Deputy prime minister fears piracy of protected foods such as Parmigiano-ReggianoItaly will not ratify the EU’s free trade agreement with Canada, the Italian deputy prime minister has said, potentially scuppering the bloc’s biggest deal in years.
As with Brexit, the economic effects of uncertainty over tariffs will take time to appearDonald Trump’s phony, blowhard’s trade war just got real.The steel and aluminium tariffs that the Trump administration imposed at the beginning of June were important mainly for their symbolic value, not for their real economic impact. While the tariffs signified that the US was no longer playing by the rules of the world trading system, they targeted just $45bn of imports, less than 0.25% of GDP in an $18.5tn US economy.Related: Will Trump's tariff war alter the balance of economic power? | Mohamed El-Erian Continue reading...
Number of people starting an apprenticeship fell by 34% in first three terms of 2017-18The government has come under pressure to revamp its apprenticeship scheme after figures showed the number of training places slumped by a third over the last nine months.In the first three terms of the 2017-18 academic year, the number of people starting an apprenticeship fell to 290,500, a 34% reduction on the 440,300 during the same nine-month period in the previous year. It is also nearly 25% down on the 384,500 apprenticeships started in the equivalent period in 2015-16.Related: It’s not wage rises that are a problem for the economy – it’s the lack of them | Thomas Frank Continue reading...
‘No winners, only casualties’ if US imposes further tariffs, European commission warnsThe European commission has cut its growth forecasts for the UK and Europe this year, blaming the threat of a trade war with the US, which it warned would produce “no winners, only casualtiesâ€.Britain will slump to the bottom of the EU league table for growth in 2018, the commission said, as it is “particularly exposed†to an escalation of trade tensions and while Brexit uncertainty persists.Related: EC cuts growth forecasts as trade war looms; US inflation hits six year high - as it happened Continue reading...
Furniture retailers buck a trend that boosted sales for many high street outletsBritain’s heatwave has hit sales at the homeware retailers DFS Furniture and Dunelm, compounding difficult conditions on the high street and forcing both companies to warn profits this year would be below expectations.Shares in DFS tumbled 10% in early trading after it blamed the long hot spell for a big fall in orders and told the City that earnings in the current financial year would be lower than in 2017 – its second profit warning in just over a year. Dunelm cut its forecast further after issuing a profit warning in May. Continue reading...
OECD says UK’s lack of investment since 2008 is drag on economic growthThe Organisation for Economic Cooperation and Development (OECD) has urged the British government to dramatically increase public spending on rail, green energy and digital infrastructure to support the economy’s long-term future, saying that ministers could treble their investment over the longer term.The Paris-based thinktank, which has 34 of the richest countries as members, said the UK’s lack of public investment since the financial crash in 2008 was a drag on economic growth.Related: Warm weather and royal wedding help UK return to GDP growth Continue reading...
Business chiefs moan about vacant jobs going unfilled and how it threatens the economy – so why don’t they just pay more?In recent weeks media outlets in the US have been fretting over what would ordinarily be considered good news – the roaring American economy, which has brought low unemployment and, in some places, a labour shortage. Owners and managers have complained about their problems in finding people to fill low-wage positions. “Nobody wants to do manual labour any more,†as one trade association grandee told the Baltimore Sun, and so the manual labour simply goes undone.Company bosses talk about the things they have done to fix the situation: the ads they’ve published; the guest-worker visas for which they’ve applied; how they are going into schools to encourage kids to learn construction skills or to drive trucks. The Wall Street Journal reports on the amazing perks that plumbing companies are now offering new hires: quiet rooms, jetski trips, pottery classes, free breakfast, free beer.Related: Pay rises faster for top 1% of earners in developed world – reportAll the free beer in the world can’t drown out what’s comingRelated: Don’t wait for worried workers to call the shots on wages Continue reading...
Despite UK ‘turmoil’, sterling has never been more stable against the euroThe UK is, President Trump kindly informs us, in turmoil. In Westminster, there is feverish talk of a leadership challenge. The economy is in a state of peak Brexit uncertainty. The trade deficit has worsened yet again. An increasingly bitter trade war is battering Britain’s FTSE-quoted commodity giants.In the past, sterling, as the barometer of the nation’s international standing, would have collapsed in value in such a crisis. Yet for the last year the pound-euro rate has never been more stable. Continue reading...
by Phillip Inman and Lily Kuo in Beijing on (#3TQ2F)
Beijing vows countermeasures if Trump administration acts on latest threat of tariffsGlobal investors have been rattled after a threat by the Trump administration to impose 10% duties on $200bn (£151bn) of imports prompted protests from Beijing and brought an all-out trade war a step closer.
Donald Trump’s latest round of import restrictions affect a wide range of items including human hair and lithographsThe latest round of US tariffs imposed on $200bn (£151bn) of Chinese imports by Donald Trump will affect 6,000 more products, including everyday consumer goods such as deodorants, shampoo and food.
Bank of England says England win can help Britain recover from Brexit-induced slowdownEngland’s World Cup success combined with the heatwave is helping the UK economy recover from the slowdown triggered by the Brexit vote and heavy snowfall earlier this year, according to economists.
by Richard Partington Economics correspondent on (#3TKXC)
Shoppers returned to high street in May but factory output continued to shrinkThe start of the summer heatwave has helped the British economy recover ground after grinding to a halt earlier this year, despite a severe downturn for the manufacturing industry in the three months to May.
Cuts and closures underline the flaws of a system dominated by Westminster’s power. From health to schools to housing, we need an urgent rethink‘We cannot survive as we are beyond this next financial year. There is no money. I am not crying wolf. I never cry wolf.†So says the Conservative leader of Torbay council, in Devon: a local authority that delivers the full range of services but can no longer function at even the most basic level.After years of bone-crunching austerity, by 2020 it will be faced with another £12m of cuts – so the most obvious option is to downgrade itself to a district council, hand over its most essential work to the bigger Devon county council, and hope for the best. Whether this will improve anything is an interesting question: since 2010, in real terms, Devon’s funding from government has been cut by 76%.Related: How can we protect our libraries from closure when the council ignores us?Related: Council cuts are putting the vulnerable at risk, Tory peer says Continue reading...
While it has sizeable risks, the US battle with China could open the door to a new eraThe latest round of tit-for-tat tariffs by the United States and China has intensified the global debate about whether the world is facing a mere trade skirmish or heading rapidly toward a full-blown trade war. But what is really at stake may be even more fundamental. Either accidentally or by design, Donald Trump’s administration may have paved the way for a “Reagan moment†for the international trade regime.In the 1980s, Ronald Reagan initiated a military spending race with the Soviet Union that ended up altering the global balance of power in ways that affected many countries worldwide. Today, Trump has launched a tariff race with China, an economic superpower, perhaps with similarly far-reaching potential consequences. Like under Reagan, the US is better placed to win the current competition with China – but the risks are sizeable.Related: Trump’s trade war: what is it and which products are affected?The Trump administration will need to avoid actually pushing other countries (especially China) too hard too soonRelated: Why America’s cheese capital is at the center of Trump’s trade war Continue reading...
Philips CEO says cost of exported products could increase if UK leaves single customs unionThe Dutch electronics firm Philips has warned it may shift production out of Britain in the event of a “hard†Brexit, saying it was “deeply concerned about competitiveness†of its operations there.The Amsterdam-based group employs about 1,500 people in Britain, most notably at its factory at Glemsford in Suffolk making baby care products for export. Continue reading...
by Richard Partington Economics correspondent on (#3TGBE)
New model from ONS should improve the economic growth picture for policymakersBritain will this week become one of the first major developed economies in the world to publish economic growth figures on a monthly basis.Starting from Tuesday, the Office for National Statistics will produce estimates for the monthly growth in gross domestic product (GDP) alongside a range of other statistical indicators for the health of the British economy.
Bank of England – set for August rise – has been consistently wrong about labour marketThe message from the Bank of England has been clear: get ready for an August increase in interest rates. Modestly higher official borrowing costs are needed to prevent the economy from overheating.This, of course, is exactly what Threadneedle Street was saying three months ago. Back then it had convinced the City that a May rate increase was pretty much a done deal but then got cold feet as weak economic data from the first three months of 2018 poured in.Related: Bank of England expert: World Cup feelgood factor backs case for rate rise“It is our contention that the natural rate of unemployment in most advanced countries is well below 4% and perhaps even below 3%.Employment rates and participation rates can rise, and unemployment rates can fall and by a lot. Globalisation has weakened workers’ bargaining power. Migrant flows may have put downward pressure on wages and greased the wheels of the labour market as their presence increased mobility. The decline in the home ownership, which slows job creation and increases unemployment, has helped mobility and lowered the natural rate.†Continue reading...
The retired are having a great time at the expense of young families thanks to generous pensions and property wealthThe intergenerational argument has vanished – buried beneath the Brexit talks and the traditional fixation with class inequality. The fear that millennials, whatever their class, are going to have a tougher time than their forebears appears to have had the life squashed out of it.A two-year investigation by the Intergenerational Commission, a group sponsored by the Resolution Foundation thinktank, has found that what it calls the “contract between the generations†is at breaking point. It warns that society risks dumping a disproportionate amount of the costs of an ageing population on their shoulders. It’s been going on for some time and now the situation is acute.Their disposable income is beyond what many working families could ever achieve through higher wages or even promotionsRelated: Radical ideas for rebalancing Britain's baby boomers and millennials Continue reading...
by Caleb Gayle in Kansas City, Missouri on (#3TF61)
As Trump highlights declining jobless figures, Kansas City offers a window into how the recovery has passed many African Americans byKansas City is booming. Employers and investors have poured into the midwestern city since the recession. At least $1bn has gone into its sparkling new downtown, revitalized arts district and shiny new condos. So why is Sly James, its highly regarded outgoing mayor, so unhappy?James, who steps down in July 2019, is leaving office with a sense of disappointment that despite Kansas City’s obvious accomplishments, the city’s recovery has left one large section of society behind: African Americans.Stock Market up almost 40% since the Election, with 7 Trillion Dollars of U.S. value built throughout the economy. Lowest unemployment rate in many decades, with Black & Hispanic unemployment lowest in History, and Female unemployment lowest in 21 years. Highest confidence ever!Related: 'Predatory police': the high price of driving while black in Missouri Continue reading...
Rate of growth continues to lag behind levels achieved before the 2008 financial crisisBritain’s dismal track record on improving worker productivity since the financial crisis continued in the first three months of the year, amid mounting concern Brexit will further damage the efficiency growth required for boosting wages.Economic output per hour of work dropped in the UK by 0.4% in the first quarter after a rise of 0.6% in the final quarter of 2017, according to the latest snapshot from the Office for National Statistics.Related: Back pay worth £1.44m owed to thousands of UK workers, official figures showRelated: Solihull's Land Rover workers react to boss's Brexit warning Continue reading...
The disaster unfolds. Meanwhile the Tories continue to gut what remains of the state, from child protection to social careIn a cruel (but nevertheless accurate) analogy, Brexit is sometimes referred to as the political equivalent of setting your own house on fire. While David Cameron’s gamble lit the match, Theresa May and her ministers have fanned the flames, lurching between the growing risk of a no-deal Brexit and warnings that even an optimistic deal will probably put at risk the NHS, trillions of pounds worth of contracts and tens of thousands of jobs.But increasingly, I can’t help but think there’s a missing part to this analogy. It isn’t only that Brexit means ministers are about to set the house on fire but that it’s distracting from the fact that the rest of the street is already alight.Related: Universal credit puts ‘welfare savings’ before human beings' lives | Frances RyanRelated: Carers don't need to be paid compliments – they just need to be paid | Frances Ryan Continue reading...
Activists want action on an overpaid chief exec, while loyalists plead for more timeThe scrap at Premier Foods, owner of Mr Kipling cakes, Angel Delight and Bisto gravy, is turning into a mini classic. On one side, there is an angry Hong Kong hedge fund, Oasis, that wants to oust Premier’s chief executive; it calls Gavin Darby overpaid and accuses him of overseeing five years of failure at a “zombie-like†company.On the other side, the board argues there are no quick fixes and has rolled out two retailing lords to heap praise on Darby. Lord MacLaurin, who established Tesco as a force in the land in the 1980s and 1990s, called his achievements “hugely impressiveâ€. Lord Price, who was in charge of Waitrose for a decade, said the activist risks “destroying significant value, rather than creating it†if it succeeds. Continue reading...
Bank of England more likely to increase interest rates as inflationary pressures riseThe UK economy has bounced back from a soft patch in the opening months of 2018, according to a closely watched survey of the services sector that showed stronger than expected activity last month.In the latest sign that bad weather held back the economy during the first quarter, the health check by the Chartered Institute for Procurement and Supply and IHS Markit reported the strongest growth in eight months.Related: UK economy picks up speed as service sector growth hits eight-month high - business live Continue reading...
Both sides made 6 July tariff threat but 12-hour time difference gives Chinese edgeChina has denied it will fire the opening salvo in an escalating trade dispute with the US, insisting that it would not bring in 25% tariffs on $34bn (£26bn) of American goods before a move from Washington.Both sides have threatened to impose similarly sized tariffs on 6 July, but because of the 12-hour time difference, it was thought the Chinese tariffs on US imports ranging from soybean to stainless steel pipes could take effect earlier. Continue reading...
OECD says wage growth is still ‘missing in action’ across 35 nations it representsPay is rising much faster for the top 1% of earners compared with those on average salaries in the richest countries, according to a report calling on governments to do more to tackle “wageless growth†since the financial crisis.Despite more people being in work than at any time since the onset of the banking crisis a decade ago, the Organisation for Economic Co-operation and Development said wage growth was still “missing in action†across the 35 countries represented by the Paris-based group of wealthy nations.
Report predicts number of empty shops could rise to 100,000 within a decadeThe crisis on UK high streets could leave 100,000 shops empty within a decade, according to an independent review that argues struggling retailers should no longer be relied upon to prop up ailing town centres.The Grimsey Review 2 makes a series of recommendations including an overhaul of the business rates system and a ban on out-of-town developments. It predicts nearly 70,000 high street jobs will disappear this year. Continue reading...
Building rebound added to latest GDP results will increase pressure to raise interest ratesBritain’s construction industry staged a stronger than expected recovery in June, overcoming the worst of a slowdown this year and helping edge the Bank of England closer towards raising interest rates.After suffering during the heavy snow earlier this year, when diggers and cranes were forced to fall idle across the country, bright sunshine and warmer weather over the past month helped builders back to work.
BCC tells government to stop ‘squabbling’ as PBSC says it needs assurances on travelBritish businesses have issued Theresa May with a list of Brexit demands after warning firms are losing patience over the lack of progress in talks with the EU.A group of Britain’s leading professional and business services firms has written to the prime minister with a list of requirements they say are essential to preserve the £188bn industry with its 4.6m jobs and “keep the wheels of the British economy turningâ€.Related: Tory differences over UK's post-Brexit future spill into the open Continue reading...
Thinktank says rising cost of transport, childcare and energy is hitting low-income familiesLow-income families need their disposable income to rise by nearly a third in order to meet rising transport, childcare and energy costs, according to a report. Continue reading...
by Patrick Butler Social policy editor on (#3T7JM)
LGA chief says austerity could damage local authorities ‘beyond recognition’Local authorities have reached the point where relentless financial cutbacks are putting the wellbeing of vulnerable adults and children at risk, the Conservative leader of the Local Government Association (LGA) has warned.The Tory peer Lord Porter said that after eight years of austerity during which £16bn has been stripped from municipal budgets in England, councils risked being “damaged beyond recognition†and communities depleted of vital services.Related: Bus services in 'crisis' as councils cut funding, campaigners warn Continue reading...
by Edward Helmore in New York and agencies on (#3T7JP)
President says US is very close to making ‘fair trade deals’ as big banks voice warn of threats to economic growthDonald Trump has defended his controversial positions on tariffs and trade, even as global markets were buffeted by a disappointing start to the second half of the year.At a meeting with the prime minister of the Netherlands, Mark Rutte, in the Oval Office on Monday, the president mused that the World Trade Organization had mistreated the US: “I hope they change their ways. They have been treating us very badly for many, many years and that’s why we were at a big disadvantage with the WTO.Related: Trump's EU trade war costing manufacturers in US and eurozoneRelated: EU says Trump car tariffs 'will put a tax on the US people' Continue reading...
by Pippa Crerar Deputy political editor on (#3T7BZ)
Exclusive: Ministers also considering end to cap on alcohol taxes to boost public spending and cut deficitThe government is close to lifting its eight-year long freeze on fuel duty to raise billions of pounds to help meet pressure from cabinet ministers to boost public spending while also continuing to reduce the deficit.
Tariffs are slowing productivity and driving up costs, new figures showDonald Trump’s trade tariffs are driving up costs for US manufacturers and exacerbating a slowdown for eurozone factories, new figures showed on Monday, as the EU and the US edge closer towards a full-scale trade war with potentially damaging consequences for the global economy.According to the latest survey of American factories by IHS Markit – closely watched for any early warning signals for the world’s largest economy – the president’s tariffs added to the cost of raw materials and components in June. It also contributed to the lengthiest delays for supplies reaching factory production lines since the poll was started in 2007.Related: Tariff fears drag markets down as EU and Trump trade blows – business live Continue reading...
All the day’s economic and financial news, as US president says Europe is “possibly as bad as Chinaâ€, and EU threatens tariffs on more American goods
European commission hits back at president, threatening tariffs on $300bn of US goodsDonald Trump will put a “tax on the American people†if he goes ahead with a threat to hit European carmakers with punitive tariffs, the European Union has warned.
PM expected to ask ministers to choose between Norway-style partnership and Canada-style trade dealDowning Street has produced a third possible model for the UK’s post-Brexit customs arrangements, which will be among issues discussed by the cabinet at a crunch meeting at Chequers on Friday.Related: May's cabinet still squabbling as Chequers Brexit meeting looms Continue reading...
The US president need only look as far as Obama’s experiment with tariffs to see the problemThe trade war is getting nastier. Phase one began when Donald Trump whacked duties on imported steel and aluminium, and announced $50bn (£37.8bn) worth of tariffs on Chinese goods. Beijing retaliated dollar for dollar, while the EU targeted Levi’s jeans, bourbon whiskey and Harley-Davidson motorcycles.Harley-Davidson responded by saying it would shift production of motorbikes for the EU market out of the US. A different president might have seen this as a warning of the collateral damage likely to be caused to the US economy from a trade war, but not this one. Continue reading...
The bad news is mounting but Labour are failing to put the future of the country above narrow political interestsWhat did Harold Wilson, James Callaghan and Michael Foot have in common? The answer, obviously, is many things. But my main purpose in bracketing them together today is that they were all leaders of the Labour party who overcame their doubts about UK membership of the European Union and became supporters – in Foot’s case, towards the end of his life, passionately so.I was reminded of this first by the much-reported chant at the pro-EU demonstration in London last weekend (“Where’s Jeremy Corbyn?â€) and secondly when I attended the launch by the Strand group of King’s College London, of the fascinating new book Half In, Half Out (Biteback), about British prime ministers and their attitude to Europe.Related: Where’s Jeremy Corbyn? Lost in a rose-tinted vision of Labour’s past | John Harris Continue reading...
The language of business and finance used to be easy. Now it’s all derivatives, FDI balances and ‘summing to zero’I think it is just as well for the City and the world of high finance that I lost all interest in matters fiscal after completing an A-level in economics.Supply and demand, the multiplier effect, macro and micro economics, bull and bear markets. Basically understood. Fast forward from long ago last century to the present day… bond yields, derivatives, interim permissions, net FDI balances. Nope, not a clue. Continue reading...
Leading lights in northern England’s premier seaside resorts were in a sunny mood last week, but the towns still face deep-rooted social problems, poverty and lack of infrastructureThe sky is cloudless and the tide is high. Seagulls are scavenging, skin is blistering and the sea looks tempting. The trams go rumbling along the front and the air is thick with the authentic smell of the seaside: malt vinegar on chips.On a day like this, Blackpool appears not to have a care in the world. The town grew up as an oasis of fun and still does what it was set up to do in Victorian times. As the ice-cream stalls coin it in, it is hard to believe that Blackpool is usually portrayed as a town without a future, the biggest victim of consumer demand for more exotic destinations.We don't get a lot of help from outside. We have to make our own luck Continue reading...
Surprise as ONS upgrades earlier estimates after improved construction figuresThe UK economy grew at a faster rate than initially thought in the first three months of 2018, raising hopes for a pick-up in growth after the sluggish start to the year.The Office for National Statistics unexpectedly revised higher its third and final estimate for UK growth in the first quarter to 0.2%, after two earlier estimates of 0.1%.Related: Bank of England moves closer to August interest rate rise Continue reading...