Rishi Sunak promises gradual end to coronavirus wage subsidies as concerns grow

Rolling coverage of the latest economic and financial news, as American companies slash payrolls at an unprecedented rate

Pandemic risks exacerbating economic and social divisions between countries

Climate advisers call for work and training in low-carbon heating, water efficiency and flood-protection

Greece’s former finance minister Yanis Varoufakis and Irish economist David McWilliams on the hope for a global new deal

UK’s 800,000 school leavers and graduates need jobs and education offers amid turmoil, says thinktank

Readers respond to John Harris’s article on how UBI could offer security to millions of peopleJohn Harris rightly points out that the need for a universal basic income is increasingly compelling (Why universal basic income could help us fight the next wave of economic shocks, 3 May). A problem that has dogged UBI is that it is perceived as a state handout and raises questions of how it will be paid for. But there is a morally just means of financing a basic income for all. Land is a gift of nature (the commons), which over the course of history has been appropriated into private ownership by the ruling minorities. Ownership of such a vital resource bestows on the rentier class owners enormous wealth, power and social advantage, to the disadvantage of the dispossessed majority.This unjust situation could be partly redressed through restoring the principle of the commons and imposing a rental charge on landholders (similar to a land value tax), with the revenue used to finance a UBI.

Fears ruling could undermine ECB’s authority to ward off the financial crisis and spell end of quantitative easing

Global economy heads for deepest recession since Great Depression as business comes to near standstill

Increasing links with US will aid recovery after coronavirus crisis, says Liz Truss

After nine weeks of confinement, Italians are back in the streets. But the most difficult decisions have yet to be made“We are living in the night of the virus,” wrote one academic, soon after Europe’s first Covid-19 lockdown was imposed in Italy. “Living in the dark, because it’s difficult to see what’s happening out there, since we are shut up in our homes.”On Monday Italians entered blinking into the light again, after nine weeks of more or less total confinement, enforced by a combination of fines and moral exhortation. As the prime minister, Giuseppe Conte, begins tentatively to reopen the economy, the employees of Ferrari and Lamborghini are returning to their factories, along with other workers in the manufacturing and construction industries. Shops will open in two weeks’ time; bars and hairdressers in June. Italians are able to exercise freely at last, stroll through late spring sunshine and visit relatives. Continue reading...

Rolling coverage of the latest economic and financial news, as investors worry about new trade war between Washington and Beijing

Health, making ends meet and job security among worries highlighted in ONS poll

Without $90bn in aid we will see soaring conflict, poverty, hunger and global instability. But a relief package is viable

The crisis has brought the economy to a near halt, and left millions of people out of work. But thanks to intervention on an unprecedented scale, a full-scale meltdown has been averted – for now. By Adam Tooze• Read the text version here Continue reading...

As previous crises have shown, prematurely halting economic stimulus would be very unwise“Those who cannot remember the past are condemned to repeat it,” George Santayana famously quipped in 1905. It is a phrase that has been repeated for over a century, but rarely heeded. As Covid-19 decimates the global economy, our understanding of history could be the difference between a V- or U-shaped recession and a W-shaped one, in which incipient recovery is followed by successive relapses.As recently as March, V-shaped recoveries in individual economies seemed plausible. Once infections and deaths had peaked and begun to decline, the logic went, people would eagerly return to work. Economic activity might even get an extra boost, as consumers released pent-up demand.Related: Ten reasons why a 'Greater Depression' for the 2020s is inevitableRelated: Economic recovery from the Covid-19 crisis will need a balancing act Continue reading...

Poll finds 90% of CFOs at big firms report high uncertainty with most forecasting a deep and prolonged downturnBusiness confidence at British companies has sunk to an all-time low because of the coronavirus pandemic, according to a survey of finance chiefs at the largest UK firms.The accountancy group Deloitte found that nine out of 10 finance directors believe there is a high or very high level of uncertainty facing their business. Continue reading...

What’s needed after Covid-19 is a bigger, smarter state, with more devolved decisions, a greener economy and a stronger safety net

The developed world’s response to the pandemic is imperilling health systems, economies and livelihoods already on the edge

The epidemic of 1918-21 is overshadowed by war and the Great Depression. But it holds lessons for us stillIt is a sobering thought that, according to the many well-researched accounts to have appeared in recent weeks, this Johnson/Cummings government seems to have been prepared to risk 250,000 deaths from the policy of “herd immunity”. This approach was, mercifully, laid to rest after the intervention of Professor Neil Ferguson, of Imperial College London, on 16 March. There followed the introduction of lockdown and what some of us prefer to call “physical distancing.”Commentators have been putting the 27,000 or more deaths in this country attributed to the virus so far in the context of the 60,000 civilian deaths recorded during the second world war. This is bad enough. But I wonder how many people are aware that during the “Spanish” flu epidemic of 1918-21, which followed the first world war, the estimated loss of life in this country was, well, 250,000?Sunak is doing his best to do the right, Keynesian thing with the economy, and has realised the importance of the state Continue reading...

US president escalates attack on Beijing’s handling of coronavirus pandemic

Each month controls are in place will cut 1.5% off annual growth, says consultancy firm

Rolling live coverage of business, economics and financial markets

Bank of England data shows sweeping changes to spending in March

City regulator questions whether companies can claim compensation for disruption

Big businesses will soon be asking taxpayers for even more financial support. Let’s set out principles for who should get funds and howOne day, a billionaire; the next, a human dartboard. The attacks on Sir Richard Branson after he implored the UK government to give a £500m bailout to his Virgin Atlantic airline have been sharp and stinging. To the tycoon they must also have been unsurprising, since he knows there are powerful criticisms of state handouts to big business. Indeed, some have been made by none other than Sir Richard Branson. When, in 2009, arch-rival British Airways begged Gordon Brown’s government for help, he opposed any such intervention. “We should wait for its demise,” he proposed, arguing that “loss-making and inefficient airlines should be allowed to go to the wall”.Barely a decade later, the businessman appears to have changed his mind and so gifted the world a case study in hubris. Yet the huffing and puffing over this one heavily branded mendicant should not drown out a more significant fact: many big businesses will soon be knocking on Rishi Sunak’s door asking if the chancellor can spare a few hundred million. That will be on top of the hundreds of billions already set aside for loans, grants and support for industries such as fishing. Companies that may have been perfectly sound before this pandemic have now run aground; others that were struggling in 2019 now face complete collapse. The question for Westminster is which companies to support and on what terms. Which makes now a vital time to set out some principles for such bailouts. Continue reading...

The euro area is suffering its worst contraction ever, as the French economy suffers its biggest plunge since the second world war

Christine Lagarde says there could be a 15% collapse after record first quarter output fall

Pace of job losses appears to be slowing but figures increase and many people yet to receive benefits as backlog hits US systemAnother 3.8 million people lost their jobs in the US last week as the coronavirus pandemic continued to batter the economy. The pace of layoffs appears to be slowing, but in just six weeks an unprecedented 30 million Americans have now sought unemployment benefits and the numbers are still growing.Related: Back to the future: are drive-in theaters the future of safe cinema trips? Continue reading...

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...