Low earners seven times more likely to work in sectors worst hit by shutdown, study finds

A new economics paper suggests a red-amber-green solution to safely ease us out of coronavirus restrictions

Boris Johnson has shown a woeful lack of responsibility as the Covid-19 pandemic has escalated

Economic hardship is blighting some more quickly than others

Coronavirus has changed Britain’s social and political orthodoxies. But not every crisis results in a revolutionAs a classical scholar, our prime minister will be all too aware of some uncanny parallels between the onset of coronavirus and the plague that beset Athens in 430BC.The immortal historian Thucydides wrote: “At the beginning the doctors were quite incapable of treating the disease because of their ignorance of the right methods … In fact, mortality among the doctors was the highest of all since they came more frequently in contact with the sick.”The end of capitalism? I doubt it. The Tories suddenly becoming fully paid-up Keynesians? For how long, I wonder Continue reading...

The new ‘Cbils’ scheme is much improved. But many of its shortcomings could have been identified at the startBanks are wicked and Rishi Sunak walks on water. That, at least, was the narrative that prevailed until the end of last week. The dashing new chancellor, the cabinet star of the coronavirus moment, had assembled the Treasury’s armoury to provide lending to British businesses on unprecedented scale. It was only the damn banks that were stopping the cash reaching intended recipients.This storyline now looks wrong. Sunak and the Treasury’s “further action”, announced on Thursday night to support struggling British firms, was not a mere tweak. It was a sweeping redesign of a lending scheme that had glaring flaws.Some banks were asking for guarantees at launch; some weren’t. No wonder borrowers were angry Continue reading...

Chaos in response to Covid-19 is no surprise. Nor is the unscrupulous operators’ pursuit of profit and political advantage

As mayor of Tehran I have seen lives lost as a result of medical shortages. This is no time for vindictive politics• Coronavirus latest updates

Live coverage as American payrolls data shows big rise in unemployment, after composite PMI data shows UK business activity sunk to a record low in March following the Covid-19 lockdown

The coronavirus crisis is causing catastrophic levels of joblessness but the damage will not only be economic

Blame for the crash | MPs’ votes on pay rises for nurses and themselves | Beards and PPE for doctors | Feast or Famine? | Key worker Steve BellI agree with Larry Elliott (Blaming Labour won’t work this time – the Tories will have to own this crisis, 3 April) that the true villains of the 2008 financial crash were never punished, and that their misdeeds indirectly resulted in our being unprepared for the current pandemic. I suggest we all open our windows this evening and boo for the bankers.

Coronavirus fuelling faster collapse than 1930s, warns ex-Bank of England rate-setter

Although UK data lags behind the US, the evidence is mounting – coronavirus makes 2008 look trivial

A million people, myself included, have turned to UC in Britain’s lockdown. Now we will see the ordeals claimants face• Coronavirus latest updates

Data from online bank Revolut shows convenience stores boom and decline in cash use

Shadow chancellor says the cost need to be borne by those with the broadest shoulders

Decade-long record of growth halted as US lost 701,000 jobs but full impact of coronavirus will be reflected in next month’s report

Though it has not been officially declared, we are already in a deep recession that will get deeper before it gets betterThis week the US labor department released data on initial unemployment insurance (UI) claims, showing that UI claims jumped from 211,000 in the week ending 7 March 2020 6.6 million in the week ending 28 March. This is more than a 3,000% increase in three weeks. In fact, every state in the country reported its highest initial claims ever either last week or the week before. Over the last two weeks alone, nearly 10 million workers have filed unemployment insurance claims. And given that health insurance is tied to work for so many, we estimate that 3.5 million workers likely also lost their health insurance in the last two weeks. The grief and suffering behind these numbers is incomprehensible. Though it has not been officially declared, we are certainly already in a deep recession that will get deeper before it gets better.Related: As the numbers of dead and unemployed grow, Trump looks and sounds smaller | Richard WolffeHeidi Shierholz is director of policy at the Economic Policy Institute and served as chief economist at the US Department of Labor Continue reading...

There is no right or wrong way for governments to deal with the financial impact of coronavirus - only trade-offs

Conservatives laid post-2008 damage at the opposition’s door. This time they will be held accountable for how prepared Britain wasThroughout history, pandemics have often had profound economic effects. The most famous of all, the Black Death of the mid-14th century, wiped out between a third and two-fifths of the population of western Europe. The labour shortages that followed are credited with hastening the end of the feudal system.Covid-19 is nowhere near as deadly as the Black Death, but the shock it has dealt to an already vulnerable global economy has been immense. Perhaps inevitably, there is talk of life never being the same again. Continue reading...

Rolling coverage of the latest economic and financial news as oil prices jump by more than 30% and the US jobless report reveals scale of coronavirus damage

US sees second major unemployment rise as millions working in retail, restaurants, and travel lose jobsMore than 6.65 million people filed for unemployment benefits in the US last week, the latest official figures to highlight the devastating economic impact of the Covid-19 pandemic on the American economy.The federal labor department announced that a new record number of people sought benefits after losing their jobs in the week ending 27 March as long lines formed at unemployment offices, phone lines jammed and websites collapsed under the weight of claims across the US.Related: What US unemployment benefits can I get during the coronavirus? Your payment options explained Continue reading...

Change is coming to the UK, when this crisis is over. Unless progressives have a plan, they will lose out like they did in 2008It can take a grave national crisis to fire a flare, revealing the ugliest features of a society defined by injustices that the wealthy and powerful would rather forget. It took the second world war to achieve what the Jarrow hunger marches of the 1930s struggled for: to illustrate the national shame that millions of people who were called upon to make grand sacrifices were afflicted by poverty and malnourishment. As child evacuees with hungry bellies arrived on the doorsteps of the relatively well-to-do, the other Britain could no longer be ignored. “A revolutionary moment in the world’s history is a time for revolutions, not for patching,” declared William Beveridge as he laid the foundations for the postwar welfare state. Unprecedented state direction of the economy meant that Labour’s ambitious programme of nationalisation no longer seemed quite so scary. The old order perished in the rubble of war-ravaged Britain.Coronavirus has done two things: it has magnified existing social crises and has proved that the government can act decisively when the will is there. Millions are only ever one pay packet away from destitution; the self-employed and gig economy workers lack security and basic rights; private tenants are at the mercy of their landlords; our welfare state is woefully inadequate; and many designated “key workers” are desperately undervalued and badly paid. Who, in good faith, can now blind themselves to these grim truths?Related: Young people have paid enough – spare them from footing the coronavirus bill | Gaby Hinsliff Continue reading...

Some self-employed workers and high earners at risk despite subsidy plan, warn thinktanks

Coronavirus fears are feeding financial and economic anxiety and vice versa. Breaking the cycle will not be easy, but it is possible

Low Pay Commission says cost of fighting coronavirus pandemic endangers flagship pledge to raise national living wage to £10.50 an hourThe government has been warned it could be forced to abandon targets for ending low pay in Britain by raising the legal minimum wage, as the economic costs of Covid-19 mount.The Low Pay Commission, the independent body which advises ministers on legal wage floors, said the government target to increase the national living wage to two-thirds of average earnings by 2024 could be in danger.The national living wage is the minimum wage that must be paid to workers in the UK, and it came into effect on 1 April 2016. Continue reading...

Lenders asked to scrap cash bonuses for 2020 in order to help ease the impact of financial turbulenceBritain’s largest banks have agreed to scrap nearly £8bn worth of dividends in light of the coronavirus crisis, giving banks an additional cushion to weather an economic downturn.The Bank of England has also ordered lenders to cancel plans for cash bonuses for executives, as it asked financial institutions to boost their strength ahead of a likely recession.Related: UK payday lenders start suspending new loans in Covid-19 crisis Continue reading...

Britain’s stock market has posted its biggest quarterly slump since Black Monday, as the coronavirus forces UK into a deep recession

Speed of US stock market fall outstrips even 1929 Wall Street crash, reflecting global scenarioThe FTSE 100 has posted its biggest quarterly fall for more than three decades amid the financial panic caused by the coronavirus, as the economic costs of the global health pandemic continue to mount.The leading index of UK company shares plunged by 25% in the three months to the end of March, the biggest quarterly contraction in London-listed share values since the aftermath of Black Monday in October 1987.Related: The stock markets have rallied, so is peak panic over?Related: China gets mixed results in its attempt to lift lockdown Continue reading...

In the past fortnight an optimism of sorts has returned but the rebound rests in part on some pretty heroic assumptionsAt the end of the first quarter of the year, stock market investors are counting their losses. The FTSE 100 index has fallen 25% since the turn of the year, its worst single quarter since 1987. The financial crisis of 2008, around the collapse of Lehman Brothers, ran for several quarters and should still be considered more severe. But, whatever your yardstick, 2020 so far has been brutal for equity investors, which includes most people with a pension plan.Narrow your focus to the last couple of weeks, however, and the picture looks different. You could almost believe normal life has returned. The FTSE 100 overall has risen in seven of the last nine trading days, and in eight of the last 12. And, if you caught the bottom, congratulations: you could have made about 16% in three days.Related: Coronavirus pandemic has delivered the fastest, deepest economic shock in history Continue reading...

Across the world, Covid-19 has triggered community action on a vast scale. It’s a powerful riposte to both government and private money

The Dutch-led opposition to a ‘coronabond’ to raise funds for nations hardest-hit by the pandemic is self-defeating

Contrary to what Donald Trump would like to believe, such a pandemic was predicted last yearEvents like the Covid-19 pandemic, the US housing-market crash of 2007-09 and the terrorist attacks of 11 September 2001, are often called “black swans”. The term is meant to suggest that no one could have seen them coming. But, in fact, these episodes each involved known unknowns, rather than what the former US secretary of defence Donald Rumsfeld famously called “unknown unknowns”.After all, in each case, knowledgable analysts were aware not only that such a thing could happen but also that it was likely to happen eventually. Although the precise nature and timing of these events were not predictable with high probability, the severity of the consequences were. Had policymakers considered the risks and taken more preventive steps in advance, they might have averted or mitigated disaster.Related: Coronavirus forces economics profession to leave comfort zone | Mohamed El-Erian Continue reading...

Rolling coverage of the latest economic and financial news

Rich countries urged to help emerging economies cope with coronavirus ‘financial tsunami’

The left hopes coronavirus will lead to change, but it’s far from certain

Starling says peak supermarket shopping due to coronavirus was two weekends ago

Brent crude likely to continue slide as Riyadh faces off with Russia and US

People earning less than $75,000 will receive a one-time cash payment – but data shows the money won’t last very long

For years there has been a stubborn reluctance to adopt a more multidisciplinary approachWith the coronavirus devastating one economy after another, the economics profession – and thus the analytical underpinnings for sound policymaking and crisis management – is having to play catchup. Of particular concern are the economics of viral contagion, of fear and of “circuit breakers”. The more that economic thinking advances to meet changing realities, the better will be the analysis that informs the policy response.That response is set to be both novel and inevitably costly. Governments and central banks are pursuing unprecedented measures to mitigate the global downturn, lest a now-certain global recession gives way to a depression (already an uncomfortably high risk). As they do, we will likely see a further erosion of the distinction between mainstream economics in advanced economies and in developing economies.Related: Coronavirus pandemic has delivered the fastest, deepest economic shock in historyThe risk that the financial system will reverse-infect the real economy and cause a depression is too big to ignore Continue reading...

Analysts say unemployment could also double in deepest recession since financial crisis

Last week’s meeting of leaders was supposed to help. Instead it turned out to be a complete car crashEurope is being ravaged by the coronavirus pandemic. There have been more than 10,000 deaths in Italy. In the grimmest of league tables, Spain comes second. Normal life has been suspended across the continent and the hit to the economy is immense. France’s output is running at two-thirds of what it was last year. Germany has abandoned fiscal rectitude and – along with the rest – adopted a “whatever it takes” approach.Border controls have been erected to stop the flow of people even though this contravenes one of the founding principles of the single market. Rules on state aid to struggling companies have been relaxed. The European Central Bank has embarked on a gigantic asset purchase scheme in an attempt to flood the eurozone economy with cheap money. Continue reading...

CEOs, billionaires and advisers have the president’s ear and want people back to work. They are callous – and wrong

Coronavirus could lead to permanent closure of struggling town shops, say analysts

Getting the Bank of England to print money to cover the government’s debts is in principle a good ideaThis is an economic crisis and it’s right that government takes unprecedented steps to compensate employees and the self-employed from huge income hits. But how are we going to pay for these decisions? Eventually taxes will go up, but governments need to raise cash right now as tax revenues fall and spending surges. Luckily, borrowing costs are low, but what happens if financial markets are unable to absorb the huge amounts of extra borrowing?This is a crucial question with which treasuries around the world, and the IMF, are starting to grapple. The gung-ho among you may like the answer of the economist Jordi Galí, who last week called for central banks to print money for government without it ever being paid back. Our view at the Resolution Foundation is that he is right to examine the case for monetary financing (the Bank of England creating money to directly buy government debt). But we don’t agree that the objective is for it to never be repayable – in fact, we argued last week that it’s crucial to stress that any unavoidable monetary financing would be temporary and that the central bank could sell off government bonds when things calm down. We’ve seen unprecedented steps by government to tackle this crisis, with big price tags attached. Unprecedented measures may be needed to pay for them, but we should plan for that with utmost care. Continue reading...

Proponents of modern monetary theory believe that countries can and should keep printing as much money as they needTreasury officials have spent the last couple of weeks asking themselves how much the exchequer should spend fighting coronavirus. Curled up with laptops in the spare room or on the kitchen table, banished from their neoclassical headquarters, they have debated how many borrowed billions ought to be devoted to rescuing companies from bankruptcy and households from destitution.Thinking about what a nation should spend when its income falls off a cliff, and how much it will owe as a consequence, is especially mind-boggling for conservative policymakers emerging from 10 years of austerity. Many have spent their entire careers telling voters that paying back what the country has borrowed is of paramount importance.Is this real money that will eventually need to be paid back? Or can it somehow be left behind by one generation to be written off by the next? Continue reading...

Governments and investors woke up too late to the crisis. Now they are facing the deepest global recession in history

Legal groups across the US are calling on federal and state governments to halt debt collection as it continues unabated

Agency says government borrowing levels are set to rise and outlook remains negative for Britain’s sovereign debt score

As the coronavirus pandemic destroys jobs across Australia, New Zealanders who have lived and worked here for years are finding they have no access to welfare