Readers react to criticism of the Treasury by leavers including Bernard Jenkin. Plus responses to John Harris and Dick TaverneCritics of Brexit have focused on the damage it will do to our economy, but there is a greater damage and that is the threat it poses to our democratic system. In a democracy dissent must be allowed and the voice of the opposition must be heard. Brexiters, rather than listen to the dissenters, seek to silence them. The abuse directed at Philip Hammond by leavers (Tory Brexiters turn their fire on Treasury, 9 October) suggests that they are unwilling to engage with the difficult reality of the negotiations; they just seek to suppress the uncomfortable facts.What we instead see is the encroachment of Orwell’s newspeak on the political dialogue: bad news is turned into good, the message in the media should be encouraging, inconvenient awkward facts about the costs of Brexit should be ignored and replaced by the warm words spoken about Brexit by such as James Dyson. One positive message from Dyson is more credible than the collective expressed anxieties of the CBI and the City. They seem to wish to control the political debate so that when the Brexit begins to have significant negative impact on the economy, both the media and Westminster remain on message, and so that when the negative effects of Brexit impact on people’s income, the media story will be one about wicked Europeans doing the British down that will absolve our political leaders from any blame for the post-Brexit economic mess.

Pioneer of behavioural economics is best known for ‘nudge’ theory, which has influenced politicians and policymakers• What is behavioural economics?One of the founding fathers of “nudge” theory, which has helped boost British tax receipts and encouraged smokers to become vapers, has been awarded the 2017 Nobel prize for economics.Richard Thaler co-wrote a bestselling book on the nudge concept read by politicians around the world and soon had them embracing the notion that people can be influenced by prompts – such as changing the wording of tax demands – to alter their behaviour.Related: What is behavioural economics? Continue reading...

After US academic Richard Thaler wins Nobel prize in economics for pioneering work, we take a closer look at his field• Richard Thaler wins Nobel prize in economicsBehavioural economics incorporates the study of psychology into the analysis of the decision-making behind an economic outcome, such as the factors leading up to a consumer buying one product instead of another.The US academic Richard Thaler won the Nobel prize in economics on Monday for his pioneering work in this field. The Royal Swedish Academy of Sciences, which awarded the £845,000 prize, praised Thaler for incorporating psychological assumptions into analyses of economic decision-making. Continue reading...

Weak pound, higher inflation and Brexit uncertainty likely to be behind fall in overseas spending, says UK FinanceDebit cards are being used less often abroad because the fall in the pound after the EU referendum has encouraged more Britons to holiday in the UK, the banking industry has claimed.UK Finance, the financial sector trade body, said staycations helped explain why activity on debit cards overseas was 13% lower this August than a year ago. Since the UK voted to leave the EU in June 2016 the pound has fallen 11% against the dollar and 14% against the euro, making it more expensive for UK-based holidaymakers to take foreign holidays.Related: Brexit transition deal needed by Christmas, says Bank official Continue reading...

Professor of behavioural sciences and economics at University of Chicago given annual economics award

The cryptocurrency is up 1,600% in two years – but state efforts to remove its near-anonymity will undermine its popularityIs the cryptocurrency bitcoin the biggest bubble in the world today, or a great investment bet on the cutting edge of new-age financial technology? My best guess is that in the long run, the technology will thrive, but that the price of bitcoin will collapse.If you haven’t been following the bitcoin story, its price is up 600% over the past 12 months, and 1,600% in the past 24 months. At over $4,200 (as of 5 October), a single unit of the virtual currency is now worth more than three times an ounce of gold. Some bitcoin evangelists see it going far higher in the next few years.Related: Warnings grow louder over cryptocurrency as valuations soarRelated: Introducing the new celebrity accessory: bitcoin-style cryptocurrencies Continue reading...

Academics who could be in running for prestigious award include those working on price bubbles, productivity and corporate financeThe former governor of the Reserve Bank of India and a string of American academics are among potential candidates for the Nobel prize for economics, due to be announced on Monday in Stockholm.The 9m Swedish kronor (£848,091) prize is not among the Nobel Foundation’s official awards for literature, peace, medicine, physics and chemistry but was established separately by Sweden’s central bank, Sveriges Riksbank, in memory of the Swedish inventor Alfred Nobel.Related: The Nobel prize in economics takes too little account of social democracy | Avner OfferRelated: Don’t let the Nobel prize fool you. Economics is not a science | Joris Luyendijk Continue reading...

Soft neoliberalism has exhausted its appeal. The best progressive alternative is an explicit embrace of socialismSocialism is back, much to the chagrin of those who declared it dead and buried at the “end of history” in the 1990s. When the New Republic, long the house organ of American neoliberalism, runs an article on The Socialism America Needs Now, it’s clear that something has fundamentally changed.The soft neoliberalism represented by Tony Blair, Bill Clinton and Paul Keating has exhausted its appeal, and not just in the English-speaking world. Throughout Europe, new movements of the left have emerged to challenge or displace social democratic parties discredited by the austerity politics of the last decade.Related: 'The S-word': how young Americans fell in love with socialismThe traditional notion of full employment, focused on full-time jobs for male breadwinners, is no longer adequateRelated: It's not new to accuse Labor of socialism but this panicked attack is threadbare | Greg JerichoRelated: Am I a socialist? You asked Google – here’s the answer | Zoe WilliamsRelated: Neoliberalism: the idea that swallowed the worldIn the aftermath of neoliberal failure, some utopian vision is what is neededRelated: 'Something big has to change': could Australia afford a universal basic income?Related: What if we could stop exploiting people and cut unemployment at a stroke? | Phil McDuff Continue reading...

The IMF is seen as a hand-wringing liberal institution making nuanced and technical suggestions in an age of broad-brush solutionsChristine Lagarde, boss of the International Monetary Fund, is expected to deliver a hard-hitting speech at the organisation’s annual meeting this week, urging world leaders to push ahead with reforms to turn the current global economic recovery into something more sustainable.Lagarde, who is now in her second four-year term as managing director of the Washington-based lender of last resort, will talk about a lack of education, training and productivity. She will, no doubt, develop the argument she put forward in London a fortnight ago that regulators need to be wary of lenders outside the mainstream repeating the same errors as the banks a decade ago. Continue reading...

Chancellor goes before Treasury select committee with fading chance to hit budget targets and under pressure to ease off on austerityPhilip Hammond faces the Treasury select committee on Wednesday in his first appearance since June’s general election. There will be plenty for the chancellor to talk about.Reports suggest the Office for Budgetary Responsibility will downgrade its forecasts on Tuesday, making it harder for Hammond to hit his budget targets. The fiscal watchdog appears to have accepted that its estimates for productivity growth have been consistently over-optimistic. Productivity, or output per hour, stagnated in the three months to June, official figures showed on Friday. Continue reading...

It’s had control of monetary policy for 20 years but, if the government persists with leaving the EU, governor Mark Carney only has the power to limit the inevitable damage this will do to our economyIn common with Sir John Major, Denis Healey, the Bank of England’s historian David Kynaston, and former governor (1983-93) Robin Leigh-Pemberton, I had great reservations about the granting of independence to the Bank.By independence – more precisely “operational independence” – was meant control of monetary policy: giving the Bank the power to change interest rates, as opposed to merely offering advice to chancellors and prime ministers that could be ignored.Related: Is the Bank of England losing its way? Continue reading...

Only the few benefit from unrestrained capitalismI found the collection of comments on capitalism last Sunday fascinating (“Is capitalism at a crossroads?”, In Focus). The contribution by Ruth Lea represents the sort of thing we are likely to hear from the Conservatives at the next election. It’s so full of unsupported statements (“sound management of the public finances”? Oh, please) it would be difficult to know where to start, but, shouted loudly enough, it will certainly resonate with many people on the right.However, there are a few simple, commonsense truths we should keep in mind. First, Labour is not planning to abolish capitalism. Attempts to do that in the last century were disastrous failures and North Korea and Venezuela continue to provide stark warnings. But capitalism is a necessary answer for the efficient production of wealth, not a sufficient one. Continue reading...

SEC files seen by the Guardian show that in 2017, money manager State Street rejected shareholder proposals to tackle gender inequality at least 12 timesIn March, State Street Global Advisors unveiled Fearless Girl, a statue of a young girl confronting the charging Wall Street bull. It became an instant cultural touchstone.Related: Fearless Girl company discriminated against women by underpaying themFight like a girl. pic.twitter.com/qGTn46jS9WMen who don’t like women taking up space are exactly why we need the Fearless Girl. https://t.co/D2OZl4ituJ Continue reading...

Non-farm payrolls fell by 33,000 last month as Hurricanes Harvey and Irma triggered a record drop in employment in the hospitality and leisure sectors

Slower economic growth is likely in the next few years, and it’s going to harm living standards. The chancellor should stock up on headache tabletsThe news that the government’s independent fiscal watchdog, the Office for Budget Responsibility, is about to slash its forecasts should not have come as a surprise. The chancellor’s fiscal plans were based on forecasts dating back to March this year and already looked to be, once again, too optimistic. The IMF, the OECD and, most notably, the Bank of England, have already sounded a more pessimistic tone and, to an extent, this is just the OBR playing catch up.But even if the news isn’t exactly unexpected, it is still a political headache for the chancellor, and perhaps goes some way to explaining the modesty of the giveaways at this week’s Conservative conference. In his autumn statement of 2016, Philip Hammond relaxed the fiscal rules and gave himself plenty of room for manoeuvre, but that space is now vanishing, just when the political pressure for higher spending is on the rise.Productivity estimates rarely feature in a chancellor’s budget day speech, even as one of the most important variablesRelated: UK economy may not withstand interest rate rise – S&P Continue reading...

OBR also expected to cut productivity forecasts, wiping out about two-thirds of chancellor’s £26bn budget ‘war chest’The productivity of UK workers fell in the three months to June, piling pressure on the chancellor, Philip Hammond, before his budget next month.Despite increasing numbers of hours put in by workers, labour productivity as measured by output per hour fell by 0.1% in the three months to June, according to the Office for National Statistics. That continues a fall started earlier this year, albeit at a slower pace, from the 0.5% drop recorded in the three months to March.Related: Labour has a once-in-a-generation opportunity, and the Tories know it | Larry Elliott Continue reading...

Exclusive: Bjarni Benediktsson, current Iceland leader, sold millions of króna of Glitnir assets before state took control in 2008

An interest hike looks increasingly risky amid fears over motoring loans and diesel power and uncertainty over a Brexit dealThe 9.3% fall in new car registrations in September – a figure even weaker than expected – is alarming. September is the second-biggest month in the car trade and it is now odds-on that registrations will fall in 2017 for the first time in six years.One can argue all day about usefulness of car sales as a barometer of general economic confidence, but the figures usually crop up in the discussions of the Bank of England’s rate-setting monetary policy committee. They matter. Continue reading...

Britain is motoring towards its first drop in annual car sales since 2011, after suffering a 9% drop in registrations last month

Firms with presence in UK must make provisions for hard exit. Anything else is naive, warns trade chiefGerman firms operating in the UK must brace themselves for a “very hard Brexit”, the Federation of German Industries has warned, as it called on its members to take precautions or be prepared to face heavy economic losses.

People are ready for a radical change. Trying to brand Corbyn a Marxist throwback who wants to turn Britain into Venezuela won’t workJim Callaghan would have had some sympathy for Theresa May as she struggled with her croaky voice and the prankster handing her a mock P45. Back in 1979 when Margaret Thatcher was on the brink of power, the then Labour prime minister summed up what it was like to feel authority slipping away. “There are times, perhaps once every 30 years, when there is a sea change in politics,” Callaghan said. “It then does not matter what you say or what you do. There is a shift in what the public wants and what it approves of.”Related: Theresa May’s conference speech: the verdict | The panelRelated: Why Theresa May’s pledges won’t fix the UK’s housing disaster | Matt Wilde Continue reading...

Ratings agency issues warning after surveys show businesses have not recovered from weak first half of yearThe ratings agency Standard & Poor’s has warned that Britain’s economy may not be strong enough to support an interest rate rise following hints from policymakers that there could be an increase in the cost of borrowing next month.S&P said it was sceptical that the Bank of England could justify a rate rise after recent business surveys showed an expected recovery from a weak first half of the year had failed to materialise. Continue reading...

The Republicans’ proposals dodge necessary changes and will leave the country with a mountain of debtHaving failed to “repeal and replace” the 2010 Affordable Care Act (“Obamacare”), Donald Trump’s administration and the Republican congressional majority have now moved on to tax reform. Eight months after assuming office, the administration has been able to offer only an outline of what it has in mind. But what we know is enough to feel a deep sense of alarm.Tax policy should reflect a country’s values and address its problems. And today, the United States – and much of the world – confronts four central problems: widening income inequality, growing job insecurity, climate change and anaemic productivity growth. America faces, in addition, the need to rebuild its decaying infrastructure and strengthen its underperforming primary and secondary education system.Related: The great unwinding: Fed begins slow demise of its post-crash stimulus Continue reading...

Sector reports modest growth in September but confidence almost at its weakest since the end of 2011Britain’s services sector expanded at a “modest” pace last month as mounting concerns about the impact of Brexit dampened orders and hit business confidence.Service sector companies reported strong consumer spending had underpinned expansion while orders from other businesses had fallen back to leave overall new sales growth at the slowest pace since August 2016.Related: Lending to UK firms at risk after Brexit, Bank of England warns Continue reading...

Central bank attempts to prevent creation of new eurozone debt pile by making it more expensive to hold problem loansThe European Central Bank is attempting to put a lid on the near €1tn (£886bn) of bad debts stored in eurozone banks by asking lenders to be more prudent about the way they handle new customers falling behind on repayments.The Frankfurt-based institution issued guidance on Wednesday intended to stop a new pile of problem debts being built up inside eurozone banks by setting out how much cash it wanted lenders to set aside for bad debts incurred from January 2018.Related: Why central banks are not hitting their 2% inflation target | Nouriel Roubini Continue reading...

International organisation joins Bank of England in voicing concern over high levels of household borrowingThe International Monetary Fund has issued a warning to governments that rely on debt-fuelled consumer spending to boost economic growth, telling them they run the risk of another major financial collapse.In a report before the IMF’s annual meeting in Washington next week, it said analysis of consumer spending and levels of household debt showed that economies benefited in the first two to three years when households raised their levels of borrowing, but then risks began to mount.

Rising cost of imports such as food and fuel since Brexit vote is pushing prices to rise at faster rate than anywhere in G7The UK has the highest inflation rate among the world’s top economies, in the latest sign the Brexit vote is contributing to a squeeze on living standards.The increased cost of importing food and fuel is pushing prices to rise at a faster rate than anywhere in the G7 group of leading global economies, according to the Organisation for Economic Co-operation and Development. The UK is only behind Turkey, Mexico and the eastern European states of Latvia and Estonia in the club of 35 developed nations.Related: UK construction in contraction for first time since Brexit vote aftermath Continue reading...

Austerity means careful, selective investment is needed in core services, says Martin Tett, the Conservative leader of Buckinghamshire council

September PMI records negative growth for first time in more than a year following a sustained drop in new workBritain’s construction industry has contracted for the first time since the immediate aftermath of the Brexit vote, as rising political uncertainty leads to a sustained drop in new work.September data revealed a difficult month for building companies, as new projects failed to materialise to replenish jobs planned before the referendum. The drop in workload was attributed to fragile confidence and subdued appetite for risk, especially in the commercial building sector.Related: Slowdown in UK manufacturing as weak pound raises costs Continue reading...

Britain’s factories were hit by a jump in price pressures last month, dragging back growth

Martin Wheatcroft returns fire at Professor Richard Murphy on the risks of quantitative easingI am very pleased that Professor Richard Murphy, in his defence of People’s Quantitative Easing (Letters, 29 September), in response to my letter (28 September), accepts that QE debt is not automatically cost-free. But he slightly missed the point of my response, which is that irrespective of whether interest rates are expressed in nominal or inflation-adjusted terms, each pound going out in interest means one less pound being available to be spent on public services. There does seem some logic in Richard’s view that continuing to expand QE might allow the Bank of England to keep base rates very low or even zero. However, we only have one experience of QE, conducted in a particular set of economic circumstances following the financial crisis, as part of monetary policy operated by respected independent central banks. I would be cautious in assuming that this QE experiment will continue to operate in the same way in different circumstances, especially if for non-monetary policy reasons.Your correspondent Richard Middleton asks a question many have asked, but to which no Treasury civil servant can respond. Answering properly involves the use of “Bank of England” and “insolvency” in the same sentence and so is a question best avoided. The Bank of England is not just a regulator – it is an operating bank, with assets in the form of government debt (and a small amount of gold) balancing its liabilities in the form of bank deposits and cash money. While the government could in theory cancel some or all of this debt, I have a feeling that attempting to run our economy with an insolvent central bank might not be the best idea.

Markit/Cips UK manufacturing PMI shows activity fell to 55.9 last month as the cost of goods used in the production process roseBritain’s manufacturers are showing signs of a slowdown in growth, as the boost to exporters from the weak pound is offset by rising production costs and fears over Brexit.Sterling’s depreciation was widely expected to benefit manufacturers as their goods become more competitively priced for foreign buyers. However the cost of imported materials used in the production process has also risen, hitting a six-month high last month, according to a closely watched barometer of factory sentiment.Related: Weak pound could boost manufacturing, if manufacturing itself wasn’t so weak Continue reading...

The Labour leader’s plans to take over railways, water and energy have high levels of public supportFew opinion polls that claim to detect a shift in public attitudes merit the ubiquitous label “landmark research”, but here’s one that does. The Legatum Institute, a thinktank, and Populus have found levels of support for nationalising large parts of the economy that would have been hard to believe a few years ago.The big four industries in the sights of Labour’s Jeremy Corbyn and John McDonnell should all return to public ownership, according to a strong majority of respondents. Water topped the poll (83%), followed by electricity (77%), gas (77%) and the railways (76%). Continue reading...

EU officials bewildered by claims the union is a one-size fits all club when there are many more social democratic, statist members than the UKThere is a group of Labour MPs who support a clean Brexit to break free from the shackles of a corporatist cartel that blocks state intervention.Labour leader Jeremy Corbyn has long been sympathetic to the Labour Brexit – or “Lexit” – argument for the UK to leave the single market, if not the customs union, to escape a Brussels oligarchy that some believe has frowned on efforts by left-leaning governments to support individual industries or nationalise them to protect consumers’ and workers’ rights. Continue reading...

The physics graduates who brought the financial world to its knees in 2008 have been busy again – is a similar catastrophe likely?A warning from the Bank of England last week that the banking sector could lose as much as £30bn in unpaid debt from credit cards, personal loans and car finance if interest rates and unemployment were to rise sharply was only the latest shot across the industry’s bows.During the summer months individual central bank executives made speeches to that effect and the main consumer finance regulator has talked about tackling the worst excesses of the loan business. Continue reading...

While older Britons have enjoyed two spending booms, millennials have been squeezed by flat incomes and rising housing costs

Ex-cabinet minister issues warning before conference as data shows lifestyles of those aged 25-34 falling behind older voters

ONS revised data reveals rising consumer debt, shrinking services sector and worsening foreign trade as Bank of England hints at rate riseThe UK economy grew at a slower pace than previously thought in July, with fresh warning signals pointing to weaker growth as the Bank of England prepares to raise the cost of borrowing for the first time in a decade.Britain recorded its weakest annual growth rate since 2013 in the three months to the end of June, according to revised figures published on Friday by the Office for National Statistics (ONS). The country’s services sector showed signs of contracting, while the UK’s trading position with the rest of the world also deteriorated.Related: Bank warned not to raise interest rates amid squeeze on households Continue reading...

All the day’s economic and financial news, including new UK GDP figures, Nationwide house prices, and the latest from BoE governor Mark Carney

Reserve Bank’s deputy governor Guy Debelle says people increasingly blame central banks for economic woesOne of the Reserve Bank’s most senior officials has warned the public’s anxiety about low interest rates and their affect on the distribution of wealth is posing a “new threat” to central bank independence.Guy Debelle, RBA deputy governor, issued the warning to central bank colleagues in London overnight.Related: Scott Morrison claims 'better days ahead' for Australian economyRelated: CEOs: if people aren’t spending, maybe you need to pay them more | Greg Jericho Continue reading...

It is 20 years since the Bank of England gained independence. It may not survive the nationalist pressures of leaving the EUBank of England independence, announced just five days after Labour’s 1997 landslide victory, was a tightly kept secret of the kind that Gordon Brown made his trademark. Yet it was almost at once accepted as the last, critical piece of a framework to protect the UK economy from the inflationary tendencies of weak governments on a par with joining the European Community 25 years previously. Today, at a conference marking the 20th anniversary of his coup, Mr Brown added another claim to its significance as a force for stability: only the discipline of independence had enabled him to keep sterling out of the eurozone.But like other speakers both before and after him at today’s conference, the former chancellor warned that just as the post-crash recession had played a significant role in Brexit, so might it undermine the case for Bank independence: the argument for taking back control could just as easily be extended to the power of the Bank to set interest rates, and with consequences as devastating. Mr Brown suggested that the answer to economic populism might be to set up a strategic oversight group that included Treasury officials as well as Bank economists. Mark Carney, the governor of the Bank, suggested it was a bigger challenge. The threat was a response to “QE, nationalism, and loss of trust in globalisation”. No central bank could stop Brexit making the UK poorer. Independence is not the same as omnipotence: the challenge it faces comes from events far beyond its control. Continue reading...

Professor Richard Murphy offers further explanation of his concept, Richard Middleton on writing off the debt, and Ivor Morgan on qualitative easingTwo comments on my letter concerning the use of People’s Quantitative Easing to buy out PFI (27 September) in your paper on 28 September require a response.Martin Wheatcroft says that the Bank of England reserve deposits of our clearing banks, which is where most QE funds are now located, have interest paid on them, meaning that People’s QE is not costless, and that cost could rise, considerably. He makes three mistakes. First, interest is only paid by Bank of England discretion. It could withdraw or limit it. Second, he quotes nominal and not inflation-adjusted interest rates, and it is adjusted rates that matter overall for People’s QE because they indicate the real cost. Third, he assumes UK interest rates will rise without QE being unwound, and that is exceptionally unlikely. His scenario will not come to pass: if rates were as high as he suggests there would be no QE-generated funds in the Bank of England on which interest would be due. Continue reading...

Former PM says politicians must take joint responsibility with Bank for heading off future financial crises, not rely on expertsGordon Brown has said the Bank of England will be vulnerable to populist demands to “take back control” unless elected politicians accept joint responsibility for heading off future financial crises.The former prime minister called for the creation of a joint Treasury-Bank strategic oversight group to assess risks to the economy, saying it was unfair for Threadneedle Street to be blamed for policy failures in areas it did not control. Continue reading...

All the day’s economic and financial news, as the Bank of England holds a conference to mark 20 years of setting UK interest rates

The governor of the Bank of England has said the central bank alone cannot guarantee prosperity. Speaking on Thursday, Carney said the UK's medium-term prosperity would depend on the country's new relationship with the EU

World faces disaster if those who contributed ‘lion’s share’ to global warming don’t aid low-income countries, IMF saysThe International Monetary Fund has told rich countries they must do more to help poor nations cope with climate change or suffer from the weaker global growth and higher migration flows that will inevitably result.In a chapter released ahead of the publication of next month’s World Economic Outlook, the Washington-based IMF said low-income countries had contributed little to the increase in greenhouse gas concentrations and could not afford to tackle the problem from their own meagre resources.Related: Al Gore: 'The rich have subverted all reason'Related: Climate deniers want to protect the status quo that made them rich Continue reading...

PM expected to contrast her approach with that of Jeremy Corbyn, who has called for more state control at Labour conferenceA strong and properly regulated free-market economy is the only way to guarantee higher living standards, Theresa May will say on Thursday as she contrasts her economic approach with the call for more state control made by Labour at this week’s conference.In a speech to mark the 20th anniversary of the independence of the Bank of England, the prime minister will insist that there are benefits from an open and innovative economy – provided it is reformed and properly regulated. “A free-market economy, operating under the right rules and regulations, is the greatest agent of collective human progress ever created,” May will say.Related: Jeremy Corbyn: neoliberalism is broken and we are now the centre ground Continue reading...

The Labour leader thinks the election this summer is proof that his party is now electable because of socialism not despite it. It’s too early to bet against himIt is remarkable what a difference a single election can make. Even if you lose. Jeremy Corbyn delivered his third – and best – speech as Labour leader to a party giddy with optimism. By reducing the Tories to minority government and increasing Labour’s vote by the biggest amount since 1945, Mr Corbyn has transformed gloom to cheer. That the Labour leader has done so from the left is a vindication of his brand of “modern, progressive socialist” politics. Mr Corbyn’s attachment to socialism is important: since the 1990s Labour leaders have avoided mentioning the word, which they viewed as being synonymous with the then unpopular notions of state control and higher taxes. They preferred instead to declare their loyalty to democratic socialist “values”. Values are less controversial than policies. Values can be shared, whereas policies divide. However, Mr Corbyn’s speech was peppered with plans to intervene in markets where vested interests, represented by the Conservative party, have conspired against the multitude. The Labour leader wants to distinguish his party from the thinking of the last four decades, arguing for a “new model of economic management to replace the failed dogmas of neoliberalism”. His contention is that the party is now electable because of socialism, not despite it.This is stirring stuff. There’s little doubt that Mr Corbyn spoke to the passions of the party, but did he speak to the preoccupations of the wider electorate? His diagnosis is founded on unquestionable truths: that an era of deregulation, privatisation and low taxes for the wealthy came tumbling down with the global financial crisis. Bankers played a leading role in the crisis, but it’s the rest of society that has paid for the crash. This has had profound consequences: most notably class divisions have been politically revived. “Them and us” economics is rooted in the fact the top 1% of society has recovered all the ground it lost while the average worker faces the longest period of falling real-terms pay since the Napoleonic wars. It’s difficult to sell capitalism to those with no capital. Continue reading...

UK slips one place to eighth in competitiveness rankings as Switzerland tops World Economic Forum league tableThe 10th anniversary of the worst downturn since the Great Depression finds the global economy at risk of a fresh crisis and ill-prepared for the disruption likely from the robot age, the World Economic Forum has warned.The body that organises the annual gathering of the global elite in Davos each January used its annual league table of competitiveness to stress that the failure to push through growth and productivity-friendly policies since the crash of 2007-08 had jeopardised chances of a sustained recovery.Related: The eurozone strikes back – why Europe is booming again Continue reading...

The motoring organisation is a market leader with solid cash flows, but private equity owners have left it strugglingHere comes Simon Breakwell, hauled from the crew of non-executive directors, to perform running repairs on the AA as its new chief executive. His first tweak? A delay to an IT upgrade and a warning that an extra £35m must be spent. The shares hit another all-time low.On the plus side, boring talk about computers makes a change from recent excitement, such as last month’s removal of executive chairman Bob Mackenzie for gross misconduct after an altercation with a colleague in the bar of a Surrey hotel. We’ll leave the two sides’ lawyers to chew over the details of the incident and ask a different question. How is that the AA, which ought to be the model of a dull and reliable investment, has performed so dreadfully for shareholders?Related: Business Today: sign up for a morning shot of financial news Continue reading...