Economics | The Guardian

Until now, the US has tried to avoid hurting consumers when imposing tariffs. From next month, they will be fully exposedThe timing could not be better. On 1 September 1939, German troops crossed the border into Poland, triggering the start of the second world war. Eighty years to the day later, on 1 September 2019, Donald Trump plans to impose a 10% tariff on a fresh range of Chinese imports into the US. If that happens, it will mark the moment when trade’s cold war turns hot.Make no mistake, the unexpected announcement threatens to have serious consequences. Up until now, the Chinese goods targeted for tariffs have been carefully selected to avoid hurting consumers. That is no longer the case. From next month, almost everything China sends to the US will be affected. In bald terms, that means Americans are going to be paying more for their smartphones, laptops and clothes. Trump boasts that the US is going to be “taxing the hell out of China” but he has got the economics completely wrong. The taxes will be paid by Americans faced with paying more for imports.China is waiting to see whether someone with less protectionist instincts wins the race for the White House next year Continue reading...

Boris Johnson’s plan for expansionist borrowing is far less economically literate than Gordon Brown’s was 10 years agoWhen confronted with an uncertain future, writers who claim to have seen through a window into the next decade find it easier than usual to make the bestseller lists.Some futurology books are gloomy and some are optimistic. Britain’s prime minister probably did not read any of them before coming to the conclusion that a strong sense of belief and a sunny disposition could cure most ills.Banks have the reserves to lend to small and medium-sized businesses: sadly, there are no takers Continue reading...

Our global economy should serve rather than dominate people – and that includes factoring in the climate crisis, tooSomething is killing conventional economics and it’s probably an inside job. Reliance on abstract mathematics and absurd assumptions has brought the discipline into disrepute, even if politics and policy are guided by the ghosts of its teaching.Nobody was surprised recently to learn that the price of the overdue and over-budget HS2 high-speed rail project could rise by another £30bn. People were surprised to learn, however, that in the cost-benefit analysis used to justify the original project, planners assumed that no passengers work while on a train. That made the times savings on the new line look more valuable than they really were.Related: What happens when ordinary people learn economics? | Aditya ChakraborttyRelated: While economic growth continues we’ll never kick our fossil fuels habit | George Monbiot Continue reading...

US president has threatened to impose a new 10% tariff on $300bn of Chinese goods

Markets fell sharply as Trump threatens fresh tariffs; US non-farm payrolls matched economists’ expectations in July, while June figures were revised down

The US is threatening to impose tariffs on a further $300bn of Chinese goods

Wall Street, Asian markets and oil fall after president’s tweet about placing tariffs on practically all remaining China tradeDonald Trump’s surprise decision to escalate the trade war with tariffs on another $300bn of Chinese goods has sent global financial markets into a tailspin.After sharp falls on Wall Street in the wake of the US president’s announcement on Twitter on Thursday, Asian share prices plummeted on Friday morning as growing hopes that the world’s two economic superpowers would be able to reach a deal were dashed.Related: Trump's threat of new China tariffs sparks backlash from US retailersHere's your chart of the day. Trump's tariffs now cover virtually all of U.S. imports from China.

For years, councils have been starved of resources. The resulting crisis in public services is matched by a crisis of democracySome people think Britain’s greatest challenge is the impending Brexit. They are wrong. Britain’s greatest challenge is the impending collapse in its local public services. I recently travelled to cities in France, Belgium, the Netherlands and Germany. The contrast to Britain was stark. Of course surface impressions can be deceptive, but I was struck by the absence of piles of litter, potholed streets, screaming police cars, tacky ads on roundabouts and graffiti. There were also fewer desperate people pleading for money. I felt I was briefly in a civilised continent. The difference is that in continental Europe, these matters are at the discretion of local people, the mayor and electors. As they get richer, they reasonably expect, vote for and pay locally for better services. In Britain they are not allowed to do this. So they get worse.Over the “austerity” decade since 2010, British government has stripped localities of a great chunk of their centrally supplied resources. What is left is spent on statutory services such as social care, schools and roads. Local government has become an instrument of the centre. Money has steadily dried up for discretionary activities, such as youth clubs, old people’s homes, children’s agencies, drug treatment centres, homeless shelters, libraries, cleaner streets and public gardens. Successive chancellors have treated impoverished councils’ pleas with contempt and cavalier disregard.Related: Police chief: cuts must be reversed to fix 'social fabric' and stop gangsRelated: Austerity to blame for 130,000 ‘preventable’ UK deaths – report Continue reading...

Latest inflation report assumes smooth transition to UK-EU deal, but markets take different viewWhat if Napoleon had won the battle of Waterloo? What if Lord Halifax rather than Churchill had become prime minister in May 1940? To the “what if” history book could soon be added a new chapter – “what if” the UK had exited the EU with a deal in October 2019?That, despite everything that has been happening at Westminster in the past week, remains the assumption of the Bank of England. In its last inflation report before the Brexit deadline, the Bank said its base case was a smooth transition to a UK-EU trade deal. Its projections do not include the possibility of a no-deal exit.Boris Johnson, prime ministerRelated: Bank of England holds interest rates as it cuts growth outlook – business live Continue reading...

The PM wants to put rocket boosters on the British economy. It sounds thrilling, but what does ‘boosterism’ really mean?Asked this week what his new economic policy was, Alexander Boris de Pfeffel Johnson replied: “Boosterism!” He wanted to put “rocket boosters” on the British economy, as a way of “turbocharging” it. Turbocharging (in aviation, originally “turbo-supercharging”) sounds perfectly thrilling, as long as the vehicle one turbocharges is not heading straight for a concrete wall. But is it quite the same as “boosterism”?A rocket “booster” is the massive first stage of a multipart rocket, such as the Saturn V that delivered the Apollo 11 astronauts to the moon. But the verb “to boost”, as well as meaning “to steal” in thieves’ cant, has also long meant to support or encourage. And so “boosterism”, since 1926, is the act of talking something up, whether it be a dodgy stock or one’s own reputation, a new invention or a country. (Some leftwing intellectuals during the cold war were accused of “Soviet boosterism”.) Continue reading...

MPC votes 9-0 to keep interest rates at 0.75% as uncertainty drags down the UK economyBritain has a one in three chance of plunging into recession at the start of next year as the heightened uncertainty over Brexit drags down the economy, the Bank of England has warned.The central bank said business investment was stalling, with trade tensions and slowing demand in the global economy also having an impact on UK growth.Related: Pound sinks to fresh low against dollar amid no-deal Brexit fears Continue reading...

Welcome to the land of warped priority, where the Tories can find money for ruinous policies – but not for hungry familiesYou can tell a lot about a person by their priorities. It’s true with friends – say, the mate who ditches your birthday drinks for a date – but take a look at British politics, and it’s increasingly the case with ministers, or even the country.Related: More than 4m in UK are trapped in deep poverty, study findsRelated: The Lib Dems are deeply stained by austerity. Don’t trust them | Frances Ryan Continue reading...

As the chancellor announces a further £2.1bn to prepare for a no-deal Brexit, we look again at what crashing out could mean for BritainThe Treasury this week announced a further £2.1bn in to get the country ready; it said the money would be used to “accelerate preparations at the border, support business readiness and ensure the supply of critical medicines.” Continue reading...

Donald Trump has been pushing for it, but the real problem lies with the man in charge – Jerome PowellDonald Trump got less than he wanted. Wall Street was unimpressed. Both the White House and the financial markets see the first cut in US interest rates in more than a decade as a taste of more to come. And they are right.Announcing its quarter-point cut, the Federal Reserve said the decision was warranted by global developments – shorthand for Trump’s trade wars – and muted inflationary pressure. The idea is that this is an insurance policy against the risk of a possible recession. Continue reading...

Fed chief Jerome Powell ‘let us down’, says Trump amid disappointment that rates were not cut harderThe US Federal Reserve has cut interest rates for the first time in more than a decade and signalled its readiness to provide more support as growth slows in the world’s largest economy.The US central bank cut its key benchmark interest rate by a quarter of a percentage point, to a range of 2%-2.25%, in the first reduction in borrowing costs since immediately after the financial crisis a decade ago. Continue reading...

When you are dealing with a rare disorder like Rett syndrome, invariably the GP has never heard of it, writes Becky Jenner. And Dr Kirsten Lamb writes that GPs always intend to provide excellent care but most have had little training in learning disabilityAs CEO of the national charity Rett UK, which supports families affected by the rare and devastating neurological disorder Rett syndrome, and mum to 24-year-old Rosie who has Rett syndrome, I fully support the case for learning disabilities doctors (Letters, 27 July). Hospital admissions are extremely stressful for people with complex needs and their families. When you are dealing with a disorder like Rett syndrome, invariably the GP has never heard of it; a paediatrician may recall reading about it in a textbook. Wikipedia seems to be their preferred choice for a quick whistle-stop tour – about as helpful as a chocolate teapot. The parent has to become the expert.Once young people leave the relative comfort of children’s services where their care is overseen by a specialist community paediatrician, their care is transferred to their GP. The GP will have had very little to do with this young person up to this point. Transition still remains hugely problematic – often described by families as a “cliff edge”. This is largely because the key missing piece in the jigsaw is one person who will take the lead in providing holistic, coordinated care and treatment. A learning disability doctor is that person. Someone who has had the training, has the interest and motivation to champion the care for people with learning disabilities. Someone who understands that you cannot treat one area in isolation without having an understanding of how it can impact on other co-morbidities.

The outgoing ECB chief is locking his successor into a new phase of expansionary monetary policyExpectations – and, for many economists, rather bad ones – have been confirmed: the European Central Bank has decided to inflate the eurozone. Following the ECB’s latest policy meeting on 25 July, the outgoing president Mario Draghi made it clear that the bank’s seemingly harmless inflation target of 1.9% will in fact be the basis for a new phase of expansionary monetary policy over the next few years. This will go well beyond the ECB’s stimulus measures to date and is likely to pose further risks to the European economy.We should remember that the Maastricht treaty assigned the ECB the single, non-negotiable goal of maintaining stable prices, which, if taken literally, would mean an inflation rate of zero. This is very different from the mandate given to other central banks. The introduction of the euro, however, caused interest rates in southern Europe to fall, leading to an inflationary bubble that raised annual price growth to well over 2% in some countries. The ECB’s governing council then argued that the goal of price stability could not be achieved exactly and also pointed to several measurement errors that complicate policymaking. So, the authorities said, they would tolerate average inflation of up to 2% for the eurozone as a whole. Continue reading...

As a no-deal Brexit looms sterling is starting a steep slide and growth is stalling

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

Each month we look at key indicators to see what effect the Brexit process has had on growth, prosperity and trade

Mass protests triggered by leaked text messages have led to the resignation of Ricardo Rosselló. Oliver Laughland discusses his time on the island. And: Larry Elliott on why sterling is at a 28-month lowHundreds of thousands of people have lined the streets of Puerto Rico over the past couple of weeks in some of the largest demonstrations in the US territory’s history. They began in response to hundreds of pages of leaked text messages between the governor, Ricardo Rosselló, and 11 members of his inner circle, which made homophobic and sexist jokes and mocked the victims of Hurricane Maria.However, the problems go further back than July. The Rosselló administration has been plagued by allegations of corruption and mismanagement during the response to Hurricane Maria. Shortly before the messages were leaked, the FBI arrested five former government officials and contractors accused of misappropriating millions of dollars in federal funds given to the island after the disaster. Continue reading...

Business reiterates importance of frictionless trade with EU as foreign minister heads to AsiaBusiness groups have stressed the importance of continued frictionless trade with the EU after Dominic Raab used his first overseas trip as foreign secretary to urge UK firms to “raise their game” and focus more on exporting to other regions.Organisations including the CBI and Make UK, which represents the manufacturing sector, said that while British companies had already expanded to countries across the globe, exports to the EU accounted for almost half of the total. Continue reading...

US president sends series of tweets and suggests agreement might be delayedMarkets have fallen sharply across Europe after Donald Trump reignited trade war fears with a series of tweets attacking China’s handling of negotiations with the US.With a two-day meeting between the countries’ trade teams due to begin in Shanghai, the US president said China’s economy was “doing very badly” and added negotiators “just don’t come through” on agreements, including promises to buy US farm goods.China is doing very badly, worst year in 27 - was supposed to start buying our agricultural product now - no signs that they are doing so. That is the problem with China, they just don’t come through. Our Economy has become MUCH larger than the Chinese Economy is last 3 years.......to ripoff the USA, even bigger and better than ever before. The problem with them waiting, however, is that if & when I win, the deal that they get will be much tougher than what we are negotiating now...or no deal at all. We have all the cards, our past leaders never got it! Continue reading...

Money markets did not take a disorderly departure seriously, but do now. So should JohnsonBritish holidaymakers heading abroad for their summer holidays might not thank him for it, but the fall in the value of the pound to its lowest level in 28 months is evidence that Boris Johnson’s Brexit strategy is having an impact.The currency markets never took the idea seriously that the UK would leave the EU without a deal when Theresa May was prime minister. That has changed in the past five days as the new government has rammed home the message that the 31 October deadline for departure is set in stone.Related: No-deal Brexit: how likely is it and what would be the impact?Related: No, a falling pound is not good. It’s a sign of weakness and decline | Dan Davies Continue reading...

Britain has a vocal weak-currency lobby but depreciation is not a route to long-term success, as Italy could tell youLike the weather, the foreign exchange market changes every day and appears at the end of the evening news. Unlike the weather, though, the external value of the pound isn’t directly experienced by most people, except when they go on holiday. This creates something of a cognitive vacuum – into which a lot of politicised folk theories seem to get sucked and which makes the exchange rate one of our lowest-quality debates. Now the pound has reached its lowest level against the dollar for two years as the market starts taking the possibility of no-deal Brexit seriously, meaning that sterling makes a rare appearance as a leading news story.On the one hand, there’s a tendency to regard the exchange rate as akin to the national share price, and to take pride in the fact that one pound buys more than one unit of nearly every currency in the world, apart from a few oil state dinars. On the other hand, the UK has a surprisingly vocal weak-currency lobby, based on memories of past episodes of tight interest-rate policy and of the squeeze placed on our manufacturing exports back in the 1980s, when we were briefly an oil state ourselves. To a regrettable extent, foreign exchange analysis is all about finding a story that’s convenient for your (political or financial) position and telling it as forcefully as possible.Related: What does the falling pound mean for holidays and prices? Continue reading...

Rolling coverage of business, economics and markets as stock markets and the pound fall

Retaliatory proposal follows France’s announced levy for US technology companiesA threat by Donald Trump to tax French wines in retaliation to a proposed levy aimed at big US technology companies is “completely moronic”, France’s agriculture minister has said.French plans to place a 3% tax on the “GAFAs” – Google, Amazon, Facebook and Apple – drew an angry response from the US president, who warned last week that his administration would announce “substantial reciprocal action”.Related: France hits back at US over tax on digital giants Continue reading...

Bank of England governor had been cited as contender to take over from Christine LagardeThe shortlist of European candidates to lead the International Monetary Fund has been reduced to a handful of names – but Mark Carney has not made the final cut.The Bank of England governor had been cited as a contender to take over from Christine Lagarde, who stands down as the fund’s managing director in September to move to the European Central Bank. Despite being a previous bookies’ favourite, Carney is not on a shortlist drawn up by France’s finance minister, Bruno Le Maire, who is organising the process of selecting Europe’s candidate. Continue reading...

Rolling coverage of business, economics and markets as ministers ramp up plans to leave EU without a deal

In the first of a new series, we look at the PM’s promises and their costThe last day of the parliamentary session before the summer recess normally marks the period when the Treasury starts to wind down for the summer. The chancellor takes a break and a skeleton team takes control. But not this year.Seated next to Boris Johnson as he made his first statement to MPs last Thursday was Sajid Javid, the new chancellor of the exchequer, and the man given the task of delivering the prime minister’s tax and spending pledges this autumn. Continue reading...

As the US president at last gets his interest rate cut he must wish he could have had the bold ECB boss at the FedCentral bankers rarely say anything that sticks in the memory. Mark Carney has been at the Bank of England for the past six years and is known as the rock star central banker, and not always in a good way. His answers to questions at press conferences are often like solos from the lead guitarist of a 1970s prog rock band: long and boring.Indeed, only two central bankers have ever come up what might be called zingers. William McChesney Martin, who ran the US central bank for almost two decades from 1951 to 1970, said the Federal Reserve was in the position of a “chaperone who has ordered the punch bowl removed just when the party was really warming up”.Related: Fed chairman hints at first interest rate cut in over a decade Continue reading...

We have seen external shocks and misguided policies push Britain into crisis before. But never willed self-harm like this‘While we were strongly opposed to the Trotskyist revolution that has taken place in this country, now that it has occurred the important thing is that it should be made to work properly.”It was on something like those lines that a few of us wrote a parody of a Financial Times leading article many years ago on a very slow news day, when I was working for the FT.Perhaps he really is deluded and believes that a period of 'optimism' can work miracles Continue reading...

Government action is needed to preserve Britain’s high streets. But no law can protect a company from unrestrained ambitionEven by Mike Ashley’s standards, Sport’s Direct’s annual results statement on Friday was an extraordinary performance. The idiosyncratic billionaire’s comments included expressing regret about buying House of Fraser last year due to its “terminal” problems; urging the City regulator to offer voluntary drugs tests to the chief executives of listed businesses; revealing that none of the big four auditors are able or willing to work with Sports Direct; and railing at length over the circumstances of his company’s failed bid for control of Debenhams. Oh, and there will be no profit guidance for next year.The coup de grace, the show-stopper, came at the end: an unresolved €674m (£605m) tax bill from the Belgian authorities. The final paragraph of the results came out of the blue and will almost certainly trigger a punitive response from investors on Monday and, in the medium term, an attempt to punish the company’s board. Continue reading...

If the Conservative party wants to win over large sections of the poor then it will have to tackle the damagingly high levels of inequality in the UKOne the eve of the 2015 election, one that most pollsters thought David Cameron would not win, Boris Johnson gave perhaps the most interesting and insightful interview of his career. Sensing the ball was about to come loose from the back of the scrum, as Mr Johnson might put it, he told the Spectator magazine that the Conservatives were finished if they continued to be seen as defenders of the rich and, particularly, the privileged. He argued that “the wealth gap has been allowed to get too big” and is now “outrageous”. His post-mortem assumed that Mr Cameron was politically a dead man walking and about to be felled in a living standards election. Not for the first time, Mr Johnson’s timing failed him.Mr Cameron won. Mr Johnson had to wait another four years before he got his chance to run the country. His instincts, however, were right. The Tories are seen as “for themselves”, “out of touch” and for rich families and pinstriped City workers. Voters don’t look at the Conservatives and see themselves. Yet Mr Johnson campaigned to become Tory leader on a platform of tax cuts for the rich combined with a staunch defence of bankers. He was bankrolled by billionaires and hedge fund managers. Mr Johnson’s outreach to the rich was understandable given that six out of seven of the voters he was canvassing do not believe that government should redistribute income from the better-off to those who are less well-off. That explains why Mr Johnson has backed the Laffer curve, a discredited theory that claims lower tax rates for the rich will lead to higher tax revenues. Continue reading...

Rolling coverage of the latest economic and financial news as US figures show slowdown was less severe than expected

Decline was slower than expected as US gross domestic product grew at an annual rate of 2.1% between April and JuneUS economic growth slowed in the second quarter of 2019 as trade disputes and a global slowdown took their toll, the commerce department announced on Friday.Revised figures from previous quarters showed the US narrowly missed Donald Trump’s pledge to grow the economy by over 3% last year. The commerce department pegged growth at 2.9% in 2018.Related: Americans positive on economy but views deeply split by politics and wealthQ2 GDP Up 2.1% Not bad considering we have the very heavy weight of the Federal Reserve anchor wrapped around our neck. Almost no inflation. USA is set to Zoom! Continue reading...

After decades of rightwing dominance, a transatlantic movement of leftwing economists is building a practical alternative to neoliberalism. By Andy Beckett• Read the text version here Continue reading...

Economists remain fixated on the need for 2% inflation. It’s time to move onThe Federal Reserve has some reasons to cut interest rates at its 31 July meeting, or subsequently if the US economy weakens. (There is also a case for holding rates steady, if growth remains as strong as it has been over the past year.) But one argument for easing is less persuasive: a perceived imperative to get US inflation up to or above 2%.The Fed set the 2% inflation target in January 2012 under its then chair, Ben Bernanke, after some other central banks had already done so. Japan followed suit a year later, shortly after the prime minister, Shinzo Abe, returned to power on the promise that monetary policy would raise inflation (Japan had previously suffered from falling prices).Related: Does setting inflation targets cloud our view of the economy? | Robert Shiller Continue reading...

His cabinet is stuffed with Thatcherite true believers who will hardly be inclined to undertake a vital reboot of the economySo farewell then, Project Fear. Out go the predictions of imminent economic catastrophe, in comes Mr Brightside and his vision of the sunny uplands that lie ahead. Before he became prime minister, Harold Wilson talked of how the Britain of the future would be forged in the white heat of the technological revolution. For Boris Johnson, it is full-fibre broadband.Little has changed since 1963. Then, as now, Britain was strong in science and rich in new ideas. Then, as now, it was less good than other countries at exploiting them. Wilson’s optimism drained away after he arrived in office, as Johnson’s may well also, and for the same reason: a sterling crisis. But for now the country will be love-bombed with the new prime minister’s can-do spirit.The causes of Brexit lie not in leftwing economic policies but in Thatcherism and austerity after 2010Related: How representative is Boris Johnson's new cabinet? Continue reading...

As trade talks are set to resume after a two-month halt, an aid package will see producers paid up to $150 per acreThe US government will pay American farmers hurt by the trade war with China between $15 and $150 per acre in an aid package totaling $16bn with farmers in the South poised to see higher rates than in the midwest.As US and Chinese negotiators prepare to meet face-to-face for the first time since talks on the dispute collapsed in May, the agriculture secretary, Sonny Perdue, said the package showed that Donald Trump knew farmers were “fighting the fight”.Related: Donald Trump's trade war hurting China more than US, says IMFRelated: Even Trump may ultimately retreat from the cost of the China trade war Continue reading...

Pew study finds richer, Republican Americans more likely to view economy positively than poorer Americans and DemocratsAmericans are more positive about the state of the US economy than they have been in nearly two decades, but their views are deeply divided by political leaning and income, according to a new survey.Pew Research Center’s latest report on people’s views of the US economy reveals a wide split of opinion on the state of the economy and who should get the credit for it. While a majority of the public (55%) describe national economic conditions as “excellent or good”, those views vary wildly depending on political convictions and income.Related: US job growth rebounds as economy adds 224,000 jobs in June Continue reading...

Readers share their views on the Liberal Democrats in the week that Jo Swinson was elected as their new leaderJo Swinson asserts that Jeremy Corbyn can’t be trusted on Brexit (Report, 24 July). Maybe it’s worth asking whether she can be trusted on many of the things that contributed to the referendum outcome she wants to overturn. She voted for scrapping the education maintenance allowance and for increasing tuition fees; for reducing housing benefits; against letting benefits rise in line with inflation; against increasing taxes for those earning over £150,000; against taxes on bankers’ bonuses; for reducing corporation tax; against restricting NHS provision to private patients.Simply resetting the Brexit clock won’t address the disquiet that produced the leave victory. We need a government committed to, among other things, an economic model that distributes national wealth more appropriately – around the country, and across all sections of society. Corbyn has a long-standing commitment to tackling economic and social inequality and Jo Swinson condemns herself by turning her back on him.

Outgoing president says outlook is worsening and inflation is well below targetThe European Central Bank has given a clear signal that it will join the US Federal Reserve in seeking to boost global growth as it expressed concern about flagging levels of activity and undershooting inflation in the eurozone.Financial markets were left fully braced for a cut in interest rates from the ECB in September, together with a resumption of money creation under its quantitative easing programme. Continue reading...

CBI calls figures ‘hugely concerning’ amid Brexit uncertainty on the high streetBritain’s retailers have recorded the longest period of falling sales for almost eight years, fuelling mounting concern for the economy ahead of Brexit.The Confederation of British Industry said retail sales across the country had dropped for a third month running in July, marking the longest period for sliding sales since 2011.Related: High street suffers 'summer slump' as Brexit and wet weather bite Continue reading...

Rolling coverage of the latest economic and financial news as Mario Draghi prepares central bank for interest rate cuts

Much of modern China’s epic growth was driven by private enterprise – but under Xi Jinping, the Communist party has returned to being the ultimate authority in business as well as politics. By Richard McGregorWhen Xi Jinping took power in 2012, he extolled the importance of the state economy at every turn, while all around him watched as China’s high-speed economy was driven by private entrepreneurs. Since then, Xi has engineered an unmistakable shift in policy. At the time he took office, private firms were responsible for about 50% of all investment in China and about 75% of economic output. But as Nicholas Lardy, a US economist who has long studied the Chinese economy, concluded in a recent study, “Since 2012, private, market-driven growth has given way to a resurgence of the role of the state.”From the Mao era onwards, Chinese state firms have always had a predominant role in the economy, and the Communist party has always maintained direct control over state firms. For more than a decade, the party has also tried to ensure it played a role inside private businesses. But in his first term in office, Xi has overseen a sea change in how the party approaches the economy, dramatically strengthening the party’s role in both government and private businesses.Related: Inside China's audacious global propaganda campaign Continue reading...

Drop in exports prompts factory contraction in Eurozone’s largest economy

ASX200 heads towards pre-GFC record, but weak economic growth spells a ‘potentially dangerous’ situationA lot has changed since November 2007. Back then, John Howard was still prime minister, you could buy a nice house in Sydney for less than $500,000 and no one had ever heard of Instagram.It was also the month when Australia’s benchmark stock market index, the ASX200, reached an all-time high of 6,828.7. With the full extent of the US subprime crisis still hidden, all seemed set fair for the local market to continue growing on the back of the mining boom and strong banks.Related: Reserve Bank interest rates cut to historic low of 1% – as it happened Continue reading...

From nationwide full-fibre broadband to 20,000 extra police officers, here’s what 10 of his plans might costTaxes will be cut and public spending increased if Boris Johnson makes good on the pledges he has made in recent weeks while campaigning to be prime minister.In a marked reversal of the fiscal restraint enforced over the past nine years, Johnson has committed himself to a multibillion pound programme of measures paid for by extra government borrowing.A cabinet reshuffleRelated: Fishy figures: Boris Johnson's public service pledges are fantasy economics | Richard Vize Continue reading...