Individual acts of philanthropy, however inspiring, are not the solution to the current crisisFrom sponsored bike rides to tombolas and auctions, fundraising drives are part of the fabric of our lives. They can help to strengthen social ties as well as raising money – as when parents bond with teachers across tables loaded with jumble or cakes. Funds raised in this way have long provided valuable extracurricular extras for schools, helping to pay for trips or special projects such as pantomimes or gardens. And there is no reason why communities should not seek to add to the resources supplied by the state.What they cannot do, and should not be forced to attempt, is compensate for the state’s shortcomings. When schools are forced to fundraise for essentials such as pencils, no amount of the goodwill associated with donations can disguise the underlying problem. Yet an investigation by the Guardian shows that the line has been crossed decisively and that such drives are becoming routine. About 100 schools in England have Amazon wishlists including such items as erasers and glue; another 10 are asking for soap, vacuum bags or other cleaning products. Last month, one Surrey headteacher revealed that cuts have led to her helping to clean her school’s toilets and serving in the canteen. Evidence of the damaging effect of cuts on special needs provision and in narrowing the curriculum is widespread. Last month 7,000 headteachers united to warn of a “funding crisis” in a letter to parents sent after education secretary Damian Hinds refused to meet them. They are right. Continue reading...

World Economic Outlook refers to ‘large, long-lasting negative impacts’ on Britain and EU

Trade wars, protests in France and Italy’s plight are all potential pitfalls for the world’s economy

US and European policymakers once believed they had the tools to deal with sluggish recoveryNot too long ago, the conventional wisdom held that “Japanification” could never happen in western economies. Leading US economists argued that if the combined threat of weak growth, disinflation and perpetually low interest rates ever materialised, policymakers would have the tools to deal with it. They had no problem lecturing the Japanese about the need for bold measures to pull their country out of a decades-old rut. Japanification was regarded as the avoidable consequence of poor policymaking, not as an inevitability.And yet the spectre of Japanification now looms over the west. After the 2008 financial crisis the recoveries in Europe and the US were more sluggish and less inclusive than the majority of policymakers, politicians and economists expected. More recently, hopes for achieving “escape velocity” out of the “new normal” of low growth and persistent disinflationary pressure have been dashed in Europe and Japan, and some worry that they may be receding in the US.Related: Why is Trump easing financial rules when Europe has opposing view? | Howard Davies Continue reading...

JPMorgan CEO Jamie Dimon decries socialism. Unless of course it’s the banks that need a government bailoutIn his annual letter to shareholders, distributed last week, JPMorgan Chase CEO Jamie Dimon took aim at socialism, warning it would be “a disaster for our country,” because it produces “stagnation, corruption and often worse.”Dimon should know. He was at the helm when JPMorgan received a $25bn socialist-like bailout in 2008, after it and other Wall Street banks almost tanked because of their reckless loans.Related: Panic is on the agenda at Davos – but it’s too little too late | Aditya ChakraborttyRobert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. He is also a columnist for Guardian US Continue reading...

Normally robust services sector leads the rout, according to BDO optimism indexBusiness confidence has crashed to the lowest point since 2012, and the economy is only growing because firms are stockpiling ahead of Brexit, according to a key sentiment indicator.The BDO optimism index, which charts how businesses expect output to develop in the next three to six months, fell faster in March that at any time since the bleakest days in the aftermath of the Lehman Brothers collapse in 2008. Continue reading...

When Trump won the election, photographer Brian Rose made straight for the gambling town – to show the reality behind his billionaire boasts. The broken city he captured speaks volumes about today’s AmericaWhen Donald Trump opened the towering Trump Taj Mahal Casino in Atlantic City in March 1990, he declared it “the eighth wonder of the world” and joined in the celebrations at a launch ceremony filled with portly actors dressed as genies brandishing tacky golden lamps. Even though it was purchased with almost $700m worth of junk bonds – which meant the Taj had to come up with $94m a year just to pay off its debts, and $1m a day to be profitable – Trump insisted the casino would make Atlantic City great again, returning the area to its prohibition-era glory days.When photographer Brian Rose arrived in the city in 2016, the bankrupt Taj was practically empty. His images of the building’s exterior look eerily quiet, as if all its workers had left in a sudden hurry, with what was once a thriving casino now unkempt and surrounded by damaged sand dunes. He photographed a family of stray cats nesting in a spot where gamblers might once have collapsed in a drunken stupor.The fact that Atlantic City is freezing cold for at least two thirds of the year doesn't help Continue reading...

In 1846 Robert Peel defied his party with a repeal, dooming them to years in the wildernessThe mood in the Conservative party is fractious. Backbench MPs are at odds with their own prime minister. An issue that has been bubbling away beneath the surface for decades has burst out into fratricidal warfare. Ireland is central to the political crisis.That was Britain in early 1846 when Sir Robert Peel used the Irish potato famine to push through the repeal of the Corn Laws, splitting the party in the process but the parallels between mid-19th century Britain and today are obvious. The fear for the Tories is a long spell in the political wilderness: it took 28 years after 1846 for the Conservatives to form a majority government. Continue reading...

While his predecessor and proponents of no-deal vanish into fantasy, the governor is clear about the dangers we faceWhen my old friend Mervyn King completed his 10-year term as governor of the Bank of England in June 2013, I was deputed, as one of the older journalists who attended his press conferences over the years, to make some farewell remarks.I praised him for the frank, even-handed and (almost) always enlightening way in which he had handled the press conferences associated with the Bank’s regular inflation reports and the deliberations of the monetary policy committee the governor chairs. And I meant it.Many Remainers harbour doubts about the way the EU operates. But economic self-harm is not the route to sensible reform Continue reading...

Flaws in the global economy that led to the 2008 financial crisis were papered over rather than dealt withLast week marked the 10th anniversary of the London G20 summit, an event that took place at the low point in the deepest slump since the 1930s, yet represented the high point of international cooperation.A decade on, the global outlook is once again darkening. World trade growth is at its weakest since 2009, the protectionism that the London summit eschewed has reared its head, and central banks have responded to faltering growth by scaling down plans to raise interest rates. Continue reading...

Negotiators meet again on Monday to resolve dispute that has cast a shadow over global financial marketsChina said “new progress” had been made in trade talks with the United States as the two sides prepare to resume discussions next week to try to secure a pact that would end a tit-for-tat tariff battle that has cast a shadow over global markets.In a short statement on Sunday, Chinese news agency Xinhua said the remaining issues would be handled through “various effective means”.Related: IMF chief warns of slower growth for most countries worldwide Continue reading...

The non-farm payrolls showed 196,000 jobs were created in March, but wage growth slowed to 3.2% and manufacturing jobs fell unexpectedly

Manufacturing, which has added jobs for 19 consecutive months, lost jobs in March, shedding 6,000 positionsThe US added 196,000 jobs in March bouncing back from a sharp drop in February.The latest figures will be a relief for those concerned that the long economic recovery is running out of steam. But they also contain a worrying wrinkle: manufacturing, which has added jobs for 19 consecutive months, lost jobs in March, shedding 6,000 positions.Related: Raft of woeful forecasts spells an end to Trump’s economic bragging rights Continue reading...

ONS says Britain achieving growth of only a quarter the level seen a decade agoBritain has maintained its dismal productivity record, with the rise in worker efficiency in 2018 only a quarter of the level seen before the financial crisis a decade ago.Amid fears Brexit uncertainty is set to further damage productivity growth, holding back improvements in living standards, the Office for National Statistics said labour productivity grew by only 0.5% last year compared to 2017.Related: UK worker productivity growth falls to two-year low on back of Brexit concernsRelated: We’re working like it’s 1975, but the jobs boom isn’t all it seems. Here’s why | Larry Elliott Continue reading...

Rolling coverage of the latest economic and financial news, including another worrying drop in demand for German manufactured goods

Concern that overvaluation, low interest rates and loose lending will affect stabilityA growing number of homes in the US and China are teetering on the brink of a price slump that would drag their economies into a recession, the International Monetary Fund has warned.Using the latest evidence from global housing markets, the Washington-based organisation said there was a clear increase in the risk of a housing price collapse in both countries after years of ultra-low interest rates and loose lending by financial institutions.Related: A burst of good news can’t hide the economic hazards ahead in 2019Related: Raft of woeful forecasts spells an end to Trump’s economic bragging rights Continue reading...

Brexit chaos also behind slow sales in March, traditionally a strong month in the industrySales of new cars fell last month as UK consumers shunned diesel vehicles and Brexit chaos deterred buyers in what is traditionally a strong month for the industry.The number of new car registrations fell by 3.4% to 458,054 in a crucial plate change month that usually encourages buyers into showrooms. It was the lowest number for March in six years.Related: Self-driving cars could provide £62bn boost to UK economy by 2030 Continue reading...

But such potential may be threatened by a no-deal Brexit, says SMMTBritain’s leading position in developing self-driving cars could produce a £62bn economic boost by 2030, the car industry claimed – but warned that such potential could be jeopardised by a no-deal Brexit.A report published by the Society of Motor Manufacturers and Traders said the UK has significant advantages over other countries in pushing connected and autonomous vehicles, including forward-looking legislation allowing autonomous cars to be insured and driven on a greater proportion of roads than elsewhere. Continue reading...

It’s seen as a key part of a soft Brexit, but in reality the union has not provided much of a boost to trade of goods with the EUThe Corn Laws. The tariff reform debate of the early 20th century. Imperial preference in the 1930s. There have been times in Britain’s modern history when trade policy has really mattered, breaking parties and swinging elections. To that list can now be added the question of whether Britain should be in a customs union with the European Union.Business certainly thinks so. Leaving the customs union would give Britain freedom to negotiate its own trade deals but this, according to the country’s most powerful employers’ organisation, the CBI, is not why people voted for Brexit. That was primarily about money and immigration rather than a desire for the local supermarket to be able to stock hormone-treated US beef.Customs unions or trade liberalisation deals matter a whole lot less than the underlying shape of an economyRelated: Is May’s offer to Labour sincere? Here’s why the answer is probably not | Tom Kibasi Continue reading...

Creation of body to protect UK firms from unfair global trade practices is behind scheduleLiam Fox’s international trade department has faced further criticism for its lack of Brexit readiness after it emerged that the creation of the watchdog tasked with protecting UK companies from unfair global trading practices was behind schedule.The government said on Wednesday that the Trade Remedies Authority (TRA) would not be established in time for a no-deal Brexit. Continue reading...

Overall business activity stalled in March, according to latest IHS Markit/Cips surveyThe British economy is at risk of sliding into a deepening downturn after stalling in the first quarter, after the weakest performance in the private sector in almost seven years as Brexit approaches.In the latest sign the gridlock over leaving the EU is extracting a high price from the economy, the survey from IHS Markit and the Chartered Institute of Procurement and Supply showed overall business activity stalled in March.Related: Blow to UK global trade as new watchdog chief quits before launch(April 10, 2019) Plan or extension agreed by EU27? Continue reading...

Threat to innovation could spark action against giants such as Facebook and Google

UK services sector suffers contraction in March as “intense political uncertainty” hurts business

Fund report calls for profits to be targeted by a tougher international tax regimeThe International Monetary Fund has warned that the market power exercised by a small number of global companies threatens to stifle innovation and make it harder for central banks to deal with recessions.Adding its contribution to the growing public debate about the corporate power exercised by the US tech giants such as Google, Amazon, Apple and Facebook, the IMF said it would be concerned if there was any further increase in the clout of already dominant firms.Related: Big tech has too much monopoly power – it's right to take it on | Kenneth RogoffRelated: IMF chief joins calls for big tech firms to pay more tax Continue reading...

Campaigners say repayments have doubled since 2010, leading to public spending cutsDebt repayments by the world’s poorest countries have doubled since 2010 to reach their highest level since just before the internationally organised write-off in 2005, campaigners have warned.The Jubilee Debt Campaign (JDC) said a borrowing spree when global interest rates were low had left many developing nations facing repayments bills that were forcing them into public spending cuts.Related: The west is exporting austerity to Africa. It’s a disaster Continue reading...

Christine Lagarde says world economy ‘unsettled’ as fund poised to downgrade forecastThe head of the International Monetary Fund has warned that the majority of countries around the world can expect slower growth in 2019 as the global economy loses momentum.Christine Lagarde said rising trade tensions, concerns over Brexit and tougher financial conditions as central banks raised interest rates had “increasingly unsettled” the world economy over recent months.Related: IMF: no-deal Brexit and Chinese slump are biggest economic risks Continue reading...

Presidential candidate Elizabeth Warren has accused technology giants of competing unfairlyDisplaying a degree of courage and clarity that is difficult to overstate, US senator and presidential candidate Elizabeth Warren has taken on big tech, including Facebook, Google, Amazon and Apple. Warren’s proposals amount to a total rethink of the United States’ exceptionally permissive merger and acquisition policy over the past four decades. Indeed, big tech is only the poster child for a significant increase in monopoly and oligopoly power across a broad swath of the American economy. Although the best approach is still far from clear, I could not agree more that something needs to done, especially when it comes to big tech’s ability to buy out potential competitors and use their platform dominance to move into other lines of business.Warren is courageous because big tech is big money for most leading Democratic candidates, particularly progressives, for whom California is a veritable campaign-financing ATM. And although one can certainly object, Warren is not alone in thinking that the tech giants have gained excessive market dominance; in fact, it is one of the few issues in Washington on which there is some semblance of agreement. Other candidates, most notably Senator Amy Klobuchar of Minnesota, have also taken principled stands.Our treatment of ‘the railroad problem’ will show the quality and caliber of our political sense. It will go far in foreshadowing the future lines of our social and political growth. It may indicate whether the American democracy, like all the democratic experiments which have preceded it, is to become extinct because the people had not wit enough or virtue enough to make the common good supreme. Continue reading...

Major shifts in the economy should be foreseeable, but no one forecast such massive risesShould we have known in March 2009 that the US S&P 500 stock index would quadruple in value in the next 10 years, or that Japan’s Nikkei 225 would triple, followed closely by Hong Kong’s Hang Seng index? The conventional wisdom is that it is never possible to “time the market”. But moves as big as these, it might seem, must have been at least partly foreseeable.The problem is that no one can prove why a boom happened, even after the fact, let alone show how it could have been predicted. The US boom since 2009 is a case in point. Continue reading...

If forecasts are wrong, developed countries will need to rethink immigration, healthcare and pensionsIt was Europe’s deadliest ever import. A particularly virulent form of the bubonic plague travelled westwards from China across the steppes of Asia and ended up at Black Sea ports. As far as can be established, rats carrying diseased fleas were on ships that set sail from the Crimea to Mediterranean ports. Between 1348 and 1350, the Black Death killed at least a third of Europe’s population, with mortality rates as high as 60% in some parts of the continent.Europe has not since witnessed anything remotely like the depopulation of the mid-14th century. It took hundreds of years in some regions for the population to regain its pre-Black Death level and the economic effects were profound. A shortage of labour meant wages went up. Land was left untilled and fell in price. The gap between landowners and workers narrowed. Incentives to develop labour-saving devices meant productivity rose. Continue reading...

The prospect of trade war with China has receded, but so have hopes of the US economy continuing its 2018 growth ratesThere was a sense of relief across global financial markets this weekend after the hardliners among Donald Trump’s trade negotiators appeared to soften their line on import tariffs against Chinese goods.Treasury secretary Steve Mnuchin and trade representative Robert Lighthizer let it be known that talks last week had been “constructive”, which was taken as code for Beijing virtually capitulating to Trump’s demands. Continue reading...

Now that the whole world feels poor and debt relief is out of fashion, some countries are left with big debts at high ratesAusterity is more than just a European response to the 2008 financial crash. It is the common response of indebted countries wherever they may be. And no more so than in Africa.Trapped in binding agreements for loans they can ill afford with international investors, most African countries have kept their heads down and trimmed their spending.Namibia pays 10% on its debt: the UK pays 1.8%. The multiplier effect pushes the former into dangerous territory. Continue reading...

Records obtained by Guardian show Stephen Moore reprimanded by judge for not paying alimony, child support and other debts

Lyft, which went public on Friday, will soon be joined by Uber, Airbnb and other companies valued over $1bn – and they may be just the animal to burst a bubbleFive years ago Aileen Lee, founder of Silicon Valley investor Cowboy Ventures, coined the term “unicorn” for a private company valued at more than $1bn. Back then unicorns were almost as rare as their mythical namesakes – just 39 existed, according to Lee. Now there are 334 around the world, worth more than $1tn. And this week some of the very biggest beasts started stampeding towards the public markets.Related: Lyft share price soars 20% in minutes on taxi app's stock market debutRelated: IPO mania: San Francisco braces for 'earthquake' of new tech millionairesRelated: ‘I made $3.75 an hour’: Lyft and Uber drivers push to unionize for better payI think there is a lot of worry that this is the top of the market. If a bear market happens, these companies are not going to be very popular Continue reading...

New GDP report shows that British bosses have cut back on buying new machinery and computers, as Brexit crisis hits confidence

Mervyn King says Britain could ease ‘dislocation costs’ with six months of planningThe former governor of the Bank of England, Mervyn King, has attacked MPs over their handling of Brexit and called for Britain to leave the EU without a deal after six months of preparation.In an extraordinary intervention, Lord King said it appeared Britain’s political class had “suffered a collective nervous breakdown” and accused MPs of exaggerating the economic risks of no-deal Brexit. Continue reading...

Average families have been net borrowers since just after Brexit referendum, says ONSBritish households have spent more than they received for an unprecedented nine consecutive quarters amid a longer squeeze on real incomes, according to official figures.Households across the country have been net borrowers in every quarter between October 2016 – when living costs started to rise after the Brexit vote – and December 2018. The Office for National Statistics said the run of nine quarters was unprecedented on comparable records dating back to 1987.Related: UK business investment suffers longest decline since financial crisis - business live Continue reading...

Istanbul stock market plunges as President Erdoğan tries to stop lira being lent abroadFinancial markets in Turkey have experienced a fresh period of turmoil, putting the country’s recovery from recession at risk and raising questions over the health of emerging markets as the world economy slows.President Recep Tayyip Erdoğan’s government heaped pressure on Turkey’s banks on Wednesday to stop them lending the lira to overseas financial institutions, in a move that triggered the cost of offshore borrowing in the Turkish currency to surge by more than 1,000% overnight.Related: Turkey may be the spark that lights a fire in the world economy | Larry Elliott Continue reading...

Industry warns of ‘fever pitch’ of anxiety over fears of damage caused by BrexitCar manufacturers have said their anxiety over Brexit is now “at fever pitch” after latest monthly production figures showed another major decline, with a 15% year-on-year drop in output in February.The double-digit drop was the ninth consecutive month in which British car manufacturing output has fallen. Continue reading...

Cost of borrowing lira overnight surges to 1,000% as Ankara tries to shore up the currency

Erdoğan’s costly move against currency speculators could prove to have major ripple effectsThe battle waged by Turkey’s Recep Tayyip Erdoğan against currency speculators is a classic pyrrhic victory. The show of resolve by the self-styled strongman on Wednesday stopped investors from dumping the lira but at enormous cost in both the short and long term. That Turkey will be damaged is beyond question. All that’s in doubt is how severe that damage will be and whether the fallout will be felt elsewhere. Looking at the fragile state of the global economy, there’s every chance it will be.The backdrop to the latest instalment of a long-running crisis is that Erdoğan is this week facing important local elections at a time when the Turkish economy is in recession. In an attempt to drum up support, Turkey’s president last week condemned Donald Trump’s decision to recognise Israeli control over the Golan heights, but this proved a spectacular own goal by convincing foreign investors that Ankara was on a collision course with Washington. The lira plunged. Continue reading...

Stephen Moore disputes the IRS claim and says he is ‘eager to reach an agreement’ but has been frustrated by bureaucracy

Latest CBI figures show sales slid in March by the most since October 2017UK retail sales fell in March at the fastest rate for more than a year, as Britain’s mounting political crisis over Brexit weighed on consumers’ willingness to spend, according to a survey of major retailers.The latest figures from the Confederation of British Industry, covering high street firms responsible for a third of employment in retailing, showed that retail sales slid in March by the most since October 2017.Related: UK manufacturers in despair at Brexit impasse, says CBI Continue reading...

Business as usual is causing environmental destruction and spiralling inequality. Our bill is a radical plan to address bothFaced with unprecedented challenges, politicians appear more divided than ever – that’s why Labour’s Clive Lewis and I are doing something bold. We are jointly tabling a bill in parliament designed to address two of the greatest threats we face – climate breakdown and spiralling inequality. Our bill would introduce a “green new deal” – an unprecedented mobilisation of resources invested to prevent climate breakdown, reverse inequality, and heal our communities. It demands major structural changes in our approach to the ecosystem, coupled with a radical transformation of the finance sector and the economy, to deliver both social justice and a livable planet.It’s an idea congresswoman Alexandria Ocasio-Cortez has recently reinvigorated in the US. And it could scarcely be more urgent. The UN’s top scientists have warned we have just 11 years to halve global emissions and avoid climate catastrophe. Global wildlife populations have collapsed by nearly 60% in our lifetimes. This has led 1.4 million young people to join the inspiring global school strikes movement to demand change. The response from ministers? To continue to force fracking on local communities, and to hand millions in tax breaks to the fossil fuel industry. Last week, unbelievably, a new coal mine was given a green-light on their watch.Related: The Earth is in a death spiral. It will take radical action to save us | George Monbiot Continue reading...

Rolling coverage of the latest economic and financial news, including weaker-than-expected housing data from Britain and America

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

Two former members of Bank of England’s rate-setting committee on the economic outlook

Latest Guardian analysis finds economic indicators positive but weaker growth is forecast

European leaders and China’s Xi Jinping put on a show of unity in the face of US tariffsDonald Trump was not on the guest list for Emmanuel Macron’s mini-summit in Paris, but the presence of the US president was still very much felt as Europe’s leaders sat down to talk trade, business deals and geopolitics with China’s Xi Jinping.At one level, the message from the meeting of China’s leader with Macron, the German chancellor Angela Merkel and the European commission president Jean-Claude Juncker was obvious: this was a show of unity in the face of Trump’s tariffs aimed across both the Atlantic and the Pacific.Related: Emmanuel Macron hosts Xi Jinping in attempt to strengthen EU-China relationship Continue reading...

Rolling coverage of the latest economic and financial news, as markets are hit by anxiety over the global economy