Former prime minister says group should commit to global vaccine drive and slams UK’s foreign aid cut

Summer spending frenzy could be on cards as studies point to big economic bouncebackCoronavirus – latest updatesSee all our coronavirus coverageOptimism among business leaders is at a record high based on hopes that Britons will commence a multibillion-pound summer spending frenzy after being freed from lockdown.On the day that non-essential shops and other businesses in England reopened for the first time since January, three separate studies suggest that the bounceback in the economy could be broader and faster than previously expected. Small, medium and larger FTSE companies all reported improved sentiment, with only exporters – affected by Brexit as well as coronavirus – suffering a downturn in fortunes. Continue reading...

Heavy borrowing by businesses could easily end in higher inflation and a ballooning trade deficitNever have the opening lines of TS Eliot’s The Waste Land seemed more apt. In 2020, April really was the cruellest month, as the first wave of Covid-19 deaths peaked and businesses were shuttered. Between March and April, UK output slumped by a fifth.This year, April will be different. The success of the vaccine programme means the government can go ahead with the next phase of the gradual unlocking of England’s economy. From Monday, it will be possible to go to the pub for a pint, provided you are prepared to brave the spring weather and drink outside.Related: Britain is ‘bouncing back’ into the same old economy Continue reading...

The GOP says the $2tn infrastructure plan is too big. Democrats say Trump cut taxes and ‘spent like a drunken sailor’The response was as uniform as it was predictable.Related: Republican ‘attacks’ on corporations over voting rights bills are a hypocritical shamRelated: On the House review: John Boehner’s lament for pre-Trump Republicans Continue reading...

If it can be achieved, the president’s goal will transform the economic balance of powerMore than a decade has passed without any progress in bringing the global tax system into the modern age. But less than three months after taking office, President Joe Biden has raised hopes of a breakthrough, with proposals that could kill tax havens dead and force multinationals to pay a fairer share of tax.The change in tone could not be more marked. With last week’s proposal for a global minimum corporate tax rate, Washington has turned away from years of economic orthodoxy that stretched back to the early 1980s and prioritised a neoliberal world vision – of free-market competition, government indifference and unblinking advocacy of globalisation. Continue reading...

Hopes of a rapid recovery overshadow the fact that the Tories have failed to reinvent the way the UK does businessIn some government circles, the excitement before Britain’s opening-up and return to something like normality is making ministers giddy.Grant Shapps says everyone may start booking a foreign holiday now that he is at work revamping last year’s colour-coded map of the world. With a traffic-light system of testing and quarantine rules in place, it is likely that nowhere will be out of bounds for Britons to visit. Inside No 10, last year’s recession is forgotten and the possibilities during the second half of the year are considered to be almost boundless.Policies masquerade as strategic when the only consistent thing about them is that they are tactical Continue reading...

Campaigners say US global blueprint would help raise billions from multinationals and tech giants

The Biden administration wants to end profit-shifting to tax havens by big tech firms and other multinationalsTax systems around the world have been increasingly left behind in recent years by the rise of globalisation and digital media companies such as Google, Amazon, Apple and Facebook. They are firms operating across international borders that can shift profits around to exploit the most attractive low-tax locations.Related: UK house prices hit record high a year after Covid-19 lockdowns began – business live Continue reading...

Ismail Ahmed, a refugee turned multimillionaire, says his country has had to battle ‘negative PR’Aid agencies are hindering development and undermining efforts to attract investment in Somaliland, according to a former World Bank and UN official turned entrepreneur.Ismail Ahmed, founder of the money-transfer company WorldRemit, claims Somaliland, his birthplace, has had to battle “negative PR” from aid agencies exaggerating their role to protect their interests. Somaliland declared itself a sovereign state independent of Somalia in 1991, but it is not recognised internationally.Related: When is a nation not a nation? Somaliland’s dream of independence Continue reading...

Duke tells IMF and World Bank event that investment in reforestation and cleaner oceans must be stepped upBanks can help to turn the tide in the battle against climate breakdown by investing more in nature, the Duke of Cambridge has said.Prince William told a joint International Monetary Fund and World Bank event on the climate emergency that there needed to be a marked stepping-up of investment in projects such as reforestation and cleaner oceans. Continue reading...

New American proposals offer the prospect of a global deal against corporate tax avoidance. Britain has a vital role to play in making it workThe terrible global cloud that is the Covid-19 pandemic offered the world the glimpse of a silver lining this week. New tax proposals by Joe Biden mean that the economic emergency caused by coronavirus could result in big multinational corporations having to pay the fair amounts of tax they have avoided for so long. A breakthrough this week at the 135-nation Organisation for Economic Co-operation and Development talks in Paris may produce an agreement. Giants like Facebook and Google would then have to pay up – and not before time. This is definitely a step in the right direction.Until Covid, the OECD corporate tax negotiations that began nearly a decade ago had been deadlocked, especially after the Trump administration refused to agree to anything that might raise taxes on US tech giants. Individual nations, notably in Europe, had started to impose or threaten stiffer local taxes, leading to retaliatory threats from Washington, but without inhibiting the big multinationals’ lucrative tax-avoidance strategies. Under Donald Trump, the US had even made clear that it reserved the right to allow American corporations to remain outside any new OECD-brokered regime. Mr Biden abandoned that demand in January. Continue reading...

Surge in housebuilding joined by strong growth in infrastructure and commercial projectsBritain’s construction sector has had its sharpest pick-up in activity since 2014 amid signs that the domestic economy is recovering more quickly than Brexit- and pandemic-affected trade flows, new figures have shown.The latest snapshot of the construction sector, which accounts for around 6% of total UK output, pointed to an across-the-board increase in March, with house-building, commercial projects and infrastructure work all displaying strong growth. Continue reading...

After Biden’s stimulus, the era of small states, low taxes and balanced budgets suddenly looks to be overA wealth tax to help pay for the cost of fighting the pandemic. An international agreement to prevent a race to the bottom on corporate tax. An insistence that recovery from the second severe crisis in just over a decade should be green and inclusive. A conviction that governments should spend whatever it takes to fend off the threat of mass unemployment, paying no heed to the size of budget deficit.There’s nothing startlingly new about any of these ideas, which have been knocking around for years, if not decades. What is different is that these are no longer just proposals put forward by progressive thinktanks or marginalised Keynesians in academia, but form part of an agenda being pursued by the International Monetary Fund and the US Treasury under Joe Biden’s presidency.Larry Elliott is the Guardian’s economics editor Continue reading...

Rolling coverage of the latest economic and financial news as Covid recovery hopes lift stocks

Meetings of finance ministers follow change in US stance, with consensus growing on tackling tax avoidanceFinance ministers from the G20 group of the world’s largest economies are exploring a global minimum tax on corporate profits, amid growing international consensus on tackling avoidance after the pandemic.The move to set a floor on tax rates paid by corporations comes after the US made the case for an international base rate this week, in a move by the Biden administration to end US resistance to international tax reforms.Related: Tax abuse and money laundering is trapping billions in poverty, says UN Related: UK overseas territories top list of world’s leading tax havens Continue reading...

Jamie Dimon says in shareholder letter economy on edge of ‘Goldilocks moment’ but upbeat news comes with caveatsThe US is about to enter a post-pandemic boom, according to JP Morgan boss Jamie Dimon, even though it has been “torn and crippled by politics, as well as racial and income inequality.”Related: Banks pledge to fight climate crisis – but their boards have deep links with fossil fuels Continue reading...

Fiscal monitor says rich should pay more tax on temporary basis to help support poor and vulnerable

Investor optimism rises after global body upgrades growth forecastsShares in the UK’s leading companies have closed at a post-pandemic high after hopes of economic recovery and calming words from the International Monetary Fund (IMF) boosted the optimism of investors.Related: Western economies recovering faster than expected from Covid, says IMF Continue reading...

Rolling coverage of the latest economic and financial news as businesses in England prepare to reopen on 12 April

Growth forecast upgraded amid US and UK vaccine programmes and stimulus packagesStronger recoveries from the Covid-19 pandemic in the US, the UK and other rich western countries will result in faster than expected growth for the global economy this year, the International Monetary Fund has predicted.The Washington-based IMF’s half-yearly World Economic Outlook (WEO) said successful vaccine programmes, businesses adapting to the challenges of lockdown and Joe Biden’s $1.9tn (£1.4tn) stimulus package had been key factors in the upgrade.Related: IMF calls for tax hikes on wealthy to reduce income gap Continue reading...

If the government intends to ‘build back better’ it needs to ensure better protection for workers

The long-running series in which readers answer other readers’ questions on subjects ranging from trivial flights of fancy to profound scientific and philosophical conceptsThe chancellor has borrowed an unprecedented amount of money. Who is lending it to him, and where did they get it?

Exiting the EU was not good for Britain. Greed did not bring us the vaccine. Johnson’s narratives will not stand the light of dayThere can be few people who have not at some stage in their lives felt that they had been “taken for a ride” or conned. Yet that, I think, will be the dawning realisation of a fair proportion of the 37% of the electorate who – without, in most cases, having the faintest idea of the implications – voted on 23 June 2016 to leave the European Union.Now, usually, if one is conned, it is over some relatively minor matter in the great scheme of things, and one learns one’s lesson. But when a significant part of a country is taken for a ride, it cannot be dismissed as a trivial matter from which it can easily recover.At a time when he pays lip service to carers, the man we have to call prime minister is a don’t-carer Continue reading...

To European eyes, the $2tn infrastructure plan may not be exceptional, but for America it seems revolutionaryFrom a European perspective, Joe Biden’s plans for a $2 trillion boost to spending on infrastructure is not a radical statement of intent. The money will be spread over eight years and raise the federal budget on capital projects by about 1 percentage point a year.And the US is starting from a very low base. Congress levies federal taxes that amounted to a little more than 16% as a proportion of national income (GDP) in 2019 and the total level of taxes, taking into account state and local charges, is 24.5% of GDP. By way of comparison, the UK’s share of tax levied as a percentage of GDP is around 37% and in France it is 46%. Continue reading...

The modernisation of China’s exchange-rate system could deal the currency a painful blow

Factory output growth in March hits 10-year high as new orders and employment expand at rapid pace

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American Jobs Plan would rebuild roads, highways and bridges; confront the climate crisis and curb wealth inequalityJoe Biden on Wednesday unveiled what he called a “once-in-a-generation” investment in American infrastructure, promising a nation still struggling to overcome the coronavirus pandemic that his $2tn plan would create the “strongest, most resilient, innovative economy in the world”.Speaking at a carpenters’ training center outside of Pittsburgh, where he launched his campaign two years ago, Biden returned as president to elaborate on his campaign pledge to “rebuild the backbone of America”.Related: Biden’s $2tn infrastructure plan aims to ‘finally address climate crisis as a nation'Related: ‘I knew they were hungry’: the stimulus feature that lifts millions of US kids out of poverty Continue reading...

Global lender of last resort warns inequality exacerbated by Covid crisis could trigger social unrest

Statutory minimum wages go up on same day as inflation-busting increases to utility and phone billsApproximately 2 million of the UK’s lowest-paid workers will receive a raise from Thursday after increases to statutory minimum wage rates. However, many workers are unlikely to feel better off as the pay rise comes on the same day as inflation-busting increases hit household bills.Workers aged 23-24 are expected be the biggest beneficiaries after the government announced that they will start receiving the new minimum living wage of £8.91 a hour – up from the £8.20 a hour they are currently entitled to. Continue reading...

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Expansion in second half of 2020 and increase in household savings raise hopes for recovery this year

Twelve months after the pandemic struck the Guardian’s economic tracker reveals real risk of lasting damage

Our latest snapshot of key economic indicators shows the deficit soaring but unemployment holding steady

Huge fiscal support has safeguarded jobs and demand, but only skills and training can prevent long-term economic scarring

Rolling coverage of the latest economic and financial news

We knew leaving the EU would weaken us. Now we can see it will limit the ability of the government to rein in big techWhat do lipstick, cravats, gold chains and poker chips have in common? The answer is that they are among a host of items that the US is threatening to impose punitive import tariffs on if the UK proceeds with its plan to implement a tax on big tech. The new duties are intended to raise $325m – the amount the US government believes the exchequer will raise from the 2% tax on revenues of tech firms.In some respects, this is just part of the merry-go-round in international trade (though actual merry-go-rounds have also been slapped with new tariffs) as countries ruthlessly pursue their national interests. But it matters because it reveals Britain’s newfound weakness in international trade from outside the EU – and how that weakness may limit the ability of the government to curb the power of big tech.Related: Data shows collapse of UK food and drink exports post-BrexitRelated: Any success for 'global Britain' still hangs on its relationship with the EU | Mujtaba Rahman Continue reading...

The long-running series in which readers answer other readers’ questions on subjects ranging from trivial flights of fancy to profound scientific and philosophical conceptsThe chancellor has borrowed an unprecedented amount of money. Who is lending it to him, and where did they get it?

Analysis: Buhari’s deputy wants to create jobs, feed pupils and cut red tape. Is he too high-profile for his critics?The role of vice-president is one that John Adams, the first person in the US to hold the position, called “the most insignificant office that ever the invention of man contrived”.Nigeria’s Patience Jonathan captured the situation in her sarcastic response to a journalist who asked about her husband, Goodluck Jonathan, when he was vice-president. She said: “He is in his office reading newspapers.”Related: 'I'm a fighter': WTO's first female, African head ready for battleHere you have a man of ideas, marrying that into his role as a man of action Continue reading...

Liquidation of Bill Hwang’s Archegos Capital Management sparked a fire sale of more than $20bn assets

Businesses beset by ‘nightmare’ combination of mounting costs and paperwork as well as delivery delaysSmall businesses have reported a marked drop in exports to the EU as another company bemoaned the post-Brexit “nightmare” of delivery delays and increased costs.The Federation of Small Businesses (FSB), a lobby group, said 35 of the 132 exporters it surveyed had temporarily suspended trade with the EU or stopped it permanently. One in 10 of the exporters surveyed said they were also considering giving up trade with EU customers. Continue reading...

Freedom of information data will increase calls for country to be granted debt amnestyWhen Dominic Raab, the foreign secretary, was in Sudan in January he offered £40m in aid to help its poorest people, who are facing unprecedented food scarcity in a debt-laden country where austerity is deepening.Sudan, ruled by an unelected military-led transitional government after longtime ruler Omar al-Bashir was deposed in 2019, owes the UK almost £900m. But the Observer can reveal that almost 80% of that was accrued from interest, leading to calls for an unconditional debt amnesty. Continue reading...

Red tape and a labour shortage leave retailers and millions of lockdown gardeners with scant pickingsDelphiniums, lupins and other hardy perennials are hard to come by. Roses, fruit trees and house plants are in short supply. As for garden furniture, and equipment, if you think you can walk into a garden centre today and buy whatever you desire, think again.Garden retailers across the UK are facing a “perfect storm” of Brexit and the pandemic, according to the Horticultural Trades Association (HTA). Demand is two to three times higher than normal, thanks to the extra three million people who have taken up gardening during lockdown. Meanwhile, supply has fallen by around 50% over the past year. Continue reading...

Key hurdles are size and weight of container vessel, which is as tall as a 20-storey block of flatDredge and pull, dredge and pull. Dislodging a vessel that has become lodged in sand is simple, in theory. If the vessel is as long as New York’s Empire State building is tall, then the process gets more complicated.Dredgers, tugboats and excavators, guided by world-leading consultants in salvaging ships, have been working for days to free the 220,000 tons, 400 metre-long Ever Given that became stuck in the Suez canal last Tuesday.Related: At least 20 livestock ships caught in Suez canal logjam Continue reading...

Covid deficits are forcing councils into selling land to developers – and now US money is finding its way into the NHSBritain has an endless supply of family silver to sell. Unlike some earls and duchesses, who find they are down to their last Rubens and must sell the estate to make ends meet, the creative folk in Whitehall never run out of options.Local authority land provides an inexhaustible supply of assets, and it has never been more available than now, as the pandemic careers through council finances like an out-of-control double-decker bus.There is always more, if you know where to look. It’s the same when ministers look around for less tangible things to sell – such as contracts that tie Britain’s taxpayers to commercial agreements for decades Continue reading...

Analysis: 12% of global shipping uses the canal with any delays disrupting supply chains, fuelling shortages and hiking pricesWorld trade’s pre-eminent shortcut – the Suez Canal – is facing “massive” disruption which could cause cargo delays around the globe, shipping experts warned on Friday.The narrow, 120-mile passage of water linking the Red Sea and the Mediterranean allows ships of colossal proportions to navigate a relatively direct route from Asia to Europe, rather than taking a 3,500-mile diversion around Africa. Continue reading...

Sector staged modest comeback in February, with easing of England’s outside Covid restrictions in sight

New fund to help firms outside retail, leisure and hospitality sectors with taxes they pay on premises