by Anetta Jones, Max Duncan Jess Gormley and Chris Mi on (#4V2SQ)
Cuba's strange dual system means that public sector workers and those in private enterprise are paid in different currencies. Laura, a GP, earns Cuban pesos, whereas Rogelio, who was a doctor, now makes more in an hour as a taxi driver than he used to in a month because he is paid in 'convertible pesos', which are worth 24 times more. As doctors and teachers struggle to buy basic goods, is it time for change?
Heavy discounting at furniture stores also helps pull down rate from recent peak of 3.1% in 2017Inflation fell to 1.5% in October, its lowest level in three years, pushed down by heavy discounting at furniture stores and a decline in the price of energy.The Office for National Statistics said price cuts across the recreation and culture sectors coupled with the falling cost of household goods more than offset increases to clothing and footwear to pull down inflation from its recent peak of 3.1% in 2017.RPI
Slowdown in growth and Brexit uncertainty are making businesses more cautiousEmployment in the UK has fallen at its fastest rate in four years amid growing evidence that a slowing economy is taking its toll on the labour market.Figures from the Office for National Statistics showed that pay growth had fallen back in the three months to September, leading to speculation that the jobs market is past its peak. Continue reading...
Store closures, shift to online shopping and political uncertainty fuel £147m loss at LandsecLandsec, which owns shopping centres including Trinity Leeds, Westgate Oxford and Bluewater in Kent, has slumped to a first-half loss after being hit by store closures as retailers battle weak consumer spending and a shift to online shopping.The property group’s chief executive, Robert Noel, said the general election and Brexit delay meant “continued uncertainty in the near termâ€. “The retail market continues to be challenged as retailers adapt to structural change, rising costs and a more cautious consumer,†he said. “Limited demand for space and poor investor sentiment is impacting rental and capital values.†Continue reading...
Millions of people with disabilities need help to get out of bed, wash and go to the toilet. Their needs must not be ignored in this electionI can’t help but wonder what the social care equivalent of the well-worn NHS general election photo op would be. Instead of health secretaries putting on scrubs and a party leader looking sympathetic next to a patient’s bedside, perhaps Boris Johnson would like to wait with a paraplegic as she soils herself in her front room because she has no assistant to help her get to the toilet.This is not so much a public policy issue as a full-blown humanitarian crisisRelated: Labour to announce it would reverse austerity cuts to adult social care Continue reading...
Is the regime at risk of the kind of protests seen in Hong Kong, France and Chile?For more than a decade, China has accounted for a quarter or more of global economic growth. With its economy currently navigating a rough patch, the question is whether this impressive performance will persist.Cassandras pointing to the possibility of a Chinese growth slowdown regularly invoke the spectre of a middle-income trap. Now that China is no longer poor, they warn, growth rates will fall, just as they have in all but a handful countries that have reached the same income level. Growth is harder, they observe, when it can no longer be based on brute-force capital accumulation. Now, it must be based on innovation, which is difficult to bring about in an economy that is still centrally directed.Related: A Chinese digital currency is the real threat, not Facebook's Libra | Kenneth RogoffIf unrest does, in fact, break out at some point in the future, foreign investors will be quick to withdraw Continue reading...
Business figures from film and TV, housebuilding and manufacturing discuss how their firms are doingThe UK has avoided recession after official figures showed the economy growing by 0.3% in the third quarter of the year. We talk to businesses in key sectors about their view of the economy’s performance. Continue reading...
Western governments need to start thinking about their response to currencies they cannot controlThe Facebook chief executive, Mark Zuckerberg, was at least half right when he recently told Congress that there was no US monopoly on regulation of next-generation payments technology. You may not like Facebook’s proposed Libra (pseudo) cryptocurrency, Zuckerberg implied, but a state-run Chinese digital currency with global ambitions is perhaps just a few months away, and you will probably like that even less.Perhaps Zuckerberg went too far when he suggested that the imminent rise of a Chinese digital currency could undermine overall dollar dominance of global trade and finance – at least the large part that is legal, taxed, and regulated. In fact, US regulators have vast power not only over domestic entities but also over any financial firms that need access to dollar markets, as Europe recently learned to its dismay when the US forced European banks to comply with severe restrictions on doing business with Iran.Related: 'You're trying to help drug dealers': Zuckerberg faces angry lawmakers at Libra hearing Continue reading...
GDP figures show 0.3% growth in third quarter but economy shrank in SeptemberBritain’s economy avoided a recession in the third quarter after it expanded by 0.3% but the annual pace of growth was the slowest for nearly 10 years as Brexit uncertainty depressed business activity.Official figures showed the UK returned to growth between July and September after a dip of 0.2% in the three months to the end of June. A technical recession is defined by two successive quarters of negative growth. Continue reading...
The league tables created by conservative thinktanks show that neoliberalism is about ringfencing economic powerTwo of the “freest economies†in the world are on fire. According to indexes of “economic freedom†published annually separately by two conservative thinktanks – the Heritage Foundation and the Fraser Institute – Hong Kong has been number one in the rankings for more than 20 years. Chile is ranked first in Latin America by both indexes, which also place it above Germany and Sweden in the global league table.Violent protest in Hong Kong has entered its eighth month. The target is Beijing, but the lack of universal suffrage that is catalysing popular anger has long been part of Hong Kong’s economic model. In Chile, where student-led protests against a rise in subway fares turned into a nationwide anti-government movement, the death toll is at least 18.Related: Neoliberalism promised freedom – instead it delivers stifling control | George MonbiotRelated: Neoliberalism is killing our love lives | Bhaskar Sunkara Continue reading...
by Richard Partington Economics correspondent on (#4TYBA)
Chancellor claims Labour set on raising expenditure by 30% but £1.2tn price tag fails to assess pay-back through nationalisationSajid Javid has attacked Labour’s spending plans, saying the price tag of the party’s proposal to reshape the economy and public services would be as high as £1.2tn over five years.Ahead of the general election in December, the Conservatives published a dossier over the weekend assessing the cost of Labour’s plans. Here is an analysis of the costing document.Related: General election: parties announce policies for veterans on Remembrance Sunday – live news Continue reading...
The children’s centres were one of the vital public services Britain once took for granted. A decade on, much has been lostBoth Labour and the Liberal Democrats announced policies this weekend to dramatically increase free childcare hours. Understandably, these plans dominated the headlines – parents, and especially women, currently face extortionate bills just to take care of their children. Recent figures show that under the Conservatives, childcare costs have risen twice as fast as wages.Related: Lib Dems promise 35 hours of free childcare from nine months old Continue reading...
As the rival chancellors square up for the general election, each is promising a version of ‘cakeism’The Conservatives say Labour’s £1.2tn spending plans would bankrupt the economy. Labour says all its commitments will be fully costed and that the Tories are running scared. Predictably, it hasn’t taken long for the election to descend into slanging matches, dodgy dossiers and a battle for economic credibility.In truth, both parties want to have their cake and eat it. John McDonnell, the shadow chancellor, says ordinary voters need not fear his spending proposals because investment in infrastructure will be covered by borrowing, and increases in the day-to-day costs of government – such as pay – will be paid for by higher corporation tax and an increase in income tax for the better off. Continue reading...
Celebrate the end of austerity. But the new cash must be spent wiselyIf there was one welcome development from the first week of the election campaign, it was the general acceptance that Britain needs more investment and that the government should pay for it. More than that, the two main political parties now agree that much of this investment should by financed with borrowed money, taking advantage of the ultra-low interest rates that the UK pays on its debts.It is a moment to celebrate, following almost a decade of austerity, when the main aim of the Treasury was to bring down the government’s annual spending deficit at the expense of, among other things, public investment. Continue reading...
The tangled relationship between London banks and the EU is hard to fix in a trade deal, and the conflict could anger ToriesOne of the many contradictions in Boris Johnson’s election prospectus is the plan to sign a free trade agreement with the EU by December 2020 and at the same time break free, by his own definition, of EU control.It’s a contradiction that has, among other things, spurred Nigel Farage to threaten to field 600 candidates in the general election. Farage rightly says that the only way Johnson can sign a deal within a year is if he maintains the current alignment with the EU and all its rules. And if this is his plan, any chance of merrily signing free trade deals with other countries is sunk.Europe might not sing with one voice. Yet that is likely to make for even slower progress on UK trade talks than otherwise Continue reading...
by Larry Elliott as told to Sophie Zeldin-O'Neill on (#4TX4N)
Our economics editor reflects on the ups and downs of 30 years at the Guardian – and why he felt compelled to vote LeaveIt was October 1988 – just over 31 years ago! I was hired to cover business, with a special responsibility for property. Canary Wharf was being built and the UK was in the middle of a house price boom. I remember my first day clearly. I reported on British Gas, with a deadline of about 5pm. Back then it was only a newspaper, so there was no huge rush to file copy like there is today. Continue reading...
US president says reports from Beijing he had agreed to start phasing out tariffs were untrueHopes of an early end to the US-China trade war have received a setback after Donald Trump said he had yet to agree to start reducing tariffs on imports from America’s rival.The US president said that while he was keen on a deal with China, reports from Beijing that he had agreed to start phasing out tariffs were untrue. Continue reading...
Even capitalists agree our economic model is broken. Fundamental change on the scale of 1945 and 1979 is needed nowGeneral elections are rarely epoch-defining events. Though the parties pretend that their political differences are large, in economic terms they rarely are. But this one could be different.Of course, elections lead to change. Labour’s victory in 1997 marked a decisive break with the Thatcher-Major years in terms of public spending and welfare policy. Yet New Labour didn’t fundamentally challenge the dominant model of economic policy that it had inherited from the Tories: a globalised and declining manufacturing sector, and deregulated financial and labour markets. In 2010 the coalition brought in austerity. But Labour would have done so too, continuing the fiscal orthodoxy. Even at elections, economic policy is usually largely consensual.Related: The beauty of a Green New Deal is that it would pay for itself | Ann Pettifor Continue reading...
Like the big banks, big tech uses its lobbying muscle to avoid regulation, and thinks it should play by different rules. And like the banks, it could be about to wreak financial havoc on us all. By Rana Foroohar‘In every major economic downturn in US history, the ‘villains’ have been the ‘heroes’ during the preceding boom,†said the late, great management guru Peter Drucker. I cannot help but wonder if that might be the case over the next few years, as the United States (and possibly the world) heads toward its next big slowdown. Downturns historically come about once every decade, and it has been more than that since the 2008 financial crisis. Back then, banks were the “too-big-to-fail†institutions responsible for our falling stock portfolios, home prices and salaries. Technology companies, by contrast, have led the market upswing over the past decade. But this time around, it is the big tech firms that could play the spoiler role.You wouldn’t think it could be so when you look at the biggest and richest tech firms today. Take Apple. Warren Buffett says he wished he owned even more Apple stock. (His Berkshire Hathaway has a 5% stake in the company.) Goldman Sachs is launching a new credit card with the tech titan, which became the world’s first $1tn market-cap company in 2018. But hidden within these bullish headlines are a number of disturbing economic trends, of which Apple is already an exemplar. Study this one company and you begin to understand how big tech companies – the new too-big-to-fail institutions – could indeed sow the seeds of the next crisis.Related: Why Silicon Valley can’t fix itself Continue reading...
Mitsotakis government seeks foreign capital from new residents in prosperity driveNot so long ago, the idea of Greece announcing tax relief measures to entice the global rich would have been regarded as a joke. With the EU’s weakest economy and a leftist government that has been in power for just three months, the world’s wealthy were keen to keep their distance.But in a marked departure of policy, the centre-right administration led by Kyriakos Mitsotakis has offered an array of incentives to attract the rich.Related: Greek PM announces fast-track reforms and red tape cuts Continue reading...
Two outside experts on MPC say weakness of UK economy warrants immediate reductionThe chances of a cut in interest rates have increased after two members of the Bank of England’s key policy body responded to a growth downgrade – inspired by Brexit and a trade war – by voting for cheaper borrowing.In the first split vote on Threadneedle Street’s monetary policy committee (MPC) since June 2018, the Bank voted 7-2 to keep official interest rates on hold at 0.75%. But two of the outside experts appointed to the committee by the government, Jonathan Haskell and Michael Saunders, said the weakness of the economy warranted an immediate reduction.Related: Bank of England in surprise split over interest rates - business live Continue reading...
Treasury forecaster’s report was expected to show decline in UK public financesThe government’s top civil servant has blocked publication of a report by the Treasury’s economic forecaster that was expected to show the UK’s public finances have deteriorated over the last eight months.Mark Sedwill, the head of the Cabinet Office, pulled the plug only an hour before the Office for Budget Responsibility was due to send out documents that were also expected to chart how Brexit uncertainty has worsened the outlook for public finances.Related: Mark Sedwill: PM’s trusted adviser who led Gavin Williamson inquiry Continue reading...
As a member of the Patriotic Millionaires organization I’ve seen how our system perpetuates gross inequality but now I’m a proud ‘traitor to our class’If Donald Trump really wants to make America great again, he’d do what our country did when it was at the height of its economic stability and equality: increase the top income tax rate to 90%.Related: The IMF thinks carbon taxes will stop the climate crisis. That's a terrible idea | Kate AronoffPhilanthropy alone won’t cut it. Advocacy is in orderGeorge Zimmer is the founder and former CEO of Men’s Wearhouse, and the founder, CEO and chairman of Generation Tux Continue reading...
Car sales slump as reports claim firms are laying off staff as Brexit uncertainty deters consumers from major spendingBritain’s flagging economy suffered a further blow in October after companies in the key services sector reported a decline in new orders for the seventh month this year and car sales slumped again, taking the annual decline to 6.7%.Analysts blamed the weaker outlook on Brexit uncertainty, which continued to take its toll on business and consumer confidence at home and abroad. Continue reading...
Fabian Society sets out five-year plan to end in-work povertyTax and national insurance thresholds would be frozen for the next five years to help finance a £45bn assault on poverty under radical proposals from one of Britain’s leading leftwing thinktanks.The Fabian Society, which is affiliated to the Labour party, said a range of working-age and child benefits should be raised by £5 a week as an emergency measure in the first year of the next government.Related: The Tories can’t run away from the horrors of Food Bank Britain | Frances Ryan Continue reading...
After 40 years of neoliberalism, the verdict is in – the fruits of growth went to the few at the topAt the end of the cold war, the political scientist Francis Fukuyama wrote a celebrated essay called The End of History? Communism’s collapse, he argued, would clear the last obstacle separating the entire world from its destiny of liberal democracy and market economies. Many people agreed.Related: When recession comes, expect central banks to rewrite the rules | Nouriel Roubini Continue reading...
Median wages still languishing £20 a week below pre-financial crash levels, according to ONSHousehold debt soared by a third to record levels in the past decade as workers struggled to cope with the impact of a prolonged squeeze on wages, a new report has said.TUC analysis found that the average non-mortgage debt of a working family had hit £14,200 through an increased reliance on credit cards, bank loans, payday lending and other unsecured forms of borrowing. Continue reading...
The Damascene conversion to a spending splurge funded via borrowing may not wash with voters, let alone the IFSBy any standards, the UK’s economic performance in the 2010s has been poor. Workers are still earning less in inflation-adjusted terms than they were when the financial crisis erupted in 2008, productivity growth has collapsed, business investment has been weak, the trading performance wretched.Despite all that, Britain has had nine uninterrupted years of Conservative rule and, if the polls are right, is on course for another five. Has the state of the economy ceased to determine election results? Continue reading...
The UK now has more than 150 billionaires, and that ought to be an admission of failure, according to the opening shots of Labour’s election campaignShould anybody have nine zeroes to their name? In the opening stages of the election campaign, Jeremy Corbyn launched a salvo against billionaires. A Labour government would go after super-rich people who exploit a “rigged system†to benefit themselves at the expense of the many, he warned in a speech last week.Britain has more than 150 billionaires, who control assets worth £525bn. Yet with 14 million people in relative poverty, each one of these billionaires could be seen as a failure of government policy.Even if they didn’t pay tax or spend a penny of their earnings, it would take an average UK worker more than 40,000 years to become a billionaire Continue reading...
It is hard to credit Johnson’s appeal to ‘left-behind’ voters when it was his party that chose to leave them behindIn 1970 the prime minister, Harold Wilson, called a general election he expected to win and lost. In the 1974 “who governs Britain?†election, called by prime minister Edward Heath, opposition leader Wilson expected to lose – and won.Heath had successfully negotiated the UK’s entry to the European Economic Community in 1973, in which venture premiers Harold Macmillan (in 1963) and Wilson (in 1967) had failed. In 1974 Wilson was faced with a Labour party divided on the European question – plus ça change – and successfully went over the heads of his party to win a referendum in 1975, with a majority of two to one in favour of what we would now call Remain.The virtual freeze in average real incomes since the 2007-08 crash, and the austerity that followed it, have manifestly contributed to discontent Continue reading...
British factories suffer sixth consecutive month of falling new ordersBritain’s factories suffered a sixth consecutive month of falling new orders in October as ongoing Brexit uncertainty hit demand from domestic customers.Weak global demand for British manufactured goods also played a part in forcing firms to lay off workers for the seventh straight month, according to a survey of the industry. Continue reading...
Labor department figures beat analysts’ expectations but show steep drops in manufacturing sector and slower hiring this yearUS employers added a solid 128,000 jobs in October, a figure that was held down by a now-settled strike against General Motors that caused several thousand workers to be temporarily counted as unemployed.Related: Pelosi bangs the gavel: House votes to endorse Trump impeachment inquiry Continue reading...
Beijing sees US president as impulsive and fears he could pull out of any deal, reports sayA trade deal between the US and China is imminent and only delayed by the need to find a venue for a signing ceremony, according to Donald Trump.After almost two years of wrangling over US import tariffs on Chinese goods, which sparked a tit-for-tat row between the world’s largest trading nations, the two sides were close to a comprehensive long-term trade agreement, the president said. Continue reading...
A decade of disastrous policy has left the Treasury far worse off than expected. The next government must invest to rebuildWhile much of the talk this week has been about the election, far less reported was the news that government coffers will probably be a massive £43bn worse off than expected. This would wipe out the often-quoted £27bn “headroom†built up by the former chancellor Philip Hammond to cope with the costs of Brexit, and overshoot the government’s deficit target by £16bn.Related: UK Treasury on course to exceed this year's deficit target by £16bn Continue reading...
3.2% quarterly fall rivals the worst three-month slide during the 2008 financial crisisHong Kong has plunged into deep recession after its economy was hit by a double whammy of violent street protests and the US-China trade war.Activity contracted by 3.2% in the three months to September as a loss of exports was compounded by a collapse in consumer spending and a loss of revenue from tourists. Continue reading...
Annual growth rate for 19-nation bloc continues steady slowdownFresh evidence of the impact of global trade wars on the eurozone has emerged with official figures revealing growth in the 19-nation single currency bloc was 0.2% in the three months to September.Data from the EU’s statistical agency, Eurostat, showed activity expanded by 0.2% in the latest quarter – unchanged on the three months to June.Gross domestic product (GDP) measures the total value of activity in the economy over a given period of time. Continue reading...