rich sites such as woods and wetlands more valuable because of the ‘ecosystem services’ they provideThe economic benefits of protecting nature-rich sites such as wetlands and woodlands outweigh the profit that could be made from using the land for resource extraction, according to the largest study yet to look at the value of protecting nature at specific locations.Scientists analysed 24 sites in six continents and found the asset returns of “ecosystem services” such as carbon storage and flood prevention created by conservation work was, pound for pound, greater than manmade capital created by using the land for activities such as forestry or farming cereals, sugar, tea or cocoa.Related: How much is an elephant worth? Meet the ecologists doing the sums Continue reading...

Joe Biden’s vaccine announcement created optimism, but a rebound must be sustainable

Bank of England’s Andrew Bailey expects permanent shifts in spending and work routines

Treasury committee hopes to pin down chancellor on investment, the environment, NHS and universal creditRishi Sunak will face questions from MPs on the influential Commons Treasury committee this week over his spend now, pay later budget plan to combine emergency Covid support schemes with the biggest tax rises since 1993.The chancellor outlined tax rises on companies and middle-income workers to pay for an extra £65bn of financial support to see the UK through the pandemic, bringing total government spending on the crisis to more than £400bn.Related: Contested grants to hidden cuts: how ‘Scrooge’ Sunak's shine fadedRelated: Rishi Sunak and the Treasury need to think big and plan long term Continue reading...

Construction only just started at the key livestock port of Portsmouth, while the facility at Dover is just ‘a muddy field’A string of British ports are urging the government to delay the next wave of Brexit red tape, saying that border checkposts will not be ready for the July deadline, while inland customs facilities being built are also behind schedule.With the Brexit minister, Lord Frost, reportedly considering reviewing plans for full customs checks on all imported goods, pressure is building on ministers to push back their deadlines, and set out measures for scaling back controls. Continue reading...

The budget showed how strategic planning and investment loses out to quick fixes. A department for the economy is urgently neededImagine that the UK established a fully functioning department of the economy. Imagine it was led by a Cabinet heavy-hitter with the clout to resist the Treasury’s desire to strangle the new ministry at birth. Run with the idea for a moment that this new arm of the state had the task of tackling long-term challenges: weak investment, poor productivity, the north-south divide, and the transition to a net carbon-zero economy.Now stop daydreaming and wake up to the real world. There have been attempts in the past to siphon off some of the power of the Treasury to a new ministry – most famously the creation of the Department for Economic Affairs by Harold Wilson after the 1964 election. Wilson put George Brown, a heavyweight, in charge but it was still killed off with relative ease by the Treasury.Related: More long-term thinking is needed to protect the UK economy Continue reading...

Grants to ministers’ seats and plans to axe spending and lift taxes marred the chancellor’s post-Covid packageRichmond’s cobbled market square is quiet compared to the bustling Saturday mornings of pre-lockdown times, though there is a hubbub of well-heeled retirees bumping into people they know and stopping for a chat.“The jewel in the heart of North Yorkshire, the gateway to the Yorkshire Dales,” is how the town proudly brands itself. Tourism is important here. But even when visitor numbers are badly down, as they are now, there is an air of rural affluence about the place that suggests Richmond will survive hard times far better than most.Related: £1bn to ‘level up’ towns … but Tories already cut £2.4bn Continue reading...

The evangelists in government claim that a new era of greatness in trade and influence is on its way. But the evidence of disaster is piling upGlobal Britain is a catchy slogan. There is the delicious hint of recovered greatness – though this time not imperial but global. It also neatly deflects the charge that leaving the EU is rampant little Englandism; instead, it is the EU that is made to seem parochial and inward-looking. What’s more, it represents ambition.Global Britain will be a great power as we used to be – cutting trade deals with the world, sending our fleet east of Aden again to project naval power as part of a pivot to Asia; and taking the lead in upholding democracy and the rule of law. The wartime entertainer Bud Flanagan can rest easy. “Who do you think you are kidding, Remainers, if you think old England’s done.”To be the force for good it could and should be, Britain had to be more modest, casting itself as an honest broker Continue reading...

The chancellor appeared to have learned from the austerity disaster, but a glance beyond the short term shows he has notChancellor Sunak made much of his attachment to fiscal prudence in the run-up to last Wednesday’s budget – so much so that balancing the books seemed to become a moral crusade.This worried a lot of people. As that great Treasury permanent secretary of yesteryear, Sir Douglas Allen (Lord Croham) once observed: what matters is not balancing the budget, but balancing the economy.The empirical evidence suggests that freeports are not a great source of new investment: they merely divert the location of planned investment Continue reading...

While higher interest rates would add to the cost of financing the debt burden, central banks are unlikely to raise them soonThere was a warning after last week’s budget that Rishi Sunak’s recovery plans could be blown off course by a rise in inflation of such strength that it would force central banks to raise interest rates. A modest increase of just 1% in the interest paid on government debt would add between £20bn and £25bn to the cost of financing the UK’s debt and sink any hopes Sunak had of balancing day-to-day income and spending by 2026.Sunak said as much in his budget speech, using the prospect of higher interest bills as a reason to ramp up taxes on households and businesses in the second half of the parliament.Many in the febrile stock markets have bet that a surge in demand from US consumers will trigger rising prices Continue reading...

A letter signed by 29 experts and activist groups says Cormann’s climate record should rule him out of secretary-general’s jobInternational climate change groups and influential advisers on the global shift from fossil fuels have written to the OECD expressing “grave concerns” over Australian politician Mathias Cormann’s bid to be its next secretary-general.Former Australian finance minister Cormann’s record in a government that “persistently failed to take effective action” to cut emissions while blocking international action meant he was “not a suitable candidate”, the letter says.Related: Mathias Cormann: the OECD candidate who helped destroy Australia’s carbon-trading schemeDear @OECD,

Group led by Bank of England economist ditched in favour of government’s ‘plan for growth’Business leaders have criticised Kwasi Kwarteng, the business secretary, for shutting down the Industrial Strategy Council, the government’s in-house thinktank plotting the regeneration of Britain’s hard-pressed regions.The decision to disband the council, which was led by the Bank of England’s chief economist, Andy Haldane, was called a “sad and bad” decision by Matthew Taylor, the chief executive of the Royal Society for Arts, Manufactures and Commerce. Continue reading...