Contract workers prop up big earners but under Trump’s anti-labor administration are ruthlessly exploited themselvesUber just filed its first quarterly report as a publicly traded company. Although it lost $1bn, investors may still do well because the losses appear to be declining.Related: The Uber drivers forced to sleep in parking lots to make a decent livingThe standard economic measures – unemployment and income – look better than Americans feelCalifornia is countering Trump on this, as on other issuesRelated: Gig economy: California bill granting employee status passes assemblyRobert 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...

Two decades of public health improvements have stalled, says IPPR thinktankMore than 130,000 deaths in the UK since 2012 could have been prevented if improvements in public health policy had not stalled as a direct result of austerity cuts, according to a hard-hitting analysis to be published this week.The study by the Institute for Public Policy Research (IPPR) thinktank finds that, after two decades in which preventable diseases were reduced as a result of spending on better education and prevention, there has been a seven-year “perfect storm” in which state provision has been pared back because of budget cuts, while harmful behaviours among people of all ages have increased. Continue reading...

April’s annual growth drops from 6.4% in March to 5.9% as households cut borrowingConsumers increased their borrowing in April at the slowest pace since 2014, revealing a reluctance to buy goods on credit amid persistent Brexit uncertainty.The annual growth rate in unsecured consumer lending dropped to 5.9% from 6.4% in March, as households limited their spending on credit cards and cut back on finance deals to purchase a new car. Not since June 2014 has the rate of borrowing growth been so low, the Bank of England said. Continue reading...

After 5% tariff announced, president tweets ‘Mexico has taken advantage of the US for decades’Donald Trump has defended his decision to impose new tariffs on Mexico as stock markets worldwide were rattled by fears of an escalation in trade tensions.“Mexico has taken advantage of the United States for decades,” Trump tweeted. “Because of the Dems, our Immigration Laws are BAD. Mexico makes a FORTUNE from the U.S., have for decades, they can easily fix this problem. Time for them to finally do what must be done!”Related: Markets shaken as Trump announces shock Mexico tariffs – as it happenedTariffs are border taxes charged on foreign imports. Importers pay them upon entry to the customs agency of the country or bloc imposing them.Related: ‘The people applaud him’: Amlo receives in-flight serenade from passenger Continue reading...

Levies to start on 10 June linked to ‘remedying illegal immigration’

US to place 5% tariff on goods as Mexico president says ‘social problems aren’t resolved with taxes’Donald Trump has announced that he is placing a 5% tariff on all Mexican imports to pressure the country to do more to curb immigration into the US, in a surprise move that has rattled markets.The US president said the tariff would gradually increase “until the illegal immigration problem is remedied”. He made the announcement via Twitter after telling reporters earlier on Thursday he was planning “a major statement” that would be his “biggest” so far about the border.Related: Markets shaken as Trump announces shock Mexico tariffs – business liveTariffs are border taxes charged on foreign imports. Importers pay them upon entry to the customs agency of the country or bloc imposing them. Continue reading...

Bank of England suggests disconnect between investors’ attitudes and uncertaintyThe Bank of England has warned the value of shares and other assets could fall sharply if financial markets are underestimating the risks of a fresh crisis.Dave Ramsden, the Bank’s deputy governor responsible for banks and markets, said there was a disconnect between heightened levels of global policy uncertainty and the relatively relaxed attitude of investors. Continue reading...

World’s second-largest economy is not afraid of a trade war, says senior diplomat

For decades the US and others have pursued a free-market agenda which has failed spectacularlyWhat kind of economic system is most conducive to human wellbeing? That question has come to define the current era, because, after 40 years of neoliberalism in the United States and other advanced economies, we know what doesn’t work.The neoliberal experiment – lower taxes on the rich, deregulation of labour and product markets, financialisation, and globalisation – has been a spectacular failure. Growth is lower than it was in the quarter-century after the second world war, and most of it has accrued to the very top of the income scale. After decades of stagnant or even falling incomes for those below them, neoliberalism must be pronounced dead and buried.There is no magic bullet that can reverse the damage done by decades of neoliberalism Continue reading...

Senior official says China is ‘not afraid’ of a trade war as Beijing signals potential restrictions on rare-earth exportsProvoking trade disputes is “naked economic terrorism“, a senior Chinese diplomat said on Thursday, ramping up the rhetoric against the US amid a bitter trade war that shows no signs of ending soon.Zhang Hanhui, China’s vice foreign minister told reporters in Beijing China opposed the use of “big sticks” such as trade sanctions, tariffs and protectionism.The roots of the dispute come from US president Donald Trump’s “America first” project to protect the US’ position as the world’s leading economy, while encouraging businesses to hire more workers in the US and to manufacture their products there.Related: Global markets fall as China prepares to hit back at US in trade warUS President Donald Trump Trump has often repeated that China pays for US tariffs on its goods. 'We have billions of dollars coming into our treasury from China. We never had 10 cents coming into our treasury; now we have billions coming in' he said on 24 January 2019. On 5 May he tweeted: 'For 10 months, China has been paying Tariffs to the USA.' Continue reading...

UK2070 commission urges government to emulate German reunification to bridge gapLondon and the south-east will see more than half of the UK’s future job growth if the government does not address the massive gulf between the capital and everywhere else, an independent inquiry into the UK’s deep–rooted inequalities has warned.Bob Kerslake, the former head of the civil service and chair of the UK2070 commission on regional inequality, said the UK was going “materially in the wrong direction”. He urged the government to take lessons from Germany in reunifying the country by setting up a £250bn “national renewal fund”.Related: Tackling inequality means addressing divisions that go way beyond income | Gaby HinsliffMuch greater devolution of powers and funding, including the creation of four new “super regional” economic development agencies.A spatial plan to guide the future development of the whole of the UK.Action to harness new technologies and strengthen local economies. Continue reading...

US president’s target has tended to be Beijing but his focus is likely to turn more to the Federal ReserveStock markets around the world are sending a message to Donald Trump: end your trade war with China or face the nightmare scenario of running for a second term in the White House with the economy in serious trouble.The big falls seen on the world’s major bourses this week are the result of one thing: the growing fear of the impact of the standoff between Washington and Beijing on trade, industrial production and business confidence.Related: US-China trade: what are rare-earth metals, and what's the dispute? Continue reading...

This devastating expose met the people in need whose lives are being ruined by government cuts. Anything slashed by two-thirds is no longer fit for purpose‘Hope I die before I get old,” sang the Who in 1965. What was written in the spirit of nihilistic affectation now sounds, for their generation and the aged cohorts behind them, like a heartfelt prayer.Panorama’s Crisis in Care: Who Cares? (BBC One) is the result of the BBC social affairs correspondent Alison Holt’s 10-month investigation into the travails of four families in Somerset living with someone with complex care needs and the problems of the local council in fulfilling its duty to meet them.Any questioning of (let alone response from) the government was conspicuous by its absence Continue reading...

Dow Jones slumps after Beijing signals readiness to restrict exports of rare-earth elementsFinancial markets around the world have sold off sharply after Beijing signalled a readiness to strike back at Washington in their escalating trade war by restricting exports of rare-earth elements.Wall Street recorded steep losses on Wednesday as the Dow Jones slumped to the lowest level in almost four months, losing about 221 points to trade at 25,126. The S&P 500 index also fell to a two-month low, sliding by 19 points to 2,783.Related: US-China trade: what are rare-earth metals and what's the dispute?Related: Trump needs to make peace with China and get a cut in interest rates | Larry Elliott Continue reading...

Central bank says that growth slowdown threatens financial stability

The metals are used to produce a number of goods, including mobile phones and camerasWhat are rare-earth metals?

Three of the key players co-author a book about lessons of the past and make proposals for the futureJournalists, the adage goes, write the first rough draft of history. It’s a grand claim but perhaps the best of them achieve something close to that. In the case of the great financial crisis of 2008, Andrew Ross Sorkin of the New York Times did so in his book Too Big to Fail, which remains a useful description of how it felt on Wall Street when the markets began to collapse. Sorkin had good access to the key people involved.The second draft of history is often written by the key people themselves. After the second world war, Winston Churchill confidently asserted that history would treat him kindly because “I propose to write that history”. When the financial crisis erupted, the same thought may have crossed the minds of Hank Paulson, Ben Bernanke and Tim Geithner, who were US Treasury secretary, chairman of the Federal Reserve Bank and president of the New York Fed, respectively. All three published lengthy memoirs explaining why they did and didn’t, do what they did and didn’t do – inevitably, with a degree of self-justification in each case.Related: How the Amazon-Google-Uber effect sets inflation | Mohamed El-ErianDonald Trump is doing what he can to stop them by heckling from the sidelines Continue reading...

Drop in finances is a reflection of austerity drive imposed by Tory-led governmentsCouncil spending on local services has fallen by more than a fifth since 2010, according to a report from Britain’s leading independent economics thinktank.In a reflection of the austerity drive imposed on local authorities by Conservative-led governments during the past decade, the Institute for Fiscal Studies said spending on services in England had fallen by 21% between 2009-10 and 2017-18. Continue reading...

The process gets underway to fill the top jobs at key EU institutions including the European Central Bank

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

Two former members of Bank of England’s rate-setting committee on Britain’s economic prospects

While stockpiling gave growth a boost, uncertainty is delaying investment and pay increases

IFS study shows Conservatives wrong to plan tax cuts, says John McDonnellThe UK tax system does help reduce the country’s wealth inequality problem, according to a report released on Monday by the Institute for Fiscal Studies, but benefits still do most of the heavy lifting.The findings were seized on by the shadow chancellor, John McDonnell, who said the IFS’s evidence showed that the government was wrong to plan tax cuts. Continue reading...

A new chancellor would have to decide on the spending review and the next Bank of England governorThe Conservative hopefuls lining up to replace Theresa May can be divided into two categories: those with a chance of becoming prime minister and those who see a tilt at the premiership as a way of securing promotion in the new Cabinet. There will be plenty in the second group who fancy their chances of becoming chancellor of the exchequer.There are circumstances in which Philip Hammond could stay at the Treasury. Graham Brady might come from nowhere and decide that continuity is a precious commodity in current circumstances. One of the Brexiters in the running for PM might want to reach out to the remainers in the Conservative party. Continue reading...

British Steel’s collapse reveals the common fate of industries left to fall into the hands of private equityAcross the Midlands and north of England – and in pockets of the south – there are once proud single-industry towns laid low, with no determined effort to make good what once was. It could be Chatham and Rochester in Kent – or Birkenhead, Wigan or Mansfield further north.They survive as economies in which the main business is providing the foundational goods and services necessary to get by – supermarkets, petrol stations, hospitals, care homes. But there are few thriving private sector companies in 21st-century industries, a paucity of opportunity, and wages are below the national average.The high-speed rail network HS2 is set to be put on 'pause' by a scorched-earth Tory government Continue reading...

The ‘alt-right’ would have us believe that the EU is a leftist cabal. It’s actually working for a much more sinister groupWhatever the outcome of the European Union elections, it is only a matter of months before Theresa May’s successor is handed the task of scuttling over to Brussels in a desperate attempt to secure a fresh Brexit deal.When they return empty-handed – which is certain when the project aims to secure access to the customs union, minus any treaty obligations or the Irish backstop – failure will be blamed on forces inside Europe’s “deep state”. A no-deal Brexit can only be the fault of Brussels – and that will be the public relations spin. Continue reading...

Sterling is under pressure after Theresa May announces she’ll resign in June, paving the way for a Brexiteer successor

Clothing sales, a sunny February and web promotions drive fastest online growthBritish shoppers have notched up the fastest quarterly growth in online retail sales on record, in the latest sign of the shifting trends fuelling the decline of the high street.The Office for National Statistics said the amount of goods sold outside of bricks-and-mortar stores increased by 9.4% in the three months to April, the strongest growth of any quarter since comparable records began in June 1988.What's the problem? Continue reading...

Tech innovations have driven the drift down in prices – policymakers ignore such forces at their perilDebates about inflation in advanced economies have changed remarkably over the past decades. Setting aside (mis)measurement issues, concerns about debilitatingly high inflation and the excessive power of bond markets are long gone, and the worry now is that excessively low inflation may hinder growth.Moreover, while persistently subdued – and, on nearly $11tn (£8.7tn) of global bonds, negative – interest rates may be causing resource misallocations and undercutting long-term financial security for households, elevated asset prices have heightened the risk of future financial instability. Also, investors have become highly (and happily) dependent on central banks, when they should be prudently more fearful of them.Related: Trump's trade policy is a hot mess of conflicting goals – with few winners | Jeffrey Frankel Continue reading...

Shares fall sharply in Asia, Europe and North America in intensifying war of wordsThe deepening trade and technology war between the US and China has sent global stock markets sharply lower and prompted a warning from the IMF of the increasing risks to the global economy.Shares fell sharply in Europe and North America on Thursday as investors took fright at the the intensifying war of words between Washington and Beijing, poor news on the American economy, and political chaos in Britain.Related: Trump's trade policy is a hot mess of conflicting goals – with few winners | Jeffrey Frankel Continue reading...

Ex-civil service chief says spending review opportunity to focus on health and happinessPersonal wellbeing rather than economic growth should be the primary aim of government spending, according to a report by the former head of the civil service and politicians.Launching a report urging a sea change in thinking from ministers, Gus O’Donnell, who served as cabinet secretary to three prime ministers, said Britain could lead the world by making wellbeing the goal of government policy.Related: Government may slash three-year spending review due to Brexit Continue reading...

Financial markets hit as tensions between Beijing and Washington escalate, and fears of a no-deal Brexit rise

Government will continue to supply aircraft to be used in war, says Jeremy HuntThe UK government has negotiated a loophole in a German arms export ban to Saudi Arabia that will ensure UK-supplied planes will continue to be used in the war in Yemen, the foreign secretary, Jeremy Hunt, has confirmed.The news is contained in two unpublished letters from cabinet ministers to the parliamentary Committee on Arms Export Controls (CEAC). The aircraft, Tornado fighter bombers and Eurofighter Typhoons, are used in the Saudi bombing raids designed to push back the Houthi rebellion in the four-year civil war in Yemen. The aircraft were developed by consortiums of European companies and Germany supplies spares for them.Related: UK arms exports are still playing a central role in Yemen’s humanitarian crisis | Anna Stavrianakis Continue reading...

Readers respond to the collapse of British Steel, which has put 5,000 jobs directly at risk and endangered thousands more in the supply chainYour editorial (23 May) is surely right to say that Scunthorpe steelworks’ distress was forged in the fires of Brexit, for which this government ought to take responsibility. Jeremy Corbyn ought also to take responsibility, for failing to make the case against Brexit clearly both before and after the referendum.But political infighting is not going to support Scunthorpe and its steelworks. Politicians of goodwill on all sides could perhaps investigate with local people new means of ownership and management of the steelworks, possibly with EU help. These might include a co-operative model, a workers’ or management buyout, a partnership between the government and third-sector organisations, or a completely new model rooted in local circumstances. Continue reading...

Tariffs war with China has hurt almost every segment of the US economyEarlier this month, the US President, Donald Trump, suddenly revealed that a trade agreement between the US and China was not imminent after all. On the contrary, on 10 May the Trump administration raised its previous 10% tariff on $200bn (£158bn) worth of Chinese goods to 25% and threatened to apply the same rate to the remaining $300bn or so of US imports from China by late June. China then retaliated with reciprocal tariffs on $60bn worth of US exports, effective 1 June. Surprised stock markets fell in response, with the S&P 500 down 4% over the first week of the renewed trade war.US trade policy is a hot mess of conflicting goals. Given the current impasse in talks with China, and Trump’s general unpredictability, the inconsistencies of US trade policy – and their costs – are unlikely to go away soon.Related: Could the US-China trade row become a global cold war? | Nouriel RoubiniTo say that both countries gain overall from trade is not to claim that every citizen of each country benefits Continue reading...

Leaving the EU will make life worse for poor and disabled people – but the anger that led to the vote must be addressedUnless austerity ends, the UK’s poorest people face lives that are “solitary, poor, nasty, brutish, and short”. That was the finding on Wednesday from Philip Alston, the UN rapporteur on extreme poverty, who warned worse could be yet to come “for the most vulnerable, who face a major adverse impact” if Brexit proceeds.Days earlier, down the line at BBC 5 Live, the Brexit party candidate Lucy Harris declared that the average leave voter wants Brexit “at any cost”. Pressed further by presenter Nicky Campbell, Harris admitted this could mean volunteering for “30 years” of economic downturn.Related: Britain is trapped in the purposeless austerity that gave us Brexit | Aditya Chakrabortty Continue reading...

Sterling weakens amid reports of cabinet ministers turning on Theresa May

Longest losing streak takes place since creation of single currency two decades agoThe pound has suffered its longest losing streak against the euro since the creation of the single currency two decades ago as turmoil in Downing Street spilled over into the world’s currency markets.Speculation that Theresa May’s premiership was coming to an end following her failure to win support for her Brexit deal saw sterling drop for a 13th day in a row against the euro.Related: Sterling heads for worst week of the year as Brexit talks collapse Continue reading...

Chris Grover says austerity policies are even more punishing than the workhouse, John Veit-Wilson on social security for everyone, Jack Czauderna on so many reports, Dr David Alderson on why he won’t vote for the Lib Dems, and Paul Nicolson et al on the inequality between renters and landlords or landownersPhilip Alston, the UN rapporteur on extreme poverty, is right to say that austerity has sought to recreate the workhouse for the 21st century (Report, 22 May). The idea of “less eligibility” (that the experience of state support should always be felt as being economically and socially worse than earning a living) underpinned the 19th-century workhouse and frames contemporary austerity policies. But, in the weaponising of less eligibility for today’s precarious labour markets, social security policy goes beyond the oppressiveness of the poor law. Though the experience of the poor law was designed to be deeply unpleasant and grudging, it was also designed to relieve destitution by focusing on the needs of all household members.In contrast, social security policy, particularly after George Osborne’s 2015 budget, is designed to create destitution by, for example, only providing support for two children per household and limiting benefit payments in arbitrary ways via the benefit cap. The Department for Work and Pensions claims that Alston provides a “completely inaccurate picture of our approach to tackling poverty”. If anything, he under-emphasises the regressiveness of contemporary social security policies.

ONS says consumer prices index was 2.1% in April, up from 1.9% in MarchDearer energy bills and a pick-up in the cost of transport have pushed the annual rate of inflation back above the government’s 2% target for the first time in four months.Figures from the Office for National Statistics showed that inflation as measured by the consumer prices index stood at 2.1% in April, up from 1.9% in March.Related: UK inflation driven up by 'brutal' energy bills; Brexit woes hit pound - business live Continue reading...

Rolling coverage of the latest economic and financial news, as UK factory orders slow and Jamie Oliver’s restaurant chain slides into administration

CBI says ‘economic paralysis’ caused by Brexit is bringing UK ‘ever closer to disaster’Britain’s manufacturing sector has suffered the worst slump in orders for more than two and a half years as the car and textile industries struggled against Brexit headwinds.The CBI said its industrial trends monitor for May showed that without an agreement with the European Union, the manufacturing sector was gripped by “economic paralysis” and moving “ever closer to disaster”. Continue reading...

Intensification of tariff dispute also likely to knock almost $600bn off world economyDonald Trump has been warned by the west’s most influential economics thinktank that further escalation of the US-China trade war would unleash significant damage for the American economy, as well as the rest of the world.The Paris-based Organisation for Economic Co-operation and Development (OECD) said that an intensification of the dispute between Washington and Beijing would likely knock as much as 0.7% off the level of global GDP by 2021-22.Related: US-China trade skirmishes obscure the start of tech cold warUS President Donald Trump Trump has often repeated that China pays for US tariffs on its goods. 'We have billions of dollars coming into our treasury from China. We never had 10 cents coming into our treasury; now we have billions coming in' he said on 24 January 2019. On 5 May he tweeted: 'For 10 months, China has been paying Tariffs to the USA.' Continue reading...

The UK is a rich country, but food poverty is now a daily reality for many families. This is not inevitable

Huawei dispute shows how Washington is seeking to counter Beijing’s use of technology to gain geopolitical supremacyThe decision by Google, Intel and Qualcomm to freeze cooperation with Huawei could mark the point where the rumbling trade war between the US and China becomes a full-blown tech cold war.By excluding China from western know-how, the Trump administration has made it clear that the real battle is about which of the two economic superpowers has the technological edge for the next two decades.Related: 'There will be conflict': Huawei founder says US underestimates company's strengthRelated: The Guardian view on Google versus Huawei: no winners | Editorial Continue reading...

Ren Zhengfei says firm is fully prepared to face US bans and that 5G plans will be unaffectedThe founder of Huawei has said the US “underestimates” the Chinese telecom makers’s strength and that conflict with the US is inevitable in the quest to “stand on top of the world”.Ren Zhengfei said his company was fully prepared to face US bans on key components following new trade restrictions caused by Donald Trump’s declaration of a national economic emergency last weekRelated: US ban on Huawei a ‘cynically timed’ blow in escalating trade war, says firm Continue reading...

Ben Broadbent says projects postponed amid political uncertainty will be cancelledBusinesses would be likely to cancel their investment projects in Britain under a no-deal Brexit, paving the way for weaker economic growth in future, a deputy governor of the Bank of England has warned.Ben Broadbent, a senior policymaker at Threadneedle Street as the deputy governor for monetary policy, said that business investment plans that had been put on ice amid the political uncertainty over Brexit would probably be torn up altogether should the UK leave without a deal. Continue reading...

Chinese phonemaker shut out from Android software after Trump ban

If Donald Trump and Xi Jinping slide into ongoing animosity, the world will pay the priceA few years ago, as part of a western delegation to China, I met Xi Jinping in Beijing’s Great Hall of the People. When addressing us, Xi argued that China’s rise would be peaceful, and that other countries – namely, the US – need not worry about the “Thucydides trap”, so named for the Greek historian who chronicled how Sparta’s fear of a rising Athens made war between the two inevitable. In his 2017 book Destined for War: Can America and China Escape Thucydides’s Trap?, Harvard University’s Graham Allison examines 16 earlier rivalries between an emerging and an established power, and finds that 12 of them led to war. No doubt, Xi wanted us to focus on the remaining four.Despite the mutual awareness of the Thucydides trap – and the recognition that history is not deterministic – China and the US seem to be falling into it anyway. Though a hot war between the world’s two major powers still seems far-fetched, a cold war is becoming more likely.Related: US warship sails in disputed South China Sea amid trade tensionsRelated: Google’s Huawei ban is good news: tech giants shouldn’t always get their way | Simon Jenkins Continue reading...