Economics | The Guardian

Resolution Foundation claims half of those furloughed in April have not returned to work

Pandemic creates employment boom in new sectors despite devastation of economy

Rolling live coverage of business, economics and financial markets as European economy suffers its worst recession since at least 1995

Data reveals contraction in second quarter wiped out more than decade of expansion

Republican infighting has delayed an expansion to the weekly cash benefit – so what happens if a deal can’t be reached?For millions of unemployed Americans dealing with the worst economic crisis since the Great Depression a $600 payment each week from the government has been a vital lifeline, allowing them to keep their homes and put food on the table despite losing their jobs.Related: US economy suffers worst quarter since the second world war as GDP shrinks by 32.9%Related: Trump suggests delaying presidential election as dire economic data released Continue reading...

Opposition seeks to protect jobs as it urges government to keep helping worst-hit sectors

The US has recorded its biggest shrinkage ever and without soon-to-expire government benefits things would be much worseEconomic data released on Thursday by the government revealed that during April, May and June, the US economy experienced the most severe shrinkage in its history. The details paint a worrying picture of the US’s chances of an imminent recovery.Related: US economy suffers worst quarter since the second world war as GDP shrinks by 32.9% Continue reading...

Companies are stashing away their government-funded bounce-back loans for a reasonWay back when Britain had a much bigger industrial base than today, ICI’s results were seen as a sign of how well things were going. Times change, and these days it is not a manufacturing giant like ICI but a high street bank that has taken on the role of the economy’s bellwether.If what’s happening at Lloyds Banking Group really is a reflection of what is happening to the UK as a whole – and there is a good argument for that – there is plenty to be concerned about. Lloyds has a big presence in the mortgage market, car loans, credit cards and business lending. It is almost entirely UK-focused. Continue reading...

Drop in quarterly gross domestic product comes as 1.43m people file for unemployment benefits, a second week of increases, amid Covid-19 pandemicThe US economy shrank by an annual rate of 32.9% between April and June, its sharpest contraction since the second world war, government figures revealed on Thursday, as more signs emerged of the coronavirus pandemic’s heavy toll on the country’s economy.The record-setting quarterly fall in economic growth compared to the same time last year came as another 1.43 million Americans filed for unemployment benefits last week, a second week of rises after a four-month decline.Related: 'What’s going to give?': millions fret as Republicans threaten to halt $600 weekly lifesaver Continue reading...

Bank of England says it’s a V so far. But data suggests the spending revival could wane in autumn

Analysis of pandemic’s effects on businesses examines work, growth and stock markets

Guardian analysis shows hit to workers gathering pace despite boost from lockdown easing

Energy giant hit by massive change in fortunes as Covid-19 crisis forces writedown in asset valuesRoyal Dutch Shell has reported a deep financial loss after a record writedown on the value of its oil and gas assets due to the collapse in global market prices triggered by coronavirus.The Anglo-Dutch oil giant revealed a net loss of $18.3bn (£14.1bn) for the second quarter of 2020, down sharply from a net profit of $3bn over the same period last year and $2.7bn in the first three months of 2020. Continue reading...

Even before the pandemic the global economy was facing a range of potentially devastating tail risksIn February, I warned that any number of foreseeable crises – “white swans” – could trigger a massive global disturbance this year. I noted: “… the US and Iran have already had a military confrontation that will likely soon escalate; China is in the grip of a viral outbreak that could become a global pandemic; cyberwarfare is ongoing; major holders of US treasuries are pursuing diversification strategies; the Democratic presidential primary is exposing rifts in the opposition to Donald Trump and already casting doubt on vote-counting processes; rivalries between the US and four revisionist powers are escalating; and the real-world costs of climate change and other environmental trends are mounting.”Since February the Covid-19 outbreak in China did indeed explode into a pandemic, vindicating those of us who warned early on that the coronavirus would have severe consequences for the global economy. Owing to massive stimulus policies, the Greater Recession of 2020 has not become a Greater Depression. But the global economy remains fragile and even if a V-shaped recovery from highly depressed output and demand were to occur, it might last for only a quarter or two, given the low level of economic activity. Continue reading...

Jerry Nadler unimpressed with Mark Zuckerberg’s answer on Instagram deal, while Amazon boss Jeff Bezos accused of hypocrisy

Exclusive: No 10 had ‘change of attitude’ after pressure from business, says commissioner

As we progress through the pandemic, tens of thousands of people are being made redundant. The Guardian will track these job losses as they are announced

Santander sets aside £2.8bn after being pushed to the first loss in its 163-year history

Analysis by Labour finds percentage rise of benefit claimants far outstrips other areasTourist hotspots across the UK are bearing the brunt of the ailing jobs market, an analysis of data on unemployment benefit claims since the Covid-19 lockdown has shown.Figures from Labour show that in areas heavily reliant on tourism the rise in the number of people seeking unemployment benefits in recent months is an average of 65 percentage points higher than in other areas. The data has prompted Keir Starmer to warn that holiday towns are facing a jobs crisis. Continue reading...

Thinktank says ending Covid-19 wage subsidy scheme from August could cost 1.2m jobsThe government closing its furlough scheme this autumn is a “mistake” that will drive up unemployment by 1.2 million by Christmas, one of the UK’s leading economics thinktanks has warned.Sounding the alarm over the mounting risk to jobs, the National Institute of Economic and Social Research (NIESR) said extending the wage subsidy scheme until the middle of next year would dramatically cut the number of redundancies across Britain and would probably pay for itself.Related: Selfridges to cut 450 jobs as Covid-19 causes 'toughest year' Continue reading...

Retailers report best sales in more than a year after the easing of lockdown restrictions

As we progress through the pandemic, tens of thousands of people are being made redundant. The Guardian will track these job losses as they are announced

Reports that Covid-19 could be transmitted by handling cash gave people another reason to steer clear of paper money

Analysis comes as some new vacancies in UK are receiving hundreds of applicants each

Boss warns of crisis as pandemic leaves company with no orders since March

Investors buy precious metal as concerns grow over global economy and US-China row

Thinktank predicts economy will shrink by 20% in April to June putting back a full recovery 18 months later than forecastThe UK’s economic recovery from the Covid-19 crisis could take 18 months longer than expected with hopes of a V-shaped recovery fading fast, according to a leading economic forecaster.Britain’s economic output is not expected to return to its 2019 level until the end of 2024, the EY Item Club said on Monday in its latest projections on the health of the UK economy. It had previously expected GDP to match fourth-quarter 2019 size in early 2023. Continue reading...

These economic times demand bold intervention to reconstruct our shattered economy and rebuild Australian workplacesIn 2018, treasurer Josh Frydenberg established a permanent media brand in Australian politics with an unwisely self-produced short video.It was unexceptional Tory scaremongering about the evils of taxation, but his words weren’t why the footage went viral. Audiences were stunned by the direction. In it, the treasurer shuffles down a hill and speaks like a man compelled into performing the script of a hostage video for a killer robot that’s cunningly disguised as his own suit.Related: Economists on the Treasury update: 'the bottom line is we need more stimulus' | Emma Dawson, Chris Edmond and Cherelle MurphyThe enduring “success” of the neoliberal era is really measured in how effectively it transferred wealth to the richRelated: Can we now have a less brain-dead conversation about debt and deficit? | Katharine Murphy Continue reading...

As in the novels of Jane Austen, social mobility in Britain today appears dependent on the wealth you inherit or marry in to, rather than how much you can set aside from a pay packetIn the 1970s British households held wealth worth around three times the nation’s GDP. Today it’s more than seven times, the highest such ratio in over a century. People in the top 10% of society have £2.5m, on average, in wealth. The bottom 10% have virtually nothing. The gap cannot currently be made up by saving. As in the novels of Jane Austen, social mobility appears dependent on the wealth you inherit or marry in to, rather than how much you can set aside from wages.Just how significant this trend has become was highlighted by the Institute for Fiscal Studies, which last week said as many as one in 10 UK adults born in the 1980s will inherit more than half as much money from their parents as the average person earns in a lifetime. Those born 20 years earlier in the top decile had received less than a third of average lifetime earnings. Continue reading...

Boris Johnson’s tenure will be coloured by the Covid-19 economic recovery but urgent fixes are needed nowA year into the premiership of Boris Johnson, a new kind of normality is beginning to dawn. The roads are getting busier, pubs are open again, and people are slowly returning to the high street as summer rolls on.It would be normal after a year in power for a prime minister to lay it on thick about their achievements so far. But after four months of crisis inflicted by the pandemic, Johnson’s achievements in the past year will always be coloured by Covid-19.Related: Until Covid-19 uncertainty melts away there's little chance of full economic recoveryRelated: A second wave of Covid-19 will punish the economy, lockdown or not Continue reading...

Its remote setting and a decision to shut down helped keep cases fairly low, but unemployment soared. What next?The Sheraton Waikiki stands just a sea-smooth pebble throw from one of Hawaii’s most famous beaches. Working the front desk, Jordyn Wallace loved meeting new people from different states and faraway countries in one of the world’s most beautiful holiday destinations.Related: Niagara Falls tour boats highlight US and Canada's stark Covid-19 divideRelated: Florida hospitals stretched to capacity by acute coronavirus outbreak Continue reading...

Epic challenges face us, yet the government is unprepared and devoid of imaginationThe last week has been my most human for four months. I have been to a hairdresser; eaten out in restaurants and at friends’ homes; played tennis and golf; stood in the street talking with work colleagues; and, what seemed most novel of all, shared a beer in a pub. It all feels rather heady.But none of it was normal. Everybody wore masks at the hairdresser; the restaurants were deserted; windows and doors were wide open at my friends; we had the inside of the pub to ourselves. Meanwhile, Zooming continues unabated; public transport still seems a risk of last resort; and, in the supermarket on Friday, I wore a mask like everyone else – and thought this right and unremarkable. Go into our city centres and they are eerily quiet. What is human and how we interact are being redefined.Suddenly it is obvious that a resilient public health system is the cornerstone of a functioning economy and society. Continue reading...

The £750bn package agreed in Brussels last week is an innovative way of sharing the pain of the pandemicBack in May, critics of the EU gleefully pounced on news that the German constitutional court had ruled unlawful the European Central Bank’s plans to flood the financial system with cheap credit.If the ECB was unable to expand its rescue mission for the eurozone, the euro itself was in danger and without the euro, the pillars of European political cooperation would collapse.The 'frugal four' wealthy countries wanted a veto over the management of the debt, but have acceded to majority voting Continue reading...

We should not be worrying about paying the pandemic bill yet. But some will worry – and Tory tensions may riseSebastian Haffner, who was a distinguished correspondent for the Observer after the second world war, was in Berlin during the 1930s before escaping to Britain, and witnessed with horror the rise of Hitler and the assault on treasured public institutions.After Haffner’s death, his son Oliver – with whom I was at school – discovered a manuscript written by his father of what it was like to see the decay of civilised standards. It became a bestseller in Germany, and Oliver translated it into English. The book was published here under the title Defying Hitler – catchy but somewhat misleading, because, of course, most didn’t defy Hitler.As has been noted by almost anyone who watched Sunak’s presentation of his mini-budget, Johnson’s body language was a sight to behold Continue reading...

In Harlow, a bounce-back in June is now petering out for some traders – and fears are still growing over jobsIt appeared from business surveys last week that Britain’s private sector was surging back to life. But on the streets of Harlow, Essex, opinions about the state of the post-lockdown economy are mixed.Nel Amodei, 46, is trying to rebuild trade at her fledgling coffee shop in Harlow’s old town, Nel’s, launched 10 weeks before the UK closed down in March – and said things were still not normal. Continue reading...

Aircraft maker says it will end French and Spanish state support used by Trump administration to justify tariffsAirbus has said it is taking the last step to end 16 years of bitter litigation with the US at the World Trade Organization (WTO) over subsidies that the White House said disadvantaged rival aerospace company Boeing.The European aircraft manufacturer on Friday said it will end a system of financial support from France and Spain that the WTO had deemed illegal and unfair to Boeing. Continue reading...

Consumer spending recovers near pre-pandemic levels but UK still on course for recession

IMF says 30 years of gains for women could be erased as recession deepens

Exclusive: Survey reveals lack of childcare played role in almost half of female layoffs

The recovery package promises deeper integration between European countries. Here’s why I think it won’t workDuring the early years of the eurozone crisis, I remember gauging its depths by the rapidly diminishing half-life of the celebrations that followed every European Union summit. Premature proclamations that the crisis was over inspired hope, which caused the money markets to rebound. But then, at some point, gloom would unfailingly return. As the years of austerity for the many and socialism for the few ground on, that point arrived sooner after each EU summit.Could it be that, at long last, this sad pattern has been broken by last week’s summit, which resulted in a brand new, €750bn post-pandemic EU recovery fund?Related: With its recovery deal, is the EU finally starting to act like a unifying force? | Shahin Valléee Continue reading...

Rolling coverage of the latest business and markets news after business activity jumped in July

Future of many council-owned sites hangs in balance as covid lockdown tips finances into red

Economy reopened in July as pent-up demand from customers led to jump in sales

Treasury and business committees to question whether policies will help or hinder sustainable recoveryMPs plan to scrutinise the government’s green economic plans and industrial strategy to test whether they are still fit for purpose in the wake of the coronavirus crisis.The government will face two separate inquiries into its plans, by the Treasury and business department parliamentary select committees, to question whether its existing policies will help or hinder sustainable post-pandemic economic growth. Continue reading...

The number of Americans filing fresh unemployment claims jumped last week to 1.4m, as states impose new lockdown measures

UK to bear brunt of job losses with 600 staff set to go as part of cost-cutting exercise

Figures come as Congress debates an extension to the $600 weekly lifeline for those on unemployment benefitsThe number of Americans filing for unemployment benefits last week rose again last week after four months of falls, as the surge in coronavirus cases led states, including California and Texas, to pause the reopening of businesses shuttered to slow the coronavirus’s spread.Related: Portland mayor teargassed as calls mount for Trump to withdraw federal agents – live Continue reading...

Shares rise on strong quarterly sales but company warns global recession has begun

The economy was sputtering before the pandemic hit and Covid-19 has delivered a body blowThe May budget was cancelled, so we’ve had to wait for revised forecasts mapping the impact of Covid-19 on the budget and the economy. The Treasury produced new numbers on Thursday. What did we learn?Related: Australian unemployment to tip over 9% by Christmas and budget deficit to hit $184bn in 2020-21Related: Economists on the Treasury update: 'the bottom line is we need more stimulus' | Emma Dawson, Chris Edmond and Cherelle Murphy Continue reading...

MPs say chancellor must fulfil vow to help workers, including newly employed and newly self-employed