Economics | The Guardian

Greg Jericho asks three experts what should be done to save the country from recessionWith the unemployment rate rising from 5.0% at the start of the year to 5.3% in August, and the latest GDP figures showing slow growth and the economy going backwards when accounting for population increase, talk is very quickly turning to what can be (or should) be done.There are two policy arms of the economy – fiscal and monetary. The government controls the fiscal side through spending and taxes; the Reserve Bank controls the monetary side.By choosing to undershoot the inflation target, the RBA has damaged the credibility not just of the target, but monetary policy itselfRelated: The global economy is slowing down. What can governments do about it?Reinstate the Labor party’s 2010 agreement that subordinated the financial stability objective to the inflation target;Have Lowe front a press conference after each CPI release to explain the outcome and underscore the RBA’s ownership of inflation;Make Lowe’s reappointment conditional on inflation averaging between 2-3% over the remainder of his term.It’s not a lack of ammunition that’s holding the RBA back, but an unwillingness to use that ammunitionRelated: A decade after Lehman fell, the global economy is not better. It’s worseImmediately increase the rate of Newstart by at least $75 per week;Bring forward stage two of the tax cuts legislated in July;Legislate to reverse the cuts to penalty rates across all awards;Abolish the cap on APS salaries and provide pay rises of at least 3% to federal employees.The RBA should transition to QE as soon as the level of the cash rate becomes a constraint on its ability to meet its mandateRelated: Wealth inequality is soaring – here are the 10 reasons why it’s happening | Dominic FrisbyRelated: Test of nerve for markets as 10 years of cheap money come to an endThere is still much more the Reserve Bank could do to improve transparency and accountability Continue reading...

As the former PM publishes his memoirs, Patrick Wintour tells Anushka Asthana that Cameron’s pursuit of austerity and decision to call an EU referendum sowed the seeds of his demise. Plus, in opinion, George Monbiot on the global climate strikeDavid Cameron announced his intention to resign as prime minister the morning after Britain voted to leave the EU in a referendum he had decided to hold and then lost. It came after years of austerity, his government’s response to the global financial crisis, in which huge cuts to local services had hit communities hard.The Guardian’s diplomatic editor, Patrick Wintour, tells Anushka Asthana that as political editor at the time, he watched Cameron’s rise to the leadership and then into Downing Street. But his premiership was to be defined by those two big crises: the 2008 economic crash and Brexit. As Cameron publishes his memoirs, the consequences of the decisions he made as prime minister are still playing out in real time. Continue reading...

Readers offer their views on how governments and citizens can help to reduce humans’ environmental impactGreta Thunberg, the young Swedish climate activist, has tapped into a global passion for change from the outdated, exploitative system to a holistic and responsible one (Thunberg tells US Congress: ‘I want you to take real action on climate’, 19 September). The industrial paradigm separates materials from their histories. Forests may have been torn down, lakes polluted, people and animals displaced, but the consumer doesn’t know this. Society has taught us that it is essential to have the latest product and not to question where it came from or who was hurt in the process. The need for change has to be now.Sometimes it is hard to know what to do. People have been led by consumerism for so long that it is difficult to see that there is another way, but there are many practical things we can do, such as: don’t fly unless absolutely necessary; eat less meat and dairy; plant a tree; create a garden with shrubs and flowers that will attract wildlife; line-dry clothes; unplug electronic devices; turn lights off when not needed; drive less; grow your own vegetables or eat local produce; don’t buy fast fashion; ask where products have come from. Continue reading...

The evidence suggests that central government must boost the legal and fiscal autonomy of local authorities if urban regeneration efforts are to succeed, writes Robin HambletonThanks to Tony Naylor for his perspicacious analysis of the big challenges facing those trying to regenerate town and city centres in Britain (High streets can be reborn. But developers are in the way, 14 September). He puts his finger on the central issue when he states that: “The remote coalition of global property management, pension and investment funds that owns most shopping precincts and malls is, at best, distantly concerned with the local population.”In my recent international book Leading the Inclusive City (Policy Press), I argue that the most important divide facing modern democracies is the growing conflict between place-less and place-based power. By place-less power, I mean the exercise of power by decision-makers who are unconcerned by the impact of their decisions on communities living in particular places. Globalisation has meant their power has skyrocketed in the last 30 years. This disconnect between power and place largely explains why many towns have been “left behind”. Continue reading...

Perhaps it is time the public start questioning what makes their taxi ride, package delivery, plumber or gym so much cheaper than it was only a few years ago, suggests James Hope-ThompsonHaving waited 27 months for an employment tribunal preliminary hearing for non-payment of holiday pay and worker status, I cannot thank the Resolution Foundation enough for highlighting this and other issues related to precarious employment (Million UK workers not receiving holiday pay, says report, 16 September).For too long people have perceived the “gig economy” as something limited to apps and transportation, but it extends to carers, fitness workers, football club cleaners and many more. When overseas clothing sweatshops came to the fore several years ago the public turned their backs on cheap clothing that wasn’t responsibly produced; similarly more recently with fair trade food. Perhaps it is time the public started questioning what makes their taxi ride, package delivery, plumber or gym so much cheaper than it was only a few years ago. Perhaps those companies that play by the rules and abide by the law can start fighting unfair competition through a “fair employer” accreditation scheme backed by the government and the sustainable investing industry.

The prime minister’s walkabouts were meant to be a pre-election charm offensive. Instead, he has been confronted by people who are sick of austerityLife is just too short, Siobhan McArdle said, to be a chief executive in the NHS right now. In an unusually blunt resignation letter earlier this month, the outgoing leader of the troubled South Tees hospitals foundation trust said her hospitals had delivered millions in so-called “efficiency savings”, but now the cupboard was bare. The trust had already been severely criticised by regulators for a bed shortage that was hurting patients; it couldn’t, she suggested, keep cutting without care suffering. It’s rare for a hospital boss to throw in the towel so publicly, but many in the NHS will understand where she was coming from.The number of patients waiting for NHS surgery is now at its highest since records began in 2007. One in 11 NHS posts are lying vacant as staff quit and aren’t replaced. If we didn’t have a winter crisis last year, or not in the classic sense of patients piling up in corridors, that’s arguably because what was once an acute seasonal shortage of beds has become a chronic one rumbling all year long. For months all this has rather puzzlingly failed to get much political traction. But now, thanks to the father of a very sick baby girl, it has.The angry father – Omar Salem – did the most dangerous thing a voter can do to a politician, which is to speak his mindRelated: No-deal Brexit will cut 3% off UK economic growth, warns OECD Continue reading...

UK central bank votes to keep interest rates at 0.75%, and warns that Brexit is making economic data volatile

Bank of England leaves rates on hold but signals that could change in near futureBrexit uncertainty and the slowdown in global growth has weakened the economy and made an interest rate cut more likely, the Bank of England has said.The central bank said interest rates would remain at 0.75% after a unanimous vote of the monetary policy committee (MPC) on Thursday, but it signalled that further Brexit uncertainty amid a US-China tariff war could warrant a rate cut in the near future.Related: Bank of England warns of one in three chance of Brexit recession Continue reading...

Group forecasts 2020 recession just as global economy starts downward trendA no-deal Brexit will slice almost 3% from the UK economic growth over the next three years compared with just 0.6% from the rest of the EU, according to the latest health check of the global economy by the Organisation for Economic Co-operation and Development.Amid concerns that all developed countries will experience slower growth next year, the Paris-based club for the world’s 35 richest states warned that the UK would take the biggest hit if the government failed to secure an agreement with the EU.The Organisation for Economic Co-operation and Development is an intergovernmental organisation formed in 1961 to work on global trade and the world economy. It has 36 member countries.Related: Global economic growth has peaked, warns OECD Continue reading...

The US Fed votes to cut interest rates for the second time this year, but president Trump wants more

Tories’ Liz Truss expects UK to secure two-way trade and visa-free work deals after BrexitFree movement between Australia and the UK would be explored by the government in “post-Brexit” business talks, Liz Truss, the international trade secretary, has announced.Yesterday, while on a trip to Australia, Truss told journalists in Canberra that securing a trade deal was an “absolute priority” after Britain left the EU. She believed an arrangement would take months rather than years to complete.Related: Boris Johnson given two-week EU deadline for Irish backstop plan Continue reading...

Companies taking a wait-and-see approach to raising prices before Brexit, say economistsUK inflation fell to its lowest level in almost three years after the end of summer sales kept clothing prices down, easing pressure on consumers before the Brexit deadline.The annual rate dipped to 1.7% in August after a 2.1% increase in July, according to the Office for National Statistics, taking inflation down to the lowest level since December 2016. Continue reading...

Plan to cut interest rates and continue QE is an exchange-rate policy in all but nameOn 12 September, the European Central Bank decided to launch yet another asset-purchase programme, with plans to buy €20bn ($22bn) in new securities per month for an indefinite period of time, using the same structure as it has in the past. The decision was not made unanimously: the German, French, Dutch, Austrian, and Estonian members of the ECB council have all voiced fierce opposition to further quantitative easing (QE).ECB president Mario Draghi claims that the majority in favour of further loosening was so large that it was unnecessary even to count the votes. Never mind that the countries opposing the decision hold 56% of the ECB’s paid-in equity capital and account for 60% of eurozone output. Counting their compatriots on the ECB governing council, however, they have only seven out of 25 potential votes (subject to a rotating limitation). Draghi did have a majority, then, but it represented a very clear minority of the ECB’s liable capital. This raises considerable concerns about the governing council’s decision-making process. Continue reading...

Committee damns government for failing to encourage investment and boost productivityThe UK is lagging behind the world’s other advanced economies in the shift to robots and automation in the workplace – putting jobs, businesses and the prosperity of whole regions at risk, according to an influential group of MPs.MPs on the business, energy and industrial strategy (BEIS) committee said UK firms were losing out to competitors in the rest of the G7 after the government cut support for companies and failed to encourage investment.Productivity is an economic measure of the efficiency of a workforce. It typically measures the level of output per hour of work, or per worker. Continue reading...

Thinktank challenges official statistics claiming average citizen is £128 poorer than a decade agoBritons are £128 a year worse off on average than they were in 2008, according to a report that reveals household incomes were hit harder in the wake of the financial crash than official figures have revealed.The New Economics Foundation said figures used to calculate GDP, which is adjusted to take account of rising prices, failed to include essential items that affected the cost of living over the last 10 years.Related: Has the age of austerity really come to an end? Continue reading...

An economy rooted in precarity means county lines will continue to be seen as part of a way out of poverty, writes Nick Moss, while Chris Hughes says the Crown Prosecution Service should target the adults who recruit children to sell drugsYour editorial on county lines states, rightly, that “there is no point in pretending that there is any quick fix” (Police will not be able to cut off the county lines drug dealers on their own, 17 September). However, all the solutions put forward in relation to the phenomenon – better funding of youth services, placing youth services on a statutory footing etc – evade the fundamental point: this is a business model that works.For those higher up the chain it is low-risk and lucrative. For users, it makes drugs more easily accessible, more cheaply. For the street dealers, we have to ask whether, in an economy predicated on low-paid, precarious employment, any other option is available that can put £250 a day into their hands. Continue reading...

The left across the world is embracing the idea that soaring wealth inequality can be tackled by giving employees a stake in their companies – and a say over the profits and decisions of their employersThe rich really are different from you. While the pall of the financial crisis still hangs over the ordinary worker, whose income is lower today than in 2008, the share of pre-tax income going to the top 0.1% of UK adults, the 53,000 who earn half a million pounds a year, is approaching the level just before the crash a decade ago. How have the rich done it? One reason is the “light touch” nature of UK company regulation. Another is that they can muster armies of lawyers and accountants to help them reduce their tax bills. A third is that they extract a great deal of wealth from their ownership and control of companies. To see how these factors might coalesce it is instructive to note that in 2017, to avoid paying a new higher rate of tax, 100 extremely wealthy individuals withdrew dividends averaging £30m each from their companies to save a total of £100m before the change took effect.The French economist Thomas Piketty presented a simple explanation for rising inequality. He argued that wealth generally grows faster than the economy, and it tended to become concentrated, as more wealth brings more opportunities to save and invest. Tackling disparities in power and capital has become the leitmotif of the left globally. This is a very good thing. The chosen method is often some form of collective action by the state on behalf of workers. France’s president, Emmanuel Macron, has just pushed through a law for mandatory profit-sharing schemes for employees in firms with more than 50 workers. In the US, Democratic presidential hopefuls Bernie Sanders and Elizabeth Warren propose to tackle soaring wealth inequality by giving employees a stake in their companies – and increased authority over the profits and decisions made by their employers. Continue reading...

Saudi Arabia is reportedly making better-than-expected progress recovering from the drone attack on its huge crude processing facility in Abqaiq

Unemployment rate tells a different story about the economy when race is considered, even when job numbers are strong“What I’ve done for African Americans in two and a half years, no president has been able to do anything like it,” Donald Trump boasted in August, the latest in a series of statements in which he has claimed to be the best president for black Americans in history.Bahiyyah Dixon, 36, of Newark, New Jersey, isn’t feeling it. Even during a period of historic economic growth, the numbers are stacked most heavily against black Americans, like Dixon. Continue reading...

Interest rate cuts may be necessary on top of central bank’s recent move to ease lending restrictionsGrowth in China’s industrial production slumped last month to its weakest rate in more than 17 years as US import tariffs and softening domestic demand took their toll on factory owners.Measures of retail sales and investment also reinforced concerns that the world’s second largest economy would need to make further cuts to interest rates to boost growth after moves last week by its central bank to ease lending restrictions were criticised by some analysts as “too little, too late”.Related: If China's economy crashes Australia will be hit hard, report says Continue reading...

An ageing population has left 83% of businesses fighting to find workers with the right skills, a problem that is slated to worsenFor someone who makes “job-killing robots” Tony Nighswander has an ironic problem. The US jobs market has not been this hot for 50 years and the president of APT Manufacturing Solutions, an Ohio-based company that specializes in robotic equipment, can’t find enough workers.With American unemployment at lows last seen around the time of the first lunar landing, his clients are turning to APT and its robots to fill the positions they can’t find people for. But he doesn’t dare take on more salespeople because he’s not sure he can hire enough workers to get the robots running.The US has now added jobs every month for a record 107 months in a row. There were 7.35m job openings in the US in June, 1.3 jobs for every unemployed person Continue reading...

Business spending due to decline by 1.5% this year, fuelled by Brexit uncertaintyBrexit uncertainty and a global economic slowdown amid the US-China trade war has set Britain on course for the most prolonged slump in business investment in 17 years, according to the British Chambers of Commerce (BCC).Setting Britain on course for weaker economic growth in future, the lobby group said business spending in the UK was due to decline by 1.5% in 2019 and by 0.1% next year as companies put their investment plans on ice amid the global political turmoil. Continue reading...

When great power comes with great irresponsibilityThe publication of extracts from David Cameron’s memoirs casts a chill light on the flaws of the British political system. The interest lies not in the detail of who stabbed whose back or which lies Boris Johnson told and when. By releasing only extracts, Mr Cameron is able to control the narrative for a few days. The full verdict must wait until the whole book is out. But a broad outline already seems clear.Mr Cameron is upper-class – a distant relation of the Queen. Yet he won two elections in a country which was supposed to be a “classless society”. His father was a stockbroker who sent his clever son to Eton. From there, he went to Oxford where Mr Cameron was a member of a posh dining club. He was also smart, gaining a first-class degree. His poshness never held him back in politics, neither did the Notting Hill set he cultivated. Mr Cameron’s right-hand man was George Osborne, the son of a baronet. At a time of austerity and economic gloom, it might have been considered dangerous to look out of touch. His political skill was to translate his personal brand into a guarantee that his was a new, moderate Tory party.This editorial was amended on 15 September 2019. The original version of this editorial posted online fell far short of our standards. It has now been amended, and we apologise completely. Continue reading...

Financial sector is rattled by John McDonnell’s support for an FTT that would raise about £7bn a yearA comprehensive tax on financial transactions once seemed like a pipe dream but is now only a few months and a general election away.When asked at an event last week if he would support a new plan that would raise an estimated £7bn a year for the exchequer, the shadow chancellor, John McDonnell, had a one-word answer: yes. The proposals were unchallengeable, he said.More churn has meant more short-termism Continue reading...

Small businesses aren’t listening to the recession talk as of late – they’re continuing to invest, grow and hire at historically high levelsThere’s been a lot of talk of recession lately but small businesses, for the most part, don’t seem to be listening.That’s the conclusion from the National Federation of Independent Business (NFIB). The business group’s most recent small business optimism index, released Tuesday, fell slightly. But don’t let that fool you. The index – which has been measured quarterly since 1973 and monthly since 1986 – remains extremely strong, coming in among the top 15% of its historical levels.Related: It's now easier than ever for US small businesses to go bankrupt | Gene Marks Continue reading...

Energy network companies are under scrutiny after last month’s outage, the worst of its kind in a decadeThere is never a good time for a blackout, but for Britain’s energy companies the timing of last month’s power failure could scarcely have been worse.The best that the owners of the UK’s energy pipes and wires can expect in the coming years is a tighter squeeze on their deflated profits by the industry regulator. A Labour government could support nationalisation. In the meantime, investors are turning their backs on energy network companies.Why did multiple failures cascade through the system following a single lightning strike? Continue reading...

Retirement benefits are indeed declining, and funds are in deficit. But those on zero-hour jobs at universities have it worseBritain’s university sector is a jewel in the nation’s crown. It is a world leader in research, generates £20bn in export revenues and is credited with playing a big part in raising the productivity of the UK’s workforce during a period of rapid expansion in the 1990s and 2000s.So successful have universities been in attracting students – even in the teeth of a huge rise in course fees – that they have managed to paper over deep cracks in their finances.The truth is, the boat marked 'guaranteed pensions' has sailed for all but government employees Continue reading...

They turn savings into an income for life – but demand has fallen sharplyThis week pension annuities collapsed to an all-time low. So are they now a pointless purchase?It is a product that turns your pension savings into an income for life, but demand has fallen off a cliff since the government introduced a range of “pension freedoms” in 2015 that meant people no longer had to take one out. Continue reading...

Across the country, imaginative projects are increasing footfall. Yet without radical intervention, they can only do so muchAnyone who has walked down a British high street recently will not be surprised by the latest news on their dire state. A report by the Local Data Company and PricewaterhouseCoopers reveals that chain-store closures are at their highest level since their audit began in 2010. On Britain’s top 500 high streets, 1,234 shops shut in the first half of 2019.Related: Retailers call for action as high street store closures soar Continue reading...

Rolling coverage of the latest economic and financial news, the LSE rejects proposed merger with HKEX

Social divisions cause stress, anxiety and doubts about self-worth, write Richard Wilkinson, Kate Pickett and Wanda Wyporska, while Nicholas Falk believes housing wealth is at the root of the problemWe welcome Richard Partington’s article (How inequality is growing worldwide, Journal, 9 September). The sense of being “left behind” contributes, as he says, to political polarisation – but that is a symptom of the many wider effects of inequality which research since the 1970s has established.Most fundamentally, inequality is socially divisive, making status more important and strengthening the view that some people are worth more than others. Continue reading...

Finance minister says governments’ monetary sovereignty could be at riskFrance has said it will block the development of Facebook’s Libra in Europe, dealing the cryptocurrency a fresh blow.The French finance minister, Bruno Le Maire, said plans for Libra could not move ahead until concerns over consumer risk and governments’ monetary sovereignty were addressed.Related: What is Libra? All you need to know about Facebook's new cryptocurrencyRelated: The Guardian view on Facebook’s Libra: funny money | Editorial Continue reading...

European Central Bank has voted to restart its QE programme, and hit banks with deeper negative interest rates to make them lend

Weekly shop could be hit if chaos predicted in leaked government documents occurs

Mario Draghi says bank will reboot quantitative easing in month Lagarde succeeds himThe European Central Bank has announced a fresh stimulus package in an attempt to prevent the fragile eurozone economy from grinding to a halt, with an interest rate cut and plans to pump €20bn (£19bn) a month into the financial markets.In one of his final acts in his ECB presidency, before Christine Lagarde takes charge in November, Mario Draghi said governments across the eurozone needed to take greater steps to reboot growth by ramping up public spending or cutting taxes. Continue reading...

The separation of monetary and fiscal policy serves the neoliberal status quo. It won’t survive the next crashIndependent central banks were once all the rage. Taking decisions over interest rates and handing them to technocrats was seen as a sensible way of preventing politicians from trying to buy votes with cheap money. They couldn’t be trusted to keep inflation under control, but central banks could.Related: Trump raises pressure on Federal Reserve to cut interest rates Continue reading...

Labour-commissioned report advocates sector-by-sector approach to reducing hoursA French-style cap on the length of the working week has been rejected by a study, commissioned by the Labour party, into ways of giving employees more leisure time.The report, by the cross-bench peer Robert Skidelsky, found a blanket limit on working hours was unrealistic and undesirable, and instead proposed a sector-by-sector approach.Related: Longer working hours do not mean higher profits, say economists Continue reading...

Rolling coverage of the latest economic and financial news

US central bank risks reputation with Americans if it pulls its punches with the White HouseWilliam Dudley, the immediate past president of the Federal Reserve Bank of New York, recently stirred up a hornet’s nest when he called for the Fed to consider the impact of its policies on the 2020 presidential election. In fact, Dudley performed a valuable public service by observing that Fed policy can influence politics, sometimes with profound implications for the course of the US. But that doesn’t mean his recommendations were on target.Dudley’s logic was straightforward. If the Fed cuts interest rates in response to Donald Trump’s disruptive trade policy actions, the president may be encouraged to resort to more of the same. Trump believes that the US and China are locked in a trade war to the death. But he has acknowledged that the stock market reacts negatively to his tariff threats, that trade-related uncertainty weakens growth and that this damages his re-election prospects.Related: Argentina's economic crisis is the result of avoidable mistakes Continue reading...

The special election is taking place in North Carolina’s ninth congressional district, which Trump won by 12 points in 2016

Government urged to step in over crisis that has cost tens of thousands of jobsRetailers and unions are calling for urgent government action to help struggling high streets as new data shows the number of shops, pubs and restaurants lying empty is rising at the fastest pace in nearly a decade.About 16 stores closed their doors every day in the first half of 2019 while only nine opened, resulting in a net decline of 1,234 chain stores on Britain’s top 500 high streets according to analysis by PricewaterhouseCoopers (PwC) and high street analysts the Local Data Company (LDC).What’s the problem? Continue reading...

There is no good time to be leaving the EU but this might be the worst – as a failure to learn the lessons of the 2008 crash leaves the country exposed to another downturnThere is more than a little truth in the idea that those who do not learn from history are condemned to repeat it. The global financial crisis was meant to lead to an economic and political reckoning for neoliberals carried away with their own ideology. They made all sorts of unrealistic promises that even a brief reflection would have shattered. Yet more than a decade on, the reckoning is far from over. This is especially true in the United Kingdom, whose prime minister peddles a sunny optimism in the merits of splendid isolation to fuel his Brexit fantasies. History ought to be a protection against this stripe of reckless utopianism. Yet in a world of instant headlines and short-term hits, who has time to dwell on the inconvenient truths? Still, dwell we must. David Blanchflower, the US-based economist, points out that thanks to a short-sighted austerity policy this has been the slowest economic recovery for 300 years. While politicians trumpet near-record levels of unemployment and wage growth, they fail to mention that the latest figures show that average earnings, when adjusted for inflation, stand at £502 a week in total pay, £23 lower than in February 2008.There’s a tendency to put the best possible spin on GDP data, despite this being notoriously difficult to forecast. This week it was reported that the UK’s economy grew faster than expected in July, with breathless reporting that despite earlier concerns there was now only a 10% chance of recession. Yet in 2008 the forecasts for GDP were all of rosy growth in the UK. It was only a year later that they were revised down to show what was obvious: that Britain was in a slump. Crashing a car because you were looking backwards rather than forwards is no excuse. Professor Blanchflower became, briefly, a household name a decade ago. He sat on the Bank of England’s monetary policy committee and argued that the US economy in April 2008 was in recession and the UK was about to go into one. To alleviate the pain, the economist argued for swift and large rate cuts. For his troubles he was called “bonkers”. He told his fellow economists at the Bank that they were “fiddling while Rome burns”. They fiddled; the UK economy almost burned down. Continue reading...

Hiring eases in three months to July, showing stress placed on economy by BrexitPay growth for workers in Britain has accelerated at the fastest annual rate in more than a decade, despite cracks emerging in the jobs market as employers hold off against hiring new staff ahead of Brexit.Workers’ pay, including bonuses, picked up to 4% in the three months to July, compared with the same period a year earlier, marking the fastest average wage growth since mid-2008.Related: KPMG predicts no-deal Brexit recession in 2020 Continue reading...

The IMF and others must play a part in preventing another debt defaultInvestors and economic observers have begun to ask the same question that I posed in an article published 18 years ago: “Who lost Argentina?” In late 2001, the country was in the grips of an intensifying blame game, and would soon default on its debt obligations, fall into a deep recession, and suffer a lasting blow to its international credibility. This time around, many of the same contenders for the roles of victim and accuser are back, but others have joined them. Intentionally or not, all are reprising an avoidable tragedy.After a poor primary-election outcome, Argentinian president Mauricio Macri finds himself running for another term under economic and financial conditions that he promised would never return. The country has imposed capital controls and announced a re-profiling of its debt payments. Its sovereign debt has been downgraded deeper into junk territory by Moody’s, and to selective default by Standard & Poor’s. A deep recession is under way, inflation is very high, and an increase in poverty is sure to follow.Related: Events, dear boy, events: how politics is making markets volatile Continue reading...

The latest UK labour market statistics show that fewer jobs are being created, but the unemployment rate hasn’t been lower since 1974

French economist’s Capital and Ideology expands on themes in Capital in the 21st Century, which sold 2m copiesSix years after being catapulted to fame with a blockbuster about the concentration of wealth, the French economist Thomas Piketty has returned with an epic new book on capitalism.Abiding by the rule that every bestseller demands a follow-up, Capital and Ideology expands on the themes sketched out in Capital in the 21st Century, which sold 2m copies worldwide after its publication in 2013.Related: Capital in the Twenty-first Century by Thomas Piketty – reviewRelated: Thomas Piketty's Capital: everything you need to know about the surprise bestseller Continue reading...

UK economy didn’t post any growth in the last quarter, but GDP did pick up in July alone

The US needs more immigrants to maintain current levels of economic growth and welfare provision – but that doesn’t mean unlimited migrationThe idea of open borders underpins many of the American left’s current stances on immigration. Although this isn’t always stated explicitly, it explains both the vehement opposition to Trump’s proposed wall on the border with Mexico (whose construction actually began under Bill Clinton) and the insistence on rolling back regulation on immigration flows.Yet this is a weak position, for at least two reasons. First, states presuppose borders. Failing to control borders is not an immigration policy, but the lack of one. It’s also a position likely to reinforce the already widespread perception that immigration flows are “out of control”.Carlo Invernizzi-Accetti is Associate Professor of political science at the City University of New York – City College Continue reading...

Country avoids technical recession – but GDP is stagnant across three-month periodThe risks of the UK sliding into its first recession in a decade have receded after a stronger-than-expected and across-the-board 0.3% increase in activity in July.Data from the Office for National Statistics showed that after a dismal spring and early summer all sectors of the economy registered growth in the third quarter’s first month.Related: Brexit recession fears ease as UK returns to growth in July - business live Continue reading...