Economics | The Guardian

Why focus on production of goods, rather than on health, education and environment?Just under 10 years ago, the international Commission on the Measurement of Economic Performance and Social Progress issued its report, Mismeasuring Our Lives: Why GDP Doesn’t Add Up. The title summed it up: GDP is not a good measure of wellbeing. What we measure affects what we do: if we measure the wrong thing, we will do the wrong thing. If we focus only on material wellbeing – on, say, the production of goods, rather than on health, education, and the environment – we become distorted in the same way that these measures are distorted; we become more materialistic.We were more than pleased with the reception of our report, which spurred an international movement of academics, civil society, and governments to construct and employ metrics that reflected a broader conception of wellbeing. The OECD has constructed a better life index, containing a range of metrics that better reflect what constitutes and leads to wellbeing. It also supported a successor to the commission, the High Level Expert Group on the Measurement of Economic Performance and Social Progress. Last week, at the OECD’s sixth World Forum on Statistics, Knowledge, and Policy in Incheon, South Korea, the group issued its report, Beyond GDP: Measuring What Counts for Economic and Social Performance.Related: Trump's trade wars and Brexit are making us all poorer | Jeffrey Frankel Continue reading...

Sum available for 2021-25 represents doubling of current five-year planThe World Bank is to make about $200bn (£157bn) available to fund action on climate change from 2021-25, helping countries adapt to the effects of warming and reduce greenhouse gas emissions.The sum represents a doubling of the five-year investment plan put in place after the landmark Paris agreement of 2015. Continue reading...

Firms fear imports of raw materials will dry up or rise in price when Britain leaves the EU, survey saysManufacturers are stockpiling goods ahead of March’s Brexit date as the prospect of queues at Britain’s ports grows more likely.Production remained strong across the manufacturing sector in recent months, with firms fearful that imports of raw materials will dry up in the event of a no-deal Brexit or go up in price should a deal go ahead. In response, they are making as many goods as possible and piling them up in storage, according to a quarterly survey from the EEF, the manufacturers’ trade body. Continue reading...

Trump and Xi’s truce at the G20 is a start but international trade still stands at the crossroadsContestants on Strictly Come Dancing dread the Argentine tango. No matter how good the choreography, it is technically tricky and devilishly difficult to get right.So the audience was holding its breath as Donald Trump and Xi Jinping got into hold for their own version of the dance in Buenos Aires this weekend. Trade tension between the world’s two biggest economies has increased markedly over the past 12 months and the chances of what Strictly judge Craig Revel Horwood calls a “dance disaster” were high.Related: The Observer view on Donald Trump’s growing list of failures | Observer editorial Continue reading...

Strains are showing in the US economy and the president knows a downturn would harm his chances for a second termThe strong economy that helped Donald Trump scrape through the midterm elections looks like it might make itself absent when he runs for re-election in 2020. In recent months, strains have started to appear that belie America’s vigorous headline growth rate and its buoyant jobs market.Last week the International Monetary Fund (IMF) warned that Trump’s escalating trade war with China was beginning to hurt global trade.Related: The G20: Donald Trump and the rise of the strongmen Continue reading...

It wouldn’t be wholly surprising if the PM won the ‘meaningful vote’. But no one will give much for Britain’s chances if she doesUnlike some of the people I meet, I am not beginning to feel sorry for Theresa May. In the way she has handled her referendum inheritance from David Cameron, she has aggravated the crisis at almost every turn.The chaos the Conservative party has inflicted on this benighted nation is such that almost anything could happen in the next few weeks and months. Indeed, as a betting man (a small punter, not a serious gambler) I have placed a tiny bet that, notwithstanding the forecasts of almost every political pundit, her attempt to rally the electors to persuade their MPs to back her in the 11 December vote might just succeed against all the odds.Even Philip Hammond has had to concede that all Brexit scenarios involve self-inflicted economic damage Continue reading...

The author of a seminal account of French society charts widening cultural divisionsFrom the 1980s onwards, it was clear there was a price to be paid for western societies adapting to a new economic model and that price was sacrificing the European and American working class. No one thought the fallout would hit the bedrock of the lower-middle class, too. It’s obvious now, however, that the new model not only weakened the fringes of the proletariat but society as a whole.The paradox is this is not a result of the failure of the globalised economic model but of its success. In recent decades, the French economy, like the European and US economies, has continued to create wealth. We are thus, on average, richer. The problem is at the same time unemployment, insecurity and poverty have also increased. The central question, therefore, is not whether a globalised economy is efficient, but what to do with this model when it fails to create and nurture a coherent society?'Workers' no longer live in areas where employment is created, giving rise to a social and cultural shockRelated: France’s ‘gilets jaunes’ leave Macron feeling decidedly off-colour Continue reading...

Each country’s legislature must also approve the agreement but Democrats in the US are already demanding changes

Business group warns of growing shortages across all skills levelsNine in 10 businesses say Brexit has affected their ability to recruit and train staff this year, the Confederation of British Industry has said.The Recruitment and Employment Confederation, the professional body for the recruitment industry, says the public sector, including the NHS and schools, face up to seven more years of skills shortages, based on current demand. Continue reading...

Rolling coverage of the day’s political developments as they unfolded, including Theresa May and Jeremy Corbyn at PMQs and the publication of the government’s official analysis of the economic impact of Brexit

UK central bank outlines scenario of falling house prices, a sterling crisis and a shrinking economy, but critics aren’t convinced

Bank of England governor says we must prepare for the worst, but will anyone listen?A bigger slump than the one that followed the financial crisis. A 25% fall in the value of the pound. An annual inflation rate of 6.6%. Official borrowing costs up to 5.5%. Our job, Mark Carney said, is not to hope for the best but to prepare for the worst.And the governor of the Bank of England certainly laid it on. Asked by MPs on the Treasury select committee to imagine what could happen to the economy in the worst possible scenario, Carney painted a bleak picture of goods not clearing customs, the EU refusing to accept UK products and financial markets in meltdown.Related: Labour will inevitably back second Brexit referendum, says McDonnell Continue reading...

Michael Greenwood, Geoff Naylor and David Murray on the failures of economic policyWhile agreeing with the thrust of Paul Mason’s article (A new politics of emotion is needed to beat the far right, Journal, 26 November), it is surely necessary to employ economics if we are to defeat neoliberalism. We have lived under this regime, with increasing severity, for 25 years or so. The result has been the stagnation of real incomes for the large majority, with the benefits of GDP growth accruing to those at the top of income and wealth distributions. This has suppressed growth, as those with less money tend to spend it and those with more hide it and avoid tax. Lower UK growth is clearly shown in comparative data.So if neoliberalism is a school of economics, it is a failure if the aim of economic policy is to encourage growth and the reinvestment of the benefits. Of course, neoliberalism is not economics, it is political dogma, supported by its beneficiaries. We need economics undergraduates to demand to be taught real economics and not the propaganda of power that is neoliberalism.

Latest stress tests examine worst-case scenario of a credit crunch-style economic shockUK banks are strong enough to survive a disorderly Brexit that could leave the country worse off than the 2008 financial crisis, according to the Bank of England.Related: Bank: no-deal Brexit will be worse than the financial crisis - business live Continue reading...

Bank warns of immediate economic crash, GDP to fall by 8%, unemployment to rise to 7.5%Britain crashing out of the European Union without a deal could trigger a deep and damaging recession with worse consequences for the UK economy than the 2008 financial crisis, the Bank of England has warned.Related: UK significantly worse off under all Brexit scenarios – official forecastRelated: This Brexit deal would be a disaster for innovators and entrepreneurs | Deborah MeadenRelated: UK banks can survive a disorderly Brexit, says Bank of EnglandThe @bankofengland #Brexir analysis is highly speculative and extreme. It will add to the view that the Bank is getting unnecessarily involved in politics and that will further undermine perceptions of its independence and credibility.And I won't make a full judgement until I see the details. But their bad-case losses from a no-deal Brexit look extremely high. I mean, 8 percent of GDP was the kind of estimate we used to make for countries with 150 percent effective rates of protection. 2/ Continue reading...

Three separate reports published this week have each reached the same conclusion. Britain will be worse off outside the EUYou wait for months for an analysis of the economic impacts of Brexit, and then three come along at once. But, in contrast to the public perception that economists can’t agree on even the most basic questions, like whether austerity was necessary or desirable, what is most striking about the reports published this week is how much they have in common. All three analyses this week (a report funded by the People’s Vote and produced by National Institute of Economic and Social Research (NIESR); the UK in a Changing Europe report that I and Thomas Sampson of LSE co-wrote; and, most importantly, today’s “cross-government long-term economic analysis”) all share the same basic messages.Related: Frictionless unicorns, ‘max fac’ and cake: your guide to Brexit lingo | Hannah Jane ParkinsonIf MPs reject the deal, there are seven possible paths the country could go down next.

We need frictionless access to markets and to encourage startups to build their businesses in the UK. Not a second-best dealYou don’t succeed in business by settling for second best, and successful entrepreneurs don’t roll over and accept defeat. That’s why I am so baffled by Carolyn Fairbairn’s surrender on Brexit.Writing in the Financial Times today Fairbairn, who heads the Confederation of British Industry (CBI) and is supposed to be the voice of British business, says that the prime minister’s deal is “not perfect” but that “the majority of businesses support it”.Related: Business leaders call for second Brexit referendumRelated: Forget the people’s vote, parliament should ditch Brexit | Steve Richards Continue reading...

Analysis produced by range of government departments suggests GDP could fall by 10.7%• Follow the latest politics news - live updatesThe UK would be significantly worse off under all possible Brexit scenarios in 15 years’ time, according to a benchmark economic analysis produced by a range of government departments including the Treasury.The keenly anticipated document concludes that GDP would have been 0.6% lower under the Chequers plan in 2035-36 – although that has been ditched after a revolt from the Conservative right – and 7.7% lower in the event of the UK crashing out with no deal, when compared with the UK remaining in the European Union.Related: PMQs: Brexit analysis is meaningless, Corbyn tells May Continue reading...

Representatives say possible EU agreement ends uncertainty and is better than the ‘cliff-edge’ of no dealThe automotive industry and Airbus have offered tentative support to Theresa May’s proposed Brexit deal, warning that the “cliff-edge” no-deal alternative would be much worse for the UK.Backing from representatives of an industry and a company that collectively support nearly a million jobs in the UK will boost the prime minister’s hopes of securing parliamentary approval for her plan ahead of the 11 December vote.Related: New blow for UK car industry as European parts factories close Continue reading...

As vote on Brexit deal looms, Philip Hammond says there is no version of leaving the EU that will increase prosperity• Follow the day’s politics news and reaction live updatesPhilip Hammond has said that the UK will be worse off “in pure economic terms” under all possible Brexit outcomes – including the prime minister’s own deal.Speaking on Wednesday morning, the chancellor gave strong hints the government had begun its contingency planning should it lose the vote in parliament on Theresa May’s Brexit deal negotiated with the EU.Related: Brexit phrasebook: a guide to the talks' key terms Continue reading...

US president says he expects to move ahead on plans to raise tariffs to 25% from 1 JanuaryDonald Trump has raised the stakes in the escalating global trade dispute between the US, China and some of America’s traditional allies ahead of a major gathering of world leaders this week.Ahead of the G20 meeting in Argentina, which begins on Friday, the US president used a newspaper interview to warn China that he expects to move ahead on the imposition of higher import tariffs on Chinese goods.Related: Trump's trade wars and Brexit are making us all poorer | Jeffrey Frankel Continue reading...

Current policies are hitting real incomes – and only voters, not central banks, can change thatThe world is in a trade war and there is no sign of peace breaking out anytime soon. By now, the disruption to trade appears extensive enough to factor negatively into forecasts for economic growth. Does that mean the Federal Reserve should stop gradually raising interest rates?The answer is no. Monetary policy cannot mitigate the damage done by foolish trade policies.Related: Does setting inflation targets cloud our view of the economy? | Robert Shiller Continue reading...

Women more likely to be hit by underpayments than men, Low Pay Commission figures revealAlmost one in four British workers on the government’s national living wage are paid less than they should be, according to official figures, with more women than men hit by underpayments.The figures revealed by the government’s Low Pay Commission showed that 369,000 workers – representing about 23% of all of those over the age of 25 who are covered by the national living wage – were paid less than that amount this year.Minimum wages in the UK explainedRelated: UK has weakest wage growth in advanced G20 nations, says ILO Continue reading...

In her solo show, Haley McGee values the gifts her exes gave her, while rating how much fun they were – and how good the sex wasImagine an episode of The Antiques Roadshow where the objects are all gifts from your old partners and a price is put on their sentimental value. What might that faded T-shirt or once-loved mixtape be worth in cash terms?In her performance The Ex-Boyfriend Yard Sale, currently at Camden People’s theatre in London, Haley McGee invites audiences to evaluate several presents from her exes. A coffeepot, a vintage typewriter, a guitar and a necklace are among the items displayed on plinths on the stage. When McGee reveals more intimate information about each relationship, we raise or lower our valuations accordingly. It all starts to feel like an alarmingly personal version of The Price Is Right. Continue reading...

Now even harder work begins for Theresa May as she battles MPs over the withdrawal agreementWelcome to your Guardian weekly Brexit briefing, more necessary than ever as it all starts hotting up … If you’d like to receive it as a weekly email, please sign up here. And catch up with our monthly Brexit Means … podcast here.Finally, producing the Guardian’s independent, in-depth journalism takes time and money. We do it because we believe our perspective matters and it may be yours, too. If you value our Brexit coverage, please become a Guardian supporter. Thank you.May could bring it back for a second vote, perhaps with very minor tweaks.She could resign and be replaced by a different leader who could then appeal to a majority in parliament, perhaps by offering a softer deal.Tory backbenchers could depose her via a no-confidence vote.In an ultimate gamble, May could call a general election, appealing to voters to back her over the heads of squabbling MPs.Labour could try to force an election through a vote of no confidence.Calls for a second referendum could become impossible to ignore, especially if Labour decided to back them.Britain could crash out on 29 March without a deal.UK economy would be 4% smaller after 10 years under May’s Brexit plan, the respected economic forecaster NIESR says.European court rejects British expats’ referendum challenge.Figures show rise in EU nationals exiting public sector after Brexit vote.Knighted Tory MP Sir John Hayes says he still won’t back May’s deal.Blowtorches in Brussels as protesters demand a people’s vote.Britain on verge of historic blunder, Boris Johnson says at DUP conference.Philip Hammond insists Theresa May’s Brexit deal is better than staying in EU.So will Europe miss the UK when it’s gone? Probably not.The leave adviser Shanker Singham admits UK would be better off staying in EU.Majestic Wine to stockpile 1m extra bottles for no-deal Brexit.The Brexit political declaration – rated.The health secretary, Matt Hancock, says second Brexit referendum possible.Even as May shook hands with Jean-Claude Juncker, the political village was transforming itself into a noisy constitutional souk. At every stall, the traders offer alternative models: “Norway for now!”; “Canada ++!”; “Switzerland!”; “Get yer article 50 extension here!” None of these alternatives, it should be emphasised, has been seriously countenanced by the EU. But they are already being offered to curious MPs at early-bird prices. What unites this cacophonous marketplace is the absolute assumption that the deal will fail in December. The 585-page agreement and its 26-page political annex are already regarded as redundant. The variables are dizzying, the stakes vertiginous. The worst news for May is that the past two and a half years were the easy bit.Amazing that - yet again - we are 45 minutes in & still not single voice, from any party, including Tories, backing @theresa_may's Brexit deal. Even ultra loyalist Michael Fallon now puts the boot in - "is it really wise to trust future of our economy to use 'best endeavours'"? Continue reading...

Frankfurt’s Dax index rises by 1.45%, while the City’s FTSE 100 ends day up by 1.2%Italy has shown the first signs of backing away from a budget clash with Brussels, sparking a share rally in Rome.On a day when equities rose across the globe, tentative signs of progress in negotiations between the European commission and Italy’s populist leaders resulted in the key barometer of the Italian stock market rising by almost 3%. Continue reading...

Mitsubishi has followed Nissan’s lead, and voted to remove Carlos Ghosn from chairmanship after allegations of financial wrongdoing

People’s Vote-commissioned study says loss is equivalent to annual output of WalesTheresa May’s Brexit deal is expected to cost the UK economy as much as £100bn over the next decade compared with remaining in the EU, according to one of the country’s leading economic thinktanks.An analysis of the prime minister’s EU withdrawal agreement from the National Institute of Economic and Social Research suggested that by 2030, Britain would lose GDP growth equivalent to the annual economic output of Wales. Continue reading...

Britain ranks bottom in group of nine wealthy countries for pay performance since 2009Workers in Britain have had the weakest real wage growth among the most advanced nations in the G20, according to UN data showing the scale of the UK’s “lost decade” for pay.According to the International Labour Organization, Britain ranked bottom of a group of nine wealthy nations for its pay performance since 2009, after the financial crisis. Continue reading...

They aim to promote stability, but might actually increase uncertainty about real things like home values or investmentsIn many countries, inflation has become so low and stable in recent decades that it appears to have faded into the woodwork. Whereas galloping inflation was once widely viewed as the number one economic problem, today most people – at least in the developed countries – hardly ever talk about it or even pay attention to it. But “silent inflation” still has subtle effects on our judgment, and it may still lead to some consequential mistakes.Since New Zealand’s central bank set the first example in 1989, monetary authorities around the world have increasingly pursued a policy of setting inflation targets (or target ranges) that are substantially above zero. That is, policymakers plan to have inflation, but steady inflation. What used to be a dirty word is now announced publicly, and moderation is enforced.Related: UK inflation steady at 2.4% in October after food price war Continue reading...

Exiting the EU highlights the risks of economic and political fragmentationThe singular issue of Brexit has consumed the United Kingdom for two-and-a-half years. The “if”, “how” and “when” of the country’s withdrawal from the European Union, after decades of membership, has understandably dominated news coverage, and sidelined almost every other policy debate. Lost in the mix, for example, has been any serious discussion of how the UK should boost productivity and competitiveness at a time of global economic and financial fluidity.At the same time, the rest of the world’s interest in Brexit has understandably waned. The UK’s negotiations with the EU have dragged on through multiple déjà vu moments, and the consensus is that the economic fallout will be felt far more acutely in Britain than in the EU, let alone in countries elsewhere.Related: Business leaders rally behind May's Brexit deal amid fears of crashing out Continue reading...

Attachment to place and identity can be part of a radical democratic project that speaks to people’s heartsIn Europe, the United States and Brazil, authoritarian nationalism is sweeping to power through a mixture of negative emotion and elite connivance. But this is no mere re-run of the 1930s. In the first place, unlike in Germany, Italy and Spain at the incipient moments of their dictatorships, the existing elites neither want nor need fascism. Their problem is that they don’t know how to fight it.Over the past 15 years political science has engaged a well-evidenced but unfruitful debate over what caused the rise of parties such as Ukip, the Party for Freedom (PVV) in the Netherlands, or France’s Front National. In general, I think it is proven that cultural rather than economic insecurities are what’s driving politics to the right. But it does not follow from this that action at the economic level can’t stem the tide of plebeian racism. In order to get the actions right, though, we have to understand that the political narratives of the centre are failing due to the way the free-market economy was designed.People understood that emotion could only reinsert itself into decision-making if the system were disruptedRelated: How populist are you? Continue reading...

More government money goes to subsidising housebuyers than to housing benefit – a situation that is not only unfair but costing the economy dearWhen official figures show that the number of new homes built for social renting has fallen by almost four-fifths in a decade, it should come as no surprise that more than a million families in England are stuck on council waiting lists.The dramatic slide resulted in only 6,463 in social housing homes being built in England in 2017-18, down from almost 30,000 a decade earlier. High on the list of blame for this shameful situation are government cuts, both to local authority budgets and to housing associations’ spending power. Continue reading...

Labour Brexiters see the UK as essentially different from France and Germany - but we share the same economic challenges, including reluctance to pay more taxThere are some Labour-supporting Brexiters who like to think that Britain is peculiar among European nations, and that differences of language, culture and history mean it should never have found itself inside a common market, let alone a union, with its continental neighbours.Jacques Delors’s speech to the TUC in 1988 positioned the UK inside a family of like-minded nations. And it had the effect of converting not only much of the UK trades union movement to the benefits of a marriage between social protection and regulated markets, but also much of the Labour party. Continue reading...

Brexit Britain is recusing itself from a level of influence on the global stage and downgrading its clout in the worldThe UK is in the perverse situation of having no coherent foreign policy on the eve of completing an international negotiation that has consumed all of the government’s energy. The situation is less paradoxical than it sounds, because Brexit is a project based on an assertion of what the country does not want to be – a member of the EU – without a clear articulation of what it should be instead. That omission will be felt keenly, but not discussed, at Sunday’s extraordinary summit, where Theresa May and the 27 other European heads of government are expected to agree the broad outlines of a future partnership. But this “deal” will not answer the existential question that Brexit raises: if Britain’s influence in the world is no longer to be deployed as part of a European project, how will it be felt?The leave campaign did not recognise that as a legitimate question because Eurosceptics always saw “Brussels” as a hostile force and a drain on the sovereign power of a nation state. Brexit, in that view, offered enhanced status as “Global Britain”. That fantasy, like so many of the leaver pledges, has been dismantled by events. The dynamics of a 27-to-one negotiation have demonstrated how a continental bloc asserts power greater than the sum of its parts and greater than any one European country can wield alone. Power in the world is not simply a matter of autonomy to sign trade deals. EU membership has been an axiom of British foreign and security policy well beyond the arena of economic cooperation. To jettison that arrangement would have been risky at any point in recent decades. With Donald Trump in the White House, the timing is exquisitely poor. Mr Trump has started a trade war with China that looks like the prologue to a long confrontation between superpowers. Traditionally, a US president would look to Europe for strategic alliance under such circumstances, but Mr Trump has also picked trade fights with Brussels and heaped scorn on the EU. Continue reading...

Conservative MPs, both leavers and remainers, inflicted this misery on Britain – only defeating Toryism can stop itAt least one in 200 people in Britain – one of the wealthiest nations that has ever existed – is homeless. Last year there was the biggest rise in child poverty for three decades. Benefit claimants have had their state support stopped – “sanctioned” – for attending a funeral, for missing a jobcentre appointment after being hit by a car, and – in the case of one 60-year-old army veteran – for selling poppies for the Royal Legion, thus allegedly showing he wasn’t trying hard enough to look for work. One woman I met had to pay the bedroom tax after her daughter died: she now had a spare room, you see. These are random examples of the institutionalised cruelty of austerity Britain. You cannot understand the political turmoil now afflicting Britain without understanding these injustices. That’s not to claim that all of those battered by austerity voted for Brexit - they certainly did not – but as one academic study found this year, its impact was decisive in winning the vote for leave.Related: Angry England clearly desires change. But blame inequality, not Brussels | Polly ToynbeeRelated: For people suffering under austerity Corbyn is the answer, not the EU | Holly Rigby Continue reading...

Forget a ‘people’s vote’: reversing Brexit would be a terrible betrayal of the people left behind by the EU’s neoliberal agendaWhen I tell people that I voted in favour of leaving the EU in 2016, my statement is often followed by an awkward pause. Sometimes, the reaction is openly hostile; did I not realise that my vote had enabled racists and power-hungry Tories to destroy the country? In an era where to be anti-Brexit has become a symbol of progressive credentials, my leave vote is seen as a transgression against a cosmopolitan, liberal ideal.But the truth is that I am not alone: 35% of Labour voters such as me also voted for Brexit. Not only that, but polls of my fellow Labour party members on their desire for a second referendum are far from conclusive. This is because there have always been strong, anti-capitalist arguments for leaving the European Union. The reality is that the EU project is far more about neoliberal free trade for the rich and punishing austerity for the poor than about Aperol spritz, discounted Zara coats and Erasmus study programmes.Related: Here’s what the people’s vote campaign needs to do | John HarrisRelated: Leftwing Brexiters want out from the 'transnational juggernaut' | Larry Elliott Continue reading...

Half of costs to British economy related to lower employment and productivityMental ill-health is costing the UK more than £94bn every year, counting treatment, social support costs and the losses to the economy from people who cannot work, according to the OECD.The Organisation for Economic Co-operation and Development’s report shows the whole of Europe is struggling with the burden of mental ill-health, which affects an estimated 84 million people – one in six. The cost to the UK economy is in line with the average for Europe at 4% of GDP. Nearly half the UK costs (£42bn) are indirect costs related to lower employment and productivity. Continue reading...

First reading since chancellor’s ‘gamble’ on future strength is a worrying sign, say analystsBritain’s budget deficit rose to the highest October level for three years, handing Philip Hammond disappointing news soon after his budget “gamble” on the future strength of the public finances.The first snapshot since last month’s autumn budget revealed that public sector net borrowing, excluding the nationalised banks, grew by £1.6n to £8.8bn compared with October a year ago, according to the Office for National Statistics. Continue reading...

Far-right deputy PM defiant despite threat of sanctions of up to 0.7% of GDPItaly’s deputy prime minister Matteo Salvini has said he is prepared to confront EU leaders after the European commission rejected his country’s draft 2019 budget for a second time, while calling on them to “respect the Italian people”.Italy is facing sanctions after the commission said in a report that the government of the far-right League and anti-establishment Five Star Movement had seriously violated fiscal rules. Continue reading...

Two former members of Bank of England’s rate-setting committee on the economic outlook

Most economic indicators in October point to lasting damage if UK crashes out of EU

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

Tory attacked as out of touch for saying families living in poverty could renegotiate rentLabour and poverty charities have condemned a government minister as out of touch after he suggested that families living in poverty because of the benefit cap could consider taking in a lodger to make ends meet.Justin Tomlinson, the junior work and pensions minister, told a committee of MPs that other ways families could cope with the impact of the cap would be to move, or to seek to renegotiate their rent. Continue reading...

Thinktank says even ‘soft’ Brexit will harm UK as strong global growth reaches peakBritain needs to forge a deal with the European Union that brings the closest possible relationship or risk an economic downturn, the Organisation for Economic Co-operation and Development (OECD) has warned in its latest health check on the global economy.The thinktank, which advises 34 of the world’s richest countries, appeared to support Theresa May’s deal with the EU, or an even closer alternative, as the best way to avoid harming the UK economy and placing extra strain on global growth. Continue reading...

Bank of England governor says failure to reach a deal would cause a ‘large negative shock’Mark Carney has thrown his weight behind Theresa May’s Brexit deal, warning that a no-deal scenario would damage the economy, trigger job losses, lead to lower pay for workers and cause inflation to rise.The governor of the Bank of England said May’s draft EU withdrawal agreement would “support economic outcomes” that would be positive for the British economy, primarily because it would give Britain more time to prepare for whatever final Brexit deal is agreed between Westminster and Brussels. Continue reading...

A group of extremists within the Tory party would welcome the havoc unleashed by ‘no deal’ to advance their causeThe vultures circle a wounded prime minister, who is attacked by the hordes of extremists in her party while beset by new inconvenient facts daily exposing the damage Brexit can do. Look, the British army is preparing for the worst: emergency troops are at the ready. Operation Temperer, which usually provides soldiers for terrorist attacks, is now ordered to make 10,000 soldiers available to keep order on the streets and in shops, and to distribute emergency medicines in case of a no-deal crash-out.“Our firms are spending hundreds of millions of pounds preparing for the worst case – and not one penny of it will create new jobs or new products,” warns the Confederation of British Industry chief, Carolyn Fairbairn.Related: We don’t need to leave the EU to control immigration, Mrs May | Charles Clarke and Alan JohnsonThe great Brexit rift is a war for the nation’s soul between a revolutionary right and a social democracy under threatRelated: Mrs May has put her cards on the table. Now it’s everyone else’s turn | Andrew RawnsleyRelated: Brexit is a class betrayal. So why is Labour colluding in it? | John Harris Continue reading...

Good news for food shops but other high-street outlets may suffer as consumers go onlineOnline shopping and food retailers are forecast to be the winners this Christmas as consumers keep a tight rein on spending on clothing, homewares and other non-food items.Total retail spending is expected to rise 4% in December, compared with the same month in 2017, to reach nearly £48bn excluding VAT, according to data from the market research firm Mintel. Continue reading...

The Nissan-Renault alliance is in crisis after one of the world’s most powerful auto bosses is accused of under-reporting his salary over many years

Readers respond after the UN poverty envoy said austerity has inflicted ‘great misery’ on UK citizensThe UN envoy’s visit and report concluding that “Austerity has inflicted misery on people” (Report, 17 November) could not be more important. His confirmation that poverty and humiliation has been heaped upon millions of vulnerable men, women and children by this government has to be a spur to action for us all. As Philip Alston said with great clarity, “in the UK poverty is a political choice”. A deeply shameful one. For once, someone listened to those who are struggling to survive and care for children without homes, healthcare or an income. After all, a personal or health crisis can plunge anyone into poverty.We can all get caught up in the demands, distractions and problems of our everyday lives (including Brexit), but this reflects on our humanity and it is to our shame if every one of us does not continue to fight against these punitive policies with every fibre of our being. Rising destitution and a generation of children suffering deprivation must never become the new normal. Food banks and practical help are essential in the short term, but we have to achieve change and constantly reject government rhetoric denying the devastating impact of austerity policies and denigrating vulnerable people as “undeserving”. All this while tax cuts are given to the rich. None of us can stand by.