Rolling coverage of the day’s political developments as they happen, including reaction to the budget, Philip Hammond’s morning interviews and the Institute for Fiscal Studies’ post-budget briefing.
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Heather Stewart is joined by Larry Elliott, Sonia Sodha and Robert Colvile to discuss the second budget of the year. Plus we hear from Robert Chote – the man responsible for the drastic downward revision to Britain’s economic growth forecasts – and the Resolution Foundation’s Matthew WhittakerIt was billed as a “make or break budget†for the under-fire chancellor, so Philip Hammond put on a brave face and offered up tax cuts to first-time buyers, a bit more money for the NHS, tweaks to universal credit and a higher minimum wage.But the major story from the second budget of the year came in the form of drastically revised economic growth projections from the independent Office for Budget Responsibility. Its director, Robert Chote, joins Heather Stewart to explain why he cut his forecast for Britain’s economic output so suddenly. Continue reading...
The dominant school of economics has long marketed itself as value-free. But the chancellor should be honest about the ideological nature of his decisionsYou’d think that a leading figure giving their most important speech of the year on what exactly they’re planning on doing with the nation’s money would try to avoid inductive leaps, questionable stats, and a stubborn inability to be open about the fact that their actions are a choice, not a necessity.But when it’s the budget, and your job title is chancellor of the exchequer, it seems like anything goes. It’s not Philip Hammond’s fault (though given he uses “too many technical words†by his own admission, he’s probably not helping); I’m not sure there’s ever been a time where the budget felt like an honest, open, high-quality discussion on how our collective tax money is going to be spent. Isn’t that a little strange?The public is tired of being told that there’s only one way forward, when it’s clear that political choices are being made on our behalfRelated: Hammond’s ‘make-or-break budget’ wasn’t bold – just more of the same | Aditya Chakrabortty Continue reading...
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Chancellor’s measures to improve economic growth include training, tax relief and £2.5bn fund for innovatorsThe government’s latest attempt to tackle Britain’s poor productivity record focused on extra funding for artificial intelligence, skills and technology, as the chancellor introduced measures to boost economic growth.Philip Hammond said there would be an expansion in the national productivity investment fund which he launched last year. The fund would rise from £23bn to £31bn to help kickstart improvements in efficiency levels across the UK.Productivity is an economic measure of the efficiency of a workforce. It typically measures the level of output per hour of work, or per worker.Related: Budget 2017: Hammond masks gloomy outlook with stamp duty cutRelated: The real budget story is the sharp cut in growth forecasts | Larry Elliott Continue reading...
Shadow chancellor refuses to be pinned down on specific cost of servicing debt from party’s spending plans, accusing BBC presenter of ‘trite journalism’The shadow chancellor, John McDonnell, has refused to put a figure on the cost of Labour’s plans for extra borrowing and dismissed being challenged on specific numbers as “trite journalismâ€.Asked nine times by BBC Radio 4’s Today presenter Mishal Husain how much extra it would cost to service public debt under Labour, McDonnell refused to give a figure. Instead he repeatedly claimed that extra borrowing would “pay for itselfâ€.Related: Budget 2017: Hammond dismisses claim stamp duty cut will just push up prices - Politics live Continue reading...
Resolution Foundation says cut in growth announced in budget means household disposable incomes will fall until 2020The UK is on course for the longest fall in living standards since records began in the 1950s, as analysis shows Philip Hammond’s budget will drive up inequality.The Resolution Foundation said the stark downgrade to economic growth revealed by the chancellor on Wednesday means household disposable incomes were now set to fall until 2020. It also found the poorest third are set for an average loss of £715 a year over the coming five years, while the richest third stand to gain £185 on average. Continue reading...
OBR warns chancellor faces long period of sluggish wages growth that will dent tax receipts and increase borrowingPhilip Hammond must borrow an extra £90bn over the next five years after the Treasury’s independent forecaster downgraded productivity growth.The Office for Budget Responsibility (OBR) warned that the chancellor faced a long period of lower than expected wages growth that would dent tax receipts and push up borrowing. The cumulative effect over the life of the parliament would add £90.5bn to the UK’s debt pile and jeopardise Hammond’s target of balancing the government’s books by 2025, it said.Productivity is an economic measure of the efficiency of a workforce. It typically measures the level of output per hour of work, or per worker.Related: The real budget story is the sharp cut in growth forecasts | Larry ElliottThe Office for Budget Responsibility is the government’s independent forecaster, which gives its verdict on the outlook for growth and the public finances twice a year. Continue reading...
Budget aims to tackle London-centric economy by announcing spending plans for areas including the north and MidlandsEnglish regions including the north and the Midlands will receive a multibillion-pound investment in an effort to reduce the weighting of the economy towards London.Speaking as he announced plans aimed at improving transport links and devolving more power to the regions, Philip Hammond said “far too much of our economic strength is concentrated in our capital cityâ€.Related: Autumn budget: the winners, the losers and the overlooked Continue reading...
Just over 157,000 cars produced in October, 3.5% more than same time last year, as exports rise by 5% and domestic demand falls 2.9%Car production increased last month as rising exports made up for falling demand in the UK, new figures reveal.
Forecaster now expects economy to grow by just 1.5% in 2017, rather than 2% originally suggested in MarchBritain’s growth prospects are far weaker than previously thought, according to the Office for Budget Responsibility, as stalling productivity and cash-strapped consumers provide a bleak backdrop for the economy.The government’s independent economic forecaster sharply downgraded its growth predictions and now expects the economy to grow by just 1.5% this year, after predicting 2% growth back in March at the time of the last budget.The Office for Budget Responsibility is the government’s independent forecaster, which gives its verdict on the outlook for growth and the public finances twice a year. Continue reading...
Philip Hammond has admitted that seven years of obsessing about the public sector deficit and shrinking the state has left the economy enfeebled and smaller than before the crisis. But he continues to put ideology above evidence
by Donna Ferguson Miles Brignall Patrick Collinson Sh on (#38PYZ)
How did Philip Hammond’s budget affect you? The Guardian talks to families, workers and businesses across BritainWith a newborn baby and a 14-month-old son to support on an annual income of less than £20,000, police community support officer Laurence Ridge, 21, was hoping for better news in the budget.“I think the decision to abolish stamp duty for first-time buyers is reasonable but he should have announced a bigger pay rise for public sector workers – the 1% we get is miniscule compared with inflation. Building 300,000 affordable homes is nothing, spread out across the country. Where are they all?â€Related: Stamp duty cut for first-time buyers will push up prices, warns OBRRelated: Key points from budget 2017 – at a glanceRelated: What the 2017 autumn budget means for you Continue reading...
Hammond may have called time on austerity but his money is too little, too late – with Brexit looming the weak economy needs to be put on war footingThe 1956 Suez crisis was the moment Britain had to wake up to the fact that it was no longer the force it once was. The November 2017 budget was its economic equivalent.Forget the extra money to paper over the cracks in the NHS. Leave to one side the willingness to throw money at sorting out universal credit. The real story was not the latest attempt to boost home ownership but the news from the Office for Budget Responsibility on the state of the economy. This was little short of calamitous.The Office for Budget Responsibility is the government’s independent forecaster, which gives its verdict on the outlook for growth and the public finances twice a year. Continue reading...
Chancellor calls it a ‘balanced’ budget and uses eye-catching offer to first-time buyers to counter Britain’s deteriorating economic prospectsPhilip Hammond placed a stamp duty cut for first-time buyers at the heart of his budget on Wednesday as he sought to mask Britain’s deteriorating economic prospects by pledging to “revive the homeowning dreamâ€.Faced with evidence showing that the UK will be one of the weakest growing major economies in the next five years, the chancellor announced a modest increase in funding for the NHS, and announced £15bn of measures to tackle the housing crisis.Related: Autumn budget: the winners, the losers and the overlookedRelated: The Guardian view on budget 2017: a missed opportunity | EditorialThe Office for Budget Responsibility is the government’s independent forecaster, which gives its verdict on the outlook for growth and the public finances twice a year. Continue reading...
The chancellor’s second budget of the year sets out where Philip Hammond expects the state to get money from in 2018, and how he expects it to be spent. Phillip Inman explains Continue reading...
Philip Hammond could have responded to bad economic news with cuts – instead he has increased spending and borrowingForget the extra money for housing. Put to one side the package of support for the NHS. Ignore the willingness to throw money at sorting out universal credit. The real story from the budget was slower growth not just this year but every year up until 2022.This downgrade has been a long time in coming. Ever since it was founded, the independent Office for Budget Responsibility has wrongly predicted a pick-up in productivity growth and is now heartily sick of ending up with egg on its face.Related: Key points from budget 2017 – at a glance Continue reading...
by Matthew d'Ancona, Faiza Shaheen, Jonathan Freedlan on (#38PKY)
Philip Hammond has held on to his own job, for now. But his budget changes may prove little more than window dressing as Brexit loomsRelated: Autumn budget 2017: Hammond scraps stamp duty for first-time buyers for homes worth up to £300,000 - updatesRelated: Stamp duty cut for first-time buyers hopes to fix housing marketRelated: The real budget story is the sharp cut in growth forecasts | Larry Elliott Continue reading...
Retailers say households facing squeeze on real incomes are putting off purchases as they go into key Christmas periodBritons are putting off major home appliance and furniture purchases and DIY projects, in the latest sign that household budgets are under pressure in the run-up to Christmas.On Tuesday, the DIY chain B&Q, the department store chain John Lewis and AO, the online electrical retailer, joined the list of companies warning of tough trading conditions, as the slowdown in the housing market has a knock-on effect on demand for everything from fitted kitchens and bathrooms to sofas and washing machines.Related: Business Today: sign up for a morning shot of financial news Continue reading...
by Angela Monaghan and Richard Partington on (#38NN7)
As the graphs and data show, Philip Hammond faces weaker growth, Brexit uncertainty and falling living standardsThe chancellor, Philip Hammond, is delivering one of the most difficult budgets in recent times, set against a backdrop of weaker growth, Brexit uncertainty and falling living standards.Here are five key charts to consider. Continue reading...
Growth must go on – it’s the political imperative everywhere, and it’s destroying the Earth. But there’s no way of greening it, so we need a new system
These are not normal times: the chancellor is unable to fund giveaways by raising taxes in the hope the public will forget themIn normal times, the first budget after a general election is a predictable affair. The chancellor of the exchequer stands up, conjures up the ghost of Sir Stafford Cripps, administers some pain and quickly moves on.In Westminster it is known as aligning the economic and political cycles. In plain English, it means getting the bad news out of the way early in order that there will be money to spare just before voters have to go to the polls again. Only rarely do governments deviate from this approach and when they do it rarely ends well.Related: Business Today: sign up for a morning shot of financial newsRelated: Widening UK budget deficit hands Hammond a headache Continue reading...
How will the chancellor try to improve British productivity and tackle pressures over public services and welfare?This is Philip Hammond’s first budget statement since the general election in June and the third since he became chancellor last year.In March he was cheered by his backbenchers after the UK avoided the recession predicted by many analysts following the Brexit vote last year. Employment was climbing and measures of consumer and business confidence, which plummeted after the referendum, had bounced back. Continue reading...
Global demand for British goods and weak pound bring sharp improvement in both total and export order booksOrder books for Britain’s factories are at their strongest for almost 30 years as the weak pound and global growth bolsters demand for manufactured goods.In a boost to the chancellor on the eve of the budget, the CBI’s monthly health check of industry showed a sharp improvement in both total and export order books.Related: UK budget deficit widened unexpectedly, but factory orders rise – business live Continue reading...
Rise in public sector net borrowing points to weaker economy than expected and will further limit chancellor’s spending powerBritain’s deficit unexpectedly widened in October, handing Philip Hammond disappointing news on the eve of the budget.
Weather event could drive up costs of commodities such as coffee and cocoa as Britons face Brexit and inflation squeezeUK consumers could be hit by a new bout of food price inflation next year after the return of the La Niña global weather phenomenon, which may hit production of key commodities including coffee and cocoa.The UK is expected to be particularly exposed to the effect of the event, which tends to prompt dry weather in the US midwest and heavy rainfall in south-east Asia and Australia, because of the uncertainty caused by Brexit.Related: Business Today: sign up for a morning shot of financial newsRelated: Food prices would soar after no-deal Brexit, warns major dairy boss Continue reading...
Surrounded by critics, the chancellor will have little room for manoeuvre but is likely to be as upbeat as he thinks he can bePhilip Hammond faces an all but impossible job when he delivers his budget on Wednesday. Behind him will sit critics on the right and even to the left of the party, and he will have to deliver a fiscal message that sounds fresh after its key themes, housing, skills and a modest injection of resources for the NHS have already been briefed out.
Recreational shopping is not about collecting objects so much as experiencesOn Thursday, nothing out of the ordinary will happen in Britain. Millions of people will get up and go to work as normal; families will remain widely dispersed; shops will be open as usual; and at the end of the day the nation will gather for its traditional meals of takeaway and microwaved convenience foods eaten in front of a screen. In the US, by contrast, it will be the feast of Thanksgiving, when the whole country shuts down and families gather from across vast distances for a ritual meal celebrating America’s founding myth. An anthropologist might well suppose that this was the most important festival of the year, far more so than Christmas. No one would dare declare a war on Thanksgiving. So it makes a kind of sense that the day after be given over to the frenzy of shopping.It makes no sense at all for Black Friday to be transplanted to Britain. There is nothing at all special about the day in the British social calendar. Even in the retail calendar it falls squarely in the middle of the runup to Christmas, which nowadays starts some time in early October, so that there are already angels watching over the crowds in Oxford Street in central London, while in Bradford the Christmas decorations went up even earlier.Related: UK shoppers forecast to spend £10bn in Black Friday sales Continue reading...
Zimbabwe is one of many countries where China is acquiring an overseas empire of investment and influence, says Otto InglisOne aspect of the coup d’etat in Zimbabwe (Chaos in Zimbabwe after Mugabe refuses to resign, 20 November) is highly significant for Britain and the wider world: it has been suggested that shortly before the coup the head of the army, General Constantino Chiwenga, visited China to obtain tacit Chinese government support for the move.That is a stunning indication of the importance of China to Zimbabwe, especially to its elite, and of the complete eclipse of the influence of Britain as the former colonial power. Continue reading...
The lingerie brand’s star model Gigi Hadid got into trouble over a gaffe that a more seasoned business traveller to China might have anticipated. So what hope for future forays into this repressive state?As a movie plot, it would work better for Johnny English than James Bond: the lingerie brand Victoria’s Secret saw its launch in China mired in controversy when the People’s Republic refused to issue visas to invited celebrities and journalists. Katy Perry was barred for seemingly supporting the independence of Taiwan, while model Gigi Hadid transgressed by squinting in a way some Chinese people thought was racist, while posing with a fortune cookie that looked like Buddha. Add in China’s standard unpredictability when it comes to issuing press visas and you have loss of face all around.A brief history Continue reading...
Dave Ramsden says one of the reasons for his vote against raising interest rates was that workers were showing pay restraintBritain’s unusually weak pay growth could be caused by workers reining in their demands due to Brexit uncertainty, a senior Bank of England official has said.In his first speech since joining the Bank from the Treasury, Dave Ramsden said the impact of the EU referendum on inflation had persuaded him to vote against an increase in interest rates earlier this month. Continue reading...
by Lisa O'Carroll Brexit correspondent on (#38G4M)
Logistics company CEVA says delays could lead to ‘calamitous situation’ at Dover, and warns it may already be too lateOne of the world’s biggest logistics companies, whose clients include Rolls-Royce, Airbus and Primark, has said it is “bordering on insanity†to think new Brexit customs systems will be in place for 2019.Leigh Pomlett, the executive director of CEVA Group, which specialises in road, air and ocean-going freight, said Downing Street and the Treasury did not understand how difficult it would be to have a system in place in 15 months’ time, when the UK leaves the EU.Related: Brexit: failure to update customs system could be 'catastrophic' Continue reading...
The consequences of the tax program will shelve support for the Republicans, but once in power the Democrats’ hands will be financially bound for yearsI think many Democrats and independent political observers are puzzled by the intensity with which Republicans are pursuing their tax cut. It’s not politically popular and may well lead to the party’s defeat in next year’s congressional elections. So why do it?
Getting rid of deficits is disastrous for economies – as Bill Clinton proved in the 1990s. But don’t expect Philip Hammond to ditch this crazy obsessionPhilip Hammond is in a bind as he prepares for the autumn budget. On the one hand, with Theresa May reeling from ministerial resignations and facing rebellion from the right of her party over Brexit, the chancellor is under pressure from his own MPs to ginger the budget horse. On the other hand he is being stalked by John McDonnell’s popular (and sensible) policies. And the only defence Hammond can mount is the increasingly threadbare invocation of the “fiscal rulesâ€, of keeping the deficit low and maintaining “credibilityâ€.Related: Housing, tax, pensions: what are your hopes for the the autumn budget? Continue reading...
by Rowena Mason Deputy political editor on (#38ECV)
Wednesday’s budget seen as make or break for chancellor who is already unpopular with pro-Brexit ToriesPhilip Hammond will face a fight for his political life at this week’s budget after he was accused of being hopelessly out of touch for claiming there were “no unemployed people†in the UK.The chancellor found himself at the centre of a damaging row over the gaffe as he prepares for a difficult budget on Wednesday at a time of worsening economic forecasts and uncertain Brexit negotiations.Related: The ‘no unemployment’ chancellor needs a budget of compassion | Matthew d’AnconaRelated: Labour's Rebecca Long-Bailey says budget must 'level up' spending in north Continue reading...
Alongside the human costs, cuts have hurt our economy, and we’ve now reached a dangerous tipping point, say Joseph Stiglitz, Ha-Joon Chang and 111 othersSeven years of austerity has destroyed lives. An estimated 30,000 excess deaths can be linked to cuts in NHS spending and the social care crisis in 2015 alone. The number of food parcels given to impoverished Britons has grown from tens of thousands in 2010 to over a million. Children are suffering from real-terms spending cuts in up to 88% of schools. The public sector pay cap has meant that millions of workers are struggling to make ends meet.Alongside the mounting human costs, austerity has hurt our economy. The UK has experienced its weakest recovery on record and suffers from poor levels of investment, leading to low productivity and falling wages. This government has missed every one of its own debt reduction targets because austerity simply doesn’t work. Continue reading...
The chancellor should change course but with no majority, no money and no productivity growth there’s no hope of thatPhilip Hammond did not get his nickname of “Spreadsheet Phil†for nothing. The chancellor is a cautious man, who thinks that tackling Britain’s productivity challenge is a better use of his time than trying to wrongfoot his opposite number, John McDonnell, with political gimmicks.Hammond’s instinct in the run-up to his second budget has been to hunker down, to hide himself away in the Treasury and send out messages that he simply doesn’t have the money to bail the government out of its current troubles.
Past generations of British politicians proved equal to the crises that faced them. This time, there is a strong whiff of panic in the corridors of powerTo say that the lunatics have taken over the asylum would doubtless be termed politically incorrect. But the uncomfortable truth is that a bunch of ideological Brexit clowns have perpetrated a coup on the British government and the majority of the British people.Seldom – or, to be more precise, never – in half a century of covering British economics have I encountered such a failure of leadership at a time of crisis. We came close to the abyss in 1976 but were saved by Jim Callaghan, the prime minister, and Denis Healey, the chancellor. On that occasion, after fraught talks, the two held the cabinet together and negotiated a loan from the International Monetary Fund which restored our credibility in the markets. Continue reading...
The online giant will have a real store in London for Black Friday. In this topsy-turvy retail world, innovation is now a necessityBlack Friday 2017: where to find the best UK dealsOn London’s Oxford Street a row of glittering snowflakes guides shoppers along the golden mile of fashion and department stores. The 750,000 lights floating above Selfridges, John Lewis and Debenhams are a decades-old tradition but events like Black Friday have changed Christmas shopping for ever.The UK high street has just experienced something of a watershed, what some have called its “Tesla momentâ€. Online fashion website Asos overtook Marks & Spencer in market value terms for the first time despite not having a single store to its name. The comparison with the automotive industry comes because electric carmaker Tesla moved ahead of the 114-year-old Ford Motor Company in market value earlier this year.Related: Business Today: sign up for a morning shot of financial news Continue reading...
No bespoke trade deal can be as good as the single market, says Sir Martin DonnellyThere is no trade deal on offer from the European Union that will stop Britain taking a major economic hit after Brexit, the government’s former top trade official has warned.In a direct warning to MPs, Sir Martin Donnelly, the chief civil servant in Liam Fox’s Department for International Trade until earlier this year, states that leaving the single market in favour of negotiating a long-winded, Canada-style trade deal will “damage UK competitiveness and leave us with less investment, lower living standards and long queues at the borderâ€.Related: We shouldn’t even be contemplating leaving the single market Continue reading...
Guardian readers on the economic divisions facing BritainBefore anyone leaps with joy at the commercial prospects of the Oxford-Cambridge sprawl belt (Hammond urged to invest £7bn in transport links for new towns, 17 November), they should read Larry Elliott’s bleak exposition of the two nations we have become (No wonder the north is angry. Here’s a plan to bridge the bitter Brexit divide, 17 November). It’s curious how the greenfield sprawl lobby has always been obsessed with the northern home counties and south-east Midlands. Andrew Adonis’s enthusiasm for the Oxford-Cambridge axis is only the latest chapter in a saga stretching back to Letchworth Garden City in Edwardian times.Low-density greenfield development is highly profitable for developers and really good at increasing traffic and greenhouse gas emissions. It’s also proved good at dragging wealth out of places that desperately need it to regions which lack the housing to support population growth. Backing economic “winners†just perpetuates an endless spiral of housebuilding, roadbuilding and destruction of our precious farmland. It also exacerbates the dangerous divide between rich and poor regions.
by Angela Monaghan (until 2.30pm) and Nick Fletcher on (#387YF)
The president of the European Central Bank warned in a speech in Frankfurt that although the eurozone economy was ‘robust’, recovery was still heavily reliant on stimulus from the European Central Bank
Building society warns ‘sluggish’ economy, Brexit uncertainty, weak wage increases and rising inflation are hurting customers’ financesHousehold finances are under worsening pressure, according to Nationwide building society, which reported a fall in profits and warned of tougher trading conditions ahead.Total mortgage lending slipped from £17.5bn to £16.7bn, largely because of a steep decline in loans for buy-to-let following the tax changes. But as lending for landlords has fallen, loans granted to first-time buyers have surged.Related: Nationwide sounds note of caution over lending in run-up to Brexit Continue reading...
The government’s own figures have proved what has been obvious since 2010: minorities, women and disabled people are the ones being hit the hardestIf the point of government is to make the already disadvantaged worse off, then the Conservatives have used the last seven years in power exceptionally well. Today the Equality and Human Rights Commission released a major report calculating the impact austerity is having on Britain – painstakingly calculating the impact that changes to all tax, social security and public spending since 2010 will have on each of us by 2022.Black households (as the report puts it) will lose 5% of income – more than double the loss for white householdsRelated: Women and disabled people hit hardest by years of austerity, report confirms Continue reading...