OBR also expected to cut productivity forecasts, wiping out about two-thirds of chancellor’s £26bn budget ‘war chest’The productivity of UK workers fell in the three months to June, piling pressure on the chancellor, Philip Hammond, before his budget next month.Despite increasing numbers of hours put in by workers, labour productivity as measured by output per hour fell by 0.1% in the three months to June, according to the Office for National Statistics. That continues a fall started earlier this year, albeit at a slower pace, from the 0.5% drop recorded in the three months to March.Related: Labour has a once-in-a-generation opportunity, and the Tories know it | Larry Elliott Continue reading...

Exclusive: Bjarni Benediktsson, current Iceland leader, sold millions of króna of Glitnir assets before state took control in 2008

An interest hike looks increasingly risky amid fears over motoring loans and diesel power and uncertainty over a Brexit dealThe 9.3% fall in new car registrations in September – a figure even weaker than expected – is alarming. September is the second-biggest month in the car trade and it is now odds-on that registrations will fall in 2017 for the first time in six years.One can argue all day about usefulness of car sales as a barometer of general economic confidence, but the figures usually crop up in the discussions of the Bank of England’s rate-setting monetary policy committee. They matter. Continue reading...

Britain is motoring towards its first drop in annual car sales since 2011, after suffering a 9% drop in registrations last month

Firms with presence in UK must make provisions for hard exit. Anything else is naive, warns trade chiefGerman firms operating in the UK must brace themselves for a “very hard Brexit”, the Federation of German Industries has warned, as it called on its members to take precautions or be prepared to face heavy economic losses.

People are ready for a radical change. Trying to brand Corbyn a Marxist throwback who wants to turn Britain into Venezuela won’t workJim Callaghan would have had some sympathy for Theresa May as she struggled with her croaky voice and the prankster handing her a mock P45. Back in 1979 when Margaret Thatcher was on the brink of power, the then Labour prime minister summed up what it was like to feel authority slipping away. “There are times, perhaps once every 30 years, when there is a sea change in politics,” Callaghan said. “It then does not matter what you say or what you do. There is a shift in what the public wants and what it approves of.”Related: Theresa May’s conference speech: the verdict | The panelRelated: Why Theresa May’s pledges won’t fix the UK’s housing disaster | Matt Wilde Continue reading...

Ratings agency issues warning after surveys show businesses have not recovered from weak first half of yearThe ratings agency Standard & Poor’s has warned that Britain’s economy may not be strong enough to support an interest rate rise following hints from policymakers that there could be an increase in the cost of borrowing next month.S&P said it was sceptical that the Bank of England could justify a rate rise after recent business surveys showed an expected recovery from a weak first half of the year had failed to materialise. Continue reading...

The Republicans’ proposals dodge necessary changes and will leave the country with a mountain of debtHaving failed to “repeal and replace” the 2010 Affordable Care Act (“Obamacare”), Donald Trump’s administration and the Republican congressional majority have now moved on to tax reform. Eight months after assuming office, the administration has been able to offer only an outline of what it has in mind. But what we know is enough to feel a deep sense of alarm.Tax policy should reflect a country’s values and address its problems. And today, the United States – and much of the world – confronts four central problems: widening income inequality, growing job insecurity, climate change and anaemic productivity growth. America faces, in addition, the need to rebuild its decaying infrastructure and strengthen its underperforming primary and secondary education system.Related: The great unwinding: Fed begins slow demise of its post-crash stimulus Continue reading...

Sector reports modest growth in September but confidence almost at its weakest since the end of 2011Britain’s services sector expanded at a “modest” pace last month as mounting concerns about the impact of Brexit dampened orders and hit business confidence.Service sector companies reported strong consumer spending had underpinned expansion while orders from other businesses had fallen back to leave overall new sales growth at the slowest pace since August 2016.Related: Lending to UK firms at risk after Brexit, Bank of England warns Continue reading...

Central bank attempts to prevent creation of new eurozone debt pile by making it more expensive to hold problem loansThe European Central Bank is attempting to put a lid on the near €1tn (£886bn) of bad debts stored in eurozone banks by asking lenders to be more prudent about the way they handle new customers falling behind on repayments.The Frankfurt-based institution issued guidance on Wednesday intended to stop a new pile of problem debts being built up inside eurozone banks by setting out how much cash it wanted lenders to set aside for bad debts incurred from January 2018.Related: Why central banks are not hitting their 2% inflation target | Nouriel Roubini Continue reading...

International organisation joins Bank of England in voicing concern over high levels of household borrowingThe International Monetary Fund has issued a warning to governments that rely on debt-fuelled consumer spending to boost economic growth, telling them they run the risk of another major financial collapse.In a report before the IMF’s annual meeting in Washington next week, it said analysis of consumer spending and levels of household debt showed that economies benefited in the first two to three years when households raised their levels of borrowing, but then risks began to mount.

Rising cost of imports such as food and fuel since Brexit vote is pushing prices to rise at faster rate than anywhere in G7The UK has the highest inflation rate among the world’s top economies, in the latest sign the Brexit vote is contributing to a squeeze on living standards.The increased cost of importing food and fuel is pushing prices to rise at a faster rate than anywhere in the G7 group of leading global economies, according to the Organisation for Economic Co-operation and Development. The UK is only behind Turkey, Mexico and the eastern European states of Latvia and Estonia in the club of 35 developed nations.Related: UK construction in contraction for first time since Brexit vote aftermath Continue reading...

Austerity means careful, selective investment is needed in core services, says Martin Tett, the Conservative leader of Buckinghamshire council

September PMI records negative growth for first time in more than a year following a sustained drop in new workBritain’s construction industry has contracted for the first time since the immediate aftermath of the Brexit vote, as rising political uncertainty leads to a sustained drop in new work.September data revealed a difficult month for building companies, as new projects failed to materialise to replenish jobs planned before the referendum. The drop in workload was attributed to fragile confidence and subdued appetite for risk, especially in the commercial building sector.Related: Slowdown in UK manufacturing as weak pound raises costs Continue reading...

Britain’s factories were hit by a jump in price pressures last month, dragging back growth

Martin Wheatcroft returns fire at Professor Richard Murphy on the risks of quantitative easingI am very pleased that Professor Richard Murphy, in his defence of People’s Quantitative Easing (Letters, 29 September), in response to my letter (28 September), accepts that QE debt is not automatically cost-free. But he slightly missed the point of my response, which is that irrespective of whether interest rates are expressed in nominal or inflation-adjusted terms, each pound going out in interest means one less pound being available to be spent on public services. There does seem some logic in Richard’s view that continuing to expand QE might allow the Bank of England to keep base rates very low or even zero. However, we only have one experience of QE, conducted in a particular set of economic circumstances following the financial crisis, as part of monetary policy operated by respected independent central banks. I would be cautious in assuming that this QE experiment will continue to operate in the same way in different circumstances, especially if for non-monetary policy reasons.Your correspondent Richard Middleton asks a question many have asked, but to which no Treasury civil servant can respond. Answering properly involves the use of “Bank of England” and “insolvency” in the same sentence and so is a question best avoided. The Bank of England is not just a regulator – it is an operating bank, with assets in the form of government debt (and a small amount of gold) balancing its liabilities in the form of bank deposits and cash money. While the government could in theory cancel some or all of this debt, I have a feeling that attempting to run our economy with an insolvent central bank might not be the best idea.

Markit/Cips UK manufacturing PMI shows activity fell to 55.9 last month as the cost of goods used in the production process roseBritain’s manufacturers are showing signs of a slowdown in growth, as the boost to exporters from the weak pound is offset by rising production costs and fears over Brexit.Sterling’s depreciation was widely expected to benefit manufacturers as their goods become more competitively priced for foreign buyers. However the cost of imported materials used in the production process has also risen, hitting a six-month high last month, according to a closely watched barometer of factory sentiment.Related: Weak pound could boost manufacturing, if manufacturing itself wasn’t so weak Continue reading...

The Labour leader’s plans to take over railways, water and energy have high levels of public supportFew opinion polls that claim to detect a shift in public attitudes merit the ubiquitous label “landmark research”, but here’s one that does. The Legatum Institute, a thinktank, and Populus have found levels of support for nationalising large parts of the economy that would have been hard to believe a few years ago.The big four industries in the sights of Labour’s Jeremy Corbyn and John McDonnell should all return to public ownership, according to a strong majority of respondents. Water topped the poll (83%), followed by electricity (77%), gas (77%) and the railways (76%). Continue reading...

EU officials bewildered by claims the union is a one-size fits all club when there are many more social democratic, statist members than the UKThere is a group of Labour MPs who support a clean Brexit to break free from the shackles of a corporatist cartel that blocks state intervention.Labour leader Jeremy Corbyn has long been sympathetic to the Labour Brexit – or “Lexit” – argument for the UK to leave the single market, if not the customs union, to escape a Brussels oligarchy that some believe has frowned on efforts by left-leaning governments to support individual industries or nationalise them to protect consumers’ and workers’ rights. Continue reading...

The physics graduates who brought the financial world to its knees in 2008 have been busy again – is a similar catastrophe likely?A warning from the Bank of England last week that the banking sector could lose as much as £30bn in unpaid debt from credit cards, personal loans and car finance if interest rates and unemployment were to rise sharply was only the latest shot across the industry’s bows.During the summer months individual central bank executives made speeches to that effect and the main consumer finance regulator has talked about tackling the worst excesses of the loan business. Continue reading...

While older Britons have enjoyed two spending booms, millennials have been squeezed by flat incomes and rising housing costs

Ex-cabinet minister issues warning before conference as data shows lifestyles of those aged 25-34 falling behind older voters

ONS revised data reveals rising consumer debt, shrinking services sector and worsening foreign trade as Bank of England hints at rate riseThe UK economy grew at a slower pace than previously thought in July, with fresh warning signals pointing to weaker growth as the Bank of England prepares to raise the cost of borrowing for the first time in a decade.Britain recorded its weakest annual growth rate since 2013 in the three months to the end of June, according to revised figures published on Friday by the Office for National Statistics (ONS). The country’s services sector showed signs of contracting, while the UK’s trading position with the rest of the world also deteriorated.Related: Bank warned not to raise interest rates amid squeeze on households Continue reading...

All the day’s economic and financial news, including new UK GDP figures, Nationwide house prices, and the latest from BoE governor Mark Carney

Reserve Bank’s deputy governor Guy Debelle says people increasingly blame central banks for economic woesOne of the Reserve Bank’s most senior officials has warned the public’s anxiety about low interest rates and their affect on the distribution of wealth is posing a “new threat” to central bank independence.Guy Debelle, RBA deputy governor, issued the warning to central bank colleagues in London overnight.Related: Scott Morrison claims 'better days ahead' for Australian economyRelated: CEOs: if people aren’t spending, maybe you need to pay them more | Greg Jericho Continue reading...

It is 20 years since the Bank of England gained independence. It may not survive the nationalist pressures of leaving the EUBank of England independence, announced just five days after Labour’s 1997 landslide victory, was a tightly kept secret of the kind that Gordon Brown made his trademark. Yet it was almost at once accepted as the last, critical piece of a framework to protect the UK economy from the inflationary tendencies of weak governments on a par with joining the European Community 25 years previously. Today, at a conference marking the 20th anniversary of his coup, Mr Brown added another claim to its significance as a force for stability: only the discipline of independence had enabled him to keep sterling out of the eurozone.But like other speakers both before and after him at today’s conference, the former chancellor warned that just as the post-crash recession had played a significant role in Brexit, so might it undermine the case for Bank independence: the argument for taking back control could just as easily be extended to the power of the Bank to set interest rates, and with consequences as devastating. Mr Brown suggested that the answer to economic populism might be to set up a strategic oversight group that included Treasury officials as well as Bank economists. Mark Carney, the governor of the Bank, suggested it was a bigger challenge. The threat was a response to “QE, nationalism, and loss of trust in globalisation”. No central bank could stop Brexit making the UK poorer. Independence is not the same as omnipotence: the challenge it faces comes from events far beyond its control. Continue reading...

Professor Richard Murphy offers further explanation of his concept, Richard Middleton on writing off the debt, and Ivor Morgan on qualitative easingTwo comments on my letter concerning the use of People’s Quantitative Easing to buy out PFI (27 September) in your paper on 28 September require a response.Martin Wheatcroft says that the Bank of England reserve deposits of our clearing banks, which is where most QE funds are now located, have interest paid on them, meaning that People’s QE is not costless, and that cost could rise, considerably. He makes three mistakes. First, interest is only paid by Bank of England discretion. It could withdraw or limit it. Second, he quotes nominal and not inflation-adjusted interest rates, and it is adjusted rates that matter overall for People’s QE because they indicate the real cost. Third, he assumes UK interest rates will rise without QE being unwound, and that is exceptionally unlikely. His scenario will not come to pass: if rates were as high as he suggests there would be no QE-generated funds in the Bank of England on which interest would be due. Continue reading...

Former PM says politicians must take joint responsibility with Bank for heading off future financial crises, not rely on expertsGordon Brown has said the Bank of England will be vulnerable to populist demands to “take back control” unless elected politicians accept joint responsibility for heading off future financial crises.The former prime minister called for the creation of a joint Treasury-Bank strategic oversight group to assess risks to the economy, saying it was unfair for Threadneedle Street to be blamed for policy failures in areas it did not control. Continue reading...

All the day’s economic and financial news, as the Bank of England holds a conference to mark 20 years of setting UK interest rates

The governor of the Bank of England has said the central bank alone cannot guarantee prosperity. Speaking on Thursday, Carney said the UK's medium-term prosperity would depend on the country's new relationship with the EU

World faces disaster if those who contributed ‘lion’s share’ to global warming don’t aid low-income countries, IMF saysThe International Monetary Fund has told rich countries they must do more to help poor nations cope with climate change or suffer from the weaker global growth and higher migration flows that will inevitably result.In a chapter released ahead of the publication of next month’s World Economic Outlook, the Washington-based IMF said low-income countries had contributed little to the increase in greenhouse gas concentrations and could not afford to tackle the problem from their own meagre resources.Related: Al Gore: 'The rich have subverted all reason'Related: Climate deniers want to protect the status quo that made them rich Continue reading...

PM expected to contrast her approach with that of Jeremy Corbyn, who has called for more state control at Labour conferenceA strong and properly regulated free-market economy is the only way to guarantee higher living standards, Theresa May will say on Thursday as she contrasts her economic approach with the call for more state control made by Labour at this week’s conference.In a speech to mark the 20th anniversary of the independence of the Bank of England, the prime minister will insist that there are benefits from an open and innovative economy – provided it is reformed and properly regulated. “A free-market economy, operating under the right rules and regulations, is the greatest agent of collective human progress ever created,” May will say.Related: Jeremy Corbyn: neoliberalism is broken and we are now the centre ground Continue reading...

The Labour leader thinks the election this summer is proof that his party is now electable because of socialism not despite it. It’s too early to bet against himIt is remarkable what a difference a single election can make. Even if you lose. Jeremy Corbyn delivered his third – and best – speech as Labour leader to a party giddy with optimism. By reducing the Tories to minority government and increasing Labour’s vote by the biggest amount since 1945, Mr Corbyn has transformed gloom to cheer. That the Labour leader has done so from the left is a vindication of his brand of “modern, progressive socialist” politics. Mr Corbyn’s attachment to socialism is important: since the 1990s Labour leaders have avoided mentioning the word, which they viewed as being synonymous with the then unpopular notions of state control and higher taxes. They preferred instead to declare their loyalty to democratic socialist “values”. Values are less controversial than policies. Values can be shared, whereas policies divide. However, Mr Corbyn’s speech was peppered with plans to intervene in markets where vested interests, represented by the Conservative party, have conspired against the multitude. The Labour leader wants to distinguish his party from the thinking of the last four decades, arguing for a “new model of economic management to replace the failed dogmas of neoliberalism”. His contention is that the party is now electable because of socialism, not despite it.This is stirring stuff. There’s little doubt that Mr Corbyn spoke to the passions of the party, but did he speak to the preoccupations of the wider electorate? His diagnosis is founded on unquestionable truths: that an era of deregulation, privatisation and low taxes for the wealthy came tumbling down with the global financial crisis. Bankers played a leading role in the crisis, but it’s the rest of society that has paid for the crash. This has had profound consequences: most notably class divisions have been politically revived. “Them and us” economics is rooted in the fact the top 1% of society has recovered all the ground it lost while the average worker faces the longest period of falling real-terms pay since the Napoleonic wars. It’s difficult to sell capitalism to those with no capital. Continue reading...

UK slips one place to eighth in competitiveness rankings as Switzerland tops World Economic Forum league tableThe 10th anniversary of the worst downturn since the Great Depression finds the global economy at risk of a fresh crisis and ill-prepared for the disruption likely from the robot age, the World Economic Forum has warned.The body that organises the annual gathering of the global elite in Davos each January used its annual league table of competitiveness to stress that the failure to push through growth and productivity-friendly policies since the crash of 2007-08 had jeopardised chances of a sustained recovery.Related: The eurozone strikes back – why Europe is booming again Continue reading...

The motoring organisation is a market leader with solid cash flows, but private equity owners have left it strugglingHere comes Simon Breakwell, hauled from the crew of non-executive directors, to perform running repairs on the AA as its new chief executive. His first tweak? A delay to an IT upgrade and a warning that an extra £35m must be spent. The shares hit another all-time low.On the plus side, boring talk about computers makes a change from recent excitement, such as last month’s removal of executive chairman Bob Mackenzie for gross misconduct after an altercation with a colleague in the bar of a Surrey hotel. We’ll leave the two sides’ lawyers to chew over the details of the incident and ask a different question. How is that the AA, which ought to be the model of a dull and reliable investment, has performed so dreadfully for shareholders?Related: Business Today: sign up for a morning shot of financial news Continue reading...

Readers respond to shadow chancellor John McDonnell’s pledge to bring billions of pounds’ worth of PFI projects and their staff back under government controlIn your editorial (26 September) on John McDonnell’s proposal that PFI contracts be bought back by a future Labour government you suggest that any such action might be constrained by the need to persuade the financial markets to continue to lend the government money. This was an error on your part: this constraint does not exist.Firstly that is because no government has to borrow. Quantitative easing proved that. In the UK the government (via the Bank of England) has done £435bn of QE, with the result that the government owns nearly a quarter of its own debt now, effectively cancelling it and all the interest payments due on it in the process. What this means is that another £58bn of QE could be used to cover capital costs of PFI without any difficulty. The remaining cost of buying out the service element may be little more and since QE debt carries no interest cost, there may be precisely no cost at all to buying these PFI contracts back into government control as a result. This was precisely the basis of People’s QE, which I created in 2010 and which was one of the platforms on which Jeremy Corbyn was elected Labour leader two years ago. In that case the idea that we are beholden to the bond market “confidence fairy” (as Paul Krugman so aptly named it) when proposing such a move is just nonsense. The fact is that if bond markets are truculent any government can just work around them. Continue reading...

Sterling has risen to €1.14 for the first time since early July

Annual study of the nation’s wellbeing also finds residents of Hertsmere in Hertfordshire are Britain’s unhappiestThe inhabitants of Craven, a district in the southern Yorkshire Dales, are the happiest in the country, according to official statistics.At the other end of the scale, the Office for National Statistics’ (ONS) annual study of the nation’s happiness and wellbeing found that residents of Hertsmere borough council, on the northern edge of London’s suburban sprawl, were the unhappiest in Britain in the 12 months to the end of March.Related: Business Today: sign up for a morning shot of financial newsRelated: Step aside Denmark. Norway takes world’s happiest nation crown Continue reading...

Ex-MPC member David Blanchflower says there is ‘absolutely no basis’ for Bank of England to raise rates as early as NovemberThe Bank of England has been warned against raising interest rates from as early as November, as a monthly Guardian analysis of the economy indicates pressure growing on households following the Brexit vote.One year since Threadneedle Street’s emergency rate cut to 0.25% from 0.5% to avert a post-Brexit vote recession, the Guardian’s tracker of economic news paints a tougher picture for consumers. As the Bank prepares to reverse the cut with the first rate hike in a decade, senior economists have warned against raising the cost of borrowing for consumers pinched by low wage growth.Related: Should interest rates go up as Brexit approaches? Experts debate the dataRelated: How has the Brexit vote affected the UK economy? September verdict 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...

Two former MPC members differ on what recent indicators mean for the economy, and whether it is time for dearer borrowingProfessor of economics at Dartmouth College, New Hampshire, and member of the Bank of England’s monetary policy committee from June 2006 to May 2009Related: How has the Brexit vote affected the UK economy? September verdict Continue reading...

British consumers are dipping further into their savings amid a squeeze from rising prices and falling real wages, figures showBritish consumers have been dipping further into their savings amid a squeeze from rising prices and falling real wages, figures show, as growth in personal bank deposits fell to the slowest annual rate since the height of the financial crisis.Annual growth in personal deposits with high street banks fell to 2.2% in August, in the weakest month since May 2009, according to figures published by banking trade body UK Finance. There was also about £1bn withdrawn from cash Isa accounts, with tax changes allowing up to £1,000 of interest to be earned tax free.Related: Oil hits 26-month high on supply fears – business live Continue reading...

Treasurer Scott Morrison says ‘cautious and wise’ approach to finances is helping Australia maintain its credit ratingA multibillion-dollar cut to spending on social services and higher-than-expected tax revenue have helped the government deliver a smaller budget deficit than forecast for 2016-17.The treasurer, Scott Morrison, said the smaller deficit illustrated the Coalition had been taking a “cautious and wise” approach to the nation’s finances, helping Australia maintain its credit rating.Related: NDIS rollout targets in doubt because of lack of resourcing, Allan Fels saysRelated: Federal budget 2017: the 10 graphs you need to see | Greg Jericho Continue reading...

London and Frankfurt will lose out to New York and Singapore if UK and EU do not agree deal, says reportLondon and Frankfurt will lose out to New York and Singapore unless a free trade deal on financial services after Brexit is agreed, according to leading City businesses.The report from key banks, law firms and fund managers in the UK proposes a “bespoke” free trade agreement once Britain leaves the EU.Related: New Brexit rules ‘could lead to unskilled workforce crisis’ Continue reading...

Analysts say prices could rise further, in a move that would put upward pressure on UK inflationOil prices jumped to their highest for more than two years on Monday after major producers said output cuts were squeezing supplies.Brent crude leapt by 2.7% to $58.39 (£43.35) a barrel as analysts said prices could rise to levels not seen since 2014, in a move that would put further upward pressure on inflation in the UK. The oil price squeeze has been orchestrated by the Opec oil producers’ group but could be exacerbated if Turkey follows through on threats to block supplies from Kurdistan.Related: Bank of England warns a consumer debt crisis could cost banks £30bn Continue reading...

John McDonnell is right to call for the end of PFIs but, like the rest of his agenda, it won’t be easyIn a conference speech stuffed with more crowd-titillating plums than the proverbial pudding, John McDonnell betrayed a confidence in the Labour party’s prospects of power that he may come to regret. But however much Conservatives make hay with the cost implications of what even his friends would regard as a wildly ambitious economic agenda, the shadow chancellor put one new and important policy on the table: the huge and continuing cost of private finance initiatives (PFIs).For more than 20 years, successive administrations have depended on what are essentially hire purchase deals to buy new schools, hospitals and prisons. In 2006, the peak year, contracts were signed for more than 70 projects worth more than £7bn. The deals allowed long-overdue renewal of the public infrastructure, but at a cost that is now eating into the sustainability of the services they were built to provide. Mr McDonnell was – it soon emerged – exaggerating when he told an ecstatic conference that Labour would take them all back in house (a project with an incalculable price tag), but the party is right to pledge to try to find ways of cutting the cost. Continue reading...

Meghnad Desai says greater analysis is required and David Reed says black and minority ethnic groups in Britain seem to be doing pretty well. Plus letters from Peter Cave and Ian WatsonThe raw truth of the Guardian report on minorities (Minorities report: it’s still snowy white at the pinnacle, 25 September) is undeniable. But to make progress we need much more grainy detail than we have. What are “the positions of most power”? Are they all in the public sector or large corporations rather than in corner grocery shops or small or medium sized enterprises (chemist shops)?We also need a breakdown of black and minority ethnic groups by their constituent groups. South Asians are reputed to prefer private sector jobs or self-employment rather than public sector or private corporate sector jobs. Are these positions of power? Continue reading...

UK central bank warns that £30bn of loans could turn sour if Britain’s economy falls into recession

Stress tests reveal lenders are underestimating exposure to bad debt in face of an economic downturn

This autumn marks the anniversaries of two notable economic humiliations. But they are as nothing to what might happen if we leave the EUThis is quite an anniversary year for great British economic disasters. Last weekend saw the 25th anniversary of the ignominious exit of the pound from the European exchange rate mechanism – “the first Brexit”, and, I still hope, the only one.Then this November will see the 50th anniversary of the dramatic 14% devaluation of the pound – an episode from which the Labour government of Harold Wilson never quite recovered, not least because Wilson made the mistake of proclaiming that “the pound in your pocket has not been devalued” – based on a brief by Treasury officials which was aimed at explaining that, from the point of view of the pocket or purse, it was only the price of imports that were going up, and spending on imports was only a small fraction of total household spending. Continue reading...