The ex-chancellor rejoices as his target is finally hit, but austerity has taken a terrible tollGeorge Osborne, cheered on by the Institute for Fiscal Studies, basked in self-admiration last week. With a tweet, Osborne joined in celebrations around the elimination of the deficit on Britain’s current budget – used for day-to-day spending on, for example, the NHS, housing, education and local government.The cheerleaders ignored the consequences of that “achievement”, not least of which is the threat to Britain’s economy and social fabric caused by the turmoil of Brexit.While employment revived, jobs have been recast as part-time, temporary and insecureWe got there in the end - a remarkable national effort. Thank you. https://t.co/8D23AKbuwHWhat is austerity? Continue reading...

Financial impact of the ‘beast from the east’ and storm Emma worst since Christmas 2010Gridlocked motorways, empty restaurants and idle diggers seen across Britain last week cost the economy at least £1bn a day and could halve GDP growth in the first three months of the year.Analysts said the impact of the “beast from the east” sweeping in from Siberia and the arrival of Storm Emma hitting the south coast was likely to be the most costly weather event since 2010, when freezing temperatures and snow brought the economy to a standstill a week before Christmas.Related: Beast from the East meets Storm Emma, causing UK's worst weather in years Continue reading...

With the Bank of England controlling inflation, and the Treasury enslaved to pensioner votes, policies that would share wealth with younger generations don’t stand a chanceThe greatest threat to our economy comes from its ageing population. With the baby-boomer generation making up a large proportion of society, we find ourselves in a situation where public policy is mostly geared towards shoring up the gains made by boomers over the past 40 years, and industrial disputes are driven by an ageing union membership most worried about its pension entitlements.It is a problem that Britain shares with its continental cousins, the US and Japan, now that all are struggling with a situation where a fifth of their populations is aged over 65 and the proportion is rising fast. Ageing populations have many effects on an economy, not least the desire among those nearing retirement age to save excessively.The glut of stocks, bonds and property savings will maintain the trend of too much money chasing too few opportunities Continue reading...

IMF joins China in warning of potential harm from 25% tariff imposed on metal imports but Trump insists ‘trade wars are good’

Donald Trump’s plan to impose tariffs on steel and aluminium imports have caused international criticism, and sent markets sliding

Readers respond to the week’s bitterly cold weather and the effect it has had on the nationFrank Field (Letters, 2 March) draws our attention to the rise of destitution in the UK today as children from poor families arrive at school hungry and ill-prepared to learn. The impact of the recent snow and sub-zero temperatures on these children’s lives cannot be underestimated. With their schools closed, they must remain in their unheated homes for days on end without the comfort of a warm classroom or a hot meal. Government austerity and welfare cuts are cold comfort indeed to these poor children.

Threat of a trade war with China led investors to sell off US manufacturers including Caterpillar and Boeing

Why aren’t wages growing in Australia? For Guardian Australia’s series The pay paradox Gareth Hutchens and Greg Jericho examine the long-term and short-term reasons for the trend, including high unemployment and weaker employee bargaining power, with experts John Buchanan, from Sydney University, and Saul Eslake, former chief economist at ANZ. ‘Employers have changed the whole nature of work,’ says Buchanan• Whatever happened to wage rises in Australia? Continue reading...

Uncertainty over Brexit and strengthening pound hitting British factories, survey showsBritain’s factories suffered a slowdown in growth to an eight-month low last month as manufacturers were hit by the twin headwinds of Brexit uncertainty and a stronger pound.The IHS Markit/CIPS survey showed that manufacturing output remained robust and above the historic average, but the purchasing manager’s index (PMI) that measures activity across the sector slipped to 55.2 in February, its second-lowest reading since the June 2016 Brexit vote. A figure above 50 indicates growth. Continue reading...

Another home furnishings firm feels effects of falling consumer confidenceMore high street store closures could be on the cards after Carpetright warned it would slump into the red this year and said it was asking its banks for help to ride out the financial storm.The floor covering chain’s third profit warning in four months comes the day after Toys R Us and Maplin, two of the high street’s best known retailers, went into administration, casting doubt over the future of 5,500 jobs and 300 stores.Like-for-like sales have become the benchmark in the City for judging the current performance of retailers. Typically represented as percentage growth rates, like-for-like sales measure sales at stores that have been open for at least a year, stripping out the impact of sales at newer stores. The idea is that they allow a more transparent comparison of a retailer’s sales performance over a certain period of time, when compared with the same period of time a year earlier. Continue reading...

UK retail gloom as two chains employing 5,500 people call in the administrators

The latest article in our new economics series looks at what happened when a German utilities contract expired, and one man thought his neighbours could take over

Aditya Chakrabortty speaks to Iris Degenhardt-Meister, who is part of a cooperative energy company that runs the electricity grid in Wolfhagen, Germany, and asks Prof Andrew Cumbers from the University of Glasgow if such a model could work in BritainSubscribe and review on Apple Podcasts, Soundcloud, Audioboom, Mixcloud and Acast, and join the discussion on Facebook and TwitterIn Britain, rip-off energy prices have become politically toxic, with the major parties vying to offer price caps, heating allowances and a transition to lower-carbon technologies. But truly radical plans – such as taking the supply of energy back into the hands of local communities – have never been given serious consideration. It is a model that has been trialled in the German town of Wolfhagen and is now a source of local pride. Aditya Chakrabortty hears from Iris Degenhardt-Meister, who sits on the board of the local energy cooperative, which not only replaced a major multinational in running the town’s energy supply but is now aiming to make it 100% renewable. Continue reading...

Cash-strapped council says up to 2,000 cases involving older and disabled people are unassignedCare services for older and disabled adults are on the verge of being unsafe in Northamptonshire, the crisis-ridden county council has said, with as many as 2,000 cases unassigned because of major budget cuts.The Tory-run council, which declared it was close to effective bankruptcy earlier this month, was given the prognosis by senior officials as it sought to agree a additional £10m cuts programme that would include the closure of 21 of its 36 libraries. Continue reading...

A council bankruptcy exposes how the Treasury hijacked devolution as a way of palming off responsibility to local councils for making cuts, while keeping the power to make policy. That has to changeNorthamptonshire county council’s bankruptcy was made in Downing Street. Up and down the country there are increasing numbers of local examples of the ruinous effects of austerity. Each is unhappy in its own way but, when aggregated together, they reveal how an entire social infrastructure is being shredded. In the case of Northamptonshire, the most eye-catching measure is that all bus subsidies will be cut on Wednesday. This does not mean buses will stop running across 900 square miles in the east Midlands, but it will almost certainly see many socially needed routes scrapped. Bus services paid for by councils in England and Wales are mostly used by older people, schoolchildren, and the less well-off. It is these groups that will end up marooned and isolated, with few other options for getting around.Northamptonshire is just the tip of the iceberg: cuts to public funding have helped shrink Britain’s bus network to levels last seen in the late 1980s. The National Audit Office estimated that bus budgets have been slashed by 40% since 2010. Routes have been either scrapped or shortened and timetables have been reduced. At the same time bus fares have gone up. The austerity of David Cameron and Theresa May has meant bus services faced death by a thousand cuts. Unlike the railways, buses are fading silently. Despite more journeys being made on buses than trains outside of London, they rarely appear on Westminster’s radar. Rail commuters are voters who politicians understand: largely middle class and found in marginal constituencies. Bus users are numerous, but constitute a less politically noisy base. Continue reading...

Sheffield councillor Bryan Lodge and others respond to protests against the city’s tree replacement programmeIn Sheffield – with 4.5 million trees, still Europe’s greenest city – we know that a small band choose to ignore the facts in their protests against our lawful tree replacement programme (The roots of resistance, G2, 26 February). But we remain happy to let the facts speak. There will be more trees at the end of this work than at the beginning, as we plant trees for tomorrow. Opponents are entitled to their opinions; but they are not entitled to their own facts. The facts are at sheffieldnewsroom.co.uk/street-trees-mythWe continue to welcome peaceful protest, but it cannot be acceptable for a tiny minority of hardcore protesters to attempt the imposition of their views against the wishes of the majority of local residents who want the council to complete its programme of highways improvements, and the consequent wasting of large amounts of taxpayers’ money in additional programme costs and legal bills.

Things might have turned out differently had President Nixon not been reminded of Speenhamland, says David Beake. Plus Mike Higgins on how today’s student loan system shows the feasibility of the sort of large taxation shift necessary for a UBIA basic income (Beveridge was cradle-to-grave: who could sell that these days?, Polly Toynbee, 26 February) came close to fruition in the US in 1969 through the unlikely offices of President Nixon, who wanted every American family of four to have, from the state, at least $1,600 dollars a year – that’s $10,000 today. Until, that is, Nixon was reminded of events in Speenhamland, Berkshire, in 1795; there every citizen had a basic income against rising food prices and, by most accounts, it all worked well but a royal commission falsely claimed that all manner of social evils befell the town. Nixon’s advisers, including one Milton Friedman, recalled this and the idea was swiftly dropped. As Rutger Bregman says in his excellent Utopia for Realists, until Nixon heard bad reports about 18th-century Berkshire, the “fallacy that a life without poverty is a privilege you have to work for, rather than a right we all deserve” was, very nearly, dismissed even by capitalism’s HQ.

US cable giant Comcast has made a dramatic move to take control of UK broadcaster Sky; new Fed chair Powell hints at US rate rises

Love them or hate them it seems cryptocurrencies and the blockchain are too big to ignoreA few days ago, President Nicolás Maduro of Venezuela announced that his government had launched the petro, a new state-sponsored cryptocurrency. He claimed that $735m (£529m) worth of the new currency had already been sold, though observers are sceptical, unless state entities have been obliged to buy them. Even they will find it hard to do so, however, as the technology platform on which the petro will be traded has not yet been confirmed.Related: Venezuela's new bitcoin: an ingenious plan or worthless cryptocurrency?An initial coin offering (ICO) is when a new cryptocurrency company offers a portion of its tokens for sale all at once to jumpstart trading, raise funds for continued development and earn a return on investment for its founders.Related: Bitcoin: what have experts said about the cryptocurrency? Continue reading...

M&G boss Anne Richards says City attitudes discouraged women from joining the industryAn alpha male culture prevalent in City firms was a catalyst for the 2008 financial crisis and discouraged women from joining the industry in the aftermath, MPs have been told.It is also one of the reasons why the sector has so few women in top jobs today, because of a lack of candidates rising from the middle ranks, the Treasury select committee heard on Tuesday. Continue reading...

Studying statistics is not the only way to spot signs of a downturn. Here are a few of the more unlikely economic indicatorsIn the search for how to predict the next recession, – sadly, you just know another one will be along sooner or later – economists are willing to look well beyond the traditional statistics.Researchers at the National Bureau of Economic Research think they might have found a new way to spot recessions early, based on a long-running truism that birthrates fall during recessions. They have gone one step earlier and looked at conception rates instead, and found these drop several months before any other signs of a recession – meaning we might have a new way to see them coming. However, as a sign no indicator is perfect, the US conception rate appeared to drop sharply late in 2014, with no corresponding recession having followed – yet. Continue reading...

New office comprised mostly of staff who worked for Royal Bank of Scotland’s ‘disgraceful’ GRGThree-quarters of the staff and nearly all the senior managers at Royal Bank of Scotland’s new division, which supports struggling businesses, previously worked at its controversial Global Restructuring Group, which has been accused of pushing firms into bankruptcy.The Treasury select committee, which last week published a full report into the GRG scandal, said 136 of 182 employees at the current restructuring business and 30 out of 32 senior managers came from GRG.Related: The Guardian view on Labour and banks: not casino capitalism | Editorial Continue reading...

All the day’s economic and financial news, including the latest UK mortgage approvals data

Valdis Dombrovskis calls for global response to rise of cryptocurrencies at industry roundtableThe European Union has warned that it will regulate cryptocurrencies if the risks exposed by the meteoric rise of bitcoin and its ilk are not addressed.The boom and bust of cryptocurrencies has seen some investors make millions where others have suffered heavy losses. Bitcoin, which now trades at about $9,000 (£8,000) a token but recently dropped to less than $6,000, leads the pack, rising nearly 2,000% to just under $20,000 in 2017, fuelling a global investment craze.Related: Bitcoin is 'noxious poison', says Warren Buffett's investment chief Continue reading...

Thinktank warns that older workers are not bearing their share of the pensions burden

A Bank of England rate change would add £10bn to UK mortgage bill, Savills saysA 1% rise in interest rates would add around £10bn to the UK’s mortgage bill, according to analysis from estate agent Savills.The increase would equate to adding £930 a year to the cost of servicing the average mortgage. Borrowers on variable rate deals influenced by movements in the Bank of England base rate would be the first to feel the pain, putting the annual mortgage bill up by £4.3bn immediately, Savills said. Continue reading...

200m £10 notes are still in circulation with £1bn likely to miss 1 March deadline, says Bank of England

How do we balance selfishness and community? A Christian tradition of ethical reasoning offers a helpful perspectiveThe belief that we are naturally and fundamentally selfish, from our genes upwards, may be the most powerful of all the acids eating at the foundations of the welfare state and of the wider postwar liberal order. It gains its power from the fact that it is half true. It gains its danger from being half a lie. Everyone but the most miserable knows from personal experience that people are full of goodness as well as of its opposite. We are fairly generous, unselfish, even sometimes thoughtful and trusting in our private lives, most of the time. Public life, however, is increasingly conducted as if universal selfishness defined human nature, and politics must be a zero-sum game. In countries where the economy is stagnating, as Britain’s has been for the past 10 years, this is horribly credible. Each pound in lower taxes for the rich is taken from health or education for the poor; security for the old (if they’re lucky) is funded by vastly inflated house prices and insecurity for the young. The interests of immigrants are set against those of the indigenous population. The interests of Britain are set against those of the EU.None of these oppositions are inevitable. Groups need not be selfish any more than individual people have to be. What most of all makes them so is mistrust. One of the motors of distrust and meanness in ourselves is the belief that others are cheating. The belief that the others are in it only for themselves is at the root of almost all assaults on the welfare state, and even on the ideology of welfare. It contributes to the gleeful trashing of the reputation of charities. Acts of breathtaking selfishness like the Republican tax cut – which has just awarded $29bn to the profits of one firm alone, Berkshire Hathaway, controlled by one of the world’s richest men, Warren Buffett, at the expense of healthcare and even food for millions of poor Americans – are justified and made politically possible by the belief that the poor are endlessly grasping and can never be given enough: so why not give them nothing. Continue reading...

The prospective damage to the health service from leaving the EU is severe. How can the party of Attlee contemplate it?Many years ago, I was outside the studio of the BBC’s Today programme waiting my turn to be interviewed about the latest sterling crisis. Alongside me were two gentlemen of a certain age who were keeping themselves to themselves and looked as though they would not hurt a fly. When my turn came, I said to the studio assistant: “As a matter of interest, who were those two gentlemen outside?” “Oh, them? They are the Militant Tendency.”For younger readers, the Militant Tendency were an extreme leftwing group who came very close to capturing the Labour party. Not all of them were as harmless-looking as those two, and it is to the eternal credit of Neil Kinnock and Roy Hattersley that they fought them off. Continue reading...

Boss of taxpayer-owned bank hails profit as ‘symbolic moment’ despite looming litigationRoyal Bank of Scotland has posted its first annual profit in a decade, but admitted it is braced for a multibillion-pound hit from US regulators.The bank, which is still 71%-owned by the government, made a profit of £752m in 2017, following a £7bn loss in 2016. Its chief executive, Ross McEwan, declared it a symbolic moment and an indication RBS had moved on. The bank, however, would still have been in the red if a long-anticipated fine from the US Department of Justice (DoJ) had arrived during the financial year.Royal Bank of Scotland has made its first annual profit in a decade. Does this mean it is in good financial health? Continue reading...

Two former members of Bank of England’s interest rate-setting committee discuss the outlook consumers are squeezed by inflation• The economy is starting to deteriorate

UK growth during 2017 has been revised down to 1.7%.

Each month we look at key indicators to see what effect the Brexit process has on growth, prosperity and trade in the UK• The economy is starting to deteriorate

Cracks are starting to appear in UK economic resilience, with unemployment rising and growth slowing

G7 rivals outpace UK as consumers rein in spending amid Brexit-fuelled price inflationBritain’s economy grew at a slower rate than first thought in the final three months of 2017, leaving the UK lagging further behind other major economies as it prepares to leave the EU.The Office for National Statistics revised down its estimate for UK growth in the fourth quarter to 0.4%, following an earlier estimate of 0.5% and missing economists’ forecasts that the rate would be unchanged.Gross domestic product (GDP) is a key government statistic and provides a measure of the UK's total economic activity.Inflation is when prices rise. Deflation is the opposite – price decreases over time – but inflation is far more common. Continue reading...

The amount of the smog allowance should vary according to the city’s air quality – compensating workers and their families for living in a polluted environment while incentivising municipalities to clean up their acts

‘Three basket approach’ would breach agreement to prevent cherry-picking, says BrusselsThe EU has ruled out the UK government’s preferred approach to a future trade deal, describing it as a risk to the European project, just as Theresa May is seeking to strike an agreement on the way forward within her cabinet.

Centrica profit falls nearly 20% as it expands cost-cutting drive to save extra £500m a yearCentrica, the owner of British Gas, will shed a further 4,000 jobs by 2020 as part of a cost-cutting programme, which it blamed on the government’s energy price cap and fierce competition in the market.Britain’s largest energy company reported on Thursday a fall of 17% in operating profit to £1.25bn in 2017, owing to poor performance in its business energy supply and North America divisions. Continue reading...

Scrutiny is needed to examine risks for investors, says Treasury committee chair Nicky MorganA powerful committee of MPs is launching an inquiry into bitcoin and other digital currencies over fears that cryptocurrencies could lead to increased “market volatility, money laundering and cybercrime”.

While employment prospects are good, wages and other areas of the economy aren’t expected to grow at the rate the treasury hopesThe latest review of Australia’s economy by the International Monetary Fund has a much less rosy outlook for the next few years than does the government’s budget papers. And in light of the latest release of wages price data showing continued weak wages growth, the IMF crucially predicts much lower wages growth than does the budget – a factor which creates a major risk to the government’s hopes for a return to surplus by 2021.Related: Economy returning to normal? It can only be the 'new normal' | Greg JerichoRelated: Whoever wins the argument over wages growth will likely win the next election | Greg Jericho Continue reading...

Mark Carney has told MPs that household incomes will be 5% lower because of Brexit, as he clashes with his own chief economist about the merits of devaluation

Official figures reveal 1.47 million out of work as young people struggle to find jobsThe prospect of an interest rate rise before the summer has receded after the number of people out of work in Britain rose at the fastest rate in almost five years.Fuelled by an increase in unemployment among young people under the age of 24, the number of jobless rose by 46,000 to stand at 1.47 million in the three months to December, according to the Office for National Statistics. Continue reading...

Christopher Rainger thinks Keir Starmer should say ‘No Brexit’ is the best ‘Jobs Brexit’. But John Doherty recalls David Cameron’s pledge that the referendum would be final. And Peter McKenna says that if anyone led the Brexit charge it was Tony BennWhat a game-changer it will be when Keir Starmer gets up in the Commons and announces that Labour has decided that the best “Jobs Brexit” is “No Brexit”. Recent polling (Labour will win the next election if it becomes the party of remain, theguardian.com, 18 February) shows the majority of Labour members oppose Brexit and the majority of Labour voters do too.Numerous independent and government reports have said that the effect on jobs and the economy from all Brexit options will be bad, with fruit growers already moving from Hereford to China. So, to change Labour’s stance from a hard-to-explain “Jobs Brexit” to an easily defendable “No Brexit” will be changing the policy as the facts change, with no loss of face. Brexit was mis-sold to the public and only Labour can halt Britain’s descent into chaos. It must join with other progressive parties across Europe and fight for Britain to remain and reform the EU. It’s also the only way Labour can win the election that must follow the collapse of talks or Theresa May’s fall from power.

Resolution Foundation says young Britons have suffered biggest reversal in fortunes save for young GreeksBritain’s millennial generation, born since 1981, have suffered a bigger reversal in financial fortunes than their counterparts in most other developed countries except Greece, according to a study.The report by the Resolution Foundation paints a gloomy picture for all young adults across the developed world – apart from the Nordic countries. It highlights how incomes are depressed, jobs scarce and home ownership is slumping for the millennial generation compared with the baby boomers that preceded them.Although precise definitions differ, broadly speaking millennials are those people born between the early 1980s and the late 1990s. They are so called because they turned 18 in or after 2000. They are also collectively known as Generation Y Continue reading...

Focus groups make us feel our views matter – but no one with power cares what we think

These radical places across the UK that encourage the spirit of inquiry are in danger of being taken for granted and need protectingLast Sunday afternoon was the classic start to February half-term: the rain was sheeting down outside, and we’d already played every game in the cupboard and watched too much TV. My sons, aged five and eight, were beginning to squabble and whine, and I knew from experience that if we didn’t leave the house in the next five minutes things were going to get ugly.Happily, we were visiting relatives in Liverpool – a city with a fine selection of museums, many of them free to enter. Within a few minutes of shoving the boys out of the front door, we were standing in the magnificent lobby of the World Museum, wondering what to do first: explore space? Check out the leaf-cutter ants? Take a trip to ancient Egypt? The place was buzzing with families escaping the rain, and with visitors to the opening weekend of an exhibition of terracotta warriors. By the end of the afternoon we had lifted a meteorite, found out about the eating habits of sea cucumbers (gross), learned about female pharaohs and watched Tim Peake drink water in space.It’s easy to dismiss museums as fusty places that we’ve been dragged around on school tripsRelated: UK museum collecting at risk from lack of funding, report warns Continue reading...

Rightmove reports busiest ever month and optimistic pricing but property is taking longer to sellThe average price of a UK property coming on to the market has risen by more than £2,400 in a month to just over £300,000 amid evidence of “record” levels of house-hunting activity, according to Rightmove.The website, which tracks 90% of the UK property market, said the national average asking price for a home had increased by 0.8% during the past month, following the 0.7% rise it reported in mid-January.

Readers including Caroline Lucas and Ruth Lister respond to Guardian articles by Owen Jones and Gaby HinsliffOwen Jones’s discussion of tax seeks to put forward a “radical” agenda but is actually strikingly conservative, especially because of its focus on higher income tax rates (Tax radicals? McDonnell and Corbyn are not radical enough, 16 February). This focus is unhelpfully constraining for two reasons.First, income tax now matters much less than it used to – it has fallen from over half of total UK revenue in the 1970s to about 30% today. There have been compensating rises in VAT and national insurance contributions, and the second of these especially is ripe for radical reform. Second, within income tax, the focus on the rates is far too narrow. How much tax is paid is hugely affected by the tax base, and the allowances given. The most indefensible of these is the allowance for pension contributions at the higher rates, a huge bonus for the better-off. George Osborne seemed to be shaping up to do something about these, but then bottled it. Continue reading...