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...

Gloom and optimism greet news of economic upturn after decline due to coronavirus

This Brexiter government is pursuing its political goal, whatever the economic cost. Its predecessors did the same

Rishi Sunak gives himself option of delaying autumn budget due to economic uncertainty

Rolling coverage of the latest economic and financial news, as ECB says the eurozone saw a strong rebound over the summer

Storage issues could hit cost of fruit and veg as supermarket chain’s profits plungeSupermarket prices will go up unless the UK government negotiates a tariff-free Brexit deal with Europe, the boss of Morrisons, Britain’s fourth-largest grocery chain, has warned.“From our point of view representing British consumers we would like the government and the leaders of the country to negotiate a deal that includes no tariffs UK to Europe or Europe to the UK because tariffs do drive inflation,” said David Potts, the chief executive of the Bradford-based supermarket. Continue reading...

Chancellor must use autumn budget to create new roles for workers after furlough scheme ends, says thinktankRishi Sunak has been urged to pump more than £15bn into job creation schemes at the autumn budget to protect 1 million people from unemployment after the furlough scheme comes to an end.Warning that the jobs recovery from the coronavirus pandemic could be weaker than in any of the past three big recessions, the Learning and Work Institute said a dramatic shift in public investment was needed to stimulate employment and avoid lasting damage for unemployed workers. Continue reading...

The health emergency and the economic fallout is likely to worsen in OctoberApril marked the most dramatic and, some would say, dangerous phase of the Covid-19 crisis in the US. Deaths were increasing, bodies were piling up in refrigerated trucks outside hospitals in New York City and ventilators and personal protective equipment were in desperately short supply. The economy was falling off the proverbial cliff, with unemployment soaring to 14.7%.Since then, supplies of medical and protective equipment have improved. Doctors are figuring out when to put patients on ventilators and when to take them off. We have recognised the importance of protecting vulnerable populations, including the elderly. The infected are now younger on average, further reducing fatalities. With help from the Coronavirus Aid, Relief, and Economic Security (Cares) Act, economic activity has stabilised, albeit at lower levels.Related: After coronavirus we should be ready for an uncertainty pandemicThere will be less policy support now if the economy again goes south Continue reading...

Worker footfall was at 17% of pre-lockdown levels at end of August, unchanged from June

Former prime minister calls for Bank to take employment into account when setting policies

With the spectre of deflation looming in the wake of Covid-19, radical new policies could revolutionise the world economy

NAO forecast for costs of 190 pandemic measures over half year finds furlough outlay of £35.4bn so far most expensive

Rolling coverage of the latest economic and financial news, as no-deal fears hit sterling and tech stocks drop again

Covid-19 gave us a glimpse of a less work-driven society, but it will take determination to avoid a return to the old normal

Andy Haldane says extension to job retention scheme risks delaying ‘inevitable’ shake-out of firms hit by Covid-19

Government told failure will damage UK economy as critical negotiations begin

Long-term competitiveness at risk if scheme ends for critical industrial sectors, says Make UKThe government’s furlough scheme must be extended for critical sectors of British industry or the country risks losing key skills as it recovers from the pandemic, according to the UK’s foremost manufacturing group.Make UK is joining calls for the government to change its mind about ending the coronavirus job retention scheme in the autumn, after a survey of its members showed almost two-thirds (62%) of companies agreed with the proposal that the scheme be extended. Continue reading...

Friends of the Earth seeks judicial review, saying aid deal contradicts climate commitmentsEnvironmentalists at Friends of the Earth will mount a legal challenge against the government’s decision to offer $1bn in financial support to a major fossil fuel project in Mozambique that they say is “incompatible” with the Paris climate agreement.The green group will go to the high court this week to seek a judicial review into the government’s decision to use taxpayer money to “worsen the climate emergency” by helping to finance a $20bn gas project on the Mozambican coast.Related: Boris Johnson poised to stop UK funding overseas fossil fuel projects Continue reading...

Economists have conducted a cost-benefit analysis of the blanket shutdown. It makes for grim readingCancer treatments cancelled. Children deprived of schooling. More cases of domestic abuse. Continued restrictions on personal freedom. Over and above the direct damage caused to the economy, the collateral damage from the Covid-19 pandemic has been colossal.And the crisis is not over by any means. Travel restrictions come and go with mind-boggling frequency. Local quarantining has replaced national lockdowns. Every leading policymaker in the UK, from the chancellor, Rishi Sunak, downwards, knows that the job losses to come threaten to leave permanent scars. Continue reading...

Mass unemployment and soaring debt will place acute pressure on the relationship between prime minister and chancellorBoris Johnson told the most recent meeting of his cabinet that they had been “sailing into the teeth of a gale” before promising them “there will be brighter days and calmer seas ahead”. Which would make me very nervous about venturing out on a boat with this prime minister. He clearly does not check the weather forecast. What lies ahead is not calmer seas, but even more turbulent waters. The government is heading into a storm the like of which neither he nor anyone else on his inexperienced crew has ever endured.There is a vast black cloud massing on the near horizon. It is the looming horror of mass unemployment. The virus-induced slump has already had a nasty effect on many Britons, but for quite a lot of voters the experience has not yet been as horrible as they may have first feared. The impact has been softened by improved welfare payments, job-retention schemes, business rescue packages and other emergency measures. This has delayed the reckoning. Though the public has taken an increasingly dim view of the government’s handling of the epidemic, Tory MPs have been able to clutch to the consolation that their party has maintained a lead over Labour on economic competence. They cannot be sure that will endure as support schemes unwind. One veteran Tory remarks of the cabinet: “This is a generation of politicians who have no experience of mass unemployment. If we go into Christmas with three million people unemployed, that will be beyond ghastly. The psychological shock will be enormous.” Continue reading...

No 11’s warnings of ‘bombshell’ tax rises may have been confected. But if they were true, they would be a mistakeCaught on the steps of Downing Street, Rishi Sunak had a message to send last week. Whether or not the lapse was deliberate, the capture of the chancellor’s notes by a press photographer played a useful role in laying the ground for his autumn budget.There would be no “horror show of tax rises with no end in sight”, read the note Sunak was taking with him to a meeting of nervous backbench Tory MPs, unsettled that the party of low taxes was on the road to embracing Corbynomics.Sunak has developed a reputation as a savvy media operator. After the whipping-up of a media storm, modest tax rises will sound much better to the Tory faithful Continue reading...

Trump, Putin and Xi all want to make Europe less powerful and united. Britain’s departure has offered them succourWhen Brexit happens, “the EU will no longer exist”. So said Nigel Farage to Michel Barnier, who was to become the EU’s chief Brexit negotiator, a few days after the 2016 referendum.Barnier revealed this recently at the end of an interview with the French journalist Marion van Renterghem, about which she writes in the current issue of the New European.Brexit weakens the country in a world where the geopolitical rivalry between the US, Russia and China is becoming ever more menacing Continue reading...

We are eight weeks from a momentous election. If Joe Biden wins, he must work to redistribute income – and powerOn Labor Day weekend, eight weeks before one of the most consequential elections in American history, it’s useful to consider the inequalities of income and wealth that fueled Donald Trump’s victory four years ago – and which are now wider than ever.Related: Speaking for Myself review: Sarah Sanders writes one for the Trump teamTrump speaks the language of authoritarian populism but acts in the interests of America’s emerging oligarchyRelated: Wildfires rage, Covid spreads: in California, life as we knew it has disappeared | Dana FrankRobert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a columnist for Guardian US Continue reading...

With pent-up demand and the stamp duty holiday sending the cost of homes soaring, we look at the groups and sectors that stand to gain or lose outUK house prices have hit a record high since the lifting of lockdown, after the fastest monthly growth in property values in August since 2004, fuelled by the release of pent-up demand and the government’s stamp duty cut.Despite Britain plunging into the deepest recession in modern history in the second quarter, estate agents report a surge in interest from those with the financial security to move, and from those whose priorities have been changed by Covid-19. There are, however, winners and losers in this rapidly moving market, as Covid-19 creates a period of boom and bust. Continue reading...

Tourist town’s hope to stem lockdown losses by extending famous lights display to January met with pessimism

Greg Delaney, Richard Tudway and Jacqueline Darby respond to an article by Larry Elliott

Michael Saunders warns ‘sweet spot’ caused by massive fiscal support is coming to an end

Coffee sales around the world have fallen, risen and plunged again, hitting producers hard

Rolling live coverage of business, economics and financial markets ahead of crucial US non-farm payrolls data

I was a student last time, an optimist who believed education would be my ticket out of povertyRecently I found myself binge-watching Ramsay’s Kitchen Nightmares USA. Those first episodes are pre-2008, so often a very ordinary person will casually tell Gordon, “I’m in $1m of debt, chef” – a reminder of irresponsible lenders and the economic chaos that was just around the corner.I was on season four when the news alert came in: we’re in another recession, the deepest yet. This will be my third. I don’t remember the first one (1990-91) because I was a baby hurling bowls of mush (a fair response to a recession, if you ask me).Related: Fight or flight? A zombie survival game taught me a lot | Coco Khan Continue reading...

Employers added 1.4m new jobs, a number that was markedly lower than in recent months – 1.8m in July, 4.8m in June and 2.5m in MayThe pace of recovery in the US jobs market slowed again in August as the coronavirus’s impact on the economy appeared to be broadening.Employers added 1.4m new jobs and the unemployment rate dropped to 8.4% last month, dropping below 10% for the first time since the pandemic took hold, the labor department announced on Friday.Related: Stock markets fall as investors sell off tech stock amid US job fears Continue reading...

A post-pandemic expansion – if there is one – may take years to meet the definition of recoveryThe next few months will tell us a lot about the shape of the coming global recovery. Despite ebullient stock markets, uncertainty about Covid-19 remains pervasive. Regardless of the pandemic’s course, therefore, the world’s struggle with the virus so far is likely to affect growth, employment and politics for a very long time.Let’s start with the possible good news. In an optimistic scenario, regulators will have approved at least two leading first-generation Covid-19 vaccines by the end of this year. Thanks to extraordinary government regulatory and financial support, these vaccines are going into production even before the conclusion of human clinical trials. Assuming they are effective, biotech firms will already have some 200m doses on hand by the end of 2020, and will be on track to produce billions more. Distributing them will be a huge undertaking in itself, in part because the public will need to be convinced that a fast-tracked vaccine is safe. Continue reading...

UK should adopt German-style wage support for short-time working, unions say

Over a hundred people record version of One Day More to urge chancellor to act

US stock market is suffering its worst day since June, as Apple and Tesla lead stock markets into the red

The ex-Australian PM is a political evangelist for free trade who has got three big trade deals over the lineIt is often said, in a phrase once attributed to Benjamin Disraeli, that there are three categories of mistruths: lies, damned lies and statistics. By the same token there are three types of geeks: geeks, super-geeks and trade negotiators.Trade negotiators know the difference between the bound and applied tariff on imports of cars into Brazil. They know the quota for frozen lamb that can imported into the EU from New Zealand. They know their way around all 22,500 pages of commitments made by different countries at the end of the Uruguay round of trade talks in 1993. These people are experts and, despite what the health secretary, Matt Hancock, has said, Tony Abbott is not one of them.Related: What hiring a failed Australian prime minister tells us about corrupt Britain | Nick Cohen Continue reading...

As online retail booms, distribution centres are hiring – and the workers they depend on could organise for a better dealEvery day we hear of more redundancies as the country slides further into a pandemic-induced economic crisis. But there is another storyline playing out in warehouses and distribution centres across the UK: not of layoffs but of hiring sprees.Last week, Tesco announced it is planning to permanently employ 16,000 workers to staff its expanded online shopping operation. Amazon is reported to have just rented a 2.3m sq ft distribution centre on the outskirts of London. Informed estimates put the likely workforce employed there at over 1,000. While employment in most of the economy is contracting, logistics is booming.Related: Low demand for UK office workers reveals ‘asymmetric recovery’Related: No internships, no entry-level work: under-25s fear Covid jobs squeeze Continue reading...

The coronavirus crisis provides an opportunity to stop two centuries of decline. But that’s going to take a lot of courageThe day the World Health Organization declared Covid-19 a global pandemic was also the occasion of Rishi Sunak’s budget. Announcing an extra £12bn to fight the virus, Britain’s newly appointed chancellor said the measures were “temporary, timely and targeted”.That was less than six months ago, but it now feels like a long time. Within days of the budget, Sunak’s three-Ts approach became redundant. The economy was in a deep freeze, and the country had gone into full lockdown. Continue reading...

Greater London, where number of closed outlets has increased by almost two-thirds, is hardest hit by riseThe number of empty shops on UK high streets has risen to its highest level in six years as city centres, and especially London, suffer from a dive in visitor numbers.Nearly 11% of shops remained vacant in July compared with 9.8% in January, with the number of empty premises rising in six out of 10 UK regions, according to retail analysis firm Springboard. Greater London suffered by far the worst blow, with empty shops increasing by nearly two-thirds. Continue reading...

Rolling coverage of the latest economic and financial news, as MPs quiz the Bank of England about the economic cost of Covid-19