Government schemes, like startup loans and help for self-employed, crucial for tackling UK unemployment

Job losses at fastest rate on record as economic recovery from first lockdown loses steam

Our latest snapshot of key economic indicators shows recovery is fizzling out

US GDP figures mask several difficulties – and the outlook for the eurozone is bleakNever in its history has the United States seen anything like it. The world’s biggest economy grew at an annualised rate of just over 33% in the three months ending in September. The eurozone will break all records when it reports GDP figures tomorrow, as will the UK when the Office for National Statistics publishes its third-quarter data next month.In normal times, booming economies would mean soaring share prices, with the bullish mood tempered perhaps by a bit of concern that central banks might put an end to the party by raising interest rates. Continue reading...

Rolling coverage of the latest economic and financial news, as the US economy returns to growth

Findings come as chancellor is told new support measures not enough to protect jobs or firms

YouGov’s latest worldwide survey on globalism, populism and immigration reveals an encouragingly progressive outlook

Institution tells Britain to forget rising debt and spend to protect jobs and companies

The right wants to spread alarm about government borrowing, but it’s a sound, affordable response to the pandemicA number of journalists, politicians and observers have become increasingly concerned about the mounting quantity of public debt involved in the UK’s coronavirus response. These “quantity vigilantes”, as I like to call them, worry that public debt has been growing at unprecedented levels since the pandemic began, passing 100% of GDP – a level not seen since 1963.This record peacetime deficit will only mount as the second wave of coronavirus hits jobs, investment and spending across the British economy. So how bad will it get? To some alarmists, what awaits us is no longer simply the “sacred responsibility” to balance the books for the next generation – that old Conservative trope marshalled to legitimise austerity – but something far worse: an impending currency crisis.Related: UK government borrowing soars to record high during Covid pandemicRelated: The myth of the 'efficient' private sector has been busted by Covid | Rosie Collington Continue reading...

The latest US GDP figures have given Trump something to crow about but that will ring hollow for poor people, minorities, women and the youngIf you drop a ball from a very high window, you can expect a big bounce. The ball, however, has still been dropped.Thursday’s release of the US gross domestic product (GDP) figures are Donald Trump’s last chance to claim he has been a great president for the economy before the election. And boy did he claim it.GDP number just announced. Biggest and Best in the History of our Country, and not even close. Next year will be FANTASTIC!!! However, Sleepy Joe Biden and his proposed record setting tax increase, would kill it all. So glad this great GDP number came out before November 3rd.Related: US economy bounces back but deeper trends hint at enduring woeOnly one in four Americans has a job that allows them to work from home, according to the Bureau of Labor Statistics Continue reading...

If result is contested it could drag on for weeks and trigger a major risk-off episode in marketsOpinion polls in the US have long pointed to the strong possibility of a Democratic party sweep in the election on 3 November, with Joe Biden winning the presidency and Democrats gaining control of the US Senate and holding on to the House of Representatives, putting an end to divided government.But if the election turns out to be mostly a referendum on Donald Trump, Democrats might win just the White House while failing to retake the Senate. And one cannot rule out the possibility of Donald Trump navigating a narrow path to an electoral college victory, and of Republicans holding on to the Senate, thus reproducing the status quo.Related: Joe Biden looks like a safe pair of hands for the US economy | Jeffrey Frankel Continue reading...

Workforces in Birmingham and Hounslow have been hit hard by the Covid-19 pandemic. We find out how they are coping

Property market posted an 11% rise in median values, masking rising homelessness and a widening social divide, critics sayNew Zealand house prices have defied the Covid-19 recession and soared to record levels, prompting warnings that the hot property market will damage the country’s long-term economic wellbeing and widen inequality.New Zealand, which already had some of the most unaffordable housing in the world, saw median prices rise 11.1 % in the year to September, while the median price in Auckland reached nearly $1m (US$660,000). Prices rose 2.5% across the country in September compared with August.Related: New Zealand must cast off its worries about government debt in its Covid recovery | Max HarrisRelated: New Zealand housing crisis: just 47 'affordable' homes built in six months Continue reading...

With scheme due to end on Saturday, Rishi Sunak is under pressure to extend protection measuresEconomists have urged the chancellor to extend the furlough scheme and ramp up support for businesses and workers amid rising concern that rapidly growing infection rates from Covid-19 will force the government to impose a national lockdown, triggering a double dip recession.With the furlough scheme due to end on Saturday and unemployment expected to increase sharply in the run-up to Christmas, Rishi Sunak is under pressure to extend the Treasury’s protection measures beyond the levels announced last week, or risk higher rates of business closures and an economic slump. Continue reading...

Rolling coverage of the latest economic and financial news, as European markets sink to their lowest point since May

Two-thirds of UK businesses were at risk of insolvency last month, according to official figures

Sources say it is unclear if move is attempt to sabotage trade body much criticised by TrumpThe US is blocking the appointment of Ngozi Okonjo-Iweala as the next head of the World Trade Organization despite the former finance minister of Nigeria winning the overwhelming backing of the WTO’s 164 members, it has emerged.Dr Okonjo-Iweala had moved a step closer to becoming the first woman and the first African to be director of the global trade watchdog after securing the support of a key group of trade ambassadors in Geneva. Soundings taken by a selection panel of three WTO trade ministers found she had far more support than her South Korean rival, Yoo Myung-hee.Related: 'It can’t be business as usual': the Nigerian frontrunner to be next WTO head Continue reading...

My friend John Loxley, who has died aged 77, was a socialist economist who wanted to change the world for the better. He was a teacher and adviser to politicians in Canada and assisted African governments and international development agencies in negotiating with the World Bank and IMF. He advised Nelson Mandela and the ANC on post-apartheid alternative economic policy.Born in Sheffield, John was the seventh of 12 children of John Loxley, a steelworker, and his wife, Elizabeth (nee Antcliff), a seamstress. He went to King Edward VII school, then to Leeds University, graduating in economics in 1963. Three years later he was awarded a PhD for his thesis on the East African monetary and banking system, and during the period of his research he lectured at Makerere University in Uganda. Continue reading...

As a new report spells out how financial institutions contribute to biodiversity loss, the clamour is growing for a new approach

Contrary to popular belief, Democratic presidents have been better for the economy than RepublicansIn a few days, Americans will choose a president. Opinion polling suggests that voters favour former Vice-President Joe Biden when it comes to social policy, foreign policy, the environment and managing the pandemic, not to mention personal character. But until recently, some polls indicated that on the economy, voters favoured Donald Trump.The general impression that the US economy does better under Republicans than Democrats is long-standing. But the facts do not support it. Continue reading...

Carolyn Fairbairn says the UK economy is in ‘suspended animation’ while issue remain unresolvedThe head of the UK’s leading employers’ organisation has stepped up pressure on the government to conclude trade talks with the EU so that the country can move on from the “suspended animation” of the past four years.Reflecting on her five years as director general of the CBI, Dame Carolyn Fairbairn said her biggest regret was that the issue had not been resolved earlier and warned ministers that businesses grappling with Covid-19 were unprepared for a hard Brexit. Continue reading...

Report reveals groups with highest rates of unemployment as job support scheme ends

Rolling coverage of the latest economic and financial news

Consumer spending’s loss of momentum in October signals flatlining of broader economy

Ballooning Tory spending in response to the pandemic does nothing to redistribute wealth, but it does buy votersIt has been said of Boris Johnson that he is now “more Castro than Castro” and that the economy is now more “socialist … than at any point in British history”. This is, of course, plainly not true. Socialism is normally understood as common ownership of the means of production, distribution and exchange – with power in the hands of workers and citizens, rather than shareholders – and the fundamental aim of a society of equals. The temporary expansion of state spending during a global pandemic is obviously not the same, and the current government is plainly relaxed about inequality.Yet it is hard to overstate the scale of that expansion. Between March this year and next, the Office for Budget Responsibility forecasts an increase in government borrowing of £372bn. That’s three times the annual budget for the entire NHS or about 15% of the entire UK pre-pandemic economy. So what are the wider implications of this expansion in state spending?Related: Debt may be cheap, but the UK's poor productivity will cost us dear Continue reading...

Even with effective vaccine, hospitality sector will struggle to return to 2019 levels

Investors’ summer optimism gives way to insecurity as curfews and lockdowns return

The repercussions are everywhere, from reduced retail footfall to losses at train companiesIt took time, but the Industrial Revolution profoundly changed the way people worked. Out went cottage industries and in came giant factories. People migrated from rural areas to the cities.Gradually, as economies became more service-sector driven, the big factory was replaced by the big office, but the principle remained the same: employees left their home in the morning for their place of work and returned in the evening. Continue reading...

Survey finds nearly two-thirds of entrepreneurs believe their business may not survive pandemic

Many low earners are in jobs hit hard by the coronavirus, and help for them feeds straight back into the economy

Review finds testing flaws meant support went to many workers who lost no income but not to others who hadRishi Sunak’s flagship scheme to help the self-employed through the pandemic has handed £1.3bn to workers who saw no loss of income while giving nothing to 500,000 people left without work, new analysis has revealed.In a sign of major flaws in the £12.7bn self-employment income support scheme (SEISS), more than 400,000 workers were able to claim support despite losing no income in the crisis. Continue reading...

Small firms are borrowing big sums to survive. They must be given the option of a debt-for-equity swap with the TreasuryBritain is sleepwalking into a debt crisis that will undermine its prospects of a sustainable recovery.It’s not the debts of the government that are at issue; it is the monumental amount of borrowing by the private sector, much of it from the Treasury, that will hang like a dead weight on the shoulders of thousands of businesses, possibly for a decade.Of course the government would be in the game of 'picking winners' – something the Treasury has always rejected Continue reading...

Labour says hundreds of thousands of people will be left struggling under new scheme

IHS Markit index shows growth is at its weakest since the recovery from lockdown began

Covid has tanked the gains he made in the economy and any new stimulus could be too lateIt all looked so simple for Donald Trump as he took the stage at the World Economic Forum in Davos in January this year. At the start of an election year, the annual gathering of the global business elite was an opportunity to launch his campaign.It was one Trump eagerly seized. The next 30 minutes was one long boast, detailing how a US economy that had allegedly been on its knees under Barack Obama had been transformed under his stewardship. Continue reading...

Chancellor announces new support deal amid concerns over mass unemployment

Hospitality and leisure bosses welcome grants but remain wary of uncertain future

Latest updates: Boris Johnson says he ‘share people’s frustrations’ as figures reveal new low in reaching contacts; further areas added to tier 2 restrictions. This live blog is now closed – please follow the global live blog for latest updates

Rolling coverage of the latest economic and financial news

U-turn on job support scheme leaves many self-employed feeling aggrieved

There are many means by which government and the market can improve opportunitiesInequality has been seizing ever more of the public’s attention in recent years, reflected everywhere from papal encyclicals and economic tomes by French socialists to technical academic debates and the demotic language of politicians and pundits. The health and economic effects of the Covid-19 pandemic have further elevated these concerns.But which aspect of inequality should we be worried about? There are inequalities of opportunity and inequalities of outcome; there is overall inequality and there is inequality at the tails of the distribution. Should we be more worried about absolute or relative positions – mobility or stability? What is really more important, the distribution of the economic pie or the level and growth of living standards?Related: Can central banks keep holding off the Covid economic crisis? | Mohamed El-Erian Continue reading...

12m adults struggling to pay bills, with BAME people worst hit, official figures show

Chancellor to meet employers groups and unions amid pressure from lockdown-hit areas

Crisis creates highest debt-to-GDP ratio since 1960

Rolling coverage of the latest economic and financial news

Sean Rickard and Clive Spragg take issue with an article by Larry Elliott. Plus letters from Christopher Hill and SP Chakravarty on post-Brexit trade dealsLarry Elliott (Boris Johnson’s split from Brussels echoes Henry VIII’s break with Rome, 18 October) seems too willing to accept that the UK’s economic performance has been constrained by EU membership and that models showing the economic cost of Brexit should be treated with scepticism because behaviour can change. Behaviour can change, but not always for the best. Rather than observing that, post-Brexit, the government can nurture industrial regeneration, it would be wise to understand why the UK has spent less on state and regional aids than comparable EU members, and why they have achieved more impressive productivity growth.As to his outmoded view that a fall in sterling’s value will relieve some Brexit pain, all we can say for certain is that it will make the country poorer. Since the financial crash, sterling has lost some 25% of its value, yet the current account continued to decline until the Covid recession reduced import demand. Continue reading...

UK chancellor will set out one-year plan covering budgeting needs of departments

Covid crisis means government’s long-term economic agenda must wait

Centre for Policy Studies plan includes new limits on child benefit and foreign aid cutsA right-of-centre thinktank with close links to Downing Street has called for the pensions triple lock to be scrapped, the aid budget to be cut and child benefit further limited as part of £30bn worth of spending cuts designed to spare the UK from post Covid-19 tax increases.The Centre for Policy Studies (CPS) said its nine-point plan would ensure that the government was getting value for money and ensure that frontline services were protected as the Treasury took steps to repair the public finances.Related: UK economy nears 'perilous turning point' on Covid-19Introduced in 2011 by the coalition government, the triple lock guarantees that the basic state pension will rise by a minimum of either 2.5%, the rate of inflation or average earnings growth, whichever is largest.A cut of 160,000 in public sector administrative staff at an estimated saving of £3.5bn.The sale of high-value council homes and replacing them with cheaper properties (£1.5bn).Reducing the number of quangos and combining their back-office functions (£3bn).Streamlining local government and its administrative costs (£1bn).Improving e-procurement and data sharing (£4.5bn).Making child benefit part of the child tax credit system and tightening eligibility (£1bn). Continue reading...