by Richard Partington Economics correspondent on (#3T2SP)
Report highlights risk of rising inequality against women worldwideThe world economy faces a looming “care crisis†risking further division between men and women across the planet, according to a UN report calling for governments and companies worldwide to spend at least an extra $7tn (£5.3tn) on care by 2030.Making the case for spending on support for children, old people and the neediest in society to double by the end of the next decade, the UN’s International Labour Organisation (ILO) warned demographic changes alone mean the current path for care funding falls far short of requirements.
Some of the world’s biggest scandals have gone unspotted for years. The nature of fraud is that it works outside our field of vision. By Dan Davies‘Guys, you’ve got to hear this,†I said. I was sitting in front of my computer one day in July 2012, with one eye on a screen of share prices and the other on a live stream of the House of Commons Treasury select committee hearings. As the Barclays share price took a graceful swan dive, I pulled my headphones out of the socket and turned up the volume so everyone could hear. My colleagues left their terminals and came around to watch BBC Parliament with me.It didn’t take long to realise what was happening. “Bob’s getting murdered,†someone said.Related: The financial scandal no one is talking about Continue reading...
Whitbread plans more outlets in busier locations to offset weak city centre spendingWhitbread has blamed falling sales at its Costa coffee shops on cash-strapped shoppers staying away from Britain’s high streets.The company, which is the UK’s biggest coffee-shop chain, said sales at outlets open for more than a year fell 2% in the quarter to the end of May. Costa has 3,800 coffee shops, with 2,400 in the UK. It also has more than 8,000 highly profitable coffee vending machines. Continue reading...
UK cities move up the ranks on worldwide cost of living list as pound rallies against the dollarThe pound’s strengthening against the dollar has increased the cost of living in London, Birmingham and Aberdeen, which have moved up the ranks of the world’s most expensive cities.Hong Kong is the world’s most expensive city for expatriates, followed by Tokyo, Zurich, Singapore and Seoul, according to a cost of living survey, which ranks 209 cities on the cost of a basket of more than 200 goods and services such as coffee, bread, milk, cinema and rent. Continue reading...
UK overall drops to fifth in survey because of cross-border movement fears after BrexitLondon has retained its position as the most desirable city for overseas workers, beating New York, Berlin and Barcelona, according to the latest study by the Boston Consulting Group and totaljobs.com.The UK overall, however, has dropped three places in the country rankings over concerns about the cross-border movement of workers following Brexit. The study also found that the number of British workers willing to seek employment overseas has soared to more than 60% – the largest increase in any country.Related: Tit-for-tat tariff battle could spark downturn in global economy – BIS Continue reading...
KPMG finds companies earning profits mostly abroad have benefited since EU referendumBusinesses that earn most of their profits abroad have benefited since the Brexit vote from an inflow of funds from investors at the expense of domestic companies that rely on sales in the UK, according to two separate analyses of the London stock market.In the two years since the EU referendum, the disparity between the share performances of companies that operate largely inside the UK and ones that repatriate profits from foreign subsidiaries has almost reached a record high, said the accountancy company KPMG.Related: Tit-for-tat tariff battle could spark downturn in global economy – BIS Continue reading...
PM will head to latest EU summit with employers such as Airbus reconsidering investment in UKBritain in 2016: the Conservatives are making a mess of running the nation, cutting public services to the bone and tearing themselves apart over Europe, while Labour under Jeremy Corbyn fail to make serious inroads as the opposition party of the day.Fast forward two years since the Brexit vote and very little has changed. David Cameron might well have vanished from political life and Corbyn has indeed robbed Theresa May of the Tories’ majority in parliament. Yet in terms of progress towards leaving the EU – on the second anniversary of the referendum over the weekend – the government has next to nothing of substance to show for itself.Related: Tit-for-tat tariff battle could spark downturn in global economy – BISA customs union is an agreement by a group of countries, such as the EU, to all apply the same tariffs on imported goods from the rest of the world and, typically, eliminate them entirely for trade within the group. By doing this, they can help avoid the need for costly and time-consuming customs checks during trade between members of the union. Asian shipping containers arriving at Felixstowe or Rotterdam, for example, need only pass through customs once before their contents head to markets all over Europe. Lorries passing between Dover and Calais avoid delay entirely. Continue reading...
The president has claimed that trade wars are ‘easy to win’ but Beijing and the EU plan to hit back against states that elected himWashington’s penchant for brandishing “big sticks†will come back to haunt it, China Daily, official organ of the Chinese government, warned on Friday as trade tensions between the two countries continued to fray. And China, and the EU, have identified just where that haunting will begin: in America’s heartland.For Donald Trump, the threat of a trade war with China, as well as potentially with Mexico and Canada, is a vital component of an overdue effort to correct longstanding injustices that have seen the US taken advantage of by trading partners for “far too longâ€.
Warning comes as Donald Trump steps up war of words with key trading alliesAn escalation of protectionist measures could spark a fresh downturn just as the global economy is picking itself up after the last one, the international body that represents the world’s central banks has warned.The Bank for International Settlements (BIS) said there were already signs that “the ratcheting up of rhetoric†was weighing on investment. It comes as Donald Trump steps up hostility with some of the US’s key trading partners and allies, raising fears of a full-blown trade war.Related: Trump threatens car tariffs after EU sets up £2.5bn of levies on US Continue reading...
The president’s tough tweets about EU car imports on Friday create another unstable element in a widening confrontationIt’s a skirmish, no more than that. The trade tariffs going up around the world might be adding millions to the cost of importing goods, but it’s not a war and it won’t mean the end of global growth. Or at least that seems to be the general view. The International Monetary Fund (IMF), the Organisation for Economic Cooperation and Development (OECD), and the majority of investment banks and thinktanks do worry about the latest round of niggly tit-for-tat tariff battles. They have condemned them, and some – including the IMF’s boss, Christine Lagarde – have rounded on the main protagonist: President Donald Trump. But have they begun to panic? Not yet.The European Union’s retaliation against steel and aluminium tariffs imposed by Trump were announced last week and amounted to $3.4bn on US products including bourbon, peanut butter and orange juice. Continue reading...
The Bank of England fears low unemployment will cause runaway pay – but it has misread the situationThe bargaining power of the average British worker should be back to where it was when Tammy Wynette topped the charts with Stand By Your Man and the Rolling Stones announced an upcoming American tour with a performance from the back of a truck on Fifth Avenue.May 1975 was the last time the unemployment rate stood at 4.2%. Back then official statistics showed that wages and salaries were increasing at 29.4%.Related: Pound rallies after Bank of England is split on interest rates - as it happenedRelated: How the collapse in full-time work for men is fuelling record underemployment | Greg Jericho Continue reading...
The leading candidates to become Britain’s top central banker after Mark Carney leaves next summerMark Carney steps down next summer and candidates are limbering up to replace the governor of the Bank of England, one of the most prestigious roles in central banking. A former member of the bank’s rate-setting monetary policy committee, Andrew Sentance, added some edge to the contest last week by demanding that the new head must not be “jetted in from overseas†and must have a better grasp of the UK economy than Carney. Nonetheless, some prominent foreign names are tipped for the job. Continue reading...
Mark Carney steps down next summer. His successor will face not just personal scrutiny, but questions about the job itselfPhilip Hammond has spent many idle moments thinking about who should succeed Bank of England governor Mark Carney. How, the chancellor asks himself, can he repeat the stunning, rabbit-out-of-a-hat moment when No 11’s previous incumbent, George Osborne, said in 2013 that the Canadian central banker who was heading the global post-crash clean-up operation was coming to help Britain’s laboured recovery?Carney is due to step down next June and has said the date is fixed in his diary after already extending his stay by a year to steer the Bank through Brexit and out the other side.Some have labelled Carney an “unreliable boyfriend†– all promises and no action Continue reading...
by Jon Henley, Daniel Boffey in Brussels and Helena S on (#3SV4B)
Athens hails agreement to give country access to markets in August after final bailoutGreece’s government has said the country is “turning a page†after eurozone member states reached an agreement on the final elements of a plan to make its massive debt pile more manageable, ending an eight-year bailout programme.“I have to say the Greek government is happy with this deal,†the finance minister, Euclid Tsakalotos, said on Friday. “But at the same time, this government will not forget what the Greek people went through in the past eight years.â€Greece has really made the job – they have fulfilled their commitmentsRelated: Eurozone braces for row with Greece over bailout exit terms Continue reading...
Financial links to Hong Kong mean that Chinese slowdown could have serious UK impactThe Bank of England has warned that the health of China’s economy poses a greater risk to the UK’s financial stability than previously realised.New analysis from the Bank has found that a sharp economic slowdown in China would have a serious impact on the UK. If China’s credit boom blows up, Britain would suffer serious economic harm, it says, adding: “China’s credit boom is now one of the largest and longest running ever recorded. Indeed, rapid credit expansions, such as China’s, have typically preceded financial crises.â€Related: Trump threatens tariff on European cars; Opec agrees to boost oil output - business live Continue reading...
In his big speech this week the chancellor made a general case for soft Brexit. The Airbus disinvestment threat shows that he must sharpen his gameTwo years ago this week, Britain voted to leave the EU. One year ago, the chancellor of the exchequer’s annual Mansion House speech was cancelled because of the fire at Grenfell Tower. On Thursday, Philip Hammond went ahead with this year’s speech to the City. And it was almost as if Mr Hammond had mistakenly brought along the kind of speech he might have given 12 months ago, when the Brexit process was in its infancy. But Brexit is not in its infancy. It is approaching the point of no return.True, Brexit was inescapably central to the chancellor’s prudent case this week. But the content of his speech was of an almost wholly general kind: he wanted a good deal, to protect markets from uncertainty, to uphold low friction borders and open markets, to construct an enduring partnership that recognises that Europe is Britain’s most important trading partner. He could – and would – have said all of this in 2017. Continue reading...
Bourbon whiskey, Levi’s and Harley-Davidson on list as EU measures comes into forceDonald Trump has threatened to widen the mounting trade dispute between US and the EU by imposing tariffs on European cars, after Brussels made good on its threat of retaliatory levies on American products including bourbon whiskey, Levi’s jeans and Harley-Davidson motorbikes.Raising the stakes in the tit-for-tat exchange of import tariffs threatening to spark a global trade war, the US president tweeted in response to the EU tariffs which came into effect late on Thursday: “If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!â€Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here! Continue reading...
Anything less than 0.4% for the second quarter could spell yet another embarrassing delayHere we go again. The Bank of England has restarted its drumroll in preparation for a rate hike. Andy Haldane, the Bank’s chief economist, has joined the rate-risers, expanding their number to three. As a whole, the nine-strong committee stuck to its line that the miserable 0.1% growth in GDP in the first quarter was a weather-induced blip. Its view that momentum will recover in the April to June quarter was deemed to be “broadly on trackâ€.Financial markets got the message. The pound rose and the likelihood of a rate-rise to 0.75% in August is now priced as a 65% probability. Continue reading...
Chief economist, Andy Haldane, joins two others on MPC in pushing for an increaseThe Bank of England raised the chances of an August rate rise after its chief economist joined two other members of its rate-setting monetary policy committee voting for an immediate hike in borrowing costs.For the first time since joining the MPC four years ago, Andy Haldane broke ranks with the majority on the nine member rate-setting panel to join Ian McCafferty and Michael Saunders in calling for an increase in interest rates. The move is likely to heighten speculation that Threadneedle Street could be gearing up for a rise in two months’ time.Related: Bank of England leaves interest rates on hold, but chief economist pushes for a rise - business liveOne of Gordon Brown’s first moves as chancellor in 1997 was to hand control of interest rates to an independent Bank of England. Previously the cost of borrowing had been decided between the chancellor and the governor of the Bank. Continue reading...
The state spends a spiralling amount on vulnerable children but fails to protect them. We need to focus on supporting parentsJudges are only meant to speak in court, and they may not pronounce on government policy. So it’s a rare day when a judge turns whistleblower. It’s practically unknown for two senior judges to state publicly, in terms, that there’s a crisis in our care system which is damaging children and families across the land. But Andrew McFarlane, the incoming president of the high court’s family division, this week agreed with his predecessor James Munby, who warned in 2016 that the “seemingly relentless†rise in the number of care applications has resulted in a burgeoning children’s services disaster. This is, according to McFarlane, “untenable†for the courts and care system.The new president of the family court was speaking at the launch of the Care Crisis review, which was prompted by Munby’s alarm call. The seven-month process, facilitated by the charity Family Rights Group, listened to over 2,000 people including social workers, local authorities, Ofsted, women who have lost their children, adopters, and children who have been in care.Related: Child protection costs 'threaten local councils' financial stability'Related: Cuts to children’s centres mean lifelines are disappearing. Ask Alka | Frances Ryan Continue reading...
Labour missed its chance for real change after the financial crash. Now it is in danger of flunking it on BrexitIn normal circumstances, John McDonnell’s plan to shake up the Bank of England would be creating quite a buzz in Labour circles. The proposal that Threadneedle Street should have a productivity growth target as well as one for inflation would be the biggest change to the way the Bank operates since it was granted the power to set interest rates by Gordon Brown in 1997. These, though, are not normal circumstances. The political focus is on whether the government can get Brexit legislation through parliament, not on whether it is possible to give the Bank the task of raising Britain’s long-term growth rate. As the second anniversary of the EU referendum approaches, McDonnell might think it is time to move on, but the left as a whole is having trouble doing so. That’s unfortunate but indicative of a deep, and politically dangerous, conservatism.Related: Labour to propose Bank of England remit to boost productivityRelated: Enough Brexit fairytales. In the real world spending must increase | Phil McDuff Continue reading...
Philip Hammond will use speech to outline a plan for striking deals outside the EUThe government plans to safeguard London’s position as the world’s leading financial centre after Brexit by signing a series of financial partnerships with non-EU countries.Philip Hammond will use his keynote Mansion House to the City’s elite on Thursday to say that the government intends to strike deals outside of the single market that will make the UK a gateway to financial markets. Continue reading...
by Lisa O'Carroll Brexit correspondent on (#3SNBM)
Port’s head of policy says there will be serious congestion without a suitable trade dealThe port of Dover has warned there will be serious traffic congestion once a week in the town and on surrounding routes unless the government achieves a Brexit deal involving frictionless trade.Richard Christian, the port’s head of policy, said there would be “regular gridlock†in Kent in the event of a hard Brexit, and disruption to freight traffic on ferries and Eurotunnel services would have a profound impact on Britain’s economy. Continue reading...
Swelling ranks of the UK’s pensioners joining middle earners have pushed median up, says IFS studyMiddle-class households in the UK have seen their incomes grow more strongly than those at the top and bottom ends of the earnings scale during the years since the financial crash, according to the Institute for Fiscal Studies.Between 2012 and 2017, the average income increased by 8% after taking into account inflation. For those in the bottom 10% of earners and those in the top 10%, incomes increased by just 4%, as those at the bottom were hit by benefit cuts and those at the top by tax rises and sluggish salary growth. Continue reading...
John McDonnell will call for major changes to UK’s financial system based on broad reviewThe Bank of England could be given a mandate to boost productivity growth under a Labour government as part of opposition plans to overhaul the country’s “economic architectureâ€.Revealing the findings from a review of the UK financial system, the shadow chancellor, John McDonnell, will on Wednesday make the case for a fundamental transformation that could include a revamp of the Bank’s remit in order to help drive economic growth.
Landmark research finds profit-shifting is driving global reduction in headline tax rates, not competitionA landmark study has found multinational corporations are shifting roughly $16bn in profits out of Australia into tax havens every year.It has also found the steady decline in corporate tax rates globally since the 1980s has not been driven by countries competing harder for productive capital and pushing corporate tax rates down, despite what politicians say.Non-haven countries steal revenue from each other while letting tax havens flourishRelated: British overseas territories in talks to keep tax haven secrecyRelated: Offshore secrecy: inside the movement to crack it open Continue reading...
by Graeme Wearden (until 2.30) and Nick Fletcher on (#3SJ6S)
Trade war fears are escalating as president Trump pledges fresh measures against Chinese imports; Beijing calls it ‘blackmail’ and vows to retaliate
Judith Daniels thanks her council for her wonderful local library, Keith McClellan looks at the role they play in democracy, and Keith Martin argues their closure is breaking the lawI could not agree more with your leader (Editorial, 18 June) and the wonderful, life-affirming institutions that are public libraries. While sitting in my local community library writing this letter, I am surrounded by myriad activities including a well-attended jobs fair, people browsing shelves, and a cafe stocked with delicious food.It is a sad indictment that our libraries are being decimated because local councils are being starved of the very necessary funds to keep them alive. Every generation from a child in arms to a centenarian can feel at home in a library’s multicultural, inclusive atmosphere. Loneliness is the scourge of our disconnected and alienated world, so libraries help to solve a real mental health problem by opening their doors to everyone. I agree too that helpful, knowledgeable staff and volunteers are the lynchpin that ties it all together. I am very fortunate that in Norfolk we have not lost this educational, vibrant, inclusive mine of information. I could not be more grateful to our far-sighted county council.
Leaving the EU won’t result in a bonanza for public services but neither will it plunge them into renewed austerityTheresa May has spent the weekend trying to convince people that there is such a thing as a “Brexit dividend†with the dead-eyed look of a minimum-wage sales assistant trying to get you to sign up for the extended warranty. It’s obvious nonsense even she doesn’t believe in, but her job depends on going through the motions, so go through them she will.May’s newly announced NHS spending promises come with the vaguest funding plans possible. She announced yesterday that “as a country taxpayers will need to contribute a bit more, but we will do that in a fair and balanced way,†which could mean almost anything. Mostly, though, she is relying on the notion that money we used to send to the EU will be freed up for other things. This claim has been comprehensively, utterly debunked ever since it first appeared on the side of Boris Johnson’s infamous bus. The Office for Budget Responsibility and the Institute for Fiscal Studies have both pointed out, again, that it won’t happen and has no relationship to reality. It’s a lie, and at this stage it’s not even a very good one.Related: May's NHS 'Brexit dividend' claim draws scepticism and doubtRelated: There’s no light at the end of this tunnel. Just more pain | Polly Toynbee Continue reading...
The US president has said he plans tariffs on an extra $200bn of imports from ChinaRaising the stakes in the escalating trade standoff between the US and China overnight, Donald Trump has asked US trade officials to draft plans for additional tariffs on $200bn (£152bn) of Chinese imports. The president wants them set at a 10% rate, while indicating he would be prepared to impose tariffs on yet another $200bn of imports if China were to retaliate.Related: Trump threatens new tariffs on $200bn in Chinese imports Continue reading...
Theresa May is pandering to her pro-Brexit supporters. The important public finance issue, which is unresolved, is whether to raise taxes or abandon austerity – or bothWhen she was interviewed on Sunday’s BBC One Andrew Marr programme, Theresa May knowingly and dishonestly suggested that leaving the European Union was the central dynamic behind her new NHS spending pledges. Having started by saying she was determined to secure the NHS’s future, she immediately invoked the shoddy Brexit campaign bus slogan of 2016 with implied approval. Then she talked about the money Britain would save by leaving the EU; finally she deliberately spoke in ways that would lead any unwary listener to assume that a so-called “Brexit dividend†was the windfall that enabled her to make the new spending pledge. Characteristically, Boris Johnson was even more mendacious, calling the pledge “a down payment on the cash we will soon get back from our EU paymentsâ€.All of this was a lie. It disgraces Mrs May to tell such a whopper. True, by the time that she gave her speech on NHS spending on Monday, her words were rather more circumspect; the essential deception nevertheless endured. “Some of the extra funding†will come from money that now goes to the EU, she said at London’s Royal Free Hospital, “but the commitment I am making goes beyond that Brexit dividend.†That is true with bells on, since the NHS pledge dwarfs any future savings on the UK’s Brexit payments. Continue reading...
IMF figures show the world is more indebted than during the financial crisis and needs more borrowing to create growthAt the end of May, the International Monetary Fund launched its global debt database. For the first time, IMF statisticians have compiled a comprehensive set of calculations of public and private debt, country by country, constructing a time series stretching back to the end of the second world war . It is an impressive piece of work.The headline figure is striking: global debt has hit a new high of 225% of world GDP, exceeding the previous record of 213% in 2009. So, as the IMF points out, there has been no deleveraging at the global level since the 2007-08 financial crisis. In some countries, the composition of debt changed, as public debt replaced private debt in the post-crisis recession, but that shift has mostly stopped.Related: Eurozone braces for row with Greece over bailout exit terms Continue reading...
Concerns likely that country will suffer fourth collapse unless EU writes off some debtEurozone finance ministers are braced for a row this week with the Greek government over the terms of a “golden goodbye†as the country prepares to exit its third bailout programme.Concerns that Greece will suffer a fourth financial collapse unless an agreement is signed with the EU to write off some of its debt mountain are likely to surface before a showdown in Brussels on Thursday. Continue reading...
Marks & Spencer’s announcement last month that it would close more than 100 stores by 2022 sent shockwaves along UK high streets. In 2015, Aldershot lost theirs – and this is what happened next
Living through the biggest economic slump in a century, it’s no surprise people are angryThere has been much debate about why the public has started to lose faith in mainstream political parties but the reason behind the rise of populism doesn’t take much working out.The past decade has seen the biggest financial crisis in a century, the biggest slump since the Great Depression and the slowest recovery since the second world war. Living standards have flatlined and public spending has been cut. Continue reading...
Theresa May’s endless prevarications are not just infuriating her own MPs, but British business as well‘Neither Labour nor the Tories have a credible plan for Brexit,†declared Lord Macpherson, former top official at the Treasury, on Twitter. This distinguished civil servant, who has seen ministers of both major parties grapple with economic crises, went on to ask: “Have the British people ever been so ill-served by the two main parties?â€It is no wonder that the EU negotiator, the estimable Michel Barnier, finds himself, week in and week out, having to point out that all the imaginative solutions with which he is presented by the British have, indeed, to be left to the imagination.None of the alternative 'soft Brexit' options is anywhere near as satisfactory as the position we are already in Continue reading...
With the base rate in the eurozone still at 0%, funds are flowing back to the US using a myriad of financial instrumentsWhile governments around the world contemplate the fallout from Donald Trump’s trade war with China, banks are wrestling with central bank moves that are likely to have a much more fundamental impact on the global economy.On Wednesday the US Federal Reserve pressed ahead with its policy of raising interest rates, adding a seventh quarter-point rise since 2015 to leave the base rate at 1.75-2%. The Fed also pledged to continue selling back to the private markets loans it bought as part of a vast $4.5 trillion quantitative easing programme. Continue reading...
City co-op pays homage to Kitty Wilkinson, who opened the UK’s first public washhouseShe is the only woman whose achievements are deemed worthy of a statue in Liverpool’s St George’s Hall. Her sleeves are rolled up, she is ready to get her hands dirty – while the men around her are captured in their pomp, ready to preach a sermon or deliver a speech to parliament.Now Kitty Wilkinson, the Irish inventor of the public washhouse, is to be honoured again in her adopted home. This time the woman known as the Saint of the Slums will be immortalised not in marble but in soap suds, when a non-profit launderette will open bearing her name. Continue reading...
A decade of austerity has had a lasting legacy for eurozone members Ireland, Portugal, Greece and SpainThree years after it was saved from bankruptcy in 2010 with a €67.5bn rescue loan, Ireland became the first stricken eurozone state to stand on its own two feet. Continue reading...
When the country lets its banks go bust 10 years ago, there seemed to be no timetable for recovery. Things have changedTen years since the financial crisis in Iceland, the noise of the computer servers mining for bitcoin on a former Nato airbase is many decibels louder than the vast turbines spinning away in the hydroelectric power plant down the road.Having come through the crisis a decade ago, Iceland is now enjoying an economic revival, with technology, renewable energy and tourism replacing the unsustainable boom in banking. Visitor numbers have quadrupled and output per head is among the strongest in Europe. The employment rate is the highest in the world. Continue reading...