Billionaire says holding fresh referendum soon could save UK from ‘immense damage’A campaign to secure a second Brexit referendum within a year and save the UK from “immense damage” is to be launched in days, the philanthropist and financier George Soros has announced.The billionaire founder of the Open Society Foundation said the prospect of the UK’s prolonged divorce from Brussels could help persuade the British public by a “convincing margin” that EU membership was in their interests.Related: Enemy of nationalists: George Soros and his liberal campaignsStaying in the single market and customs union Continue reading...

Eurozone crisis rears its head again with prospect of new elections in Italy and vote of no confidence in Spain2.51pm BSTThe turmoil over the failed Italian coalition, with the prospect of new elections in the autumn, has revived memories of the crisis which engulfed the eurozone over Greece. Investors have taken fright that Italy might effectively vote to leave the euro, sending markets and bond prices tumbling.And on top of that, there is concern over Spain, where the government faces a no confidence vote on Friday.2.43pm BSTCould this be a slap on the wrist from the President of the European Council for some of the earlier comments from the ECB and EU?My appeal to all EU institutions: please respect the voters. We are there to serve them, not to lecture them. #Italy @dwnews2.35pm BSTThe global market slump in the wake of Italy’s latest political problems has spread to the US, with Wall Street opening sharply lower.The Dow Jones Industrial Average is down 190 points or 0.7% while the S&P 500 fell 0.6% at the start of trading and the Nasdaq Composite losing 0.4%. US Treasury bonds, one of the perceived havens for investors in times of turmoil, have moved higher, with the 10 year yield conversely at the lowest level since April.1.40pm BSTIt’s not just Italy causing concern of course:#Spain's yield spread widening to German #bunds may not be as fast as #Italy, but still takes 10-year Spanish Bono yield to 1.662, up about 470 basis points since end March 1/ ^KO1.00pm BSTAt times like this it is worth looking at the VIX index - the so-called fear index which shows investors’ expectations of near term market volatility.So far today it has jumped 17% to 15.49, the highest level since the beginning of May.12.43pm BSTUnless there is something lost in the translation here, this appears to be another unhelpful comment, this time from EU commissioner Günther Oettinger:'The markets will teach the Italians to vote for the right thing', told me #EU commissioner #Oettinger in an exclusive interview in Strasbourg. More on @dwnews (full interview tonight at 21.00 DW/German) pic.twitter.com/oVPOPIMBUd12.28pm BSTAs the Italian crisis continues, billionaire financier George Soros is in a negative mood about the EU in a speech today:Another "major" financial crisis may be looming and the EU faces an imminent existential threat, George Soros says https://t.co/Jkw1Rhq6Tk pic.twitter.com/TgzF12JRu912.07pm BSTAs the Italian crisis grips investors, markets had become complacent in the wake of the QE support programmes from the world’s leading central banks, says Premier Asset Management’s Jake Robbins:The Presidential rejection of a democratically elected coalition government has thrown Italy into a constitutional crisis, one made worse given it was because of the coalition’s anti EU beliefs. In echoes of the euro crisis earlier this decade, these events could ultimately threaten the future of the EU, or at the very least, question it in its current form.Whilst it is no surprise that Italian yields have soared and equities plunged as investors reprice the actual risk of holding Italian assets, this crisis has been on the cards for some time and shows how complacent financial markets have become in the era of quantitative easing. At the same time there has been a noticeable slowdown in growth across the EU this year which will also continue to weigh on sentiment towards both Italian and EU wide assets. Throw in heightened geopolitical risks in other parts of the world such as the US and Asia, rising interest rates and the reduction in central bank support through quantitative easing, then the outlook for financial markets is far less certain than over the past few years.11.35am BSTHere’s Reuters’ latest report on the volatility in the markets:A deepening political crisis in Italy, the euro zone’s third biggest economy, fuelled a heavy selloff in Italian assets and the euro reminiscent of the euro zone debt crisis of 2010-2012.Short-term Italian bond yields, which move inversely to price, were set for their biggest one-day jump since 1992, while Italian and wider euro zone banking stocks were set to suffer their worst day since August 2016.11.29am BSTEarlier Italy sold €5.5bn worth of six month bonds, but at the highest yield for more than five years.Amid the turmoil surrounding the country’s political future, it sold the expected amount of bonds but at a yield or interest rate of an average 1.213%. At the previous auction for this maturity the yield was negative at -0.421%.11.09am BSTUS markets are expected to open lower in the wake of the European declines, with the Dow Jones Industrial Average forecast to lose around 190 points at the start of trading.11.03am BSTNot sure this is an entirely helpful remark from the European Central Bank’s Vitor Constancio. When asked about any ECB help for Italy he is quoted as saying: “Italy knows the rules. They might want to read them again.”Reuters reports:Any intervention by the European Central Bank to help Italy in the event of liquidity problems must meet the bank’s mandate and “certain conditions”, its outgoing Vice-President was quoted as saying on Tuesday.“Italy knows the rules. They might want to read them again,” Vitor Constancio told Spiegel magazine in an interview, according to a pre-release, when asked if the central bank would intervene if needed and rescue Italy from insolvency.10.37am BSTBack with the markets, and analyst Joshua Mahony at IG, says:With markets transfixed on affairs in Italy and Spain (amid a vote of no confidence for Rajoy), we are seeing a sharp shift into safe haven assets, driving the Japanese yen and gold prices higher in recent days. FTSE 100-listed gold producers Fresnillo and Randgold are the best performers in the bluechip index in early trade amid a shift into gold. We often see stocks benefit when currencies come under pressure, but the flight to safety this morning means the euro and the pound are also getting another pounding alongside the stock market declines.10.21am BSTAway from markets for a moment, and some good news for Pret A Manger employees after the takeover deal, as tweeted by the chain’s chief executive:Today is a big day for @Pret. As we welcome JAB, we’ll be thanking the people who really matter by giving each of our 12,000 employees £1,000 when the deal completes10.09am BSTMoody’s, which recently put Italy’s Baa2 credit rating on review for a downgrade, has commented on the latest developments.It said Italy was likely to be downgraded if the next government pursued fiscal policies which were not sufficient to place the public debt ratio on a sustainable downward trajectory in the coming years.Moody’s: We will conclude the review when we will have better visibility on the policy direction of the country, which means that the time frame for the review may exceed the typical period of up to three months.10.04am BSTNot even during the 2010-2012 Eurozone crisis did Italian yields rise so rapidly in just a few hours of trading. pic.twitter.com/yV884hZZ6A10.02am BSTNeil Wilson, chief market analyst for Markets.com, says:We’ve seen a steep selloff in risk assets as the Italian political troubles deepen, with investors seemingly dumping their exposure to Italy. Whilst a lot has already been written on the topic, the moves this morning warrant attention as we are seeing some incredible price action in Italian bonds with the market moving at speeds not seen since the worst of the Eurozone debt crisis.The big question is whether this is just an Italian problem or one that risks significant spill-over into the rest of Europe. The one thing that has become apparent is that markets treated the election result with excessive calm and has been jolted by the populists’ success in agreeing terms...9.59am BSTThe head of Italy’s central bank has said the country’s economy is recovering and growth is increasingly self sustained, but said any move to weaken the country’s public finances could undermine confidence and years of valuable reforms.Ignazio Visco, speaking to the bank’s annual meeting, made the comments amid the political turmoil which is likely to lead to a new election, with euro membership likely to be among the main issues for voters.9.51am BSTThe market rout is intensifying, in the wake of the Italian political crisis.The FTSE 100 is now down nearly 120 points or 1.5%, Germany’s Dax is down 1.6% and France’s Cac has fallen 1.87%.Ooft. Italian 2-year yield up 126 bps today, blowing away even the biggest increases at the height of the 2011-12 euro debt crisis. This is on course for the biggest one-day rise since Sept 1992. pic.twitter.com/Eh7e37QNmG9.10am BSTIt may not have taken in the latest developments, but the recent political uncertainty in Italy has hit consumer confidence.The confidence index fell to 113.7 in May, the lowest since August last year and below the 116.5 level expected by analysts. The April figure came in at 116.9.9.03am BSTOops! #Italexit back in the spotlight. #Italy's likelihood of leaving the Euro more than tripled from 3.6% to 11.3%. So, the troublesome calm in the euro zone is a thing of the past, Sentix says. pic.twitter.com/lPLDim3sXT8.47am BSTTime to call this a crisis, says Kit Juckes of Societe Generale:Having rejected the NL/5-star leaders’ nomination of Paolo Savona as [Italian] Economy Minister, President Mattarella has called on Carlo Cottarelli to form an interim administration.His chances of succeeding are slim and elections are likely in September. Which leaves us 3-4 months of uncertainty ahead of a vote that may be seen as a referendum on Euro-membership. The threat of further rating downgrades hangs over the BTP [Italian bond] market (and is largely priced-in), and the European Central Bank’s plans for providing forward guidance on policy normalisation are up in the air. Which means that the risk of EUR/USD reaching 1.10 by the end of the summer is significantly higher than the possibility of a recovery to 1.20.8.25am BSTAs expected the threat of a new eurozone crisis - this time involving Italy and/or Spain rather than Greece - has sent markets sharply lower in early trading.The FTSE 100 is down 0.78% at 7670, while Germany’s Dax has dropped 0.6% and France’s Cac 0.69%.8.13am BSTMore on the sale of ubiquitous sandwich chain Pret A Manger:Pret a Manger, the British sandwich shop chain, is being taken over by the German-controlled company behind Krispy Kreme donuts and Kenco coffee in a deal worth more than £1.5bn.Bridgepoint, the UK-based private equity firm, has agreed to sell Pret to the investment group JAB Holdings, which has been rapidly acquiring companies linked to the coffee market in recent years.Related: Pret a Manger sold for more than £1.5bn to Krispy Kreme owner8.10am BSTBack with Italy, and bond yields are continuing to leap higher:#Italy this morning. 2y government bond yield at almost 2%. Was -0.19% at the start of the year. Increased a full percentage point in one night. pic.twitter.com/DTrqr1b3U98.06am BSTThe unscheduled trading statement from Dixons Carphone shows it now expects profits of around £300m in its next financial year, well below the £387m expected by analysts.It forecast the UK electrical market would contract, and new broom chief executive Alex Baldock - eight weeks in the job - seemed to take a swipe at previous management when he said:We will correct recent underinvestment in both our colleague and customer proposition. In the coming year we expect to make a cost investment of around £30m in these areas across the UK and Ireland, giving our colleagues the right tools and the customer an improved experience.The share price of Dixons Carphone has been recovering strongly since new CEO Alex Baldock took over, on the back of vibes about strong trading ahead of the World Cup. But, out of the blue, the company has come out with a profit warning today! The issue appears to be that although headline of PBT of £382m for y/e April will hit City expectations that will be only down to an odd one-off £25m systems implementation benefit, given gross margin pressures in Q4. And the company has come out with detailed guidance for the year that has just started, y/e April 2019, warning of a fall back to headline PBT of £300m! That is partly because of the impact of one-off items, but also reflects continued problems in the mobile phone business (despite the much-vaunted talks with the networks about better terms) and, amazingly, a £30m hit to “correct recent underinvestment in both our colleague and customer proposition”. After all that, investors may not be in much of a mood to listen to the new CEO’s assertion that “though there’s plenty to fix, it’s all fixable”...7.53am BSTItalian bond yields have jumped on the political turmoil engulfing the country, with the two year yields rising above 1% for the first time since 2014.7.49am BSTThe euro continues to come under pressure, falling to its lowest level since November 2017 against the dollar.It is down 4% so far this month at $1.159, and is also at a new six and a half month low against the Swiss franc. It has fallen 0.1% against the pound.7.43am BSTGood morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.It’s been a little while, but the eurozone looks like it could be heading towards another period of turmoil. And it is not Greece this time.Related: Italian president names interim prime minister until fresh electionsThe overriding problem for investors is that these are two of the largest, most important economies in the eurozone. Euro traders are aware that the potential fallout from Italy mainly, but also this Spanish headache, dwarfs the fallout which could have been following the Greek debt saga and as a result the euro has fallen heavily out of favour and has continued to decline overnight. With potential elections just around the corner in both Spain and Italy, a summer of volatility now seems almost a given.European Opening Calls (with FTSE revised):#FTSE 7692 -0.50%#DAX 12811 -0.41%#CAC 5492 -0.31%#MIB 21809 -0.56%#IBEX 9732 -0.33% Continue reading...

Each month we look at key indicators to see what effect the Brexit process has on growth, prosperity and trade• ‘Brexit is a disaster’ – experts debate the latest economic data

Two former members of Bank of England’s interest rate-setting committee examine why UK growth lags its EU rivals• UK economy feels chill from spectre of disorderly Brexit

Business activity fails to recover as much as forecast from ‘beast from the east’• ‘Brexit is a disaster’ – experts debate the latest economic data

Wider use of unmanned aerial vehicles will create jobs and boost GDP by 2%, says reportUsing drones to transform working practices could boost Britain’s economy by £42bn by 2030, research claims.Increased use of drones, in sectors from construction or defence to energy or logistics, will employ hundreds of thousands of people and lift GDP by almost 2%, according to a report by accountants PwC.Related: Vodafone pilots new software to thwart rogue drones Continue reading...

Sergio Mattarella asks former IMF economist Carlo Cottarelli to try to form a governmentItaly’s president has formally asked Carlo Cottarelli to try to form a government after quashing the hopes of the Five Star Movement and Lega to form western Europe’s first populist government.Sergio Mattarella turned to the former International Monetary Fund economist to run a technocratic government until a fresh election can be held. The president’s office announced that he had given a mandate to Cottarelli to try to form a government after about an hour of talks on Monday morning. Continue reading...

The Labour party should be congratulated for its progressive economic ideas. But as Tory MPs prepare to drop austerity and start spending, the opposition needs to be bolderThe Labour party has long attempted to remodel society under the banner of equality. In that sense, the party’s current leadership is no different from earlier incarnations. Jeremy Corbyn and his shadow chancellor, John McDonnell, offered a bold manifesto at last year’s election, one which made it clear that they are agreed, in ambition if nothing else, with their nemesis Margaret Thatcher that “economics are the method; the object is to change the soul”. Since then Mr Corbyn and Mr McDonnell have sketched out, admittedly in dry policy documents, a number of instruments of their revolution. But they have shied away from making a coherent public case for notions of progressive values, radical democracy and collective action. That is a mistake, not least because a programme that seeks to transform Britain must conquer minds as well as spirits.It has been left to others to make the argument. Last week in Renewal, an academic journal, two leftwing thinkers – Martin O’Neill and Joe Guinan – outlined the size and scope of Corbynomics. They credit Karl Polanyi, an Austrian economic sociologist, for inspiring Mr Corbyn’s policies. Polanyi warned that capitalist systems quickly become dominated by markets, where values are framed by cash. The result is the “annihilation (of) the natural substance of society”. He argued, perceptively, instead that cooperation was more important to humans than competition. If reciprocity was considered, then the notion of what was valuable could be broadened to better represent society’s health. Continue reading...

A boomtown of the Industrial Revolution, it now uses machine learning to gauge the residents’ emotional stateWhen Rochdale is in the news it tends to be for the wrong reasons, such as associations with child sex exploitation and urban decay. Yet, in its heyday, Rochdale was one of the most prosperous places on earth. The town hall – a magnificent example of Victorian gothic – exudes civic pride. But it was built a long time ago, when Britain was the workshop of the world, cotton was king and the north of England was more prosperous than the south.Related: Nottingham has lowest household disposable income in UK Continue reading...

Mark Carney’s recent warning about a Leave-affected economy is being ignored. That is unfortunate, because it’s importantOne of the features of the Brexit vote is that it shows economics doesn’t matter very much. At least not to the 52% who voted to leave the European Union, and who the pollsters tell us still largely feel as they did on 23 June 2016.That seems strange when the debate about Scottish independence focused for much of the time on the possible economic gains and losses. But there was no doubting, when the Brexit votes were counted, that George Osborne’s Project Fear had been smashed on the rocks of public indifference. Continue reading...

Ross McEwan faces some hard questions at the bank’s AGM this week. At least he has some good news to fall back onIt is unlikely Royal Bank of Scotland chief executive Ross McEwan expected the positive results announced in April to quell anger among a significant body of his shareholders.That anger is anticipated to become clear on Wednesday at the company’s annual meeting in Edinburgh, when a vote is expected on setting up a new shareholder committee that would give investors power over the pay levels of senior executives. Continue reading...

Many economists believe life in the developing world is improving fast. It certainly isn’t in the sub-Saharan regionThere is a comforting mainstream narrative which tells us that African nations, like the rest of the developing world, are doing just fine. Look past the terrorist incidents, the latest Ebola outbreak and areas of drought, and you will find that poverty is being alleviated and diseases confined to isolated pockets. A combination of western aid, Chinese investment and the rejuvenating application of neoliberal economic medicine in the guise of free trade has come to the rescue, this narrative runs, improving matters by measurable degrees.This draws on figures from the World Bank showing that in 1981 around 42% of the world’s population was extremely poor, using $1.90 a day in 2011 prices as a yardstick. By 2013, that figure had fallen to 10.7%. An estimate by the bank suggests it fell further, to 9.1%, in 2016. Likewise, polio and other major diseases are in full retreat.Totting up the net outflow of funds since 1980 delivers the alarming figure of $16.3tn Continue reading...

Clothing sales to fall for second consecutive year after shift to ‘experience economy’Fashion sales are in retreat across the UK as clothing purchases come under pressure from tight household finances and the lure of the gym, restaurants and entertainment.The volume of clothing sold is expected to fall for the second successive year, declining by 0.5% in 2018 after a fall of 0.8% the year before, as the recent woes of Marks & Spencer are reflected across the high street.Related: High street gloom: which chains are feeling the pain? Continue reading...

Readers respond to a report that British households will need to pay an extra £2,000 a year in tax to help the NHS cope with the demands of an ageing populationNobody now disputes the need for a significant and sustained increase in revenue for the NHS and social care (Household tax bills ‘must rise by £2,000 to fix crisis in NHS’, 24 May). Rather, there are two political battles to be settled: how significant an increase the country feels it can afford, and from whom it wishes the additional revenue to be raised.The first question can only be answered through an ongoing “strategic welfare review”, conducted by the government along the lines of the present strategic defence review. Regular official long-term projections are required so that the country can be presented with a range of funding scenarios, based on different levels of service and accompanying outcomes it might expect from health and social care. Continue reading...

Economists warn that Britain’s economy is losing momentum after growth almost stalled in the first three months of the year

Growth slumps to 0.1% on weak business investment and household spendingThe weakest household spending for three years and falling levels of business investment dragged the economy to the worst quarter for five years, official statisticians have said.The Office for National Statistics confirmed its previous estimate that GDP growth slumped to 0.1% in the first quarter, while sticking to its view that the “beast from the east” had little impact.

The NHS needs £2000 more per household to survive. But as long as they’re ahead in the polls, the Tories don’t seem to careThis is it. The bailiffs are at the door waving the red-ink bill. Pay up or else. For eight years the government has stuck the NHS bill behind the clock but now the crunch has come. Will July’s NHS 70th birthday be a celebration or a funeral? The Institute for Fiscal Studies (IFS), grand truth-teller of fiscal facts, alongside the Health Foundation, an NHS pulse-taker, declare the service needs – absolutely, unequivocally needs – funds that add another £2000 a year per household in tax over the next 15 years.Related: NHS needs £2,000 in tax from every household to stay afloat – reportIn polls, people swear they would pay more for the NHS. But politicians fear tax-raisers get punished on election day Continue reading...

Take-home pay is one-fifth of the disposable income enjoyed by people in west LondonNottingham is the city with the lowest incomes in the UK, where residents’ take-home pay is only one-fifth of the disposable income enjoyed by people in west London.The average household income, once taxes and benefits are taken into account, is only £12,232 in Nottingham, compared to £58,816 in Kensington and Chelsea, and Hammersmith and Fulham in west London.

UK’s former chief EU diplomat Sir Ivan Rogers takes aim at PM’s Brexit strategy in speechBritain must face reality on post-Brexit trade rather than continue the “buccaneering blather” of hard Brexiters, the UK’s former chief EU diplomat Sir Ivan Rogers has said.Rogers, the former chief Brussels adviser to both David Cameron and Theresa May, took aim at the prime minister’s Brexit strategy in a forensic speech on Wednesday, but also criticised the plans of both hardline remainers and leavers, calling them “bluntly, delusional”.A 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...

Commerce department to investigate whether imports threaten US industry, as foreign automakers criticize effortThe Trump administration has launched a national security investigation into car and truck imports that could lead to new US tariffs similar to those imposed on imported steel and aluminum in March.The commerce department said the investigation under Section 232 of the Trade Expansion Act of 1962 would investigate whether vehicle and parts imports were threatening the industry’s health and ability to research and develop new, advanced technologies.Related: Trump says China trade deal is 'too hard to get done' Continue reading...

Politicians of all stripes have for too long avoided confronting hard truths about rising demand for health services and how to meet the costThere isn’t much about last year’s general election that Theresa May is in a hurry to revisit, least of all the plan to reform social care by a mechanism that came to be known as the “dementia tax”. The pitch was poor, but the concept deserved a fairer hearing. Outside the partisan frenzy of a campaign, it might have started a necessary conversation about long-term funding to meet the costs of an ageing population.New research published today lays bare the challenge. A model developed by the Health Foundation, a charity, and the Institute for Fiscal Studies anticipates demand for spending on adult social care to rise by 3.9% a year over the next 15 years. Over the same period, the population over the age of 65 is expected to increase by 4.4 million; and the number over 85 by 1.3 million. Continue reading...

Cheaper airfares helped to pull Britain’s inflation rate down to 2.4% last month

The duchess wants to champion female empowerment. Letting women participate fully in the workforce would be a good startThere’s nothing quite like a royal wedding to get the British to part with their cash, so in one respect the idea that the new Duchess of Sussex could be good news for the economy is a statement of the blindingly obvious. Retailers have had a tough time recently, and a bit of Meghanmania was just what they needed to get the tills ringing.Interest in the newest member of the royal family will linger longer than the feelgood factor. People are clearly fascinated by her backstory and take notice of what she thinks. Role models are important, and just as it matters that Christine Lagarde sees fighting for women’s rights as a vital part of her job as head of the International Monetary Fund, so it matters that the Duchess of Sussex calls herself a feminist and wants to champion female empowerment. Feminism is an economic issue.Related: 'I'm proud to be a feminist': Meghan Markle makes online debut as Duchess of SussexRelated: Will women be equal to men in 100 years? | Margaret Atwood, Lola Okolosie, Polly Toynbee, Athene Donald and Julie Bindel Continue reading...

Lower airfares helped bring down consumer price index to 2.4% in April, says ONSUK inflation unexpectedly fell further last month to the lowest level in more than a year as lower airfares provided some relief for cash-strapped Britons.Triggering a sell-off in the pound to the lowest levels seen this year, the consumer price index dropped from 2.5% in March to 2.4%, according to the Office for National Statistics (ONS). Economists had expected the annual rate of growth in prices to remain unchanged.Related: UK inflation falls to 13-month low, sending pound sliding – business live Continue reading...

Bill partially lifts restrictions enacted after 2008 financial crash as Republicans tell banking sector ‘help is on the way’The US Congress on Tuesday passed a partial rollback of banking rules put in place to prevent a repeat of the 2008 financial crisis, sending the bill for Donald Trump’s signature, in what amounts to a major step in the administration’s plan to return to a more deregulated banking system.

Bank of England governor’s comments risk renewed confrontation with BrexitersBritish households are more than £900 worse off after the vote to leave the EU, according to the governor of the Bank of England, in comments that risk a renewed confrontation with senior Brexit supporters in the government.

Jeremy Wright wants high court to unfreeze National Fund to help pay national debtThe attorney general has applied to the high court to release at least £400m from a fund that has in effect been frozen, in order to reduce the UK’s massive national debt.The legal manoeuvre was launched by Jeremy Wright QC following criticism over delays about what to do with the National Fund, which was established in 1928 with the aim of paying off the country’s accumulated financial liabilities.Related: UK debt is explosive – and it only needs a spark to light the fuse | Larry Elliott Continue reading...

Poll of CEOs finds backlash from political populism among leading concernsBusiness leaders around the globe have said the rise of economic nationalism triggered by Brexit, Donald Trump and populist politics poses the greatest threat to their growth.According to a survey of 1,300 chief executives from some of the world’s biggest companies, carried out by the accountancy company KPMG, British business leaders are notably more pessimistic than their peers.Related: Italian markets in turmoil as political novice emerges as frontrunner to be PM Continue reading...

Exclusive: Agreement could rebuild trust in trade liberalisation, thinktanks argue• Sign up to receive the top stories from Guardian Australia every morningAustralia and the United Kingdom have been urged to negotiate a high-quality free-trade agreement to help rebuild public trust in trade liberalisation.The agreement should include labour and environmental standards but not a controversial investor dispute settlement clause, says new research from two progressive thinktanks, the McKell Institute in Australia and Demos in the UK.Related: Life on the breadline: It’s a relentless daily struggle to not feel bad about yourself | Nijole NaujokasRelated: Trump trade tariffs: what they mean for Australia and what happens next Continue reading...

UK stock market hits new peak after US Treasury secretary Mnuchin says the trade war with China is ‘on hold’

Markets rose after US said it reached an agreement with China to ease trade imbalances between the world’s two largest economiesUS stocks surged on Monday after the treasury secretary, Steve Mnuchin, said the prospect of a trade war was “on hold” following an agreement to suspend tariff threats.Related: US and China put trade war 'on hold' Continue reading...

Attempts to reinvent money such as bitcoin often create excitement, but achieve littleThe cryptocurrency revolution, which started with bitcoin in 2009, claims to be inventing new kinds of money. There are now nearly 2,000 cryptocurrencies, and millions of people worldwide are excited by them. What accounts for this enthusiasm, which so far remains undampened by warnings that the revolution is a sham?One must bear in mind that attempts to reinvent money have a long history. As the sociologist Viviana Zelizer points out in her book The Social Meaning of Money: “Despite the commonsense idea that ‘a dollar is a dollar is a dollar,’ everywhere we look people are constantly creating different kinds of money.” Many of these innovations generate real excitement, at least for a while. Continue reading...

Steven Mnuchin, US Treasury secretary, says negotiations over tariffs with China have borne fruitAmerica has pulled back from launching a trade war with China that could have destabilised the global economy, by agreeing to put proposed tariffs on Chinese imports “on hold”.The Treasury secretary, Steven Mnuchin, said on Sunday that negotiations with Chinese officials have borne fruit, meaning Washington and Beijing can step back from imposing punishing tariffs on each other’s exports.Related: Xi strikes conciliatory tone on trade but offers few concessionsRelated: China and US reach 'consensus' on reducing trade gap Continue reading...

Changes in supply and demand mean that current highs will be corrected next yearThe big story in the financial markets in 2018 has been the sharp rise in oil prices, which last week hit $80 a barrel for the first time in four years.But if oil analysts are right and the cost of crude is set to carry on rising, hitting $100 a barrel over the coming months, the big story of 2019 is going to be how oil came down to earth with a bump.US shale oil is highly profitable at $80 a barrel, so production is bound to expand, and increase supply Continue reading...

The chaotic negotiations both within the Tory party and without means we need to consider an alternative: not leavingYour correspondent is not as well up on social media as his wife and children, but I could not help noticing a slogan posted beneath a London traffic light the other day. It claimed to be from the Instagram project Notes to Strangers – new to me, I must confess – and confidently proclaimed: “Having a Plan B will make your Plan A unsuccessful”.This was on yet another day when the press was full of reports about the chaos within Theresa May’s hapless government about the Brexit “negotiations” – negotiations that seem to be taking place mainly within her warring cabinet rather than with the rest of the EU. And – surprise, surprise – neither of the proposals supposedly being discussed is in any case considered remotely viable by most, indeed all, of the experts I have talked to.As for the Irish border problem, I have yet to meet any serious person who thinks it is soluble Continue reading...

Some believe that big tech offers developing economies a global platform. But others say ceding control of data and markets to the west could cripple societiesAfrican countries should be nervous about the big technology companies sweeping through their economies, knocking out established businesses and crushing startups before they have had a chance to blossom.That’s the message from the anti-poverty charity Global Justice Now in a report that warns of an “e-pocalypse” across the southern hemisphere, as western firms keen to sell sophisticated digital services use their muscle to outmanoeuvre local businesses in poorer nations. Africa is seen as particularly vulnerable after decades of underinvestment that has left many countries with seemingly little option but to accept the terms laid down by the tech giants.'Without [keeping data local] it's so much more difficult for countries to regulate and tax industries' Continue reading...

Foreign secretary’s Latin America trip will also include stops in Peru and ChileBoris Johnson will lay a wreath to commemorate the Falklands conflict in Argentina this weekend as part of a five-day visit to Latin America.The foreign secretary will also travel to Peru and Chile during the trip, which is aimed at showcasing Britain’s internationalist credentials after Brexit.Related: Chilean villagers claim British appetite for avocados is draining region dry Continue reading...

Country pursues deal after President Mauricio Macri fails to stem run on the pesoArgentina’s struggle this week to prevent a collapse in its currency and soaring interest rates from destabilising its ailing economy appeared to have ended in failure on Friday, leaving it to seek financial aid from the International Monetary Fund.The IMF, the lender of last resort to nation states, said the South American country had formally requested an “exceptional access standby arrangement” that would allow Argentina to pay its foreign bills while the government sought to prevent a repeat of the 2001 crisis. Continue reading...

Readers respond for and against George Monbiot, including Tony Juniper of WWFThe natural world is an incredible wonder that inspires us all, but despite our love of wildlife and wild places, there is no doubt that it is facing catastrophic decline, here and abroad. George Monbiot (The UK government wants to put a price on nature – but that will destroy it, 15 May) suggests that in efforts to save the natural world there are grave dangers in putting a “price on nature”.Yet one reason we are failing to do what is necessary is because nature is still seen as “nice to have”, rather than essential in sustaining our health, wealth and security. Many companies, economists and governments regard environmental destruction as a regrettable but inevitable consequence of economic growth – the “price of progress”. If we don’t change this mindset, then there will be little prospect for the revolution in ideas that is needed to avoid a mass extinction event and disastrous climatic changes. Continue reading...

Donald Trump, geopolitics and more make an impact, posing a challenge for central banksThe price of oil has hit its highest level since November 2014, reaching $80 per barrel, as geopolitical fears cause concerns to rise over potential disruption to supplies.Brent crude futures, the international benchmark, have risen by around half in the past year.Related: Brent crude oil hits $80 per barrel as Total threatens to quit Iran - business live Continue reading...

Let’s talk about the economy without repeating misogynist mythsThe economy, according to a newspaper headline, is “at a menopausal moment”. The deputy governor of the Bank of England, former Goldman Sachs banker Ben Broadbent, has been quoted as comparing the current slump in productivity to a similar, and much debated, spell of stagnation in the late years of Queen Victoria’s reign. This period was identified in 1952 by the economist Henry Phelps Brown as “the climacteric of the 1890s”. Broadbent, asked to explain what was meant by a “climacteric”, said that it was a biological word meaning “menopausal, but can apply to both genders … it means you’re past your peak, you’re no longer potent”.And with that Mr Broadbent, to use another bodily metaphor, fell flat on his face. Anyone equipped with basic common sense, leave alone in possession of a prominent position in public life, ought to be ashamed of the claim that the menopause means that a woman is over the hill and lacks “potency”. Such ideas are, plain and simple, misogynist myths. Continue reading...

Deputy BoE governor criticised after saying Britain’s economy is in a “menopausal” phase after passing its productive peak.

Labour leader presses PM at question time for details of plan for customs deal with EUJeremy Corbyn has accused the government of being “in complete disarray” over its Brexit negotiations, using prime minister’s questions to warn that delays and uncertainty caused by cabinet divisions were risking jobs and investment.Focusing on Brexit for a second consecutive week, the Labour leader lambasted Theresa May for being unable even to unite her ministers around a common plan, leaving her hopelessly exposed when it comes to talks with the EU. Continue reading...

Regular pay is up by 2.9% on a year ago, which could make an August interest rate rise more likelyThe prospect of an August increase in interest rates from the Bank of England has loomed larger after the latest official figures showed that strong jobs growth had pushed the UK’s employment rate to a fresh record in the first three months of 2018.Despite the slowest growth in more than five years, the Office for National Statistics said there were 32.34 million people in work in the first quarter of the year, an increase of 197,000 on the previous quarter and up by 396,000 on the first three months of 2017.

Legalisation of sports betting in US should be greeted with caution by UK operatorsThe estimate that $150bn-worth (£110bn) of sports bets are placed illegally in the US every year may be exaggerated but nobody doubts the true figure is enormous. That it is why it is mystifying that the US, or most of it, has held out so long against legalisation. Money – in the form of easy tax revenues – usually beats puritan scruples in the US.Now, finally, the door has opened. The US supreme court has struck down the federal ban on sports betting, paving the way for a mini revolution. Each state will have to pass its own legislation and many may still confine betting to casinos and racecourses. Others, though, may allow betting via mobile phones, in which case large parts of the US could eventually look very European, and specifically British, in their approach.Related: UK bookmaker values surpass £1.5bn as sports betting is set to be legal in US Continue reading...

The sharp shift in exchange rates destabilises emerging economies and threatens trade talksArgentinian president Mauricio Macri’s government has asked the International Monetary Fund for a loan that it hopes can stem a peso rout that has driven up interest rates, will slow the economy, and threatens the reform programme. This reversal of fortune for the economy partly, though far from fully, reflects broader pressure created by the US dollar’s recent appreciation – a process that is set to accelerate, because both monetary policy and growth differentials are now favouring the US.For a while now, the US Federal Reserve has been well ahead of other systemically important central banks in normalising monetary policy – that is, raising interest rates, eliminating large-scale asset purchases, and starting the multi-year process of shrinking its balance sheet. This was amplified this year by another catalyst of the dollar’s recent appreciation; a growing, and less favourable, divergence between economic data and expectations in the rest of the world.Related: The UK economy’s slowdown is clear to all. Except the Bank of England Continue reading...

In place of the ‘big society’ we were so fatuously promised, we have growing numbers of loan sharks and slumlordsIt may be hard to believe, in the midst of a benefit sanctions regime that sees one in five universal credit applications turned down, and a “hostile environment” that directly led to the Windrush scandal, but most of the current Conservative government also stood at the 2010 general election with a campaign that centred on something called the “big society”. The idea was that the state, massive and overblown as it apparently was after years of Labour profligacy, was taking up too much space in people’s lives. Move the government out of the way and communities would step in to fill the gaps, giving it some of that old British blitz spirit, reinvigorating civil society along the way.As with many Tory policies, this was based on the fantasies of people whose only interaction with the realities of the private rental market was checking the yields on their property portfolios. It’s a philosophy that contains a toxic mix of soft-focus nostalgia for a time that never was, and quasi-religious moralising that sees poverty not as a scourge to be eradicated but a tool for disciplining society’s undeserving into better behaviour.Related: Loan sharks are circling, says one of UK's biggest doorstep lendersRelated: We supported women with complex needs. What will they do now? Continue reading...

Decline bigger than same period in recession-hit 2009 and one in 10 town centre shops lie emptyShoppers are deserting the high street in greater numbers than during the depths of the recession in 2009, creating a brutal climate that is putting thousands more retail jobs at risk.The coming days will be crucial to the future of a handful of household names, including Mothercare and Carpetright, which are trying to persuade investors to make vital cash injections so they can jettison unwanted stores. There is also the spectre of job losses at Poundworld, the struggling discount chain, which is being cut adrift by its American owners.Related: MPs launch inquiry into high streets facing threat from online Continue reading...

Harriet Lamb writes in favour of peacebuilding as a saver of money and livesYour report (11 May) about the MoD’s £21bn budget shortfall is yet another reminder that the UK desperately needs “lower cost” complementary efforts that reduce security threats in the long term. With global conflict at its highest level in 30 years, the UK should invest in sustainable solutions to resolving conflict, that go beyond putting a lid on the problem as our adventures in Iraq and Libya have shown and the Chilcot inquiry made clear. This can be achieved through investing in peacebuilding – interventions that deal with the root causes of conflict – both in policy and financial terms. Every US$1 invested in peacebuilding potentially leads to a US$16 decline in the cost of armed conflict. No small change, when the total losses from armed conflict stand at US$1.04trn annually. Peacebuilding is effective, cost-effective and popular according to polls – and it would help with the MoD’s funding problem. What’s not to like?

With worldwide debt at $164tn, 190 countries will be included in database dating back to 1950sWith global debt currently at a record high, the International Monetary Fund is launching a database of public and private borrowing across 190 countries – virtually the entire world – dating back to the 1950s.In April the fund said the global economy was more indebted than before the financial crisis and immediate action needed to be taken before the next downturn. It said worldwide debt now stood at $164tn, equal to 225% of global GDP and up from a previous record of 213% in 2009.Related: Global debt now worse than before financial crisis, says IMF Continue reading...