Cuts and closures underline the flaws of a system dominated by Westminster’s power. From health to schools to housing, we need an urgent rethink‘We cannot survive as we are beyond this next financial year. There is no money. I am not crying wolf. I never cry wolf.” So says the Conservative leader of Torbay council, in Devon: a local authority that delivers the full range of services but can no longer function at even the most basic level.After years of bone-crunching austerity, by 2020 it will be faced with another £12m of cuts – so the most obvious option is to downgrade itself to a district council, hand over its most essential work to the bigger Devon county council, and hope for the best. Whether this will improve anything is an interesting question: since 2010, in real terms, Devon’s funding from government has been cut by 76%.Related: How can we protect our libraries from closure when the council ignores us?Related: Council cuts are putting the vulnerable at risk, Tory peer says Continue reading...

While it has sizeable risks, the US battle with China could open the door to a new eraThe latest round of tit-for-tat tariffs by the United States and China has intensified the global debate about whether the world is facing a mere trade skirmish or heading rapidly toward a full-blown trade war. But what is really at stake may be even more fundamental. Either accidentally or by design, Donald Trump’s administration may have paved the way for a “Reagan moment” for the international trade regime.In the 1980s, Ronald Reagan initiated a military spending race with the Soviet Union that ended up altering the global balance of power in ways that affected many countries worldwide. Today, Trump has launched a tariff race with China, an economic superpower, perhaps with similarly far-reaching potential consequences. Like under Reagan, the US is better placed to win the current competition with China – but the risks are sizeable.Related: Trump’s trade war: what is it and which products are affected?The Trump administration will need to avoid actually pushing other countries (especially China) too hard too soonRelated: Why America’s cheese capital is at the center of Trump’s trade war Continue reading...

Philips CEO says cost of exported products could increase if UK leaves single customs unionThe Dutch electronics firm Philips has warned it may shift production out of Britain in the event of a “hard” Brexit, saying it was “deeply concerned about competitiveness” of its operations there.The Amsterdam-based group employs about 1,500 people in Britain, most notably at its factory at Glemsford in Suffolk making baby care products for export. Continue reading...

New model from ONS should improve the economic growth picture for policymakersBritain will this week become one of the first major developed economies in the world to publish economic growth figures on a monthly basis.Starting from Tuesday, the Office for National Statistics will produce estimates for the monthly growth in gross domestic product (GDP) alongside a range of other statistical indicators for the health of the British economy.

Bank of England – set for August rise – has been consistently wrong about labour marketThe message from the Bank of England has been clear: get ready for an August increase in interest rates. Modestly higher official borrowing costs are needed to prevent the economy from overheating.This, of course, is exactly what Threadneedle Street was saying three months ago. Back then it had convinced the City that a May rate increase was pretty much a done deal but then got cold feet as weak economic data from the first three months of 2018 poured in.Related: Bank of England expert: World Cup feelgood factor backs case for rate rise“It is our contention that the natural rate of unemployment in most advanced countries is well below 4% and perhaps even below 3%.Employment rates and participation rates can rise, and unemployment rates can fall and by a lot. Globalisation has weakened workers’ bargaining power. Migrant flows may have put downward pressure on wages and greased the wheels of the labour market as their presence increased mobility. The decline in the home ownership, which slows job creation and increases unemployment, has helped mobility and lowered the natural rate.” Continue reading...

The retired are having a great time at the expense of young families thanks to generous pensions and property wealthThe intergenerational argument has vanished – buried beneath the Brexit talks and the traditional fixation with class inequality. The fear that millennials, whatever their class, are going to have a tougher time than their forebears appears to have had the life squashed out of it.A two-year investigation by the Intergenerational Commission, a group sponsored by the Resolution Foundation thinktank, has found that what it calls the “contract between the generations” is at breaking point. It warns that society risks dumping a disproportionate amount of the costs of an ageing population on their shoulders. It’s been going on for some time and now the situation is acute.Their disposable income is beyond what many working families could ever achieve through higher wages or even promotionsRelated: Radical ideas for rebalancing Britain's baby boomers and millennials Continue reading...

As Trump highlights declining jobless figures, Kansas City offers a window into how the recovery has passed many African Americans byKansas City is booming. Employers and investors have poured into the midwestern city since the recession. At least $1bn has gone into its sparkling new downtown, revitalized arts district and shiny new condos. So why is Sly James, its highly regarded outgoing mayor, so unhappy?James, who steps down in July 2019, is leaving office with a sense of disappointment that despite Kansas City’s obvious accomplishments, the city’s recovery has left one large section of society behind: African Americans.Stock Market up almost 40% since the Election, with 7 Trillion Dollars of U.S. value built throughout the economy. Lowest unemployment rate in many decades, with Black & Hispanic unemployment lowest in History, and Female unemployment lowest in 21 years. Highest confidence ever!Related: 'Predatory police': the high price of driving while black in Missouri Continue reading...

All the day’s economic and financial news, as Washington and Beijing impose 25% tariffs on billions of dollars of each other’s exports

As the US and China plunge into a tit-for-tat trade battle, we look at what’s at stake

Rate of growth continues to lag behind levels achieved before the 2008 financial crisisBritain’s dismal track record on improving worker productivity since the financial crisis continued in the first three months of the year, amid mounting concern Brexit will further damage the efficiency growth required for boosting wages.Economic output per hour of work dropped in the UK by 0.4% in the first quarter after a rise of 0.6% in the final quarter of 2017, according to the latest snapshot from the Office for National Statistics.Related: Back pay worth £1.44m owed to thousands of UK workers, official figures showRelated: Solihull's Land Rover workers react to boss's Brexit warning Continue reading...

Bank of England governor says tariffs announced so far have already slowed global economy

The disaster unfolds. Meanwhile the Tories continue to gut what remains of the state, from child protection to social careIn a cruel (but nevertheless accurate) analogy, Brexit is sometimes referred to as the political equivalent of setting your own house on fire. While David Cameron’s gamble lit the match, Theresa May and her ministers have fanned the flames, lurching between the growing risk of a no-deal Brexit and warnings that even an optimistic deal will probably put at risk the NHS, trillions of pounds worth of contracts and tens of thousands of jobs.But increasingly, I can’t help but think there’s a missing part to this analogy. It isn’t only that Brexit means ministers are about to set the house on fire but that it’s distracting from the fact that the rest of the street is already alight.Related: Universal credit puts ‘welfare savings’ before human beings' lives | Frances RyanRelated: Carers don't need to be paid compliments – they just need to be paid | Frances Ryan Continue reading...

Activists want action on an overpaid chief exec, while loyalists plead for more timeThe scrap at Premier Foods, owner of Mr Kipling cakes, Angel Delight and Bisto gravy, is turning into a mini classic. On one side, there is an angry Hong Kong hedge fund, Oasis, that wants to oust Premier’s chief executive; it calls Gavin Darby overpaid and accuses him of overseeing five years of failure at a “zombie-like” company.On the other side, the board argues there are no quick fixes and has rolled out two retailing lords to heap praise on Darby. Lord MacLaurin, who established Tesco as a force in the land in the 1980s and 1990s, called his achievements “hugely impressive”. Lord Price, who was in charge of Waitrose for a decade, said the activist risks “destroying significant value, rather than creating it” if it succeeds. Continue reading...

All the day’s economic and financial news, as Britain’s services companies report that activity rose at a faster pace in June

Bank of England more likely to increase interest rates as inflationary pressures riseThe UK economy has bounced back from a soft patch in the opening months of 2018, according to a closely watched survey of the services sector that showed stronger than expected activity last month.In the latest sign that bad weather held back the economy during the first quarter, the health check by the Chartered Institute for Procurement and Supply and IHS Markit reported the strongest growth in eight months.Related: UK economy picks up speed as service sector growth hits eight-month high - business live Continue reading...

Both sides made 6 July tariff threat but 12-hour time difference gives Chinese edgeChina has denied it will fire the opening salvo in an escalating trade dispute with the US, insisting that it would not bring in 25% tariffs on $34bn (£26bn) of American goods before a move from Washington.Both sides have threatened to impose similarly sized tariffs on 6 July, but because of the 12-hour time difference, it was thought the Chinese tariffs on US imports ranging from soybean to stainless steel pipes could take effect earlier. Continue reading...

OECD says wage growth is still ‘missing in action’ across 35 nations it representsPay is rising much faster for the top 1% of earners compared with those on average salaries in the richest countries, according to a report calling on governments to do more to tackle “wageless growth” since the financial crisis.Despite more people being in work than at any time since the onset of the banking crisis a decade ago, the Organisation for Economic Co-operation and Development said wage growth was still “missing in action” across the 35 countries represented by the Paris-based group of wealthy nations.

Report predicts number of empty shops could rise to 100,000 within a decadeThe crisis on UK high streets could leave 100,000 shops empty within a decade, according to an independent review that argues struggling retailers should no longer be relied upon to prop up ailing town centres.The Grimsey Review 2 makes a series of recommendations including an overhaul of the business rates system and a ban on out-of-town developments. It predicts nearly 70,000 high street jobs will disappear this year. Continue reading...

Building rebound added to latest GDP results will increase pressure to raise interest ratesBritain’s construction industry staged a stronger than expected recovery in June, overcoming the worst of a slowdown this year and helping edge the Bank of England closer towards raising interest rates.After suffering during the heavy snow earlier this year, when diggers and cranes were forced to fall idle across the country, bright sunshine and warmer weather over the past month helped builders back to work.

All the day’s economic and financial news, including the latest reaction to Donald Trump’s tariffs and a new survey of UK construction

BCC tells government to stop ‘squabbling’ as PBSC says it needs assurances on travelBritish businesses have issued Theresa May with a list of Brexit demands after warning firms are losing patience over the lack of progress in talks with the EU.A group of Britain’s leading professional and business services firms has written to the prime minister with a list of requirements they say are essential to preserve the £188bn industry with its 4.6m jobs and “keep the wheels of the British economy turning”.Related: Tory differences over UK's post-Brexit future spill into the open Continue reading...

Thinktank says rising cost of transport, childcare and energy is hitting low-income familiesLow-income families need their disposable income to rise by nearly a third in order to meet rising transport, childcare and energy costs, according to a report. Continue reading...

LGA chief says austerity could damage local authorities ‘beyond recognition’Local authorities have reached the point where relentless financial cutbacks are putting the wellbeing of vulnerable adults and children at risk, the Conservative leader of the Local Government Association (LGA) has warned.The Tory peer Lord Porter said that after eight years of austerity during which £16bn has been stripped from municipal budgets in England, councils risked being “damaged beyond recognition” and communities depleted of vital services.Related: Bus services in 'crisis' as councils cut funding, campaigners warn Continue reading...

President says US is very close to making ‘fair trade deals’ as big banks voice warn of threats to economic growthDonald Trump has defended his controversial positions on tariffs and trade, even as global markets were buffeted by a disappointing start to the second half of the year.At a meeting with the prime minister of the Netherlands, Mark Rutte, in the Oval Office on Monday, the president mused that the World Trade Organization had mistreated the US: “I hope they change their ways. They have been treating us very badly for many, many years and that’s why we were at a big disadvantage with the WTO.Related: Trump's EU trade war costing manufacturers in US and eurozoneRelated: EU says Trump car tariffs 'will put a tax on the US people' Continue reading...

Exclusive: Ministers also considering end to cap on alcohol taxes to boost public spending and cut deficitThe government is close to lifting its eight-year long freeze on fuel duty to raise billions of pounds to help meet pressure from cabinet ministers to boost public spending while also continuing to reduce the deficit.

Tariffs are slowing productivity and driving up costs, new figures showDonald Trump’s trade tariffs are driving up costs for US manufacturers and exacerbating a slowdown for eurozone factories, new figures showed on Monday, as the EU and the US edge closer towards a full-scale trade war with potentially damaging consequences for the global economy.According to the latest survey of American factories by IHS Markit – closely watched for any early warning signals for the world’s largest economy – the president’s tariffs added to the cost of raw materials and components in June. It also contributed to the lengthiest delays for supplies reaching factory production lines since the poll was started in 2007.Related: Tariff fears drag markets down as EU and Trump trade blows – business live Continue reading...

All the day’s economic and financial news, as US president says Europe is “possibly as bad as China”, and EU threatens tariffs on more American goods

European commission hits back at president, threatening tariffs on $300bn of US goodsDonald Trump will put a “tax on the American people” if he goes ahead with a threat to hit European carmakers with punitive tariffs, the European Union has warned.

PM expected to ask ministers to choose between Norway-style partnership and Canada-style trade dealDowning Street has produced a third possible model for the UK’s post-Brexit customs arrangements, which will be among issues discussed by the cabinet at a crunch meeting at Chequers on Friday.Related: May's cabinet still squabbling as Chequers Brexit meeting looms Continue reading...

The US president need only look as far as Obama’s experiment with tariffs to see the problemThe trade war is getting nastier. Phase one began when Donald Trump whacked duties on imported steel and aluminium, and announced $50bn (£37.8bn) worth of tariffs on Chinese goods. Beijing retaliated dollar for dollar, while the EU targeted Levi’s jeans, bourbon whiskey and Harley-Davidson motorcycles.Harley-Davidson responded by saying it would shift production of motorbikes for the EU market out of the US. A different president might have seen this as a warning of the collateral damage likely to be caused to the US economy from a trade war, but not this one. Continue reading...

The bad news is mounting but Labour are failing to put the future of the country above narrow political interestsWhat did Harold Wilson, James Callaghan and Michael Foot have in common? The answer, obviously, is many things. But my main purpose in bracketing them together today is that they were all leaders of the Labour party who overcame their doubts about UK membership of the European Union and became supporters – in Foot’s case, towards the end of his life, passionately so.I was reminded of this first by the much-reported chant at the pro-EU demonstration in London last weekend (“Where’s Jeremy Corbyn?”) and secondly when I attended the launch by the Strand group of King’s College London, of the fascinating new book Half In, Half Out (Biteback), about British prime ministers and their attitude to Europe.Related: Where’s Jeremy Corbyn? Lost in a rose-tinted vision of Labour’s past | John Harris Continue reading...

The language of business and finance used to be easy. Now it’s all derivatives, FDI balances and ‘summing to zero’I think it is just as well for the City and the world of high finance that I lost all interest in matters fiscal after completing an A-level in economics.Supply and demand, the multiplier effect, macro and micro economics, bull and bear markets. Basically understood. Fast forward from long ago last century to the present day… bond yields, derivatives, interim permissions, net FDI balances. Nope, not a clue. Continue reading...

Leading lights in northern England’s premier seaside resorts were in a sunny mood last week, but the towns still face deep-rooted social problems, poverty and lack of infrastructureThe sky is cloudless and the tide is high. Seagulls are scavenging, skin is blistering and the sea looks tempting. The trams go rumbling along the front and the air is thick with the authentic smell of the seaside: malt vinegar on chips.On a day like this, Blackpool appears not to have a care in the world. The town grew up as an oasis of fun and still does what it was set up to do in Victorian times. As the ice-cream stalls coin it in, it is hard to believe that Blackpool is usually portrayed as a town without a future, the biggest victim of consumer demand for more exotic destinations.We don't get a lot of help from outside. We have to make our own luck Continue reading...

Surprise as ONS upgrades earlier estimates after improved construction figuresThe UK economy grew at a faster rate than initially thought in the first three months of 2018, raising hopes for a pick-up in growth after the sluggish start to the year.The Office for National Statistics unexpectedly revised higher its third and final estimate for UK growth in the first quarter to 0.2%, after two earlier estimates of 0.1%.Related: Bank of England moves closer to August interest rate rise Continue reading...

The pound rises against the dollar after UK growth in the first quarter of 2018 is revised up to 0.2% from 0.1%

David Drumm, already jailed for fraud, pleads guilty over loans to property developers

The US Supreme Court has just stripped back the power of organised labour still further, but millennials don’t care. In an era of inequality and frustration they are joining unions in unprecedented numbers

Reactions to Afua Hirsch’s opinion piece on 2018’s anniversaries of the founding of the NHS and the Universal Declaration of Human RightsIn reminding us of the 70th anniversary yet to come on 10 December 2018 of the Universal Declaration of Human Rights (Celebrate the NHS at 70. But don’t forget what inspired it, Journal, 27 June), Afua Hirsch missed an opportunity to reflect that it was a Briton, HG Wells, whose The Rights of Man provided the source for much of the text of the declaration. Thus, through the work of the drafting committee chaired by a Canadian, John Peters Humphrey, the UK played a key underpinning role in its drafting.The declaration was the principal driver in the development of the 1950 European convention on human rights, which adopted much of the UDHR but also established a court for the enforcement of the convention: the European court of human rights. Another Briton, Sir David Maxwell Fyfe, played a key part in the development of the convention. Continue reading...

Chief economist Andy Haldane says England’s displays have boosted consumer spendingThe performances of Harry Kane and his team-mates in the World Cup are helping the economy bounce back from its weather-beaten start to the year and supporting the need for an interest rate rise, the Bank of England’s chief economist has said.Andy Haldane – who last week raised eyebrows by joining dissenters on the Monetary Policy Committee (MPC) to vote for an increase from 0.5% to 0.75% – said England’s recent football success had added to the “feelgood factor” among consumers.Related: Greene King sells more beer through England's World Cup cheer Continue reading...

My husband, Ernie Gordon, who has died aged 93, was an engineer and trade union official who eventually became an economist at the National Economic Development Office.He was born in Southwark, London, to Sam, an engineer in a machine-tool factory, and Lilian (nee Darton). The family moved to a new council estate in St Helier, south London, where Ernie went to Glastonbury Road boys school. At the outbreak of the second world war the family moved to Salisbury, Wiltshire, where Ernie followed in his father’s footsteps by working for a local engineering firm, Moore Brothers. Continue reading...

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...

Two former members of Bank of England’s interest rate-setting committee discuss the outlook as industry warns of job losses

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

The latest monthly Guardian analysis finds manufacturers concerned by the uncertain outlook

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...

Motorcycle manufacturer warns that EU tariffs will force it to move work overseas, as Donald Trump’s trade spat hits US companies

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...