Rolling coverage of the latest economic and financial news

Carolyn Fairbairn said second lockdown will be worse than the first for many businesses

When the remote town of St Just, Cornwall, was locked down in March, the small community worried that its economy wouldn’t survive. But one town councillor, Daisy Gibbs, rallied an army of volunteers to form ‘the Daisy chain’, an informal support network to ensure every household in the district had support. Inspired by her imagination and resilience, filmmaker Sky Neal followed the Daisy Chain for seven months, as local businesses adapted and the community pulled together to realise a more sustainable future. However, as a second wave of restrictions threatens, the town has to dig deep to find the resilience they need to ensure their future. Can they re-invent their local economy to survive and thrive beyond Covid? Continue reading...

Filmmaker Sky Neal returns to her hometown in Cornwall to capture a community fighting to keep the local economy alive in the face of the Covid lockdownThe new Guardian documentary follows the innovative activities of a volunteer support network, the Daisy Chain. For seven months, filmmaker Sky Neal immersed herself in the community of St Just, the most westerly town in England. As food producers and business owners in the town struggle to survive the first lockdown, how will they find the resilience to pull together and face a second wave with winter approaching?What inspired you to make this film? Continue reading...

Exclusive: Liz Truss urged to sign off deals quickly to spare African states high tariffs once Brexit transition period endsThe Labour party has urged the UK trade secretary, Liz Truss, to end delays over rollover deals with Kenya and Ghana to prevent them being slapped with high tariffs when the UK leaves the EU on 1 January.Negotiations with Kenya and Ghana have yet to be signed off with only nine weeks to go before the UK’s transition deal with the EU comes to an end, when import charges would be imposed on goods worth £2.6bn from the African countries. Continue reading...

Economists predict another big hit but the GDP drop will not be so severe, not least because it has less far to fall

Economists predict a further GDP fall from between 7.5% and 10% with unemployment to soar

Fears about high government borrowing raising inflation and interest rates are overstatedBoth of the big jobs in UK economic management changed hands earlier this year. Within weeks of Rishi Sunak taking over from Sajid Javid at the Treasury, Andrew Bailey replaced Mark Carney at the Bank of England.Sunak has barely been out of the news in the months since, and he will remain centre stage after the decision to put England back into lockdown. In the past few weeks alone, the chancellor has announced and recalibrated the job support scheme. Now he has been forced to reinstate the furlough, with the Treasury back to paying 80% of the wages of those unable to work.Related: Increase public spending to tackle Covid second wave, IMF tells UK Continue reading...

The president has questioned American democracy for four years, creating challenges abroadThe last time a Republican won the popular vote for president, the winning candidate declared that the spread of democracy was central to American security.“It is the policy of the United States to seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world,” said George W Bush in his second inaugural address in 2005.The challenges facing US democracy promotion have clearly grown through the Trump years Continue reading...

Polls and pundits alike are wavering at the irresponsibility of further burdening an economy struggling under CovidDenials predictably emerged from 10 Downing Street last week over the suggestion in the Observer that Boris Johnson was waiting for the result of the US election before possibly opting for a no-deal Brexit.However I, for one, place a lot more credence on the judgment and reliability of Sir Ivan Rogers, our former ambassador to the European Union, than I do on anything coming from a Downing Street where “Eyetest” Cummings continues to rule the roost.I am all in favour of an extension, preferably leading to an entire rethink of the wisdom of Brexit Continue reading...

Carolyn Fairbairn of CBI says her ‘really big disappointment’ was the lack of help for British services in the potential dealA business-led campaign to widen a “thin” Brexit deal struck between Britain and the European Union will begin immediately in the new year, it has emerged, amid concerns about the long-term effects on the UK’s economy.In an interview with the Observer, Carolyn Fairbairn, the outgoing director general of the CBI, said that securing a basic deal with the EU should be seen as a “starting point” for a deeper relationship. She warned of a serious effect on Britain’s large services sector, including financial and legal services, as well as engineering.Related: With the Brexit walkout and sulk over, is the UK on the home straight for a deal? Continue reading...

The catastrophe facing the UK is a direct result of our government’s obsession with libertarian issues. Now we must avoid repeating the same mistakes

Large cross-party group urges government to allow councils to run pilot schemes

With a second wave of Covid-19 well under way, workers need the lifeline of the job retention scheme more than everThe daunting scale of the second coronavirus wave becomes clearer by the day. Figures published on Friday by the Office for National Statistics showed more than 50,000 new infections a day in the week to 23 October, up from 35,000 a day a week earlier. The numbers are surging in almost every part of the country and in every age group, with secondary school children showing a particularly steep growth curve. Figures for the week now ending seem certain to be higher still. As a result, tougher restrictions are being introduced across many areas of Britain, with more to come. Pressure for a fuller lockdown, like the ones announced in many of our neighbouring European countries this week, is growing.This is therefore a very strange time for the UK government’s job retention scheme, better known as the furlough programme, to be closing down. Yet Saturday is the final day of the scheme that the chancellor, Rishi Sunak, introduced at the start of the March lockdown. Continue reading...

France, Germany, Spain and Italy have all posted record rises in GDP, but the region is still below its pre-pandemic levels

Wall Street also tumbles as global markets fear economic fallout from new Covid-19 restrictionsStock markets in Europe have had their worst week since June after investors shrugged off record-breaking growth for the eurozone and focused on the likely impact of fresh lockdown restrictions.Amid growing fears that a second wave of Covid-19 would end the west’s recovery and even threaten a double-dip recession, news of a near 14% quarterly jump in the GDP of the single currency zone did nothing to lift the mood.Related: Investors should prepare for worst over US presidential electionRelated: Eurozone posts fastest growth on record; FTSE 100 suffers worst week since June – business live Continue reading...

Treasury rejects researcher’s claim that its scheme was closely linked to rise in cases

Pent-up demand in the Covid lockdown and the stamp-duty cut kept the property market hot, but a chill is on its way

Nurseries say doubling up of regulations will mean a rise in costs and EU suppliers going elsewhere

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