Credit ratings agency says failing to agree deal will lead to weaker pound, higher inflation and pay squeezeBritish households would face a renewed squeeze on living standards from a no-deal Brexit that could tip the country into recession, according to a report.Issuing a stark warning for Britain that crashing out of the EU without a deal next year would have widespread ramifications, the credit ratings agency Moody’s said the risks to the British economy had “risen materially” in recent months.Related: Government publishes latest round of no-deal Brexit planning documents - Politics liveRelated: Driving licences may be invalid in EU if no Brexit deal, UK warns Continue reading...

Conditions will soon be ripe for a financial crisis, but governments will have their hands tiedAs we mark the 10th anniversary of the collapse of Lehman Brothers, there are still ongoing debates about the causes and consequences of the financial crisis, and whether the lessons needed to prepare for the next one have been absorbed. But looking ahead, the more relevant question is what actually will trigger the next global recession and crisis, and when.The current global expansion will likely continue into next year, given that the US is running large fiscal deficits, China is pursuing loose fiscal and credit policies, and Europe remains on a recovery path. But by 2020, the conditions will be ripe for a financial crisis, followed by a global recession.Related: Lehman collapse: what has happened to the markets since?Related: What became of the G20 leaders who met in 2008 to avert financial crisis?Related: Ten years on from the crash, we need to get ready for another one | Robert Skidelsky Continue reading...

Annual earnings more than 3% lower than in 2008 with millenials worst hitThe financial crisis has had a lasting impact on the UK economy and people’s incomes, with annual wages still £760 lower than they were a decade ago , according to the Institute for Fiscal Studies.The institute’s analysis shows median annual earnings fell to £23,327 last year, 3.2% lower than in 2008 when the average wage was £24,088. Continue reading...

All the day’s economic and financial news, as Chinese leader calls for Asian states to unite against US protectionist trade policies

Former PM delivers scathing analysis of how the problems of 2009 remain unresolvedA leaderless world is sleepwalking towards a repeat of its near meltdown in late 2008 and early 2009 because it has failed to remedy the causes of the financial crash of a decade ago, former prime minister Gordon Brown has warned.Britain’s leader during the period when the collapse of the US investment bank Lehman Brothers put every major bank at risk, said that after a decade of stagnation the global economy was now moving into a decade of vulnerability.In the next crisis a breakdown of trust in the financial sector would be mirrored by breakdown in trust between governments Continue reading...

The effect on the FTSE 100 through to pensions, house prices and savers

Our bold proposals would raise £15bn per year, which we would use to revive public services and create a citizens’ wealth fundMuch of the anger in today’s politics stems from an ongoing stagnation in living standards, coupled with the sight of a small minority becoming infinitely richer. Britain is one of the most unequal societies in Europe, where success increasingly depends on where you live and who your parents are. Forty-four per cent of UK wealth is owned by 10% of households, while just 9% of wealth is owned by the bottom half. This looks set to continue, with more than half of the net increase in wealth between 2010 and 2014 captured by the top decile of households.Yet although wealth inequality is twice as great as income inequality, which has on some measures actually fallen slightly in recent years, it has strangely received far less attention.Related: Thinktank calls for major overhaul of Britain's economy Continue reading...

We look at their fortunes and how their countries coped with the worst financial collapse since the 1930sIn the wake of the collapse of Lehman Brothers in 2008 the G20 called an emergency meeting in Washington in a bid to contain the fallout from the mounting financial crisis. In the decade since each nation represented has had diverging fortunes.Of the world leaders who attended the summit, only two are still in position today – Angela Merkel and Recep Tayyip Erdoğan. One is in prison and four others have become embroiled in corruption charges. Here we look at the global ramifications of the crash for those present and the countries or organisations they represented. Continue reading...

The lessons of 2008 have not been fully learned: stop risky lending by banks, address fiscal policy and reduce inequalityThe collapse of Lehman Brothers on 15 September 2008 unleashed the worst global downturn since the Great Depression of 1929. And it was almost entirely unanticipated. Ten years on is a good time to ask what governments, policymakers, and economists might learn from this catastrophe – how to prevent future ones, and how to overcome them if they happen. Of these two, prevention is far better than cure. Once a downturn gathers momentum, the scale of intervention needed to reverse it becomes frighteningly large. Budget deficits balloon, public debts soar, governments take over banks – all conjuring up visions of looming state bankruptcy, or worse, state control over the economy. So the most important question is: how can these catastrophes be prevented?By prevention, I do not chiefly mean trying to stop the semi-regular fluctuations of the business cycle. Capitalist market economies exhibit rhythms of economic activity. The political economist Joseph Schumpeter called them waves of creation and destruction, or perhaps they simply arise from temporary mistakes of optimism and pessimism. The authorities already possess the tools to dampen, if not altogether prevent, these fluctuations – if they want to. Central banks can use interest rates to restrict or expand credit; government budgets have built-in stabilisers, with revenues falling when the economy turns down, and rising when it expands.Related: Ten years after the financial crash, the timid left should be full of regrets | Larry ElliottRelated: Our financial system only works for the 1%. It will take another crash to fix it | John Quiggin Continue reading...

Pro free trade economists claim leaving the EU single market would increase UK living standards – but beware of how they crunch the numbersBritain has “nothing to fear” from a “clean break” with the European Union, according to a report by the group of economists who have consistently argued that Brexit will be a liberating experience.The Economists For Free Trade (EFFT) report argued that moving outside the EU’s single market could lead to prices in the shops declining by 8% and the economy growing by an extra 7% over the next 15 years, or by more than £1tn in today’s money.Related: Unilever's decision to go Dutch should be shot down | Nils Pratley Continue reading...

Forget all the worries about no deal being reached – there are literally no downsides to BrexitShortly before 11am, committee room nine began to fill up. First in were Owen Paterson, Steve Baker, Peter Bone, David Davis, Iain Duncan Smith, Bill Cash and Andrew Bridgen. Next was Matt Ridley. Always useful to have a climate change denier who destroyed Northern Rock onboard. Then came Jacob Rees-Mogg, followed a short while later by a sleep-deprived Boris Johnson, trying to slip in unnoticed. A full house. Just about all those whom no sane person would dream of leaving in charge of the country were gathered together to tell the world how they proposed to run the country if given half a chance.It was all very confusing. Last week, we were told by the Brexiters that they would be announcing their alternative cunning plan to the prime minister’s Chequers deal this week, only for them to change their mind when it was revealed the best they could come up with was to turn the UK into a tax haven, spend billions on a “star wars” defence system and invade the Argies. Continue reading...

US subprimes set off the last crisis. We look at the possible causes of another crashIn early 2007, the then chairman of the Federal Reserve, Ben Bernanke, dismissed the idea that the slowdown in the US housing market had profound implications. It was, according to the man running the world’s most powerful central bank, just a local affair.Everybody knows what happened next. Within 18 months the local problem in the US subprime mortgage market had ballooned into the biggest global financial crisis since the 1930s. When Lehman Brothers went bankrupt 10 years ago this week, it was the catalyst for a month of turmoil in which no financial institution was considered entirely safe. Continue reading...

New cryptocurrencies such as Tether may be pegged to the dollar, but they have big flawsWhile the mania for cryptocurrencies may have peaked, new units continue to be announced, seemingly by the day. Prominent among the new arrivals are so-called “stable coins.” Bearing names such as Tether, Basis, and Saga, their value is rigidly tied to the dollar, the euro, or a basket of national currencies.It’s easy to see the appeal of these units. Viable monies provide a reliable means of payment, unit of account, and store of value. But conventional cryptocurrencies, such as bitcoin, trade at wildly fluctuating prices, which means that their purchasing power – their command over goods and services – is highly unstable. Hence they are unattractive as units of account.Related: UK in strong position to be leader in crypto economy, report says Continue reading...

Ten years ago Lehman Brothers collapsed amid the worst financial crisis in almost a century. Photographer Andy Hall takes to the streets of the City of London to see what’s changed Continue reading...

Ten years ago this weekend the investment bank’s bankruptcy caused panic in US and UKTen years ago this weekend Lehman Brothers crashed into bankruptcy – the biggest corporate failure in history – and sent the world’s financial system reeling close to collapse, causing panic among policymakers on both sides of the Atlantic. The US government was forced into a $700bn (£540bn) bailout of the banking sector, while in the UK, Lloyds Bank rescued HBOS and the government was then forced to rescue Lloyds and Royal Bank of Scotland.A decade on, what has happened to the key players involved in the financial crisis and its aftermath?In 2009 Fuld sold an apartment in Manhattan for $25m and a collection of art for $13.5mPaulson has been a severe critic of TrumpRelated: Have the 'too big to fail' banks really met their Waterloo? | Richard PartingtonOnly a year after the HBOS crisis Hornby was back in business Continue reading...

Companies in Wales, Scotland and Northern Ireland more pessimistic on hiring plansEmployers in England are more optimistic about being able to shrug off the impact of Brexit than anywhere else in the UK but a gloomy outlook across the rest of Britain has dragged overall hiring optimism to its lowest level in six years.Revealing increasing divisions across the country, the latest snapshot from the jobs market by the employment agency ManpowerGroup comes less than 200 days before Britain is due to formally leave the EU. Continue reading...

Ten years on from the financial crisis, the sustainability of the planet is at stake – markets cannot survive without moralsThe real question that should mark the 10th anniversary of the financial crash is a moral one: what was finance for, what was investment for, what was corporate activity for, in 2008, and what is it for now? So far, analyses have focused on two dimensions of the crisis. First, whether enough was subsequently done, in terms of new regulation and technical fixes such as ringfencing the banks, to prevent a repeat meltdown. And second, a focus on the consequences – the global political upheaval that came in its wake, or more precisely, the decade of immiseration that the briefly thrilling, phosphorous destruction unleashed.Both approaches risk being a distraction. The next crisis most likely won’t come from improperly supervised instruments of speculative finance. The Economist, for example, suggests the risks lie in the level of household borrowing and the euro. And while it is impossible to avoid asking whether the super-rich simply walked away from the wreckage, laughing as they left societies trying to hold themselves together through painful austerity, the answer generates resentment and a lust for revenge. To know that a disproportionate concentration of wealth is destabilising as well as unjust does not give us a meaningful or creative blueprint for the future we want to build.Related: Our financial system only works for the 1%. It will take another crash to fix it | John QuigginRelated: 'If it was Lehman Sisters, it would be a different world' – Christine Lagarde Continue reading...

A growing number of people are renting damp, unsuitable homes, and action to protect them is overdueThe rise in property prices in the UK between 1970 and 2013 was unmatched in any other rich country. The housing policies pursued by successive UK governments in a rapidly globalising world have made millionaires of hundreds of thousands of families who still consider themselves to be middle-class, middle-income people, in defiance of the evidence of their assets.For those not lucky enough to have secured a foothold on the property ladder before prices began their vertiginous ascent, the effect has been quite different. As is widely understood by the public as well as politicians, millions of people who might once have aspired to become homeowners now recognise that this is likely to take them much longer than it took people in previous generations, if it happens at all. Prices in the south-east but also in other parts of the country have, at many multiples of average incomes, moved beyond the reach of anyone who does not have a cash deposit of tens of thousands of pounds. The property ladder has been kicked away. Continue reading...

Retail sales pick up, while construction sector bounces back after weak start to yearThe hottest summer since records began helped the British economy gather strength in the three months to July, as shoppers hit the high street and England progressed to the semi-finals at the World Cup.The Office for National Statistics said GDP increased by 0.6% in the period from a rate of 0.4% in the previous three months, driven by a rise in activity in Britain’s dominant services sector. The latest snapshot beat forecasts made by City economists for slower growth of 0.5% in the three months to July. Continue reading...

Slump in consumer spending and business investment likely to reduce chance of recoveryA sharp fall in consumer spending and business investment is expected to drag Britain’s growth rate down to just 1.3% this year, dispelling hopes that the UK’s sluggish rate of expansion in the first six months will recover in the second half of the year.According to the consultancy KPMG, Brexit uncertainty will take a bigger toll on the economy than many forecasters, including the Bank of England, expect following a slump in consumer spending from 1.9% last year to 1.2% in 2018 and an even bigger drop in business investment, from 3.4% in 2017 to 0.8% this year.Gross domestic product (GDP) is a key government statistic and provides a measure of the UK's total economic activity.Related: Personal debts 'shear almost £900m off British economy' Continue reading...

‘Some people think robots will make humans redundant, and we should prepare by lying on sun loungers. I don’t know’The world can be a very scary place. When I wrote Sapiens and Homo Deus I had no idea they would both become worldwide bestsellers. So I was totally unprepared when my publishers immediately demanded a follow-up. For a few hours I was in a state of panic, before inspiration came to me. If my previous books had dealt with the past and the future, why didn’t I just recycle a whole load of articles I had written for other publications and try to present them as my take on the present. Even though they also invariably dealt with the future. So here we go...Disillusionment: No one knows what the future will look like. Humans like to tell themselves stories, be they in the form of religion or political ideologies, such as nationalism, communism and liberalism. But none of these can adequately prepare us for what may happen in the next 50 years. New technology and climate change might make the world more different than we can possibly imagine. So we had better keep an open mind and hope for the best. Continue reading...

Ever since Lehmans went bust banks have been promising to reform, but we’re not there yetHistorians have recorded turning points for time immemorial. The crossing of the Rubicon by Caesar, the Boston Tea Party for the United States, Britain’s triumph at Waterloo and decline after Suez.For the chroniclers of capitalism, the collapse of Lehman Brothers a decade ago this week stands as the major tipping point in modern financial history. The talk in the City will be of the days before Lehman and those after. Continue reading...

Governments have failed to force banks to protect themselves from risks – and some are greater than they were a decade agoTen years ago this weekend, frantic efforts were being made to save one of the biggest banks in the world. When chancellor Alistair Darling overruled Barclays’ supreme stupidity in considering the takeover of the stricken Lehman Brothers investment bank – the extent and complexity of its debts would have brought down both it and probably the British banking system – the die was cast. Lehman collapsed and the shockwaves are still felt to this day.Suddenly, the proud buccaneers of high finance were exposed as “sapient nincompoops”, as the great economic commentator Walter Bagehot described the senior executives of Overend, Gurney & Co in the wake of its collapse 150 years earlier. All the assumptions made by a generation of free-market economists, conservative politicians and the financial establishment were shown to be ideological tosh propagated by today’s nincompoops.Finance can do more or less as it likes, but if it collapses, be sure that governments will be asked to step in again Continue reading...

Leavers may talk about the long term, but the damage to British life and institutions is already painfully apparentWhen the Bank of England was celebrating the 20th anniversary of becoming independent last year, I was asked whether I agreed that, notwithstanding my initial doubts, independence had proved a success.I replied that it was too early to tell. This was an echo of a widely misunderstood quotation from the Chinese prime minister Zhou Enlai, who, when President Nixon asked him what he thought of the impact of the French Revolution, reportedly replied: “It is too early to tell.”The terrible thing is the way so many people still assume that Brexit will have to happen Continue reading...

More trade union membership will boost the British economy, says the IPPR. Yet unions themselves also need to changeIf a report last week by the IPPR thinktank could be packaged as an energy drink, it would certainly put a spring in the step of every trade union leader in Britain. With Labour party wrangling filling their inboxes as they head to Manchester for the TUC annual conference this weekend, they could do with a lift.From recommending a wider role in the workplace, including places in the boardroom, to a greater role on national bodies shaping Britain’s economic future, the thinktank’s report put trade unions centre stage.A new social partnership, with a council that includes trade unions, would be tasked with driving up productivity Continue reading...

President fires back at company after it said its watch and headphones would cost more if China tariffs go aheadDonald Trump tweeted on Saturday that Apple should make products in the United States if it wants to avoid tariffs on Chinese imports.The company told trade officials in a letter on Friday that the proposed tariffs would affect prices for a “wide range” of Apple products, including its watch.Apple prices may increase because of the massive Tariffs we may be imposing on China - but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now. Exciting! #MAGARelated: Trump threatens new tariffs on $267bn of Chinese goods Continue reading...

As America’s economy booms, investors are lured back to the US – and away from the countries that were relying on themIn the past six months, some of the world’s fastest-growing economies have found themselves flat on the floor, gasping for breath and, in one case, seeking help from the global financial rescue centre otherwise known as the International Monetary Fund.Argentina’s $50bn bailout by the Washington-based lender of last resort is the most extreme event so far, but it sits alongside the dramatic collapse of the Turkish lira, a recession in South Africa and dire economic predictions for the Philippines, Indonesia and Mexico.Related: Trump threatens new tariffs on $267bn of Chinese goods Continue reading...

President says further package ‘ready to go’ as Apple warns trade war will hike prices

The technology could vastly improve lives, the economist says – but only if the tech titans that control it are properly regulated. ‘What we have now is totally inadequate’It must be hard for Joseph Stiglitz to remain an optimist in the face of the grim future he fears may be coming. The Nobel laureate and former chief economist at the World Bank has thought carefully about how artificial intelligence will affect our lives. On the back of the technology, we could build ourselves a richer society and perhaps enjoy a shorter working week, he says. But there are countless pitfalls to avoid on the way. The ones Stiglitz has in mind are hardly trivial. He worries about hamfisted moves that lead to routine exploitation in our daily lives, that leave society more divided than ever and threaten the fundamentals of democracy.“Artificial intelligence and robotisation have the potential to increase the productivity of the economy and, in principle, that could make everybody better off,” he says. “But only if they are well managed.”We’ve gone from a 60-hour working week to a 45-hour week and we could go to 30 or 25 Continue reading...

Readers discuss the IPPR’s report on rebalancing the economy, bankers’ bonuses, the NAO report on personal debt, the left’s response to the 2008 financial crisis, and the hopes placed on a Corbyn-led Labour partyThe IPPR report contains many intriguing ideas (Tom Kibasi: We can and must rebalance the economy. Here’s how, 5 September). By 2022, when we could have an effective reforming government, the systemic inequalities the report identifies will have increased considerably, local authorities will be in their death throes, and a Brexit recession may be under way. The problems will be immense. But the solutions proposed by Kibasi, Welby et al amount to feng shui realignments of the devastation wrought by Osborne’s wrecking balls.“Workers on boards”, to take one example, will require legislation, regulation, oversight, education, time and funding. The system works well where there is an extensive Mittelstand, but may not suit our complex outsourced structures, which were developed precisely to circumvent the type of demands workers would make (decent conditions, good wages and secure pensions). Continue reading...

The true story of how the City of London invented offshore banking – and set the rich freeEvery January, to coincide with the World Economic Forum in Davos, Oxfam tells us how much richer the world’s richest people have got. In 2016, their report showed that the wealthiest 62 individuals owned the same amount as the bottom half of the world’s population. This year, that number had dropped to 42: three-and-half-dozen people with as much stuff as three-and-a-half billion.This yearly ritual has become part of the news cycle, and the inequality it exposes has ceased to shock us. The very rich getting very much richer is now part of life, like the procession of the seasons. But we should be extremely concerned: their increased wealth gives them ever-greater control of our politics and of our media. Countries that were once democracies are becoming plutocracies; plutocracies are becoming oligarchies; oligarchies are becoming kleptocracies.Related: Nevis: how the world’s most secretive offshore haven refuses to clean up Continue reading...

Poll comes amid concern record employment masks poor-quality, insecure jobsBritain’s worst bosses will have nowhere to hide under plans to survey the quality of jobs in the UK by tracking how workers feel about their managers as well as their mental health and sense of job security.The government is considering measuring the quality as well as quantity of work, amid growing concern that the social and economic benefits of record high levels of employment are being undermined by poor quality, insecure jobs.Related: The Guardian view on record employment: Not the whole picture | EditorialRelated: Pay growth slows to weakest in a year despite fall in joblessnessMinimum wages in the UK explainedRelated: UK employment is up – it’s just a shame the workers are so miserable | Faiza Shaheen Continue reading...

Rising inflation and falling wage growth add to woes of traditional retailersThe UK high street has posted its worst August performance for three years, in further evidence of the pressure on traditional retailers.Underlying sales at physical stores slid 2.7% last month, compared with August 2017, with homewares and fashion taking the biggest hit, according to the latest data from the advisory firm BDO, which monitors mid-sized, non-food chains. Continue reading...

All the day’s economic and financial news, as emerging market shares and currencies slide

Proposed levies would come on top of existing 25% tariffs on $50bn of Chinese exportsBeijing has laid the ground for another round of tit-for-tat tariffs in the US-China trade war as it declared its readiness to retaliate if Washington imposes a fresh set of duties on $200bn (£155bn) of Chinese goods, which could happen as soon as this week.The proposed new tariffs from Washington – levied at 25% of the value of thousands of specific products – would come on top of existing 25% tariffs on $50bn of Chinese exports, most of which kicked in on 6 July. China was quick to strike back then, imposing tariffs on a similar amount of US goods.Related: Trump's WTO threats matter – especially to a post-Brexit Britain Continue reading...

Secular stagnation advocates should agree on outcome if their preferred policies had been implementedAs Larry Summers rightly points out, the term “secular stagnation” became popular as the second world war was drawing to a close. Alvin Hansen (and many others) worried that, without the stimulation provided by the war, the economy would return to recession or depression. There was, it seemed, a fundamental malady.But it didn’t happen. How did Hansen and others get it so wrong? Like some modern-day secular stagnation advocates, there were deep flaws in the underlying micro- and macroeconomic analysis – most importantly, in the analysis of the causes of the Great Depression itself.Related: Weak economic recovery was down to flawed policies, not secular stagnation | Joseph StiglitzInadequate financial regulation left Americans vulnerable to predatory banking behaviour and saddled with enormous debts Continue reading...

The latest demands from the IPPR give Labour the perfect opportunity to push the envelope further leftAs the economist Milton Friedman once said: “Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.” It was an insight Friedman and his co-thinkers deployed with great success to seed the ideological beginnings of neoliberalism.Laissez-faire economics lay discredited after the Great Depression and the resulting rise in extremism, and then the success of wartime planning and the rise of the left. But Friedman and his allies refused to give up, meeting in the picturesque Swiss village of Mont Pèlerin in 1947 to prepare an intellectual fightback. When crisis did indeed come, three decades later, the ideological foundations for what became known as Thatcherism and Reaganism had already been constructed.Related: Thinktank calls for major overhaul of Britain's economyRelated: We can and must rebalance the economy. Here’s how | Tom Kibasi Continue reading...

Watchdog calculates cost to business and public purse of indebted and stressed adults – not helped by harsh bailiffsThe British economy is losing almost £900m a year from the rapid rise in personal debt problems, according to a report from the Whitehall spending watchdog.The National Audit Office (NAO) report said reduced levels of worker efficiency, people staying away from work and greater chances of people in debt committing crime, meant there was a wider cost of £897m annually to the overall economy.Related: MPs rebuke councils for 'overzealous' use of bailiffs Continue reading...

The IPPR’s proposal will not be popular among directors, but the idea is soundMany of the arguments in the IPPR’s prosperity and economic justice report would probably raise a cheer or two in big British boardrooms. Not every director is a wild advocate for the shareholder-first version of capitalism that the report diagnoses as a major failing in the UK economy. Far-sighted business folk happily concede that short-term horizons can lead unhappily to under-investment and the pursuit of impossible targets.It’s just that, when it comes to one specific recommendation in the IPPR’s report, one can hear the howls of outrage already. The idea that large companies of more than 250 employees should have at least two elected workers on both their main board and their remuneration committee will be damned as unworkable, naive and a certain route to making companies uncompetitive. Continue reading...

The claim that Britain’s economic model is systemically unjust was recently deemed radical and extreme. Now it is indisputableEd Miliband is not often cited among the big winners in British politics. His five-year term as Labour leader ended in a humiliating election defeat. But that does not necessarily invalidate arguments he tried to make about injustice built into the UK economy, the systematic depression of wages and a short-term profiteering culture that spread insecurity and inequality. Mr Miliband’s analysis has subsequently been vindicated, to the extent that many Conservatives now talk about a crisis in capitalism. When Labour figures use that kind of language, the Tories denounce it as a slippery slope towards Bolshevism.In a polarised political climate it is important to build on areas of consensus, so a substantial and non-partisan economic reform programme, published this week, should be welcome across the political spectrum. The Institute for Public Policy Research thinktank issued the final report of its commission for economic justice, bringing together business leaders, economists, trade unionists, representatives from the worlds of technology, finance, charities – and the archbishop of Canterbury. Justin Welby’s presence on the panel is a reminder that economics can, or should be, an ethical pursuit as well as a technical one. Continue reading...

The language of enchantment is used by architects, bankers, entrepreneurs, marketers and others devoted to the art of ‘spin’, says Brian Moeran. Plus: lessons have been learned since the 2008 crash, says Nick Mayer, a former director for Lehman BrothersPhilip Pullman presents a persuasive case for why we should continue to believe in magic (The realm of enchantment, Review, 1 September), even though most Guardian readers live in a contemporary social world that pays lip service at least to rational practices (Donald Trump notwithstanding). He asks whether there might be varieties of magical experience and suggests that such a book has yet to be written.Such a book does indeed exist. A recent edited volume, Magical Capitalism, covers topics ranging from contract law to science, by way of finance, business, marketing, advertising, cultural production, and the political economy in general. Its contributors – all anthropologists – argue that the kind of magic studied by their predecessors in less developed societies – shamanism, sorcery, enchantment, the occult – is not only alive and well, but flourishing in the midst of so-called “modernity”. As the Ashmolean Museum exhibition would have its visitors, we are frequently and unconsciously “spellbound”. Continue reading...

IMF head says the male domination of banking could lead to another financial crisisChristine Lagarde has said male domination of the banking industry made the collapse of Lehman Brothers more likely, as she urged further reforms to prevent a repeat of the financial crisis triggered by its failure a decade ago.Writing on the IMF blog ahead of the 10th anniversary of the US investment bank’s collapse next week, the head of the International Monetary Fund said significant measures had been taken to fix the financial system, although she warned more work was still required, particularly on gender diversity. Continue reading...

Indonesia, Saudi Arabia and China are among those hit by trade wars and strong dollarEmerging markets have been hit by a renewed wave of sell-offs in shares and currencies, with Indonesia, Saudi Arabia and China among the countries hit by trade war tensions and a strengthening dollar.European shares also fell on Wednesday as investors registered concerns over the impact on the global economy if more emerging markets were to follow Argentina and Turkey into financial crisis.Related: Emerging markets: who's taking the biggest hits and why? Continue reading...

Government’s ambitious strategy does not provide any clarity for British firmsThe British government has launched its plan to turn the United Kingdom into an “exporting superpower”. It is an ambitious, if not entirely fanciful, goal.Given the escalating trade war between the US and China, countries around the world are rushing to consolidate their trade relations and preserve existing supply chains. Not so the UK, which is in the final stages of negotiations to withdraw from the European Union – a move that will upend its relationship with its single largest trade partner. The country will soon become not just a lesser exporter but also a lesser power.Related: Was the financial crisis wasted? | Howard DaviesThe crankshaft of a BMW Mini crosses the English Channel three times before the car is completed Continue reading...

Industry accounting for 80% of economic output held back by labour shortage – surveyBritain’s services sector is increasingly struggling to find enough workers amid falling numbers of skilled applicants as Britain prepares to leave the EU.The latest snapshot from IHS Markit and the Chartered Institute of Procurement & Supply (Cips) for the services industry – which accounts for almost 80% of national economic output – suggested companies are being held back from carrying out their activities by the labour shortage. Continue reading...

Ireland is the EU’s star performer, but almost 700 families have become homeless in the capital this yearJobs are bountiful, luring back emigrants and drawing newcomers. Property prices are soaring. Chic restaurants are fully booked weeks in advance. RTÉ television is showcasing the top new entries to Ireland’s rich list – many of them tech tycoons , plus a Ferrari salesman and other purveyors of luxury.Not long ago considered a hopeless case, Ireland’s economy is now roaring ahead with 5.6% GDP growth, making it the European Union’s star performer.Related: Dublin's ghost signs: preserving a city's fading memoriesCongratulations to everyone occupying the vacant property at 34 Nth Frederick St, Dublin. Injunction be damned: it’s better to break the law than to break the poor. #TakeBacktheCity #HousingCrisis Continue reading...

From rising rents to stagnating wages, millions struggle in Britain’s skewed system. My thinktank has some answersToday, most people in poverty are in working households. Despite near full employment, pay continues to stagnate for the majority of people, even while growth has occurred. The nations and regions of the UK continue to diverge. For many, work is precarious as well as poorly paid: nearly a million people are on zero-hours contracts and many more are in bogus self-employment, where employers have simply sought to shirk their responsibilities. It is a state of profound economic injustice.That’s why the message of the Institute for Public Policy Research commission on economic justice, which I chair, is that the economy needs fundamental change.Related: UK wage growth slides to lowest rate in six months Continue reading...

Claims that the finance sector brings jobs and revenue were exposed as a sham – and the rest of us inherited a legacy of debtAugust 2005, and the people who steer the world economy gather in the mountains of Wyoming. Flying in are finance ministers and central bank chiefs. In front of this global elite, the International Monetary Fund’s chief economist will sound the gravest warning of his life. Raghuram Rajan must try to avert a catastrophe, yet as he leaves home he tells his wife, “Either this talk will make me or I’ll look a fool for evermore.”The summit is supposed to be one big leaving bash for Alan Greenspan, stepping down after nearly two decades running the US Federal Reserve. “We were all competing to say how great a central banker he had been,” Rajan told me in an interview for a Radio 4 programme to be aired this month. He’d even begun researching a presentation about “all the wonderful things that had happened” in finance under Greenspan’s reign. Except the closer he looked, the more frightened he became.Voters moaned about politicians looking and sounding the same, but for Wall Street, it was a huge plusRelated: Ten years on, how countries that crashed are faringRelated: What happens when ordinary people learn economics? | Aditya Chakrabortty Continue reading...

The UK is the fifth most unequal country in Europe but has taken steps to reduce disparities of income