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!”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 track”.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...

All the day’s economic and financial news, as the Bank of England is split over interest rates

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...

All the day’s economic and financial news, as investors worry that Donald Trump could trigger a full-blown trade war with China

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...

In Manchester, groundbreaking economics courses are giving locals the means to challenge some of society’s received wisdom – for free.

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 architecture”.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...

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...

The Canada debacle showed the global economic system is no longer anchored by cooperationTo say that this month’s summit of G7 leaders in Canada was an unusual one would be an understatement. A traditionally friendly and predictable gathering of like-minded countries was marred by finger-pointing and disagreement, resulting in an inability to achieve consensus on a final communiqué. But, while political analysts were quick to declare the end of the G7’s coherence, integrity, and usefulness, markets were unfazed. In fact, the longer-term outcome may well prove markets right, albeit with some important qualifications.Participants at the G7 summit reportedly clashed over issues such as climate change and the possibility of readmitting Russia. But the highly publicised discord was fuelled mainly by disagreements over the effects of trade among the members. Those disagreements – amplified by persistent differences on basic facts – impeded progress in other areas where greater consensus might have been possible, including Iran, some other Middle East issues, North Korea, migration and refugee relief.Related: Q&A: how damaging was Donald Trump’s G7 blow-up? 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 payments”.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...

Britain’s bosses warn that Britain’s economy is weakening, as German prosecutors arrest boss of VW’s Audi division

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?”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...

The case for reviving the Glass-Steagall Act has surprising support across the political spectrum. Here’s why we should listen

Growth commission’s strategy would lead to extra decade of cuts and restraint, says IFSAn independent Scotland would face an extra 10 years of austerity if it implemented plans outlined by a Scottish National party report, the Institute for Fiscal Studies has warned.

Technology is starting to behave in intelligent and unpredictable ways that even its creators don’t understand. As machines increasingly shape global events, how can we regain control?The voice-activated gadget in the corner of your bedroom suddenly laughs maniacally, and sends a recording of your pillow talk to a colleague. The clip of Peppa Pig your toddler is watching on YouTube unexpectedly descends into bloodletting and death. The social network you use to keep in touch with old school friends turns out to be influencing elections and fomenting coups.Related: YouTube to clamp down on disturbing kids' videos such as dark Peppa PigThe cloud is the central metaphor of the int­ernet: a global system of great power that is almost impossible to graspWhile traders might have played a longer game, the machines, faced with uncertainty, got out as quickly as possibleRelated: UK homes vulnerable to 'staggering' level of corporate surveillanceUsers are encouraged to keep their phones in their beds, to record their sleep patterns. Where does all this data go?In 2016 three networks at Google developed a private form of encryption. The machines are learning to keep their secrets Continue reading...

European Central Bank has voted to stop its huge bond-buying programme, but interest rates will remain at record lows for a long time

Wind-down in three-year bond buying programme balanced with a hold on interest ratesThe European Central Bank has shrugged off evidence of a slowdown in the eurozone and announced that it will phase out the stimulus provided by its massive three-year bond-buying programme to the eurozone economy by the end of the year.Despite warning that the single currency area was going through a soft patch at a time when protectionist risks were rising, the ECB said it would wind down its bond purchases over the next six months. Continue reading...

Fed describes jobs market as ‘strong’ but chair Jay Powell acknowledges mounting concern among US executives over tradeThe Federal Reserve raised US interest rates again on Wednesday, the seventh increase since 2015 when the central bank resumed raising rates after the last recession.The Fed move came after a two-day meeting where its members discussed the robust state of the US economy and the potential impact of a trade war amid rising tension between the US and its largest trading partners.Related: Fed proposes changes to rule limiting risky trading on Wall StreetRelated: Four in 10 Americans can't cover a $400 emergency expense, Fed finds Continue reading...

President Gjordje Ivanov says no to deal renaming country as Republic of North MacedoniaGovernments in Skopje and Athens have faced a furious backlash as the challenge of solving one of the world’s most bitter diplomatic feuds hit home just a day after Macedonia announced it was willing to change its name.

The right-wing triumph in Ontario shows the left needs a new populism – backed by street protest and a bold NDPThe guardians of respectable opinion forecast that Doug Ford would never become Ontario’s Premier. Now that he has, they are suggesting his reign might be orderly and painless.

Almost one in three WPP investors fail to back pay report, but Sir Martin Sorrell will still leave with £19m of share options despite investigation into personal conduct.

It was supposed to bring shared prosperity, but instead it has slowed growth and sown discordThe euro may be approaching another crisis. Italy, the eurozone’s third largest economy, has chosen what can at best be described as a eurosceptic government. This should surprise no one. The backlash in Italy is another predictable (and predicted) episode in the long saga of a poorly designed currency arrangement, in which the dominant power, Germany, impedes the necessary reforms and insists on policies that exacerbate the inherent problems, using rhetoric seemingly intended to inflame passions.Italy has been performing poorly since the euro’s launch. Its real (inflation-adjusted) GDP in 2016 was the same as it was in 2001. But the eurozone as a whole has not been doing well, either. From 2008 to 2016, its real GDP increased by just 3% in total. In 2000, a year after the euro was introduced, the US economy was only 13% larger than the eurozone; by 2016 it was 26% larger. After real growth of around 2.4% in 2017 – not enough to reverse the damage of a decade of malaise – the eurozone economy is faltering again.Related: The EU v Italy’s new government: which will blink first? Continue reading...

Populist parties’ ambitious fiscal plans have put them on a collision course with BrusselsThe majority of Italians want two things: new political leadership and the euro. The question is whether they can have both.The point about new leadership is uncontroversial. The country’s two ruling populist parties, the League and the Five Star Movement (M5S), together commanded 50% of the vote in the 4 March general election, and, as a result, have majorities in both houses of parliament. Their majorities may be slim, but the election, in which the main centre-right and centre-left parties eked out just 33%, was a resounding repudiation of the status quo.Related: Can the euro be saved? | Joseph Stiglitz Continue reading...

Economists predicted rise to 2.6% on back of 40% higher global oil prices than year agoUK inflation unexpectedly stayed at a one-year low last month, despite average petrol prices rising to the highest level for almost four years.The consumer prices index (CPI) remained at 2.4% in May for the second month running, according to the Office for National Statistics, confounding economists’ expectations for the rate to increase to 2.6% amid rising global oil prices. Continue reading...

Trump’s comments dash hopes of resolving US-Canada trade row, and may lead to economic hardships on both sidesDonald Trump has doubled down on his criticism of Justin Trudeau, warning that his stance on trade discussions was a “mistake” that would cost Canada “a lot of money”.At a news conference on Tuesday after his summit with North Korean leader Kim Jong-un, Trump referred to the Canadian prime minister’s pledge to proceed with retaliatory measures in response to Trump’s move to impose tariffs on aluminum and steel.

Workers’ pay packets still increasing slowly despite fresh fall in unemploymentThe prospect of a summer increase in interest rates from the Bank of England has receded after the latest official figures showed a fall in wage inflation despite a fresh drop in unemployment.A near-stalling of the economy in the first quarter of 2018 failed to halt jobs growth but had an impact on earnings growth, which edged lower in the three months to the end of April, according to the Office for National Statistics. Continue reading...

A growing number of tech entrepreneurs are breathing new life into the Greek capitalOn the surface, Athens doesn’t seem like the best place to start a business. Since the country’s financial crisis almost a decade ago, about one in five small businesses have folded and unemployment levels still hover around 20%.However, the local startup scene is enjoying some surprising successes, fuelled by a talented and ambitious young workforce who have found themselves unable to rely on traditional employment routes. These include recruitment software company Workable, which has raised more than €29m (£25.5m) in local and international funding, and ride-hailing app Taxibeat, which was sold to automotive company Daimler for an undisclosed amount last year.Related: Greece relaxes capital controls to prove worst of turmoil is overRelated: Who’d be young and Greek? Searching for a future after the debt crisis75% of Greek company founders are residents of other countriesRelated: 'Tourism is our lifejacket': debt-stricken Greece gets record number of visitors Continue reading...

Whether called internships or placements, these schemes damage the economy as well as young people’s prospectsLabour MP Chuka Umunna didn’t set out to cause controversy when he advertised a student placement role in his office. Until the advert was picked up by the Graduate Fog website, which campaigns for fair internships and better treatment of graduates by employers, nobody thought there would be an issue. After all, while it’s Labour party policy to ban unpaid internships, “placement schemes” are different. Aren’t they?The rationale seems to be that because such placements are part of a student’s education, they are different from internships and thus shouldn’t be subject to the same rules. Perhaps, in the best cases, placements can play the role that their advocates say they do. Making them unpaid, however, certainly puts temptation in an employer’s path.Related: Unpaid internships rig the system. Curb them, now | Owen JonesRelated: Capita’s wily scheme locks naive graduates into tied servitude | Jolyon Maugham Continue reading...

China has reportedly relaxed trade restrictions amid dismay from North Korean refugees

Downturn evidence mounts as poll has employer pessimism at highest for six yearsThe British economy is showing the greatest signs of stress since the eurozone crisis and fears of a double-dip recession six years ago, as worrying reports show the steepest fall in manufacturing output and the greatest degrees of pessimism among employers since 2012.Concerns over Brexit and a slowdown for high street spending are among the major factors contributing towards 2018 being the worst time in six years for British firms planning to take on new staff, according to a closely watched survey compiled by the recruitment firm ManpowerGroup.Related: UK manufacturing has largest monthly fall in output for five years Continue reading...

Rural areas also at disadvantage as schools in cities attract better-qualified teachersSchools with a higher proportion of disadvantaged students are less likely to have qualified teachers than schools with a more privileged intake, according to a report.The international study found that in more than a third of countries, including the UK, teachers in “the most disadvantaged schools” are less qualified or less experienced than those in the most advantaged schools. Continue reading...

Biggest fall in production since 2012 suggests Bank of England’s optimism may be misplacedThere was a ready-made explanation when the March manufacturing figures were bad. Falling factory output was all down to the weather – the blizzards brought in by the “beast from the east”.No such excuse is available this time. Manufacturing posted its biggest fall in production in more than five years. It was the third monthly decline running and nine of 13 industrial subsectors said they had cut output. The expected bounce-back in the construction sector was also a lot less vigorous than predicted, while order books for building firms look weak.Related: UK manufacturing has largest monthly fall in output for five years Continue reading...