Retail sales rise beats expectations but economists warn it could prove temporary as inflation squeezes payRetail sales rebounded in June as the sunny weather put consumers in the mood to update their summer wardrobes.
Analysts say shoppers buying fewer and cheaper baking ingredients less often in sign inflation dampening Great British Bake Off effectThere are signs Britain’s home baking boom may be running out of steam, just as Channel 4 prepares to relaunch one of its main catalysts, The Great British Bake Off.The amount of baking ingredients, including flour, dried fruits and cake coverings, sold by supermarkets fell 3.8% in the year to the end of March, according to analysts at Kantar Worldpanel.Related: Channel 4's Great British Bake Off 'will have fantastic chemistry' Continue reading...
Investors await monetary policy reading from the ECB as key index hits 2007 levels after the Dow, S&P and Nasdaq hit new all-time highsShares in Asia have reached their highest point for nearly 10 years bolstered by a surge in stock markets around the world on the back of strong US corporate earnings.As investors awaited the European Central Bank meeting for clues on its policy outlooks, the MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.15%, hovering near its highest level since December 2007.Related: How could we cope if capitalism failed? Ask 26 Greek factory workers | Aditya ChakraborttyEverything is Awesome!!!
TUC urges government to act as IFS report highlights growing north-south divide and regional concentration of povertyThe TUC has demanded action from the government to close Britain’s regional inequality divide after a report showed that incomes in the Midlands, Wales and the north of England are no higher than they were in the south-east two decades ago.Frances O’Grady, the TUC general secretary, said ministers could not shrug off findings from the Institute for Fiscal Studies indicating that incomes in the most prosperous part of Britain – the south-east of England – were 25% higher than in the poorest region, the West Midlands.Related: Which countries are the most (and least) committed to reducing inequality? Continue reading...
The German version of conservatism provides a model, says John Veit-Wilson; while Derrick Joad suggests Michael Oakeshott should be essential readingKate Maltby’s analysis of the Conservative party’s disarray (My party has gambled away its reputation, 17 July) fails to see that its neoliberals are the equivalent of what the Trotskyists were in the Labour party of the past. Neoliberals are an entryist group standing for a body of economists’ ideas that can’t be implemented in a real, living diverse society with complex people in it, because it is a simple imaginary theory, totally anti-statist and individualist, as opposed to the far-left totally statist and collectivist version. Both are essentially authoritarian, not democratic.What Maltby ought to recommend to the Conservative party is paying more attention to the continental version of conservatism, which has continued its success as exemplified in modern Germany, strongly statist to ensure a hierarchical integrated society with a powerful but decentralised state to provide the social and logistical infrastructure for the economy of modern business and industry as well as social order for the population. Continue reading...
Average UK property price rose 4.7% last year adding about £3,300 to the cost of buying a typical home but London growth slows markedlyGrowth in UK house prices has slowed but remains close to 5%, with faster growth seen outside London, according to official data.House prices across the country increased 4.7% in the year to May, hitting an average of £220,713, the Office for National Statistics (ONS) said. The annual rate fell from 5.3% in April. Between April and May, prices were up 0.5%.Related: Prefab sprout: off-the-peg homes bid to ease UK housing crisis Continue reading...
Fall means the squeeze on real incomes will be less severe – and removes the threat of an interest rate riseRising inflation has been one of the big economic stories of the past year. The depreciation of sterling after the EU referendum has made the things Britain imports, such as clothes and food, dearer and the cost of living has risen steadily as a result.The drop in the annual inflation rate to 2.6% in June was a welcome surprise. Two years ago, inflation was zero; in the month of the Brexit vote it was 0.5%. By May it had risen to 2.9%, with many City analysts confident that it would breach the 3% barrier within the next couple of months.Related: Lower fuel prices slow pace of UK inflation Continue reading...
CPI drop to 2.6% provides some relief for cash-strapped consumers, but concern grows over living standards squeezeInflation fell unexpectedly in June for the first time in nine months as lower fuel prices provided some respite for cash-strapped consumers.The consumer prices index fell to 2.6% from a four-year high of 2.9% in May according to the Office for National Statistics. Economists had expected the rate to be unchanged. Continue reading...
Cuts have almost certainly halted a rise in life expectancy. Our social order is bankrupt. We don’t just need a new government, we need a new way to organise society
Economy likely to cool in next two years because of rising inflation arising from weak pound, consultancy predictsRecord levels of employment will fail to prevent the economy’s growth rate slowing this year and next during a period when consumer spending will be squeezed by rising inflation and falling living standards, the consultancy firm PwC has predicted.PwC said action by the chancellor, Philip Hammond, in his autumn budget would help offset weaker household spending and delayed investment by firms anxious about Brexit.Related: Business Today: sign up for a morning shot of financial news Continue reading...
City analysts believe there will have been a pause in June in cost of living rises, but food prices are expected to increaseFresh evidence of the impact of the post-Brexit depreciation in the value of the pound will be revealed on Tuesday with the release of the latest set of official inflation figures.City analysts believe there will have been a pause in June in the steady increase in the cost of living to 2.9% in the 12 months since the EU referendum, but most believe the respite will prove temporary. Continue reading...
by Denis Campbell Health policy editor on (#2WQ7V)
Sir Michael Marmot, a former government adviser, highlights ‘miserly’ levels of spending on health and social careA century-long rise in life expectancy has stalled since 2010 when austerity brought about deep cuts in NHS and social care spending, according to research by a former government adviser on the links between poverty and ill-health.Related: Now we find out the real cost of austerity – our lives cut short | Owen Jones Continue reading...
Britain’s economic growth will continue to weaken in 2017, as Brexit-related anxiety and domestic political uncertainty continueThe UK needs to prepare itself for weaker economic performance, two major forecasting groups have said, in the latest studies predicting the downsides of the Brexit vote.Related: Election euphoria won’t last if Labour doesn’t foil Brexit folly Continue reading...
World’s oldest insurance market warns cost to global economy of cyber-attack could be as much as worst natural disastersLloyd’s of London has warned that a serious cyber-attack could cost the global economy more than $120bn (£92bn) – as much as catastrophic natural disasters such as Hurricanes Katrina and Sandy.Published two months after a ransomware cyber-attack that hobbled NHS hospitals and hit nearly 100 countries, a 56-page report from the world’s oldest insurance market says the threat posed by such global attacks has spiralled and poses a huge risk to business and governments over the next decade.Related: Lloyd's boss says manmade risks are bigger threats than natural disastersRelated: Insurers must adapt to climate change | John Nelson Continue reading...
The richest in our society are not worth the rewards they give themselves. It’s because they have captured ideologically the political process that these absurdities continueThis summer marks 10 years since the beginning of the financial crash in the UK, when depositors lined up outside branches of a small British bank, Northern Rock, to withdraw all of their savings as quickly as possible, particularly since everyone else was doing the same. This led to the UK’s first bank run in 150 years. The global crash that followed saw panic, which seemed a prudent reaction. When the dust settled, it was clear the elites had failed to anticipate the near-apocalyptic events. They had placed too much faith in market liberalisation, deregulation and tax cutting that benefitted the very wealthy disproportionately. In an instant everything changed. Yet nothing did.As research for the Resolution Foundation this weekend shows, the rich are back. While the rest of society have shared in an equality of misery following the crash, the top 1% – households with incomes of £275,000 – have now recovered all the ground they lost during the world’s worst post-second world war slump. The share of income going to the very richest is now 8.5%. That’s double their share in 1985. The question has to be asked: has the value of the 1% in society doubled in the last 20 years? What have all these higher earners – in the City or in the boardrooms – done that has been so socially useful to see their share of total wages go up so much? Continue reading...
The British Chambers of Commerce have told the Low Pay Commission that a rise of more than 2.7% in the national living wage could lead to job cutsLow-paid workers in the private sector should see their wages restricted to inflation-only rises, according to business leaders, who have said that without the real-terms freeze, they could be forced to make job cuts.The British Chambers of Commerce (BCC) said the “national living wage†(NLW) should rise by a maximum of 2.7% in its response to the Low Pay Commission’s call for comments on minimum wage levels, which are due to be set in the autumn. Continue reading...
Readers debate the arguments of Matthew Taylor’s report on the proliferation of short-term, freelance and casual workRafael Behr’s commentary on Matthew Taylor’s “gig economy†report is too kind by half (The gig economy can be exploitative – but there is no easy path to Good Work, 12 July). Both in the report and in interviews, Taylor seems more concerned to preserve the gig economy business model than worried about the resultant exploitation. The business owners’ excuse, that they couldn’t run their business otherwise, is exactly the same old excuse used right back to the slave owners.If the only way the business model can work is by denying workers’ rights, rights hard-won by generations of struggle, then that flawed model has no place in any kind of decent, fair society. The Orwellian rebranding of the workers’ title “dependent contractorsâ€, or some such nonsense, should tell you all you need to know about how flawed Taylor’s proposals are. It really is that simple.
David Chambers wonders whether pension funds that invest primarily outside the UK are part of the problem. Plus Chris Hughes says economic growth is needed only to service debtNikil Saval writes that “Globalisation could take place in services, capital and ideas … but what it meant most often was making it cheaper to trade across borders†(The great globalisation backlash, 15 July). We hear no more from him about cross-border movements of capital. When I studied economics in the 1950s we spoke of “capital flight†as a major cause of economic stagnation and regulatory capture. The rich in most of South America appeared to be free to invest their winnings in US equities to the detriment of their local industries. My pension fund invests more abroad than in UK equities. Am I complicit in a modern version of capital flight? Could it be that another tenet of conventional wisdom needs to be challenged: that free movement of capital across borders benefits us all?
Despite the unprecedented speed of current breakthroughs investment is weak and money is either stashed away or distributed to shareholdersPrepare for the age of the driverless car and the robot that does the housework. That was the message from the World Economic Forum earlier this year as it hailed the start of a new industrial revolution. According to the WEF, the fourth big structural change in the past 250 years is upon us. The first industrial revolution was about water and steam. The second was about electricity and mass production. The third harnessed electronics and information technology to automate production. Now it is the turn of artificial intelligence, nanotechnology, biotechnology, materials science, 3D printing and quantum computing to transform the global economy.People running companies are dominated by short-term performance targets and the need to keep shareholders sweetRelated: Can democracy survive the fourth industrial revolution? Should it?Shareholder value maximisation has certainly delivered for the top 1% Continue reading...
Beauty products and womenswear sales both all up on last year as shoppers shun expensive household items due to shrinking disposable incomeWant to know where the economy is heading? Then read my lips. The boss of John Lewis has pointed to a return of “the lipstick effect†– when a rise in sales of beauty products heralds a consumer squeeze.With disposable income under pressure, shoppers are holding off on buying big ticket household items like sofas, beds and washing machines. But tough times also encourage shoppers to treat themselves, and history has shown that sales of cheap thrills – from lipstick to takeaway coffee, expensive perfume, skin cream and sparkling wine – can do well in a downturn.Related: Political upheaval will lead to UK economy slowing down, says Moody's Continue reading...
Rest of British population, especially young and those renting homes, still struggling, says Resolution FoundationThe contrasting fortunes of rich and poor in the decade since the start of the financial crisis are starkly illustrated by a new report showing the young and those renting homes struggling while the top 1% have now recouped all the ground they lost during the world’s worst post-second world war slump.New research from the Resolution Foundation showed that households with incomes of £275,000 or more quickly recovered from the impact of the deep recession and have seen their share of national income return to the level seen before the global banking system froze up in the summer of 2007.Related: Welcome to the new dark ages, where only the wealthy can retire | Peter FlemingRelated: Theresa May accused of insulting teachers as pay rise is held at 1% Continue reading...
The budget watchdog has warned over the threats debt, recession and Brexit pose to the UK’s financesIt was one of George Osborne’s most effective soundbites. Before, during and after the 2010 general election, the man who served as David Cameron’s chancellor for six years blamed his austerity measures on Labour’s failure to “fix the roof while the sun was shiningâ€.What goes around comes around. The Office for Budget Responsibility was set up by Osborne in 2010 to keep tabs on the state of the public finances free from the clutches of politicians and has now published its first report into the long-term fiscal risks facing Britain.Related: UK public finances face twin threat from Brexit and downturn, says OBR Continue reading...
It’s not just a populist backlash – many economists who once swore by free trade have changed their minds, too. How had they got it so wrong? By Nikil SavalThe annual January gathering of the World Economic Forum in Davos is usually a placid affair: a place for well-heeled participants to exchange notes on global business opportunities, or powder conditions on the local ski slopes, while cradling champagne and canapes. This January, the ultra-rich and the sparkling wine returned, but by all reports the mood was one of anxiety, defensiveness and self-reproach.The future of economic globalisation, for which the Davos men and women see themselves as caretakers, had been shaken by a series of political earthquakes. “Globalisation†can mean many things, but what lay in particular doubt was the long-advanced project of increasing free trade in goods across borders. The previous summer, Britain had voted to leave the largest trading bloc in the world. In November, the unexpected victory of Donald Trump, who vowed to withdraw from major trade deals, appeared to jeopardise the trading relationships of the world’s richest country. Forthcoming elections in France and Germany suddenly seemed to bear the possibility of anti-globalisation parties garnering better results than ever before. The barbarians weren’t at the gates to the ski-lifts yet – but they weren’t very far.Related: Globalisation once made the world go around. Is it about to grind to a halt? Continue reading...
by Gwyn Topham Transport correspondent on (#2WCY4)
Prizewinner Gergely Raccuja, 27, aims to scrap vehicle tax and fuel duty to help fund all road repairs with more eco-friendly scheme collected by insurersA graduate transport planner has won a £250,000 prize for a plan to improve Britain’s ailing roads with a proposal to scrap fuel and vehicle taxes and replace them with a pay-per-mile charging scheme.The scheme would reward users of lighter, cleaner vehicles and ensure a steady stream of revenue to the exchequer (pdf), with the £27bn received annually from fuel duty now jeopardised by electric vehicles. Continue reading...
Responses to John Rapley’s long read on how economics became a religion, from John Airs, Saville and Barry Kushner, Geoff Naylor, DBC Reed, William Wallace, Robin Le Mare and Martin London John Rapley quotes the belief of Nobel laureates George Akerlof and Robert Shiller that “storytelling is a ‘new variable’ for economics, since ‘the material frames that underlie people’s decisions’ are shaped by the stories they tell themselves†(Greed is God, 11 July). Rapley refers to one story that the “comfortable†tell themselves about their privileged existence being the “reward of life in a meritocratic societyâ€. Raoul Martinez in his Creating Freedom counters that story with a far more convincing one.Rapley then quotes the American economist Wassily Leontief, also counselling against the dangers of self-satisfaction, calling for economists “to work more closely with other disciplinesâ€. Kate Raworth in Doughnut Economics does just that, offering, for example, a lovely quotation from Janine Benyus, “a leading thinker and doer in the field of biomimicry†who writes: “We are big-brained animals, but we are newcomers on this planet, so we are still acting like toddlers expecting Mother Nature to clean up after us.†And the wonderful storyteller Naomi Klein concludes her No Is Not Enough with: “Here is what needs to be understood in our bones: the spell of neoliberalism has been broken, crushed under the weight of lived experience and a mountain of evidence.†Continue reading...
Budget watchdog warns country is in worse shape to withstand recession than on the eve of 2007 financial crashBritain’s public finances are in worse shape to withstand a recession than they were on the eve of the 2007 financial crash a decade ago and face the twin threat of a fresh downturn and Brexit, the Treasury’s independent forecaster has warned.The Office for Budget Responsibility – the UK’s fiscal watchdog – said another recession was inevitable at some point and that Theresa May’s failure to win a parliamentary majority in last month’s election left the public finances more vulnerable to being blown off course than they were in 2007.Related: Business Today: sign up for a morning shot of financial newsRelated: The Tories have failed to fix the roof – and now rainclouds are looming | Larry Elliott Continue reading...
Ben Broadbent says ‘imponderables’ in UK economy include being a year or more away from knowing what Brexit meansThe Bank of England should resist increasing interest rates while the direction of the economy remains unclear, according to one of the central bank’s senior policymakers, an announcement that reduces the chances of a rate hike this year.Ben Broadbent, a close ally of BoE governor Mark Carney, said he was not ready to raise interest rates while the the bank’s monetary policy committee (MPC) found it “very difficult†to judge whether there had been a significant improvement. “In my opinion, it is a bit tricky at the moment to make a decision [to raise rates]. I am not ready to do it yet,†the deputy governor said. Continue reading...
Tax and spending watchdog warns that Treasury might need to return to its spending squeeze in aftermath of BrexitPhilip Hammond would need to spend an extra £33bn a year to “end austerity†according to a leading tax and spending watchdog.The Institute for Fiscal Studies (IFS) said the chancellor could use his autumn budget to reverse major cuts scheduled to hit public spending and still keep the government’s spending deficit at 2.4% of GDP by 2021. Continue reading...
Having fewer children is a no-brainer, write Robin Maynard and Jonathon Porritt. The overconsuming west must not blame the global south, says Christine Galavotti. It is ironic that Italy bears the brunt of the surge of ecological migrants, says Chris Brausch. Apocalyptic changes in the countryside go largely unnoticed, says John GreenIt is heartening to see the Guardian giving considered coverage to the issue of human population and its impacts upon our planet and the threat that continued population growth and excessive consumption pose to the wellbeing and indeed survival of future generations (Best solution to climate change? Fewer children, 12 July). For too long population has been a taboo subject avoided by those normally courageous and outspoken in publicising inconvenient truths about the consequences of ongoing environmental damage.The new study from Lund University showing that the most effective solution to curbing climate change is for people to have fewer children and smaller families confirms research we highlighted back in 2012, when seeking to persuade the likes of Friends of the Earth, Greenpeace and the World Wildlife Fund to talk openly and honestly about population issues (with little success!). That earlier study by Oregon State University concluded that, over a lifetime, a family that chose to have one less child would reduce their greenhouse gas emissions by 20 times the amount saved from undertaking all other obvious “eco-friendly†lifestyle changes. Continue reading...
Economist who helped shape the direction of education in developing countriesThe economist Christopher Colclough, who has died aged 70 of cancer, did much to shape the course of education in developing countries. In 1982, he assembled a range of hard evidence to show that primary education does more for economic development than secondary or higher education. An article he wrote for the World Bank showed how, in the developing world, primary education brought productivity benefits for work in the informal sector (the very small-scale operations that can be important for poor communities) and smallholder agricultural production. In addition, by improving literacy and numeracy, primary education contributes to wider social and economic life, through better health, nutrition and birth spacing.His paper played a key part in shifting aid-supported education programmes away from secondary and higher education towards the primary level – a shift undertaken by the World Bank, the Department for International Development (DFID) and other donor governments over the following years. This helped set the stage for the first global UN Education for All Conference, held in Jomtien, Thailand, in 1990, at which 155 governments and supporting NGOs made commitments for expanding primary education, so that all girls and boys would have one. Continue reading...
Taylor’s report on modern working practices calls for clearer legislation on employment status, but what’s needed is a statutory definition of self-employmentMatthew Taylor’s report into modern working practices makes some important recommendations that, if implemented, could make a real difference to thousands of people. However, the report falls short of solving the most pressing issue facing the UK’s flexible labour market – clarifying what self-employment is.Related: May says she will help gig economy workers but fails to pledge new lawsIt will still be up to the courts to rule on employment status, which is a big hurdle for individualsRelated: The gig economy can be exploitative – but there is no easy path to Good Work | Rafael Behr Continue reading...
Some at the Bank of England flirted with a rise, but the latest ONS figures suggest the doves will continue to hold swayThe City has been getting mightily excited in recent weeks at the prospect of the Bank of England raising interest rates next month. Sorry to disappoint, but it’s not going to happen. In truth, it was never going to happen. The Old Lady has been showing a bit of leg, that’s all.Related: UK pay squeeze intensifies as real wages continue to fall Continue reading...
TUC urges government to intervene as households come under pressure despite lowest unemployment since 1975UK consumers are suffering a sustained fall in living standards as real pay fell again in the three months to May, piling more pressure on cash-strapped households.Regular pay adjusted to account for the impact of inflation fell by 0.5% year on year over the period, shrinking family incomes and signalling a weaker outlook for consumer spending.Related: UK unemployment rate hits lowest since 1975, but real wages keep falling - business live Continue reading...
The government is continuing to ignore medics’ repeated warnings about understaffing. The result will be many more avoidable patient deathsAll we know is that the victim is young, female and unconscious. Hit by a lorry, we’ve been told, while walking through town. We’re poised and waiting in gloves and gowns when the paramedics burst through the swing doors. We descend as one and, in a matter of seconds, we’ve cut her clothes away. She’s naked but for her underwear, a tangle of wires and tubes, and the stiff plastic collar protecting her neck. There’s no blood, no bruising, no twisted limbs.Related: Exhibition illustrates the deadly impact of NHS cuts | David BattyLike the residents of Grenfell Tower, NHS staff have warned repeatedly that the drive to cut costs will cost livesRelated: Revealed: scale of hospital staff shortages in top Tory areas Continue reading...
Ratings agency says economy has started to slow and is expected to weaken considerably throughout the yearBritain’s economy will lose momentum this year amid squeezed living standards and uncertainty over Brexit and the inconclusive election result, leading ratings agencies have predicted.Moody’s said the qualms about talks in Brussels and the minority government have increased the UK’s political and financial risks.
The Taylor report on work has disappointed many with its pragmatic approach. But it’s better than nothingThe Taylor report was commissioned nine months ago. Theresa May was in her prime, apparently in a job for life, or at least until 2020, and she was keen to add substance to her early rhetoric on the “just about managing†by commissioning Matthew Taylor, a respected Blair-era policy guru, to examine ways of improving work. No one foresaw the irony in these altered times of Mrs May trying to boost her chances of survival by presenting a report on precarious work.Mr Taylor, a man who has always preferred a nudge to a shove, was never likely to mount a revolutionary challenge to the established order. But expectations were high, and now many people are disappointed. Yet it is a very substantial report. Mr Taylor rightly defends its essential recognition of the value not just of work but of good work. And it is important to remember that despite record levels of employment, many people want to work more hours than they do and others, classed as economically inactive, want a job. Britain’s labour market too often offers low pay, low productivity and long hours. These are deeply ingrained problems. Continue reading...
We must pursue integration with the health service despite our differences, says the president of the Association of Directors of Adult Social ServicesAs president of the Association of Directors of Adult Social Services (Adass), Margaret Willcox finds herself in an unusual position. In the mounting friction between health and social care, she’s a leading figure on one side of the fence who also spent half her career on the other side – starting out as a nurse.Related: We have to address the faultline between social care and the NHS | Richard HumphriesRelated: Safety alert as watchdog warns that one in three nursing homes is failing Continue reading...
Its moral code promises salvation, its high priests uphold their orthodoxy. But perhaps too many of its doctrines are taken on faith. By John RapleyAlthough Britain has an established church, few of us today pay it much mind. We follow an even more powerful religion, around which we have oriented our lives: economics. Think about it. Economics offers a comprehensive doctrine with a moral code promising adherents salvation in this world; an ideology so compelling that the faithful remake whole societies to conform to its demands. It has its gnostics, mystics and magicians who conjure money out of thin air, using spells such as “derivative†or “structured investment vehicleâ€. And, like the old religions it has displaced, it has its prophets, reformists, moralists and above all, its high priests who uphold orthodoxy in the face of heresy.Over time, successive economists slid into the role we had removed from the churchmen: giving us guidance on how to reach a promised land of material abundance and endless contentment. For a long time, they seemed to deliver on that promise, succeeding in a way few other religions had ever done, our incomes rising thousands of times over and delivering a cornucopia bursting with new inventions, cures and delights.Economists work best when they take the stories we have given them, and advise us on how we can help them to come trueRelated: The cult of the expert – and how it collapsed | Sebastian Mallaby Continue reading...
Deal first to be announced since Tory MPs raised concerns over public sector pay following the poor election performanceTheresa May has been accused of insulting teachers by offering them a 1% pay rise after she refused to bow to pressure from some Tory MPs, Labour and trade unions to begin easing the public sector wage cap.The Department for Education said it would accept the recommendation of a 1% pay rise made by the independent pay review body, days after an open revolt by some senior cabinet ministers who said the seven-year cap should be lifted. Continue reading...
When the next recession strikes, advanced economies will have no choice but to resort to unconventional monetary policies againFinancial markets are starting to get rattled by the winding-down of unconventional monetary policies in many advanced economies. Soon enough, the Bank of Japan (BOJ) and the Swiss National Bank (SNB) will be the only central banks still maintaining unconventional monetary policies for the long term.The US Federal Reserve started phasing out its asset-purchase programme (quantitative easing, or QE) in 2014, and began normalising interest rates in late 2015. The European Central Bank is now pondering just how fast to taper its own QE policy in 2018, and when to start phasing out negative interest rates.Related: How healthy is the global financial system? Continue reading...