Monthly jobs update suggests gains for those in more senior positions were far greater than for those without a college degreeIt’s been a long, slow recovery for US workers but wages finally appear to be growing again, according to the latest jobs report released on Friday. But behind the headline rate the figures show – once more – that inequality is on the rise.On Friday the labor department released its latest monthly jobs update. The US added 200,000 new positions in January, higher than expected, but the real surprise was in wage growth. Hourly earnings rose 0.3% in January, enough to lift the annual rate up to 2.9%.Related: Donald Trump's tariffs on panels will cost US solar industry thousands of jobs Continue reading...
Nouriel Roubini calls cryptocurrency the ‘mother of all bubbles’ as it falls below $8,000The economist credited with predicting the 2008 global financial crisis said a 12% fall in the value of bitcoin on Friday was the latest proof that the cryptocurrency was the biggest bubble in history and destined for a crash.Nouriel Roubini, professor of economics at New York University, said bitcoin was “the mother of all bubbles†favoured by “charlatans and swindlers†as it fell below $8,000 (£5,600) early on Friday, marking a 30% drop since the beginning of the week as investors became increasingly twitchy about a clampdown on cryptocurrencies by regulators. Later it rallied, climbing back over $8,600 by 3pm (GMT).Bitcoin is the first, and the biggest, "cryptocurrency" – a decentralised tradable digital asset. Whether it is a bad investment is the big question. Bitcoin can only be used as a medium of exchange and in practice has been far more important for the dark economy than it has for most legitimate uses. The lack of any central authority makes bitcoin remarkably resilient to censorship, corruption – or regulation. That means it has attracted a range of backers, from libertarian monetarists who enjoy the idea of a currency with no inflation and no central bank, to drug dealers who like the fact that it is hard (but not impossible) to trace a bitcoin transaction back to a physical person. Continue reading...
Readers respond to Brexit minister Steve Baker’s assertion that Whitehall economic forecasts are always wrongIn a way Steve Baker is right (Backlash over minister’s claim that government forecasts are never right, 31 January), because it is nigh impossible to predict with precision a particular outcome in a world characterised by lots of unknowns. The Bank of England, among others, has long recognised this and provided a measure of uncertainty around its forecasts. In the case of Brexit, however, economic studies are not attempting to predict a final outcome but what will happen under different assumptions about the form of Brexit. The actual behaviour of the economy will not only reflect these assumptions but also other factors, such as growth in the US and other economies.So it will not be possible to judge the quality of the economic analysis of Brexit from what actually happens in the economy. Actual growth in the future will be a mixture of Brexit- and non-Brexit-related influences. In order to evaluate the analysis of Brexit after the event it would be necessary to isolate the influence of the non-Brexit factors. In that sense, economic forecasts can neither be proved right nor wrong in terms of Brexit since any forecast errors might be put down to non-Brexit reasons. The importance of economic analysis of Brexit is in the assessed contribution of the Brexit effects to any future development of the UK economy. So after Brexit, only time and serious analysis can reveal whether the economic models were right or not.
Orders, goods and jobs growing at record rate since the creation of the single currencyEurozone factories are boosting production at one of the fastest rates recorded since the launch of the single currency as the result of booming global demand and the pro-growth approach adopted by the European Central Bank.The latest snapshot of manufacturing in the 19-nation zone shows that orders, output and employment were all growing strongly last month. Continue reading...
Rising raw material costs dent factory resurgence with output down to seven-month lowBritain’s manufacturers showed signs of a slowdown at the start of the year amid rising costs for raw materials, sending factory output to a seven-month low.The Markit/Cips UK manufacturing PMI index showed activity fell to 55.3 last month from 56.2 in December, missing City forecasts of a further acceleration in growth. However, the PMI remained well above its long-run average of 51.7 and above the 50 mark which separates expansion from contraction.Inflation is when prices rise. Deflation is the opposite – price decreases over time – but inflation is far more common. Continue reading...
Data has become the world’s most important resource. Now Silicon Valley giants want to keep government from standing in the way of profitsOne hundred and sixty years ago, the first transatlantic telegram traveled from Britain to the United States along a rickety undersea wire. It consisted of 21 words – and took seventeen hours to arrive.Today, the same trip takes as little as 60 milliseconds. A dense mesh of fiber-optic cables girdles the world, pumping vast quantities of information across the planet. The McKinsey Global Institute estimates that 543 terabits of data are flowing across borders every second. That’s the equivalent of roughly 13 million copies of the complete works of Shakespeare.Related: Data will change the world, and we must get its governance rightData is nothing less than the lifeblood of global capitalismRelated: The new cold war: how our focus on Russia obscures social media's real threat Continue reading...
by Presented by Aditya Chakrabortty and produced by P on (#3EQ0H)
In the first episode of our new mini-series, Aditya Chakrabortty speaks to Preston city councillor Matthew Brown about his alternative approach to keeping wealth in the local economySubscribe and review on Apple Podcasts, Soundcloud, Audioboom, Mixcloud and Acast, and join the discussion on Facebook and TwitterA new podcast that showcases the people and ideas in Aditya Chakrabortty’s new fortnightly column The Alternatives. Every two weeks, we’ll bring the characters – and the places in which they live – to life as we hear their alternative approaches for making the economy work for everyone. Continue reading...
In a new series looking at how to make the economy work for everyone, Guardian columnist Aditya Chakrabortty finds out how Preston turned its fortunes around by spending locallyThe city of Preston in Lancashire dates back to Roman times. It is listed in the Domesday book as Prestune. It’s where inventor Richard Arkwright kickstarted the cotton trade. Yet ask local people to tell you its history and they jump straight to 2011. That was Preston’s year zero, when the grand schemes for the city fell apart. For more than a decade the council had bet everything on a massive shopping mall. The Tithebarn would sprawl over the city centre, cost £700m and be built by two of the biggest developers on the planet. It was going to have a Marks & Sparks, a multiplex and a huge John Lewis store. It was the lottery ticket, said the council leader. The lifeline, the turnaround, the magic bullet.Related: The Alternatives: how Preston took back control – podcastHas you or your community come up with answers to doing things differently? If so we'd like to hear from you. Share your stories via this form and we'll be in touch.
The Fed chair has set the bar high for her successor, a tenure defined by five major achievementsJanet Yellen, the Federal Reserve chair, begins her final rate-setting meeting at the helm of the US central bank on Tuesday, before she is replaced by Donald Trump’s chosen successor, Jerome Powell.The first woman to lead the Fed arrived in February 2014 at a time when the money-printing machine of quantitative easing was whirring at full-tilt under her predecessor, Ben Bernanke. QE, which involved the Fed buying bonds from financial institutions, pumped billions of dollars into the US economy to keep it afloat after the financial crisis. Continue reading...
Readers suggest boosting provincial centres, controlling rents, greater regulation of landlords, and minimum incomesAnn Pettifor (Journal, 27 January) identifies several important strategies for solving London’s crisis of “unreal estateâ€, but omits one that is vital: developing regional economies. By the standards of most European nations, Britain’s economy is incredibly concentrated in a single conurbation. Today’s online technologies should make it possible for every business with a huge London office to have regional offices all over the country.There are plenty of provincial centres with large enough resident populations – let’s say of 250,000 people – to build a wider commuter belt around. Even counties remote from the other metropolitan areas have such population centres. Along the west coast mainline Milton Keynes and Stoke fill gaps. In the east Midlands most of the counties’ eponymous towns are now big cities. Along the south coast Sussex has Brighton, Hampshire and Dorset Southampton, and Devon and Cornwall Plymouth. Even the gap between London and Bristol now has Swindon. Continue reading...
US currency regains some ground after being hit by fears of trade war, while sterling hit by renewed political uncertainty2.40pm GMTWith the dollar recovering from its recent weakness, and continuing uncertainty over Brexit, the pound has come under pressure today and is currently 0.63% lower at $1.4080.Meanwhile bonds prices are falling and yields rising, as central banks increasingly look to move away from their low interest rate and QE programmes which have supported markets for several years now. German and US yields in particular have move sharply higher.2.36pm GMTWith the recovery in the dollar, a decline in bond prices and a busy week ahead, US markets have slipped back from their record levels.As well as the Federal Reserve’s latest interest rate setting meeting, there is the State of the Union address and a host of results from the likes of Apple, Alphabet, Facebook, Microsoft and Amazon.2.20pm GMTHere’s our full report on the EU’s warning to Donald Trump over trade. Daniel Boffey writes:Brussels has warned that it stands ready to retaliate and potentially open up a transatlantic trade war if the US delivers on apparent threats to restrict European imports.The US president, Donald Trump, claimed in an interview with ITV broadcast on Sunday that the EU had been “very unfair†on American exporters, and that it would “morph into something very big†that would “turn out to be very much to [the EU’s] detrimentâ€.Related: Brussels prepared for trade war with US if it restricts EU imports1.58pm GMTSaving down, consumption and sentiment up -- another sign we are approaching the latter stages of the expansion. pic.twitter.com/LQUK10VKBW1.36pm GMTThe latest set of US inflation figures have risen in December in line with forecasts.The personal consumption expenditures price index - it may be a mouthful but it is the Federal Reserve’s preferred measure of inflation - climbed from 0.1% in November to 0.2% last month. On an annual basis it rose 1.5%, the same as in November. It is still below the Fed’s 2% target.1.02pm GMTA surge higher in yields on government #bonds is among the notable moves in financial #markets so far this morning.
Northern Europe needs its neighbours to pay back its debts soon … before its baby boomers retireTen years after the Great Recession plumbed economic depths unseen since the Great Depression, it is necessary to step back from quotidian politics to get a glimpse of the bigger picture. Europeans need to ask themselves where they have been, and where they are headed next on their journey.
Donald Trump says the EU has been ‘very unfair’ on US exportersBrussels has warned that it stands ready to retaliate and potentially open up a transatlantic trade war if the US delivers on apparent threats to restrict European imports.The US president, Donald Trump, claimed in an interview with ITV broadcast on Sunday that the EU had been “very unfair†on American exporters, and that it would “morph into something very big†that would “turn out to be very much to [the EU’s] detrimentâ€.Related: Bombardier wins fight against huge tariffs on aircraft imports Continue reading...
High inflation, weak consumer confidence and Brexit are discouraging consumer spendingEconomic growth in the UK is expected to slow in the first few months of 2018 as high inflation, weak consumer confidence and uncertainty surrounding Brexit discourage high street spending and investment.A series of business and consumer surveys pointed to lower growth, ending a strong run that culminated in a rise in GDP growth to 0.5% in the last quarter of 2017.
Workers in Wakefield and Mansfield worst affected as tech advances risk widening north-south divideWorkers in Mansfield, Sunderland and Wakefield are at the highest risk of having their jobs taken by machines, according to a report warning that automation stands to further widen the north-south divide.Outside of the south of England, one in four jobs are at risk of being replaced by advances in technology – much higher than the 18% average for wealthier locations closer to London. Struggling towns and cities in the north and the Midlands are most exposed. A total of 3.6m UK jobs could be replaced by machines.Artificial Intelligence has various definitions, but in general it means a program that uses data to build a model of some aspect of the world. This model is then used to make informed decisions and predictions about future events. The technology is used widely, to provide speech and face recognition, language translation, and personal recommendations on music, film and shopping sites. In the future, it could deliver driverless cars, smart personal assistants, and intelligent energy grids. AI has the potential to make organisations more effective and efficient, but the technology raises serious issues of ethics, governance, privacy and law.Productivity is an economic measure of the efficiency of a workforce. It typically measures the level of output per hour of work, or per worker. Continue reading...
Better-than-expected employment and GDP statistics disguise over-reliance on consumer spending and a lack of investment. Then there’s the problem of an EU transition deal …Taken at face value the latest employment figures and last year’s GDP growth defied the doomsayers. They were better than the City expected and, for those sitting inside the Treasury, supported the view that Britain’s economy remains, in the finance ministry’s parlance, steady and resilient.The number of people in employment hit a record high and the percentage of those aged 16 to 64 in the workforce was at its joint highest since 1971. Job vacancies were at an all-time high and wages growth ticked higher to 2.4%.Davos is a Swiss ski resort now more famous for hosting the annual four-day conference for the World Economic Forum. For participants it is a festival of networking. Getting an invitation is a sign you have made it – and the elaborate system of badges reveals your place in the Davos hierarchy.
Out of Schengen, out of the euro, with a budget rebate and still at the top table: we are already ‘having our cake and eating it’The ghost at the feast during the annual Venice seminar held by the Italian government for British and Italian journalists last weekend was the shadow of Brexit. While Italian officials were scrupulously reticent about voicing opinions on the subject, the undercurrents were obvious – not least because the Italians value the UK as an “outward-looking†ally in some of the more introspective discussions in Brussels.Reports from Davos, too, show bafflement on the part of fellow Europeans and others about the UK referendum and subsequent debate.Staying in the single market and customs unionThe ultimate irony is that, as members of the EU, we have been able to cherry-pick all sorts of concessions Continue reading...
by Graeme Wearden and Larry Elliott in Davos on (#3EC49)
Reforms may threaten recovery and lead to bigger US budget deficit, says Christine LagardeDonald Trump’s huge tax cuts are a threat to the stability of the global economy, the managing director of the International Monetary Fund has warned.Christine Lagarde singled out Trump’s tax reforms as one of three risks that could destabilise the current economic recovery, especially given the boom in stock markets in the past year. Continue reading...
President declares US open for business as he accuses media for being nasty, mean and fakeDonald Trump has taken his battle with the media on to the global stage by using a speech in Davos declaring the US open for business to accuse his press and TV critics of being mean, vicious and purveyors of fake news.Some members of the audience of business leaders, politicians, academics and media representatives at the World Economic Forum responded to the president’s renewed onslaught by hissing.Related: Davos 2018: Trump puts North Korea high on agenda in 'America first' speech - live updates Continue reading...
Personal debt rises to £1.6tn as record number of households turn to ‘bankruptcy deals’The number of people who went brankrupt in 2017 soared to the highest level since the aftermath of the financial crisis, according to official figures that reveal the devastating toll of mounting debts on British households.The Insolvency Service said 99,196 people were declared insolvent in 2017 – a 9.4% rise on the year before and only a shade below the peak figures recorded during the recession.Related: The UK's debt crisis – in figures Continue reading...
UK shadow chancellor to tell business leaders at WEF of ‘avalanche of discontent’The UK shadow chancellor, John McDonnell, has used his debut appearance at the World Economic Forum to warn leaders of global businesses that they are held in contempt by ordinary voters who have struggled through a decade of austerity.Interviewed by the Guardian in Davos, McDonnell said he found the euphoria in Davos about the modest pick-up in world growth shocking, adding that those running big corporations were guilty of complacency.Related: Davos 2018: Donald Trump to give speech at World Economic Forum - live updates Continue reading...
ONS puts quarterly growth at 0.5% but warns annual pace is slowest since 2012The British economy grew at a faster rate than expected in the final three months of 2017, despite pockets of weaker and more uneven growth triggered by the Brexit vote.GDP grew by 0.5% in the fourth quarter after expansion of 0.4% in the previous three months, according to the Office for National Statistics (ONS). City economists had forecast growth of 0.4%.
Davos speakers round on cryptocurrency as Robert Shiller calls it a clever idea with an impermanent futureThe Nobel prize-winning economist Robert Shiller has said bitcoin will not be a “permanent feature†of the financial world, as politicians indicated that a clampdown on cryptocurrencies was coming.Speaking at the World Economic Forum in Davos on Thursday, Shiller hailed bitcoin as a “really clever ideaâ€. But although he was impressed with the technology behind it, he was concerned that it had “gone viral as a currencyâ€. Continue reading...
Take-up declines by 27% as critics say levy on scheme is deterring employersThe government is under renewed pressure to implement a “radical rethink†of apprenticeships after a near 27% fall in the number taking up trainee posts in the last quarter of 2017.The number starting apprenticeships dropped to 114,000 between August and October, down from 155,700 in the same period in 2016. That followed a 59% drop in the previous three months after the introduction of the apprenticeship levy in April last year. Continue reading...
Readers react to Rafael Behr’s piece on John McDonnell’s appearance at Davos and ‘capisceptics’Rafael Behr’s article (Even at Davos capitalism’s critics are centre stage, 23 January) seems to be a “will he/won’t he†piece about whether Jeremy Corbyn wants to overthrow capitalism. Really? Is that really a serious question? Once in power is Corbyn really going to set about singlehandedly dismantling a global financial system? Yet Behr wants to know if that’s Corbyn’s ultimate goal. Should we ask if Theresa May’s ultimate goal is fascism? She hasn’t ruled it out, you know.It’s quite clear that Corbyn wants a form of social democracy, but Behr is not sure if Corbyn wants something more extreme. If only there was some kind of manifesto that laid out Labour’s plans and policies for how they would govern? Oh well, we may never know until we’re in the gulag.
Two former members of Bank of England’s interest rate-setting committee discuss the outlook for the economySenior economic adviser at the PwC consultancy and member of the Bank of England’s monetary policy committee from October 2006 to May 2011Related: How has the Brexit vote affected the economy? January verdictRelated: Consumers are being squeezed – two views from monetary policy committee insiders Continue reading...
by Larry Elliott and Graeme Wearden in Davos on (#3E4VS)
German chancellor uses Davos speech to protest against sanctions on imports from ChinaGermany’s chancellor Angela Merkel has sent out a strong warning to Donald Trump about the dangers of protectionism as the United States said it was preparing to impose fresh sanctions on imports from China.Merkel used a speech to the World Economic Forum in Davos to stress the need for multilateral answers to global problems on a day when Trump’s commerce secretary, Wilbur Ross, prompted fears of a tit-for-tat trade war between Washington and Beijing.Related: Whatever he chooses to say at Davos, Trump will make headlinesRelated: Protectionism is rising the world over. Our best defense is fighting inequality | Wally Adeyemo Continue reading...
Each month we look at key indicators to see what effect the Brexit process has on growth, prosperity and trade in the UKRelated: Sterling hits highest level since Brexit vote Continue reading...
Shortage of skilled staff helps raise pay but wage growth still lags behind inflation, official figures showThe pressure on employers to find skilled staff appeared to push up wages by more than expected in November as UK job vacancies reached a new peak.City economists had expected the uncertainty surrounding the Brexit talks to limit wage rises, excluding bonuses, to 2.3%, the same rate as in October, but they increased to 2.4% in the three months to November. The figure rose to 2.5% when bonuses were included.Related: Brexit helped push down living standards in 2017 – experts debate the data Continue reading...
by Richard Partington Economics correspondent on (#3E57F)
Upswing in global growth bumps up the pound as UK economy proves resilient despite concerns over leaving the EUThe pound has reached its highest levels since before the Brexit vote, as a Guardian analysis of economic news over the past month shows the economy benefiting from an upswing in global growth.Sterling surged against the dollar on Wednesday, extending gains in the past month to hit more than $1.40 for the first time since the June 2016 referendum, after fresh figures showed employment hitting its highest levels since the 1970s when modern records began.Related: Consumers are being squeezed – two views from monetary policy committee insidersRelated: How has the Brexit vote affected the economy? January verdict Continue reading...
Trump’s decision to impose a 30% tariff will cost the US around 23,000 jobs and risks slowing the growth of clean energy, advocates warnDonald Trump’s decision to impose a tariff on imported solar panels will cost the US solar industry about 23,000 jobs this year and risks slowing the growth of clean energy that would help address climate change, renewable energy advocates warned.
by Patrick Butler Social policy editor on (#3E3NW)
End Child Poverty says years-long freeze on benefits is major factor in emerging crisisMore than half of all children in the UK’s very poorest areas are now growing up in poverty as the impact of cuts to benefits continues to be felt by the least well-off families, according to a new study.An analysis published by the End Child Poverty coalition of charities shows that the biggest increases in child poverty in the past two years have occurred in areas already identified as deprivation hotspots. Continue reading...
by Larry Elliott and Graeme Wearden in Davos on (#3E2XT)
Canadian prime minister says employing more women is the smart thing to doCanada’s prime minister, Justin Trudeau, has challenged leaders of the world’s biggest corporations to hire more women and to tackle sexual harassment as he warned that a business-as-usual approach to tackling inequality would lead to failure for everyone.In a keynote speech to the World Economic Forum in Davos, Trudeau said hiring, promoting and retaining more women was the key to narrowing the “staggering†gap between rich and poor.Related: Cate Blanchett urges Davos to give refugees more compassionRelated: Davos 2018: Justin Trudeau blasts gender inequality; Modi warns against protectionism; Blanchett on refugees - as it happened Continue reading...
Axel Weber says cryptocurrency ‘not an investment we would advise’ while South Korea bans anonymous tradingBitcoin has fallen 12% over 24 hours while the chairman of UBS warned against investing in it and South Korea continued to crack down on cryptocurrencies by banning anonymous trading.
Remain supporter Ãngel GurrÃa says UK needs to accept vote but keep close links with EUÃngel GurrÃa, the head of one of the west’s leading thinktanks and one of the most prominent supporters of remain during the EU referendum campaign, has said it is time to move on and ensure that Brexit is a success.“We have no choice,†the secretary general of the Organisation for Economic Cooperation and Development said in an interview with the Guardian at the World Economic Forum in Davos. “We have to take action and make it as smooth as possible.†Continue reading...
It’s not the Trump effect or tax cuts. Americans seem to have a strong desire to own capitalThe level of stock markets differs widely across countries. And right now, the United States is leading the world. What everyone wants to know is why – and whether its stock market’s current level is justified.We can get a simple intuitive measure of the differences between countries by looking at price-earnings ratios. I have long advocated the cyclically adjusted price-earnings (CAPE) ratio that John Campbell (now at Harvard University) and I developed 30 years ago.Related: Dow Jones tops 26,000 for first time as stock market boom continues Continue reading...
Grimbarians feel isolated many times over: from London, from Britain and from the fishing industry that once opened it to the world. Yet among the concern, Tim Burrows finds new energy. All images by Christopher ThomondZoe Moore grew up in Grimsby, not far from her family’s chip shop. She visited the docks every day with her mum to buy the fish they would later skin, fillet and fry. Now Moore is a manager for Young’s Seafood, which supplies the breaded cod found in the freezers of corner shops countrywide; she attended last year’s carnival dressed as a fish finger. The twentysomething is a Grimbarian made good, but she’s not celebrating. Something is wrong in her town.“Mum’s had CCTV [installed] on her house,†says Moore. “People try to steal cars on her street. They even cut the brake lines [of her car] and put fireworks in it. There have been stabbings. It’s awful.â€This community was built around an industry that doesn’t exist any moreIf a local person can say, ‘I designed that,’ you are a long way to breaking the back of the chip on their shoulderIf you come to Grimsby, you come for a reasonRelated: Made in Stoke-on-Trent – Episode 1: We Have Lift-offSome consultants told us of all the wonderful plans for Grimsby. Everybody got very excited about it. Nothing happenedThere is great concern, but great hope as wellI don’t know whether Grimsby has an audience for critical art yet, but you don’t until you’ve triedRelated: Made in Stoke-on-Trent – Episode 2: £1 for a House Continue reading...
PwC survey to mark opening of Davos finds most companies are optimistic about growthNine out of 10 business leaders in Britain are upbeat about the growth prospects for their companies over the coming year despite uncertainty about the impact of Brexit, the consultancy firm PwC has reported.In its annual survey of chief executives to mark the start of the World Economic Forum in Davos, PwC found that optimism about the health of the global economy was boosting confidence.Related: IMF lifts global growth forecast, but cuts UK growth in 2019 - business liveRelated: The Guardian view on Davos and inequality: a demagogue takes advantage Continue reading...
The idea that disadvantaged people place undue strain on the system won’t go away. But the problem is underfunding – not people who eat too many chipsAnyone still observing dry January may be on to something: last week the Big Issue’s founder, John Bird, launched the magazine’s “NHS pledgeâ€: a request for readers and supporters to “volunteer for the NHS by staying healthy†and not become “a drain†on its time and resources. The depiction of individual people as a drain on resources understandably left many of us bridling – as it fits the narrative promoted by the government and its supporters that the key problem facing our healthcare system is too much demand, rather than too little funding.Yes, we could all do more to take responsibility for our own health. But health and the decisions we make about health are complex, as any doctor will tell you, and poverty is a crucial factor. Such admonishments about personal responsibility are invariably directed at the poor, so that the deserving/undeserving poor become deserving/undeserving patients. Eating habits in particular are endlessly scrutinised, with the “let them eat gruel†trope regularly trotted out. Why on earth do poor people go hungry, wonder rich people, when porridge is so cheap?Yes, we could all do more to take responsibility for our own health. But the decisions we make are complexRelated: NHS crisis is main worry for Conservative voters, poll suggests Continue reading...
Maastricht treaty limits on public spending may have fuelled private finance, argues Ted Watson. Plus other readers’ views on the controversial funding mechanismGeorge Monbiot (Opinion, 17 January) asserts that the PFI bosses fleeced us all. Twenty years ago there were exceptions. Oxfordshire county council and many other councils recognised its deceptive creative accounting and avoided using PFI.Central government does not distinguish between irresponsible borrowing for revenue and responsible borrowing for capital. Both are in the public spending borrowing requirement (PSBR) which central government wished to present as low (a high PSBR leads to austerity to reduce it), so it restricted local government’s borrowing and used PFI to disguise its own borrowing. Continue reading...
Extreme weather, such as droughts in Australia, pose significant risk to growth, IMF warnsThe International Monetary Fund has lifted its forecasts for global growth, saying momentum is building in global economic activity and Donald Trump’s tax cuts in the US are likely to stimulate activity further.It says the growth momentum is expected to carry into 2018 and 2019, and it has revised upwards its global growth forecasts by 0.2 percentage points for both years, from 3.7% to 3.9%.Related: Top 1% of Australians own more wealth than bottom 70% combinedRelated: Technology will widen pay gap and hit women hardest – Davos report Continue reading...