If global growth resumes in 2021 some developing countries may skate through the crisis. Others won’t be so luckyLast March, when Covid-19 infected the world economy, many observers feared that emerging markets and developing countries would suffer the most, financially and otherwise. Economically, they relied on commodity exports, remittances, and tourism, all of which fell through the floor with the pandemic. There was every reason to expect a tsunami of financial crises and debt defaults.The tsunami never arrived. Just six countries – Argentina, Ecuador, Belize, Lebanon, Suriname, and Zambia – have defaulted on their sovereign debt, and only the first two have restructured their debts.Related: Scotland needs a plan for a new currency if it wants independence | Barry Eichengreen Continue reading...

Pound rallies in early trading in Asia but sterling and equities remain vulnerableCity investors are bracing for a volatile week after Boris Johnson and Ursula von der Leyen stepped back from the brink of a no-deal Brexit.The decision to “go the extra mile” and continue talks beyond the weekend removed the immediate threat of UK-EU trade talks collapsing on Sunday, which hit stocks and the pound hard on Friday.Related: No-deal Brexit: markets brace for big hit to UK company shares and sterlingRelated: Any port in a perfect storm: UK container trade is grinding to a halt Continue reading...

Amid a likely third wave of Covid-19 and a hard Brexit, a new package of employment and social support is needed fastThe third wave is coming. Since the arrival of the coronavirus vaccine, there had been hope that winter would quickly pass and give way to a brighter 2021.After a dark year, the big breakthrough in medical science represented a shot in the arm for both a tired nation and a government running out of road. Now there was a chance everything would be fine by spring.Related: Don't bank on there being roaring 2020s to save the UK economyWhat is universal credit? Continue reading...

Prime minister says both sides are ‘still very far apart on some key things’

Americans across the country say they can’t afford rent and fear losing their home when CDC eviction moratorium ends soonBefore the pandemic hit, 34-year-old Andrew Perry of New Orleans worked in bars and did live sound engineering for shows. But now, with venues closed, Perry has struggled to find another job, even at minimum wage, while his unemployment benefits have been reduced to just $90 per week. He’s worrying about losing his home.Related: Trump under fire for hosting Christmas parties as Covid deaths mountI had to draw a Christmas tree on the wall. How do I explain to my daughter I had nothing to offer? Continue reading...

The Committee on Climate Change has shown that decarbonising is not only affordable but highly desirableFew crises come with a users’ manual. The government’s official climate advisers, the Committee on Climate Change, have come close, however, with a new 1,000-page tome setting out a blueprint for how Britain can decarbonise its economy and cut emissions to virtually zero by 2050.The committee’s green manifesto, published last week, brings to heel the two most pervasive myths that climate deniers have set to stalk Britain’s climate ambitions. The first is a menacing right-wing imagining of economic hardship in which the “eye-watering costs” of green investment collide with a slowdown in productivity and growth. This is a fallacy easily disproved.The plan also deftly tackles any dark mutterings about the way ahead offering just a grim dystopia of personal sacrifice Continue reading...

Innovation and competition are being stifled. But there are signs of optimismWhen the history of our times gets written, historians will shake their heads, wondering why so few remarked on what was going on before their eyes. Rather than allow foreigners and immigrants and the EU to be blamed for the ills of great swathes of our working populations who became prey to the fantasies of a Boris Johnson or a Donald Trump, why did the political classes not identify and correct the real source of the just grievances that drove support for such warped politicians?The US and Britain in particular have created an economic system of organised plunder, resulting in widespread precarious livelihoods. Over the last generation we have witnessed the rise of rentier capitalism, supercharged by new technologies, to establish economic structures in which having and owning has been vastly privileged over doing, creating and risk-taking. The share of profits in national income has risen, the share of wages fallen while work has become organised around short-term contracts. The decline in the incentive to make and innovate has been accompanied by a weakening in the rate of productivity growth.An indulgent government will be forced to allow consolidation of the markets into monopolies Continue reading...

Even Leavers seem to be dimly recognising that the size and reach of the EU made Britain stronger than departing ever will‘The surest recipe for killing a lie is to multiply the witnesses to truth.” This observation by the 18th-century statesman Charles James Fox is quoted by the veteran foreign correspondent – and sometime independent MP – Martin Bell in his memoir War and the Death of News.Bell writes about the distortion of news – a practice made into an art form by Boris Johnson’s friend Donald Trump. The quotation is surely pertinent to the way that the lies about the wonders of Brexit are falling apart as the truth of what the Brexiters have wreaked unfolds in front of our eyes.Membership gave the UK a share in the accumulated sovereignty and bargaining power of the EU in a world dominated by the US and China Continue reading...

From farming to travel, the car industry to academia, the pressure is building on the prime minister to reach an agreement

Companies are praying a trade agreement can be struck, but must prepare for talks to fail. Which will be most affected?The scene is set for a showdown, and the future of the UK economy is at stake. Will Britain secure a free trade deal with the EU? Or will the prime minister choose to sail into uncharted waters, not only stepping outside the single market and customs union, as the UK will be even under a deal, but adding the tariffs and border checks that come with a no-deal Brexit?Armed with a determination to end the transition period on 31 December, Boris Johnson is poised to force British businesses to sell their goods and services across the EU without any of the benefits that a deal offers, and with only a few days’ notice. Here we assess the impact on some of the worst-hit industries of securing a deal – albeit a slimmed-down one – compared with the alternative. Continue reading...

Severe delays as businesses try to get goods into Britain before a potential no-deal Brexit on 1 January

Rolling coverage of the latest business and markets news, as Brexit fears hit currency and stock markets

The former Australian prime minister Malcolm Turnbull says his country’s trade deal with the EU is ‘not one Britain would want, frankly’As the 31 December deadline for a Brexit trade deal with the EU looms, Boris Johnson has again warned the UK to stand by for the possibility of an “Australia-style” deal. It sounds like something two countries that rely on international trade might reasonably want to embark on, but what would it actually mean?Now is the time for the public and businesses to get ready for the Australian option on January 1st. pic.twitter.com/lLJfmIy9XI“Be careful what you wish for. Australia’s relationship with the EU is not one, from a trade point of view, that Britain would want.”

UK economic growth hits a six-month low and European Central Bank launches new stimulus

The UK and EU are still far apart on key issues – will Britain really crash out in three weeks?Boris Johnson and the European commission president, Ursula von der Leyen, met in person over a three-hour scallop and turbot dinner to try to unlock the Brexit trade negotiations deadlock. As expected, both sides agreed to continue talking – but they agreed that the gaps between their positions remain wide. Continue reading...

Analysis: now does not seem a good moment for the PM to plunge Britain into a last-ditch battle with the EUBrexit deal or no Brexit deal, the UK faces a rocky few months as businesses, left dangling until the last minute, find out what kind of relationship the UK is going to have with the EU from 1 January.All eyes are on the last-minute talks between Boris Johnson’s team at No 10 and their counterparts in Brussels. Not much else matters ahead of the climax on Sunday. Continue reading...

GDP grew just 0.4% in October with economy expected to contract again due to November lockdownsBritain’s economic recovery from the first wave of Covid-19 had almost come to a standstill as fresh restrictions affecting the hospitality sector were imposed in the autumn, according to the latest official data.Figures from the Office for National Statistics showed that national output – or gross domestic product – rose by 0.4% in October. Continue reading...

Brexit uncertainty and business jitters caused by Covid lockdowns will delay investment rebound

Potential crackdown on sharing economy comes as chancellor seeks to revive public finances

Rolling coverage of the latest economic and financial news

Analysis: While there are similarities with the 2015 clash between Athens and Brussels, there are also key differencesIt was a marathon even by the European Union’s standards. For hours, leaders of countries in the eurozone argued, haggled and shouted at each other. After breaks for refreshment, they argued, haggled and shouted some more. Rumours swirled around the packed media room. Eventually, as Brussels was waking to a new morning, the 17-hour overnight summit staggered to an end.All participants were in agreement that victory had been snatched from the jaws of defeat. Despite the brinkmanship, a deal was eventually done – as seasoned EU watchers had always said it would be, even when all hope seemed lost. Continue reading...

In a holiday shopping season with rampant rates of Covid-19 infection, we must protect frontline workers before it’s too lateThere are few scenes more sordid than the surging wealth gains of the world’s billionaire class during an unprecedented pandemic when millions have lost their lives, health, and livelihoods.As the US heads into another wave of Covid-19 infections, the wealth of 650 American billionaires has increased by over $1tn since mid-March, the beginning of the pandemic lockdowns.The contrast between billionaires making no sacrifice and their workers making the ultimate sacrifice is unethical and corruptRelated: Amazon workers are fighting for their rights. This holiday season, think of them | David Adler and James SchneiderChuck Collins directs the program on inequality at the Institute for Policy Studies, where Omar Ocampo is an inequality researcher. They are co-authors of the report Billionaire Wealth vs Community Health: Protecting Essential Workers from Pandemic Profiteers, which was produced by Bargaining for the Common Good, the Institute for Policy Studies, and United for Respect Continue reading...

The pandemic has worsened existing economic hardships for young adults – and taken a serious toll on mental healthDavid Little of Tampa, Florida, obtained his master’s degree in architecture and was excitedly waiting for his girlfriend to finish her degree before the couple moved to Philadelphia. The coronavirus pandemic halted those plans as they both struggled to find work matching their education.“I have no idea what I’m doing right now. My plans were completely ruined by all of this,” said Little, 26, who was working as a valet before he was laid off in April. “There are no jobs out there even nationwide for entry level architecture grads, there is no real end in sight, and with my girlfriend not having any income because she’s also in architecture, it’s causing tension that wouldn’t normally be there.”Related: Biden pledges '100m shots in 100 days' as he introduces health teamIn the US, the National Suicide Prevention Lifeline is at 800-273-8255 or chat for support. You can also text HOME to 741741 to connect with a crisis text line counselor. In the UK and Ireland, Samaritans can be contacted on 116 123 or email jo@samaritans.org or jo@samaritans.ie. In Australia, the crisis support service Lifeline is 13 11 14. Other international helplines can be found at www.befrienders.org Continue reading...

We need an informed public that sees through the poisonous myth billionaires want us to believe: that income is a measure of your market worth

Tax experts and economists outline ‘fairest, most efficient’ way to repair public finances and quickly raise £260bnThe government has been urged to launch a one-off wealth tax on millionaire households to raise up to £260bn in response to the coronavirus pandemic, as the crisis damages Britain’s public finances and exacerbates inequality.The Wealth Tax Commission – a group of leading tax experts and economists brought together by the London School of Economics and Warwick University to examine the case for a levy on assets – said targeting the richest in society would be the fairest and most efficient way to raise taxes in response to the pandemic.How would a wealth tax work?Related: Make UK super-rich pay one-off wealth tax, says Fabian Society Continue reading...

England’s November lockdown boosted supermarket sales, with turkeys, alcoholic spirits, Christmas puddings and festive lights in demand

Relocation to Amsterdam will give better access to European markets ‘regardless of Brexit outcome’Commonwealth Bank of Australia has said it will move its European headquarters from London to Amsterdam in the coming months after Britain’s departure from the EU.The departure comes despite declarations by the UK’s prime minister, Boris Johnson, that the British economy would “thrive” with an “Australian-style” trade deal with the EU, which many describe as a euphemism for a no-deal crash out of the bloc. Continue reading...

Dame Louise Casey makes plea as report shows 1 million people in UK struggle for foodFormer government adviser Dame Louise Casey has urged Boris Johnson to deliver a “Beveridge moment” and overhaul welfare, as she launched an urgent appeal for public donations of food and money to get the poorest through winter.Harking back to Sir William Beveridge’s 1942 report that led to the founding of the welfare state, Casey said an equivalent to the Sage expert panel of scientists advising on the response to Covid-19 was needed to tackle sharp rises in poverty and to “work out how the legacy of this pandemic isn’t the quadrupling of food banks”.Related: Firm given free school meals voucher contract despite ‘limited evidence’ of capability Continue reading...

More employers planning to shed jobs than hire in first quarter of 2021 as Covid continues to hit economy

Rolling coverage of the latest economic and financial news

Readers discuss the importance of the fishing industry to a final deal with the European Union

Business leaders and unions spell out threat to food, farming and manufacturingBusiness leaders and trade unions have urged the government to strike a last-minute Brexit agreement as they warned that the UK economy is ill equipped for a disruptive no-deal scenario.With talks between Boris Johnson’s government and Brussels on a knife-edge, the warnings from leaders in business and industry came as the pound slid on the global currency markets on fears that talks could end this week without a deal. Continue reading...

The UK, US and EU plan to spend to create growth – but they must be realistic about costsEncouraging news about more effective antiviral treatments and promising vaccines is fuelling cautious optimism that rich countries, at least, could tame the Covid-19 pandemic by the end of 2021. For now, though, as a brutal second wave cascades around the world, broad and robust relief remains essential. Governments should allow public debt to rise further to mitigate the catastrophe, even if there are longer-term costs. But where will new growth, already tepid in advanced economies before the pandemic, come from?Macroeconomists of all stripes broadly agree that productive infrastructure spending is welcome after a deep recession. I have long shared that view, at least for genuinely productive projects. Yet infrastructure spending in advanced economies has been declining intermittently for decades. (China, which is at a very different stage of development, is another story entirely.) The US, for example, spent only 2.3% of GDP ($441bn, or £331bn)) on transportation and water infrastructure in 2017, a lower share than at any time since the mid-1950s.Related: Crossrail work to continue after £825m government loan Continue reading...

Millions of self-employed workers are set to lose their benefits after Christmas and lawmakers have yet to find a solutionSuzy Young, an artist in Winterport, Maine, cheered when Congress enacted an innovative program that provided unemployment benefits to artists, freelancers and the self-employed after Covid-19 hit the US. But like many others, Young – whose art sales have plunged in recent months – is angry that this pandemic aid program is due to expire the day after Christmas.Related: Joe Biden's economic team beats Trump's goon squad – but it faces a steep challenge | Robert ReichWe need to help people out here from starving. We need Congress to hear us, we’re in the worst place Continue reading...

Bank of England’s chief economist says spending spree could help Britain bounce back

The pandemic has badly hit people who were already facing financial hardship. I met some of them; it was a sobering experience

Inflation and policy errors would put an end to any consumer spending spreeLondon’s blue-chip FTSE 100 index closed at a nine-month high on Friday, finally recouping all the ground lost since the UK went into lockdown in March. The City is not alone. In New York, shares are at levels never seen before. As someone once said: they think it’s all over.And in a sense it is. Current share prices do not reflect the current state of the major global economies, which, outside of China and a few other Asian countries, is grim. Rather, they are looking ahead and trying to predict what life will be like in six months or a year’s time.Related: OECD: UK economic recovery will lag behind all rivals bar ArgentinaThe pent-up demand story is already evident in the housing market Continue reading...

Coronavirus survey finds urban flight is a middle-class thing, that communities matter more – and Boris Johnson has done a bad job

Coronavirus vaccines promise a rapid economic rebound, but many of the 2.6 million thrown out of work have a grim futureWhen the prime minister announced, in the last week of October, a second national lockdown in England, the best thing to do, it turns out, was to buy shares in pub companies, airlines, gyms, retailers and restaurant operators – in other words, those businesses that were about to get clobbered again.No stock-picking skill was required. Everything has gone up. Here’s a sample of representative names: JD Wetherspoon up 37%; easyJet 88%; the Gym Group 64%; Marks & Spencer 60%; and Restaurant Group, owner of Wagamama, 83%. Continue reading...

Even Adam Smith, whose writings have been misused by rightwingers, believed there was an ethical dimension to sellingMark Carney stuck it to laissez-faire capitalists in his Reith lecture last week. There has always been a moral dimension to selling stuff, the former Bank of England governor told any listening free marketers. Their own bible would tell them so.The bible in question was written by Adam Smith, the 18th-century Scottish moral philosopher and economist whose phrase “the invisible hand” is trotted out by every pro-market evangelist keen to justify the idea that governments should let businesses get on with selling, unfettered except by the most basic regulations.Carney believes forcing companies to be transparent gives shareholders the ammunition to impose moral obligations on the managers of their assets Continue reading...

The first female US Treasury secretary must tackle the damage wreaked by the pandemic while keeping Wall Street happyOf all the 78 US Treasury secretaries since Alexander Hamilton first took up the office in 1789, few have faced an in-tray piled quite so high as the one that will greet the first woman in the job: Janet Yellen.The choice of the Brooklyn-born doctor’s daughter to succeed Steve Mnuchin was a statement of intent by president-elect Joe Biden. Where many of her predecessors have been scions of Wall Street, Yellen’s background is in economics and public policy, and she has made it clear that her priorities are with Americans struggling to get by rather than with investment bankers. “There is a huge amount of suffering out there,” she said in September as she urged Congress to agree a new stimulus package.The appointment was probably one of the most well received in the history of the US Treasury Continue reading...

Rolling coverage of the latest economic and financial news

Janet Yellen and fellow leaders have called for more government intervention and a stronger safety netJoe Biden’s incoming economic team is filled with firsts. The lineup that the incoming president introduced this week will, if approved, place women and people of color at the controls of the US economy during one of the darkest periods in recent history.While the team is historic, it also faces a historic challenge. Unemployment has fallen dramatically since the early days of the coronavirus pandemic. It fell to 6.7% in November. But it remains 3.2 percentage points above its level before Covid-19 struck, jobs growth is slowing sharply, long-term unemployment is growing and people of color are still suffering hardship at far higher levels than white Americans.Related: 'Help is on the way': Biden introduces economic team as pandemic ragesImagine a world where Mitch McConnell is not in the Senate. Now let's go make that happen. https://t.co/iOwO3GgDf1 Continue reading...

Watchdog finds UK is projected to fail to meet targets aimed at achieving climate goal

Rolling coverage of the latest economic and financial news, as mid-cap stocks hit their highest level in over nine months

While he was at Sussex University John Weeks did much to bring the concept of the informal sector to world attention. At the time, it was limited to a single study – of illegal brewing in Ghana – by Keith Hart. In the ILO Kenya Report on Employment, Incomes and Equality (1972), Weeks contrasted the popular view of informal sector activities as “primarily those of petty traders, street hawkers, shoeshine boys and other groups underemployed” on the streets of the big towns with the evidence he had found. The bulk of employment in the informal sector was economically efficient and profit-making, though small in scale and limited by simple technologies. Carpenters, masons, tailors and other tradesmen, along with cooks and taxi drivers, provided goods and services for a large though often poor section of the population.“From the vantage point of central Nairobi, with its gleaming skyscrapers, the dwellings and commercial structures of the informal sector look indeed like hovels,” he wrote. “For observers surrounded by imported steel, glass and concrete, it requires a leap of the imagination and considerable openness of mind to perceive the informal sector as a sector of thriving activity and a source of Kenya’s future wealth.” Continue reading...

Analysis: exasperation as fates and fortunes of large industries reliant on efforts to expand much smaller oneAn island nation can be forgiven for a preoccupation with fish. But with less than a month until the UK’s trade with the EU moves to new rules – whether under a deal or no-deal scenario – it is possible that continuing attempts to gain a win for British fishing industry could scupper much larger parts of the UK economy.Fishing is a politically charged issue on both sides of the Channel. Boris Johnson has talked of the UK becoming “an independent coastal state” and exploiting the “recapture of our spectacular natural marine wealth”, while Michel Barnier, the EU’s chief negotiator, has warned the UK against using fish as a “bargaining chip” (apparently not a pun on Britain’s national dish). Meanwhile, far bigger industries in the UK economy are left waiting. Continue reading...

President-elect says he won’t sign any new agreements until US is more competitiveBritain’s hopes of securing an early trade deal with the US have been dashed by a warning from Joe Biden, the president-elect, that America will not sign a trade deal with anyone until the US has sorted out its competitiveness.Britain had been closing in on a trade deal with the administration of Donald Trump, a fierce opponent of the European Union, but Biden has said in a New York Times interview that his priorities will be to improve investment in US manufacturing and the protection of American workers. Continue reading...

Thinktank says Brexit represents double threat to UK growthThe UK’s economic recovery from the coronavirus pandemic will lag behind every other major economy apart from Argentina, according to the Organisation for Economic Cooperation and Development.Warning the UK and other countries to resist cutting government spending in order to ensure a stronger rebound, the club of 37 rich nations said severe risks to growth and jobs still remained despite the prospect of a vaccine being deployed earlier than first anticipated. Continue reading...

Rolling coverage of the latest economic and financial news, with 25,000 jobs now at risk across two UK stricken retailers