Guardian analysis shows no-deal fears have hit outlook for employment and growth

Two former members of Bank of England’s rate-setting committee on Britain’s economic prospects

Mario Draghi warns that geopolitical risks are threatening the eurozone recovery, as he gives his final press conference as president of the European Central Bank

Mario Draghi blames slowing global economy, Brexit uncertainty and recession fears in GermanyMario Draghi, the outgoing president of the European Central Bank, has warned that slowing global growth and Brexit uncertainty pose a risk to growth in the eurozone economy amid concerns that Germany remains on the brink of recession.Speaking in Frankfurt after his final ECB policy meeting before stepping down, Draghi said the ECB was concerned that the economy of the 19-member currency bloc, which has slowed this year along with much of the global economy, faced “protracted weakness” going into 2020. Continue reading...

Readers respond to the latest select committee report on families’ struggles to get educational support for their childrenThis is the most damning select committee report I’ve ever read (Children with special needs plunged into ‘nightmare of bureaucracy’, 23 October). Line after line, it shows that the education system for disabled children is completely broken. Parents are forced to become protesters, lawyers and bureaucrats to stand any sort of chance of getting the support their child is legally entitled to. The government now has a golden opportunity to carry out a root and branch review of the system, and finally end the toxic culture and wanton law-breaking throughout the special educational needs system. They must now deliver for an entire generation of disabled children. It’s time to let parents be parents.

Descriptions of exchange-rate policies have become increasingly militaristicThe language of international monetary policy has turned militaristic. The phrase “currency war” has been popular for a decade and the US government’s more recent “weaponisation” of the dollar is generating controversy. But ironically, a martial approach could end up threatening the US currency’s global dominance.This is a good time to gauge the relative strengths of the dollar and rival international currencies (meaning currencies that are used outside their home countries). In September the Bank for International Settlements released its triennial survey of turnover in global foreign-exchange markets. The International Monetary Fund’s statistics on central-bank holdings of foreign-exchange reserves have become much more reliable since China began reporting its holdings. And the Swift payments system issues monthly data on the use of major currencies in international transactions.Related: Corporate tax avoidance: it's no longer enough to take half measuresThe US inherited the UK’s 'exorbitant privilege' Continue reading...

Activist and author Naomi Klein tells Anushka Asthana that combating the climate crisis must be at the heart of an urgent restructuring of politics and the economy. Plus: Daniel Trilling on the shocking discovery of 39 bodies inside a lorry in EssexThe Green New Deal was proposed earlier this year by Alexandria Ocasio-Cortez. It aims to address both the climate crisis and the crisis of growing inequality. It’s a political response that would mean a major restructuring of politics and the economy, and it is one that Naomi Klein believes is urgent and essential.Klein tells Anushka Asthana she came to understand the urgency of the climate crisis after years of activism on injustice and globalisation. Continue reading...

Online shopping and Brexit uncertainty blamed for closures including BonmarchéRetailers have axed 85,000 jobs in the past year as weak consumer demand, rising costs and the switch to online shopping, exacerbated by Brexit uncertainty, have put businesses under increasing pressure.The job losses in the UK’s biggest private employment sector – with particular importance for women – are the latest sign of a crisis on the high street that has seen the closure of thousands of shops and the collapse of some well-known retail names.What’s the problem? Continue reading...

Mistakes that led to the 2008 financial crisis are about to be repeated, fears Milan Bollecker, while David Reed is worried by the economic impact of soaring property pricesHistory never repeats itself but, according to the IMF, it might this time (Red alert as world ignores history lesson, 17 October). Despite countless publications and studies related to the 2008 financial crisis and its effect on the whole economic system, politicians, central banks and economic institutions seem to keep using the same logic that they used 10 years ago.The decrease in interest rates caused by central banks’ policies provoked the boom of private debt held by companies. Together with the constant diminution of companies’ abilities to repay their debts, this presents a clear underlying problem and a terrible outlook of a new global economic crisis. By favouring short-term decisions and policies in order to maintain growth at an acceptable rate as the recent IMF report proves, central banks keep committing the same errors. Will the world economic system be able to avoid another crisis if we continue to accumulate more and more risk factors?

Failure to find a way forward could result in a delayed budget, weaker pound and lower growth forecastBrexit uncertainty has been a drag on the economy. The International Monetary Fund thinks most of the damage it estimates will occur as a result of Britain’s decision to leave the EU has already happened. For obvious reasons, investment has been particularly weak with businesses reluctant to commit to new capital projects until they have a better idea what the future holds.As a matter of logic, therefore, the fresh delay to the Brexit process – unless it is short-lived – means more uncertainty and weaker activity. Investment plans will remain mothballed. Construction sites will go into hibernation for the winter. Retailers, with their busiest time of the year coming up, will have every reason to be worried about how sales will hold up. Continue reading...

Manny Fontenla-Novoa and Harriet Green are appearing before the BEIS committee

Rolling coverage of the latest business and financial news, as home delivery firm Just Eat receives a rival takeover offer

Survey finds majority of factory owners have cut investment, as insolvencies hit six-year highA wave of corporate insolvencies, company profit warnings and a gloomy forecast of manufacturing investment over the next year has sparked concerns that Brexit uncertainty will weigh on the UK economy more than previously estimated.A survey by the business lobby group the Confederation of British Industry (CBI) found that the prospect of leaving the EU’s customs union and single market without a deal had led a majority of factory owners to cut back investment for the coming year. Continue reading...

Chancellor hit by spending squeeze as borrowing climbs by a fifth in run-up to Brexit

Rolling coverage of the latest economic and financial news, as sterling is buffeted by political drama

Chancellor accused of believing ‘evidence is superfluous to good policy making’

Credit Suisse survey shows Brexit effect has reduced number of UK millionaires by 27,000The number of wealthy Chinese people has overtaken the number of rich Americans for the first time, according to a report by Credit Suisse.The bank’s annual wealth survey found there were 100 million Chinese people among the world’s top 10% of richest people, compared with 99 million in the US.Related: Don't believe the hype about millennials and money, data suggests Continue reading...

‘Brexit fatigue’ is no reason to back a vision of Britain which fulfils the ambitions of the radical rightIn the lead-up to parliament’s historic Saturday sitting, the airwaves resounded to Conservative cries of “get this done”, “let’s move on” and “lift this cloud”. The Tory hope was that understandable Brexit fatigue could become a trump card for Boris Johnson, as he sought to rush through a surprise deal that MPs were given 48 hours to consider. Sir Oliver Letwin’s successful amendment, which withholds approval for it until all necessary legislation is passed, rightly put the brakes on – to the acclaim of up to a million People’s Vote marchers. It also required Mr Johnson to write to the EU asking for an extension under the terms of the Benn act. This he has done, albeit dissociating himself from the request in a second letter (a Scottish court will examine the legality of that move).MPs on all sides of the house must now hold their nerve to subject Mr Johnson’s deal to forensic scrutiny, undistracted by his totemic Brexit deadline of 31 October. While the EU may not respond immediately to Britain’s request for an extension, it must not conspire with Mr Johnson to allow a no-deal Brexit to take place at the end of the month. The prime minister may wish to dash for the line. It is absolutely not necessary or advisable for the rest of parliament to do the same. Three and a half years of deadlock, almost entirely caused by arguments between Tory leavers, does not mean that, suddenly, anything goes. Continue reading...

Size of British contribution also hinges on better gender equality and an anti-poverty approachUK backing for a World Bank fund to help poor countries will hinge on reforms at the global institution to channel more money into tackling the climate crisis, improving gender equality and ensuring vulnerable countries can pay their debts.Speaking in Washington, the international development secretary, Alok Sharma, said the size of the UK’s contribution to the Bank’s concessional loan facility for the world’s least-developed countries would depend on a more focused anti-poverty approach.Increase the Bank’s financial support to tackle the climate crisis, including helping the most vulnerable communities to become more resilient and preparing for potential natural disastersPreserve biodiversity and invest in innovative nature-based solutions such as reforestationFocus on mobilising private-sector investment for the poorest countries – and making a priority of green, quality infrastructure projects that form the backbone of economic growthBring about improved debt transparency and sustainability, through balancing the need for finance with limits on how much governments are borrowing from different sources before the International Development Association agrees more loansProvide extra money and an increase in World Bank staff based in fragile and conflict-stricken countriesImprove rights of women and girls through increasing access to safe family planning services, ensuring girls can go to school and stronger laws against gender-based violence.Related: Almost all 10-year-olds in world's poorest countries struggle to read Continue reading...

Past crashes spawned new thinking and reform but nothing has changed since 2008 banking meltdown, says former Bank of England boss

Mervyn King’s IMF speech turned heads – dangerously little has changed since the 2008 financial crisis

Boris Johnson and his cronies want nothing more than to turn Britain into a deregulated tax haven – whatever the costIt takes a long time for economies to recover from a financial crisis, as was demonstrated after the Wall Street crash of 1929 and the world recession that followed.Similarly, it has taken a decade for the British economy to recover from the banking crisis of 2007-09 – and, indeed, it is begging the question to assume that the recovery is complete. Far from it. As is being increasingly recognised, recovery was stifled by an ill-conceived austerity programme whose deleterious effects played no small role in the outcome of the 2016 referendum.Brexit would be a damaging process that could go on for years and make our economy a lot poorer Continue reading...

Matt Stoller’s look at ‘the 100-year war between monopoly and democracy’ is highly relevant to the primary raceWall Street is scared. Elizabeth Warren has surged to the front of the Democratic pack and some of the party’s biggest donors are threatening to close their wallets or worse: donate to Donald Trump.Related: Envy in Politics review: why keeping up with the Joneses is a political trump cardStoller strafes targets across political and ideological spectrumsUnfortunately, Goliath comes up short in addressing the intersection between culture and economicsRelated: Donald Trump’s sanity is not the question. The real issue is how he got into office | Gary Younge Continue reading...

Rolling coverage of the latest business and economic news, as fresh data shows Chinese GDP grew at its weakest rate since the early 1990s

Chancellor predicts interest rates will remain at rock bottom levels and says it makes sense to borrow to boost the economySajid Javid has fuelled speculation that he is planning a voter-friendly budget next month after predicting that interest rates will remain at rock bottom levels and give him the scope to increase government borrowing.The chancellor said he was convinced that low interest rates were here to stay and that it was his job to see how he could exploit the changed circumstances to boost the economy. Continue reading...

At 75, the Bretton Woods institutions face an identity crisis. It’s time for them to chart a fresh courseThe International Monetary Fund and the World Bank have their 75th birthday this year, but the organisations that emerged from the Bretton Woods conference in 1944 are in no real mood to celebrate at their annual meetings this week. In Washington the mood is decidedly downbeat. Global growth is slowing; the conviction that low interest rates are here to stay is encouraging reckless behaviour and a dangerous build-up of debt; the climate-change clock is ticking louder. The threat of a new financial crisis is growing. The prospect of it being triggered by a climate emergency is real.Yet the problems of the two Bretton Woods institutions run deeper than that. They are bodies created to foster international cooperation at a time when international cooperation is marked by its absence. Born out of the economic chaos of the 1930s, the IMF and the World Bank had a well-defined mission three quarters of a century ago: to rebuild war-shattered economies; to provide support to countries that ran into balance-of-payments difficulties; to limit currency turbulence; and to encourage the opening up of markets. Continue reading...

Kristalina Georgieva hopes MPs back deal she feels will spare UK significant economic damageThe head of the International Monetary Fund confessed she jumped for joy after hearing news of a Brexit breakthrough that she said would spare the UK significant economic damage.Kristalina Georgieva, the IMF’s new managing director, said there would still be some impact from leaving the EU with an agreement but said much of that had already been felt in the period since the 2016 referendum.Related: British businesses say new Brexit deal worse than May's deal Continue reading...

Industry groups and firms say PM’s deal will make exporting to their biggest market harderBritish companies have expressed concerns that Boris Johnson’s Brexit deal could leave industry worse off than under the previous agreement with the EU.Businesses, investors and economists have been almost unanimously in favour of the UK securing a withdrawal deal with the EU to avoid a no-deal Brexit, and markets appeared to welcome a diminished risk of a chaotic break on 31 October, after the UK and the EU unveiled a revised deal on Thursday.Related: New IMF boss 'jumped for joy' over Brexit breakthrough Continue reading...

Boris Johnson’s agreement estimated to cost 6.7% of expected GDP rise over 15 years

The CBI’s flawed analysis ignored all the benefits of the party’s flagship policyIt’s hard to unite nationalisation advocates and sceptics. But the Confederation of British Industry has managed to do just that, getting into hot water this week with an unsubstantiated claim that the Labour party’s plans to renationalise utilities would cost £196bn. These kinds of big numbers get media attention and help drive a narrative, particularly when they come from an establishment organisation such as the CBI. But by presenting an unbalanced view it has lost out on an opportunity for genuinely useful public debate.Related: Northern rail could be renationalised, says transport secretary Continue reading...

Department store sales slump further and online shoppers also rein in spending, says ONSRetail sales failed to bounce back last month from a drop in August as Brexit uncertainty deterred shoppers from splashing out on big ticket items.The volume of sales was flat and the value down by 0.2% in September with a further slump in department store sales offsetting a modest rise in clothing and supermarket food purchases, according to the Office for National Statistics.What’s the problem? Continue reading...

The work of Esther Duflo, Abhijit Banerjee and Michael Kremer on poverty deserved this accolade, but both the prize and the discipline need reformReaders of this paper on 6 June 2011 may have spotted an editorial titled “In praise of... Esther Duflo and Abhijit Banerjee”. It was indeed a paean to the two Massachusetts Institute of Technology economists and their work to lift people out of poverty. “They make a subtle case for one big argument,” we wrote. “Aid really can help poor people, provided the money follows the evidence.” Scroll forward almost a decade to this week, and the judging committee behind the “Prize in Economic Sciences in Memory of Alfred Nobel” announced that the pair would win this year’s award, alongside their colleague Michael Kremer. To the lucky trio sharing a prize of 9 million Swedish kronor (currently £716,000, although sterling’s value in these Brexit-addled times can go down as well as down), we extend our congratulations. To the judges, we say: what took you so long?A number of precedents are being broken or tested by this welcome decision. At 46, Prof Duflo is the youngest-ever winner of this prize. She is also only the second woman to win it. Handed out since 1969, it was never given to one of the major economists of the 20th century, Joan Robinson. Prof Banerjee is only the second Indian to win it, and one of very few winners to come from outside the west. Most of the world economy is not in the west, and many of the most interesting thinkers do not come from there, as is now reflected in the senior echelons of the World Bank, the International Monetary Fund and the Bank for International Settlements. Alas, the prize givers at the Sveriges Riksbank have yet to catch up. Instead, the prize has gone to some odd choices such Milton Friedman. In 1997, Myron Scholes and Robert Merton won the prize for their work on derivatives. The very next year, the hedge fund they ran according to their model lost $4bn in just six weeks and required a state-organised bailout. Continue reading...

Freeze imposed in 2015 was planned to last until end of 2019-20 financial yearThe government has refused to commit to ending its freeze on benefits despite a promise to turn the page on a decade of austerity.The work and pensions secretary, Thérèse Coffey, said she could not give a definitive answer about whether the freeze on most working-age benefits and tax credits would continue beyond its initial four-year term. Continue reading...

With corporations loading up on debt, any recession would have dire consequences

Rolling coverage of the latest economic and financial news, including the latest UK and eurozone inflation figures

Update on markets lists eight leading countries, including US, China and UK, as vulnerableLow interest rates are encouraging companies to take on a level of debt that risks becoming a $19tn (£15tn) timebomb in the event of another global recession, the International Monetary Fund has said.In its half-yearly update on the state of the world’s financial markets, the IMF said that almost 40% of the corporate debt in eight leading countries – the US, China, Japan, Germany, Britain, France, Italy and Spain – would be impossible to service if there was a downturn half as serious as that of a decade ago.Related: IMF haunted by fears that history might be about to repeat itself | Larry Elliott Continue reading...

The long history of bias, discrimination and underestimation of women in the field of economics is why Duflo’s prize is a such a great step forwardThis week, MIT’s Esther Duflo became the second female economist to win a Nobel prize. She and her husband, Abhijit Banerjee, also of MIT, and Michael Kremer of Harvard University, shared the award “for their experimental approach to alleviating global poverty”.In Poor Economics: A Radical Rethinking of the Way To Fight Global Poverty, Duflo and Banerjee studied the poor not as “cartoon characters” but as human beings “in all their complexity and richness”. In 2003, they founded the Abdul Latif Jameel Poverty Action Lab at MIT to study poverty.Related: Economics Nobel prize won by academics for tackling povertyJill Priluck’s reporting and analysis has appeared in the New Yorker, Slate, Reuters and elsewhere Continue reading...

The International Monetary Fund tips growth will be 1.7% in 2019 but is expected to recover to 2.3% in 2020The International Monetary Fund has downgraded Australia’s economic growth forecasts by 0.4% to 1.7% in 2019 amid rising geopolitical turmoil, the US-China trade war and stalling economic growth globally.The world economic outlook forecasts, released on Wednesday, show growth is expected to recover to 2.3% in 2020, providing some support to the Reserve Bank’s view when it cut interest rates earlier in October that Australia’s economy has reached a “gentle turning point”.Related: Josh Frydenberg steers clear of the ‘S’ word while asking states to boost economyRelated: The prime minister's office accidentally sent out its talking points. We fact checked them Continue reading...

BEIS committee blasts management failures for the collapse of the world’s oldest travel company, and urges bonuses to be clawed back

Mark Carney says capital markets are financing projects likely to fuel a catastrophic rise in global heatingThe governor of the Bank of England has warned that the global financial system is backing carbon-producing projects that will raise the temperature of the planet by over 4C – more than double the pledge to limit increases to well below 2C contained in the Paris Agreement.In a stark warning over global heating, Mark Carney said the multitrillion-dollar international capital markets – where companies raise funds by selling shares and bonds to investors – are financing activities that would lift global temperatures to more than 4C above pre-industrial levels.Related: Revealed: the 20 firms behind a third of all carbon emissions Continue reading...

World growth forecast cut as central banks battle impact of protectionism

The Fund’s latest forecast accepts that financing public debt is easier when borrowing is cheap

Brexit uncertainty ‘finally taking toll’ as pay rises slow and unemployment increasesThe number of people in work fell by the largest margin in four years in August as the uncertainty created by the Brexit talks weakened Britain’s previously robust labour market.The employment figures dropped by 56,000 in the three months to the end of August from the previous quarter after a shake-out of high street retail jobs and redundancies across much of the manufacturing sector.The International Labour Organisation (ILO) jobless rate is a measure of unemployment adopted in a number of countries to reflect the state of the labour market. It is expressed in percentage terms, as a proportion of working-age people who are out of work but want a job and are actively looking for one. Continue reading...

His bold new plan is even more radical than the Labour party’s. It would transform how companies operate and for whomOligarchy rules the United States: the republic has been ransacked, its commonwealth privatised, and rentierism runs amok. The richest 10% of Americans capture an estimated 97% of all capital income – including capital gains, corporate dividends and interest payments. Since the financial crisis of 2008, almost half of all new income generated in the US has gone to the top 1%. The three wealthiest people in the US now own more wealth than the bottom 160 million Americans. And the richest family in America – the Walton family, which inherited about half of Walmart’s stock – owns more wealth than the bottom 42% of the American people.Related: The pundit class continues to misunderstand Bernie Sanders – and it shows | Nathan RobinsonRelated: Trump's mounting troubles in Iowa could spell doom for Republicans | Art Cullen Continue reading...

Dr Kevin Bannon on the root of the Caribbean country’s problems and why the US demeans the politician who became Haiti’s first democratically elected presidentHaiti’s political and economic problems are of course rooted in its exploitative treatment by the US going back decades and more (How US aid failed Haiti, The long read, 11 October). However, since 1990, in both elections and in huge popular demonstrations, Haitians have expressed their desire to be led by Jean-Bertrand Aristide – a sensible, conscientious humanitarian, and democratic reformer and a supporter of the liberation theology movement. He has been overthrown as leader and exiled twice by pro-US local elites because the US fears his influence might initiate a regional domino effect; this explains why Aristide continues to be demeaned by conservative sources in the US. Jacob Kushner’s article attributes Haiti’s woes more prominently to the philanthropy of Bill and Hilary Clinton than even the country’s disastrous 2010 earthquake. More remarkably, the article is without a single mention of Jean-Bertrand Aristide.

Abhijit Banerjee, Esther Duflo, Michael Kremer ‘dramatically improved’ practical solutionsAcademics who pioneered on-the-ground experiments to discover the most effective ways to tackle poverty in the developing world have been awarded this year’s Nobel prize for economics.Abhijit Banerjee and Esther Duflo, of the Massachusetts Institute of Technology, secured the 9m Swedish krona (£720,000) prize with the Harvard professor Michael Kremer on Monday.Related: Nobel Prize in Economics won by Banerjee, Duflo and Kremer for fighting poverty - live updates Continue reading...

Esther Duflo becomes second woman to win the Sveriges Riksbank Prize in Economic Sciences, with Abhijit Banerjee and Michael Kremer also recognised for their research alleviating poverty

Party says calculation of renationalisation costs is ‘incoherent scaremongering’Labour’s plans for a sweeping renationalisation of utilities would cost Britain almost £200bn, the Confederation of British Industry has said.Branding the plans as “eye-watering”, the nation’s foremost business lobby group, which represents some companies that would be put into state ownership under a Labour government, said the project would add to the UK’s debt levels and could come with costs to pensioners and savers. Continue reading...

Financial Stability Board says countries should be prepared for global economic downturnGlobal authorities gathering in Washington this week must stand ready to address emerging risks including a global economic downturn and Brexit, the leading body for global financial stability has warned.The Financial Stability Board – which was formed after the 2008 banking crisis that brought the financial system to its knees – said that while much has been achieved in the past decade, its job was “far from complete”. It also warned of new dangers, including higher levels of corporate debt, weaker lending standards, and cyber-attacks. Continue reading...