Chancellor promises multibillion-pound rises for hospitals, education and moreWith a general election looming, Boris Johnson has sanctioned a multibillion-pound spending programme announced at the Conservative party conference.Ministers have promised investment in the transport system, NHS and digital infrastructure in an attempt to stimulate economic growth and win back erstwhile Tory voters. But there are concerns the party has jettisoned its reputation for fiscal rectitude. Continue reading...

RBA reduces cash rate costs by another 0.25% despite rising house prices. This blog is now closed• Full report: Reserve Bank cuts interest rates to historic low to boost weak economy8.21am BSTThanks for joining us, we are going to leave our live coverage here. Just to recap the main points:8.13am BSTA quick update on the Australian share market and the dollar via our friends at Australian Associated Press:

Donald Trump cut taxes for rich Americans, but Berlin should invest in modernisationAs long as Germany’s economy was recovering well from the 2008 global financial crisis, policymakers had a coherent rationale for fiscal austerity. Rejecting other eurozone countries’ constant urging that it undertake stimulus, Germany enshrined the national commitment to budget discipline in the 2009 “debt brake”, which limits the federal structural deficit to 0.35% of GDP, and in the subsequent schwarze null (“black zero”) policy of fully balancing the budget.More German public spending, stimulus advocates argued, would reduce the country’s huge current account surplus and fuel demand that would help other eurozone members, especially in southern Europe. But with Germany experiencing low unemployment and relatively strong growth, policymakers in Berlin were understandably afraid such measures would cause the domestic economy to overheat. Continue reading...

Rolling coverage of the day’s political developments, including Brexit and the Conservative party conference

The underlying problem with the flagship Tory policy is the idea that claimants need to change. Could a new government turn this on its head?The shocking failings of universal credit are justly blamed on the government having listened to the wrong people when setting it up. The sensible reforms set out by Labour show that the opposition has been listening to the right ones. Never mind that the package of changes announced by Jeremy Corbyn on Saturday was misleadingly described as a plan to “scrap” universal credit. His party’s proposals to end the five-week wait for initial payments, scrap the benefit cap and two-child limit (and heinous “rape clause”) are sound. So are promises to review the sanctions system, ditch the “digital only” approach and hire 5,000 new advisers to help those who struggle with online applications.Brexit has temporarily obscured much else. But rising levels of poverty in the UK over the past five years, particularly among children and pensioners, rival the current chaos as the deepest stain on the Conservatives’ record. Combined with the rise of insecure, low-paid work, use of food banks and sharp increases in homelessness and rough sleeping, this immiseration must be a priority for any party seeking to replace them. Continue reading...

Sajid Javid’s speech was more hyperbole than hard cash. Many announcements crumble under scrutinyLook at the people here in Manchester at the Tory party conference, stare into their eyes and they look much as they always did – ordinary home counties folk, small business people, plus a few sharp-suited would-be spads. Not noticeably odd, yet these party members are the tiny group who have done for their country.Over the past decade, their Brexit fever has packed the Commons with Europhobes. These respectable law and order-minded patriots chose a dishonest, disreputable, disgrace of a man for prime minister, who will trash their constitution, mislead their monarch, and disrespect their judges to use “any means necessary” to get anything he wants. These ordinary people have turned into wreckers of what they used to hold dearest.More hyperbole than hard cash, many announcements crumble under scrutiny – not 40 new hospitals but refurbishment for sixRelated: Boris Johnson’s unwinnable chess match is nearing its endgame | Anand Menon and Alan Wager Continue reading...

An urgent parliamentary question has examined claims Boris Johnson’s supporters are shorting the pound

The new ECB president must encourage governments to take more pro-growth policiesA highly regarded doctor assumes the care of a chronically impaired patient who is growing weaker and more vulnerable. The patient’s longstanding treatment is not only becoming less effective; now it is also introducing harmful side effects. A better approach exists, but it is not available at the new doctor’s hospital. And in the facilities where it is available, the doctors are too distracted to take on the case.The new doctor is Christine Lagarde, the widely admired former managing director of the International Monetary Fund who will soon succeed Mario Draghi as president of the European Central Bank (ECB). Her challenge will be to avoid a second lost decade of low, insufficiently inclusive eurozone growth. How the patient fares under her care – and whether she can get key eurozone governments to provide the necessary treatment – will define not just her own legacy, but also that of Draghi.Related: ECB has put Europe on a collision course with Donald Trump Continue reading...

Before Thatcher, capital and labour had an even share – Labour merely plans to rebalance a skewed relationshipMargaret Thatcher knew what she wanted to do when she came to power in 1979. She planned to tackle inflation, cut taxes, roll back the state, and give employers the right to manage by reducing the power of trade unions.By the time Thatcher left office in 1990 inflation was still a headache for the government and there had been no real change in the size of the state. But by the mid-1980s, a combination of mass unemployment, the defeat of the miners in their year-long strike and a raft of tougher labour laws had fundamentally changed the balance of power in the workplace. Continue reading...

Precognition is the claimed paranormal ability to predict the future – and is widely considered to be pseudoscience. Why, then, is the US psychic industry worth $2bn a year?Deep in the night of 29 January 2012, Fatih Ozcan had an unusual dream. Then 27, and a waiter in a Turkish restaurant in York, Ozcan dreamed he was holding “loads of cash” while standing in front of his boss. When he arrived at the restaurant for his 5pm shift the next day, he was impatient to speak with his employer. “I was saying: ‘Where is he? I need him.’ I was telling everyone I had to play the lottery with the boss,” Ozcan says. After two hours of pestering, Ozcan’s boss agreed to play. Two days later, the winning EuroMillions numbers were drawn – the pair won £1m.“I’ve had loads of dreams that have become true, but they were little things, like travelling somewhere or having a nice day,” he says. Ozcan was certain this dream was prophetic and that he and his boss would win money together, because a month earlier he prayed for wealth for the first time. “My boss and my colleagues didn’t believe it, but I believed it and that’s why I pressured him for hours.”It’s a bit like seeing a memory of a place you have never been beforeThose who buy into the precog economy don’t like to publicise the fact – police forces prefer to keep quiet about it Continue reading...

Plans for a shorter working week – or even for guaranteed employment – can offer a way out of the casualised rat raceBritain’s economy has long since made the shift from manufacturing things to providing services. Now there is a danger that this service economy is becoming a servant economy.That is the view of the economics professor and biographer of John Maynard Keynes, Lord Skidelsky. He worries our attitude to work has hardened to a point where a cadre of managers and professionals is charged with bossing around an increasingly casualised workforce – one that is forced to contort domestic lives to suit the whims of those in charge and the profit motive.So much more needs to happen. The basic costs of living, which drive workers to scramble for money, need to come down Continue reading...

BoE’s Michael Saunders says Brexit uncertainty could trigger interest rate cut

MPC’s Michael Saunders says businesses think uncertainty will last well into 2020The Bank of England may have to cut interest rates even if a no-deal Brexit is avoided on 31 October, according to a member of the rate-setting monetary policy committee.Michael Saunders said the economy’s persistent weakness meant a delay to Brexit or even a last-minute deal could still leave policymakers with no option but to cut rates. Continue reading...

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

The Bank’s complacency is palpable. Once again it is fiddling while Rome burns

No-deal threat has taken toll on business and consumer confidence, Guardian analysis shows

It is a totally disproportionate charge at a time when savings rates are below 2%Nationwide, my current account provider, states that as a result of the recent Financial Conduct Authority ban on overdraft fees from April 2020, all overdrafts on its current accounts will be charged a single fixed rate of 39.9% EAR/APR (variable) from 11 November 2019. Is this going to be the same for all banks and building societies? If so, it seems the sector is taking advantage of the ruling to introduce iniquitous and totally disproportionate rates in the face of savings rates below 2% and inflation below 3%.

Promise to lift threshold for top rate to £80,000 would boost incomes of highest-earning 8% of populationBoris Johnson’s pledge to raise the threshold for the top rate of income tax from £50,000 to £80,000 would cost £8bn a year and boost the incomes of the highest-earning 8% of the adult population, according to the Institute for Fiscal Studies.The policy would take 2.5 million people out of paying higher-rate tax, more than reversing the increase over the past three decades, the tax and spending watchdog said. About three-quarters of the tax benefit would go to the highest-income 10% of households. Continue reading...

Nearly 12% of retail sites were unoccupied in first half of 2019, data shows, with chains hit by rising costs and low consumer confidenceBritain’s high streets, shopping centres and retail parks have been left with the highest number of empty outlets in five years as chains have taken a battering from rising costs and low consumer confidence.Nearly 12% of shopping locations were empty in the first half of 2019, up 0.6% compared to the same period last year, according to research from Local Data Company’s (LDC) review of 3,000 retail centres.Related: UK high streets 'in downward spiral' with one in 10 shops emptyRelated: Wolverhampton wonders: the indie shops bucking the high street trend Continue reading...

Kristalina Georgieva spoke of ‘huge responsibility’ of taking charge amid faltering growthBulgaria’s Kristalina Georgieva has said the global economy needs to be ready to cope with a fresh economic downturn after being chosen to head the International Monetary Fund (IMF).The economist said she was taking charge of the Washington-based organisation at a time when growth was slowing, trade tensions growing and with debt at record levels. Continue reading...

Report calls on policymakers to ward off threat by refocusing on jobs, wages and investment

The swelling ranks of people living on the streets are austerity’s public face. It is nothing short of a national disgraceFor the past five years I’ve lived in Los Angeles, where thousands of destitute people call the streets home on any given day. In part due to spiralling rents, LA has an astounding homelessness problem (recent figures revealed a 16% jump in the city to more than 36,000 out of a population of just under 4 million) in a country where “tent cities” have been normal for some time. Meanwhile, doctors are warning of outbreaks of serious infectious diseases, including typhus, among homeless populations. Attacks on homeless people, including in LA, have been a regular feature of America’s crisis. The National Coalition for the Homeless documented 37 lethal attacks in 2016 – a conservative estimate in the absence of reliable reporting of incidents.Related: I work in A&E. I see the brutal reality of the UK's homelessness crisis every dayThe swelling ranks of people living on the streets are austerity's public face Continue reading...

Trump’s rows with China and Iran, Brexit and Argentina’s populism put the world on a knife edgeIn the classic game of chicken, two drivers race directly toward each other, and the first to swerve is the loser. If neither swerves, both will probably die. In the past, such scenarios have been studied to assess the risks posed by great-power rivalries. In the case of the Cuban missile crisis, for example, Soviet and American leaders were confronted with the choice of losing face or risking a catastrophic collision. The question, always, is whether a compromise can be found that spares both parties their lives and their credibility.There are now several geo-economic games of chicken playing out. In each case, failure to compromise would lead to a collision, most likely followed by a global recession and financial crisis. The first and most important contest is between the US and China over trade and technology. The second is the brewing dispute between the US and Iran. In Europe, there is the escalating brinkmanship between Boris Johnson and the EU over Brexit. Finally, there is Argentina, which could end up on a collision course with the International Monetary Fund after the likely victory of the Peronist Alberto Fernández in next month’s presidential election. Continue reading...

German private sector shrinks, contributing to wider manufacturing recessionThe eurozone economy came close to stalling in September after declines in global trade and the threat of a no-deal Brexit triggered the fastest fall in manufacturing output in nearly seven years.Germany was the main driver of the slump after a survey of private sector activity found that the growing threat to international trade from the tit-for-tat US-China trade war had left it in the worst position since 2009. Continue reading...

Manufacturing health check shows exporters in Wales, north-east, Yorkshire and Humberside as vulnerableA health check of Britain’s manufacturers has shown thatsome of the most economically and socially deprived areas in UK are highly exposed to the impact of a no-deal Brexit.Exporters are already suffering losses, especially in Wales, north-east England, Yorkshire and Humberside, which have a significant exposure to trade with the EU, according to a report by manufacturing trade body Make UK and business advisory firm BDO.A hard Brexit would take Britain out of the EU’s single market and customs union and ends its obligations to respect the four freedoms, make big EU budget payments and accept the jurisdiction of the ECJ: what Brexiters mean by “taking back control” of Britain’s borders, laws and money. It would mean a return of trade tariffs, depending on what (if any) FTA was agreed. See our full Brexit phrasebook. Continue reading...

UK has created many part-time or self-employed roles, with new full-time posts going to older workersJobs, jobs, and more jobs. That is Britain’s economic success story of the last 10 years.While public services crumble and the welfare budget continues to be squeezed, when planning for a no-deal Brexit has displaced almost all other activities in Whitehall, ministers can always point to the UK economy as a well-oiled jobs machine.This bountiful situation forms the economic bedrock on which Brexiters base their case for quitting the EU without a deal. Continue reading...

Corbyn is claiming to emulate Harold Wilson in staying neutral over Brexit. But the reality of four decades ago was very differentMy friend Tom McGuinness, who will be known to many as the lead guitarist in Manfred Mann (now the Manfreds), recently spotted a most moving Churchill quote on a D-Day memorial in Normandy. “Men will be proud to say ‘I am a European’. We hope to see a day when men of every country will think as much of being a European as of being from their native country.”Having at one stage early in the second world war proposed a union between Britain and France, the great man cooled on the idea. Later he called for a United States of Europe, but he was not in favour of our joining. Nor was Clement Attlee, Labour prime minister from 1945 to 1951. As for Attlee’s successor as Labour leader, Hugh Gaitskell, he was passionately against it, arguing that it would be an insult to “a thousand years of history”.The referendum was called to resolve issues within the Tory party: instead it brought us the biggest crisis since Suez Continue reading...

Omar Salem said daughter still in hospital for precautionary reasons and thanked A&E staffA man who confronted Boris Johnson over the state of the NHS after years of austerity has said that his daughter is doing better.Omar Salem confronted the prime minister during a visit to a children’s ward at Whipps Cross University hospital in north-east London, where his seven-day-old daughter was being treated. Continue reading...

The scientist and author on his latest book – an epic, multidisciplinary analysis of growth – and why humanity’s endless expansion must stop.Vaclav Smil is a distinguished professor emeritus in the faculty of environment at the University of Manitoba in Winnipeg, Canada. Over more than 40 years, his books on the environment, population, food and energy have steadily grown in influence. He is now seen as one of the world’s foremost thinkers on development history and a master of statistical analysis. Bill Gates says he waits for new Smil books the way some people wait for the next Star Wars movie. The latest is Growth: From Microorganisms to Megacities.You are the nerd’s nerd. There is perhaps no other academic who paints pictures with numbers like you. You dug up the astonishing statistic that China has poured more cement every three years since 2003 than the US managed in the entire 20th century. You calculated that in 2000, the dry mass of all the humans in the world was 125m metric tonnes compared with just 10m tonnes for all wild vertebrates. And now you explore patterns of growth, from the healthy development of forests and brains to the unhealthy increase in obesity and carbon dioxide in the atmosphere. Before we get into those deeper issues, can I ask if you see yourself as a nerd?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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