Competition for workers helps push up wages, as unemployment stays at 4%Britain’s workers have started to repair the damage from a lost decade of wage growth after increased competition for workers pushed the government’s preferred measure of pay to its highest level since the UK was deep in recession a decade ago.The latest health check on the labour market from the Office for National Statistics showed that regular pay – which excludes bonuses – was 3.1% higher in the three months ending in August than in the same quarter a year earlier. Continue reading...

Aim unlikely to be compatible with balancing the books, says IFS in pre-budget viewPhilip Hammond will need £19bn from higher taxes, extra borrowing or faster-than-expected growth if this month’s budget is to fulfil the prime minister’s promises to end austerity and boost NHS spending, according to the UK’s leading experts on the public finances.The Institute for Fiscal Studies said the pledge by Theresa May at this year’s Conservative party conference to end eight years of cuts was “unlikely” to be compatible with the chancellor’s aim of balancing the nation’s books unless some tough decisions were made. Continue reading...

It’s a very jittery start to the week amid the Khashoggi standoff, US-China trade tensions and concern about US borrowing costs. Follow all the action live

Forget the ‘high-skill, hi-tech’ obsession: we should invest in everyday services to create a society run for collective goodThe late Prof Mick Moran, who taught politics and government at Manchester University for most of his professional life, had, according to his colleagues, once had “a certain residual respect for our governing elites”. That all changed during the 2008 financial crisis, after which he experienced an epiphany “because it convinced him that the officer class in business and in politics did not know what it was doing”.After his epiphany, Moran formed a collective of academics dedicated to exposing the complacency of finance-worship and to replacing it with an idea of running modern economies focused on maximising social good. They called themselves the Foundational Economy Collective, based on the idea that it’s in the everyday economy where there is most potential for true social regeneration: not top-down cash-splashing, but renewal and replenishment from the ground upwards.It hurts nobody to bring local services back into local authority control and to divest from outsourcing firmsRelated: How to build a fairer city Continue reading...

Forecasting body blames growing risks of no-deal Brexit as it downgrades estimateThe British economy is heading for its worst year in almost a decade amid the growing risks from no-deal Brexit, according to a leading economic forecaster.After official figures revealed zero growth in GDP in August, the EY Item Club said the economy would struggle to recover in the final months of the year owing to the increasing likelihood of Britain crashing out of the EU in less than six months’ time.Related: Frictionless Brexit trade deal would bolster budget – Hammond Continue reading...

Automation will bring growth, but history tells us labour’s share of national income will declineThe World Bank has a reassuring message for those fearful of being made obsolete by automation. The robot age is nothing to be worried about. Just like all previous waves of technological advance, the fourth industrial revolution will create rather than destroy jobs, so fears of mass unemployment are largely unfounded.Nor should we be concerned that the arrival of the new machine age is going to widen the gap between rich and poor, because the idea that the world is becoming a less equal place is more perception than reality.Related: Why teach drone pilots about ethics when it’s robots that will kill us? | Andrew BrownRelated: Rise of robots ‘could see workers enjoy four-day weeks’ Continue reading...

Markets rise in Abu Dhabi and Dubai; Trump issues threats of ‘severe punishment’Saudi Arabia’s stock market tumbled in early Sunday trade on concerns about relations with the international community following the disappearance of the Saudi journalist Jamal Khashoggi.Khashoggi, a prominent critic of Riyadh and a US resident, vanished on 2 October after visiting the Saudi consulate in Turkey. Ankara believes that he was murdered inside the building and his body removed. Continue reading...

Behind Theresa May’s assertion that austerity is over lurk the horrors of universal credit, Brexit and the DUP Continue reading...

If the PM can place a concrete deal before MPs, the pressure on hardliners to take it, and avoid chaos, will be intenseWhen the final Brexit deal hits the floor of the Commons, Brexiters who prefer leaving the EU without a deal than agreeing to a Chequers fudge will come under the most intense pressure to lay down their arms.They won’t just feel the water cannon of recession forecasts hosing them down. The international community, in the form of the International Monetary Fund, is weighing in with its own Project Fear, citing a no-deal Brexit as a potentially disastrous hit to global financial stability.If a customs arrangement is part of a Chequers deal, then Labour might need to back it Continue reading...

Because of heritability and upbringing, there can never be genuine equality of opportunityNo moral intuition is more hard-wired into Americans’ conception of their country as a just society than equality of opportunity. While some may be rich and others poor, we are willing to accept the market’s judgment about the distribution of income because it rewards talent, hard work and risk-taking rather than some unfair or arbitrary advantage.“We are true to our creed,” declared Barack Obama in his second inaugural address, “when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anyone else, because she is an American.”We have created a meritocratic aristocracyThe luck of parental lottery can never be overcomeSteven Pearlstein is a Pulitzer-prize winning economics columnist at the Washington Post and Robinson Professor of Public Affairs at George Mason University. This essay is drawn from his new book, Can American Capitalism Survive? (St Martin’s Press)

Index closes below 7,000 for the first time since March after challenging weekThe FTSE 100 has dropped below 7,000 for the first time in more than six months as stock markets around the world remained under pressure amid the fear of rising US interest rates.The index of UK blue-chip shares closed 11 points lower on Friday, taking it below the 7,000 milestone for the first time since March to finish the week at 6,995.91. After a closing peak of 7,877 in late May, the FTSE has now lost more than 10% of its value – the definition of a market correction.Related: Why are stock markets falling and how far will they go? Continue reading...

World Development Report dismisses concern about growing income inequality, say criticsAid charities and trade unions have denounced a World Bank report that advises some of the poorest countries in the world to accept the demands of multinational corporations to hire and fire workers and remove laws protecting workers’ rights.Oxfam said the report’s main message was that governments should abandon labour market regulation and rely instead on low levels of welfare to prevent workers falling into extreme poverty. Continue reading...

Chancellor says smooth exit would free up much of £15.4bn reserved in case of ‘no deal’A smooth Brexit that offers frictionless trade with the European Union will give the Treasury a double bonus in the budget, the chancellor has said, allowing him to boost public spending and consider cutting taxes.Philip Hammond said a deal with Brussels offering open trade with the EU would free up much of the £15.4bn he had saved this year to act as a buffer against a no-deal Brexit.Related: EU makes direct appeal to Northern Irish firms on Brexit backstop Continue reading...

Princess Eugenie’s had her big day – now it’s time to consider streamlining the working royals“As a father, my wish for my daughters is for them to be modern working young women,” is how Prince Andrew responded two years ago to rumours that Princesses Eugenie and Beatrice wanted to be elevated to the rank of working royals – and perhaps even be given public money to perform official duties.Today Eugenie tied the knot with Jack Brooksbank in a celebrity-packed ceremony at Windsor Castle that suggested she is loath to depart the royal stage for her day job as a director of a Mayfair art gallery. The wedding almost rivalled Harry’s nuptials, with 850 guests, 1,200 ballot-chosen members of the public in the palace grounds and a carriage procession over the cobblestones. Clearly, Theresa May was right: austerity is over.Related: Quoting The Great Gatsby at the royal wedding? It’s no love story | Sam Leith Continue reading...

Too many people live too far from shops selling fresh food. There are steps the government could take, but don’t hold your breathIn the past decade there has been a revolution in the British food industry. If you are a comfortably-off urban dweller, it has never been easier to procure a healthy snack. Gone are the days where a soggy sandwich and a packet of crisps were the best you could hope for: now your options include protein pots, prepared mango, chia seed yoghurt, salads containing quinoa. Large supermarkets, too, have cottoned on: if it’s fajita night, a wholemeal wrap is an option. So is reduced-fat cheese. And, if you’re happy to overlook the food miles involved, a larger selection of fresh vegetables than our grandparents could have ever imagined.Yet the food revolution does not benefit everyone. A new study from the Social Market Foundation in collaboration with Kellogg’s has found that more than a million Britons are living in “food deserts” – neighbourhoods where poverty, poor transport and a lack of big supermarkets severely curtails access to affordable fruit and vegetables.Related: More than a million UK residents live in 'food deserts', says study Continue reading...

The FTSE 100 has plunged 10% since May and Wall Street suffered its biggest drop in 8 months this week. What’s going on?A volatile week across global stock markets has escalated into a heavy sell-off, with European stock markets plunging to their lowest level in 20 months on Thursday. In the UK, the FTSE 100 entered correction territory – falling 10% from its peak in May - after Wall Street suffered its biggest drop in eight months on Wednesday. Continue reading...

Panic selling on Wall St spreads amid concern over trade disputes, inflation and Trump’s clash with FedThe City has felt the full impact of a sell-off in global financial markets with shares in the FTSE 100 index of leading companies now more than 10% below their record peak in May.On a second day of turbulence, aftershocks from panic-selling on Wall Street rippled through Asian and European bourses as dealers took fright at trade tensions, the prospect of higher inflation and Donald Trump’s attempts to put pressure on America’s central bank over interest rates. Continue reading...

Ornua, owner of Kerrygold and Pilgrims Choice brands, says it is preparing for uncertaintyThe Irish dairy company behind well-known brands such as Kerrygold has started stockpiling cheddar in the UK to guard against the risk of a major price hike for Britain’s favourite cheese in the event of a no-deal Brexit.World Trade Organization tariffs on cheddar are as high as 42%, but Irish cheese manufacturers fear sales would plummet in British supermarkets if it passed on the full extra cost to the consumer. Continue reading...

OBR says crashing out of EU would weaken economy and cause stockpiling of foodA chaotic and disorderly Brexit would have damaging consequences for the British economy and might trigger border delays and prevent aircraft landing from the EU, the government’s economic forecaster has warned.The Office for Budget Responsibility said Britain crashing out of the EU without a deal in six months’ time was likely to harm economic growth, could lead to households and businesses stockpiling goods, and spark a sharp fall in the value of the pound. Continue reading...

Women working until 64 on average, reversing 80s and 90s trend of earlier retirementWomen are on average working until the age of 64, in a dramatic reversal of the trend towards early retirement that marked the 1980s and 1990s.Figures from the Department for Work and Pensions show that both men and women are remaining at work for much longer than before, but for women the change has been more rapid.Related: The Guardian view on women and pensions: this generation deserves better | Editorial Continue reading...

Christine Lagarde says policy of raising US interest rates ‘legitimate and necessary’The boss of the International Monetary Fund has defended the Federal Reserve’s interest rate rises as “legitimate and necessary”, after Donald Trump said the central bank had “gone crazy”.Christine Lagarde made the comments at the IMF’s annual meeting in Bali, against a backdrop of tumbling stock markets and the biggest fall on Wall Street in eight months, which President Trump partly blamed on the Fed’s actions. Continue reading...

Rising US interest rates, trade war tensions and uncertainty in Italy provide a volatile mixA volatile week across global stock markets has escalated into a frenzied sell-off, with European stock markets plunging to their lowest level in 20 months on Thursday. In the UK the FTSE 100 fell to a six-month low after Wall Street suffered its biggest drop in eight months, with the Dow Jones losing more than 800 points.Related: World stock markets dive as Trump attacks 'crazy' US rate hikes Continue reading...

Europe suffers heavy losses and sell-off drags FTSE 100 into a correctionA jittery, volatile week on global financial markets has burst into a frenzy of selling, triggered by heavy losses on Wall Street and comments by Donald Trump describing US interest rate rises as “crazy”.Europe suffered heavy losses in morning trading on Thursday. The Stoxx 600 index, which tracks the biggest shares in the region, tumbled by 1.6% to its lowest level since the start of February 2017. The MSCI world stock index hit an eight-month low.Related: Why are markets plunging and which stocks are worst hit?The Australian market has been caught up in the global sell-off amid worries that rising US long-term interest rates will impact economic growth. Keep across the day's news at https://t.co/HBM7UKKl3C #ausbiz pic.twitter.com/rJMmt3qz1V Continue reading...

The storm clouds are gathering, but the world’s economies now have far fewer shelters from disaster than they did in 1929Late last month Indonesia was hit by a devastating earthquake and tsunami that left thousands of people dead and missing. This week the International Monetary Fund arrived in the country to hold its annual meeting on the island of Bali. On the day when the IMF issued a warning about trouble ahead for the global economy, the latest report from the UN’s intergovernmental panel on climate change said the world had only a dozen years left to take the steps necessary to prevent a global warming catastrophe. The message is clear for those willing to hear it: get ready for a time when economic failure combines with ecological breakdown to create the perfect storm.Even without the added complication of climate change, the challenge facing the finance ministers and central bank governors gathered in Bali would be significant enough. The IMF has cut its forecast for global growth, but the chances are that next year will be a lot worse than is currently forecast. The risks, the IMF says, are skewed to the downside. You bet they are.Related: World economy at risk of another financial crash, says IMF Continue reading...

Former PM’s thinktank predicts impact could be twice that felt by export industries, with Chequers little better than no dealBrexit will inflict long-lasting pain on Britain’s service sector, Tony Blair has warned as a report said Theresa May’s plans will be only marginally better than no-deal on the dominant industry.An analysis carried out for the former prime minister’s Institute for Global Change said that crashing out and trading on World Trade Organisation (WTO) terms would see productivity 4.91% lower in 12 years’ time than if Britain remained in the customs union and single market.Related: May faces Brexit battle as DUP threatens to sabotage government Continue reading...

Divisions over whether month points to underlying weakness in economy, or was just a blipThe UK economy ground to a halt in August, according to official figures that suggest a slowdown in growth after the World Cup.The Office for National Statistics said the rate of GDP growth in August dropped to 0% from 0.4% in July, missing City economists’ forecasts of 0.1%. Continue reading...

Deal could be done by next Wednesday but PM must abandon red line, says EU negotiatorMichel Barnier has claimed a Brexit deal could be within reach by next Wednesday but warned the prime minister that only by abandoning a key red line and agreeing to a customs union can impediments on trade between Northern Ireland and the rest of the UK be avoided.The British government would have to give up on its plans for free-trade deals with China and the US under such an agreement, the EU’s chief negotiator insisted, but otherwise a customs and regulatory border within the territory of the UK will have to be erected.Related: Brexit: Barnier says May’s Chequers plan would give UK 'huge competitive edge' over EU – Politics liveRelated: DUP threatens to vote against budget if May crosses Brexit red lines Continue reading...

Union says foreign investment funds are exploiting ancient sites in GreeceStriking trade unionists in Greece are forcing the shutdown of the country’s prime ancient sites, including the Acropolis, in a one-day protest over privatisation fears.The 24-hour walkout on Thursday is expected to close the majority of Greece’s 275 archaeological sites, monuments and museums, which generate about €100m (£87m) in revenue, mostly from ticket sales, every year.Related: Austerity is the wrong prescription for the world's wellbeing | Larry Elliott Continue reading...

Annual report says continuing uncertainty could adversely affect market confidenceA no-deal Brexit would send shockwaves through the global financial system and is one of the main risks to economic stability, the International Monetary Fund has said.Echoing concerns from the Bank of England, the Washington-based organisation said the potential for millions of financial contracts between City banks and their counterparts across rest of Europe to collapse in the event of the UK leaving the EU without a deal was a major worry.Related: Bank of England warns EU over Brexit risk to financial stability Continue reading...

Britain’s economy ground to a halt in August but quarterly growth hit 0.7%, boosted by demand for retail and food and drink during the heatwave

The surprise hit movie should lead to many more such stories being told by HollywoodIn the surprise hit movie Crazy Rich Asians (based on a 2013 Kevin Kwan novel), a New York University economics professor (Rachel), travels with her boyfriend to Singapore to meet his family. There, she learns, apparently for the first time, that her significant other (Nick) is heir to one of Asia’s largest fortunes and has a mother intent on making sure her son does not marry a commoner, Asian American or not.Partly because of its (terrific) all-Asian cast (an extreme rarity), and partly because it recalls earlier eras of great romantic comedies, the film has caused a lot of buzz. Perhaps there will even be a long overdue Oscar for Michelle Yeoh (from Crouching Tiger, Hidden Dragon), who plays the steely but loving mother.Related: Crazy Rich Asians – a sugary delight Continue reading...

Health check shows almost £1tn wiped off wealth of public sector since 2008 crashBritain’s public finances are among the weakest in the world following the 2008 financial crash, according to a fresh assessment of government assets and liabilities by the International Monetary Fund (IMF).The Washington-based lender said a health check on the wealth of 31 nations found almost £1tn had been wiped off the wealth of the UK’s public sector – equivalent to 50% of GDP – putting it in the second weakest position, with only Portugal in a worse state.Related: World economy at risk of another financial crash, says IMF Continue reading...

Readers including Fawzi Ibrahim and Caroline Lucas MP discuss ways to combat greenhouse gas emissions and tackle climate changeThe “final tick box” to limit global warming is not just political (Global warming must not exceed 1.5C, landmark UN report warns, 8 October), it is also economic. Capitalism, the cause of global warming, cannot be its remedy. Industrial production came about when commodity production became dominant – an economic system in which commodities are produced for the sole purpose of being sold, upon which they return more money to the investors than their original outlay.Related: Environmental warnings should stop drivers taking the road to ruin | LettersRelated: The time is now for a global pact for the environment | LetterRelated: The need to invest in renewables | LettersRelated: US must play leading role to save planet | LetterRelated: France offers lessons on plastic bags | Brief letters Continue reading...

Italy’s finance minister confirms plans to run a budget deficit of 2.4% of GDPThe International Monetary Fund has thrown its weight behind Brussels in its battle with Italy’s coalition government over plans to increase the indebted country’s borrowing in its next budget.The Washington-based lender of last resort, which is holding its annual conference in Bali this week, warned Rome to abide by the EU’s financial rulebook or risk a rebellion by investors that could trigger a debt default.Related: Italy aims to cut budget deficit after EU criticises spending plansRelated: European markets fall after Italy's deficit-widening budget plans Continue reading...

Rolling coverage of the latest economic and financial news, as the International Monetary Fund says UK has ‘flexibility’ to raise spending in the budget

All the deal really needed was a new name – and USMCA literally puts ‘America First’Donald Trump acts as if he has pulled off a smashing victory by replacing the North American Free Trade Agreement (Nafta) – supposedly “the worst trade deal ever” – with the new United States-Mexico-Canada Agreement. But the truth is that, while this outcome is better than an end to free trade in North America, the USMCA is no improvement over the status quo.Of course, this is Trump’s modus operandi: threaten to do something catastrophic, so people are relieved when things get only a little bit worse. That is what he did with North Korea, when he insulted its leader, Kim Jong-un, and threatened to rain down “fire and fury” on the country. Compared with nuclear conflict, his eventual meeting with Kim seemed like a triumph, even though it produced little actual progress.Related: Trump hails 'wonderful new trade deal' with Mexico and Canada Continue reading...

Conservatives in charge of stricken local authorities faced with closing basic services are voicing their sense of betrayal by the partyThe anguish of austerity cuts may have come late to the leafier Conservative-run councils of England but there is no doubt it has arrived. Reflecting on the eye-watering spending cuts stricken county halls must push through this year and next, the Kent county council leader Paul Carter declared to a Tory conference fringe meeting last week that “no Conservative came into local government to do this”. The room, packed with councillors, exploded into applause, accompanied by booming cries of “hear, hear”.Related: 'Territorial injustice' may rise in England due to council cuts – studyRelated: Don't blame councils for the harm done by government ideology | Joanne Fry Continue reading...

Employers’ organisation seeks help before Brexit on investment, skills and business ratesThe CBI has demanded that Philip Hammond use the budget on 29 October to prepare companies for a post-Brexit future with a £2bn package of measures to bolster investment, raise skills and ease the burden of business rates.The employers’ organisation said action was needed to lift Britain from the bottom of the G7 league table and it was time for the chancellor to “put warm words for business into action – no ifs, no buts.” Continue reading...

UK’s outlook for 2019 stays at 1.5% but previous forecast for 1.3% this year cut to 1.1%Donald Trump’s trade war with China and Europe is forecast to hit global growth this year and reverberate through 2019, the International Monetary Fund has warned in its latest health check on the global economy.The escalation of the US president’s protectionist policies, which has resulted in the world’s largest economy doubling import duties on some Chinese goods, has dragged down the forecast for growth this year and next, with the world’s largest trading countries, including the US, France, Germany and China, among the hardest hit.Related: World economy at risk of another financial crash, says IMF Continue reading...

Research shows post-industrial cities in north of England are being hit hardest by austerityDisproportionately harsh spending cuts to local public services in England’s poorest areas are likely to intensify perceived “territorial injustice” between deprived and wealthy parts of the country, a study has shown.Post-industrial cities in the north of England, together with some inner-city London boroughs, have been hit by the deepest cuts to local government spending since the start of austerity in 2010, says the research by the University of Cambridge.Related: Even Tory councils are now calling on ministers to ease the pain of cuts | Patrick Butler Continue reading...

World Cup-inspired summer spree ends as total sales growth slumps, figures showBritain’s retailers experienced a sharp slowdown in consumer spending last month, bringing to a close the World Cup-inspired summer spree on the high street.According to the British Retail Consortium (BRC) and the accountancy firm KPMG, growth in total sales dropped to the weakest level in almost a year. Continue reading...

The Sveriges Riksbank Prize in Economic Sciences has been awarded to two American men for work on climate change and sustainable growth

William Nordhaus and Paul Romer honoured over two of most ‘basic and pressing’ issuesTwo American economists at the forefront of work on climate change and the role of governments in boosting growth have been jointly awarded the prestigious Nobel Memorial prize for economics.The Royal Swedish Academy of Sciences said William Nordhaus and Paul Romer were being honoured for their research into two of the most “basic and pressing” economic issues of the age.Related: Nobel prize in economics goes to Nordhaus and Romer for climate change and growth - live Continue reading...

More bosses rein in hiring and investment plans amid concerns of no deal – DeloitteBritish businesses are the most anxious they have been about Brexit since the 2016 referendum, with more bosses reining in hiring and investment plans, a study has found.The accountancy group Deloitte has warned that worries over the long-term impact of Brexit are mounting. This is pushing down optimism over future prospects as firms fear their trading relations with customers in the European Union could be disrupted next year.Related: Macron makes overtures to UK car firms as Brexit talks enter critical week Continue reading...

Findings about the impact of a course of heavy-duty cuts on life expectancy make grim readingThe quack doctors rolled into town just as the global economy had come off the critical list. It was 2009 and the message from the austerity medicine show was simple: the only way back to full health was a course of heavy-duty cuts.Expert opinion was divided. There were other diagnoses available. There were economists who said austerity was the equivalent of going back to the days of blood-letting – but they lost the argument. The prescription, though it varied a bit from country to country, was pretty much the same across the developed world: get those budget deficits down.Under Greece's bailout, health spending fell from 9.8% of GDP in 2008 to 8.1% in 2014 Continue reading...

In Bali this week, the mood of the world’s gathered finance ministers will be darker than a year agoThe alarms bells have already started to sound. And this week it is expected to be announced formally that the global economy is running out of steam.As finance ministers, central bankers, academics and other delegates prepare to travel to Bali for the annual meeting of the International Monetary Fund (IMF), optimism about the future is at a low ebb. Continue reading...

There is no exit model that improves economic growth, and this disastrous project has stopped us tackling real social illsI know that Theresa May is beleaguered on all sides – not least her own – but did she realise what she was saying when she “warned” the Conservative conference that divisions over Brexit “could stop the UK leaving entirely”?Since stopping the UK leaving entirely is just what we Remainers wish to achieve, one can but marvel at the prime minister’s pronouncement. I am tempted to add “long live the divisions”, but the truth is that the sooner this Brexit fantasy is put to rest, the better.To bring public services up to scratch, there needs to be a general increase in the willingness to cough up Continue reading...

Tory delegates breathed a sigh of relief at Theresa May’s conference speech, but the chancellor has a rather different attitude to the country’s purse stringsTory cheers during Theresa May’s conference speech when she declared the end of austerity were an audible cry for freedom. The party faithful who attended last week’s annual bash in Birmingham wanted to break the chains of spending cuts that could deny them victory whenever the next general election comes along.The pain inflicted on much of the population since 2010 has energised voters, prompting many of them to join the Labour party, which staged a dramatic resurgence in 2017 and denied the Tories an outright victory. Another election, especially against a backdrop of even more severe cuts, could spell the end of even that slim majority. Continue reading...

We have great plans to build a country with opportunities for allI want the Conservatives to be a party for the whole country. I believe that the principles that guide us – security for families and the country, freedom under the rule of law and opportunity for everyone – can unite our people and help build a better future for our country.That responsibility also rests on our shoulders because of what has happened to Labour over the past few years. Millions of people who have supported Labour all their lives are appalled by what has happened to a once-great party under the leadership of Jeremy Corbyn. Antisemitism has grown, the party’s response to threats to our country’s security has become equivocal, and moderate Labour MPs have become targets for deselection and harassment. These are all alien to Labour’s best traditions. Continue reading...

We’re told the world is turning middle class, but those at the bottom have little to cheerHalf the world is now middle class. So ran the headlines reporting a Brookings Institution analysis of global poverty, according to which 3.8 billion people can now be defined as “middle class” or “rich”. We have, Brookings suggested, reached a “global tipping point”.Economic development, in China and India in particular, has helped pull millions out of poverty, a shift reflected in these figures. What is striking about the report, though, is as much what it obscures as what it reveals. The four categories in the Brookings analysis are: poor, vulnerable, middle class and rich. Notice what’s missing? The working class. Continue reading...