US protectionism raises alarms, underscoring the need for balanced policies as wealthy nations' tariffs can hurt developing economiesTo me, the most beautiful word in the dictionary is tariff," Donald Trump told business leaders in October. It's my favourite word. It needs a public relations firm." Now, with his election victory, Mr Trump's wordssend a shiver through global capitals. Many fear he may pull a curtain across the US economy, locking them out of the world's largest market and cutting off access to US technology. These fears are amplified by last year's contraction in merchandise trade - which was the first such shrinkage at a time when the global economy was growing.However, it's wise to take Mr Trump seriously, not literally. During his last term, he imposed tariffs on more than $400bn in US-China trade and renegotiated the North American free trade agreement (Nafta) in a push to reshore blue-collar jobs. In many ways, JoeBiden continued - and even accelerated - these trends. Mr Trump averaged 144,000 reshored jobs a year; in 2022, Mr Biden reached 364,000. Continue reading...

Official figures show ability to work from home differs greatly across age, job type and education

The economy matters, but the likes of Trump succeed by offering voters revenge for problems both real and imaginedDonald Trump, for the first time, won a majority of the popular vote. He took the US presidency with huge swings in his favour, increasing his share of first-time voters, young voters, black voters and Latino voters. And he gained among voters earning under $100,000, while wealthier voters preferred Harris - a reversal of the class alignments in 2020. Current voting tallies suggest the swing to the Republicans was largely caused by mass abstention among Democrat voters. This result echoes global trends. Trump and his new coalition will now head a loose alliance of far-right governments from India to Hungary, Italy, the Philippines, Argentina, the Netherlands and Israel.The rhythm of far-right successes began with Viktor Orban's landslide in Hungary's 2010 parliamentary election. Since Narendra Modi's victory in the 2014 Indian general election, it has scarcely paused: Trump's first ascent to the White House, the Brexit vote and Rodrigo Duterte's success in the Philippines all took place in 2016. Two years later, Jair Bolsonaro scored an upset in Brazil. Since the pandemic, the Brothers of Italy won the Italian general election in 2022 and Javier Milei took the Argentinian presidency in 2023. For most of this period, Benjamin Netanyahu's Likud has ruled Israel in coalition with far-right parties. Even where it is not in power, the far right is gaining, as in France and Germany. In the long view, the defeat of Trump in 2020 and Bolsonaro in 2022 were predictable oscillations in a general pattern of ascent.Richard Seymour is an author and founding editor of Salvage. His latest book is Disaster Nationalism: The Downfall of Liberal CivilizationDo you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...

US suffered greatest economic losses, report commissioned by International Chamber of Commerce finds, followed by China and IndiaViolent weather cost the world $2tn over the past decade, a report has found, as diplomats descend on the Cop29 climate summit for a tense fight over finance.The analysis of 4,000 climate-related extreme weather events, from flash floods that wash away homes in an instant to slow-burning droughts that ruin farms over years, found economic damages hit $451bn across the past two years alone. Continue reading...

The free market experiment has failed, free trade is out, and populism is rife but it can be defeated if the left can galvanise ideas into a credible planMargaret Thatcher was prime minister and Nigel Lawson her chancellor of the exchequer. Neil Kinnock was leader of the Labour party. The iron curtain separated Europe.Across the Atlantic, Ronald Reagan's second term in the White House was drawing to a close. Donald Trump floated the idea that George Bush might want him as his running mate in the looming US presidential election, an overture Bush described as strange and unbelievable".Trump won because he promised to give voters what they wanted rather than what America's liberal elite thought they ought to want. Continue reading...

Voters across the world have backed any alternative to the people in chargeWhat do the British Conservatives, the New Zealand Labour party, the LDP of Japan and the ANC of South Africa have in common? Defeat. All four led governments that have been pummelled at the polls recently as part of the greatest wave of anti-incumbent voting ever seen. Governments of left and right, radicals and moderates, liberals and nationalists: all are falling.This week the US Democratic party joined the electoral casualty list, bested by the man they ousted four years ago, the past and now future president, Donald Trump. Critics and cheerleaders alike see Trump as an extraordinary figure with a unique appeal. But his triumph is the rule, not the exception. Defeated vice-president Kamala Harris ran ahead of the global trend, even more so in the crucial swing states. But she was swept away nonetheless. Continue reading...

The chancellor's budget may have a small effect on UK interest rates. But US tax cuts and tariffs could have international repercussionsHaving been fairly critical of my (almost) friend Rachel Reeves's approach to her first budget, I wish to put in a word of praise for certain aspects of it before, er, continuing to be critical.The emphasis on devoting more resources to the NHS is long overdue. The new health secretary, Wes Streeting, does no good for the morale of doctors, nurses and patients when he goes on about the NHS being broken". In common with friends and family, I have recently had recourse to medical help, and we have been much impressed by what we have witnessed - not least by the good work of staff from overseas. Continue reading...

The chancellor will make the case for free trade as Labour is warned that it must choose between the United States and the European UnionThe chancellor Rachel Reeves will use a keynote speech this week to promote free and open trade between nations as a cornerstone of UK economic policy, putting the Labour government on direct collision course with president-elect Donald Trump.Reeves will use her first speech at the Mansion House - an annual showpiece for the chancellor - to outline a post-budget plan to go for growth". But as the UK government scrambles to respond to Trump's emphatic victory, and the challenges it poses for Britain on vital issues of economic and foreign policy, the chancellor is expected to be clear that she will take the fight to Washington in defence of free trade. Continue reading...

Donald Trump's US election campaign threat to impose 10% levies on US trading partners could hurt the UK economyOutside the US embassy in London, a steady line of visitors arrive for visa appointments. On the windswept south bank of the Thames, the fortress-like building is not the most welcoming proposition: it stands isolated, a cold glass cube hemmed in by a medieval-style moat.Inside, after Donald Trump's election victory last week, the atmosphere was not much warmer. Having flown in to promote US trade links with Britain, the governor of New Jersey, Phil Murphy, knew his job had just got a lot harder. Continue reading...

The German dream of centrist, stable government has been dashed by geopolitical forces and the cult of balanced budgetsWednesday 6 November was a seismic day in the politics of the west. On one side of the Atlantic, it was confirmed in the early hours of the morning that the hard-right nationalist Donald Trump had been elected president of the US; on the other side, the government running Europe's largest economy - Germany's traffic-light coalition of social democrats, market liberals and greens - collapsed. It could hardly have come at a worse time.The breakdown of the feuding Berlin alliance will leave a political vacuum in Germany for months, just when the EU needs decisive leadership. Instead, the country faces months of introspective electioneering, followed by protracted coalition negotiations, with investment and public spending on hold.Paul Taylor is a senior visiting fellow at the European Policy CentreDo you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...

Rolling coverage of the latest economic and financial news

Cash stops short of hoped-for bazooka option', with critics calling it an accounting exercise' that will not bolster growthChina has announced 10tn yuan in debt support for local governments and other economic measures, but stopped short of the bazooka" stimulus package that many analysts had expected.The fiscal package included raising debt ceilings for local governments by 6tn yuan (646bn) over three years, so they could replace hidden debt, which authorities said stood at 14.3tn yuan by the end of 2023. Continue reading...

There is a strong chance of the president-elect's radical strategy going wrong, with a high risk of rising prices, inflation and interest rates

New modelling finds risk to global economies much worse than previously thought, but group of central banks says even this may be an underestimateThe physical shocks caused by climate breakdown will hit global economic growth by a third, according to a risk assessment by a network of central banks.The rise in the estimated hit to the world's economies as a result of the shocks from flooding, droughts, temperature rises, and mitigating and adapting to extreme weather was the result of new climate modelling published this year. Continue reading...

The president-elect benefited from working-class hostility to a remote elite. Liberals need to reargue their caseYes, we all know it looks terrible. We have heard what Donald Trump has promised. But could there be silver linings to these ominous clouds? The election was two days ago. Tomorrow is another day, and this strange, faulty, thin-skinned but tough-as-nails character is notable for one thing: unpredictability.The essence of Trump is that he is not a politician but an egotistical wheeler-dealer. He is not a strategist, let alone an ideologue. Dealers are judged by their deeds, not their words. They react to circumstance by talking, negotiating, not policymaking. Trump is said by his friends to be aware of the mistakes he made last time round. That he is desperate not to do so again is good news.Simon Jenkins is a Guardian columnist Continue reading...

Presidents are not permitted under the law" to fire Federal Reserve chair or demote governors, Powell insists

Rise in unemployment in low hundreds of thousands as technology creates roles, Tony Blair Institute suggestsArtificial intelligence could displace between 1m and 3m private sector jobs in the UK, though the ultimate rise in unemployment will be in the low hundreds of thousands as growth in the technology also creates new roles, according to Tony Blair's thinktank.Between 60,000 and 275,000 jobs will be displaced every year over a couple of decades at the peak of the disruption, estimates from the Tony Blair Institute (TBI) suggest. Continue reading...

Narratives matter in economics, and we must acknowledge the circumstances the government faces and give credit where dueGiven the tone and content of much of the coverage in the British press, you would be forgiven for thinking that the Labour government's first budget in 14 years was a bust, and that is putting it nicely. Yet this is more than unfair. It obfuscates four important aspects of the budget, sidelines three lessons for the future and undermines today's good news from the Bank of England.In the run-up to the budget on 30 October, I was among those warning that the announcements from the chancellor, Rachel Reeves, would please almost no one" and that they should not be assessed according to their ability to meet all the demands that have been placed on them". Continue reading...

What the decision means for homeowners - and the implications for savings, loans and credit cards

Borrowing costs reduced for second time this year with Fed expected to cut US rates later on Thursday

Returning US president has promised protectionist trade measures, relaxed regulation and cheaper energy for consumers

Rare agreement among forecasters gives 96% chance of today's MPC meeting cutting borrowing costs to 4.75%The Bank of England policymakers are widely expected to cut borrowing costs for businesses and homeowners by reducing official interest rates from 5% to 4.75% when they meet later today.Financial markets are overwhelmingly forecasting that the Bank's nine-strong monetary policy committee (MPC) will reduce rates for a second time when it announces its latest decision at noon. Continue reading...

Chancellor tells Treasury select committee we've now set the envelope for spending for this parliament'Rachel Reeves has committed not to increase taxes at Labour's next budget and said the government would need to live within the means" of her spending plans if public services came under mounting pressure.After announcing the biggest package of tax rises in three decades in last week's budget, the chancellor dismissed suggestions that she would need to find additional money by the spring to repair battered public services. Continue reading...

Single Trade Window designed to reduce friction on imports and exports will be halted until at least 2026 amid cost fearsA key part of the UK's post-Brexit border strategy has been put on pause for more than a year amid government concerns over the cost of implementing the scheme.The introduction of the Single Trade Window (STW), which is designed to reduce friction for traders moving goods in and out of Britain, had already been delayed from late October to January next year, but will now be halted until at least 2026. Continue reading...

Rolling coverage of the latest economic and financial news, as investors pile into Trump trades after US election result

Country has been enjoying historic growth in economy, which has tripled since it started crude oil extraction in 2019Hundreds of thousands of Guyana citizens living at home and abroad will receive a payout of around 370 each after the country announced it was distributing its mind-boggling" oil wealth.The grant of 100,000 Guyanese dollars will be available to any citizen of the South American country over the age of 18 with a valid passport or ID card. Guyanese citizens who normally live abroad will be eligible but must be in Guyana to collect the payment. Continue reading...

Commitment by Mogadishu's largest single lender is latest in series of deals to forgive unsustainable' $4.5bn debtSomalia has announced that more than $1.1bn (860m) of outstanding loans will be cancelled by the US, a sum representing about a quarter of the country's remaining debt.The announcement is the latest in a series of agreements in which Somalia's creditors have committed to forgiving its debt obligations. Continue reading...

Move would create yet another challenge for European carmakers already struggling with falling sales and profits

NIESR warns British economy would be one of the worst affected by protectionist policies

Markets expect his policy package to harm trade and growth but reduce business taxes

This parliament's real battle won't be cultural, it will be over the size of the stateKemi Badenoch was still wooing votes from Conservative members last Wednesday, the day the budget was delivered. Now leader of only 120 MPs, she can do little more than tut over the finance bill. Nevertheless, it's the budget that sets out the great philosophical divide between Ms Badenoch and SirKeir Starmer. It lies not in a particular policy or even a political commitment, but most acutely in a graph. It's an exhibit that has received precious little discussion, yet it represents an ideological battleground that could help shape this parliament.You can find the chart about halfway through the outlook issued by the Office for Budget Responsibility(OBR). Along its X axis are the world's richest economies, ordered by how much they tax, which is a key measure of the size of their state. The countries that levy the least are Ireland, Chile, Switzerland and the US. At the other end are France, Norway, Austria and Finland - these are the biggest states, taking over 40% of GDPintax.Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...

Head of OBR says spending commitment would have materially changed' its forecast on Jeremy Hunt's pre-election budget

Later October half-term break and budget uncertainty also led to lower spending, says industryGrowth in UK retail sales slumped in October, according to industry figures that suggest shoppers have put off spending in anticipation of Black Friday promotions and because of a later school half-term break.Figures from the British Retail Consortium (BRC) show total sales grew by 0.6% year on year in October, significantly weaker than September's and less than half the three-month average growth rate. Continue reading...

Donald Trump has been ahead in betting markets, despite trailing in opinion polls

Live, rolling coverage of business, economics and financial markets as investors reassess bets after some polls suggest Kamala Harris has gained momentumIn Germany the manufacturing recession has been particularly marked - a major problem for the EU considering its massive size.Carmakers in particular have reported difficulties, and the automotive industry's troubles were also behind the fall in confidence from other businesses.The respective rates of contraction remained sharp by historical standards, amid reports from panellists of headwinds to demand from economic and political uncertainty, high interest rates and troubles in the automotive sector.Overall, the manufacturing PMI remains downbeat. It has underestimated growth in manufacturing in recent quarters so we doubt industrial production will have fallen as much as it suggests in Q4, but we look for a renewed fall in output nonetheless. By country, weakness is concentrated in GermanyEurope's manufacturing sector stands at a critical juncture, balancing newfound momentum in the south with deepening challenges in the north. Traditional powerhouses like France and Germany continue to experience declines, as northern Europe faces challenges to reclaim its competitive edge. Also, Italy is seeing output falling at a faster pace than in September.Spain is structurally on a different outlook. It is in solid expansion territory and is bumping up the overall number with its healthy order book. Greece - the second country with a PMI above 50 - is hiring and expanding output, but at the same time, is seeing new orders declining. Continue reading...

US economists and everyday Americans seem to live in two different realities - this disconnect could ultimately decide who takes the White HouseThe last few months have been filled with great news, according to US economists. Inflation is a hair's breadth from pre-pandemic levels, unemployment is close to a 50-year low. The stock market keeps hitting record highs. The Federal Reserve cut interest rates last month, the first time since 2020. Some economists have gone so far as to say that the economy we're living in is one of the best seen in decades.And yet, as the US heads to the polls, many Americans believe the economy stinks. It's a disconnect that could ultimately decide who takes the White House. Continue reading...

While some were optimistic about stabilizing costs, others told the Guardian high prices continue to squeeze financesExperts seem to agree the US economy has been on the upswing in 2024. A wave of new jobs, robust consumer spending, lower interest rates, falling inflation, impressive levels of business investment and record Wall Street highs has made the US economy the envy of the world".But many Americans appear to feel very little of that. Continue reading...

Pilot scheme said to have groundbreaking' potential for the hospitality industryOne thousand workers in the UK will get extra time off with no loss of pay in the first official pilot by the four-day week campaign under the Labour government.The British Society for Immunology and Crate Brewery in Hackney, east London, are among the businesses to have joined the latest trial, which is being led by the 4 Day Week Campaign, as it launches on Monday. Continue reading...

A dip in prosperity may not bode well for Harris, although whoever sits in the White House may not have much impactPennsylvania has been bombarded with political ads as Kamala Harris and Donald Trump duke it out for my state: the vital swing state of Pennsylvania. As we finally head to the polls, one of the - if not the biggest - issues on most small-business owners' minds will be their pocketbooks.So how are businesses and their employees doing so far in Pennsylvania? A fallback in economic prosperity may not bode well for the Harris campaign. And unfortunately, that seems to be what has happened in the past year. Continue reading...

The Fed is likely to cut base rates this month - but its decision will come the day after an explosive US electionThere could be recriminations, protest marches and even social unrest on US city streets when Federal Reserve officials meet at their Washington HQ a day after the election of a new president on 5 November.The election of Kamala Harris could bring supporters of Donald Trump on to the streets, while a victory for Trump could provoke widespread anger and condemnation among Democrats. Continue reading...

A second Trump term will threaten everything from freedom of the press and gun safety to foreign policy and climate change. The impact will be felt in many aspects of American life and across the worldIf Donald Trump returns to the White House for a second term as president, the impact will be felt in many aspects of American life and also across the world.On almost every issue of domestic US policy - from immigration to the environment to gun laws to LGBTQ+ rights - Trump has tacked far to the right of the American mainstream. Continue reading...

West's dominance is being challenged, with Brics summit showing emerging markets are unwilling to bow to pressure

The Office for Budget Responsibility's extreme conservatism means it has woefully underestimated the impact of Labour's public spending plansThere is a consensus among economists that a precondition for higher growth is higher levels of investment, and that one of the most certain ways of lifting investment levels is for the state toprovide a lead.Whether European growth in the 1950s, Japan's astounding national income-doubling plan in the 1960s or the dynamic growth of the Asian tigers in the 1970s and 80s, it has been the same story of higher public investment triggering a step change in economic growth. In the US, vast increases in investment spending on defence have induced growth and the tech revolution, given extra economic impetus by President Joe Biden's infrastructure and R&D spending. It was true of Britain in the 1950s and 1960s too, when public investment averaged more than 3% of GDP. Continue reading...

Rachel Reeves throws down budget gauntlet to new Tory chief as party's first black leader is congratulated on winLabour has thrown down an immediate challenge to the new Tory leader, Kemi Badenoch, to back Rachel Reeves's budget plans for big increases in tax, spending and borrowing, as a huge political divide threatened to open up over economic policy and the future of public services.All the main party leaders congratulated Badenoch on Saturday on becoming the first black leader of a main UK party after she stormed to victory over former immigration minister Robert Jenrick with 56.5% of the vote among Conservative party members. Continue reading...

Rachel Reeves's spending plans signal a welcome break with the past and underline the scale of the challenges facing BritainThe first Labour budget in 14years introduced some much-needed honesty on the requirement for higher taxes and borrowing in an ageing society characterised by sluggish economic growth and a deteriorating public realm. This allowed Rachel Reeves to earmark essential resources for schools and hospitals, and to increase levels of public investment to secure future growth. That this budget had no hope of being a magic bullet for Britain's economic woes, however, is no reflection of Reeves's lack of ambition, but a sign of just how bad the problems she inherited are.The Conservatives' approach to the economy has made the longstanding issues that have for decades plagued the UK worse. Through cutting back the state while doling out tax cuts to affluent households, then pursuing a hard Brexit, successive Conservative prime ministers have caused huge damage to the economy in pursuit of ideology and worsened the impact of the unenviable economic headwinds of recent years. In his last budget as chancellor, Jeremy Hunt offered up a 23bn cut in national insurance that the UK could not afford, paid for by baking in unachievable spending cuts after the July election: the height of fiscal irresponsibility. Kemi Badenoch, today elected leader of the Conservative party, will no doubt continue to cleave to a wrong-headed predilection for a small state. Continue reading...

The now-outgoing president inherited a US economy battered by Covid and a looming inflation crisisJoe Biden promised a recovery for everybody" as he prepared to take over an economy ravaged by the pandemic four years ago. Few predicted what would follow.One of two candidates - Kamala Harris, his vice-president, and Donald Trump, his predecessor - will succeed Biden in January. As millions prepare to elect the next US president, here is how the world's largest economy fared under Biden. Continue reading...

Anger over the cost of living is Trump's biggest weapon, but health and education should be winning cards for the DemocratsThere are themes playing out in the US presidential election that are familiar to most people across the developed world.The lack of affordable housing. Rocketing home insurance and childcare costs. How expensive owning and running a car has become. Continue reading...

I know first-hand that secure work and a secure home are the foundations of a better life for ordinary Britons. That defines our missionFor 14 years, the Conservatives failed working people by choosing austerity and decline. As a result, public services are crumbling and working people have paid the price. Though we come from different generations and grew up in different parts of Britain, the prime minister and I both saw how politics could make a difference to people from working-class backgrounds like ours. But the country we inherited in July had seen those opportunities denied to too many working families. That's the Britain we are determined to change.This week we turned the tide, choosing investment over decline. The budget charted a course for national renewal, fixing the foundations of our country to deliver the change Labour promised. It is a budget for working people, by a government for working people.Angela Rayner is the deputy prime ministerDo you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...

Warning from Institute of Directors comes as ratings agency Moody's says budget will do little to improve growth

Average monthly job gains in 2024 had been about 200,000, but new figures affected by Boeing strike and hurricanesThe US added just 12,000 jobs in October, the last snapshot of the employment market before election day, in a report heavily affected by the strike at Boeing and two recent hurricanes.The unemployment rate was unchanged at 4.1%. Continue reading...