Love them or hate them it seems cryptocurrencies and the blockchain are too big to ignoreA few days ago, President Nicolás Maduro of Venezuela announced that his government had launched the petro, a new state-sponsored cryptocurrency. He claimed that $735m (£529m) worth of the new currency had already been sold, though observers are sceptical, unless state entities have been obliged to buy them. Even they will find it hard to do so, however, as the technology platform on which the petro will be traded has not yet been confirmed.Related: Venezuela's new bitcoin: an ingenious plan or worthless cryptocurrency?An initial coin offering (ICO) is when a new cryptocurrency company offers a portion of its tokens for sale all at once to jumpstart trading, raise funds for continued development and earn a return on investment for its founders.Related: Bitcoin: what have experts said about the cryptocurrency? Continue reading...

M&G boss Anne Richards says City attitudes discouraged women from joining the industryAn alpha male culture prevalent in City firms was a catalyst for the 2008 financial crisis and discouraged women from joining the industry in the aftermath, MPs have been told.It is also one of the reasons why the sector has so few women in top jobs today, because of a lack of candidates rising from the middle ranks, the Treasury select committee heard on Tuesday. Continue reading...

Studying statistics is not the only way to spot signs of a downturn. Here are a few of the more unlikely economic indicatorsIn the search for how to predict the next recession, – sadly, you just know another one will be along sooner or later – economists are willing to look well beyond the traditional statistics.Researchers at the National Bureau of Economic Research think they might have found a new way to spot recessions early, based on a long-running truism that birthrates fall during recessions. They have gone one step earlier and looked at conception rates instead, and found these drop several months before any other signs of a recession – meaning we might have a new way to see them coming. However, as a sign no indicator is perfect, the US conception rate appeared to drop sharply late in 2014, with no corresponding recession having followed – yet. Continue reading...

New office comprised mostly of staff who worked for Royal Bank of Scotland’s ‘disgraceful’ GRGThree-quarters of the staff and nearly all the senior managers at Royal Bank of Scotland’s new division, which supports struggling businesses, previously worked at its controversial Global Restructuring Group, which has been accused of pushing firms into bankruptcy.The Treasury select committee, which last week published a full report into the GRG scandal, said 136 of 182 employees at the current restructuring business and 30 out of 32 senior managers came from GRG.Related: The Guardian view on Labour and banks: not casino capitalism | Editorial Continue reading...

All the day’s economic and financial news, including the latest UK mortgage approvals data

Valdis Dombrovskis calls for global response to rise of cryptocurrencies at industry roundtableThe European Union has warned that it will regulate cryptocurrencies if the risks exposed by the meteoric rise of bitcoin and its ilk are not addressed.The boom and bust of cryptocurrencies has seen some investors make millions where others have suffered heavy losses. Bitcoin, which now trades at about $9,000 (£8,000) a token but recently dropped to less than $6,000, leads the pack, rising nearly 2,000% to just under $20,000 in 2017, fuelling a global investment craze.Related: Bitcoin is 'noxious poison', says Warren Buffett's investment chief Continue reading...

Thinktank warns that older workers are not bearing their share of the pensions burden

A Bank of England rate change would add £10bn to UK mortgage bill, Savills saysA 1% rise in interest rates would add around £10bn to the UK’s mortgage bill, according to analysis from estate agent Savills.The increase would equate to adding £930 a year to the cost of servicing the average mortgage. Borrowers on variable rate deals influenced by movements in the Bank of England base rate would be the first to feel the pain, putting the annual mortgage bill up by £4.3bn immediately, Savills said. Continue reading...

200m £10 notes are still in circulation with £1bn likely to miss 1 March deadline, says Bank of England

How do we balance selfishness and community? A Christian tradition of ethical reasoning offers a helpful perspectiveThe belief that we are naturally and fundamentally selfish, from our genes upwards, may be the most powerful of all the acids eating at the foundations of the welfare state and of the wider postwar liberal order. It gains its power from the fact that it is half true. It gains its danger from being half a lie. Everyone but the most miserable knows from personal experience that people are full of goodness as well as of its opposite. We are fairly generous, unselfish, even sometimes thoughtful and trusting in our private lives, most of the time. Public life, however, is increasingly conducted as if universal selfishness defined human nature, and politics must be a zero-sum game. In countries where the economy is stagnating, as Britain’s has been for the past 10 years, this is horribly credible. Each pound in lower taxes for the rich is taken from health or education for the poor; security for the old (if they’re lucky) is funded by vastly inflated house prices and insecurity for the young. The interests of immigrants are set against those of the indigenous population. The interests of Britain are set against those of the EU.None of these oppositions are inevitable. Groups need not be selfish any more than individual people have to be. What most of all makes them so is mistrust. One of the motors of distrust and meanness in ourselves is the belief that others are cheating. The belief that the others are in it only for themselves is at the root of almost all assaults on the welfare state, and even on the ideology of welfare. It contributes to the gleeful trashing of the reputation of charities. Acts of breathtaking selfishness like the Republican tax cut – which has just awarded $29bn to the profits of one firm alone, Berkshire Hathaway, controlled by one of the world’s richest men, Warren Buffett, at the expense of healthcare and even food for millions of poor Americans – are justified and made politically possible by the belief that the poor are endlessly grasping and can never be given enough: so why not give them nothing. Continue reading...

The prospective damage to the health service from leaving the EU is severe. How can the party of Attlee contemplate it?Many years ago, I was outside the studio of the BBC’s Today programme waiting my turn to be interviewed about the latest sterling crisis. Alongside me were two gentlemen of a certain age who were keeping themselves to themselves and looked as though they would not hurt a fly. When my turn came, I said to the studio assistant: “As a matter of interest, who were those two gentlemen outside?” “Oh, them? They are the Militant Tendency.”For younger readers, the Militant Tendency were an extreme leftwing group who came very close to capturing the Labour party. Not all of them were as harmless-looking as those two, and it is to the eternal credit of Neil Kinnock and Roy Hattersley that they fought them off. Continue reading...

Boss of taxpayer-owned bank hails profit as ‘symbolic moment’ despite looming litigationRoyal Bank of Scotland has posted its first annual profit in a decade, but admitted it is braced for a multibillion-pound hit from US regulators.The bank, which is still 71%-owned by the government, made a profit of £752m in 2017, following a £7bn loss in 2016. Its chief executive, Ross McEwan, declared it a symbolic moment and an indication RBS had moved on. The bank, however, would still have been in the red if a long-anticipated fine from the US Department of Justice (DoJ) had arrived during the financial year.Royal Bank of Scotland has made its first annual profit in a decade. Does this mean it is in good financial health? Continue reading...

Two former members of Bank of England’s interest rate-setting committee discuss the outlook consumers are squeezed by inflation• The economy is starting to deteriorate

UK growth during 2017 has been revised down to 1.7%.

Each month we look at key indicators to see what effect the Brexit process has on growth, prosperity and trade in the UK• The economy is starting to deteriorate

Cracks are starting to appear in UK economic resilience, with unemployment rising and growth slowing

G7 rivals outpace UK as consumers rein in spending amid Brexit-fuelled price inflationBritain’s economy grew at a slower rate than first thought in the final three months of 2017, leaving the UK lagging further behind other major economies as it prepares to leave the EU.The Office for National Statistics revised down its estimate for UK growth in the fourth quarter to 0.4%, following an earlier estimate of 0.5% and missing economists’ forecasts that the rate would be unchanged.Gross domestic product (GDP) is a key government statistic and provides a measure of the UK's total economic activity.Inflation is when prices rise. Deflation is the opposite – price decreases over time – but inflation is far more common. Continue reading...

The amount of the smog allowance should vary according to the city’s air quality – compensating workers and their families for living in a polluted environment while incentivising municipalities to clean up their acts

‘Three basket approach’ would breach agreement to prevent cherry-picking, says BrusselsThe EU has ruled out the UK government’s preferred approach to a future trade deal, describing it as a risk to the European project, just as Theresa May is seeking to strike an agreement on the way forward within her cabinet.

Centrica profit falls nearly 20% as it expands cost-cutting drive to save extra £500m a yearCentrica, the owner of British Gas, will shed a further 4,000 jobs by 2020 as part of a cost-cutting programme, which it blamed on the government’s energy price cap and fierce competition in the market.Britain’s largest energy company reported on Thursday a fall of 17% in operating profit to £1.25bn in 2017, owing to poor performance in its business energy supply and North America divisions. Continue reading...

Scrutiny is needed to examine risks for investors, says Treasury committee chair Nicky MorganA powerful committee of MPs is launching an inquiry into bitcoin and other digital currencies over fears that cryptocurrencies could lead to increased “market volatility, money laundering and cybercrime”.

While employment prospects are good, wages and other areas of the economy aren’t expected to grow at the rate the treasury hopesThe latest review of Australia’s economy by the International Monetary Fund has a much less rosy outlook for the next few years than does the government’s budget papers. And in light of the latest release of wages price data showing continued weak wages growth, the IMF crucially predicts much lower wages growth than does the budget – a factor which creates a major risk to the government’s hopes for a return to surplus by 2021.Related: Economy returning to normal? It can only be the 'new normal' | Greg JerichoRelated: Whoever wins the argument over wages growth will likely win the next election | Greg Jericho Continue reading...

Mark Carney has told MPs that household incomes will be 5% lower because of Brexit, as he clashes with his own chief economist about the merits of devaluation

Official figures reveal 1.47 million out of work as young people struggle to find jobsThe prospect of an interest rate rise before the summer has receded after the number of people out of work in Britain rose at the fastest rate in almost five years.Fuelled by an increase in unemployment among young people under the age of 24, the number of jobless rose by 46,000 to stand at 1.47 million in the three months to December, according to the Office for National Statistics. Continue reading...

Christopher Rainger thinks Keir Starmer should say ‘No Brexit’ is the best ‘Jobs Brexit’. But John Doherty recalls David Cameron’s pledge that the referendum would be final. And Peter McKenna says that if anyone led the Brexit charge it was Tony BennWhat a game-changer it will be when Keir Starmer gets up in the Commons and announces that Labour has decided that the best “Jobs Brexit” is “No Brexit”. Recent polling (Labour will win the next election if it becomes the party of remain, theguardian.com, 18 February) shows the majority of Labour members oppose Brexit and the majority of Labour voters do too.Numerous independent and government reports have said that the effect on jobs and the economy from all Brexit options will be bad, with fruit growers already moving from Hereford to China. So, to change Labour’s stance from a hard-to-explain “Jobs Brexit” to an easily defendable “No Brexit” will be changing the policy as the facts change, with no loss of face. Brexit was mis-sold to the public and only Labour can halt Britain’s descent into chaos. It must join with other progressive parties across Europe and fight for Britain to remain and reform the EU. It’s also the only way Labour can win the election that must follow the collapse of talks or Theresa May’s fall from power.

Resolution Foundation says young Britons have suffered biggest reversal in fortunes save for young GreeksBritain’s millennial generation, born since 1981, have suffered a bigger reversal in financial fortunes than their counterparts in most other developed countries except Greece, according to a study.The report by the Resolution Foundation paints a gloomy picture for all young adults across the developed world – apart from the Nordic countries. It highlights how incomes are depressed, jobs scarce and home ownership is slumping for the millennial generation compared with the baby boomers that preceded them.Although precise definitions differ, broadly speaking millennials are those people born between the early 1980s and the late 1990s. They are so called because they turned 18 in or after 2000. They are also collectively known as Generation Y Continue reading...

Focus groups make us feel our views matter – but no one with power cares what we think

These radical places across the UK that encourage the spirit of inquiry are in danger of being taken for granted and need protectingLast Sunday afternoon was the classic start to February half-term: the rain was sheeting down outside, and we’d already played every game in the cupboard and watched too much TV. My sons, aged five and eight, were beginning to squabble and whine, and I knew from experience that if we didn’t leave the house in the next five minutes things were going to get ugly.Happily, we were visiting relatives in Liverpool – a city with a fine selection of museums, many of them free to enter. Within a few minutes of shoving the boys out of the front door, we were standing in the magnificent lobby of the World Museum, wondering what to do first: explore space? Check out the leaf-cutter ants? Take a trip to ancient Egypt? The place was buzzing with families escaping the rain, and with visitors to the opening weekend of an exhibition of terracotta warriors. By the end of the afternoon we had lifted a meteorite, found out about the eating habits of sea cucumbers (gross), learned about female pharaohs and watched Tim Peake drink water in space.It’s easy to dismiss museums as fusty places that we’ve been dragged around on school tripsRelated: UK museum collecting at risk from lack of funding, report warns Continue reading...

Rightmove reports busiest ever month and optimistic pricing but property is taking longer to sellThe average price of a UK property coming on to the market has risen by more than £2,400 in a month to just over £300,000 amid evidence of “record” levels of house-hunting activity, according to Rightmove.The website, which tracks 90% of the UK property market, said the national average asking price for a home had increased by 0.8% during the past month, following the 0.7% rise it reported in mid-January.

Readers including Caroline Lucas and Ruth Lister respond to Guardian articles by Owen Jones and Gaby HinsliffOwen Jones’s discussion of tax seeks to put forward a “radical” agenda but is actually strikingly conservative, especially because of its focus on higher income tax rates (Tax radicals? McDonnell and Corbyn are not radical enough, 16 February). This focus is unhelpfully constraining for two reasons.First, income tax now matters much less than it used to – it has fallen from over half of total UK revenue in the 1970s to about 30% today. There have been compensating rises in VAT and national insurance contributions, and the second of these especially is ripe for radical reform. Second, within income tax, the focus on the rates is far too narrow. How much tax is paid is hugely affected by the tax base, and the allowances given. The most indefensible of these is the allowance for pension contributions at the higher rates, a huge bonus for the better-off. George Osborne seemed to be shaping up to do something about these, but then bottled it. Continue reading...

With woeful productivity in parts, local authorities should decide how to spend the cash that replaces EU fundsThroughout the 1980s, a war raged between Westminster and the rest of the country that has had lasting effects. Fearing councils under the control of Michael Foot’s Labour opposition, Margaret Thatcher stripped power from town halls in a sweeping political land grab that still marks Britain today.London’s economy during the 1970s and much of the 1980s had more in common with the rest of the country than today. It even grew at a slower pace than many other regions, but the big bang deregulation of financial services in 1986 under Nigel Lawson, then chancellor, helped London’s economy to boom — aided by fat profits from investment banks in the City. At the same time, the north’s industrial base came under attack from Thatcher’s reforms, since when manufacturing as a share of national income has fallen from a quarter to just over 10%. Continue reading...

Geographical inequalities are the result of historical legacies and a fractured economyPlace has always been destiny in Britain, but never more so than in 2018. Pity the child born in Weymouth, Corby or Carlisle, locked into poor schools, a lacklustre economy and few decent jobs; if he or she had been lucky enough to be born in Tower Hamlets, Hackney or Westminster, their life chances might have been transformed. Where you are born in Britain, and England in particular, is becoming ever more a treacherous geographical lottery.Nor is the divide any more just the well-known one between north and south. So relatively strong are the performances of Bristol and Manchester, with Liverpool hard on their heels, that overlaid on the old north-south split is the beginnings of a new one – an east-west divide. Parts of the north-west such as Trafford and North Cheshire are strong economic and social performers, while the towns along the M4 and Bristol itself are doing pretty well. Continue reading...

Readers respond to an earlier letter suggesting that students should replace migrant farm workers after BrexitIn the agricultural sector there is a shortfall of 4,300 jobs with a tiny proportion of the population working on farms. Yet Aileen Hammond (Letters, 15 February) demands that 2.28 million students in higher education descend on to the farms of this country every summer and winter. I’m afraid a few second homes she wants to be made available isn’t going to be quite enough to house these students.I spent my vacations from university volunteering, getting work experience, writing dissertations – all of which has allowed me to contribute to the common good. There are also lots of other important and meaningful seasonal jobs that depend on the student vacation workforce. Forced labour of students on to farms would play havoc with these sectors and merely shift the labour problem elsewhere. Continue reading...

The same misleading metaphors are used again and again to talk about economic policy. We need a new frameWhat do people think the economy is? How do they think it works? How do you think it works, if you think it works at all? The New Economics Foundation, in its report, Framing the Economy, conducted 40 in-depth interviews in London, Newport, Glasgow, Wolverhampton and Hull, with the aim of finding points of common understanding. Though 40 is a relatively small number, the researchers were looking for images, metaphors, certainties and black holes that came up again and again, across regions and demographics.From these tropes, they’ve been able to plot how, from 2010, the coalition government’s austerity agenda played so well into people’s hopes and fears; how the public attachment to it was so tenacious. How, even as the policy was failing to stimulate the economy in the way that had been promised, it was still seemingly resistant to counter-argument. Even once it was plainly, across the country, having devastating impacts on people’s lived experience (disabled people having their benefits removed and dying weeks later, the victims of the universal credit experiment evicted from their homes), the notion itself – that we all had to tighten our belts, and that was the responsible thing to do – was curiously buoyant.The lead researcher was shocked by the 'ubiquity and level of fatalism'Related: The austerity delusion | Paul Krugman Continue reading...

January high street performance fails to pick up after disappointing December3.01pm GMTDespite hopes of a pick-up in high street spending after a poor December, UK retail sales came in weaker than expected in January.Sales of gym wear improved but food sales fell, according to the Office for National Statistics.2.53pm GMTAfter five days of rises, US markets have edged higher at the start of the week’s final trading day.The Dow Jones Industrial Average is currently up 35 points or 0.14% while the S&P 500 is 0.03% better and the Nasdaq Composite 0.04% higher.2.08pm GMTThe US housing and import price data and some mixed company results - Kraft Heinz missed expectations, Coca-Cola bettered them - has push the futures into the red.Reversing earlier gains, the Dow Jones Industrial Average is now expected to open around 13 points lower.1.42pm GMTMeanwhile US import prices climbed by more than expected in January, adding to the signs of increasing inflationary pressures.With increases in the cost of imported petrol and other goods, import prices climbed by 1% last month, compared to a 0.1% rise in December and expectations of a 0.6% increase.1.36pm GMTMore signs of strength in the US housing market.Housing starts in January came in at 1.326m units, up from a revised December figure of 1.209m and higher than the expected 1.234. December’s figure was initially given as 1.192m units.USA Housing Starts announcement - Actual: 1.326Mln, Expected: 1.234Mln pic.twitter.com/vx7s3mE9KV1.21pm GMTHere’s IG’s opening calls for the US markets:US Opening Calls:#DOW 25276 +0.29%#SPX 2738 +0.21%#NASDAQ 6821 +0.36%#IGOpeningCall12.32pm GMTUS markets are expected to open higher again, with the futures suggesting a 74 point initial rise on the Dow Jones Industrial Average. Craig Erlam, senior market analyst at Oanda, said:US equity markets could end the week with a full house of gains as long as indices manage to hold onto the small gains being seen in futures ahead of the open.This would also bring an end to two shocking weeks for equity markets that saw more than 10% quickly wiped off indices, the first time we’ve seen such a move since the start of 2016. While the prospect of higher yields and interest rates, combined with a surge in volatility, have been blamed for the decline, the rebound we’re now seeing reaffirms the belief that fundamentals are still strong which should prevent the situation deteriorating further.12.21pm GMTThe head of the British Chambers of Commerce has warned companies are facing a recruitment crisis and urged the government to act, in an article for the Guardian:British companies are facing a recruitment crisis, with labour shortages hitting critical levels in some sectors, according to a business leader who has urged the government to produce details on a post-Brexit immigration system.Adam Marshall, the director general of the British Chambers of Commerce, said the lack of candidates for some jobs was biting hard, and he warned ministers against bringing forward a “draconian and damaging” visa or work permit system.Related: Business leader warns May against harsh immigration policyRelated: Businesses are floundering while Whitehall dithers on immigration | Adam Marshall11.43am GMTHere’s our full story on the UK retail sales. Sarah Butler writes:January was a tough month for high street retailers as sales rose just 0.1%, far below City expectations, as higher prices continued to deter shoppers from spending.City analysts had expected a recovery of around 0.5% last month, after the unexpectedly sharp fall of 1.4% in December. The figures from the Office for National Statistics (ONS) indicate a pick up in year-on-year growth to 1.6% in January, from 1.5% in December, but analysts had hoped for a bigger turnaround after a very disappointing end to last year.Related: UK high street sales stagnant amid January retail gloom11.03am GMTSterling has slipped into negative territory against the dollar, as investors mull over the weaker than expected retail sales.The pound is down 0.18% at $1.4070 having earlier been as high as $1.4144. Against the euro, sterling is down 0.06% at €1.1264.11.01am GMTCommenting on the retail sales figures, Andrew Sentance, senior economic adviser at PwC, said:The squeeze on consumer spending created by high inflation and a weakened pound continues. Over the three months covering the Christmas and New Year period (November to January), the volume of retail sales was just 0.1 percent up on the previous three months - the weakest growth we have seen on this measure for nearly a year. While inflation continues to run ahead of pay increases, it is not surprising that consumers are cautious and retail sales growth is sluggish.Looking ahead, we should expect the squeeze on consumer spending from high inflation to ease as we progress through this year. But the economic benefits of lower inflation are unlikely to be felt until the second half of 2018 at the earliest. The first half of this year will continue to be a difficult environment for retailers and other consumer-facing sectors.10.35am GMTAnd the UK research director at Global Data Retail:ONS retail sales data much worse than expected, though why anyone thought people had suddenly gone on a January shopping spree is a mystery to me. https://t.co/pyDZwr7ZXC10.33am GMTHere’s the chief UK economist at Pantheon Macroeconomics:Falling food sales to blame for January's below-consensus UK retail sales. The good news is that supermarkets have largely finished hiking prices due to the weak £. But rising mortgage rates and an intensifying fiscal squeeze suggest sales growth will remain sluggish this year pic.twitter.com/AAzQSngAyy10.06am GMTHere’s breakdown of non-food sales, showing the growth in sports equipment:10.03am GMTFollowing the disappointing retail sales, economist James Smith at ING Bank is not optimistic about the outlook for the sector. But he believes the Bank of England could still raise rates in May :After what was a particularly tough Christmas trading period for retailers, consumers continued to keep the foot on the brakes through January. Retail sales barely increased in the first month of the year (0.1% rise), suggesting that shoppers were reluctant to heavily participate in the traditional January sales, backing-up separate findings from Visa. For now, we see few catalysts for a sustained rebound in spending over coming months.Consumer confidence remains depressed (despite some recent improvement) and disposable incomes look set to remain under pressure. True, wage growth has been performing better recently, giving the Bank of England increased confidence that the tight labour market is prompting firms to offer more generous pay packets. That said, it’s still early days and we think there remains a risk that some firms take a more cautious stance, amidst slower economic momentum and elevated uncertainty. At the same time, food and fuel costs are continuing to rise, even though in general consumer prices have largely adjusted to the post-Brexit weakening in the pound.Hopes for a rebound on December’s poor UK retail sales results failed to materialise after today’s data revealed sluggish growth in January.UK shoppers continued the theme of keeping their money in their pockets post-Christmas, and weaker than expected data could now have an adverse effect on the pound, which has been heading for its best weekly performance since September.Who’d be a retailer right now? The ONS sees the longer-term picture for the retail sector as in a “continued slowdown” and the average British consumer is looking at real wage declines, higher borrowing costs, and record levels of consumer deb. The average Brit has spent the past few years living the mantra “When the going gets tough, the tough go shopping” but January’s retail sales number shows that UK consumer spending is not as hardy as it once was and this represents a real risk to Q1 GDP already.9.51am GMTHere’s Societe Generale’s Kit Juckes:UK retail sales ex autos 1.5% y/y, 3-m y/y 1.4%, last time we were at this kind of rate in 2013 GDP growth was 1 1/2% too. This is the new normal. Does leaving Europe doom us to European growth rates?9.45am GMTThe weaker than expected retail sales numbers have taken the shine off sterling. The pound is now up just 0.1% against the dollar at $1.4108, having earlier climbed as high as $1.4144.9.40am GMTRhian Murphy, Office for National Statistics Senior Statistician said:Retail sales growth was broadly flat at the beginning of the New Year with the longer-term picture showing a continued slowdown in the sector. This can partly be attributed to a background of generally rising prices.Growth in the quantity of sporting equipment, games and toys being bought was offset by falling food sales when compared with the same month a year earlier.9.39am GMT9.35am GMTHigh street sales has dropped sharply in December as shoppers brought forward sales into November to take advantage of discounts including the Black Friday sales.Taking the three months from November to January, sales edged up just 0.1% after climbing 0.5% in the three months to December.9.32am GMTBritish shoppers kept their money in their pockets in January, with retail sales coming in sharply lower than forecast.Overall retail sales volumes rose 0.1% month on month, compared to expectations of an increase of around 0.5%. Year on year growth was 1.6%, the highest since August but at the bottom end of expectations of around 2.4%.9.23am GMTretail sales due in 10 mins, Barclays are much more downbeat than consensus and look for a 0.6% M/M fall pic.twitter.com/KlhHQx9HFL9.22am GMTThe pound is heading for its best weekly performance since September, buoyed by a weaker dollar, the expectation of rising interest rates from a more hawkish Bank of England, and hopes that Brexit talks will progress.Of course, that is before the UK retail sales figures, which could have an influence one way or the other.9.09am GMTAhead of the UK retail sales figures, here is economist Rupert Seggins:UK retail sales stats out at 9:30. Monthly changes are too volatile to be much signal & changing y/y figures are being distorted by the unwinding of a big base effect (see chart). Suggest focussing on %3m/3m changes. Or just stare at a chart of the levels...like the one below :) pic.twitter.com/koMCw3VwIw9.04am GMTAfter four weeks of falls - including a 4.7% decline last week - the FTSE 100 is on track for a positive five days of trading. Connor Campbell, financial analyst at Spreadex, said:Despite a week that’s been chock full of hawkish data, the markets continued to mount a comeback this Friday, extending the gains made on Thursday hit it a slew of 7 day-plus highs.The FTSE rose a further half a percent after the bell, allowing the index to tickle 7275. That is the index’s best price in around 10 days, with the FTSE finding a way to co-exist with cable’s own climb. Against the dollar sterling jumped 0.3%, lifting the pound towards $1.413 for the first time since last Monday. The currency has had less success against the euro, with its current €1.127 levels at the bottom end of the pound’s recent range.8.22am GMTMarkets are holding on to their gains ahead of the UK retail sales figures. Lee Wild, head of equity strategy at interactive investor, said:Where Wall Street goes, other markets follow, and this bounce back from last week’s lows is no different. Traders are quickly getting used to higher bond yields, higher inflation and another round of hikes in global interest rates that will follow, so much so that US stocks are recovering twice as fast as in London. Markets will remain volatile, for sure, but we’ve just found out that big investors can’t stay out of this market for long, and demand for equities typically picks up in the weeks before tax year-end.8.05am GMTWith Wall Street and Asian markets continuing their recovery after the early February slump, European share prices are off to a good start in early trading.The FTSE 100 is 44 points or 0.6% better , while Germany’s Dax is up 0.49% and France’s Cac has climbed 0.55%.8.01am GMTBalfour Beatty is trying to shake off the cloud of Carillion, the collapsed UK contractor, and today it has announced a joint venture contract win in the US.It has been awarded a $1.95bn (£1.4bn) deal to design, build, finance, operate and maintain the ‘Automated People Mover’ at Los Angeles International Airport. Balfour’s share amounts to around £420m.Good news for Balfour Beatty with a major contract award that should help the stock shrug off the cloud of the Carillion mess that has left the shares down more than 10% in the last month...Despite some setbacks in the share price following the collapse of Carillion, this is yet another sign of the solid progress being made under Leo Quinn and the Build to Last strategy. It’s the first major public-private partnership contract win in the US civil infrastructure market – one that could grow significantly in the coming years, particularly if we consider the shape of proposed infrastructure plans. The hope is that Donald Trump’s infrastructure spending plan will produce more such contracts for Balfour. Existing heavy US exposure means it is well placed to benefit, although it remains unclear exactly what the spending plan will eventually look like.7.45am GMT#Japan's Nikkei decouples from Yen. Index gained >1% despite Yen dropped to lowest level in 15mths. pic.twitter.com/Ic9RCUaTwJ7.31am GMTGood morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Stock markets continue to recover some of the ground lost during the early February rout, despite further signs yesterday of rising inflation, one of the key factors behind the slump. The concerns about price increases led to a jump in bond yields, and there seems little sign of that ending. So, as Michael Hewson, chief market analyst at CMC Markets UK, put it:The fact that stock markets appear to have recovered their equilibrium when rates are now higher than when markets first sold off, does make you question why the sell-off happened in the first place.European Opening Calls:#FTSE 7259 +0.33%#DAX 12386 +0.33%#CAC 5236 +0.26%#MIB 22561 +0.29%#IBEX 9766 +0.52%The UK had a pretty rotten month in December, with a slump of 1.5%, though that was largely as a result of bumper November number of 1.1% which had been boosted by Black Friday sales spending.Recent retail sales numbers from the British Retail Consortium and KPMG earlier this month appeared to show that while some retailers were struggling we did see a pickup in January, as consumers started to re-open their wallets after a slow December. The recent cold weather in January may well have also prompted an increase in demand for coats and gloves, with an expectation that we could see a rise of 0.6%.The pound wasted little time capitalising on the weaker dollar and continued to charge higher passing $1.41 overnight. Investors will now turn their attention towards UK retail sales due this morning at 09:30 GMT. Analysts are expecting retail sales to have increased 2.4% year on year in January, up from 1.3% in December. Given the hawkish tone from the Bank of England earlier this month, in addition to the higher than forecast CPI data, a higher reading in retail sales could see the pound target its previous high of $1.4375. Continue reading...

Consumer spending squeeze blamed for 0.1% rise with only gym kit and toys increasingJanuary was a tough month for high street retailers as sales rose just 0.1%, far below City expectations, as higher prices continued to deter shoppers from spending.City analysts had expected a recovery of around 0.5% last month, after the unexpectedly sharp fall of 1.4% in December. The figures from the Office for National Statistics (ONS) indicate a pick up in year-on-year growth to 1.6% in January, from 1.5% in December, but analysts had hoped for a bigger turnaround after a very disappointing end to last year.

Chances of owning home in UK have more than halved in 20 years, Institute for Fiscal Studies saysThe chances of a young adult on a middle income owning a home in the UK have more than halved in the past two decades.New research from the Institute for Fiscal Studies shows how an explosion in house prices above income growth has increasingly robbed the younger generation of the ability to buy their own home. For 25- to 34-year-olds earning between £22,200 and £30,600 per year, home ownership fell to just 27% in 2016 from 65% two decades ago.Related: For Generation Rent, this housing crisis is far from over | Martha GillRelated: Only Labour can solve a housing crisis the Tories created | Owen Jones Continue reading...

Last week’s steep drop in equity prices is fading memory despite predictions of US interest rate hikesNew evidence of mounting US inflation has failed to derail the recovery from last week’s plunge in share prices, with global stock markets registering fresh gains.Last week’s steep drop in equity prices was a fading memory as Wall Street shrugged off concerns that mounting cost of living pressures could force the Federal Reserve, the US central bank, into a series of interest rate rises in 2018.

The international trade secretary says the government is committed to developing future trade policy in a transparent way, while Mike Watkins asks why the media gave Boris Johnson’s Brexit speech so much coverage, but largely ignored John McDonnell’s on nationalising public service provisionGeorge Monbiot’s article (Resist a US trade deal. Your life may depend on it, 14 February) makes a number of claims surrounding “secrecy” of UK trade deals, our negotiations capacity and our approach to standards. Unfortunately, those with an anti-globalisation and anti-trade agenda will be encouraged in their actions which can only damage developing countries and push up prices for ordinary families at home.The government publishes clear guidelines on how we share information, which the UK-US trade working group strictly follows. However, it will not surprise readers that we also need to share information with other states confidentially, in order to ensure continuing close commercial and diplomatic relations. In addition, we have committed to developing our future trade policy in a transparent way and have invited views on the UK’s approach, including to future free trade agreements, and are continuing to consult and meet with a wide range of stakeholders. This work is ongoing. Continue reading...

Jacob Zuma scandals dragged down the economy. Now Cyril Ramaphosa has the chance to unleash a regional superpowerTiming matters a lot in determining political success. Gordon Brown could hardly have become prime minister at a worse time because in the summer of 2007 the UK economy had been growing for 15 years, the financial crisis was just around the corner and the only way was down.

All the day’s economic and financial news, as shares recover from last week’s rout

Social media giants have left the US government impotent – Europe must lead the way

When sociologist Richard Sennett was fleeced by an iPhone dealer in Delhi, the pair struck up a friendship that opened a window into the informality of modern citiesIn the south-east of Delhi, a vast T-shaped market has arisen on top of an underground parking garage.

The Dow moves up 100 points, shrugging off fears of imminent interest rate riseWall Street shrugged off signs of building US inflation despite lingering fears that a rapid increase in prices would force the Federal Reserve to raise interest rates.Official US data showed the seasonally adjusted consumer price index (CPI) for January rose 0.5% as households paid more for petrol, rental accommodation and healthcare. The annual rate of growth in prices held steady at 2.1% against economists’ expectations for a fall to 1.9%.

Aditya Chakrabortty hears from Hazel Tilley, a long-time resident of the Liverpool neighbourhood of Granby and now chair of its community land trust. She explains how after decades of neglect from local government, the area took matters into its own hands to provide affordable housingSubscribe and review on Apple Podcasts, Soundcloud, Audioboom, Mixcloud and Acast, and join the discussion on Facebook and TwitterIn this episode Aditya Chakrabortty speaks to Hazel Tilley, the chair of the Granby community land trust, about how her Liverpool neighbourhood took on the local council and, with the help of an enterprising young architecture firm and a social investor, transformed their local housing market. They bought homes for £1 each and redeveloped them for sale, below market price, to people with a connection to the community. Continue reading...

After last week’s shares plunge, anxious bankers are watching out for the Fed’s interest rate rises and lower corporate profitsGet ready for phase two of Wall Street’s wobble. That was the fearful advice when the latest American inflation figures provided evidence that underlying cost of living pressures were surfacing in the world’s biggest economy.The thinking seemed impeccable. When shares were plunging last week the reason was that the markets thought rising inflation would prompt the Federal Reserve – the US central bank – into a series of interest rate rises this year. That assumption was certainly not challenged by figures showing that core inflation in the latest three months has been running at its highest annualised rate in more than six years.Related: Dow Jones plunges 1,000 points as inflation fears spook investorsRelated: Persimmon boss to give away part of £110m bonus Continue reading...

Lloyd Blankfein warns that Donald Trump’s $1.5tn tax cut plan could over-stimulate an already healthy economyThe Goldman Sachs boss, Lloyd Blankfein, has added his voice to the chorus warning that Donald Trump’s $1.5tn tax cut and spending plans could lead to an overheated US economy.“The odds of a bad outcome have gone up,” Blankfein told CNN on Wednesday. Related: Goldman Sachs profits hit by Trump tax overhaul – but banks set to win in long runRelated: Trump pledges to fix infrastructure but $200bn plan falls well short Continue reading...

Busy day for economic news sees key US inflation figures, IMF on the UK and eurozone growth data

Report indicates wages will rise above inflation in all sectors except Brexit-hit constructionBritish workers are set for the biggest annual pay rise in a decade, according to forecasts from the Bank of England’s agents, as the rising minimum wage and staff shortages finally begin to lift wages above inflation.Companies expect to increase pay by 3.1% in 2018, compared with 2.6% last year, according to the latest survey of private-sector employers by the Bank’s network of agents across the country. A total of 368 businesses responded to the survey carried out between late November and mid-January, accounting for 845,000 UK employees. Continue reading...