US central bank says borrowing costs will remain at historic lows until America has weathered the coronavirus crisis

Investors shrug off US growth gloom after promising data from remdesivir drug trial

Economic slump in first quarter is worst since 2008 recession, with GDP predicted to fall at annualized 30% in next quarter

1.6 billion people face economic hit from Covid-19, says UN labour agency

Employers say furlough scheme could become ‘waiting room for redundancies’ if it ends in June

Ominous and risky trends were around long before Covid-19, making an L-shaped depression very likelyAfter the 2007-09 financial crisis, the imbalances and risks pervading the global economy were exacerbated by policy mistakes. So, rather than address the structural problems that the financial collapse and ensuing recession revealed, governments mostly kicked the can down the road, creating major downside risks that made another crisis inevitable. And now that it has arrived, the risks are growing even more acute. Unfortunately, even if the Greater Recession leads to a lacklustre U-shaped recovery this year, an L-shaped “Greater Depression” will follow later in this decade, owing to 10 ominous and risky trends.The first trend concerns deficits and their corollary risks: debts and defaults. The policy response to the Covid-19 crisis entails a massive increase in fiscal deficits – on the order of 10% of GDP or more – at a time when public debt levels in many countries were already high, if not unsustainable.Related: Economic recovery from the Covid-19 crisis will need a balancing actRelated: Donald Trump is wrong, the economic hit of the coronavirus will last for years Continue reading...

António Guterres calls for coronavirus aid to be directed at firms with green credentials

Rolling coverage of the latest economic and financial news, as UK retailers report cashflow problems and layoffs amid the pandemic

Two-thirds of firms say Covid-19 lockdown hit sales in worst month since financial crisis

NIESR also says impact of coronavirus will lead to spike in unemployment to above 10%

Pandemic spotlights racial disparities, with black workers expected to feature disproportionately in the 26m recent unemployment claimsJust two months ago in the Cabinet Room of the White House, sitting at a table surrounded by a handful of his black supporters, Donald Trump once again praised his job creation record. “Black people right now are having the best, statistically, the best numbers that you’ve ever had, and it’s really an honor,” he said. “Nobody has done more for black people than I have. Nobody has done more.”That was 27 February and Trump was also still claiming he had done an “incredible job” with the looming coronavirus pandemic. Now the virus has led 26 million Americans to file for unemployment. While the US Bureau of Labor Statistics will not release unemployment figures broken down by race until the beginning of next month, economists are certain that black Americans are suffering the brunt of Covid-19’s economic impact and will probably suffer the most dramatic consequences of the looming recession. Continue reading...

This could be the end of cities and towns as we know them. The places that make communities unique may not survive

The task is to navigate the difficult trade-offs and even more difficult politics as sensibly as possible

There has been little political will to pool taxes, borrowing and spending to support states worst hit. But it is the only way out

Coronavirus is prompting countries to rethink relations with Beijing. Are they willing to be honest about their own role?

Rolling coverage of the latest economic and financial news

In his address to the nation, the prime minister was maddeningly short on specifics about how we get out of lockdown

The pandemic has necessitated huge borrowing – but post-crisis austerity would be the very worst way to deal with itWe do not know how this pandemic will end. We do know that we will be poorer when it’s over: GDP is plunging around the world.We also know that there will be a towering pile of IOUs left from the bills run up during the crisis. When it is over we will have to figure out how to repay them – or whether to repay them at all. That question will decide the complexion of our politics, and the quality of our public infrastructure and services for years to come. Unless we tackle this issue, coronavirus debts will be the battering ram for a new campaign of austerity.Related: In the midst of an economic crisis, can 'degrowth' provide an answer? | Lola Seaton Continue reading...

Report warns that half of all UK consumer spending in 2020 will be delayed or lost completely

The repercussions of Covid-19 could yet be more deadly than the virus itself. We must act now to save lives

Salley Vickers is horrified at the thought of being incarcerated for a year because of her age, Bob Wolfson considers the big picture, and Ashley Seager says the young have proved themselves to be the packhorse heroes of the pandemicI read with horror (Coronavirus: what would a year of physical distancing mean for the UK?, 23 April) that I am likely to be incarcerated for a year because of my age (71). If this proposal were to be made law, I would immediately seek to crowdfund a legal challenge on the grounds that 1) there is no power in the Public Health Act to lock down people not reasonably believed to be infectious, and 2) that this would be disproportionate to the danger, and discriminatory, and therefore contrary to the human rights convention.Unless one suffers from a form of dementia, age does not impair one’s wits – over-70s with impaired health can be relied upon to take proper precautions. If, however, like me, they are healthy and in their right minds, they should be allowed their freedom like anyone else. There are no laws against dangerous sports, and it is many years since suicide was a criminal act. Continue reading...

My father, Wilfred Beckerman, who has died aged 94, was a renowned economist who combined a distinguished academic career, primarily as fellow of Balliol College, Oxford, with equally influential periods as an economic adviser for government. He was highly active (skiing into his 80s), a twinkly-eyed man with a good sense of humour whose love of learning and intellectual debate never left him.Born in London, the fifth of six children of poor Jewish immigrant parents, Moishe, a tailor, and Mattl, a seamstress, he left school at 15 but continued to study in his spare time. In 1943, aged 18, he joined the Royal Navy and quickly rose to officer rank. Having persuaded the LSE to let him briefly study there before joining up, despite not having the required academic qualifications, he was then eligible for the government’s scheme to allow ex-servicemen to complete their tertiary education free after the war had ended. Continue reading...

Governments unfortunate enough to be in power when a crisis strikes tend to get the blame

As 26 million Americans lose their jobs, the billionaire class has added $308bn to its wealthNever let a good crisis go to waste: as the coronavirus pandemic sweeps the world, America’s 1% have taken profitable advantage of the old saying.Some of the richest people in the US have been at the front of the queue as the government has handed out trillions of dollars to prop up an economy it shuttered amid the coronavirus pandemic. At the same time, the billionaire class has added $308bn to its wealth in four weeks - even as a record 26 million people lost their jobs.Related: Coronavirus has made Amazon a public utility – so we should treat it like one | Wendy Liu Continue reading...

Behavioural economics is being abused by politicians as a justification for flawed policies over the coronavirus outbreakI first came across “nudge” – the concept many consider to be the pinnacle of behavioural economics – at a thinktank seminar a little over 10 years ago. We were all handed a mock wine menu and asked what we’d order.This was supposed to illustrate that most price-aware diners order the second-cheapest bottle to avoid looking tight and that restaurateurs use this to nudge us towards the bottle with the highest markup. I remember thinking it an interesting insight, but that these sorts of nudges were nowhere near as likely to transform the world as their enthusiastic proponent claimed.A report on applying behavioural insights to domestic abuse included not one survivor's voice Continue reading...

While EU leaders argue over the need for coronabonds, the Federal Reserve and Congress are protecting their economyThe US model of capitalism is deeply flawed. It is highly unequal, and an inadequate welfare system means that millions of people are either living in poverty or constantly teetering on the edge. Citizens of the EU have it cushier, with more generous pensions, unemployment pay and in-work benefits.But as the events of the past month or so have shown with brutal clarity, in a crisis the American system works better. It is more flexible, more innovative and much faster to act. The Federal Reserve in Washington has acted more speedily and provided more stimulus than the European Central Bank in Frankfurt, but the contrast has been even more marked when it comes to fiscal policy – the tax and spending measures for which governments are responsible. Continue reading...

Despite the global recession triggered by coronavirus, the conditions exist to address inequality and raise living standardsThere are reasons for optimism as the UK economy and much of the rest of the world plunges into recession. That might seem like a bizarre statement when the recession is forecast to be the deepest in several centuries.Yet there are several arguments for remaining hopeful. Looking back, it is clear that previous pandemics have reduced inequality. And this one could, at least in the short term, be no exception. As the Nobel prize-winning economist Sir Angus Deaton has written: “It is an equal opportunity infection that does not pass over world leaders, senior politicians and celebrities.” Continue reading...

The shale industry made the US a major producer once again. But Covid-19 looks likely to ruin many prospectors

Retailers fear the coronavirus pandemic could permanently change consumer habits

By helping to solve a short-term funding crisis, ministers could signal their plans for a national recoveryThere is no reason why Britain’s universities should suffer permanent damage as a result of coronavirus. But, like many other institutions, they will need support in order to avoid it. The immediate issue is the present. The deaths from Covid-19 of people such as Ade Raymond, who was studying for a nursing degree at Middlesex university, will leave big gaps.On top of such personal losses comes the virus’s wider impact. While lectures and teaching continue online, the removal of access to libraries and laboratories, and, above all, to people, takes a toll – particularly on students in their final year, or on one-year courses. Following February’s strikes, some will feel they have lost half a year of their higher education. Those reliant on income from casual work (often in retail or catering), or tied into rental agreements for shared houses, risk increased debts and other hardships. Continue reading...

Rolling coverage of the latest economic and financial news, as the Covid-19 lockdown hits spending in UK shops and confidence among German firms

From management of excess deaths to public outrage, 2019 document set out likely social and economic risks

Proposal follows slow take-up of bank lending by companies during Covid-19 crisis

Degrowthers are susceptible to caricature – but their ideas raise important questions about how, how much, and why we workAmid the misery and chaos caused by the coronavirus pandemic, there are some short-term consolations. The precipitous drop in road and air traffic has left the air cleaner and the skies clearer. For advocates of a Green New Deal (GND) – a vast, state-funded green infrastructure project, including a total transition to renewable energy and the construction of mass transit systems – there are reasons to be optimistic. As the severity of the unfolding global recession becomes clear – the IMF predicts a 3% global contraction – the GND looks like the best route to recovery.Related: Could Microsoft’s climate crisis ‘moonshot’ plan really work?Lola Seaton is assistant editor at New Left Review Continue reading...

As the UK faces what may be its worst ever recession, we begin a monthly series exploring the financial shock to business and living standards

Virtual summit debates rescue package to protect single market from slumpEU summits swap huddles and wine for muted mics and pop art

April’s PMI data suggests the country will not bounce back quickly after the coronavirus lockdownTake your pick for which number was more shocking. Was it the reading of 12.9 on the PMI survey of UK business activity in April, a figure that was many degrees worse than any recorded during the 2008 financial crash? Or was it the quadrupling of the government’s borrowing requirement to an astonishing £180bn over the next three months?The dire numbers go hand-in-hand, obviously, but here’s the really worrying part for government: the detail in the PMI data, where a number below 50 suggests contraction, offered no support to the hopeful idea that the recovery will be rapid and V-shaped. Instead, the employment index plunged, suggesting the Treasury’s various schemes to protect jobs are having only a limited impact. The much-feared “scarring” of the economy may be happening already.Related: Business Today: sign up for a morning shot of financial news Continue reading...

UK is suffering fastest and deepest slump in “possibly several centuries”, warns BoE policy maker Jan Vlieghe

For distancing reasons we are minimising the number of people on the campsite so only have room for those who have worked for us before, but we are keen to recruit local people and have been in touch with many, writes Andrew Chesson

Recession and unprecedented squeeze on incomes likely, says Bank of England policymaker

An additional 4.4 million Americans filed last week, as losses have wiped out all the job gains made since end of the last recession

Borrowing for just four months nears annual peak figure for 2009-10 financial crisis as coronavirus ravages economyThe government plans to borrow £225bn from bond market investors in just four months to fund the huge increase in public spending during the coronavirus pandemic.In an early indicator of the soaring financial costs of the crisis, the Treasury said its debt management office – which sells bonds to finance the government’s spending requirements – would offer investors £180bn worth of gilts to buy between May and July, on top of £45bn already planned for April. Continue reading...

Without government support, universities will struggle to provide the education people will need to rebuild their lives after Covid-19

Setback to ‘levelling up’ UK as London’s businesses predicted to recover faster after pandemic

Rolling coverage of the latest economic and financial news, as falling clothes and fuel prices pull inflation down

UK taxes should be central to debate on paying for pandemic, suggests Richard Murphy

Joseph Stiglitz attacks Donald Trump, saying US on course for second Great Depression

Coronavirus lockdown causes fashion prices to decline for only second time since 1988

Business chiefs expect lengthy period before recovery as CDC chief warns of worse to come during US winter

Number of firms using job retention scheme rising with more mulling access, according to British Chamber of Commerce