Economics | The Guardian

The US president and Brazil’s Jair Bolsonaro will repopulate the swamp rather than drain itFollowing Emmanuel Macron’s election as president of France in May 2017, global elites breathed a sigh of relief. The populist wave, they reassured themselves, had crested. Voters had regained their sanity. Helped along by an electoral system in which the two leading candidates faced off in a second round, the “silent majority” had united behind the centrist candidate in the runoff.But now we have Brazil’s presidential election, in which Jair Bolsonaro, who displays the authoritarian, anti-establishment, and anti-other tendencies of a textbook populist, won decisively in the second round. A two-round electoral system in which the runoff pits a populist outsider against the last mainstream candidate standing is no guarantee, evidently, that the centre will hold.Related: Who deserves the credit for strong US economy? | Michael Boskin Continue reading...

If we want to create a truly fair tax system, we need to target the top 5%. Our forebears didn’t, the Tories won’t – but we will

Readers respond to news that the number of UK shops, pubs and restaurants lying empty has soared by more than 4,400 in the first six months of this yearThe plight of retailers dominates debate about the high street (Decline of the high street gathers pace as thousands of stores close, 9 November), although I can’t imagine what “decisive action … to support the battered high street” the government is expected to provide. Certainly there’s no reverse gear to address the commercial affects of a transformation in shopping habits, and high streets will inevitably have to shrink back to a core of retail activity.We need to look at this another way. Reviving high streets and town centres must be approached strategically and this begins with reinventing their role. We need high streets more than ever, but as places for people to meet and mingle throughout the day, not just to shop. Other uses must be mixed in: homes and live/work units, small offices and workshops, GP surgeries and dentists, barbers and hairdressers, youth clubs and day care centres, nurseries and primary schools, cinemas and music venues, cafes and pubs, street markets and pop-ups, independent and convenience shops. But not multiples of each. They need to have good transport links, free parking nearby, and become people-, bike- and buggy-friendly. In practice a degree of compulsory purchase might well be necessary to overcome the fragmented property ownership that inhibits any unified strategy. Continue reading...

Big tech companies are transforming societies – but their pitiful contributions aren’t enough to help governments adaptAlongside the results of last week’s US midterms came the passing of San Francisco’s Proposition C, a measure that will tax firms with an annual turnover of more than $50m (£44m) to raise an estimated $300m extra a year to help address homelessness. Last Tuesday, 60% of voters backed it: though the proposal is now snarled up in a constitutional dispute, its approval marks a big moment for a city whose housing crisis has become a matter of urgency.Given the huge concentration of technology giants in San Francisco, the debate quickly became a drama about big tech and its social responsibilities. The most high-profile supporters of the plan included Marc Benioff, the founder and CEO of the software company Salesforce, the single largest employer in the city, who donated $8m to get it on the statute book. He and his fellow campaigners were opposed by a gaggle of high-ups from such companies as Twitter, the ride-hailing giant Lyft, and the online payments service Stripe: wealthy people apparently doing their bit to resist a modest boost in help for the most vulnerable, in a place whose homelessness problem is at least partly traceable to the vast increases in property values caused by big tech’s local dominance.Related: Jeremy Corbyn: I'll tax tech firms to subsidise the BBC licence feeRelated: Tax big tech to help the homeless? San Francisco says yes after fierce campaign Continue reading...

US steel plants are meant to be booming in the wake of Trump’s tariffs – but tell that to production line workers in TrentonUnion member and mill operator Joey Casey, 40, wasn’t getting paid for the day, so he enjoyed lunch at Thatcher’s BBQ on the main square in Trenton, Georgia.Related: Trump hits China with $200bn of new tariffs as trade war escalatesWe made this company, we made it what it is, off our backs. I believe in the company stillRelated: Joseph Stiglitz: 'America should be a warning to other countries' Continue reading...

UK universities may soon struggle to repay billions in borrowing but the government can’t afford to let them failIt should be one of the bright spots in the British economy, one that shines through the Brexit gloom, but the higher education sector has become a pin on which balances the most enormous mountain of debt.And with speculation that institutions may be in financial trouble circulating around the sector, ministers are nervous.Related: We won't bail out failing universities, says higher education regulator Continue reading...

After a long recession, Italians have enjoyed three precious years of growth: but now the country is stalling again as its populist leaders wrangle with the EUGiuseppe Pasini, the president of Italian steelmaker Feralpi, based in the northern province of Brescia, has reason to be concerned. When Italy finally emerged from its crushing triple-dip recession in 2015, Brescia, an important European industrial hub some 50 miles east of Milan, enjoyed uninterrupted growth.But after the general elections in early March the economy started to slow, and in the most recent months it has ground to a halt. “After three years of optimum growth, between June and September our economy slowed to 0.1% [down from 1.3% in Q1 and 0.6% in Q2]. This came as a shock,” said Pasini, who also heads Brescia’s industrial association. “Businesses are worried; this slowdown could be particularly dangerous in 2019, not just for Brescia but for the entire country, as our region is considered a driver for the rest of the economy.”You can get away with a crisis until the moment the markets say enough is enough Continue reading...

UK GDP expanded by 0.6% in July-September, the best quarterly growth in almost two years, but economists see storm clouds ahead

Growth in the UK has been modest for a decade despite the colossal amount of stimulusNo chancellor can resist the idea of a good photo opportunity and Philip Hammond chose a brewery to mark the release of Britain’s latest growth figures. As he pulled a pint for the cameras, the chancellor’s message was that the strongest expansion in almost two years was proof of the underlying health of the economy. It was no such thing. This was a glass mainly full of froth.On the face of it, the economy has been picking up speed throughout 2018. Growth was 0.1% in the first quarter, 0.4% in the second quarter and has now hit 0.6% in the third quarter. But what actually happened was that bad weather in the first few months of the year artificially depressed activity and this weakness has been followed by a period of catch-up, especially in the construction sector. Continue reading...

July boost from World Cup and hot weather masks stagnation in following two monthsThe UK economy expanded at the fastest pace in two years during the third quarter, but has begun showing signs of a slowdown ahead of Brexit as more business investment decisions are put on hold.Related: Philip Hammond claims strong growth, but it's mostly froth Continue reading...

Economist Lord Skidelsky working with shadow chancellor on ‘practical possibilities of reducing the working week’John McDonnell, the Labour shadow chancellor, is in discussions with the distinguished economist Lord Skidelsky about an independent inquiry into cutting the working week, possibly from the traditional five days to four.The academic, who has a longstanding interest in the future of work, confirmed he was talking to the shadow chancellor about “the practical possibilities of reducing the working week”.Related: ‘Miserable staff don't make money’: the firms that have switched to a four-day weekRelated: 'No downside': New Zealand firm adopts four-day week after successful trial Continue reading...

European commission says UK will join Italy at foot of growth league even with a soft BrexitThe UK will sink to the bottom of the European economic growth league next year to join Italy as the slowest-growing economy in the EU, before falling further the year after to anchor the table alone, according to European commission forecasts.The EU’s gloomy predictions are based on a soft Brexit – meaning Britain is expected to lag behind all its EU peers even if Theresa May can reach a deal with Brussels before 29 March. Continue reading...

Readers respond to Polly Toynbee’s suggestion that the inability to raise tax has become Britain’s political diseasePolly Toynbee’s suggestion that higher taxes for all are inevitable (The refusal to raise tax has become our national disease, 6 November) ignores numerous different approaches, changes in priorities and potential savings that could mean we can all enjoy higher levels of investment in public services without raising taxes or increasing borrowing.In September, AAT published a short report highlighting £27bn of annual savings that could be made without raising taxes or increasing borrowing – by scrapping car tax and fuel duty and replacing it with a pay-as-you-drive system, by simplifying inheritance tax, and removing higher rate tax relief for pension contributions, to name just three of our proposals. Such changes might require politicians to tell some uncomfortable truths but, given that the outcome would be a simpler, fairer alternative to raising revenue, they are truths the electorate would be more likely to accept.

Tony Greaves says that only the Liberal Democrats can provide the radical and progressive politics that the UK badly needs; while Catherine Hand says they should never be forgiven for propping up the Tories’ savage austerity programmeRe What’s the point of the Lib Dems? (Journal, 7 November), I am tempted to reply: “Because we have never been in greater need of a Liberal party in the tradition of the New Liberals of a century ago – John Maynard Keynes, William Beveridge and Jo Grimond – to provide the core of the left-of-the-right liberal movement that can provide the radical and progressive alternative to backwards-looking Corbynism and the conservative (and worse) forces to the right.”But this kind of answer will bore those people who are looking for “something better, something new”, where clever but empty slogans and celebrity leadership offer new excitement and hope, however superficial and ephemeral. Yes, our present leadership (widely defined) seems incapable of providing the campaigning vim and inspiration we so desperately need, first to stop the dangerous nonsense of Brexit and then to build such a movement. And the present central party organisation, largely unaccountable to its members, sucks in resources yet seems to provide little in return of use for campaigning. Continue reading...

New EC growth forecasts warn that rising global uncertainty, international trade tensions and higher oil prices will weigh on Europe

From Brexit experts to Grenfell inspectors, non-government organisations are being told not to create ‘adverse publicity’

The cross-party education select committee firmly believes that if students are going to take on the big burden of a loan, there must surely be a good graduate job at the end of it, writes Robert Halfon MPI welcome the debate on what universities and higher education should be for, but Zoe Williams clearly needs to look at the education committee’s findings more closely rather than just highlighting one line out of one of my speeches (For Tories, the poor don’t need education, Journal, 6 November).Our report this week is focused on skills, social justice and good graduate outcomes. The fact is we have a huge skills deficit in our country, with the manufacturers organisation, the EEF, warning that almost three-quarters of businesses are concerned about finding workers with the skills they need. Yet just eight out of 24 Russell Group universities are offering degree apprenticeships. Continue reading...

Gridlock on Capitol Hill reduces chance of further fiscal stimulus and tax cuts, economists say

Analysts say a Chinese recession would only hurt the region. That may be wishful thinkingWhen China finally has its inevitable growth recession – which will almost surely be amplified by a financial crisis, given the economy’s massive leverage – how will the rest of world be affected? With US President Donald Trump’s trade war hitting China just as growth was already slowing, this is no idle question.Typical estimates, for example those embodied in the International Monetary Fund’s assessments of country risk, suggest an economic slowdown in China will hurt everyone. But the acute pain, according to the IMF, will be more regionally concentrated and confined than would be the case for a deep recession in the United States. Unfortunately, this might be wishful thinking.Related: Trump is reckless – but he knows he can't afford to antagonise China | Barry Eichengreen Continue reading...

Share price drops and chain announces founder Tim Martin is recovering from burst appendixJD Wetherspoon may raise its prices in the coming months as the pub chain warned of weaker trading, higher staff costs and said its founder and chairman, Tim Martin, would be working part time for several weeks as he recovers from a burst appendix.In a trading update for its first quarter, the pubs firm said that while it would not immediately pass on a higher wage bill to customers through price rises, it was under review. Continue reading...

Sellers are realising first offer they receive could well be their only one, analyst saysAnnual house price growth has fallen to its lowest rate in more than five years, according to Halifax.Across the UK, house prices increased by 1.5% annually in October, following a 2.5% annual increase in September, Halifax said.Related: Confidence in housing market 'collapsing', NAB survey says Continue reading...

IPPR launches world’s third biggest economics prize looking to restart UK growthOne of the biggest cash prizes in world economics has been launched to find “radical ideas” to reinvigorate the British economy.Launched against a backdrop of deep public distrust in politicians to revitalise the UK economy, the Institute for Public Policy Research (IPPR) thinktank has lined up an £150,000 prize fund to uncover fresh ideas. Continue reading...

Sterling rises on ‘thumbs-up’ hopes, as markets also wait for US midterm results

Bank had been accused by murdered journalist Daphne Caruana Galizia of processing corrupt paymentsA Maltese bank at the heart of a money-laundering investigation has had its licence withdrawn by the European Central Bank.Pilatus Bank, which opened four years ago, was officially closed down several months after its Iranian chairman and owner, Ali Sadr Hasheminejad, was charged in the US in connection with money-laundering and fraud.Related: ​Bank criticised by Daphne Caruana Galizia under scrutiny in Brussels Continue reading...

Nicky Morgan says decision to delay cut in maximum stakes could cost 300 extra lives

UK companies report that new business has weakened as anxiety over Brexit and the global economic outlook rise

Bruno Le Maire says future of euro at stake as finance chiefs urge Rome to rethink policies

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Leader portrays China as champion of globalisation ahead of talks with US president at G20 – but Asian shares continue to slideXi Jinping has promised to lower import tariffs and improve access to the Chinese market in remarks meant to portray his country as a champion of globalisation as it remains locked in a trade war with the US.“Protectionism and unilateralism is rising. Multilateralism and the free trade system are under threat … China will not close its door to the world and will only become more and more open”, the Chinese president said on Monday at the beginning of a trade fair in Shanghai.Related: Despite rapid growth in wages, Trump should be concerned | Larry ElliottRelated: Shares soar as Trump hints at possible US-China trade dealBut the point is that even with a horrendous 15 years, China would still hit the $40trn import goal. So either Xi has made a pledge that is effectively meaningless; or planners are deeply bearish about the economy's prospects. I think we know which one it is. (/END) Continue reading...

Readers respond to Preston’s success, Channel 4’s move to Leeds and Simon Jenkins’ proposal to move parliament to the north with ideas for a new political landscapeChannel 4’s move to Leeds must be just the beginning (Channel 4 chooses Leeds as its new UK headquarters, 1 November). The ambitions of this public service broadcaster must go beyond relocating 200 staff up the M1. To make a truly significant contribution, it must act as an “anchor” of a fairer and more sustainable local economy.This means working with other anchor institutions like the city council, universities, NHS trusts and the police to pay fair wages, buy local, and to invest in the city and its people. By adopting this approach, Preston council and their anchors have generated £200m for the Lancashire economy. This strategy undoubtedly played a role in Preston being named as Britain’s most improved city. Continue reading...

In the lead-up to his Australian visit, the renowned economist warns of the triple threat of rising inequality, the undermining of democracy and climate changeIt’s a stark message from a Nobel-prize winning economist.“We were a very different country 40 years ago,” he says. “The downhill slide has been pretty fast. America, I think, should be an important warning to other countries not to take for granted their institutions. I worry that things in the United States could get much worse.”Most Americans want a higher minimum wage, they want gun control, they want access to healthcare … yet our democracy can’t deliver itRelated: Joseph Stiglitz on artificial intelligence: 'We’re going towards a more divided society'The magnitude of the dysfunction [on climate change] is unbelievable Continue reading...

Country’s leaders remain defiant but citizens fear of impact on healthcare and currencyIranians are bracing for the full force of US sanctions due to hit on Monday as the Trump administration reimposes an embargo on oil, the most stringent set of punitive measures since Washington withdrew from the 2015 landmark nuclear deal, known as Joint Comprehensive Plan of Action.The new sanctions, which also aim to cut off Iran’s banking sector from the global market, are timed to coincide with the anniversary of the 1979 storming by Iranian revolutionaries of the US embassy in Tehran, when angry students took 52 American diplomats hostage for 444 days.Related: Iran sanctions: Khamenei says world opposes every Trump decision Continue reading...

This is as good as it gets for the president’s first term – labour shortages will fuel interest ratesThe US has its lowest unemployment rate since Richard Nixon was in the White House 48 years ago. Wages are growing at their fastest rate in almost a decade. No other G7 country will come close to matching America’s growth rate this year.All of which ought to be a concern for Donald Trump. If that sounds weird, consider the facts. When running against Hillary Clinton in 2016, Trump said he would put the world’s biggest economy back to work and so far he is doing so. He said he would repudiate or rewrite the “horrible” trade agreements his predecessors entered into and he has been as good as his word. The promise in his inauguration speech to put “America first” has been met in full.Related: Trump's WTO threats matter – especially to a post-Brexit BritainRelated: An economic recovery based around high debt is really no recovery | Larry Elliott Continue reading...

Our former PM apparently has regrets over the EU referendum. We have to deal with the consequences of his mistakeAlmost everywhere I go, people ask me: “Where is David Cameron?” I must admit that I occasionally bump into him. He gives a superficial impression of insouciance, but one hears on the grapevine that, privately, he regrets having called that referendum.Now we also hear that “friends” of Cameron say he wishes at some stage to return to a cabinet job, although presumably not under Theresa May. Has he no shame?I am reassured that commentators have not been fooled by claims that Hammond's budget heralded the end of austerity Continue reading...

Petrol prices have risen 20% in the past year, moving the issue to the top of the political agenda. But why? About half the cost is down to the international oil price but taxes make up 35% and politicians of both sides have not hesitated to manipulate the rate for advantage. The Coalition and Labor are now bidding to look like champions for consumers Continue reading...

FTSE 100 closes down 18 points while Wall Street drops after release of strong jobs market dataA strong week for global stocks has ended on an uncertain note at a time of fears over delays to resolve the American trade dispute with China and concerns over rising US interest rates.The FTSE 100 closed down 18 points on Friday, while Wall Street dropped in afternoon trading in New York after the release of strong jobs market data that could push the US Federal Reserve towards raising interest rates next month.Related: Slipping sales bite into Apple's $1tn pricetag Continue reading...

Rolling coverage of market reaction to Donald Trump’s trade optimism and US non-farm payrolls

Huge underfunding means that the illicitly wealthy escape the clutches of the law – and everyday crimes go unpunishedOn Thursday morning, two crime stories dominated the news.One was a government crackdown on the £100bn of “dirty money” that has been laundered through the UK. The security minister, Ben Wallace, has in his sights the lawyers and accountants, public schools and car washes that facilitate or benefit from this wrongdoing – and are, he claimed in a Guardian interview, as bad as the criminals themselves. Continue reading...

Wages were 3.1% higher in September than they were a year ago – the first time since April 2009 that growth topped 3%The US added 250,000 jobs in October – the last jobs report before Donald Trump’s first midterm elections. In good news for the president, wages grew at their fastest rate for close to a decade.Analysts had been expecting the US to add around 188,000 jobs over the month. In September the unemployment rate fell 3.7%, a 49-year low, and remained there in October.Wow! The U.S. added 250,000 Jobs in October - and this was despite the hurricanes. Unemployment at 3.7%. Wages UP! These are incredible numbers. Keep it going, Vote Republican! Continue reading...

President’s positive remarks about a call with Xi Jinping, and a report that he has asked officials to draw up terms, lift marketsAsian shares have surged on reports that Donald Trump wants to reach an agreement with Chinese president Xi Jinping about the trade dispute that has dogged markets for months.Related: Who deserves the credit for strong US economy? | Michael BoskinJust had a long and very good conversation with President Xi Jinping of China. We talked about many subjects, with a heavy emphasis on Trade. Those discussions are moving along nicely with meetings being scheduled at the G-20 in Argentina. Also had good discussion on North Korea!Related: China hits back at US with $60bn of new tariffs Continue reading...

Monetary policy committee holds interest rates at 0.75%

The Bank of England warning aims to focus MPs’ minds on getting a Brexit deal done. Project Fear Mk II might just workPicture the scene. The UK economy is in turmoil after the government fails to reach a Brexit deal with the EU. Amid fears of a looming recession, the Bank of England turns the screw by raising interest rates.Unlikely? Not according to Threadneedle Street, which has warned there is no guarantee that it would respond to the shock of a no-deal Brexit by reducing borrowing costs, which was what it did in the aftermath of the referendum in 2016.Lenders have already bumped up the cost of fixed rate mortgages ahead of the Bank of England’s decision to raise base rate from 0.25% to 0.5%, and mortgage borrowers on tracker and variable rates will see their monthly payments become more expensive in the coming days. ​ Continue reading...

This Tory promise is a bare-faced lie. Look at the list of government departments who face yet more savage cutsThe dust clears. It takes time after a budget for thinktanks and analysts to pore over the numbers in the Treasury’s Red Book. It takes a few days longer for each part of the public sector to absorb the full effect of the hammer blows rained down on them again, curiously missing from the chancellor’s speech.It didn’t take long for George Osborne to make a rare public appearance on Newsnight to defend his austerian age. With Theresa May announcing the “end of austerity” and Philip Hammond pretending to loosen the purse strings, Osborne was there in the TV studio to defend his legacy.Related: How dangerous is Jair Bolsonaro, Brazil's new president? - podcastRelated: Britain’s last budget in the EU is a sticking plaster for a nation in decline | Polly Toynbee Continue reading...

Labour-run council with localist economic policies tops Good Growth for Cities indexPreston, the Lancastrian city labelled as a poster child for “Corbynomics,” has been named as the most rapidly improving urban area in the UK to live and work.Research carried out by the accountancy firm PricewaterhouseCoopers and the thinktank Demos, which used a range of measures including employment, workers’ pay, house prices, transport, the environment, work-life-balance and inequality to rank 42 UK cities, found that Preston had improved the most in its 2018 Good Growth for Cities index. Continue reading...

The slump of Red October is easing, as spooked investors snap up shares again

Carmaker has £2.5bn plan to reduce costs as sales fall in China and EuropeThe 40,000 British employees of Jaguar Land Rover face the prospect of further job cuts after Britain’s biggest carmaker launched a £2.5bn plan to reduce costs and free up cash.JLR announced its intentions on Wednesday after slumping £90m into the red in the three months to September, hit by falling sales in China and Europe. Continue reading...

Chancellor told he is gambling with public finances and will be unable to balance booksPhilip Hammond has been told Britain needs to overhaul the tax system to raise more money for the NHS after using the budget to hand tax cuts to the rich while raising public borrowing.Urging the chancellor to conduct a formal review of taxation alongside the government’s planned spending review next year, the National Institute of Economic and Social Research said Hammond would be unable to balance the books in future without finding extra tax revenue. Continue reading...

New Zealand remains top of World Bank’s rankings despite no reforms in past yearNew Zealand has topped the World Bank’s ranking of the best countries to start and run a business in 2018, ahead of Singapore, Denmark and Hong Kong.The World Bank said New Zealand had retained its position in its Doing Business report ahead of 190 other countries, despite not implementing any reforms in the last year.Related: Oxfam criticises World Bank for backing deregulated labour markets Continue reading...

EU seminars will cover citizens’ rights, transport, border controls and financial servicesThe European Union is pressing ahead with plans for a no-deal Brexit, amid uncertainty about when high-level negotiations will resume.With 149 days until Brexit day, time is running out to secure a deal that the British government wants to nail down this autumn, to allow time for the agreement to gain assent from parliament and the European parliament.Related: Brexit phrasebook: a guide to the talks' key terms Continue reading...

Pressure begins to show amid a wider slowdown in the world’s second biggest economyThe Chinese economy has revealed fresh signs of the pressure of a trade war with the US and a wider slowdown at home as manufacturing activity fell and the yuan was fixed at a new 10-year low to the dollar.Related: No-deal Brexit would trigger lengthy UK recession, warns S&PRelated: The US-China trade war is unlikely to be settled soon | Nils Pratley Continue reading...