Concerns likely that country will suffer fourth collapse unless EU writes off some debtEurozone finance ministers are braced for a row this week with the Greek government over the terms of a “golden goodbye” as the country prepares to exit its third bailout programme.Concerns that Greece will suffer a fourth financial collapse unless an agreement is signed with the EU to write off some of its debt mountain are likely to surface before a showdown in Brussels on Thursday. Continue reading...

Marks & Spencer’s announcement last month that it would close more than 100 stores by 2022 sent shockwaves along UK high streets. In 2015, Aldershot lost theirs – and this is what happened next

Living through the biggest economic slump in a century, it’s no surprise people are angryThere has been much debate about why the public has started to lose faith in mainstream political parties but the reason behind the rise of populism doesn’t take much working out.The past decade has seen the biggest financial crisis in a century, the biggest slump since the Great Depression and the slowest recovery since the second world war. Living standards have flatlined and public spending has been cut. Continue reading...

Theresa May’s endless prevarications are not just infuriating her own MPs, but British business as well‘Neither Labour nor the Tories have a credible plan for Brexit,” declared Lord Macpherson, former top official at the Treasury, on Twitter. This distinguished civil servant, who has seen ministers of both major parties grapple with economic crises, went on to ask: “Have the British people ever been so ill-served by the two main parties?”It is no wonder that the EU negotiator, the estimable Michel Barnier, finds himself, week in and week out, having to point out that all the imaginative solutions with which he is presented by the British have, indeed, to be left to the imagination.None of the alternative 'soft Brexit' options is anywhere near as satisfactory as the position we are already in Continue reading...

With the base rate in the eurozone still at 0%, funds are flowing back to the US using a myriad of financial instrumentsWhile governments around the world contemplate the fallout from Donald Trump’s trade war with China, banks are wrestling with central bank moves that are likely to have a much more fundamental impact on the global economy.On Wednesday the US Federal Reserve pressed ahead with its policy of raising interest rates, adding a seventh quarter-point rise since 2015 to leave the base rate at 1.75-2%. The Fed also pledged to continue selling back to the private markets loans it bought as part of a vast $4.5 trillion quantitative easing programme. Continue reading...

City co-op pays homage to Kitty Wilkinson, who opened the UK’s first public washhouseShe is the only woman whose achievements are deemed worthy of a statue in Liverpool’s St George’s Hall. Her sleeves are rolled up, she is ready to get her hands dirty – while the men around her are captured in their pomp, ready to preach a sermon or deliver a speech to parliament.Now Kitty Wilkinson, the Irish inventor of the public washhouse, is to be honoured again in her adopted home. This time the woman known as the Saint of the Slums will be immortalised not in marble but in soap suds, when a non-profit launderette will open bearing her name. Continue reading...

A decade of austerity has had a lasting legacy for eurozone members Ireland, Portugal, Greece and SpainThree years after it was saved from bankruptcy in 2010 with a €67.5bn rescue loan, Ireland became the first stricken eurozone state to stand on its own two feet. Continue reading...

When the country lets its banks go bust 10 years ago, there seemed to be no timetable for recovery. Things have changedTen years since the financial crisis in Iceland, the noise of the computer servers mining for bitcoin on a former Nato airbase is many decibels louder than the vast turbines spinning away in the hydroelectric power plant down the road.Having come through the crisis a decade ago, Iceland is now enjoying an economic revival, with technology, renewable energy and tourism replacing the unsustainable boom in banking. Visitor numbers have quadrupled and output per head is among the strongest in Europe. The employment rate is the highest in the world. Continue reading...

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ONS says output fell by 1.4% in April due to wider slowdown in demand for British goodsBritain’s factories unexpectedly recorded the sharpest fall in output for more than five years in April amid falling demand for steel and electrical machinery, raising fresh concern over the strength of the economy.Pointing to fewer orders for steel used in infrastructure projects and a wider slowdown in demand for British goods at home and abroad, the Office for National Statistics said manufacturing output fell by 1.4% in April from the previous month. Economists had forecast modest growth of 0.3%.

Brexit concerns making global investors more reluctant to invest in Britain, EY findsThe UK remains Europe’s top destination for inward investment, but its star is waning as Brexit uncertainty allows Germany and France to close the gap.Last year the UK attracted 6% more foreign direct investment (FDI) projects that the previous year, according to figures compiled by EY in a survey of 450 global investors, but fell behind France, which grew by 31%, and the European average growth rate of 10%.Related: CBI cuts forecast for UK economic growth as Brexit concerns linger Continue reading...

We should not be complacent about the risks a recession could pose to advanced economiesAre brewing exchange rate and debt crises in Argentina and Turkey localised events without broader implications? Or are they early warning signs of deeper fragilities in bloated global debt markets that are being exposed as the US Federal Reserve continues to normalise interest rates?Rising interest rates could test stability in some advanced economies as well, especially in Italy, where voters, particularly in the less developed south, have opted decisively for a disruptive populist government. With an economy 10 times the size of Greece, a default in Italy would blow up the eurozone. Indeed, the populist coalition government that has now taken power has hinted that it wants write-offs for some of its under-the-table debts (not included in Italy’s official public debt of more than 130% of GDP) to the euro system through the European Central Bank.Related: World trade has fought its way back to health. These tensions risk it all | Roberto Azevêdo Continue reading...

In equal societies, citizens trust each other and contribute to their community. This goes into reverse in countries like oursThe gap between image and reality yawns ever wider. Our rich society is full of people presenting happy smiling faces both in person and online, but when the Mental Health Foundation commissioned a large survey last year, it found that 74% of adults were so stressed they felt overwhelmed or unable to cope. Almost a third had had suicidal thoughts and 16% had self-harmed at some time in their lives. The figures were higher for women than men, and substantially higher for young adults than for older age groups. And rather than getting better, the long-term trends in anxiety and mental illness are upwards.For a society that believes happiness is a product of high incomes and consumption, these figures are baffling. However, studies of people who are most into our consumerist culture have found that they are the least happy, the most insecure and often suffer poor mental health.Related: The psychological effects of inequality – Science Weekly podcastRelated: Rising inequality linked to drop in union membership Continue reading...

Even anti-trade rhetoric is enough to threaten the global recovery. Trade sanctions themselves would be disastrousIt is no small irony that as global trade grows at the healthiest clip in years, trade tensions escalate to levels not seen in decades. In 2017, trade expanded at its fastest annual pace in six years, growing 4.7%. Export growth was robust in every region of the world last year as exports in Asia grew by 10.7%, in North America by 7.3% and in Latin America by 13% – the kind of synchronised growth that we haven’t seen in a decade.Related: Trade war? What you need to know about US steel tariffs Continue reading...

The Bank of England is signalling that interest rates might increase. There are still good reasons to hold offIt’s early February all over again inside the Bank of England. Not that governor Mark Carney and his colleagues in Threadneedle Street are missing out on the good weather: it’s just that they are all making speeches about how they are poised, should the economic climate be conducive, to raise interest rates.Carney wrote to the chancellor, Philip Hammond, on 8 February to say it was “appropriate to set monetary policy so that inflation returns sustainably to its target”, after previously resisting the temptation to increase rates in times of high inflation to support jobs and growth. Continue reading...

US president appears to snub Theresa May and called for tariff-free trade with membersIn an unscheduled press conference hours before the G7 summit was due to end, Donald Trump accused the rest of the world of treating the US like a piggy bank to be robbed, appeared to snub Theresa May and called for tariff-free trade with the G7 countries.In a bravado performance, he also described Russia’s annexation of Crimea as “something that happened a while ago”, warned in the bluntest of terms against economic retaliation for the US’s introduction of tariffs, and described the way the EU treated the US as brutal.Related: Donald Trump calls for G7 to readmit Russia ahead of summit Continue reading...

A Swiss referendum on responsible banking looks likely to be defeated. And if it fails there, it would have no chance in BritainTen years after the financial crash, most Britons remain suspicious of calls to be adventurous with public money. Aware that the pre-2008 economy was akin to a high-wire act, they believe lapsing back into the old borrow-to-spend routine will only herald another disaster.That’s why the chancellor, Philip Hammond, feels secure when he bats away calls to throw off his self-imposed straitjacket and lift austerity. And it’s the reason Bank of England governor Mark Carney tells us in his speeches that he’s tied the hands of bank bosses and that their institutions are safer than at any time in a generation.In Britain, like it or not, the economy is driven by consumer spending and fuelled by debt Continue reading...

US president Donald Trump and Canadian prime minister Justin Trudeau have a light-hearted chat about tariffs, but a senior official said no headway had been made in talks about new tariffs the US has imposed on imports of steel and aluminium Continue reading...

All the day’s economic and financial news, as investors worry that world leaders will clash over trade at the G7 meeting in Quebec

Outcry as country requests assistance from international lender after peso plummetsThe International Monetary Fund has stepped in to shore up the Argentinian economy with a $50bn (£37bn) loan agreement.Argentina requested assistance from the international lender of last resort on 8 May after the peso weakened sharply in an investor exodus from emerging markets.Related: Markets fall ahead of G7 meeting; BT CEO quits - business live Continue reading...

Growth rate expected to slow amid uncertainty over single market and customs unionBritain’s leading employers’ organisation, the Confederation of British Industry, has warned the UK economy will shift down a gear this year and risks remaining in the slow lane because of Brexit.Cutting its growth forecasts for the year, owing to heavy snowfall in the opening months of 2018 and lingering fears over Brexit, the CBI said it expected the growth rate for the British economy to slow to 1.4%, from 1.8% last year. Continue reading...

With nearly a third of super accounts inactive and still being charged fees, are Australians losing money that could be going towards their retirement? The Productivity Commission has recommended a fix, but is there the political and commercial will to make these changes? Katharine Murphy speaks to Greg Jericho, of Grogonomics, and Shane Wright, the economic editor at the West Australian, about the latest growth figures and the proposed changes to make super fairer. Continue reading...

French president warned G7 members to resist a potential US drift toward ‘crude hegemony’ following Trump’s tariffs on alliesEmmanuel Macron has called on other members of the G7 to stand up to Donald Trump’s trade policies in the face of what he described as the threat of a new US “hegemony”.The French president was speaking alongside the Canadian prime minister, Justin Trudeau, who is hosting the G7 summit in Quebec amid sharp disagreements between the US president and the six other leaders of industrialized liberal democracies over trade, climate change and the nuclear deal with Iran.Prime Minister Trudeau is being so indignant, bringing up the relationship that the U.S. and Canada had over the many years and all sorts of other things...but he doesn’t bring up the fact that they charge us up to 300% on dairy — hurting our Farmers, killing our Agriculture!Related: Trump to Trudeau in testy tariff call: 'Didn't you guys burn down the White House?'Related: The G7 minus one: Trump packs wrecking ball for Canada summit Continue reading...

Salary uplift of some degrees in UK exceeds that gained from private education, says studyStudents studying economics and medicine at British universities are likely to gain the largest financial benefits from their degrees, outstripping even the considerable advantages enjoyed by private school students or people from the wealthiest backgrounds, a study has found.

All the day’s economic and financial news, as House of Fraser announces plans to shut 31 department stores and lay off thousands of staff

Economy may emerge from ‘soft patch’ as wage pressures rise, says deputy governorThe chances of an August rise in interest rates have increased after one of the most cautious policy setters at the Bank of England signalled support for higher borrowing costs.Sir Dave Ramsden, one of Threadneedle Street’s deputy governors, said the economy seemed to be coming out of its early 2018 soft patch at a time when wage pressures were mounting. Continue reading...

Government data shows scale of freelance or temporary economy as American workers try to navigate changing work environmentHow big is the “gig economy”? On Thursday, the Bureau of Labor Statistics gave the first official reading of how many Americans rely on temporary work, freelancing, and on-demand apps to make ends meet. And the answer is: a lot.Related: Unions are too vital to democracy to be allowed to gentrify and die | Kenan Malik Continue reading...

Trudeau and EU and Japanese allies stymied in trade tussle where ‘everyone loses’The Québécois police have been erecting high steel fences this week, braced for the demonstrators who normally flock to G7 summits to rail against the leaders of the global liberal order behind the security perimeter.The difference this year is that one of those leaders will be railing from the inside. Continue reading...

Motorbikes, jeans and bourbon to be hit in response to US duties on steel and aluminiumThe EU will impose tariffs on US imports ranging from Harley-Davidson motorbikes to jeans from next month in retaliation over Donald Trump’s decision to put duties on European aluminium and steel.Despite the apparent reluctance of the UK’s international trade secretary, Liam Fox, to publicly back the EU’s proposed “tit for tat” measures, the European commission said it had the full support of all 28 member states to act.Related: Europe wants to take the heat out of Trump’s steel war. That might be risky Continue reading...

Estimating risk of rising economic nationalism, the kind promoted by Donald Trump, the bank warned of ‘severe consequences’ for trade and growthA worldwide escalation of the trade tensions between the US and its major trading partners would have consequences for global trade equivalent to the 2008 financial crisis, the World Bank has warned.Using conservative estimates to assess the risks to the world economy from rising economic nationalism of the kind promoted by Donald Trump, the Washington-based organisation warned of “severe consequences” for world trade and economic growth, with the harshest impact reserved for developing nations.