Economic experts, unions and Labour sound warning after summer statementRishi Sunak has been warned he will need to act far more decisively to prevent mass unemployment this autumn after unveiling a £30bn mini budget designed to tempt nervous consumers out their Covid-19 hibernation.The chancellor announced a short-term cut in VAT for hospitality and tourism and an August “eat out to help out” discount scheme as the government sought to send out a message to the public that it was safe to leave their homes and enjoy themselves.Related: Summer statement 2020: the chancellor's key points at a glanceThe coronavirus lockdown has prompted some of the UK’s most prominent companies to announce large-scale job losses. The aviation, automotive and retail sectors have been among the worst hit, as businesses adjust to dramatically reduced revenue projections. Continue reading...

TUC and thinktanks call for immediate action to stem rising tide of redundancies

Firms ‘heartbroken’ as alcohol sales are excluded from tax relief in summer statementThousands of local pubs are at risk of closure after alcohol was excluded from government measures aimed at stimulating the hospitality and leisure sectors across the UK, the industry has warned.Restaurants, cafes, hotels and attractions such as zoos and cinemas all stand to gain from a six-month cut in VAT from 20% to 5%, which the government said would cost £4.1bn and help 150,000 businesses. The reduction in sales tax will apply to food, accommodation and attractions.Related: Summer statement 2020: the chancellor's key points at a glancePretty disappointing nothing for wet led pubs today. Anyone else think so? Continue reading...

Sunak wins plaudits for taking drastic measures to revive UK’s pandemic-stricken economy

Summer statement’s focus on energy efficiency welcomed but disappointment that no boost for renewables

Labour demand and supply hit by lockdown, particularly in retail and hospitality

DBC Reed, Alan Healey and Rae Street respond to an article by Polly Toynbee. Plus Margaret Squires on the truth of the magic money tree and David Napier on Rishi Sunak’s ‘smart’ mugAs a long-term supporter of the oldest and most radical form of wealth tax, the Henry George land tax (which Andy Burnham was trying to get the Labour party behind 10 years ago), I can claim to have some experience with popular prejudices in favour of large holdings of wealth that Polly Toynbee wrestles with in her excellent article (To save the arts and all else we hold dear, a wealth tax now seems the only answer, 6 July).Most people think wealth is a good idea and just needs sharing out in their direction. The most popular method is increases in house prices that you don’t have to work for. But house prices rises simply spread poverty, as the high rents and property values ruin capitalism by leaving people who have to work without the money to buy the totality of production they are engaged in. Continue reading...

Chancellor delivers summer statement in the Commons on UK economic recovery from pandemic

Scientists claim widespread conservation can bring rewards if right policies are followedNearly a third of the world’s oceans and land area could be placed under environmental protections without harming the global economy, and even produce bumper economic benefits if the right policies were followed, according to a global assessment.Ecosystems around the world are collapsing or hovering on the brink of disaster, with a million species threatened with extinction. But if at least 30% of the planet’s land and oceans were subject to conservation efforts, that mass extinction could be avoided and vital habitats restored, scientists estimate. Continue reading...

Chancellor announces £9bn reward for firms bringing back furloughed workers

Confusion over NSW-Victoria border closure as the state’s northern border closes for the first time in a century. Follow the latest news

Ahead of Rishi Sunak’s statement we look at public finances, economic growth, jobs, retail and the housing marketRishi Sunak is preparing to deliver his set-piece tax and spending update on Wednesday against the backdrop of a deep recession and the threat of a sharp rise in unemployment.Here are five key charts that will underpin the policymaking behind the chancellor’s announcement. Continue reading...

Chancellor expected to announce comprehensive tax and spending package

Six-month placements aim to help those hardest hit by the Covid-19 lockdown

Goal to eradicate poverty by 2030 ‘completely off track’, says outgoing special rapporteur, with Covid-19 likely to impoverish millions more

Gloomy forecast comes 10 days before EU leaders meet to discuss €750bn recovery planEurope is facing a deeper-than expected recession in 2020, while the UK economy is forecast to shrink by almost 10% this year, the European commission has said.Brussels is forecasting an 8.3% drop in GDP for the 27 economies of the European Union in 2020 followed by a 5.8% rebound in 2021. The eurozone is forecast to contract by 8.7% this year, with 6.1% growth in 2021. Both are worse declines and weaker rebounds than the historic downturn that the commission had forecast in May. Continue reading...

OECD says unemployment is likely to triple even if a second wave is avoided

Proposed £3bn environmental funding for UK contrasts with Germany’s £36bn investmentEnvironmental groups have reacted with disappointment to details of the government’s Covid-19 economic rescue package released by the Treasury.On Monday night the government announced some details of the announcement expected on Wednesday, including a £1bn energy efficiency upgrade for public buildings and insulation for some social tenants, who could save up to £200 a year on their energy bills as a result. A Green Jobs Challenge fund will provide £40m for green charities working on improving England’s landscapes, with the money to be spent on projects such as tree-planting and cleaning up rivers. A further £50m will go to innovative approaches to reducing greenhouse gas emissions from social housing.Related: Invest in the green economy and we'll recover from the Covid-19 crisis | Joseph Stiglitz Continue reading...

The effects of this economic downturn will likely be felt for years as people born between 1997 and 2012 try to start careers and build savings with an economy that was struck to rubbleGraduation was supposed to be one of the best moments of Stephany Torres’s life.As a first-generation student at the University of California Los Angeles, Torres was looking forward to celebrating her new degree with friends and family. After graduation, she was supposed to have an internship at a law firm in Los Angeles, making new connections and getting more insight into the type of law she wants to study. Continue reading...

Pandemic accelerates developments in sustainability from businesses and consumersThe queues were “absolutely crazy”, says Gavin Hudson, the owner of the cycle repair startup Butternut Bikes. As lockdown descended he began fixing old bikes in the parking lot of a Methodist church in north London, before moving his services to a furloughed pub in Crouch End. However, the surge in demand for cycle repairs meant the pop-up was soon able to afford a permanent address.“Some people come in and tell us they haven’t been on a bike in 10 years,” Hudson says. “They are dragging all kinds of bikes, covered in cobwebs, out from the shed to get back on the roads. It’s great. I think it’s really true that there are few problems in society today that can’t be made better by getting people walking and cycling more.”Related: UK public 'supports green recovery from coronavirus crisis'The number of people considering the purchase of an electric vehicle is rising Continue reading...

Exclusive: Talks may result in ‘lighter touch approach’ than with other commercial loans

To prevent inequality from increasing, we need a recovery plan with care at its heartIt is several months since the public was alerted to stark differences in the level of threat posed by Covid-19 according to their age, sex and underlying health. As the pandemic progressed, it became clearer that people of colour and those on lower incomes faced a heightened risk. Men in the UK have died from Covid-19 at almost twice the rate of women, with the most pronounced difference in older age groups. Among the working population, male security guards and taxi drivers have had the highest death rates.The economic and social effects of the pandemic follow a different pattern. The lockdown meant thousands of women and children were trapped in homes where they were vulnerable to abuse, while women were more likely to lose their jobs as well as carrying a disproportionate share of the domestic burden created by the closure of schools and nurseries. They are also overrepresented in the caring jobs where pressure has been most intense: 82% of adult social care jobs are held by women, as are 89% of nursing and health visitor posts. Continue reading...

Like Brown in 2005, Sunak plans to help the vulnerable – but the similarities end thereJust like Gordon Brown 15 years ago, Rishi Sunak has spent June working on an aid package. As was the case in 2005, details of the chancellor’s plan to help the vulnerable will be announced on 8 July.There, though, the similarity ends. Sunak’s focus is the UK economy and in particular those about to lose their jobs as a result of the Covid-19 pandemic. The doubling of work coaches in job centres tells its own story: the government knows unemployment will soar in the coming months. Continue reading...

Post Covid-19, our priority should be to build resilient systems explicitly designed to withstand worst-case scenariosEven before the pandemic came along, the world economy faced a set of deepening crises: a climate emergency, extreme inequality and huge disruption to the world of work, with robots and AI systems replacing humans.Conventional economic theories have had little to offer. On the contrary, they have acted like a cage around our thinking, vetoing a range of progressive policy ideas as unaffordable, counter-productive, incompatible with free markets, and so on. Worse than that, economics has led us, in a subtle, insidious way, to internalise a set of values and ways of seeing the world that prevents us even imagining various forms of radical change. Continue reading...

Covid-19 taught us to be cautious, but that will make economic recovery all the more difficult“When things get back to normal” was almost as common a phrase as “shall we Zoom?” in the early days of this pandemic. We’ve since been on a steep learning curve. Not a soul thinks that the thing missing in their life is another video conference, and our expectations have caught up with the reality that we’ll be living with the effects of Covid-19 for years to come.In the economics sphere, this has seen confident predictions of immediate V-shaped recoveries give way to a focus on the damage that high, lasting unemployment might do. Ongoing social distancing will mean that many firms will be smaller or not viable until a vaccine turns up. Continue reading...

The government’s shake-up of planning laws threatens wildlife and habitats; the environment bill must be brought forwardThe government has repeatedly pledged to maintain high environmental standards. It appears, however, that important laws to protect the environment are now at risk. The prime minister has again claimed that environmental assessments hold up housebuilding, and has promised the “most radical changes” to the planning system since the Second World War. There are rumours of deregulatory measures, including those that weaken laws to protect habitats and wildlife. Furthermore, the government’s flagship environment bill has been delayed and its new body to enforce environmental laws after Brexit will not be ready in time.Countless reviews, including those commissioned by the government, have shown that environmental laws guide good development when implemented well. There is no public appetite for deregulation, with 93% of Conservative voters wanting to maintain or strengthen protections for habitats and wildlife. Continue reading...

Now is not the right time for the government to step back and abandon targeted financial supportIt was trailed as a desperately needed cash injection on the scale of Roosevelt’s New Deal. Yet when the prime minister set out his plans for infrastructure investment last week, they amounted to a tiny fraction – less than £100 per head – of the more than £4,000 per person spent by the US government after the Great Depression. The chancellor is expected to set out more detail this week on what he will do to save jobs and boost demand. But all the signs are that it will be unequal to the task of protecting people’s livelihoods in the wake of the biggest economic downturn for 300 years.The unprecedented scale of the economic shutdown necessitated by the pandemic paved the way for a huge package of financial support for individuals and businesses. There have undoubtedly been important gaps, but in the main, chancellor Rishi Sunak responded swiftly and pragmatically. Just over three months later, and it seems Sunak is determined to reset course, away from the large-scale intervention that the economy continues to require, and towards a more traditionally laissez-faire approach. Hence the move towards relaxing the lockdown to allow large swaths of the economy to reopen – despite the warnings from some prominent scientists that this is happening too soon – and the planned phase out of much government financial support in the coming weeks. Continue reading...

The world accepts that spending is the way out of this crisis. Why is the Bank anxious at the faint prospect of rising prices?Key figures at the Bank of England and the Treasury are displaying a disturbing tendency for caution when the recovery from a pandemic demands bold measures. From the murmuring of officials in background briefings to the speeches of prominent policymakers, every pledge “to do whatever it takes” to rescue the economy during the pandemic comes with a clear rider.Rishi Sunak will sound heroic this week when he tells parliament how Britain’s economy can escape the effects of Covid-19. Money will be pledged – more than the £5bn Boris Johnson mustered in his recent “FDR” speech. Behind the scenes, though, officials are concerned that the UK is weak and must be careful how it spends over the coming years.Even Germany accepts that the pandemic has knocked the stuffing out of its economy and inflation is of no concern Continue reading...

The chancellor has won praise for cushioning the impact of lockdown. But his economic update this week will be fraughtJust over a year ago, Rishi Sunak was a little-known junior minister taking a political gamble. The biggest decision he made last summer, having entered parliament four years earlier as MP for Richmond in North Yorkshire, was to pen a letter.Since he wrote to the Times newspaper to back Boris Johnson to replace Theresa May 12 months ago, Britain has changed beyond all recognition. The Covid-19 pandemic has inflicted the worst public health emergency and economic crisis in modern history – and now Sunak finds himself a key player in steering Britain to recovery in Johnson’s government. Continue reading...

The chancellor is hoping to boost a British economy emerging from lockdown. Here is how he might do itOn Wednesday, the chancellor will attempt to shore up Britain’s economic recovery from coronavirus as lockdown controls are lifted across most of England. But Rishi Sunak is facing a delicate balancing act while severe risks to public health remain.Although expectations that this will be a blockbuster summer statement are being downplayed, here are some of the policy changes the chancellor is thought to be considering for this week’s economic update.Epidemics of infectious diseases behave in different ways but the 1918 influenza pandemic that killed more than 50 million people is regarded as a key example of a pandemic that occurred in multiple waves, with the latter more severe than the first. It has been replicated – albeit more mildly – in subsequent flu pandemics. Continue reading...

Ministers accused of sexism for overlooking industry in lockdown easing plan

Rolling coverage of the latest economic and financial news

Court hears Qatari leader spoke to then PM as bank was pressurised to accept government moneyA Qatari leader spoke to then prime minister Gordon Brown during the 2008 financial crisis as Barclays bank came under increasing pressure to accept government money, a former bank boss has told a high court judge.Former Barclays chief executive John Varley told Mr Justice Waksman how Qatari prime minister Sheikh Hamad spoke to Brown in October 2008 to “defuse” that pressure. Continue reading...

The White House has boasted the report is a sign of economic recovery, but millions of Americans are still out of workDonald Trump was quick to celebrate the US Department of Labor’s monthly job report on Thursday after it revealed a record 4.8m jobs came back in June as states reopened following coronavirus lockdowns.But while the White House has already boasted the report is a sign of successful economic recovery, the reality is that millions of Americans are still indefinitely out of work. And to make things worse, the report gets its data from a survey that was administered in the earlier half of June, before states such as California, Arizona and Texas reversed the reopening of businesses like gyms and bars in the wake of huge surges of new Covid-19 infections.State gov't employment a conspicuous outlier, down 25K jobs in June w/ no trend reversal thus far. Very important re deliberations over state fiscal relief. pic.twitter.com/NDXTev6fOjUnemployment is hitting women hard than men in this recession, and for Black and Hispanic women, unemployment rates are extremely high. The unemployment rate is 14.6% for Black women and 16.1% for Hispanic women. 14/ Continue reading...

Readers are unimpressed by the prime minister’s promise of £5bn to rebuild Britain

Rolling coverage of the latest economic and financial news, as the latest non-farm payroll beats forecasts

We must target public spending on green, labour intensive projects which have far more bang for their bucks than tax cutsAlthough it seems like ancient history, it hasn’t been that long since economies around the world began to close down in response to the Covid-19 pandemic. Early in the crisis, most people anticipated a quick V-shaped recovery, on the assumption that the economy merely needed a short timeout. After two months of tender loving care and heaps of money, it would pick up where it left off.It was an appealing idea. But now it is July, and a V-shaped recovery is probably a fantasy. The post-pandemic economy is likely to be anaemic, not only in countries that have failed to manage the pandemic (namely, the US), but even in those that have acquitted themselves well. The International Monetary Fund projects that by the end of 2021 the global economy will be barely larger than it was at the end of 2019 and that the US and European economies will still be about 4% smaller.Related: The post-coronavirus economic recovery must be led by the US | Mohamed El-Erian Continue reading...

Chief economist tells committee that coronavirus recovery is an opportunity to create jobs and greener planetThe British government should prioritise spending on green projects to create jobs and kickstart the economic recovery from the coronavirus crisis, the International Monetary Fund’s chief economist has said.Gita Gopinath, the IMF’s economic counsellor, said that mounting unemployment triggered by the Covid-19 crisis would require swift action to prevent lasting damage, and that spending on low-carbon projects could be used in response. Continue reading...

The paltry £5bn pledged bears no comparison to Roosevelt’s programme. Britain needs far more ambitious, green investment

Rolling coverage of the latest economic and financial news

Sadly, it’s very easy to see how the early stirrings could be crushed by a surge in unemploymentIt’s obligatory these days, even if you’re the chief economist of the Bank of England, to play the game of ascribing a letter to the likely shape of the UK’s economic recovery, so here’s Andrew Haldane’s take: “It’s early days, but my reading of the evidence is so far, so V.”As a headline-grabber, it is excellent. Most of the forecasting world rejected the V-shaped thesis weeks ago. The IMF, as it knocked another chunk off its global GDP forecast for 2020 last week, summed up the mood: “A crisis like no other, an uncertain recovery.” Continue reading...

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The prime minister wants us to ‘clap for capitalists’, but will it be loud enough to reach their tax havens?The past few months have been a bit of a downer for Boris Johnson – just one bad news story after another. So it was time for a rewrite. The equivalent of Dallas series nine when it turned out everything had been a dream. Boris would go back to his happy place of last year’s general election campaign, when all he had to do was turn up and say the same old bollocks about “getting Brexit done” and “levelling up the country” and people would be fawning over his every word.So at the Dudley Institute of Technology in the West Midlands, Johnson rehashed one of his old campaign speeches for the relaunch of “Love Boris”. Only without the bits about Brexit, which was well and truly done now, given that this was the last day he could have asked the EU for an extension to the transition. Here was Boris at his most upbeat. His most vague. His most incoherent. God help baby Wilfred if Boris ever gets round to reading him a bedtime story. Continue reading...

Rolling coverage of the latest economic and financial news, as global markets recover some of their huge losses in Q1

Green campaigners and housing experts warn Boris Johnson’s recovery plan could swiftly become a liabilityBoris Johnson’s plan to build tens of thousands of new homes risks locking in high carbon emissions for decades to come, if they are built to today’s poor efficiency standards instead of being designed for net zero carbon.The prime minister’s plans to “build, build, build” form the centrepiece of his “new deal” to lift Britain’s economy out of the coronavirus recession. About £12bn will go to building 180,000 new homes to relieve the housing crisis, while new hospitals and schools will be constructed to improve degraded public services.Related: How does Boris Johnson's 'new deal' compare with Franklin D Roosevelt's? Continue reading...

The prime minister’s announcement of his coronavirus recovery plan ranged from simplifying the planning system to clapping for capitalists

FDR’s ‘expansionary’ plan amounted to £4,300 per head; Johnson’s to less than £100It’s easy to see why Boris Johnson wants to be seen as the new Franklin Delano Roosevelt. Like FDR, he is in charge of an economy in deep trouble. Like FDR, his sympathies are with the capitalist not the communist. Like FDR, he accentuates the positive.So it was perhaps inevitable that the prime minister harked back to the New Deal of the 1930s when he announced in Dudley that higher spending on infrastructure was key to the UK’s recovery from recession and to the government’s levelling up agenda. Continue reading...

Economic activity has picked up but unemployment could prove a major concern, says Bank’s chief economist

Unions say economic plan is not big enough, while CBI and green groups say there is more to doBusiness leaders and trade unions have warned Boris Johnson that his plan to reboot the British economy from the coronavirus pandemic is not big enough to protect jobs and boost growth.Carolyn Fairbairn, the director general of the CBI, said the prime minister’s speech could build the foundations for recovery, but she added: “Foundations are there to be built on. More is needed to prevent the uneven scarring unemployment leaves on communities.” Continue reading...

The promise of £5bn to rebuild Britain is a far cry from the US recovery scheme of the 1930s