A couple who bought a two-bed flat this year say they have few immediate concerns thanks to their fixed-rate dealThe size of mortgage taken out by first-time buyers Kieran Ellis, 32, and Jordan Stefanov, 29, will send shudders through many people. The couple borrowed about £450,000 in June to buy a £490,000 two-bed flat in Crystal Palace, south London – but they are relatively relaxed about the rise in interest rates.A 0.25% rise in rates adds £54 to the monthly payments on a £450,000 loan. But like the majority of young buyers Kieran and Jordan have taken out a fixed-rate mortgage – in their case pegged at just 1.8% for two years – so the rate rise has no immediate impact on their repayments, which come in at a bit below £2,000 a month.Related: What the interest rate rise will mean for you Continue reading...
The Bank of England has increased its base rate after a decade – here’s how it will affect homeowners and saversThe 0.25% rise in Bank of England base rate to 0.5% may be small, but it marks the first rise in borrowing costs for a decade. Many mortgages will rise in cost, but savers will be looking forwards to better returns.Related: 'We have a £450,000 mortgage – but we're relaxed about the interest rate rise' Continue reading...
Increase from 0.25% to 0.5% looks imminent in wake of latest good news from Britain’s manufacturing sectorThe Bank of England is on track to raise interest rates for the first time in more than a decade on Thursday after data from manufacturers strengthened the case for an increase.The industrial sector is reporting that it remains in rude health as companies benefited from strong sales in the UK last month and new export business driven by the weak pound. Combined with high inflation and record low unemployment, the figures pointed to the Bank raising the cost of borrowing from 0.25% to 0.5%. Continue reading...
IFS forecast that 37% of children will be in relative poverty by 2022 would see all progress made in the last 20 years undoneThe number of children living in poverty will soar to a record 5.2 million over the next five years as government welfare cuts bite deepest on households with young families, a leading UK thinktank has said.New research from the Institute for Fiscal Studies predicts an increase of more than a million in the number of children living in poverty, more than reversing all the progress made over the past 20 years. Continue reading...
Gender parity ‘shifting into reverse’ as World Economic Forum adds 47 years to time needed to reach workplace equalityWomen around the globe may have to wait more than two centuries to achieve equality in the workplace, according to new research.
Government should guarantee access to transport, schools, hospitals and digital access, says industrial strategy commissionBritain’s north-south divide should be tackled by a government pledge in its new industrial strategy to provide every citizen with decent transport, schools, hospitals and digital access, an expert body says.The independent industrial strategy commission on Wednesday urged ministers to tackle Britain’s regional imbalances by committing to universal basic infrastructure – a guaranteed standard for the whole of the UK.Related: Surge in UK consumer borrowing fuels likely interest rate rise Continue reading...
by Richard Partington Economics correspondent on (#36N8B)
Thinktank says it is ‘almost certain’ leave vote has damaged living standards as it scales back economic growth forecastsBritish households are each more than £600 a year worse off following the vote to leave the European Union, according to one of the UK’s leading economic forecasting bodies.The National Institute of Economic and Social Research (NIESR) said it is “almost certain†the leave vote has damaged living standards and hit the growth potential of the economy. The thinktank also scaled back its expectations for growth in the UK for the next three years.
The incoming head of the New Economics Foundation on how the radical thinktank’s moment has come to lead the fight against inequalityMiatta Fahnbulleh, a former academic turned policy wonk who has worked for three prime ministers and the Labour party, is not your typical thinktank chief.Related: Corbyn: Hammond right to say Labour threatens whole economic systemWages have flatlined. It means you have these huge divides in wealth – and people are feeling poorer, year after year Continue reading...
The government is refusing to release 58 studies of the economic impact of leaving the EU. It is undemocratic to keep British people in the darkBrexit, we’re regularly reminded, is the will of the people. We had a referendum and the result was clear. Question the wisdom of the decision and you show yourself to be anti-democratic and out of touch, a member of a cosseted, globalist elite that fails to understand the concerns of ordinary folk.Never mind that 48% of voters represents rather a large “elite†by any normal measure. Nor that the people most enthusiastically pushing this line – among them Nigel Farage, Rupert Murdoch and several senior politicians – are themselves both privileged and powerful. The attack lands, in part, because it contains a kernel of truth. Prominent remainers sometimes have spoken about leave voters in sneering, snobbish terms. There really is an unwillingness among some affluent, metropolitan Europhiles to acknowledge that material factors contributed to the result. It doesn’t seem to occur to them that showing contempt for mass democracy could have lasting social and political repercussions – potentially fuelling more extreme rightwing populism.Related: Government refuses to release details of studies into economic impact of BrexitA hard Brexit would take Britain out of the EU’s single market and customs union and ends its obligations to respect the four freedoms, make big EU budget payments and accept the jurisdiction of the ECJ: what Brexiters mean by “taking back control†of Britain’s borders, laws and money. It would mean a return of trade tariffs, depending on what (if any) FTA was agreed. See our full Brexit phrasebook. Continue reading...
Barclays’ appetite for blind risk and greed in the midst of financial crisis is an intriguing tale – somebody should now spill all the beansGordon Brown is not alone in thinking errant British bankers got off lightly in the 2008 financial crisis. We should also be worried that the former prime minister thinks the new criminal offence of reckless misconduct that causes a financial institution to fail, which was introduced after the crisis to address the perceived legislative weaknesses, may not be up to the job.Related: Gordon Brown: Bankers should have been jailed for role in financial crisis Continue reading...
Ex-PM warns failure to take tougher stand has made it inevitable that rogue bankers will again gamble with public moneyGordon Brown has claimed bankers should have been jailed for their fraudulent and dishonest behaviour during the financial crisis that led to Britain’s deepest post-war recession and his defeat in the 2010 general election.The Labour former prime minister used the second extract from his memoirs to warn that the failure to take a tougher line with wrongdoing – as pursued by other countries – has made it inevitable that rogue bankers will again gamble with public money.Related: Gordon Brown memoirs: Barclays' RBS bid in 2008 is a staggering revelation Continue reading...
People on the building society’s variable rates would see a 0.25% increase in their monthly bill, if the Bank raises the base rate to 0.5%Nationwide has paved the way for an across-the-board increase in mortgage costs by announcing that a 0.25% interest rate rise would be passed on in full to its 600,000-plus variable-rate home loan customers.The building society said that if, as is widely expected, the Bank of England lifts the base rate by 0.25% to 0.5% on Thursday, it would increase both of its variable rates by 0.25%. Continue reading...
The 9.9% annual growth figure further adds to concerns of unmanageable debt among UK householdsA near-double-digit increase in lending to households in the year to September has left the Bank of England on track to raise interest rates on Thursday, amid concerns that consumers are creating an unmanageable mountain of unsecured debt.The pace of annual consumer credit growth was 9.9% last month, according to figures from the central bank, as borrowing on credit cards, overdrafts and unsecured loans jumped.Related: Average UK debt at £8,000 per person (not including the mortgage)Related: Consumers appear loth to spend. Is it a blip, or Brexit beginning to bite? Continue reading...
Survey reveals 6m Britons fear never being debt-free with 25% struggling to make ends meet and 62% worried about personal debt levelsMore than 6 million Britons don’t believe they will ever be debt free, according to new research which has also found the average person in the UK owes £8,000 – on top of any mortgage debt.
Fresh analysis reveals £20bn gap between government spending and tax receipts, says Institute for Fiscal StudiesFresh analysis that reveals a hole of almost £20bn in the public finances will heighten the pressure on the chancellor, Philip Hammond, ahead of next month’s budget.Britain is on track for the deficit – the gap between government spending and tax receipts – to reach £36bn by 2021-22, more than twice the initial official forecast of £17bn, according to the Institute for Fiscal Studies (IFS).Related: Bank of England poised to push interest rates back up to 0.5%Related: How the actual magic money tree worksRelated: Sparkling employment figures mask real picture of UK economy Continue reading...
Readers respond to Catalonia’s declaration of independencePaul Mason’s normally incisive journalism seems lacking in his latest piece on regional self-determination (G2, 24 October). The common thread linking separatist movements in Catalonia, Lombardy and Veneto is rich regions objecting to subsidising poorer parts of their respective countries. What’s more, the core message from Brexiters is that “we want our money back†because people are “fed up with subsidising less prosperous parts of Europeâ€.What we lack in this debate is any appreciation of the benefits of solidarity, with richer regions/countries working hard to help poorer areas catch up. Continue reading...
The head scratching over the failure to raise productivity is ignoring the real problem: cheap labour is a disincentive to investmentTheresa May originally wanted her purpose in power to be defined by improving the wellbeing of the less well-off. Despite all that has happened since, she has not, apparently, given up: with the gender pay gap in mind, at the weekend she pressed even those smaller firms not legally required to publish the difference between their male and female employees’ earnings to survey their workforce. This is typical of her style: imprecation rather than action. Within weeks of that Downing Street pledge, she was backtracking on some of the measures, such as workers and consumers on boards, that she had proposed as a way of showing she would be the voice of the just-getting-by.Yet there is no doubt she got one thing right: she identified the issue that is likely to do most damage to her government, whatever the upshot of the Brexit negotiations. A decade after the crash, many voters are still not better off; the roll-out of universal credit is going to leave some even poorer. And many of those who have had real income growth don’t feel the difference. Continue reading...
If people maintained and repaired their possessions, the world economy and the impact of human activity on the environment would be transformedAffluenza has not just changed the world, it has also changed the way we see the world. Short of money? Borrow some. Caught in the rain? Buy an umbrella. Thirsty? Buy a bottle of water and throw the bottle away.Our embrace of “convenience†and our acceptance of our inability to plan ahead is an entirely new way of thinking, and over the past seventy years we have built a new and different economic system to accommodate it.Related: If having more no longer satisfies us, perhaps we’ve reached ‘peak stuff’ | Will HuttonIf people continue to embrace the benefits of 'convenience', the impact on the natural environment will be devastating.Related: Materialism: a system that eats us from the inside out | George Monbiot Continue reading...
With the economy sluggish, Thursday is expected to bring reversal of emergency action taken following Brexit voteThe Bank of England is poised to raise interest rates this Thursday for the first time in more than a decade, raising the cost of borrowing for British households already hurt by an earnings squeeze.Threadneedle Street is expected to reverse emergency action taken following the EU referendum, when it cut rates from 0.5% to 0.25% to avert a recession. While a slump has not materialised, the British economy appears in worse health than most other major countries with potential to be blown further off course by faltering talks to leave the EU. Continue reading...
Not only are most new jobs low-skill and low-wage, but the total number of ‘hidden jobless’ remains highFalling unemployment has been the one bright spot in what has been a distinctly mediocre year for the economy. Harold Wilson was prime minister the last time Britain had a jobless rate as low as 4.3%.When the Bank of England’s monetary policy committee meets this week to discuss interest rates, the state of the labour market will feature prominently. Many of the members think that the UK is at, or very close to, full employment and that any further falls in joblessness will lead to wage inflation.Related: Falling unemployment is great for the economy? Try telling cleaners like Irene | Stefan BaskervilleIf the Bank puts up interest rates this week, it won’t be because the labour market is overheating in the Welsh valleys Continue reading...
The banks are obsessed with lending to property owners and developers, at the expense of other businesses – and the government gives them its full backingWhen everyone around you sits on their hands, it’s tempting to take control. While companies refuse to invest and Whitehall is paralysed by Brexit, why not legislate and nationalise to get something done?Britain is in the midst of an investment crisis, a productivity crisis, an income crisis and an inequality crisis – and all are so entrenched that they are beyond policies that tinker or No 10’s “nudge unitâ€. Continue reading...
After a decade of ultra-low rates, many predict a rise this week. Vital for controlling inflation and saving Bank chief Mark Carney’s face, say the hawks. A terrible idea in a weak economy, argue dovesMarkets have a tendency to panic when central banks threaten to raise interest rates. In 2014, the US Federal Reserve and its then boss, Ben Bernanke, sent traders across the world into a spin when he merely hinted that the era of almost zero rates might be ending.It’s been a decade since the Bank of England last increased the cost of borrowing, so it is no surprise that this week’s vote by the monetary policy committee, which Threadneedle Street has sketched out as a good moment for a rise, is being closely watched.Keeping the economy expanding has won out over the imperative to maintain inflation steady at 2%'Inflows of new business in September were at their lowest for 13 months, suggesting that demand has "waned again"' Continue reading...
Rush for dwindling supply of fixed-rate deals as Bank of England is expected to increase base rate this weekHouseholders have been scrambling to grab fixed-rate mortgages before Thursday’s expected interest rate rise, which would lead to the first increase in monthly loan payments in a decade.Staff at the big mortgage brokers have reported a “busy last few daysâ€, and say they are expecting more calls this week as householders with base-rate-linked loans try to insulate themselves from the anticipated increase. Continue reading...
The economy is weak and the impact of higher rates on consumer behaviour is arguableIt has been a grim week for economic news. High street stores reported rapidly falling sales – the worst since 2009. Output from Britain’s car factories tumbled, shrinking by 4.1% in September, with demand from UK car buyers plummeting by 14.2%. Meanwhile, official figures revealed the average pay for full-time workers crept up to £550 a week, but in real terms have fallen as they have been outstripped by prices. Even the one mildly positive bit of economic news – that GDP growth was slightly higher than expected – came with a warning that construction activity contracted for the second quarter in a row.In normal times we might expect a chancellor to be finding ways to stimulate the economy, with the Bank of England loosening the purse strings to lift activity. But precisely the opposite is about to happen. We are told there is an 80% certainty that the governor of the Bank of England, Mark Carney, will make the momentous announcement on Thursday that UK interest rates are to rise for the first time in 10 years.Maybe Mark Carney wants us to wake up and smell the coffee after years of bingeing on debt Continue reading...
On 2 November, the Bank of England is expected to increase the base rate after a decade. We explore what impact it will have on homeowners and saversThe longest period in living memory without a Bank of England rate rise is expected to end on Thursday, when the base rate is likely to increase by 0.25% to 0.5%. The percentage rise is small, but the worry for homebuyers with jumbo mortgages is that it could be the start of a number of increases that could make their loans unaffordable. However, for people with savings who have suffered near-invisible returns on their money, is this the light at the end of the tunnel?This week’s GDP figures, showing a slightly better performance by the economy than anticipated, has made the likelihood of an interest rate rise on 2 November almost a slam dunk, according to City experts. About 80% of market watchers are saying an increase is inevitable, although there are voices calling for the Bank to maintain rates at their historic low. Continue reading...
He was Greece’s finance minister during part of the debt crisis. A more intimate crisis inspired him to write a book explaining economics to his teenage daughterYanis Varoufakis is telling me about the birth of his daughter, Xenia. “What I felt was an immense weight of responsibility,†he says. “Absolutely blind love and the sense of focusing on one individual.†But the experience didn’t make him feel like a different person. “It didn’t change my internal constitution or the way I looked at the world.â€Related: Yanis Varoufakis: ‘I would like to live in a world where we’re all privileged’Related: Do real men change nappies?I try not to be negative in the book. I try to tell her what is fascinating and what is wrong Continue reading...
No end in sight for the new dotcom boom as Alphabet, Amazon and Microsoft shares soar after results are better than expectedUS stock markets hit new peaks on Friday after forecast-beating results from the technology companies including Google’s parent company Alphabet, Amazon and Microsoft .All three saw their shares soar to record highs in the wake of better than expected quarterly updates, adding billions in revenues and increasing profits compared with the same three-month period in 2016. Continue reading...
Central bank appointments are usually non-partisan, but in Trump’s America nothing is certain and the president may ditch traditionUS President Donald Trump’s administration is expected, by 2 November, to announce its choice, subject to Senate approval, to succeed Janet Yellen as chair of the Federal Reserve Board in February 2018. The White House has indicated it is weighing up five potential candidates. Not all of them would be a good choice.The first candidate is Yellen herself. Though Yellen is a Democrat originally appointed by President Barack Obama, there is strong precedent for Trump to re-appoint her. Her three predecessors – Ben Bernanke, Alan Greenspan, and Paul Volcker – were each reappointed to second terms by a president of the opposite party from the one who first appointed them, reflecting the value of continuity and predictability in central banking.Related: US GDP growth report released - business live Continue reading...
Applications for individual voluntary arrangements (IVAs) reach highest level since introduction in 1987British households are increasingly struggling with problem debts, according to alarming official figures, in the starkest indication yet of the UK slipping into the red.Government statistics for England and Wales show applications for individual voluntary arrangements (IVAs) – a means of managing personal debt – reached their highest level since they were introduced in 1987.The spike in their usage comes amid a 10.6% increase in wider insolvencies since the end of June. Continue reading...
Halifax survey sounds new warning over health of UK economy with 1 in 5 thinking prices will drop amid rising inflation and looming interest rate hikeConfidence in the UK housing market has slipped to its lowest level in five years, sounding renewed warnings over the health of the economy.One in five British adults surveyed by the Halifax bank expect house prices will fall in the next year, in the weakest reading for consumer expectations since October 2012. Young people under the age of 25 and those living in London are found to be least optimistic.Related: Help to buy has mostly helped housebuilders boost profits Continue reading...
The newly emboldened Chinese leader will exploit US isolationism, giving America its first serious challenge since the collapse of the Soviet UnionIt was a symbolic moment. High in the Swiss Alps, before an audience of the super-rich gathered for their annual shindig in Davos, China’s Xi Jinping delivered a powerful defence of globalisation. Protectionism, he said, was like locking yourself in a dark room. “While wind and rain may be kept outside, that dark room will also block light and air.â€On that January day nine months ago, the target for Xi’s comments was more than 4,000 miles away on the other side of the Atlantic, preparing for his inauguration as president a couple of days later. The message was simple: if Donald Trump is going to turn his back on the world, China will fill the vacuum.The US has its weaknesses too, and Trump’s tough guy act should fool nobody. It is unlikely to impress XiRelated: The $900bn question: What is the Belt and Road initiative?Related: We are obsessed with Brexit and Trump: we should be thinking about China | Martin Kettle Continue reading...
Gradual withdrawal of monetary stimulus will see European Central Bank’s bond-buying programme cut from €60bn to €30bn a monthThe European Central Bank (ECB) is to begin weaning the eurozone countries off billions of euros of monetary stimulus, edging back to normality following the recovery from the depths of the sovereign debt crisis nearly a decade ago.The central bank announced on Thursday it would halve its bond-buying programme – used to temper surging debt costs and stimulate lending to households and businesses – from €60bn to €30bn a month starting from January. The ECB pledged a gradual withdrawal of so-called “quantitative easing†to smooth the return to normality without rattling financial markets.Related: ECB asks banks to set aside more cash for bad debt amid €1tn problemRelated: People’s QE risks the Bank of England going bust | Letters Continue reading...
If Jacinda Ardern looks familiar to Britons, she should – she once worked for Tony Blair. Now she must reconcile Labour beliefs with the demands of her disparate backersJacinda Ardern, New Zealand’s new prime minister, has brought Labour back to power after nearly a decade in the wilderness. She became party leader only seven weeks before last month’s general election, and instantly transformed the party’s prospects – only to have the lead she quickly established beaten back in the final days of the campaign by a brutal National party attack on her tax policies. In the end, Labour won 37% of the vote, National 44%, but it was Ms Ardern rather than the National leader Bill English who managed to construct a governing coalition that stretches from the populist New Zealand First party to the Greens, who, for the promise of a climate change commission and more money for the environment, are committed to a confidence-and-supply arrangement – supporting Labour budgets and backing it on confidence motions. Now she has been sworn in, the country’s youngest prime minister in 150 years and its third female leader since 1997.Labour campaigned to reduce child poverty, build more affordable homes, make university free and every river swimmable: so far, so Labour. But she also committed to slow the rate of immigration from 50,000 to 30,000 a year and ensure that employers looked for New Zealand workers before they brought in migrants – even though employment rates are high, and unemployment low and forecast to stay that way. Her first move in power was equally populist: she announced plans to ban foreigners from buying existing homes: New Zealand real estate has become a priority item on the global super-rich’s shopping list, not only for buyers from China and the rest of Asia but for Americans looking for investments secure from the consequences of a Trump presidency – what the New Yorker called Doomsday prep. The discovery that the PayPal founder and Trump supporter Peter Thiel had been given New Zealand citizenship and then bought a £4.5m property on the ultra-desirable Lake Wanaka provoked a media storm, but although Auckland house prices have rocketed to an average price of over NZ$1m, it is not obvious that banning foreign buyers will do much to free up housing for New Zealanders at the affordable end of the market. Continue reading...
IFS analysis of HMRC self-assessment data shows 1 in 3 returns under-report tax owed either in error or on purpose rising to 2 in 3 self-employedBed and breakfast owners and taxi drivers are the British workers most likely to underpay their taxes when filing self-assessments, a new analysis shows.More than half of taxpayers in the construction, hospitality, and transport industries are found to under-report their income to HM Revenue and Customs, according to a study of official figures by the Institute for Fiscal Studies (IFS). Continue reading...
by Zoe Wood, Phillip Inman and Sarah Butler on (#364E6)
CBI survey shows sales dropping at fastest rate since 2009 recession, with consumers cutting back and inflation eroding spending powerHigh street sales are falling at their fastest rate since the height of the recession in 2009 as struggling households put the brakes on spending, according to a survey that is a grim omen for struggling retailers this Christmas.The CBI’s closely watched survey recorded a “steep drop†in retail sales in October. The slump sent shockwaves through the high street, with the CBI’s chief economist, Rain Newton-Smith, warning of a “softening†of demand as inflation ate into Britons’ spending power. Department stores and specialist food and drink outlets bore the brunt of the spending slowdown.Related: Business Today: sign up for a morning shot of financial newsInflation is when prices rise. Deflation is the opposite – price decreases over time – but inflation is far more common.Related: Paddington Bear to front M&S Christmas advertising campaign Continue reading...
To manage public expectations over rising interest rates, the banks should take a leaf from Donald Trump’s book and speak – and tweet – in simple termsAs global economic growth gathers pace, with the International Monetary Fund reporting that all of the G20 countries are now in an expansion phase, we are at last entering a process of normalisation of interest rates and monetary policy. That shift has been a long time coming, and in 2008 few would have forecast that the impact of the financial crisis that erupted that year would be so durable.It is fair to say that policy normalisation is proceeding at different speeds in different places. The US Federal Reserve is furthest ahead, having already lifted rates twice, while in the eurozone and Japan, normalisation is more anticipated than experienced. But the general direction of change is clear.Related: Britain's ready for interest rate rise, says Lloyds boss Continue reading...
Services sector drives faster-than-expected expansion of economy in the third quarter, but uncertainty over Brexit deal still affecting long-term outlookBritish consumers have been put on notice for an interest rate rise next week, as official figures show the economy expanding faster than expected in the three months to September.GDP grew by 0.4% in the third quarter of 2017 following expansion of 0.3% in the three months to June, according to the Office for National Statistics. City economists had forecast growth of 0.3%.
António Horta-Osório may have tried to calm concerns over Brexit, but others will be less confidentLet’s hope António Horta-Osório is right. The chief executive of Lloyds Banking Group makes the immediate outlook for the UK seem, if not rosy, then at least steady. The economy is “resilientâ€. Borrowers can cope with a quarter-point rise in interest rates to 0.5%. And we shouldn’t get too excited about the increase in consumer debt because levels are still 25% below those of a decade ago.These are all fair points, and Lloyds’ third-quarter results illustrated the theme of resilience. The bank’s percentage of impaired loans continues to run at historically low levels, despite a hit from an unnamed and mysterious “single large corporateâ€. Impairment charges over the nine months rose 20% to £538m but the loan book itself is larger after the purchase of the MBNA credit card business. Continue reading...
One piece of data means little. In truth, prospects for other developed economies look set to improve while the UK’s outlook continues to darkenThe best one-word description of today’s GDP figures is “contestedâ€. Brexiteers have seized on the fact that the economy grew by 0.4% in the last quarter, marginally ahead of the expected 0.3%, as further evidence that the warnings about leaving the EU were simply part of “project fearâ€. Meanwhile, pro-remain voices have been quick to retort that 0.4% is a still a very low number and that the annual growth rate of the economy has slipped to just 1.5% in the latest release, against 1.9% in the last quarter before the referendum. The messy politics of low, but not actually disastrously low, growth feel familiar to anyone who watched the UK economic debate in 2011 and 2012.At risk of being called a spoilsport, it’s never worth investing too much time in arguing about or overanalysing one piece of economic data – especially when it is the first of three estimates and due to be revised in a few weeks’ time in any case. Whatever the final number ends up as, the bigger picture is looking increasingly clear. The UK economy has slowed considerably over the past decade. In the years before the financial crisis we became accustomed to quarterly growth of about 0.7% and yet today some people are arguing that 0.4% is a “good resultâ€.Related: UK GDP: Britain's economy grew by 0.4% as Brexit slowdown continues - business liveWith the UK population sitting on £1,630.1bn of debt it’s easy to see how interest-rate hikes could cause problems Continue reading...
Post-crash, the UK’s economic growth has not recovered. New fiscal freedoms for the regions are among the bold measures that could rescue itThe news that our recovery is now slower than after the Great Depression should sound the death knell of an economic model that simply isn’t working.The figures are salutary. When Wall Street sneezed in 1929, the UK very quickly caught the cold. By 1932, the economy had shrunk by more than 5%. Unemployment spiralled to an extraordinary 17%, setting the stage for turbulent politics fuelled by the rise of both the British Communist party, which elected its first MP in 1935, and Oswald Mosley’s British Union of Fascists.After almost a decade of low growth and despite almost full employment, output is refusing to bounce back to old normsRelated: UK GDP: Britain's economy grew by 0.4% as Brexit slowdown continues - business live Continue reading...
UK’s biggest mortgage lender says borrowers can withstand a gradual rate rise as the economy remains resilientBritain’s borrowers can withstand the impact of the first rise in interest rates in a decade, the chief executive of Lloyds Banking Group said on Wednesday.António Horta-Osório believes any increase from the current record low of 0.25% would be gradual and said the bank – the biggest mortgage lender and savings institution in the UK – did not expect rates to reach 1% until 2019.Related: First UK interest rate rise in a decade still likely despite modest growth Continue reading...