Rishi Sunak’s choice speaks volumes about his view of Britain’s likely pace of recovery

Firms should be made to disclose exposure to global heating, report suggestsEquity markets have generally ignored the increasing number of natural disasters over the past 50 years and tougher rules are needed to make investors aware of the dangers posed by the climate crisis, the International Monetary Fund has said.Companies should be forced to disclose their exposure to climate risk because a voluntary approach does not go far enough, the IMF said in a chapter from its latest global financial stability report (GFSR). Continue reading...

Chancellor says businesses will be meeting 20% of wage bill for 8.4m workers by October

Rolling coverage of the latest economic and financial news, amid heightened tensions between the US and China

Lockdown is likely to go down in history as the UK’s most costly policy failure of modern times

Almost half of firms surveyed by lobby group are considering cutting jobs

The Covid-19 outbreak has left some struggling to pay bills, while others wallow in spare cashYears ago I wrote about Buy Nothing Day, an attempt by US campaigners to encourage us not to indulge in pointless consumerism, just for one day a year. It was widely mocked at the time. Now, for many people, it feels like Buy Nothing Day every day.When was the last time you filled up the car? Bought a train ticket? Paid an air fare? Ordered a new sofa? Or even just bought a latte or booked the cinema? Days now go by when I do not spend one pence. And I know I’m far from alone. Figures emerging across Europe reveal that forced saving is happening on an unprecedented scale. Continue reading...

Despite World Bank figures, the US remains far ahead of China in the metric that countsThe World Bank’s International Comparison Program has just released its latest measures of price levels and GDP across 176 countries – and the results are striking. For the first time, the ICP finds that China’s total real (inflation-adjusted) income is slightly larger than that of the US. In purchasing power parity (PPP) terms, China’s 2017 GDP was $19.617tn (£15.7tn), whereas the US’s stood at $19.519tnOf course, when China’s total income is divided by its massive population, the picture changes. Although China’s per capita income has pulled ahead of Egypt’s, it remains in the middle of the pack globally, behind Brazil, Iran, Thailand and Mexico.Related: Lack of international cooperation will hinder economic recovery | Howard Davies Continue reading...

Labour wants hard-hit industries protected as employers warn of major redundancies

Trump, Bolsonaro and Putin have taken a cynical political gamble with the lives of citizens

The bloc is showing the way in rebuilding coronavirus-ravaged economies to fight the climate emergency

It is better for Bank to risk too much stimulus rather than too little, says Michael Saunders

Rolling coverage of the latest economic and financial news, after US data showed another 2.1 million workers filed for unemployment benefits last week

More than 40m Americans have filed for unemployment in two months, and many are struggling to make ends meetSandra Rivera Del Valle, a cabin cleaner with airline contractor Eulen America at Orlando airport in Florida, started experiencing cold-like symptoms on 13 March. As a cancer survivor over the age of 60, she was advised by her doctor to quarantine for two weeks as a precaution, as she was unable to get tested for Covid-19.Related: Extra $600 in jobless pay offers many a lifeline – but will it be renewed?I don’t have income. I don’t know how to pay my mortgage next month. I don’t have money for food, bills, utilities Continue reading...

Covid generation of under-25s less likely to fulfil potential, regardless of background

Rishi Sunak must avoid free-market ideology. The government reducing support to workers too early would be disastrous

There has been no consistency to the regulatory changes during the coronavirus crisisThe years after the 2007-09 global financial crisis were characterised by an orgy of rule-making by financial regulators around the world to address the weaknesses exposed by the upheavals. Importantly, a renamed and reinforced Financial Stability Board (FSB), reporting to a series of G20 summits, oversaw the process of reregulation.Despite the economic impact of the measures and the complexity of making rules to suit the needs of different financial systems, a remarkable degree of consistency was achieved. While the US had never fully implemented the Basel II framework, Basel III – featuring, for example, higher reserve requirements – found its way, in more or less recognisable form, into the rulebooks of all the different US banking regulators.Related: How to avoid a W-shaped global coronavirus recession Continue reading...

Shops shutting, jobs lost, landlords wiped out. The future of our community hubs looks bleakRarely does a cabinet minister salivate in public over fast food but on hearing yesterday that chicken chain Nando’s is reopening dozens of branches, Rishi Sunak could not stop himself. “The good news we’ve all been waiting for,” the chancellor tweeted, his jauntiness somewhat out of place with a thoroughly bleak situation. He may hanker after a peri-peri hit, but the government hungers for something else besides: for normal life to resume, complete with its high-street staples. One way Boris Johnson sought to leaven his terrible week was to announce the reopening next month of all “non-essential” shops. Leave aside the dangers of doing so without anything like a mass test-and-trace regime in place, and the prime minister is still likely to be sorely disappointed.Some shops will never pull up their shutters again. By the time the retail lockdown ends, most will have been closed for 12 weeks, costing the industry over £21bn in lost sales, even before adding in overheads such as rent and staff costs. Longstanding retailers Oasis, Cath Kidston and Warehouse are all shutting down, while others, including John Lewis, have warned they may close branches. Those that do open their doors will find trading tricky. Clothes boutiques may not offer fitting rooms, bookshops may discourage browsing and all will have to maintain a decent distance between customers. For a very long time to come, shopping will not be normal. Continue reading...

Our analysis looks at growth and jobs, and the effect of the pandemic on businessesUK economy faces longer and slower recovery from Covid

Data shows we have passed the worst of the crisis in terms of damage to jobs and growth

As the UK enters the second phase of the pandemic, we stand ready to do more to support households and businessesCovid-19 recovery will be tough, warns Bank of England governor

Andrew Bailey, writing in the Guardian, hints a new round of money creation will be neededSpeedy action by the Bank of England during Covid-19 is working

UN research shows strong systems can reduce public fear and minimise workplace disruption

Plan to help EU states hardest hit by coronavirus faces resistance from ‘frugal four’The European Union executive has called for a €750bn (£671bn) recovery plan to help the hardest hit countries find a way out of the unprecedented economic downturn caused by the pandemic.The European commission president, Ursula von der Leyen, said the EU faced a defining moment, never seen in its 70-year history. “The crisis has huge externalities and spillovers across all countries and none of that can be fixed by any single country alone.” Continue reading...

Live coverage of business, economics and financial markets

Cross-party group calls for ‘faster, further, fairer’ action to tackle climate and nature crisis

Recovery will depend on consumers’ personal finances and whether they feel safeDuring the coronavirus outbreak, deserted high streets across Britain have been one of the most potent reminders of the economic damage being inflicted by the health emergency.Retail accounts for about a third of consumer spending in Britain. With much of the high street closed and the economy slumping into the worst recession since 1706, Boris Johnson’s plan to reopen non-essential shops from 15 June is key to limiting the hit to jobs and growth. Continue reading...

Andy Haldane says latest data is ‘a shade better’ than forecast but caution remains

Rolling coverage of the latest economic and financial news, as the New York Stock Exchange welcomes traders for the first time in two months3.17pm BSTGlobal stocks across Asia, Europe and the US jumped on hopes that the lifting of lockdowns across the world will help to re-start economic and corporate growth. The FTSE 100 edged towards highs last seen at the end of April. Travel stocks had a notable rally as lockdowns eased and Germany agreed to a €9bn bailout for airline Lufthansa.2.57pm BSTThe John Lewis Partnership is the latest retailer to confirm when it will open its doors, following the UK government’s planned easing of lockdown measures on non-essential retailers over the coming weeks.John Lewis said its department stores will re-open from 15 June on a “phased basis”.2.51pm BSTWith an impressive 2% plus surge right at the open, the #Dow is currently trading above 25,000 and the S&P above 3,000.

After 1945, banks worked closely with governments to ensure credit went to the right places. This should be happening now

This mass experiment in home working could mean young people no longer have to move to the south-east for jobsMy grandma, who lives in Derry, had never been to England until last year, so it was a great honour when she made the trip to London to visit me and my sister, who have both lived on the mainland (in one city or another) for the best part of a decade. We had “great craic” during her stay. We went to the big art galleries and museums, which everyone in the UK helps fund through their taxes, but many never get to visit; she accidentally attended a pro-Brexit protest; and she charmed the waiter of a pizza restaurant with what she calls her “Derry eyes”, striking because of their unusual blue and orange-yellow irises, which she has passed down to my mum, my siblings and me. She wore a lime green suit for the duration of her stay, like a very elegant leprechaun.That was almost a year ago and I haven’t seen her in person since. I’m always a bit jealous of people for whom family get-togethers like these aren’t a rarity. As they are for many young people in the UK who grew up outside of the economic hub of the south-east, the job prospects in the region where I’m from are, shall we say, not great. So, like many young people, I moved away for university, then to London for work, and now my life feels awkwardly spread across several versions of home. I don’t see most of my family as much as I’d like and I feel like I move every few years for reasons not totally within my control. Now that a pandemic has prompted this mass experiment in working from home, I have been thinking more about whether it has to be this way.Related: The pandemic has exposed the failings of Britain's centralised state | John Harris Continue reading...

From care work to shelf-stacking, many standups have taken up jobs to survive lockdown – highlighting how privilege has created a two-tier system in comedyOn 16 March, when Boris Johnson advised people to avoid pubs and theatres, the effect on live comedy was instant. “That night was like Take Me Out when all the lights go off, but with my diary,” says standup Lauren Pattison. “The first month of work went in the space of a couple of days.”In 2017, Pattison finally became a full-time comedian after years of working in restaurants, shops and bars to support her standup career. Soon after, she was nominated for best newcomer at the Edinburgh Comedy awards. Now, she’s working in a supermarket. Pattison had moved back to Newcastle upon Tyne a few weeks before lockdown to save money for the Edinburgh fringe while living with her parents. Like many standups, she relies on live comedy for the bulk of her income, gigging most nights of the week. Some gigs are rescheduled for later this year, but, says Pattison, “I’ve got to mentally and financially prepare for the fact they might get pulled.”People assume I’m gutted that I’ve had to get a job but to me it’s the most sensible thing to doThere are more working-class voices on the live circuit than in writers’ rooms or on TVRelated: Seriously funny: political comedians on humour in horrific times Continue reading...

Macron-Merkel plan to borrow on behalf of EU to help worst-hit countries is already being challenged by ‘frugal four’

EU foreign affairs chief says end of US-led global system may have arrived and Europe needs robust strategy for ChinaThe Asian century may have arrived marking the end of a US-led global system, the EU’s foreign affairs chief has said amid a growing discussion in Europe on how to weave a path between China and the US.“Analysts have long talked about the end of an American-led system and the arrival of an Asian century. This is now happening in front of our eyes,” Josep Borrell told a group of German diplomats on Monday, adding that the coronavirus pandemic could be seen as a turning point and that the “pressure to choose sides is growing”.Related: Post-coronavirus, the UK must find some friends to stand up to China | Martin KettleRelated: China raises US trade tensions with warning of ‘new cold war’ Continue reading...

Unite union says Project Birch, the government’s rescue plan, is ‘finally taking shape’

Republicans, including the president, have opposed the additional funds. But their expiration could bring ‘incredible suffering’

Australia has mishandled the inquiry into Covid-19, but it is in uncomfortable and unfamiliar territory

CEBR recalculates one-day shutdown as financial boost after ‘enforced abstinence’ from Covid-19 lockdownA prominent economist, who once suggested that the average bank holiday left the UK with a bill for billions of pounds, says an extra national holiday in October might boost the country’s economy by £500m.Douglas McWilliams, deputy chairman of the Centre for Economics and Business Research (CEBR), also suggested a move towards a four-day working week could help the UK’s finances – in an apparent reversal of his thinktank’s previous position.Related: Extra UK bank holiday could help cut £37bn tourism loss, MPs told Continue reading...

Rising unemployment is toxic for the property market and low interest rates may not be enoughThis weekend marks the start of a truncated summer house buying season, the moment the residential property market comes out of hibernation.Normally this happens at easter but, for obvious reasons, that has not been possible in 2020. Estate agents have been shuttered along with almost every other business, waiting impatiently for the lifting of the lockdown. This bank holiday weekend, with fine weather forecast, provides a chance to make up for lost time. Continue reading...

Governor Andrew Bailey is signalling that extreme measures such as negative interest rates are on the table. Rightly soWhen the Bank of England governor says he is not ruling out a cut in the cost of borrowing to below zero, you know there is trouble ahead.Negative interest rates are the last resort of the central banker and not to be used unless absolutely necessary. At least that is the thinking inside the forbidding walls of the Bank’s offices on Threadneedle Street. Only a couple of weeks ago, governor Andrew Bailey said, in effect, that the Bank had never lowered interest rates to below zero and wasn’t going to start now.The problem lies with savers who are offered negative interest on their savings. What if they refuse to accept this new reality? Continue reading...

The unique nature of the pandemic means the economic downturn could impact women for decades

Even avid free-marketeers see that only state money can get growth going, but the chancellor is suddenly running scaredA consensus has emerged that the only route out of the lockdown is with government cash. From across the political divide there is support, offered reluctantly in some quarters, for the idea that only state-funded agencies will have the financial muscle and the will to put the wheels of the economy in motion once the pandemic has receded.Private-sector companies emerging from the deep freeze will need to tiptoe before they run, hence the Royal Society of Arts and Manufacturing’s proposal of an initial three-day week. Theirs must be a slow re-emergence, observing physical distancing.This is a Tory government, so the best Sunak can do is still worth something Continue reading...

Covid-19 deaths are still rising, but there are signs of quarantine fatigue – and experts warn relaxing the rules too soon could have devastating consequences

Talks to restructure ‘unsustainable’ debt held by overseas investors continue

Despite some fine words about the environmental crisis, ministers are pushing ahead with a trade bill that threatens to damage the planetThe dust storms that devastated the US prairie during the Great Depression were the worst ecological disaster in American history. They were also, partly, manmade. Decades of farming in the Great Plains had rid the topsoil of its native grass, leaving nothing to prevent fields crumbling to dust when drought struck in 1931. Across the Dust Bowl in midwest America, millions of acres of farmland were swept away in brown blizzards. Forced off the land, hungry families headed west in search of new jobs and lives. The dust blew so far east that it settled on the White House lawn.Almost 90 years ago the US president’s response was not to lie about the scale of disaster or blame others. Instead, Franklin D Roosevelt launched one of his New Deal’s signature relief programmes: the Civilian Conservation Corps. Its mission was to put unemployed Americans to work. More than 3 million people planted 3bn trees, built shelter belts across the Great Plains to reduce the risk of dust storms, and created 700 state parks. FDR’s legacy survives, but his policy is venerated more in name than in deed. Continue reading...

Investors fear move will further heighten tensions between Beijing and WashingtonFears that moves by China to tighten its political control over Hong Kong will lead to heightened tensions between Beijing and Washington have weighed on international markets.With investors already anxious about the economic damage caused by the Covid-19 pandemic, the crackdown on dissent in Hong Kong caused shares to fall in Asia and in the US on Friday. Continue reading...

UK public borrowing soars to £62bn in a single month and retail sales slump by 18%

Recessions blight young people’s prospects for decades. We need New Deal-type policies now to help themYouth unemployment and its scarring effects on the careers of young people were a major concern in the 2008-09 recession. Now that hopes for a “V-shaped recovery” from the Covid-19 pandemic are vanishing, the issue of scarring is again relevant.Past research has shown that those who enter the labour market during a downturn carry the costs of doing so into middle age. These come in the form of lower wages and higher risk of unemployment. Whereas the work and pensions secretary, Thérèse Coffey, may claim it is “too early to set anything like that at all” (BBC Today Programme 19 May), the evidence is clear: recessions do lasting damage to young people.Related: Young workers most likely to have lost jobs during Covid-19 crisisRelated: How do we stop an unemployment pandemic? | Ewan McGaughey Continue reading...

The government has borrowed more in April than expected for the whole year. It can’t be paid back via austerity

Consumer spending plummeted 18% in April revealing stark impact of coronavirus restrictions