Economics | The Guardian

Chancellor announces ‘job support scheme’ to subsidise wages of people in work; VAT cut extended for hospitality and tourism sector until end of March

Rolling coverage of the latest economic and financial news

Chancellor appears to defend decision to reopen swathes of economy amid coronavirus

The replacement for the UK furlough scheme is similar to Germany’s Kurzarbeit

Rishi Sunak outlines plans that will take over from furlough programme

The chancellor is unveiling measures to protect jobs in the Covid crisis

Chancellor will announce employment package to replace furlough scheme

Latest PMI surveys show growth slowed at UK companies this month, while eurozone service sector shrinks

UN body figures show people in Americas and lower to middle-income nations hardest hit

LSE analysis says long term economic hit will be two to three times as large as Covid impact

Cips/Markit estimates show outlook for business is at its weakest since May

Exclusive: option part of wider emergency package to help firms through second wave of Covid-19

Austerity policies will choke off recovery and risk a double-dip recession, says UnctadThe global economy faces a lost decade after the Covid-19 pandemic unless policymakers spurn austerity measures in favour of a comprehensive recovery plan built on investment in sustainable growth, the United Nations has said.In its annual trade and development report, the UN’s economic arm said a repeat of the cost-cutting conducted by governments after the financial crisis of 2008-09 would choke off recovery and risk a double-dip recession in 2022.Related: We must increase lending to the world’s poorest countries now – or pay the price later Continue reading...

Bank of England forecasts for 7.5% unemployment this winter may have to be revised up considerablyIt is March 2021. In the UK, the clocks are about to go forward and the government is about to ease restrictions imposed six months earlier in response to a rise in Covid-19 cases. A long, hard winter is over.But at what cost? That was the question exercising politicians, business leaders and economists after the prime minister announced curbs on opening hours for pubs and restaurants, and backtracked on the government’s previous advice that people should stop working from home. Economists at Bank of America think Britain is on course to contract in both the final three months of this year and the first three months of next. Continue reading...

Manufacturer insists supplies will not run out as long as customers don’t panic buy

Lobby groups say latest advice is ‘extraordinarily reactive’ as TUC tells PM to ‘get a grip’

City says economic fightback is running out of steam as new restrictions are announced

Governor Andrew Bailey says policy has mixed results but will stay in Bank’s ‘toolbox’

Unintelligible nonsense | Snow White | Sustainable wrappers | Grey pound | ForecastingThe saving grace with Van Morrison’s bizarre decision to produce songs attacking lockdown (Van Morrison criticises ‘fascist bullies’ in anti-lockdown Covid songs, 18 September) is that few will be able to follow what he is singing about, thanks to his notoriously – and mostly wonderfully – poor diction.

Stop-start policies are harming UK plc and the fight against Covid-19. Rishi Sunak needs to plan ahead nowWhat a difference a matter of weeks makes – in that little time England has gone from eat out to help out to the brink of national lockdown.After a summer of positive news for the economy as lockdown measures were relaxed and optimism started to return, the autumn is looking set for a painful reprise of the events of earlier this year. Continue reading...

Loss of access, loss of wealth, loss of face: even Thatcher would not have inflicted something like Brexit on BritainWhatever one thinks of the handling of the pandemic, or of the poor contingency planning in earlier years, the one thing one cannot blame this government for is the virus itself.Alas, the same cannot be said of the imminence of Brexit in tooth and claw, as opposed to the transition now under way. Among the “briefings” emanating from Downing Street have been suggestions that the economic consequences of Brexit will be subsumed by the undoubted economic horrors occasioned by Covid-19.This monstrous government is prepared to throw away vital resources in favour of the freedom to conclude worse trade deals than they already have Continue reading...

The fate of wrecked Spanish trading ships in the 16th century teaches us valuable lessons for todayEconomic history is to economics what historical fiction is to literature – underappreciated, but recently returned to the limelight. Hilary Mantel’s Wolf Hall reinforced the idea that reimagining the past could be literature, while the first global pandemic in 100 years proved that history can be as useful to economists as spreadsheets. Economic history also teaches you things squeezed out by British schooling’s mania for Henry VIII and the Nazis.Take new research on the Manila galleons – ships working the lucrative trade route between Manila and Acapulco from the late 16th century. It examines a puzzle: why were vessels on this route, a monopoly of the Spanish crown, three times more likely to sink than those journeying between the Netherlands and East Asia? Continue reading...

A company steeped in oil and gas production may not find it easy to convince investors of its environmental credentials‘This is serious stuff,” said BP’s Bernard Looney. The chief executive, speaking last week at the oil giant’s three-day investor event, was talking tough on the need to tackle the climate crisis. He could just as easily have been referring to the existential tightrope that BP, and others in the fossil fuel industry, will need to walk between investor confidence and the rising public pressure to slash their greenhouse gas emissions.Over the course of three days and 10 hours of executive presentations, Looney’s new leadership team sought to convince investors that their plan to become a carbon neutral company will allow them to toe this line successfully. BP’s nascent renewable energy interests will grow while the oil production business that has powered the company for over 110 years will begin to shrink within the next decade. A whiplash of clean energy innovation, carbon capture technologies and emissions offsetting schemes will then power the company to net zero carbon by 2050. Continue reading...

This week Katharine Murphy catches up with finance writers Greg Jericho and Shane Wright on the state of Australia’s economy. They discuss the government’s decision to reduce jobseeker, Victoria’s impact on the national economy and the October budget Continue reading...

Ex-UK international trade secretary and prominent Brexiter faces female frontrunners from Kenya and NigeriaLiam Fox, Britain’s former international trade secretary, has reached the last five in the race to be the next head of the World Trade Organization (WTO), the global customs and tariffs watchdog.Fox, who was nominated by the British government for the post, will go into the second round of voting against nominees from Kenya, Nigeria, South Korea and Saudi Arabia. Continue reading...

Rolling live coverage of business, economics and financial markets as retail sales volumes rise by 0.8% in August

Report shows schools in the most deprived areas worst affected by government’s austerity policyState schools in England have suffered their worst decline in funding since the 1980s, with secondary schools and those in the most deprived areas the worst affected by the era of austerity, according to analysis by the Institute for Fiscal Studies.The decline that began after the Conservative-led coalition government took office in 2010 is so deep, the additional £7bn pledged by the current government will not be enough to reverse the cuts by 2023, leaving school spending 1% lower than in 2009-10, the IFS notes.When I first started, I had to do a big restructuring, which led to about a dozen redundancies of support staff, and that was very difficult. I was a new headteacher, but we got through it. Continue reading...

Bank of England is investigating ways of removing obstacles to step, aimed at boosting economyThe Bank of England could cut interest rates to below zero next year after officials said preparations were under way to allow the central bank to support the economy with lower borrowing costs.In a move that would bring the BoE into line with the European Central Bank and the Bank of Japan, the monetary policy committee (MPC) said it was seeking to overcome obstacles to negative interest rates that would allow further cuts from the current 0.1% base rate.Gross domestic product (GDP) measures the total value of activity in the economy over a given period of time. Continue reading...

Cost of sugar, bread and transport soar, while promised World Bank aid is yet to arriveMillions of people in Sudan are facing hardship as the cost of food and transport soars amid economic turmoil in the country.The cost of some staple foods like bread and sugar has increased by 50% over the past few weeks, driving inflation to a record high of 167%, up from 144% in July.Related: 'We had to eat our seeds for planting': 10 million in Sudan facing food shortages Continue reading...

Finance minister says figures don’t reflect the thousands of lives saved and reduced burden on health system

Uplift not enough to stop UK female postgrad’s pay being lower than male postgrads at 35Women get the greatest financial benefits from taking postgraduate degrees, although their pay levels still lag well behind those of men with master’s degrees and doctorates, according to research published by the Institute for Fiscal Studies.The study of people who took master’s degrees earlier in their career found that – compared with similar individuals with undergraduate degrees – women gained a pay bonus worth 2% of their income, while men saw a -2% effect compared with what they would have earned without a postgraduate qualification.Related: Gender pay gap begins for students straight after university – report Continue reading...

Rolling coverage of the latest economic and financial news, as UK inflation falls to its lowest level since 2015

Residents of Welsh seaside town fear economic impact of a possible second wave amid rising unemployment

In report on global economy, thinktank suggests extra borrowing is needed into 2021

Restaurant subsidy strategy introduced because of Covid-19 crisis has dramatic effect

Policymakers must seize on progress in medical innovation, the environment, work and elsewhere

President says he has to ‘do something’ about the body after it rules that duties on $200bn worth of Chinese goods breached regulationsThe United States has described the World Trade Organization as “completely inadequate” after it criticised the Trump administration’s tariffs on China.The WTO said on Tuesday that the US breached global trading rules by imposing levies on more than $200bn of Chinese goods in the opening salvo of president Donald Trump’s trade war with Beijing two years ago.Related: Could the US and Chinese economies really 'decouple'? | Isabella WeberRelated: 'We poked the bear': Australian farmers take the China trade stoush in their stride Continue reading...

Unemployment worse in already struggling areas but rate is rising rapidly elsewhere

Rolling coverage of the latest economic and financial news, including new UK unemployment statistics

695,000 people, many of them young, have left company payrolls since March

Scheme has given firms breathing space in Covid crisis, but Treasury won’t extend itRising unemployment is a slowly unfolding crisis. For many employers, decisions about redundancies and hiring have taken a back seat while they consider how to survive the pandemic.The cushion of the government’s furlough scheme has also provided them with some breathing space, allowing them to send staff home and take a longer look at how many they think they might need.Related: UK redundancies rise at fastest rate since 2009 amid Covid crisis Continue reading...

When the economy collapsed in 2008, I had to think ahead. I fear too little thought has been given to our recovery after coronavirusOur country’s Covid-19 crisis, together with the economic crisis the pandemic brought with it, is not over. In fact, it is entering a dangerous new phase.With the UK economy collapsing by 25% in March and April – a fall twice as bad as those in Europe and the US and now only halfway back to pre-crisis level – a recovery plan is needed: closer to France’s £90bn, Germany’s £115bn and the US’s £1tn is required, not the £30bn announced by the chancellor in July.Related: What now for Britain's economy – a new direction, or business as usual? | Larry Elliott Continue reading...

Carolyn Fairbairn calls for more green jobs to help economy recover from Covid-19

New thinking is needed because of economic turmoil since 2008 and environmental concernsFor years, those on the left in Britain have been arguing that the government should be more aggressive in its use of state aid to revitalise those parts of the country affected by industrial blight.Now, at last, we have ministers prepared to have a bare-knuckled fight with the EU over their right to intervene on behalf of those living where the factories and the coalmines used to be, but they grew up as disciples of Margaret Thatcher, who insisted that tough state aid rules be included in the rules for the single market. Ah the irony of it!Governments everywhere are questioning whether globalisation is all it is cracked up to beRelated: We are in desperate need of a recovery plan. But the Treasury has gone missing | Gordon Brown Continue reading...

The discussion (in certain quarters) about how much money each life is worth is morbid – and generally ignorantSign up for Guardian Australia’s coronavirus email

Boris Johnson’s government has competing priorities, and no clear message, on economic policyWhat kind of austerity would you prefer?There is the reheated version from 2010 that puts most of the emphasis on cuts in public spending. Tax rises are another option. In recent weeks Downing Street sources have floated the idea of taxes on wealth, clobbering the better off, alongside taxes on consumption, hitting everyone in the pocket. Continue reading...

Britain’s economy has now posted three months of growth, but fears over the future are mounting

Agreement offers more for its symbolism than what Britain stands to gain economically

Rishi Sunak’s response to GDP figures was telling because of concerns over jobs

The buzzword makes it sound as if disentangling the world’s two largest economies were simpleTalk of a new cold war is everywhere. Yet the economic context of the confrontation between the US and China is fundamentally different from the days of the iron curtain. The US and the Soviet Union had created competing globalisations, dividing the world into separate economic blocs. The two sides of the present divide are tied together as one “Chimerica” – with China as the global “workshop” and the US as the tech “headquarters” of the world. The old hope that this economic interdependence would prevent political conflict has been shattered. Instead, deep economic integration has increased the stakes: the core of the world economy could fall apart.Related: US v China: is this the start of a new cold war? Continue reading...