UK’s biggest mortgage lender says borrowers can withstand a gradual rate rise as the economy remains resilientBritain’s borrowers can withstand the impact of the first rise in interest rates in a decade, the chief executive of Lloyds Banking Group said on Wednesday.António Horta-Osório believes any increase from the current record low of 0.25% would be gradual and said the bank – the biggest mortgage lender and savings institution in the UK – did not expect rates to reach 1% until 2019.Related: First UK interest rate rise in a decade still likely despite modest growth Continue reading...
The absence of a post-Brexit vote recession, potential wage inflation and the Bank’s hawkish comments all point toward a riseIt wasn’t much, but for the Bank of England the slight pickup in growth will probably be enough to trigger the first increase in official interest rates in more than a decade.The economy’s trend rate of growth is a touch above 2% a year, so by that benchmark the 0.4% rise in gross domestic product in the third quarter was modest. Growth has been weaker in the first three quarters of 2017 than it was in the six months after the June 2016 EU referendum.Related: UK interest rate rise likely as GDP beats forecast to grow by 0.4%Related: Can an interest rate rise halt UK inflation? Experts debate the data Continue reading...
Enthusiasm for Richard Thaler’s work on behavioural economics means economists have more influence than ever. But their failures contributed to the financial crisis – and we’re being distracted, say Tiago Mata and Jack WrightThe praise is still pouring in for Richard Thaler, winner of the 2017 Sveriges Riksbank prize in economic sciences in memory of Alfred Nobel. The news was described as “wonderfulâ€, “well-deserved … and clarifying,†and BBC Radio 4’s More or Less explained that Thaler is an “amazing economistâ€. All this praise is due because Thaler has shown better than anyone that behavioural economics can be an engine of policy innovation. Thaler has turned failure into success, helping economists thrive during a financial crisis that they had failed to avert.Thaler is a best-selling author and an entertaining speaker who is never short of an anecdote to explain himself. It has been easy to describe the “endowment effect†– how we overvalue our possessions – or the “problem of self-control†in cartoons or on the radio. But Thaler’s insights, named in the award, are not why he is important. His true value lies in the fact that behavioural economics has refashioned economists as designers and evaluators of legislative and regulatory policy. Continue reading...
Exclusive: Billionaire media mogul says it is ‘hard to understand why a country doing so well wanted to ruin it’Michael Bloomberg, the billionaire media mogul and former mayor of New York, has said Brexit is the “single stupidest thing any country has ever done†apart from the election of Donald Trump as US president.Bloomberg argued that “it is really hard to understand why a country that was doing so well wanted to ruin it†with the Brexit vote, in a series of outspoken remarks made at a technology conference in Boston a fortnight ago.Related: With evidence of a failing Brexit, who needs prophecy? | Rafael Behr Related: Trump won't stop Americans hitting the Paris climate targets. Here's how we do it | Michael Bloomberg Continue reading...
All the day’s economic and financial news, as Sir Jon Cunliffe says the timing of Britain’s first interest rate rise since 2007 is an “open questionâ€
Restrictions on capital movement have reduced in recent decades, as capitalists who have outgrown their national homes have increasingly dominated the world, writes David KaultGary Younge’s article (Opinion, 16 October) supporting open borders is misguided. He claims migration across open borders occurred through history. However, apart from migration as part of conquest, even international tourism was rare – so that Marco Polo was considered remarkable. Younge then contrasts today’s free movement of capital with restriction on free movement of labour. Restrictions on capital movement have reduced in recent decades, as capitalists who have outgrown their national homes have increasingly dominated the world. These same forces also want free movement of labour. This has been resisted, as it clearly leads to the globalisation of poverty.While open borders are a nice ideal, in the current context those who think of themselves as “left†who prioritise open borders, are supporting international capital’s globalisation of poverty. When they denigrate the resistance to this global capitalist project, displayed by disadvantaged people throughout the developed world, they are driving it into the arms of the far right.
Two former members of the Bank of England’s rate-setting committee discuss the outlook for the UK economyProfessor of economics at Dartmouth College, New Hampshire, and member of the Bank of England’s monetary policy committee (MPC) from June 2006 to May 2009Inflation is when prices rise. Deflation is the opposite – price decreases over time – but inflation is far more common.Related: How has the Brexit vote affected the UK economy? October verdictRelated: The Brexit economy: the storm clouds are gathering Continue reading...
How has the economy reacted to the vote to leave the EU? Each month we look at key indicators to see what effect the Brexit process has on growth, prosperity and trade in the UK Continue reading...
Guardian analysis of key economic figures paints a picture of deepening gloom, with rising inflation denting consumer spending and investmentThe Bank of England is seriously considering raising rates for the first time in 10 years against a backdrop of lacklustre economic growth, as a Guardian analysis shows the Brexit vote sapping business confidence and hitting household income.
A breakdown of Australia’s highest and lowest income, levels of mortgage stress and unpaid domestic work by gender won’t come as a shock to anyoneThe latest release of data from the 2016 census reveals the ageing population has seen a shift in the makeup of our workforce with more people employed as community and personal service workers than ever before. The census data also confirms previous data suggesting that the cutting of interest rates has made servicing a mortgage easier over the past five year. But while the shift in work has seen an increase in carers and domestic cleaners, the census also reveals that women continue to the do bulk of the housework.It will probably not come as a shock to anyone that the electorate with the highest median mortgage is that held by our prime minister. The latest batch of census data released yesterday revealed than in 2016, the median monthly mortgage in the seat of Wentworth was $3,000 – some $30 a month higher than the second most expensive electorate to have a mortgage – that of Warringah, held by the previous prime minister Tony Abbott.Related: Boom and bust: five census maps that show how Australia has changedRelated: Australian census map: the results, region by region – interactive Continue reading...
The Jarrow march didn’t achieve much, says Judith Martin, while Eddie Dougall says Tory MPs should try living on benefits for a year, and Alison Rooks points out that if they do, they’ll have to borrow to pay their mortgage interestThere is a painting by Thomas Cantrell Dugdale in the Geffrye Museum in Hackney: The Arrival of the Jarrow Marchers in London, Viewed From an Interior (1930s show economic disaster needs a radical response, 23 October). A woman in evening dress leans over the back of a sofa to look out on to an elegant street at the black-clad crowd below, while the man on the sofa can’t even be bothered to turn his head.Unsurprisingly perhaps, the Jarrow march accomplished almost nothing – like the Occupy protesters 75 years later. Parliament received the marchers’ petition but declined to debate it. It took rearmament for the second world war to provide any meaningful relief for Jarrow, and then it was short lived, over even before the coming of Thatcher. Alan Price’s stirring Jarrow Song was written in 1974. Continue reading...
Survey of companies finds half are holding back planned investment because of uncertainty over exit from EUBritain’s manufacturers are putting the brakes on investment plans as uncertainty over Brexit makes them more reluctant to spend money on new factories and machinery, a report reveals.The amount invested by UK manufacturers in new plant and machinery has slowed to 6.5% of turnover, from 7.5% last year, according to a survey by EEF, the industry trade body, as companies press the pause button until there is further clarity on a Brexit deal.Related: UK business chiefs unite to demand urgent Brexit transition deal Continue reading...
Five major lobby groups write letter to David Davis in latest sign of employers’ growing alarm about state of talks with EUUK business leaders have united to urge David Davis to quickly establish a Brexit transition deal that mirrors existing arrangements or risk losing British jobs and investment.In a letter to the Brexit secretary seen by the Guardian, five of the UK’s biggest business lobby groups said time was running out for the government to strike a transition deal before firms start to rein in spending plans as they finalise budgets for 2018 and prepare to implement contingency plans for Britain’s departure from the EU.The EU27’s negotiating guidelines for the two-year Brexit talks stipulate that they must take place in two phases: separation and “orderly withdrawalâ€, followed by future relationship. Only when the EU27 decide “sufficient progress†has been made on phase one can phase two begin.
New data suggests life is getting tougher now for working-age adults than in the lost decade of the 1930sThe 1930s are the benchmark when it comes to lost decades. There are recessions and deep recessions, but then there is the Great Depression. In terms of sustained misery, nothing remotely comes close to the 10-year period that followed the Wall Street Crash of 1929.Yet in one respect – growth in living standards – the performance of the UK since the financial crisis began in 2007 has been worse than it was in the era that included coming off the Gold Standard, the formation of the National Government and the Jarrow March.Gross domestic product (GDP) is a key government statistic and provides a measure of the UK's total economic activity.Related: A weak pound is no tonic for UK's long-term economic recovery Continue reading...
GDP watchers will be out in force this week as third-quarter figures are revealedThis week’s big economic number is GDP for the third quarter, due on Wednesday morning. Economists reckon output rose by 0.3% or 0.4% in the three months to the end of September.Assuming the figure isn’t lower than expectations, economy watchers will turn quickly to the underlying trends, such as business investment. The economy has confounded predictions of a sharp post-Brexit vote slowdown or recession, mainly because of resilient consumer spending. Continue reading...
As chancellor, his enemy was rising prices – which is precisely what has followed the vote to leave the EUA few years ago I shared a platform with my old friend Lord Lawson at a conference on our membership of the European Union. This was some time before the infamous referendum. The event was good-tempered, and it will come as no surprise to readers that Lawson was, in a term yet to be coined, a “Leaverâ€, and your correspondent was not.What surprised me over subsequent coffee and drinks was the number of successful, and obviously intelligent, people in the audience who thanked Lawson and me for having covered the history of the EU. It turned out some of the audience had only the vaguest idea why, to use the original title, the European Economic Community was set up in the first place. Continue reading...
The chancellor must act in the name of fairness to younger people, and the budget would be the perfect moment to do soAs Philip Hammond prepares to defend his £12bn of welfare cuts in his autumn budget, pensioners can consider themselves lucky to be financially insulated.While most people on low and middle incomes are finding their spending power squeezed by rising inflation and cuts to in-work benefits, the triple lock on pensions is safe. Continue reading...
Workers in public sector received hourly earnings of 0.6% less than their private counterparts, for first time since 2008 financial crashPublic sector workers’ pay has dipped below that of their private sector counterparts for the first time since the financial crash, Treasury figures obtained by the GMB union reveal.The disparity, after seven years of austerity and cuts to public spending, will pile pressure on the chancellor, Philip Hammond, to abandon the public sector pay cap in next month’s budget. The analysis of hourly earnings shows that last year public sector workers were paid 0.6% less than private sector colleagues in similar jobs. By comparison, they enjoyed a premium of 3.1% compared with the private sector in 2005, rising to 5.8% in 2010. Continue reading...
Inflation-fuelled rise in VAT receipts cheers chancellor ahead of budget but analysts warn of OBR cut in forecasts and further Brexit uncertaintyBritain’s budget deficit has fallen to its lowest level in any September for the last 10 years, as higher than-expected tax recepits handed Philip Hammond a boost ahead of next month’s autumn budget.The 11% drop from September last year shows the government’s finances putting in a better than expected performance despite recent Brexit turmoil and a sharp slowdown in GDP growth.The government's finances are measured each month by the Office for National Statistics (ONS). Tax receipts make up the vast majority of government income, while spending on welfare and services make up most of its outgoings.Related: UK budget deficit narrows as shoppers boost VAT receipts Continue reading...
Former directors reject claim by bank shareholders that Gordon Brown’s government pushed bank into buying HBOS to avoid nationalisationLloyds Bank and five of its former directors “emphatically reject†allegations they were bullied into taking over HBOS, their QC has told the high court.Helen Davies was responding to claims made by 6,000 Lloyds shareholders, who have brought a £600m compensation claim that they were not given a true picture of the financial health of HBOS when they voted through the takeover in November 2008. Continue reading...
Supermarkets and petrol stations hardest hit as lacklustre pay growth and rising inflation dent spending powerHigh street sales slumped last month, pushing the UK retail sector to its lowest growth rate in four years for the three months to the end of September as the impact of rising inflation and sluggish wage growth dented consumer spending power.Official figures showed the amount of goods bought by consumers fell 0.8% in September and set the UK on course for a period of slow growth in the run-up to Christmas.Related: Sainsbury's to cut 2,000 jobs across UK Continue reading...
President says potential deal will generate thousands of US jobs as he praises Greece’s economic recovery during visit by Alexis Tsipras to White HousePresident Donald Trump reaffirmed the United States’ commitment to Greece’s economic recovery at the White House on Tuesday, a meeting that allowed the country’s prime minister to brush aside rough comments he made about Trump during the 2016 campaign.Related: Yanis Varoufakis: ‘I would like to live in a world where we’re all privileged’Related: Greek PM meets Donald Trump amid growing US tensions with TurkeyGreece should get out of the euro & go back to their own currency--they are just wasting time. Continue reading...
After Boeing tried to kill Bombardier’s C-Series plane in its infancy, Airbus’s actions secure it a sizeable stake and Bombardier wins a powerful allyComeuppance for a corporate bully rarely arrives so swiftly or so elegantly. Boeing attempted to kill Bombardier’s C-Series plane in its infancy by getting US trade authorities to impose stiff import tariffs. Now those heavy-handed legal tactics have produced an outcome that could be damaging in the long-term for Boeing. Arch-rival Airbus has swooped from the wings to grab majority control of the C-Series and proclaim that the 300% tariffs can be side-stepped via the simple remedy of conducting the final assembly of planes destined for US customers in Alabama.If Airbus’s plan works, it’s ingenious. It will get a 50.1% stake in the C-Series without paying a penny and will collect some cheap warrants on Bombardier’s shares. Bombardier wins in the sense that it now has a partner with the financial muscle and supply chains to make a success of the C-Series. Continue reading...
The economic skies are darkening over Britain. Theresa May has little alternative but to make concessions that will protect UK jobs and businessesWhen she became prime minister in 2016, Theresa May gave the impression of knowing exactly what kind of Brexit she wanted. In speeches and interviews, she made clear that Brexit was about breaking with the EU in line with the referendum, taking control of national borders, leaving European institutions including the court of justice, becoming a global free trader and, almost as an afterthought, remaining good neighbours with Europe. To the domestic audience she insisted that the essential message of the referendum was about migration control, and she implied that, though there might be economic blips along the way, she had the leadership skills to persuade the country that the gain was worth the pain.That strategy now looks very threadbare. Parts are in tatters. Others have been turned on their heads. The underlying problem for Mrs May and her government is that the fantasy of 2016 is running ever harder and more often into the reality of 2017. The reality is that the impact of Brexit on jobs, living standards and the economy is proving much more severe and much more fundamental that she had hoped in the early months of her premiership. The reality is that “global Britain†is a delusion cooked up by the Tory party’s obsessive anti-Europeans. The reality is that the UK’s post-Brexit relationship to the EU, its single market and its customs union is far more consequential than anything else on her agenda. The reality is that Mrs May threw away her authority in June, and that public opinion is losing confidence in the Brexit vision she promoted a year ago. Continue reading...
Consumer prices are at a five-year high – and rising. If you’re young, you may be OK. For the rest of us, it could be a nightmareIn 1972 my father bought a home on the south coast of England for the shockingly high price of £11,500. His mortgage was £8,000, or a little under three times his salary. Within a few years, galloping inflation had sparked the near collapse of the British economy, a run on sterling, and an IMF bailout. Yet by 1980 the ravages of runaway 1970s price rises had somehow left my father, and many like him, a fair bit better off.Related: State pension to rise after UK inflation increases to 3%The governor of the Bank of England, knows a 5% interest rate is medicine that will kill the patient Continue reading...
Thinktank warns Britain must stay close to EU or face long-term decline as it suggests a second pollThe Treasury has flatly rejected calls for a second EU referendum after the west’s leading economic thinktank, the Organisation for Economic Cooperation and Development, said reversing the decision to leave would significantly benefit the economy.“We are leaving the EU and there will not be a second referendum,†the Treasury said in a terse statement that reflected the government’s unhappiness with the OECD’s intervention.
Figure is twice that of pay settlements across the country and comes amid a rise in inflationThe rate of house price growth increased to 5% in August, according to official government figures, pushing homes further out of the reach of aspiring young buyers already squeezed by rising inflation.The average UK house price rose by £1,000 in August to reach £226,000, the Office for National Statistics (ONS) said. The increase took the annualised rate of house price inflation to 5%, up from 4.5% in July and more than double the rate of pay settlements across the country. Continue reading...
Speculation rife Bank of England may raise rate for first time in a decade as governor Mark Carney predicts prices will rise furtherThe prospect of Britain’s first interest rate increase in more than a decade loomed large on Tuesday after inflation hit its highest level since 2012 and the Bank of England governor, Mark Carney, said it had further to rise.Financial markets are now betting strongly on Threadneedle Street’s monetary policy committee reversing the quarter-point cut in borrowing costs made in the aftermath of last year’s Brexit vote after the annual increase in the cost of living edged up from 2.9 to 3%.Inflation is when prices rise. Deflation is the opposite – price decreases over time – but inflation is far more common.Related: UK inflation rate hits five-year high of 3% - business live Continue reading...
Workers in shadow chancellor John McDonnell’s constituency face highest risk of being replaced by robots, says researchWorkers in the constituency of shadow chancellor John McDonnell are at the highest risk of seeing their jobs automated in the looming workplace revolution that will affect at least one in five employees in all parliamentary seats, according to new research.The thinktank Future Advocacy – which specialises in looking at the big 21st century policy changes – said at least one-fifth of jobs in all 650 constituencies were at high risk of being automated, rising to almost 40% in McDonnell’s west London seat of Hayes and Harlington.Related: More than 70% of US fears robots taking over our lives, survey finds Continue reading...
Magical thinking about the future is not confined to the cabinet. Just ask the Office for Budget ResponsibilityPolitics, runs the cliche, is the art of the possible. The compromise. The curbed expectation.Not any more. Not in the age of Brexit and Trump. In 2017, politics is the art of the impossible. Of writing blank cheques and scattering them to the wind. Of peddling fantasies and promising the voters they will be made flesh by tomorrow.Related: Why is Hammond hated? For daring to look at the Brexit small print | Matthew d’AnconaRelated: Only Theresa can clean up the mess left by her Brexit Marx brothers | Hugh Muir Continue reading...
Sharp price rises could cost average household £260 a year if UK leaves EU without a trade deal while richest will be least affectedLeaving the European Union without a trade deal would likely result in a sharp increase in prices for food and other goods, costing the average UK household £260 and hitting low-income families hardest, according to new research.Following Theresa May’s attempt in Brussels on Monday night to unblock Brexit talks, a joint report by the Resolution Foundation thinktank and academics at Sussex University predicted that “just about managing†families in the UK’s poorer regions had most to lose from the negotiations failing.Britain wants to discuss its future trading relationship with the EU because 44% of UK exports go to, and 53% of imports come from, the EU 27 countries. Post-Brexit conditions of trade could, therefore, have a major impact on Britain’s economy.Related: Grayling's claims that UK can grow more food dismissed as 'tripe'Related: The Brexiteers’ trade fantasies are crashing down around their ears | Molly Scott Cato Continue reading...
Readers respond to Britain’s chronic shortage of affordable housing with solutions of their ownLarry Elliott suggests five steps to fix the housing market (Britain’s broken housing market – and how to fix it, 9 October) which include Kate Barker’s idea of “acquiring†large sites abutting urban areas at a modest premium to their existing use. That would effectively part-nationalise development value and might help supply, although the Tories wouldn’t do it because they reversed Labour’s two attempts at taxing development value, the Land Commission Act 1967 and the Community Land Act 1975/Development Land Tax 1976. Increased housing supply doesn’t automatically lead to lower prices of course (unless builders were to build at a rate that forced them to drop their own prices, which they wouldn’t) because, as Elliott says, the housing “market†isn’t a market at all in the traditional supply-and-demand sense.Before more of this crowded country’s open space is concreted over and its amenity value taken from those abutting urban areas, other expedients could be deployed, like penal taxation of empty property and progressive taxation of inherited property wealth, the latter of which continues to snowball for the haves and push prices further beyond the have-nots. Those two measures would do more to bring prices back closer to a manageable multiplier of local earnings and improve the rising generation’s chances of ownership. Whether the banks’ loan books could stand the strain of falling prices – and how hard the Treasury would fight to avoid them – is another question.
European markets move higher but Spain lags on Catalonia independence uncertainty, Chinese inflation jumps and oil climbs on new supply concerns2.23pm BSTOn a quiet day for economic news, stock markets have managed to push higher, helped by a jump in mining shares after positive Chinese data.Oil is also on the rise, fuelled by supply concerns after Iraq moved into oil-rich Kirkuk as a response to the recent Kurdish referendum. Latest reports suggest that Kurdistan has shut down some 350,000 barrels a day of production from its major oil fields following the flare up with central government. There is also the prospect of renewed sanctions on Iran after President Trump hit out at the UN’s nuclear deal with the country. So Brent is currently up 2.2% at $58.43 a barrel.2.01pm BSTStill with the US, and the president’s team has come out to head off claims its proposed tax cuts are just for the rich:The Trump administration said on Monday the average US household will get an estimated $4,000 more a year after corporate tax rates are slashed under its planned tax reforms. Proposing a stunning 5% increase in household income, the claim is likely to be met with skepticism from tax experts and Democratic lawmakers.Pre-empting such opposition, Donald Trump tweeted: “The Democrats only want to increase taxes and obstruct. That’s all they are good at!â€Related: Trump team claims US families will receive extra $4,000 a year from tax cuts1.51pm BSTThe pound is slipping back against the dollar following the stronger than expected New York manufacturing survey, as well as reports that the UK expects Brexit talks to break down unless the EU compromises.Sterling, which had been as high as $1.3311, is now down 0.17% at $1.3259. Against the euro the pound is down 0.01% at €1.1236.1.39pm BST1.36pm BSTStrong US Empire number = USD up = GBP down = FTSE up1.34pm BSTMore fuel to the fire that is US interest rate expectations.Most observers believe the Federal Reserve will probably raise rates in December, and the latest New York manufacturing survey backs up that idea with stronger than expected growth.12.32pm BSTAt midnight the UK’s old pound coin ceased to be legal tender.So how easy is it to spend the old coins now the deadline has passed? Our reporters have been finding out:Related: Old £1 coin: relaxed retailers mean round pound will be around for longer12.15pm BSTThe data from China has given a lift to metal prices and miners, with copper crossing the $7,000 a tonne level for the first time in three years.That in turn has pushed shares in mining companies such as Antofagasta up to 3% higher.11.15am BSTWith European markets - apart from Spain - remaining in positive territory, Wall Street is also expected to open higher. Craig Erlam, senior market analyst at Oanda, said:US equity markets are poised to start on a positive note once again, looking to build on the numerous record highs recorded in recent weeks on the prospect of a brighter global economic outlook.With corporate earnings season now underway and the number of companies reporting on the third quarter picking up quickly – 56 S&P 500 companies to release numbers this week – investors will be looking to the figures to add further support to the rally. This is particularly the case given the quieter week we have on economic data side, with predominantly tier two figures scheduled for release.10.45am BSTin a way, now is all about snap elections.
Thatcher and Reagan’s neoliberalism orthodoxy is rightly being challenged. The new consensus must lead to a more active and effective role for the stateFree-market capitalism is on trial. In the UK, Labour party leader Jeremy Corbyn accuses neoliberalism of increasing homelessness, throwing children into poverty, and causing wages to fall below subsistence level. For the defence, the Conservative prime minister, Theresa May, cites the immense potential of an open, innovative, free-market economy. Similar “proceedings†are taking place around the world.Just a quarter-century ago, the debate about economic systems – state-managed socialism or liberal democracy and capitalism – seemed to have been settled. With the Soviet Union’s collapse, the case was closed – or so it seemed.
FCA boss raises alarm over growing debt burden of young people in UK as number of insolvent 18- to 34-year-olds in the UK jumps by a thirdThe head of Britain’s financial regulator has warned that a growing number of young people are having to borrow to cover basic living costs.Andrew Bailey, the chief executive of the Financial Conduct Authority, told the BBC that while it had not yet reached crisis levels, it was worrying that debt among young people was growing. He talked about a shift in the generational pattern of wealth and income.Related: Business Today: sign up for a morning shot of financial newsRelated: The UK's debt crisis – in figures Continue reading...
Experts predict figure of 3% for September, adding to pressure on Bank of England to hike rates for first time in decadeUK inflation is expected to hit a five-year high this week, outstripping growth in pay packets and putting renewed pressure on the Bank of England to raise interest rates.City economists forecast that the consumer price index (CPI) will be shown to have risen to 3% in September, up from 2.9% a month earlier, its highest level since 2012.Related: UK has highest inflation rate among world’s top economies, says OECDRelated: UK cost-of-living crisis grows as dearer imports push inflation to 2.9%Related: Why central banks are not hitting their 2% inflation target | Nouriel Roubini Continue reading...
David Winnick says substantial regeneration work in Blakenall and surrounding areas was carried out a few years ago as a result of Labour’s New Deal, and Roy Boffy calls for massive investment in productive industriesGiles Fraser (Loose canon, 13 October) refers to the deprivation he found in parts of Blakenall, Walsall, where some time ago he was temporarily a priest. It is indeed the case that far too many try to manage on a totally inadequate income. As for people spending all day in their dressing gowns, which he mentions, I would simply point out that when unemployment was even higher there than nationally in the Thatcher years, whenever job vacancies were advertised locally the numbers who applied were far in excess of those needed. Substantial regeneration work in Blakenall and the surrounding areas was carried out a few years ago as a result of Labour’s New Deal for Communities programme.As for the present, a Church of England primary school within walking distance of Blakenall was the subject of a Commons debate I initiated in April last year. The school, built in 1862, is damp throughout, full of holes and in some classrooms it is not possible to even open the windows. When the schools minister visited the school, at my invitation, he was heard by local reporters to say “Awful, awfulâ€. Yet once again an application for substantial work to be undertaken has been turned down by the Education Funding Agency. Continue reading...
High court may ask five former Lloyds directors to explain circumstances of rescue at height of financial crisisA £600m case is due to begin in the high court this week which is expected to lead to five former directors of Lloyds Banking Group being asked to explain the circumstances that led to the rescue of HBOS during the height of the financial crisis.The bank’s former chair Sir Victor Blank and former chief executive Eric Daniels are among those named in the case brought by Lloyds shareholders who argue they would not have voted through the takeover of HBOS if they had been given the true picture of its financial health. Continue reading...
The institutions should match fine words about eradicating poverty with action to help one of the world’s most fragile statesIt is fair to say that Somalia was not top of the agenda at this year’s annual meetings of the International Monetary Fund and World Bank. Finance ministers and central bank governors were too busy chewing the fat over the state of the global economy and the threat posed by cybercrime to pay much attention to a poor country with a population of 14 million people in the Horn of Africa. Or, indeed, pay it any attention at all.Yet the decisions the IMF and World Bank make – or don’t make – about Somalia matter. They obviously matter to the 400,000 Somali children with acute malnutrition and 3 million people living in crisis or emergency food security conditions. They also matter in a wider sense, because both institutions are keen to demonstrate that they are now truly progressive and dedicated to the elimination of poverty and tackling inequality. Somalia is a good test of whether the grand plans and the lofty rhetoric actually amount to anything, because this is a country that needs help – and it needs it now.Related: Somaliland's hunger crisis: ‘The world doesn't respond until children are dying'Related: Globalisation: the rise and fall of an idea that swept the world Continue reading...
The IMF has finally departed from 40 years of orthodoxy on taxation and economic growth, but it’s unlikely to persuade anyone in the US governmentThe International Monetary Fund has been on quite a journey from the days when it was seen as the provisional wing of the Washington consensus. These days the IMF is less likely to harp on about the joys of liberalised capital flows than it is to warn of the dangers of ever-greater inequality.The fund’s latest foray into the realms of progressive economics came last week when it used its half-yearly fiscal monitor – normally a dry-as-dust publication – to make the case for higher taxes on the super-rich. Continue reading...
But Mark Carney should still be on his guard when he goes before the revamped Treasury committee and new chair Nicky MorganMark Carney faces a revamped Treasury committee on Tuesday. The Bank of England governor will no doubt be relieved by the departure of Jacob Rees-Mogg, who criticised the Bank’s comments during the Brexit referendum campaign, to Carney’s evident irritation.Labour’s ultra-direct John Mann is still there but former chairman Andrew Tyrie, who stood down as an MP in June, has been replaced by Nicky Morgan. The Conservative former education secretary has big shoes to fill – Tyrie built a reputation as a forensic, independent inquisitor. Continue reading...
by Toby Helm Observer political editor on (#352A7)
David Davis and Liam Fox were adamant leaving the EU would be easy. But with talks deadlocked, a no-deal scenario is horribly likelyA little over a year ago, David Davis was confident that Brexit Britain would soon strike new trade deals across the world. They could be negotiated and agreed without the difficulties and delays of which Remainers warned. All parts of the global trade jigsaw would fall quickly and neatly into place. “So be under no doubt,†the Brexit secretary wrote in an article for the ConservativeHome website in July 2016, “we can do deals with our trading partners, and we can do them quickly... I would expect that the negotiation phase of most of them to be concluded within between 12 and 24 months. Trade deals with the US and China alone will give us a trade area almost twice the size of the EU, and of course we will also be seeking deals with Hong Kong, Canada, Australia, India, Japan, the UAE, Indonesia – and many others.â€Around the same time, international trade secretary Liam Fox predicted that a free-trade deal with the EU, giving us continued access to EU markets after Brexit, “should be one of the easiest in human historyâ€. His fellow Tory, the hardline Eurosceptic John Redwood, also saw no problems in realising this great reconfiguration of British interests around the world. “Getting out of the EU can be quick and easy – the UK holds most of the cards in any negotiation,†he declared. Continue reading...