Thinktank says rising cost of transport, childcare and energy is hitting low-income familiesLow-income families need their disposable income to rise by nearly a third in order to meet rising transport, childcare and energy costs, according to a report. Continue reading...

LGA chief says austerity could damage local authorities ‘beyond recognition’Local authorities have reached the point where relentless financial cutbacks are putting the wellbeing of vulnerable adults and children at risk, the Conservative leader of the Local Government Association (LGA) has warned.The Tory peer Lord Porter said that after eight years of austerity during which £16bn has been stripped from municipal budgets in England, councils risked being “damaged beyond recognition” and communities depleted of vital services.Related: Bus services in 'crisis' as councils cut funding, campaigners warn Continue reading...

President says US is very close to making ‘fair trade deals’ as big banks voice warn of threats to economic growthDonald Trump has defended his controversial positions on tariffs and trade, even as global markets were buffeted by a disappointing start to the second half of the year.At a meeting with the prime minister of the Netherlands, Mark Rutte, in the Oval Office on Monday, the president mused that the World Trade Organization had mistreated the US: “I hope they change their ways. They have been treating us very badly for many, many years and that’s why we were at a big disadvantage with the WTO.Related: Trump's EU trade war costing manufacturers in US and eurozoneRelated: EU says Trump car tariffs 'will put a tax on the US people' Continue reading...

Exclusive: Ministers also considering end to cap on alcohol taxes to boost public spending and cut deficitThe government is close to lifting its eight-year long freeze on fuel duty to raise billions of pounds to help meet pressure from cabinet ministers to boost public spending while also continuing to reduce the deficit.

Tariffs are slowing productivity and driving up costs, new figures showDonald Trump’s trade tariffs are driving up costs for US manufacturers and exacerbating a slowdown for eurozone factories, new figures showed on Monday, as the EU and the US edge closer towards a full-scale trade war with potentially damaging consequences for the global economy.According to the latest survey of American factories by IHS Markit – closely watched for any early warning signals for the world’s largest economy – the president’s tariffs added to the cost of raw materials and components in June. It also contributed to the lengthiest delays for supplies reaching factory production lines since the poll was started in 2007.Related: Tariff fears drag markets down as EU and Trump trade blows – business live Continue reading...

All the day’s economic and financial news, as US president says Europe is “possibly as bad as China”, and EU threatens tariffs on more American goods

European commission hits back at president, threatening tariffs on $300bn of US goodsDonald Trump will put a “tax on the American people” if he goes ahead with a threat to hit European carmakers with punitive tariffs, the European Union has warned.

PM expected to ask ministers to choose between Norway-style partnership and Canada-style trade dealDowning Street has produced a third possible model for the UK’s post-Brexit customs arrangements, which will be among issues discussed by the cabinet at a crunch meeting at Chequers on Friday.Related: May's cabinet still squabbling as Chequers Brexit meeting looms Continue reading...

The US president need only look as far as Obama’s experiment with tariffs to see the problemThe trade war is getting nastier. Phase one began when Donald Trump whacked duties on imported steel and aluminium, and announced $50bn (£37.8bn) worth of tariffs on Chinese goods. Beijing retaliated dollar for dollar, while the EU targeted Levi’s jeans, bourbon whiskey and Harley-Davidson motorcycles.Harley-Davidson responded by saying it would shift production of motorbikes for the EU market out of the US. A different president might have seen this as a warning of the collateral damage likely to be caused to the US economy from a trade war, but not this one. Continue reading...

The bad news is mounting but Labour are failing to put the future of the country above narrow political interestsWhat did Harold Wilson, James Callaghan and Michael Foot have in common? The answer, obviously, is many things. But my main purpose in bracketing them together today is that they were all leaders of the Labour party who overcame their doubts about UK membership of the European Union and became supporters – in Foot’s case, towards the end of his life, passionately so.I was reminded of this first by the much-reported chant at the pro-EU demonstration in London last weekend (“Where’s Jeremy Corbyn?”) and secondly when I attended the launch by the Strand group of King’s College London, of the fascinating new book Half In, Half Out (Biteback), about British prime ministers and their attitude to Europe.Related: Where’s Jeremy Corbyn? Lost in a rose-tinted vision of Labour’s past | John Harris Continue reading...

The language of business and finance used to be easy. Now it’s all derivatives, FDI balances and ‘summing to zero’I think it is just as well for the City and the world of high finance that I lost all interest in matters fiscal after completing an A-level in economics.Supply and demand, the multiplier effect, macro and micro economics, bull and bear markets. Basically understood. Fast forward from long ago last century to the present day… bond yields, derivatives, interim permissions, net FDI balances. Nope, not a clue. Continue reading...

Leading lights in northern England’s premier seaside resorts were in a sunny mood last week, but the towns still face deep-rooted social problems, poverty and lack of infrastructureThe sky is cloudless and the tide is high. Seagulls are scavenging, skin is blistering and the sea looks tempting. The trams go rumbling along the front and the air is thick with the authentic smell of the seaside: malt vinegar on chips.On a day like this, Blackpool appears not to have a care in the world. The town grew up as an oasis of fun and still does what it was set up to do in Victorian times. As the ice-cream stalls coin it in, it is hard to believe that Blackpool is usually portrayed as a town without a future, the biggest victim of consumer demand for more exotic destinations.We don't get a lot of help from outside. We have to make our own luck Continue reading...

Surprise as ONS upgrades earlier estimates after improved construction figuresThe UK economy grew at a faster rate than initially thought in the first three months of 2018, raising hopes for a pick-up in growth after the sluggish start to the year.The Office for National Statistics unexpectedly revised higher its third and final estimate for UK growth in the first quarter to 0.2%, after two earlier estimates of 0.1%.Related: Bank of England moves closer to August interest rate rise Continue reading...

The pound rises against the dollar after UK growth in the first quarter of 2018 is revised up to 0.2% from 0.1%

David Drumm, already jailed for fraud, pleads guilty over loans to property developers

The US Supreme Court has just stripped back the power of organised labour still further, but millennials don’t care. In an era of inequality and frustration they are joining unions in unprecedented numbers

Reactions to Afua Hirsch’s opinion piece on 2018’s anniversaries of the founding of the NHS and the Universal Declaration of Human RightsIn reminding us of the 70th anniversary yet to come on 10 December 2018 of the Universal Declaration of Human Rights (Celebrate the NHS at 70. But don’t forget what inspired it, Journal, 27 June), Afua Hirsch missed an opportunity to reflect that it was a Briton, HG Wells, whose The Rights of Man provided the source for much of the text of the declaration. Thus, through the work of the drafting committee chaired by a Canadian, John Peters Humphrey, the UK played a key underpinning role in its drafting.The declaration was the principal driver in the development of the 1950 European convention on human rights, which adopted much of the UDHR but also established a court for the enforcement of the convention: the European court of human rights. Another Briton, Sir David Maxwell Fyfe, played a key part in the development of the convention. Continue reading...

Chief economist Andy Haldane says England’s displays have boosted consumer spendingThe performances of Harry Kane and his team-mates in the World Cup are helping the economy bounce back from its weather-beaten start to the year and supporting the need for an interest rate rise, the Bank of England’s chief economist has said.Andy Haldane – who last week raised eyebrows by joining dissenters on the Monetary Policy Committee (MPC) to vote for an increase from 0.5% to 0.75% – said England’s recent football success had added to the “feelgood factor” among consumers.Related: Greene King sells more beer through England's World Cup cheer Continue reading...

My husband, Ernie Gordon, who has died aged 93, was an engineer and trade union official who eventually became an economist at the National Economic Development Office.He was born in Southwark, London, to Sam, an engineer in a machine-tool factory, and Lilian (nee Darton). The family moved to a new council estate in St Helier, south London, where Ernie went to Glastonbury Road boys school. At the outbreak of the second world war the family moved to Salisbury, Wiltshire, where Ernie followed in his father’s footsteps by working for a local engineering firm, Moore Brothers. Continue reading...

Report highlights risk of rising inequality against women worldwideThe world economy faces a looming “care crisis” risking further division between men and women across the planet, according to a UN report calling for governments and companies worldwide to spend at least an extra $7tn (£5.3tn) on care by 2030.Making the case for spending on support for children, old people and the neediest in society to double by the end of the next decade, the UN’s International Labour Organisation (ILO) warned demographic changes alone mean the current path for care funding falls far short of requirements.

Some of the world’s biggest scandals have gone unspotted for years. The nature of fraud is that it works outside our field of vision. By Dan Davies‘Guys, you’ve got to hear this,” I said. I was sitting in front of my computer one day in July 2012, with one eye on a screen of share prices and the other on a live stream of the House of Commons Treasury select committee hearings. As the Barclays share price took a graceful swan dive, I pulled my headphones out of the socket and turned up the volume so everyone could hear. My colleagues left their terminals and came around to watch BBC Parliament with me.It didn’t take long to realise what was happening. “Bob’s getting murdered,” someone said.Related: The financial scandal no one is talking about Continue reading...

Whitbread plans more outlets in busier locations to offset weak city centre spendingWhitbread has blamed falling sales at its Costa coffee shops on cash-strapped shoppers staying away from Britain’s high streets.The company, which is the UK’s biggest coffee-shop chain, said sales at outlets open for more than a year fell 2% in the quarter to the end of May. Costa has 3,800 coffee shops, with 2,400 in the UK. It also has more than 8,000 highly profitable coffee vending machines. Continue reading...

Two former members of Bank of England’s interest rate-setting committee discuss the outlook as industry warns of job losses

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

The latest monthly Guardian analysis finds manufacturers concerned by the uncertain outlook

UK cities move up the ranks on worldwide cost of living list as pound rallies against the dollarThe pound’s strengthening against the dollar has increased the cost of living in London, Birmingham and Aberdeen, which have moved up the ranks of the world’s most expensive cities.Hong Kong is the world’s most expensive city for expatriates, followed by Tokyo, Zurich, Singapore and Seoul, according to a cost of living survey, which ranks 209 cities on the cost of a basket of more than 200 goods and services such as coffee, bread, milk, cinema and rent. Continue reading...

Motorcycle manufacturer warns that EU tariffs will force it to move work overseas, as Donald Trump’s trade spat hits US companies

UK overall drops to fifth in survey because of cross-border movement fears after BrexitLondon has retained its position as the most desirable city for overseas workers, beating New York, Berlin and Barcelona, according to the latest study by the Boston Consulting Group and totaljobs.com.The UK overall, however, has dropped three places in the country rankings over concerns about the cross-border movement of workers following Brexit. The study also found that the number of British workers willing to seek employment overseas has soared to more than 60% – the largest increase in any country.Related: Tit-for-tat tariff battle could spark downturn in global economy – BIS Continue reading...

KPMG finds companies earning profits mostly abroad have benefited since EU referendumBusinesses that earn most of their profits abroad have benefited since the Brexit vote from an inflow of funds from investors at the expense of domestic companies that rely on sales in the UK, according to two separate analyses of the London stock market.In the two years since the EU referendum, the disparity between the share performances of companies that operate largely inside the UK and ones that repatriate profits from foreign subsidiaries has almost reached a record high, said the accountancy company KPMG.Related: Tit-for-tat tariff battle could spark downturn in global economy – BIS Continue reading...

PM will head to latest EU summit with employers such as Airbus reconsidering investment in UKBritain in 2016: the Conservatives are making a mess of running the nation, cutting public services to the bone and tearing themselves apart over Europe, while Labour under Jeremy Corbyn fail to make serious inroads as the opposition party of the day.Fast forward two years since the Brexit vote and very little has changed. David Cameron might well have vanished from political life and Corbyn has indeed robbed Theresa May of the Tories’ majority in parliament. Yet in terms of progress towards leaving the EU – on the second anniversary of the referendum over the weekend – the government has next to nothing of substance to show for itself.Related: Tit-for-tat tariff battle could spark downturn in global economy – BISA customs union is an agreement by a group of countries, such as the EU, to all apply the same tariffs on imported goods from the rest of the world and, typically, eliminate them entirely for trade within the group. By doing this, they can help avoid the need for costly and time-consuming customs checks during trade between members of the union. Asian shipping containers arriving at Felixstowe or Rotterdam, for example, need only pass through customs once before their contents head to markets all over Europe. Lorries passing between Dover and Calais avoid delay entirely. Continue reading...

The president has claimed that trade wars are ‘easy to win’ but Beijing and the EU plan to hit back against states that elected himWashington’s penchant for brandishing “big sticks” will come back to haunt it, China Daily, official organ of the Chinese government, warned on Friday as trade tensions between the two countries continued to fray. And China, and the EU, have identified just where that haunting will begin: in America’s heartland.For Donald Trump, the threat of a trade war with China, as well as potentially with Mexico and Canada, is a vital component of an overdue effort to correct longstanding injustices that have seen the US taken advantage of by trading partners for “far too long”.

Warning comes as Donald Trump steps up war of words with key trading alliesAn escalation of protectionist measures could spark a fresh downturn just as the global economy is picking itself up after the last one, the international body that represents the world’s central banks has warned.The Bank for International Settlements (BIS) said there were already signs that “the ratcheting up of rhetoric” was weighing on investment. It comes as Donald Trump steps up hostility with some of the US’s key trading partners and allies, raising fears of a full-blown trade war.Related: Trump threatens car tariffs after EU sets up £2.5bn of levies on US Continue reading...

The president’s tough tweets about EU car imports on Friday create another unstable element in a widening confrontationIt’s a skirmish, no more than that. The trade tariffs going up around the world might be adding millions to the cost of importing goods, but it’s not a war and it won’t mean the end of global growth. Or at least that seems to be the general view. The International Monetary Fund (IMF), the Organisation for Economic Cooperation and Development (OECD), and the majority of investment banks and thinktanks do worry about the latest round of niggly tit-for-tat tariff battles. They have condemned them, and some – including the IMF’s boss, Christine Lagarde – have rounded on the main protagonist: President Donald Trump. But have they begun to panic? Not yet.The European Union’s retaliation against steel and aluminium tariffs imposed by Trump were announced last week and amounted to $3.4bn on US products including bourbon, peanut butter and orange juice. Continue reading...

The Bank of England fears low unemployment will cause runaway pay – but it has misread the situationThe bargaining power of the average British worker should be back to where it was when Tammy Wynette topped the charts with Stand By Your Man and the Rolling Stones announced an upcoming American tour with a performance from the back of a truck on Fifth Avenue.May 1975 was the last time the unemployment rate stood at 4.2%. Back then official statistics showed that wages and salaries were increasing at 29.4%.Related: Pound rallies after Bank of England is split on interest rates - as it happenedRelated: How the collapse in full-time work for men is fuelling record underemployment | Greg Jericho Continue reading...

The leading candidates to become Britain’s top central banker after Mark Carney leaves next summerMark Carney steps down next summer and candidates are limbering up to replace the governor of the Bank of England, one of the most prestigious roles in central banking. A former member of the bank’s rate-setting monetary policy committee, Andrew Sentance, added some edge to the contest last week by demanding that the new head must not be “jetted in from overseas” and must have a better grasp of the UK economy than Carney. Nonetheless, some prominent foreign names are tipped for the job. Continue reading...

Mark Carney steps down next summer. His successor will face not just personal scrutiny, but questions about the job itselfPhilip Hammond has spent many idle moments thinking about who should succeed Bank of England governor Mark Carney. How, the chancellor asks himself, can he repeat the stunning, rabbit-out-of-a-hat moment when No 11’s previous incumbent, George Osborne, said in 2013 that the Canadian central banker who was heading the global post-crash clean-up operation was coming to help Britain’s laboured recovery?Carney is due to step down next June and has said the date is fixed in his diary after already extending his stay by a year to steer the Bank through Brexit and out the other side.Some have labelled Carney an “unreliable boyfriend” – all promises and no action Continue reading...

Athens hails agreement to give country access to markets in August after final bailoutGreece’s government has said the country is “turning a page” after eurozone member states reached an agreement on the final elements of a plan to make its massive debt pile more manageable, ending an eight-year bailout programme.“I have to say the Greek government is happy with this deal,” the finance minister, Euclid Tsakalotos, said on Friday. “But at the same time, this government will not forget what the Greek people went through in the past eight years.”Greece has really made the job – they have fulfilled their commitmentsRelated: Eurozone braces for row with Greece over bailout exit terms Continue reading...

Financial links to Hong Kong mean that Chinese slowdown could have serious UK impactThe Bank of England has warned that the health of China’s economy poses a greater risk to the UK’s financial stability than previously realised.New analysis from the Bank has found that a sharp economic slowdown in China would have a serious impact on the UK. If China’s credit boom blows up, Britain would suffer serious economic harm, it says, adding: “China’s credit boom is now one of the largest and longest running ever recorded. Indeed, rapid credit expansions, such as China’s, have typically preceded financial crises.”Related: Trump threatens tariff on European cars; Opec agrees to boost oil output - business live Continue reading...

In his big speech this week the chancellor made a general case for soft Brexit. The Airbus disinvestment threat shows that he must sharpen his gameTwo years ago this week, Britain voted to leave the EU. One year ago, the chancellor of the exchequer’s annual Mansion House speech was cancelled because of the fire at Grenfell Tower. On Thursday, Philip Hammond went ahead with this year’s speech to the City. And it was almost as if Mr Hammond had mistakenly brought along the kind of speech he might have given 12 months ago, when the Brexit process was in its infancy. But Brexit is not in its infancy. It is approaching the point of no return.True, Brexit was inescapably central to the chancellor’s prudent case this week. But the content of his speech was of an almost wholly general kind: he wanted a good deal, to protect markets from uncertainty, to uphold low friction borders and open markets, to construct an enduring partnership that recognises that Europe is Britain’s most important trading partner. He could – and would – have said all of this in 2017. Continue reading...

Bourbon whiskey, Levi’s and Harley-Davidson on list as EU measures comes into forceDonald Trump has threatened to widen the mounting trade dispute between US and the EU by imposing tariffs on European cars, after Brussels made good on its threat of retaliatory levies on American products including bourbon whiskey, Levi’s jeans and Harley-Davidson motorbikes.Raising the stakes in the tit-for-tat exchange of import tariffs threatening to spark a global trade war, the US president tweeted in response to the EU tariffs which came into effect late on Thursday: “If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!”Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here! Continue reading...

Anything less than 0.4% for the second quarter could spell yet another embarrassing delayHere we go again. The Bank of England has restarted its drumroll in preparation for a rate hike. Andy Haldane, the Bank’s chief economist, has joined the rate-risers, expanding their number to three. As a whole, the nine-strong committee stuck to its line that the miserable 0.1% growth in GDP in the first quarter was a weather-induced blip. Its view that momentum will recover in the April to June quarter was deemed to be “broadly on track”.Financial markets got the message. The pound rose and the likelihood of a rate-rise to 0.75% in August is now priced as a 65% probability. Continue reading...

All the day’s economic and financial news, as the Bank of England is split over interest rates

Chief economist, Andy Haldane, joins two others on MPC in pushing for an increaseThe Bank of England raised the chances of an August rate rise after its chief economist joined two other members of its rate-setting monetary policy committee voting for an immediate hike in borrowing costs.For the first time since joining the MPC four years ago, Andy Haldane broke ranks with the majority on the nine member rate-setting panel to join Ian McCafferty and Michael Saunders in calling for an increase in interest rates. The move is likely to heighten speculation that Threadneedle Street could be gearing up for a rise in two months’ time.Related: Bank of England leaves interest rates on hold, but chief economist pushes for a rise - business liveOne of Gordon Brown’s first moves as chancellor in 1997 was to hand control of interest rates to an independent Bank of England. Previously the cost of borrowing had been decided between the chancellor and the governor of the Bank. Continue reading...

The state spends a spiralling amount on vulnerable children but fails to protect them. We need to focus on supporting parentsJudges are only meant to speak in court, and they may not pronounce on government policy. So it’s a rare day when a judge turns whistleblower. It’s practically unknown for two senior judges to state publicly, in terms, that there’s a crisis in our care system which is damaging children and families across the land. But Andrew McFarlane, the incoming president of the high court’s family division, this week agreed with his predecessor James Munby, who warned in 2016 that the “seemingly relentless” rise in the number of care applications has resulted in a burgeoning children’s services disaster. This is, according to McFarlane, “untenable” for the courts and care system.The new president of the family court was speaking at the launch of the Care Crisis review, which was prompted by Munby’s alarm call. The seven-month process, facilitated by the charity Family Rights Group, listened to over 2,000 people including social workers, local authorities, Ofsted, women who have lost their children, adopters, and children who have been in care.Related: Child protection costs 'threaten local councils' financial stability'Related: Cuts to children’s centres mean lifelines are disappearing. Ask Alka | Frances Ryan Continue reading...

Labour missed its chance for real change after the financial crash. Now it is in danger of flunking it on BrexitIn normal circumstances, John McDonnell’s plan to shake up the Bank of England would be creating quite a buzz in Labour circles. The proposal that Threadneedle Street should have a productivity growth target as well as one for inflation would be the biggest change to the way the Bank operates since it was granted the power to set interest rates by Gordon Brown in 1997. These, though, are not normal circumstances. The political focus is on whether the government can get Brexit legislation through parliament, not on whether it is possible to give the Bank the task of raising Britain’s long-term growth rate. As the second anniversary of the EU referendum approaches, McDonnell might think it is time to move on, but the left as a whole is having trouble doing so. That’s unfortunate but indicative of a deep, and politically dangerous, conservatism.Related: Labour to propose Bank of England remit to boost productivityRelated: Enough Brexit fairytales. In the real world spending must increase | Phil McDuff Continue reading...

Philip Hammond will use speech to outline a plan for striking deals outside the EUThe government plans to safeguard London’s position as the world’s leading financial centre after Brexit by signing a series of financial partnerships with non-EU countries.Philip Hammond will use his keynote Mansion House to the City’s elite on Thursday to say that the government intends to strike deals outside of the single market that will make the UK a gateway to financial markets. Continue reading...

All the day’s economic and financial news, as investors worry that Donald Trump could trigger a full-blown trade war with China

Port’s head of policy says there will be serious congestion without a suitable trade dealThe port of Dover has warned there will be serious traffic congestion once a week in the town and on surrounding routes unless the government achieves a Brexit deal involving frictionless trade.Richard Christian, the port’s head of policy, said there would be “regular gridlock” in Kent in the event of a hard Brexit, and disruption to freight traffic on ferries and Eurotunnel services would have a profound impact on Britain’s economy. Continue reading...

Swelling ranks of the UK’s pensioners joining middle earners have pushed median up, says IFS studyMiddle-class households in the UK have seen their incomes grow more strongly than those at the top and bottom ends of the earnings scale during the years since the financial crash, according to the Institute for Fiscal Studies.Between 2012 and 2017, the average income increased by 8% after taking into account inflation. For those in the bottom 10% of earners and those in the top 10%, incomes increased by just 4%, as those at the bottom were hit by benefit cuts and those at the top by tax rises and sluggish salary growth. Continue reading...

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