Investors nervous after Facebook and Twitter declines and await interest rate news this week from UK, US and Japan2.58pm BSTMarkets remain edgy after technology shares remain unloved in the wake of disappointing updates last week from Facebook and Twitter.Investors are also cautious ahead of a raft of central bank meetings this week, including the Bank of Japan, the US Federal Reserve and the Bank of England.2.40pm BSTBetter than expected second quarter earnings from industrial giant Caterpillar have given some support to struggling US markets.The heavy equipment maker raised its outlook for the full year, easing fears that the continuing trade dispute between the US and China would badly damage corporate profits.1.40pm BSTGermany’s inflation rate remained steady in July, above the European Central Bank’s target of 2%.Consumer prices rose 2.1% year on year, the same as the previous month, according to the Federal Statistics Office. That was the figure harmonised with the rest of the European Union - without that it was within the 2% target and down from 2.1% the previous month.Based on the results of seven regional states, German headline inflation recorded another marginal drop and slowed down to 2.0% year on year in July, from 2.1.% YoY in June and 2.2% YoY in May. Measured by the harmonized European consumer price index, headline inflation remained unchanged at 2.1%, suggesting that headline inflation in the entire Eurozone (to be released tomorrow) could have hit the 2%-mark for the fourth time in the last five years.

The project is often described as a 21st century Silk Road, made up of a ‘belt’ of overland corridors and a maritime ‘road’ of shipping lanes Continue reading...

Move by bank to divert business away from UK since Brexit vote is ‘largely symbolic’Deutsche Bank has moved a “large part” of its euro clearing activity to Frankfurt from London in a boost to the efforts of the eurozone’s top financial centre to lure business away from the City before Brexit.Germany’s biggest bank said its decision would not affect jobs because it would simply involve pushing a different button to route clearing to Eurex, the clearing division of the German exchange Deutsche Börse.Related: Brexit: UK warns EU of tit-for-tat measures over financial services Continue reading...

In the first part of a week-long series revealing the effects of China’s Belt and Road Initiative on cities around the world,Jon Watts journeys from the steppes of Central Asia to the Black Sea and into Europe,as Beijing’s grand plan radically remakes the lives of people in its path Continue reading...

Incomes in inner London are five times as high as in the Welsh valleys or CornwallAll countries have their regional differences. States in the American Deep South are poorer than those in New England. In Germany, Bavaria is richer than Brandenburg. The struggling parts of Italy are south of Rome.But Britain is in a class of its own. The gap between the richest and poorest parts is wider than in any EU country. Incomes per head in inner London are five times as high as in the Welsh valleys or Cornwall.Related: What to do about our ageing population? Give ’em all a job Continue reading...

Politics don’t matter; market forces shape our world. So ran the dominant ethos before 2008. Adam Tooze, the author of a landmark book, says it was always an illusion‘I hear people say we have to stop and debate globalisation. You might as well debate whether autumn should follow summer.” That was Tony Blair, Britain’s prime minister, in October 2005.Two years later, in the autumn of 2007, Alan Greenspan, the former chair of the US Federal Reserve, was asked by a Swiss newspaper which candidate he was supporting in the forthcoming US presidential election. His response was striking. How he voted did not matter, Greenspan declared, because “[we] are fortunate that, thanks to globalisation, policy decisions in the US have been largely replaced by global market forces. National security aside, it hardly makes any difference who will be the next president. The world is governed by market forces.” Continue reading...

America doesn’t have a jobs crisis. It has a ‘good jobs’ crisis – where too much employment is insecure, and poorly paidThe official rate of unemployment in America has plunged to a remarkably low 3.8%. The Federal Reserve forecasts that the unemployment rate will reach 3.5% by the end of the year.But the official rate hides more troubling realities: legions of college grads overqualified for their jobs, a growing number of contract workers with no job security, and an army of part-time workers desperate for full-time jobs. Almost 80% of Americans say they live from paycheck to paycheck, many not knowing how big their next one will be.Starting in the 1980s and with increasing ferocity since then, private-sector employers have fought against unionsRelated: Trump-Juncker 'talks about talks' met with scepticism Continue reading...

It would be better that MPs spoke up about the folly of leaving. But if none of them will, a second referendum is requiredI recently met several people who said they were beginning to feel sorry for Theresa May. Well, up to a point, I should have thought. She apparently wanted to be prime minister from an early age, and is now a victim of what her predecessor from the late 1950s and early 1960s, Harold Macmillan, referred to as “events”.Macmillan’s celebrated remark about “events” has gone down in political history. But, as with so many famous sayings, its full meaning has been lost. When asked what he feared most, he replied “the opposition of events, dear boy”. This was a clever dig at the weakness of the Labour party in the 1950s, which was riven with deep resentment between the Gaitskellites and the Bevanites. Macmillan was not fearful of Her Majesty’s Opposition.The apparent agreement between the US and EU to defuse Trump’s tariff wars shows the benefit of being part of a bloc Continue reading...

The Bank of England cut borrowing costs hard in 2008 and left them low. Now, after some false dawns, that might be changingThe Bank of England’s interest-rate setters are expected to vote on Thursday to raise the cost of borrowing for only the second time since the 2008 crash. Most City analysts agree: the Bank’s base rate will rise from 0.5% to 0.75%.That said, we’ve been here before. Mortgage borrowers were told in February that a rate rise was imminent and were guided by governor Mark Carney to pencil in the May meeting of the monetary policy committee (MPC) as decision day. Continue reading...

Never mind millennials. The real economic debate needs to focus on the role of over-50s in the workplaceRetirement is a dirty word for Barbara French, who at 75 still gets up before 6am on weekdays to clean the Co-op’s Plymouth groceries depot where she has worked for almost 40 years. “I enjoy coming to work,” she says. “It gives me a purpose. I think it’s wonderful if companies give us golden oldies work for as long as we want.”Much has changed in her four decades at the Co-op, not least the arrival of exotic fruits and avocados as some of Britain’s favourite foods. One certain change in the decades to come, is that more people will, like Barbara, be working for longer. Continue reading...

Expect the US economy to slow in 2019 as tariffs start to bite and higher interest rates take effectFor once there can be no dispute about what Donald Trump says. The president has been boasting for months about how well the economy is doing and the latest set of official figures show that the president is absolutely right. The US is booming.It was not just that headline growth – American GDP was expanding at an annualised rate of 4.1% in the second quarter – that was strong. All the important components of growth were up too: consumer spending by 4%, business investment by 7.3%, exports by 9.3%, federal government spending by 5.3%. Continue reading...

All the day’s economic and financial news, including growth figures from two of the world’s largest economies

Growth is major boon for Trump administration after $1.5tn in tax cuts earlier this year but economists warn it may unsustainableThe US economy roared ahead in the second quarter of 2018, growing at an annual rate of 4.1%, its fastest pace in four years, the commerce department announced on Friday.The growth will be a major boon for the Trump administration, which pushed through $1.5tn in tax cuts at the start of the year with a promise that they would be paid for by economic growth.Related: 'We need a call to action': Stacey Cunningham, the NYSE's first female presidentRelated: Sign up for the Guardian's US daily email Continue reading...

Investors desert Facebook after it missed revenue targets as the cost of the Cambridge Analytica scandal bites

British household finances among most indebted in major western countries, ONS saysBritish households spent around £900 more on average than they received in income during 2017, pushing their finances into deficit for the first time since the credit boom of the 1980s.The Office for National Statistics said the shortfall amounted to nearly £25bn – equal to almost a quarter of the NHS budget – and the overspend was mostly paid for with borrowed money, though households also ran down savings. Continue reading...

Despite their urban image, millennials are looking to suburbs and the country for a quieter, and cheaper, lifestyle

Rightwingers point out the horrors of Stalinism, yet forget the human misery their favoured economic model was built onA spectre is haunting the British media: the spectre of negative takes on capitalism. Ever since the academic and writer Ash Sarkar uttered the words “I’m a communist, you idiot” on national television, the right has recoiled in horror. The alacrity with which commentators jumped on Sarkar’s off-the-cuff comment to relitigate the cold war is deeply revealing.The right has been terrified that it is losing the war of ideas to the left ever since Jeremy Corbyn’s Labour deprived the Tories of a majority a year ago. Sarkar’s unintentional rescue of Marx’s vision of communism – as a stateless, classless society in which humanity is liberated from wage labour – from the Stalinist totalitarianism that followed led the magazine Elle to declare she was “literally a communist and literally our hero”. The Telegraph reflected: “Communism sent millions to their deaths – so why is it cool to wear it on your T-shirt?” As far as Douglas Murray of the Spectator is concerned, meanwhile, Sarkar is no better than a fascist.Related: ‘That’s when I lost my temper’: Ash Sarkar on her clash with Piers Morgan Continue reading...

Donald Trump and Jean-Claude Juncker have agreed to work together to lower trade barriers, in an apparent breakthrough in the trade dispute

Trump and Juncker’s remarks represent a step back from potential trade war after weeks of stalemate, but were short of detailDonald Trump and European Union officials on Wednesday stepped back from a trade war as they struck a deal to work towards “zero” tariffs, barriers and subsidies.The EU also agreed to buy billions of dollars worth of American exports, including soya beans and natural gas, and work to reform international trade rules.Related: Trump and Juncker appear amiable at meeting aimed to avert trade warRelated: Made in China: Trump re-election flags may get burned by his tariffs Continue reading...

US president and European commission president agreed they want to reduce tariffs, before heading into talks in WashingtonDonald Trump has begun trade talks with top European Union officials at the White House, suggesting that the US would be “pleased” if all tariffs, barriers and subsidies could be scrapped.The US president sat in the Oval Office alongside Jean-Claude Juncker, the European Commission president who is hoping to persuade him not to impose punishing tariffs on car imports and risk an all-out trade war.Related: Trump defends tariffs despite signs of trouble in global markets Continue reading...

Nearly 90% of people feel bored or confused when politicians use jargon to talk about economics, according to the charity Economy, which holds free classes across the country to help take away the barriers to understanding and change how people think Continue reading...

‘Value for money’ for public contracts is a colossal failure. Labour’s leader is right: the state should support manufacturingJeremy Corbyn wants new support ships for the Royal Navy to be built in British shipyards. He thinks it is wrong for the production of the UK’s post-Brexit passports to go to a French firm. Under a future Labour government, the state would use its buying power to support manufacturing.Related: Public contracts should go to UK firms, says Jeremy Corbyn Continue reading...

In two letters, hundreds of academics call for Goldsmiths to bring its cleaners back in house, and for James Newell to be reinstated as professor of politics at Salford UniversityWe write as staff at Goldsmiths, University of London, in support of our cleaning colleagues, and their union Unison, who are campaigning to be brought in-house (The cleaners who won fair wages, 18 July). Currently outsourced to ISS, our cleaners already face unacceptable working conditions, receiving no sick pay, holiday pay or pension entitlement.ISS is now imposing a restructure that will only entrench the existence of a two-tier workforce. In testimonials collected by Unison, cleaning staff expressed fears of losing their homes, having to miss meals in order to feed their families, and being forced to choose between unmanageable childcare costs or leaving their children home alone. Women in particular said the prospect of new shifts ending after midnight made them anxious for their safety as they have to travel long distances to get to work. Despite this, ISS is pushing ahead with these changes. Continue reading...

The rightwinger has admitted any ‘Brexit dividend’ may take 50 years. Is his hardline position linked to personal gain?In line with other Brexiters, Jacob Rees-Mogg seems to have abandoned any notion of the UK being better off after Brexit. Of course he still spouts verbiage about Brexit providing a great economic opportunity for the country, but when pushed, as he was recently, it seems clear that he no longer believes leaving the EU will bring us economic benefit, and says we may be waiting 50 years for the “Brexit dividend”, if it ever arrives at all.Related: 'We're the opposition': Rees-Mogg and his European Research Group Continue reading...

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

The latest monthly Guardian analysis finds weak growth as fears rise of hard Brexit

Growth highest in a year but firms are failing to invest in skills and products, says CBIA pick-up in the pace of manufacturing growth to its fastest in a year has failed to prevent a fall in investment as firms mothball spending plans amid concerns over Brexit.The latest snapshot of industry from the Confederation of British Industry found that despite mounting skills shortages and capacity constraints, companies were cutting back on product development and training at a rate not seen since the economy was in recession in 2009. Continue reading...

In an interview at the G20 meeting, Scott Morrison tells Fairfax the US-China trade war is a chance to look at the rulesThe Australian treasurer, Scott Morrison, has said the global trading system has failed and ought to be subject to a broad review, according to reports.The World Trade Organisation (WTO) system was “built for a different time” and the current trade war between the US, Europe and China could provide the opportunity to take a closer look at “how those rules work and how they’re operating”, he was quoted as saying.Related: Australia’s tax base is collapsing and we are on a collision course with reality | Greg Jericho Continue reading...

Thinktank says since 2010 child poverty has risen twice as fast as official figures showBritain’s poorest 30% of households saw an end to their post financial crash recovery last year as inflation and cuts to in-work benefits outweighed wage rises to leave them as much as £150 worse off.The Resolution Foundation, an independent thinktank, said its audit of income and poverty levels for 2017-2018 found that income growth slowed for all households last year.Related: Universal credit IT system 'broken', whistleblowers say Continue reading...

Prime minister uses Gateshead trip to reaffirm commitment to promoting growth in northTheresa May has reaffirmed her plans to bolster the northern powerhouse as she kicked off a summer campaign intended to win support for her much-criticised Chequers plan for Brexit at home and abroad.The prime minister chaired a cabinet meeting in Gateshead on Monday before meeting factory workers for a rare town hall-style event, while her ministers fanned out across the region on a series of visits to businesses and public institutions.Related: Desperate Brexit deadlock triggers the search for a miraculous escape | Andrew Rawnsley Continue reading...

Donald Trump has channelled the anger felt by globalisation’s discontents to serve an agenda in line with elite interestsDonald Trump’s decision to launch trade wars against all five of the United States’ closest commercial partners has brought depressingly predictable responses. China, Canada, Mexico and the European Union have all countered with tariffs on US products. The US economy is the biggest in the world and can deal with many of the responses, which are a pinprick on its giant heft. However, Mr Trump’s political base is vulnerable – and the retaliating quartet have responded with actions designed to hurt communities that voted for the US president. This entirely foreseeable response confirms that trade is something he cares deeply about but also knows little about.It does not help that Mr Trump is a narcissist with no time for the subtleties of global diplomacy. He is meeting European commission president Jean-Claude Juncker for talks on Wednesday. He calls the EU a “foe” because of its $101bn trade surplus with the US. A sensible solution for Washington is one that it vetoed when John Maynard Keynes proposed it in 1944: countries with surpluses ought to spend their extra money in deficit countries, thus boosting both private spending and export capacity. It is ironic that Mr Trump is attempting something similar by bullying rather than through what might have been achieved by multilateral arrangements. The president is happy to be swinging a wrecking ball at the world trading system. But it has been swung before. The US has been squabbling with partners who have had trading surpluses for decades. All American leaders understand that foreign nations have a great deal to lose from sanctions, imposed by Washington, that limit access to the huge US market. Because sanctions are determined unilaterally, there is little that countries can do to resist a claim that they have cheated their way into American markets. Continue reading...

Harry Potter franchise typifies intangible value Britain has to be more adept at creating. Time to ditch the tangible mindsetTake a walk through King’s Cross station most days of the week, and you will see a crowd of people gathered among the usual rush of commuters and weary travellers awaiting the umpteenth delayed London-to-Leeds service.This isn’t the complaints queue for cancellations. These people have travelled from further afield than Bradford – from South Korea, the US , France and Germany – to wait for a train that doesn’t even exist. Continue reading...

Crashing out of the EU is an extremists’ gamble – not just for the UK but also for Britain’s close neighboursThere is always a sense of “they would say that, wouldn’t they?” when a state-funded global agency that promotes free trade says that a hard Brexit would be bad for everyone.That was the International Monetary Fund’s stance before Britain’s referendum on European Union membership, and in the wake of the vote the Washington-based lender of last resort to near-bankrupt countries (most recently Argentina) has, unsurprisingly, stuck to its line. Continue reading...

The chancellor needs to fill lots of holes in public services – and it will take big moneyPhilip Hammond, under pressure to ease austerity, must spend the summer preparing the ground for sweeping tax rises that catch everyone in their net.A tax on the rich is not going to be enough to meet the demand for £20bn extra on health spending by the end of the parliament, let alone the cost of extra police officers to tackle a significant rise in crime, higher social care funding and a boost to the defence budget. Continue reading...

President indicates readiness to slap tariffs on the entirety of Chinese goods, saying it is ‘the right thing to do for our country’Donald Trump escalated economic global tensions on Friday, lashing out a range of targets that included the European Union, the Federal Reserve and China, indicating that he is prepared to raise tariffs on Chinese imports from $34bn to cover the entire $505bn of Chinese imports.“I’m willing to go to 500,” he said during a taped interview with the business channel CNBC, an escalation he was prepared to make because it “was the right thing to do for our country” and because the rise in stocks – the S&P 500 is up 31% since his election – allowed him to pursue a more aggressive trade policy.Related: The Iowa farmers on the frontline of Trump's trade war with ChinaRelated: ‘It’s pretty lonely out here’: why John Kasich is willing to criticize Trump Continue reading...

US levies on European and Chinese goods may also break WTO rules, says German leaderThe war of words over Donald Trump’s threat to impose wide-ranging tariffs on imports from China and the European Union has intensified after the German chancellor, Angela Merkel, said the levies threatened the incomes of workers across the world.On Friday, Merkel described possible US tariffs on imported cars as a breach of World Trade Organization rules and “a real threat to the prosperity of many in the world” as Trump went on US television to say that he was ready to expand his roster of tariffs on Beijing to $500bn, covering almost every product imported to the US from China.....The United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates - Really? Continue reading...

All the day’s economic and financial news, as the US president gives markets something new to worry about

She is the first woman to lead the New York Stock Exchange in its 226 years. Faced with falling sales and government pressure, though, she finds the attention to her gender a distractionThe Fearless Girl is on the move. The bronze sculpture of a little girl defiantly facing off against Wall Street’s Charging Bull launched a million selfies and became an unlikely avatar of the #MeToo movement. Soon it will be transported a few hundred metres down the road in downtown Manhattan to confront another symbol of entrenched masculinity: the New York Stock Exchange (NYSE). Stacey Cunningham says she couldn’t be more delighted.“I think she’s fantastic,” says Cunningham, the 67th president of the NYSE and the first woman to head the male-dominated institution in its 226-year history. “For me, she is a message to individuals, though. I think we need to call ourselves to action, especially as women, not to hold ourselves back.”Whether or not NYSE is sheltering a marketing operation or a vital financial institution is the least of its problems Continue reading...

Smaller reduction in June spending deficit will restrict chancellor’s budget plansWeak economic growth and sluggish tax revenues prevented the government from reducing its spending deficit in June by as much as anticipated, squeezing the chancellor’s ability to revive ailing public services in the autumn budget.City analysts expected the deficit to decline by more than £1bn compared with June 2017, following a steep fall in interest payments on the government’s total debt bill and a cut in EU budget contributions the Treasury sends to Brussels. Continue reading...

All the day’s economic and financial news, as UK retail spending disappoints and the Chinese yuan hits a one-year low

Business group says collapse of power-sharing and Brexit turmoil are taking their tollNorthern Ireland is edging towards recession, the Confederation of British Industry has warned as Theresa May arrives in Belfast for her first visit to the Irish border.The CBI said the political vacuum left by the collapse of power-sharing in Stormont along with Brexit uncertainty were taking their toll in the region, which is already the poorest performing of the 12 UK regions.Related: Varadkar says Ireland is stepping up plans for no-deal Brexit Continue reading...

Growth across Europe forecast to fall if UK adopted WTO rules, with Britain worst affectedBritain crashing out of the EU without a deal would inflict significant economic pain across Europe, leaving the region without any winners, the International Monetary Fund has warned.As the new Brexit secretary, Dominic Raab warned Europe to prepare for a no-deal exit, the IMF said such an outcome would hurt the UK most but would also have damaging economic consequences for Ireland and other EU nations.

World Cup and heatwave boost food and drink purchases but leave other sectors strugglingThe World Cup and the summer heatwave kept British shoppers away from the high street last month, despite encouraging stronger sales of food, drink and barbecues across the country.Revealing a surprise fall in retail sales in June, the Office for National Statistics said clothing stores and other non-food retailers suffered from reduced footfall amid the hot weather and football celebrations.Related: Sports Direct profits plunge by 72% after £85m hit on Debenhams stake Continue reading...

Alex Orr and Anne Loveday say the UK will lag behind, while John Mills says US negotiators will hold the whip handAs the Brexit divisions are laid bare in the House of Commons, with the Conservative party split apart, there was more than a little irony that the EU and Japan signed a huge trade deal this week that cuts or eliminates tariffs on nearly all goods (Report, 18 July).The agreement covers 600 million people and almost a third of the global economy. It will remove tariffs on European exports such as cheese and wine, and Japanese carmakers and electronics firms will face fewer barriers in the EU. Continue reading...

All the day’s economic and financial news, as the EC fines Google for competition breaches

The economy is being buffeted by growing concerns over the US president’s trade warHow does the current global economic outlook compare to that of a year ago? In 2017, the world economy was undergoing a synchronised expansion, with growth accelerating both in advanced economies and emerging markets. Moreover, despite stronger growth, inflation was tame – if not falling – even in economies such as the United States, where goods and labour markets were tightening.Stronger growth with inflation still below target allowed unconventional monetary policies either to remain in full force, as in the eurozone and Japan, or to be rolled back very gradually, as in the US. The combination of strong growth, low inflation and easy money implied that market volatility was low. And with the yields on government bonds also very low, investors’ animal spirits were running high, boosting the price of many risky assets.Related: IMF warns Trump trade war could cost global economy $430bnThe combination of a stronger dollar, higher interest rates​ and less liquidity does not bode well for emerging markets Continue reading...

Slowing house price rises and summer clothing sales dampen predicted leapThe chances of a rise in interest rates in August have dipped after British inflation remained at a one-year low last month, triggered by the summer sales.Confounding expectations for the return of higher rates of inflation in June fuelled by the rising price of petrol, the Office for National Statistics said the consumer price index remained unchanged at 2.4% from the previous month.Related: Google to appeal after EC fines it €4.34bn over Android competition breach - business live Continue reading...

The latest in our new economics series looks at how one university’s decision to bring cleaning staff in-house changed working lives and transformed a community for the betterA queue was already forming by the time Isaac Oti turned up for work before dawn that May morning. He came back a couple of hours later and – “boom!” People were spilling out of Queen Mary college, past the gates, past the engineering faculty. They were standing out on the road three or four deep, almost reaching the tube station.“It was crazy.” Even 10 years later, Oti’s eyes shine at the memory. “CRAZY!”Related: Some call it outsourcing. I call it spivvery | Aditya ChakraborttyThrough outsourcing, university managers routinely allow low-paid workers to be treated disgustinglyRelated: Want to save your job and make more money? Buy out your boss | Aditya ChakraborttyRelated: The tiny union beating the gig economy giants Continue reading...