Thinktank expressed some disapproval but Sunak can count himself relatively luckyIt is part of budget tradition that the chancellor gets a kicking from the Institute for Fiscal Studies 24 hours after presenting his package to parliament. By that token, Rishi Sunak can count himself relatively lucky.The UK’s leading tax and spending thinktank certainly had its criticisms of the budget but, given Sunak’s decision to spend and borrow hundreds of billions of pounds extra over the coming years, it could have been a lot worse.Related: An end to austerity? It’s a nice line – but one budget can’t undo the damage | Simon Wren-Lewis Continue reading...

Yes, George Osborne’s calamitous public spending cuts have been halted by Rishi Sunak. But the chancellor hasn’t reversed themDid Rishi Sunak’s budget mark an end to austerity? It wouldn’t be the first time. During the past three years, successive government budgets have supposedly “ended austerity”. So why is it that the end of austerity never actually arrives?Related: Johnsonism’s first budget is floating on hype and hot air | Aditya ChakraborttyRelated: Rishi Sunak’s big-spending budget throws Labour a huge challenge | Martin Kettle Continue reading...

Thinktank praises Covid-19 response but says ‘splurge’ relies on already announced plansRishi Sunak’s first budget is not as generous as it seems and many Whitehall departments will still be worse off than they were before the spending squeeze began in 2010, according to Britain’s foremost economics thinktank.The Institute for Fiscal Studies said the chancellor made the budget sound more substantial than it was, while relying on previously announced spending plans.Related: An end to austerity? It’s a nice line – but one budget can’t undo the damage | Simon Wren-LewisRelated: Sunak's spending plan will increase net debt by £125bn, says OBR Continue reading...

Politicians have more power over the economy than they like to admit. The chancellor is deploying his to the fullI am used to being astonished by Conservative budgets. Towards the end of my time as a special adviser to Vince Cable under the coalition, I was incredulous at how the then chancellor, George Osborne, was willing to threaten years more of cuts, despite having already slashed spending across the “non-protected” departments. Never mind whether the economy could take it, or the bond markets demanded it – this was no longer cutting fat or even muscle, but bone.Now I stand equally astonished, but this time for the opposite reason. The figures produced by Rishi Sunak in his first outing as chancellor might have come from a Conservative attack document titled “Labour’s secret plans to borrow hundreds of billions”. Glance over the budget measures table and you can find promises to spend an extra £175bn over five years, and raise just £25bn of that in tax. And this not just for cherished projects like the doubling of R&D or an infrastructure revolution – this is a chancellor willing to bandy around phrases like “fiscal stimulus”. The once-heretical idea that public spending might boost the economy is back with a bang.Related: Rishi Sunak’s big-spending budget throws Labour a huge challenge | Martin Kettle Continue reading...

Pessimistic analysts say this week’s crash might be the start of a global ‘bear market’. What have bears got to do with the market?Stock markets crashed this week on the twin shocks of coronavirus projections and an oil-price war between Saudi Arabia and Russia. Pessimistic analysts said this might be the start of a global “bear market”. But what have hairy quadrupeds got to do with it?This is one of those terms for which the internet offers various competing “folk etymologies”, which is the linguist’s polite term for nonsense. Bear markets are named because bears attack by swiping their paws downwards? No. The origin in fact lies in the old proverb warning that you shouldn’t sell a bear’s skin before you have caught the bear. In the 18th century, speculators who did sell borrowed commodities before they had paid for them – in anticipation of profiting from a fall in price – were therefore called “bearskin jobbers”, later shortened to “bears”. Continue reading...

US stock markets have been on an unprecedented streak since 2009, a bull market of gainsWall Street’s record-breaking 11-year “bull market” came to an end on Wednesday as fears about the spreading Covid-19 pandemic hit stock markets again.US stock markets have been on an unprecedented streak since 2009, a bull market of gains. On Wednesday investors sold off shares across all sectors after the World Health Organization declared the outbreak a pandemic for the first time and criticized “alarming levels of inaction” by governments in corralling the virus.AP contributed to this story Continue reading...

Former PM and ex-chancellor lead charge of MPs worried about impact of spending hikeTheresa May, the former prime minister, and Sajid Javid, who was chancellor until last month, sounded warnings over the level of spending in the budget, stressing the continued need for fiscal discipline. May led the charge of backbenchers apprehensive about the long-term impact of the public and capital spending hike.In a debate in the Commons after Rishi Sunak delivered his first statement, she said: “Although spending a lot of money may be popular and may seem the natural thing to do, there is of course that necessity to have a realistic assessment of the longer-term impact of those decisions and of the longer-term consequences.Related: 2020 budget: the Guardian panel’s verdict | Polly Toynbee, Katy Balls, Tom Kibasi and Miatta FahnbullehRelated: Sunak delivers budget bonanza: Politics Weekly podcast Continue reading...

Such good intentions will only be truly tested if the economic fallout becomes severe

Chancellor triples investment in transport and infrastructure spending, freezes fuel and alcohol duties, and removes VAT on digital publications

If it’s possible to secure incomes due to coronavirus, why can’t we help families who can’t access healthy food?This was no ordinary Conservative budget – but these are not ordinary times. In his first budget since taking office a month ago, Rishi Sunak was ebullient as he stated that this government would spend and invest “what it takes” to drive productivity and growth, and “level up” the country. His plan to address the economic impacts of coronavirus was comprehensive, clear in its understanding of the nature of the threat, and included many commendable measures – from making it easier to access statutory sick pay and benefit payments, to helping small businesses cover sick pay costs, though the TUC has called for greater support for low-paid workers. Many of today’s proposals could have come from a Labour chancellor.That said, in a budget proclaiming an intention to “get things done”, there were some major omissions. Coronavirus may be the most immediate crisis facing the UK, but it is far from the only one: we face a climate emergency; our public services – especially those run by cash-strapped councils – are at breaking point; and for too many, the economy is not delivering security or hope. The chancellor’s budget fell short of the mark on these.It was perhaps inevitable that on support for social care services the can was, as ever, kicked down the roadRelated: Road to hell: budget tarmacs over climate ambition Continue reading...

Will you be better off? Find out what effect the tax and spending plans will have on your personal finances Continue reading...

Extra £2.6bn is for capital projects only, with no new funds for maintaining existing defencesExpenditure on flooding will be doubled, the chancellor has announced in the budget, but analysis has revealed that the figure is less generous than it seems. Spending will be increased to £5.2bn for the period from 2015 to 2021, but the extra £2.6bn that includes will be for capital projects only, with no extra funds for maintenance.From the financial year 2015-16 to 2018-19, spending on flood defences was just over £3bn, and a further £815m was allocated for the financial year about to end. That comes to £3.9bn, of which about £1.3bn went on the maintenance of existing flood defences and other routine tasks. Continue reading...

Labour leader says Rishi Sunak’s spending plans will not make up for 10 years of cuts

Rishi Sunak delivered his first budget in extraordinary circumstances. What do the measures he announced mean? Continue reading...

Rishi Sunak provides biggest boost to public investment for several generations

A £30bn package to stimulate the economy was announced by Rishi Sunak as the government and Bank of England sought to protect jobs and livelihoods against the coronavirus crisis. Here are the main measures set out by the chancellor:

Rishi Sunak has delivered his budget – here are the main points, with political analysis

Fears for UK economy grow as January GDP growth flatlined before Covid-19 hit Europe

ECB boss calls on EU governments to support their economies or risk collapse

There will be gain for some consumers but pain for others after the Bank of England’s decisionThe emergency 0.5% rate cut by the Bank of England in the midst of the coronavirus outbreak will mean monthly savings for householders with tracker mortgages but more pain for savers as interest paid shrivels again – and for most borrowers who have fixed-rate mortgages, there is no gain at all. Continue reading...

Amid concern over Covid-19, the idea is to show Bank and Treasury are working as a teamThere is no point in doing things by half and the Bank of England has wheeled out the big bazooka in its effort to minimise the impact of Covid-19 on an already shaky economy.Threadneedle Street’s expertise does not extend to immunology so the Bank has no real idea how serious the outbreak will be. It thinks the impact will be temporary but admits it could be “sharp and large”. In any event, there is going to be some serious short-term disruption to activity and the aim is to ensure there is no long-term harm. Continue reading...

How the chancellor can offset the worst affects of the coronavirus fallout, from motoring to welfare, pensions to BrexitHow will the budget support the government’s plan to protect the economy from the worst affects of the coronavirus? Will Covid-19 prevent chancellor Rishi Sunak from spending to “level up” the regions and boost infrastructure spending? Here is our checklist of what to expect: Continue reading...

Chancellor Rishi Sunak’s budget will be seen by many as an emergency statement on the coronavirus crisisThe chancellor, Rishi Sunak, will deliver one of the most difficult budgets in recent times against the backdrop of the coronavirus outbreak.The de facto emergency statement will outline the government’s response to the unfolding economic crisis, while Sunak is also expected to offer some indications about how he plans to deliver on Boris Johnson’s promises for higher spending made before the election. Continue reading...

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Donald Trump’s proposal of payroll tax cuts drove US stock markets up almost 5% today, after a near-8% slump on Monday

City expects coordinated response from outgoing governor and new chancellor including rate cut and easier borrowing

The EU can rewrite its rules and let governments borrow more to counter the crisis or let Italy go the way of Greece

World’s largest exhibition company hit with a £1bn drop in its market value this year

Political leaders and central banks must listen to experts’ advice on containing the outbreak

Standard Life Aberdeen boss hoping for ‘short sharp downturn’ but urges big stimulus in UK budgetIf the coronavirus outbreak can be contained in the west as it has been in China there could be a short sharp economic downturn followed by a recovery in six months’ time, according to one of the UK’s biggest investment managers.Keith Skeoch, the chief executive of Standard Life Aberdeen, said the recent sell-off in global stock markets – which recorded their biggest losses since the 2008 financial crisis on Monday – reflected “pure panic” among investors about a coronavirus-driven economic downturn and an oil price war. Continue reading...

The likely coronavirus response will disrupt family life and show just how many children, parents and grandparents need careThere is an unlovely 20-second gap, in the parenting experience, between any given negative event and a sense of solidarity kicking in: the quick thrill of “I’m all right, Jack”. Toddlers, screaming in the supermarket? Not my circus, not my monkeys. Schools closing down for two months straight, which realistically would mean the Easter holidays rolling into September, the world transformed into one endless summer? My kids are 12 and 10, and I work from home. What could possibly be more clement, I thought? It’ll be like having co-workers, except in pyjamas.This was only fleeting, before the calamity kicked in. The disruption caused by mass school closures would be simply unmatched by any freak event in living memory: no flood, no ash cloud, no financial crash comes close to losing so much of the workforce to childcare, and for so long. We have some experience of multiple schools closing across a number of regions, for norovirus; that tended to be for no more than a couple of days, for deep cleaning. We know what it’s like to have snow days dispersed across a few counties, or for the whole country to seize up after a strong wind (if you can remember as far back as 1987). Few economic effects were observed, and none talked about, because the disruption was absorbed into each individual family, as misfortunes tend to be.Related: Charities preparing to feed children if schools shut over coronavirusThe World Health Organization is recommending that people take simple precautions to reduce exposure to and transmission of the Wuhan coronavirus, for which there is no specific cure or vaccine.Related: Even a starved NHS is still our best defence against the coronavirus | Polly Toynbee Continue reading...

Cases spike sharply across Europe and emergency measures in place from California to Saudi Arabia. This blog is closed.

Britain’s stock market has suffered its worst day since the 2008 financial crisis, as shares plunge worldwide amid fears of a global downturn

The coronavirus crisis underlines the disconnect between interest rates and productivity growth

An economic collapse may have already begun and globalisation will make recovery more difficultThe world appears to be on the brink of a sudden recession. The economic disruption caused by the coronavirus might put an end to what has been a heady decade on the world stock market since, after the 2008 global financial crisis, low interest rates and quantitative easing became the new normal. Today’s markets are registering massive falls of up to 10%, unprecedented since 2008. Billions of dollars and pounds are vanishing. It is Black Monday all over again.The coronavirus has shown a world vulnerable to fear of illness. We have yet to experience its vulnerability to the economic consequences of that fearRelated: Coronavirus won’t end globalisation, but change it hugely for the better | Will Hutton Continue reading...

FTSE100 expected to fall 6.3% on opening on Monday after Asian shares are battered by growing fears of a worldwide recessionCoronavirus: latest updates

Move follows Russian refusal to join Opec-led production cut aimed at keeping prices highThe price of crude oil has plunged by almost 27% after Saudi Arabia, the world’s top oil exporter, said it would step up production from next month, flooding global markets and most likely depressing petrol and diesel prices.Brent crude was at $33.09 a barrel on Monday morning, a fall of 27%. It was the worst one-day fall for Brent since the start of the first Gulf war in 1991. US crude fell 27% to $30.Related: Coronavirus live updates: stock markets plunge on global recession fears Continue reading...

Lobbies tell Rishi Sunak not to hike fuel or wine duty or end entrepreneur tax break to fund fight against outbreakThe chancellor is under pressure from industry groups to resist the temptation to fund coronavirus spending with tax hikes on business when he delivers the budget on Wednesday.The RAC said a majority of drivers wanted Rishi Sunak to freeze fuel duty for the 10th year following intense speculation that he plans to increase the duty on petrol and diesel by 2p a litre.Related: Rishi Sunak: the bit-part hedge fund partner now managing the economy Continue reading...

Washington DC-based bank grants funds to redraft south American state’s oil laws by lawyers linked to oil giantThe World Bank is to pay for Guyana’s oil laws to be rewritten by a legal firm that has regularly worked for ExxonMobil, just as the US producer prepares to extract as much as 8bn barrels of oil off the country’s coast.The World Bank has pledged not to fund fossil fuel extraction directly, but it is giving Guyana millions of dollars to develop governance in its burgeoning oil sector, as the south American country prepares for an oil rush led by ExxonMobil and its partners. Continue reading...

The coronavirus will reduce budget 2020 from a big bucks curtain raiser for Boris Johnson’s Toryism to a disaster relief statementNot since Denis Healey in 1974 has a chancellor had so little time to prepare for a budget. With just four weeks in his new role – only a week more than Healey had to prepare – Rishi Sunak had been expected to deliver one of the most important budgets since the financial crisis. Here at last was a Conservative majority, the biggest since Margaret Thatcher in 1987, affording him the space to define Boris Johnson’s brand of Toryism.Not for the first time, the Treasury’s freedom will be distinctly limited. Faced with the unfolding economic crisis from the coronavirus, the new chancellor has been forced to rip up his plans and start again. For now, the flagship budget once envisaged must wait. Continue reading...

The Covid-19 outbreak means Johnson and Cummings now need the help of the government machine they have attackedWhen Harold Macmillan, British prime minister 1957-63, was asked what worried him most, his celebrated reply was “the opposition of events”. This somehow got revised, as such quotes tend to, to “events, dear boy, events”.The beauty of the original reply was that, with his characteristic sardonic wit, Macmillan was also having a crack at the supposed feebleness of the official opposition – Labour – at the time. But that opposition contained some political giants, such as Labour leader Hugh Gaitskell and his opponent in chief, Aneurin Bevan. The two were the titular leaders of the Gaitskellites and the Bevanites. Then, as now, the Labour party was at war with itself; but things were nowhere near as desperate then as they are now.The advent of pan-panic may impel those well-known economic advisers Johnson and Cummings to urge the chancellor to throw caution to the winds Continue reading...

New data reveals that the recent history of wealth is more complex than we thinkWe live in a country shaped by our past but we are not very good at understanding it – not least when it comes to the debates about living standards and inequality that are central to our politics and economics. If we want to make sense of how Brexit Britain got to this point and where to go from here, the task is not just to recognise the legacy of decades past but also that times change, asking new questions of us as they do so.Too often, the stories told on both sides of our politics drive towards the wrong questions and offer the wrong policy answers. For the left, that means asserting that inequality is always rising. This is not only wrong, but dangerous in spreading the idea it is normal, when it’s anything but. Continue reading...

Country was due to repay a $1.2bn Eurobond this month but will seek to restructure its debtsLebanon said on Saturday it would default on its Eurobond debt for the first time and seek out restructuring agreements amid a spiralling financial crisis that has affected foreign currency reserves.The country, hit by a severe liquidity crunch and months of anti-government protests, was due to repay a $1.2bn (£920m) Eurobond on 9 March, while another $700m matures in April and a further $600m in June. Continue reading...

Central bankers need to coordinate their efforts to stop wavering economic sentiment from declining furtherThe Bank of England governor, Mark Carney, has spent the last week in talks with the chancellor and officials at No 10 knowing that there could be dire economic consequences if the coronavirus provokes a collapse in public confidence. Other central banks have the same concern, but mounting a coordinated response will be a challenge as shockwaves reverberate around the world.Confidence is a watchword in any crisis and especially a health crisis, according to the Centre for Economic Policy Research.With interest rates at 0.75%, there is little room for the Bank of England to help the economy by cutting rates Continue reading...

Chancellor mulling measures including tax holidays and support when staff self-isolate

Summit in Vienna aimed to slash output to prevent crash as coronavirus hits demandGlobal oil prices tumbled to lows not seen since mid-2017 on Friday after the Opec oil cartel failed to strike a deal to steady the market against the impact of the coronavirus by reining in production.The collapse of talks between the world’s largest oil producing nations has stoked investor fears that the coronavirus could trigger the most severe oil market shock in history by throttling demand from heavy industry and airlines. Continue reading...

Hostility toward the EU across the continent is nothing new, but since June 2016 parties have mostly dropped demands to leave the bloc, writes Denis MacShane, while Joe Shackles says that such hostility is rooted in opposition to the economic status quo rather than anti-immigrant sentimentEurope has always had major political parties hostile to European integration since the first steps to supra-national cooperation and partnership were taken in 1950 (Eurosceptic parties thrive across EU, but public in no mood to quit the bloc, 3 March).Labour opposed European partnership with vivid language from leaders like Hugh Gaitskell and Jim Callaghan, who used Ukip-type jargon. The Labour leadership since 2015 has not exactly been Europhile. The German Social Democrats in the 1950s denounced the European Economic Community as “Catholic, conservative and capitalist”. The French and other communist parties, which had much bigger voting shares than far-right parties today, regularly denounced Brussels. In 1978, Jacques Chirac said “voting by majority means France is paralysed” and “a federal Europe cannot fail to be dominated by the Americans”. The Guardian comment pages propagated Lexit – left support for EU withdrawal – in 2015. Poland’s PiS party has nothing positive to say about Europe except when it comes to EU agricultural and regional subsidies, when suddenly its Euroscepticism dissolves into embrace of Brussels handouts. Continue reading...

Industrial policies and other entrepreneurial state mechanisms can build better foundations for a superpower, writes Roy CobbySome observers of European integration often reframe crises like Brexit as opportunities for further development. Consequently, one can sympathise with Timothy Garton Ash’s nod to “noughties nostalgia” and commendation of the EU’s trade, regulatory and environmental expertise (Europe can be a superpower. It just needs to hang together, Journal, 2 March).He focuses on a specific set of challenges, such as diplomacy, intelligence, counter-terrorism, development aid, and “readiness to use military force”. But he omits more mundane structural problems challenging Europe’s future. Continue reading...

Lobby groups say way rates are calculated and paid hurting most those it aims to help mostWhen the Palmers department store in Great Yarmouth closes at the end of next week it will be a sad end to the story of one of the country’s oldest retail businesses.Part of the collapsed Beales chain, Palmers has been a familiar sight in the seaside resort since 1837 when Garwood Burton Palmer opened a drapery shop.High street closures in 2019Related: UK's business rates system 'broken' says Treasury committee Continue reading...