Clergy members, emergency staff and police officers among those hardest hit by inflation outstripping wage risesMany of those working on Christmas Day, including members of the clergy and the emergency services, will be paid less than a decade ago, with little sign that the earnings squeeze will fade in the new year, according to analysis.Real wages for the most-worked jobs on 25 December, barring kitchen staff, have fallen since 2007 due to rising inflation and meagre increases in pay, a TUC study has found. Continue reading...

Areas in Midlands and north of England, where support for leaving EU was high, have most exposure to trade consequencesThe UK regions that voted to leave the EU are more economically exposed to the effects of Brexit than anywhere else in Europe, research suggests.A University of Birmingham study examined the degree to which EU regions were exposed to the possible negative trade-related consequences of Britain’s departure and found areas in the Midlands and north of England, many of which voted for Brexit, had the greatest exposure. Continue reading...

Sixty five academics support the call for a new Reformation, and 21 female economists and social policy researchers also have their say. Plus letters from Dr Pete Clarke and Nicholas MaxwellIn the 500th anniversary of the Reformation, which challenged a single dominant belief system, we agree it is time for the reformation of another all-embracing and powerful set of beliefs: that of mainstream economics (Larry Elliott: Economics needs a Reformation of its own, 18 December). Neoclassical theories currently dominate the university teaching of economics, as well as public debate, policy and decision making. Yet we believe they have assumed this level of influence not as the result of open debate, challenge and the scientific method, but as a belief system whose founding principles now pass unquestioned. Its proponents claim special authority to pronounce on all matters and its teaching has taken on the characteristics of indoctrination: students being asked to memorise and repeat rather than to criticise and evaluate.The world faces poverty, inequality, ecological crises and financial instability that mainstream economics, apparently incapable of self-correction, seems powerless to understand, let alone help address. We support the call made last week in the publication of “33 theses for an economics reformation” for radically greater pluralism, and believe this necessary if we are to reverse these problems. It must begin with reform of the way economics research is funded in universities, which under the present system perpetuates the monopoly of a single narrow perspective. Ending the unhealthy intellectual monopoly within economics is not just about making the discipline more effective and democratic, it is essential to raise our collective chances of surviving and thriving. Continue reading...

Exclusive: Michel Barnier’s stark declaration quashes hopes for a bespoke trade deal to include financial servicesBritain cannot have a special deal for the City of London, the European Union’s chief Brexit negotiator has told the Guardian, dealing a blow to Theresa May’s hopes of securing a bespoke trade agreement with the bloc.

All the day’s economic and financial news, as cryptocurrency bitcoin joins the world’s largest exchange

Source reveals that at meeting with ministers the PM argued for UK to keep up calls for bespoke, ambitious deal

Strong growth recorded in November continued in December, but is expected to slow in early 2018Britain’s manufacturers have ended 2017 on a high note, with output surging to meet the strongest order books in almost three decades.The latest snapshot of industry from the CBI found the strong growth recorded in November continued in December but is expected to abate in the early months of 2018. Continue reading...

Will Theresa May be able to convince her party of the necessity for a transition period, during which the UK obeys EU rules without having any say in them?

Property website says 35% of homes up for sale have cut sale price, with Brexit vote to blame for the biggest discounts in LondonPrice cutting by homeowners desperate to shift their property in a slowing market has reached the highest levels in six years, according to an analysis by website Zoopla.Just over 35% of the homes marketed on the site have marked down their price in the hope of achieving a sale, with the biggest discounts in the London property market.Related: Housebuilders issue Brexit plea as poll shows UK reliance on EU workers Continue reading...

Controls can include monetary policy, writes Mike Ellwood; Yugo Kovach recommends restricting migrant labour; and there’s always revolution, points out Gareth ReevesI am delighted that Larry Elliott (Think our governments can no longer control capitalism? You’ve been duped, 14 December) has discovered Professor Bill Mitchell’s book Reclaiming the State.Mitchell is a respected “heterodox” economist who specialises in modern monetary theory, and writes an almost daily blog in which he explains MMT and its political and economic implications. If Elliott were to fully learn the lessons of MMT from Mitchell’s book and/or blog, then perhaps he would not write (as he recently did) about governments of countries like the UK (which issues its own currency in a floating exchange rate system) having to “borrow” in order to run a fiscal deficit. The “borrowing” that does take place is a “voluntary” restriction placed upon the government’s freedom to spend, for reasons that are no longer valid (if they ever were), as Mitchell expertly explains, and could be dropped, if the government so willed. Continue reading...

Banking trade body urges Theresa May and Philip Hammond to put City at centre of EU talks or risk dealing a major blow to the economyBritain’s banks have written to Theresa May and Philip Hammond warning that a Canada-style free trade agreement with the EU post-Brexit is not ambitious enough and that alignment with EU rules on finance is crucial.The open letter from UK Finance, which represents major banks and other financial institutions, said the government must place the City at the centre of Brexit trade talks or risk dealing a major blow to the economy.Banks, insurance companies and other financial firms in the EEA – the EU along with Iceland, Liechtenstein and Norway – are able to do business in the UK with separate regulatory approval. The system is known as passporting and allows firms to trade freely across borders. It applies the other way round, so that UK firms can operate in other EEA countries.Related: It's Frankfurt … and Paris: Goldman Sachs names post-Brexit hubsJust left Frankfurt. Great meetings, great weather, really enjoyed it. Good, because I'll be spending a lot more time there. #Brexit Continue reading...

The employment rate might look good but the outlook is far from rosy for low-paid BritonsPiece by piece, Britain’s jobs-creating machine in the years of economic recovery since the financial crisis appears to be coming unstuck.Dating back to early 2012, the number of people in employment has been on an upward curve – to fanfare from the Conservatives, who readily quote the 3 million jobs created since they came to power in 2010. But Theresa May should be worried, after figures from the Office for National Statistics last week showed the jobs engine has now chugged into reverse. Continue reading...

Neoclassical economics has become an unquestioned belief system and treats those challenging the creed as dangerousIn October 1517, an unknown Augustinian monk by the name of Martin Luther changed the world when he grabbed a hammer and nailed his 95 theses to the door of the Castle Church in Wittenberg. The Reformation started there.The tale of how the 95 theses were posted is almost certainly false. Luther never mentioned the incident and the first account of it didn’t surface until after his death. But it makes a better story than Luther writing a letter (which is what probably happened), and that’s why the economist Steve Keen, dressed in a monk’s habit and wielding a blow up hammer, could be found outside the London School of Economics last week.

As some hard economic truths become clear, the many ideologically uncommitted Britons who chose to leave may start changing their mindsMy football team, AFC Wimbledon, may be languishing down in the third division, as it was once called, but the Conservative MP for Wimbledon, Stephen Hammond, showed himself to be in the Premier League last week.In that refreshing, surprising vote on Thursday, he and his fellow Tory rebels stood up to be counted in the cause of parliamentary democracy. By voting against Theresa May’s plan to prevent parliament from having the last say on whether the terms of any Brexit deal should be accepted, they joined the noble ranks of “mutineers” and “enemies of the people”. Continue reading...

Labour’s economic plans will alleviate the long-term damage being inflicted by austerity policiesWhile the Daily Mail, with Pavlovian regularity, persists in ringing the “Marxist” alarm bell, the Financial Times is a little more measured. “Labour has a fair wind” with business leaders, the paper argued this month, “with many terrified of a hard Brexit”. At the CBI’s annual conference in November, leaders of industry gave Jeremy Corbyn a distinctly warmer welcome than they gave Theresa May.That should come as no surprise, given the destabilising extremism of the Conservative Brexiters. Their echoing of hard-right American Republican ideology and advocacy of a hard Brexit is based on the belief that the UK’s economic interests, in particular the NHS and public services, would benefit from subjugation to American oligopolistic capital. Hence the calls for the UK to join the North American Free Trade Agreement. Yet, at the same time, polling shows that the British people are disillusioned with the privatisation of key sectors, and favour nationalisation. They seek protection from the impact of deregulated market forces on their lives and livelihoods and on their children’s prospects.From 1956 to 2008, Conservative governments had an average annual surplus of 0.3% of GDP, while Labour's was 1.1% Continue reading...

There’s been a big increase in tax revenue, which should lead to a smaller than expected deficit – but so far it’s coming from companies, not individuals

Former prime minister will take charge of £750m fund to improve transport links between China and its trading partnersDavid Cameron has taken a job leading a billion-dollar investment initiative agreed between the UK and China.

Study of over 6,000 households found an increase in people reporting high mortgage debt, repayment costs and rentsAlmost a decade of improvements in household finances has started to be unpicked in the year since the EU referendum, according to the Bank of England.Findings from a biannual study for Threadneedle Street of more than 6,000 UK households found an increase in people reporting high mortgage debt when considering their income, while there were also worrying increases in repayments and in costs for renters. Continue reading...

Since 2010, more than 478 libraries have closed in England, Wales and Scotland. It’s the old Tory con: talk up advancement, then attack the institutions that make it possibleIf they weren’t already here, we’d have to invent them: public spaces, crammed with books, computers and information points, where events and meetings regularly take place, and children in particular get an early taste of the world beyond their own immediate experience.Related: The UK no longer has a national public library system | Laura SwaffieldRelated: No one needs libraries any more? What rubbish | Rhiannon Lucy Cosslett Continue reading...

Official data suggests shoppers are defying inflation increase, weak wage growth and slump in sterling since Brexit voteBlack Friday discounts encouraged British consumers to increase their spending on the high street and online in November, despite the most protracted squeeze on household income in memory.Officials at the Office for National Statistics said the American-inspired promotional event had helped drive a 1.1% increase in the number of goods bought last month compared with October, with sales of electrical household appliances making the biggest contribution to growth. City economists had forecast growth of 0.4%. Continue reading...

All the day’s economic and financial news, as central bankers hold their final monetary policy meetings of 2017

In reality there has been a class war, in which the right has spent decades using the state to undermine workers. We can fight backBlue Planet 2 demonstrated the terrifyingly fragile state of nature’s ecosystem. One of the key messages from the BBC series was that a delicate balance exists in the oceans between predators and prey. If there are too many predators, the stocks of prey fall. The predators go hungry and their numbers dwindle, allowing the prey to recover. Balance is restored.Related: Workers' rights are under threat across the world | Keith EwingTo the victors have gone the spoils: higher profits; lower personal tax rates; a higher share of national incomeRelated: Is the growth in living standards worse now than in the Great Depression? Continue reading...

Official figures reveal drop in number of people in work and pay rises lagging behind inflationBritain’s long jobs boom appears to have come to an end after official figures showed the number of people in work fell by 56,000 in the three months ending in October.The Office for National Statistics said an upswing that began in 2012, and persisted for a year after the vote to leave the EU, had petered out.The International Labour Organisation (ILO) jobless rate is a measure of unemployment adopted in a number of countries to reflect the state of the labour market. It is expressed in percentage terms, as a proportion of working-age people who are out of work but want a job and are actively looking for one. Continue reading...

Business leaders call on government to rein in planned tax increases after figures show 32,000 fewer Scots in employmentThe Scottish government is facing renewed pressure from business leaders to temper its plans for income tax rises after the jobless total increased and inflation rates rose.

Economists warn that the UK labour market may have peaked, as the number of people in work falls for the second month running

Bank announces in Paris it ‘will no longer finance upstream oil and gas’ after 2019 in response to threat posed by climate changeThe World Bank will end its financial support for oil and gas extraction within the next two years in response to the growing threat posed by climate change.In a statement that delighted campaigners opposed to fossil fuels, the Bank used a conference in Paris to announce that it “will no longer finance upstream oil and gas” after 2019.Related: Insurance giant Axa dumps investments in tar sands pipelinesRelated: Banks should disclose lending to companies with carbon-related risks, says report Continue reading...

Dearer computer games, smaller than expected falls in airfares, plus rising food, transport and clothing costs spur rate to near six-year highThe government has admitted households are feeling the pain from rising inflation after the cost of living rose to a near six-year high of 3.1% in November.Amid fears that the intensifying pressure on living standards will hit high street spending in the runup to Christmas, the financial secretary to the Treasury, Mel Stride, said 2018 would bring better news.Inflation is when prices rise. Deflation is the opposite – price decreases over time – but inflation is far more common.Related: North Sea pipeline closure 'could have significant impact on consumers' Continue reading...

Food, fuel, airline fares and recreational costs have driven the cost of living up at its fastest rate since March 2012

Friday 22 December on course to be biggest ever shopping day for food and drink as families stock up for Christmas DayShoppers in the UK will spend a record £4.2bn on food and drink in the final week before Christmas, shrugging off higher prices caused by the fall in the value of the pound since the EU referendum.

Rand Corporation study finds that under even the softest Brexit scenario, Britain will be worse off than under ‘no-Brexit’A no-deal Brexit would take 4.7% out of UK economy over 10 years, costing the UK £105bn and each member of the population £1,585, research by a US thinktank has found.Staying in the single market and customs union Continue reading...

Manpower poll shows hiring staff is flatlining in London and depicts firms as the least confident for five years about taking on new workersBritain’s employers are the most pessimistic about hiring staff than at any time in five years, underscoring fears over the number of new jobs available as the country prepares to leave the EU.A poll of 2,102 employers across nine different industry sectors found a net balance of just 4% were planning to increase staff levels rather than make cuts in the final months of the year.Related: UK employment falls for first time since aftermath of Brexit voteProductivity is an economic measure of the efficiency of a workforce. It typically measures the level of output per hour of work, or per worker. Continue reading...

It is a sad day for the NHS and for King’s patients when someone of his calibre feels they have no alternative but to throw in the towel, writes Andrew McCallYour report on Lord Kerslake’s resignation as chair of King’s College Hospital, London (Head of top NHS trust quits over cash squeeze, 11 December) finishes with a statement from NHS Improvement saying “We will replace him with a highly experienced chair to take charge of the trust’s position”.This is an inaccuracy. Under the constitution of foundation trusts, it is for the trust to select and appoint their chair, who is an independent director. I assume that, as usual, King’s nominations committee will soon start the process of appointing a new chair. But I know that we will struggle to find one so skilled, so experienced, or so dedicated as Bob Kerslake. Continue reading...

Lord Kerslake is a big beast in the public sector. His resignation from the hospital trust he chaired ought not to be dismissed as a face-saving exercise. The Treasury is imposing a brutal decline on resources for healthcareBob Kerslake has been a big figure in public service for most of the past 20 years. He was a successful chief executive of Sheffield city council, before he was enticed to Whitehall where he became permanent secretary at the Department for Communities and Local Government, and for a time head of the civil service. In 2014 he left Whitehall to run King’s College hospital foundation trust in south London, and in 2015 he was made a member of the House of Lords. His public image is of a combative man who is not afraid to speak his mind and who is passionate about public service. It is little surprise that the opposition have sought his advice.On Sunday night, Lord Kerslake announced in these pages that he was resigning from King’s in protest at what he called – correctly – the failure of government to face up to the depth of underfunding in the health service. Such a high-profile resignation by a well-respected figure is profoundly embarrassing, and he correctly anticipated a counter-attack. On Monday morning it was widely reported that he was expecting to be asked to step down by NHS Improvement, the regulator created by the Conservatives to monitors trusts’ financial management, because King’s is spending way over its budget, and has been since before he took over. King’s is now a hospital in special measures, adding to the impression that Lord Kerslake jumped before he was pushed. Continue reading...

Report says uncertainty and breakdown of Northern Ireland’s assembly will increase disparity between north and southThe gap in fortunes between the economies of Northern Ireland and Ireland will increase in the next two years as Brexit looms, according to a new report published in Dublin.Consultancy EY predicts 144,000 new jobs will be created across the entire island of Ireland between 2017 and 2020. However, the vast majority, 138,500, will be in the republic – the population of which is more than twice the size of its neighbour – with just 5,800 jobs in Northern Ireland, said EY.Counties and customs Continue reading...

He has sold out the blue-collar voters who brought him to power, while pursuing policies to enrich his fellow plutocratsDonald Trump won the US presidency with the backing of working-class and socially conservative white voters on a populist platform of economic nationalism. Trump rejected the Republican party’s traditional pro-business, pro-trade agenda, and, like Bernie Sanders on the left, appealed to Americans who have been harmed by disruptive technologies and “globalist” policies promoting free trade and migration.But while Trump ran as a populist, he has governed as a plutocrat, most recently by endorsing the discredited supply-side theory of taxation that most Republicans still cling to. Trump also ran as someone who would “drain the swamp” in Washington DC and on Wall Street. Yet he has stacked his administration with billionaires (not just millionaires) and Goldman Sachs alumni, while letting the swamp of business lobbyists rise higher than ever. Continue reading...

Brexit gives us the chance to reshape Britain’s role on the global stage. We should champion the poverty-busting power of rules-based trade

With rate rise expected to remain on hold this week, British Chambers of Commerce urges ministers to finalise transitional dealBritain’s biggest businesses are warning the economy will remain in the slow lane, as uncertainty from Brexit puts their investment plans on ice despite progress with Brussels.The interjection by British Chambers of Commerce comes before a meeting of Bank of England’s rate-setting committee this week. The BCC have told ministers they now need to finalise a transitional deal to smooth the Brexit process before firms will increase spending on staff and production capacity, despite the breakthrough last week that moved talks with the rest of the EU on to trade.What are Brexit options now? The four scenariosRelated: Business leaders urge government to create productivity watchdog Continue reading...

Report launched by John McDonnell says Bank needs to help hi-tech firms and tackle regional inequalityParts of the Bank of England could be moved out of London to Birmingham under Labour plans to push investment into other parts of the UK.The radical plan threatens the historic association of the Bank with Threadneedle Street in the City of London, where it has been based since 1734. The recommendation is part of an interim report into the UK’s financial system, led by the economist Graham Turner of GFC Economics and launched by the shadow chancellor, John McDonnell. Continue reading...

Labour objects to finance bill over tax cut to banks and Stella Creasy demands data on how measures affect womenPhilip Hammond will face attempts to vote down his budget at the first hurdle on Monday on the grounds that tax cuts for big banks must be stopped and all policies should be subject to a gender audit to show how it affects women.Labour will object to the finance bill at second reading mainly on the grounds that cuts to the bank levy costing £4.7bn should be reversed to finance children’s services.Related: ‘Ladydata’ could help solve gender inequalities | Stella Creasy Continue reading...

Obsession with debt reduction has been disastrous and arguments against a borrow-to-invest approach no longer pass musterRarely has a chancellor had to publish economic forecasts as downbeat as those in last month’s budget, but so far the political fallout has been minimal. Philip Hammond has had a good couple of weeks.That is partly explained by the focus on other matters, such as the investigation into Damian Green and, of course, Brexit. An added bonus for Hammond is that the post-budget attention has not been on him but on John McDonnell, his Labour shadow. Continue reading...

Kansas slashed taxes at the top to try to spur growth – but the plan crippled the state’s finances and proved disastrous for its Republican governorIs Donald Trump about to turn America into Kansas? It’s a question some worried people who live in the state are asking as the Republican party pushes through the biggest tax overhaul in a generation – an overhaul that, they claim, bears an uncanny resemblance to a tax plan that left their midwestern home in disarray.After a failed economic experiment meant to boost economic growth blew a hole in the Kansas budget as big as a prairie sky (a $350m deficit in the current fiscal year and nearly $600m in the next) state jobs and services have been slashed.Related: 'We are a cautionary tale': Kansas feels the pain of massive Trump-style tax cuts Continue reading...

A handful of companies now wields massive global power. Outside the EU, we will be their preyWe live in a world of corporate goliaths and the trend to gigantism is accelerating. The new era of hi-tech data capitalism has an embedded proclivity to monopoly. The bigger the network, whether Facebook or Google, the more valuable it is to be connected. Big is good in the digital universe, while even bigger is better.Meanwhile, analogue capitalism, confronted by the challenge of the new, is reacting by consolidating and merging into ever larger entities. Unless they do, comes the reply to any challenge from national competition authorities, they won’t have the heft and scale to meet the new competition. Increasingly, we are surrounded by the most awesome concentration of corporate power in the history of capitalism. In every industry, reported the Obama administration last year, the market power of the biggest companies has been growing and mark-ups and profit margins with them. America’s era of the robber barons in the late 19th century had nothing on this. Continue reading...

Hard Brexit is still a clear prospect: and while leftwing and centrist Leavers may see new futures, the right has always envisaged a return to 70s BritainA hard Brexit is still on the cards despite the cheers of business leaders for Theresa May’s fudged deal on the Irish border, concessions on EU citizens’ rights and the rise in the exit fee from £20bn to nearer £50bn.It’s easy to see how phrases like “regulatory alignment”, when coupled with a two-year transition period, could be welcomed by corporations as offering the prospect of a soft Brexit. Another reason would be the flailing of Nigel Farage and his fellow Brexiter Gisela Stuart as they accuse May of signing just about as bad a deal as they could imagine. Continue reading...

On the face of it, the US job market appears in rude health, with unemployment at a 17-year-low. But look beyond the headlines, and it’s not all milk and honeyUnemployment in the US is now at a 17-year low, having grown for 86 months in a row since the Great Recession. Hiring did grind to a halt in September after hurricanes Harvey and Irma tore through Florida and Texas, disrupting some of the country’s most economically important areas.But on Friday, the economy appeared to have shaken off the slump that followed in their wake, adding 228,000 new jobs in November according to the latest report from the Bureau of Labor Statistics. Beneath the surface, however, there are still some deep scars and structural problems remaining in the labor market. Continue reading...

Auto exports and pharma output soar, but mining, energy and construction drag down total industrial production, says ONSBritain’s car factories are helping drive the country’s manufacturing production to its longest period of growth in more than 20 years, according to government figures.The Office for National Statistics (ONS) said cars made for export and a bumper month for pharmaceutical firms helped output grow for the sixth month in a row in October – the longest unbroken period of manufacturing growth since 1994. Continue reading...

Royal Bank of Scotland’s chairman says central bankers should hang an ‘abandon hope’ warning over bitcoin

Gisela Stuart of Change Britain says move aimed at solving Irish border issue in Brexit talks would be ‘completely unacceptable’A pressure group linked to the former Vote Leave campaign has warned Theresa May that signing up to regulatory alignment with the EU to solve the Irish border problem will not allow Britain to “take back control” from Brussels.Change Britain, which was launched last year with the backing of the foreign secretary, Boris Johnson, and the environment secretary, Michael Gove, made clear its belief that such a move would fail to respect the mandate of the referendum result. Continue reading...

US cities are selling their souls to be the company’s second HQ site. It’s part of the techno-capitalist takeover of cities, ultimately funded by ordinary citizensAmazon, the online retail giant, is in the midst of running its own hunger games. The contestants are 238 cities and regions across North America. The prize is being chosen as the site for Amazon’s second headquarters (HQ2), which promises to employ upwards of 50,000 people. These cities are locked in a fierce battle to outbid each other and they’ll do anything, give anything, to be chosen.In an era of brutal austerity, cities are hollowed out and hoping for a savior. Since the tech sector is flush with cash, by showing up and saying the magic words – growth, jobs, investment, innovation – city leaders bend to their will. Amazon’s HQ2 competition is the latest egregious example of a techno-capitalist regime that’s bewitching cities around the world.Related: Bids are in for Amazon's HQ2. Now the contest begins – but will it be worth it?Related: Amazon wants goodies and tax breaks to move its HQ to your city. Say no thanks | Noam Maggor Continue reading...

The chancellor appears in front of the Treasury select committee to answer questions on the November budget and says 'high levels of engagement in the workforce, for example of disabled people' may be one of the factors keeping down UK productivity levels

There will be a rightwing backlash against Labour’s strategy for reviving the economy, but it is clearly the right approachHere is a story about how crude dogma and a factually baseless political attack line are wrecking the country’s future. Britain desperately needs investment, and with interest rates this low it would be economic madness not to borrow to fund it.Even a Conservative cabinet minister such as Sajid Javid has broken ranks to demand £50bn of borrowing to solve the housing crisisRelated: George Osborne wants money to fight the poverty he caused? He has no shame | Polly Toynbee Continue reading...