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 positionâ€.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...
by Lisa O'Carroll Brexit correspondent on (#3ADZM)
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...
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...
by Rowena Mason Deputy political editor on (#3AB07)
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 alignmentâ€, 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...
by Richard Partington and Phillip Inman on (#3A585)
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...
by Rowena Mason Deputy political editor on (#3A2YM)
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...
Health check of financial system says reforms have not gone far enough and notes similarities to US before 2008 crisisFears that China risks being the cause of a fresh global financial crisis have been highlighted by the International Monetary Fund in a hard-hitting warning about the growing debt-dependency of the world’s second biggest economy.The IMF’s health check of China’s financial system found that credit was high by international levels, that personal debt had increased in the past five years, and that the pressure to maintain the country’s rapid growth had bred an unwillingness to let struggling firms fail.Related: IMF warns China over 'dangerous' growth in debtRelated: Adani coalmine project: China Construction Bank won't grant loan, PR firm says Continue reading...
Disability charity Scope and others call for chancellor to withdraw his comments implying disabled people are to blame for sluggish economyDisability charity Scope called on Philip Hammond to withdraw his “totally unacceptable and derogatory comments†after he said Britain’s sluggish productivity could partly be blamed on more disabled people in the workforce .In Wednesday’s treasury select committee, the chancellor was asked about low economic productivity levels, which he had reported during the autumn Budget last month.Related: 'No unemployed' gaffe adds to budget pressure on Philip HammondPretty shocked actually https://t.co/Z2fUrlwjE9Shocking that Philip Hammond is trying to blame disabled people for low productivity! Disabled people contribute enormously and disability employment gap has barely changed since productivity started to stall. Disgusting scapegoating! https://t.co/1BpOF4i0nf Continue reading...
A debt-based economy cannot survive if it does not keep growing, writes David Ashton. While Maurice Vassie says that the UK should follow the Swedish model and learn to repair our possessions instead of discarding themCaroline Lucas (Letters, 2 December), is right about the need to have a more sustainable and people-friendly measure of our wellbeing. However, it is vital to understand why there is the fixation on GDP and economic growth in the first place. Ninety-seven per cent of all money circulating is borrowed and a debt-based economy cannot survive if it does not keep growing in order to service the interest on the debt. The economists at Positive Money among others have been working hard to raise awareness of how our money is created, the consequences of its creation by private banks and what the alternatives are. Coming from a similar perspective, the economist Joseph Huber has just written a new book entitled Sovereign Money: beyond reserve banking, which explains the workings of the current system, gives insights in the roots of the financial crisis and brings new solutions on how to fix a broken financial system.The pursuit of economic growth at all costs is driving planetary destruction and creating untold misery for huge numbers of people. However, policies to try to fix climate change, pollution, austerity, poverty and a host of other problems, which do not address the fundamental issue of the debt-based economy and its need for economic growth, are doomed to fail.
The secretary of state’s blustering over the impact assessments reveals one thing: the whole of the government’s Brexit strategy is built on lies and obfuscationIt called to mind Bill Clinton’s sublimely evasive remark when questioned about the veracity of statements he had made about the nature of his relationship with Monica Lewinsky. “It depends upon what the meaning of the word ‘is’ is,†said the president. David Davis, when asked by a House of Commons committee to explain why he had failed to provide anything adequately resembling the Brexit impact assessments that had been demanded by parliament fell back on an extraordinarily devious defence. There are no “impact assessments†and never had been.The secretary of state did not deploy air quotes in his testimony but the implied inverted commas carried the full weight of his argument. It was, in essence, that MPs had voted to insist on the provision of something that didn’t exist and so there was no real need to question whether or not he had complied.Related: MPs feared a David Davis cover-up. Worse, he had nothing to hideRelated: Sector-by-sector Brexit impact forecasts do not exist, says David Davis Continue reading...
The select committee worried that the government wanted to conceal alarming Brexit plans. But there were no plans at allWith its Brexit strategy hurtling off the rails, this could have been a timely moment for the government to reassure parliament about the existence of a well thought-out plan B.Instead MPs were invited to take a leap of faith on Wednesday when the Brexit select committee asked David Davis to explain what had been done to assess the impact on British business of abruptly leaving the EU.Related: Theresa May finally gets DUP's Arlene Foster on the phoneRelated: David Davis says government has not assessed impact of Brexit for different sections of economy - Politics live Continue reading...
Simon’s story is a tale of 21st-century Britain. He worked, he cared for his mother, he played by the rules. But when he fell, there was no safety netSimon’s death certificate tidies away his life in a few terse official phrases. Date of death: 12 November 2017. Causes: “a) Fatty liver†and “b) Alcohol misuseâ€. No bureaucratic curiosity about how a 51-year-old’s life came to be cut so short.Which leaves his only brother, Dave, dealing with the grief and asking all the whys. Why did Simon die so young? Why did no one else try to help?Yet there are so many people like Simon, all surplus to requirements of this shrunken economyRelated: The Guardian view on the austerity budgets: end the social and economic failure | Editorial Continue reading...
Tools for Self Reliance | Ernest Marples | UK factory orders | Babies beneath the hedges | Labour poll leadI was very interested to read (Letters, 25 November) of the project started by Irene Owens to send sewing machines to Zimbabwe. I wonder if she knows about the charity Tools for Self Reliance? TFSR has groups of volunteers in many parts of the UK. They collect and repair hand tools, which are shipped to a number of African countries. They are particularly keen to accept donations of manual sewing machines. A visit to their website, www.tfsr.org, will enable anyone wishing to donate sewing machines to contact the charity to find their nearest collection point. Hopefully in this way Irene Owen’s project can continue to help many more African families to start a small business sufficient to feed and educate their children.
British workers receive just 29% of their previous earnings, although private pensions bring figure up to near averageBritain’s workers can look forward to the worst state pension of any major country, according to a report by the developed world’s leading economic thinktank.The Organisation for Economic Cooperation and Development (OECD) study calculated that a typical British worker will at retirement receive a state pension and other benefits worth around 29% of what they had previously been earning. That compares with an average of 63% in other OECD countries, and more than 80% in Italy and the Netherlands. Continue reading...
UK’s net worth rose by £803bn over the course of last year to stand at £9.8tn at the end of 2016, says ONSBritain’s landowners have emerged as the biggest winners from the country’s largest yearly increase in national wealth on record, sitting on assets accounting for more than half of the net worth of nearly £10tn.The UK’s wealth rose by £803bn over the course of last year to stand at £9.8tn at the end of 2016, driven by a sharp increase in the value of land, contributing to the biggest annual rise since records began in 1995, according to the Office for National Statistics.Related: Tony Blair backs Labour’s ‘land value tax’ to tackle housing crisis Continue reading...
The OECD wants all countries to think about how policies will impact on women. Let’s take our cue from Sweden, where even snow-clearing considers genderWhen people think of gender equality, they probably don’t immediately think of snow. But the small Swedish city of Karlskoga did just that, when, five years ago, the city reviewed the way it cleared its streets.Related: UK gender inequality as bad as 10 years ago, EU league table showsSince 2010, the UK government’s austerity policies, including welfare cuts, have impacted massively on women Continue reading...
Trade deals were hammered out in secret by multinationals at the expense of workers and citizens. Benefits must be shared if the global economy is to workFifteen years ago, I published Globalisation and Its Discontents, a book that sought to explain why there was so much dissatisfaction with globalisation within the developing countries. Quite simply, many believed that the system was rigged against them, and global trade agreements were singled out for being particularly unfair.Now discontent with globalisation has fuelled a wave of populism in the US and other advanced economies, led by politicians who claim that the system is unfair to their countries. In the US, President Donald Trump insists that America’s trade negotiators were snookered by those from Mexico and China.
Companies such as hotels and restaurants, IT and financial firms blamed weak pound since the Brexit vote for forcing up pricesConsumers face the sharpest increase in prices charged by services firms in almost a decade, according to a survey, as a range of businesses from hotels to IT companies seek to protect profits against rising costs since the EU referendum.According to a survey from the data firm IHS Markit and the Chartered Institute of Procurement and Supply (Cips), companies in the services industries – such as hotels and restaurants, IT, financial services, transport and communications – blamed the weak pound since the Brexit vote for forcing them to drive up prices in November at the fastest pace since February 2008. That was the the second-fastest rise seen since the survey began in 1996.The purchasing managers' indices, or PMIs, track services sector companies, manufacturers and building firms around the world. Continue reading...
The solution would have boosted the North’s economy by allowing it to remain economically part of the EU. The DUP has sacrificed its voters’ interestsSo to the legions of experts required to make any sense of Northern Ireland we may now need to add lexicographers or semioticians. Where does the line, the border as it were, blur between regulatory “non-divergence†and “convergence†and “alignmentâ€?The EU-UK draft agreement that was on the table on Monday, suggests that, in all but name, Northern Ireland would have remained a part of the EU. Achieving the UK government’s agreement on this was a truly momentous achievement for Irish prime minister Leo Varadker, derided by the Brexiter ultras as being naive and out of his depth. This has been an international-relations baptism of fire, it is true, but he has come through unscathed. That the British government withdrew its own proposal was, to borrow a phrase once used by the former taoiseach Charles Haughey, “grotesque, unbelievable, bizarre, and unprecedentedâ€. It is now unclear that it will be back on the table, which is a pity as it had the great merit of ambiguity. But the proposal also throws up as many questions as it answers – nothing new in the context of either Northern Ireland or the EU’s dealings with crises.Related: Theresa May seeks to rescue Brexit deal as Dublin says it won't back down - Politics liveCounties and customsRelated: Theresa May must call the DUP’s bluff – this EU deal has to happen | Simon Jenkins Continue reading...
The prehistoric shift towards cultivation began our preoccupation with hierarchy and growth – and even changed how we perceive the passage of timeMost people regard hierarchy in human societies as inevitable, a natural part of who we are. Yet this belief contradicts much of the 200,000-year history of Homo sapiens.In fact, our ancestors have for the most part been “fiercely egalitarianâ€, intolerant of any form of inequality. While hunter-gatherers accepted that people had different skills, abilities and attributes, they aggressively rejected efforts to institutionalise them into any form of hierarchy.Related: Why 'Bushman banter' was crucial to hunter-gatherers' evolutionary successFarming-based societies created economies of hope and aspiration, in which we focus almost unerringly on the futureRelated: The Inequality Project: the Guardian's in-depth look at our unequal world Continue reading...
Readers reflect on the resignation of Alan Milburn from the Social Mobility CommissionThe resignation of Alan Milburn and the other members of the Social Mobility Commission on the grounds that the government’s “rhetoric of healing social divisions [is not] matched with the reality†suggests naivety (Never mind social mobility. Poverty is an insult to us all, 4 December). We could fill a library with the accumulated evidence of the spectrum of inequalities published since 1960. The critical question is why these have only resulted in, at most, incremental rather than substantive changes. The depressing narrative is that successive governments have introduced a wide range of social and economic policies, many reinforcing the belief that individuals are responsible for their own destiny. The “success†of these policies is reflected in electoral support for inequality, including how the most vulnerable often blame themselves for failing to manage. This is an opportunity for Labour not only to reinforce its commitment to abolish poverty, as Zoe Williams suggests, but also to address inequality in all its manifestations and offer the electorate a comprehensive programme to achieve this.
World’s second-biggest mining company bows to behind-the-scenes lobbying and ditches Sir Mick Davis as its choice for chairmanCongratulations, Simon Thompson, current non-executive director of Rio Tinto, you are deemed sufficiently safe to step up to the chairmanship. The world’s second biggest mining company didn’t describe the appointment in this way, of course – but nor did it refer to the extraordinary behind-the-scenes lobbying that killed the hopes of the board’s original preferred candidate, Sir Mick Davis.It was already known that the process had been hijacked by big shareholders, who had written to Rio to say they weren’t keen on Davis, the former boss of Xstrata and the current chairman of the Conservative party. But the blistering tone of the now-leaked letter is worth noting. It is hard to recall a similar instance of a board of a large FTSE 100 company being read the riot act over the appointment of a chairman. Continue reading...
Our economic system didn’t intend to suppress the social mobility of working-class kids, but it has. Now their prospects are so bleak that Labour’s promises to the postwar working class seem practically BolshevikIf I wanted to save capitalism, I would prioritise social mobility. Not Jude the Obscure-style mobility, where it happens over generations, but the kind we achieved in the postwar era. The kind that sent orphan, gang member and naval rating Bernard Schwartz to acting school to become Tony Curtis. The kind that makes things better in your lifetime and, in fact, in your first decade as an adult.Related: I benefited from social mobility – and I still feel like a permanent outsider | Rebecca Nicholson Continue reading...
Pushing processed foods and sedentary lifestyles on the world is jeopardising global health gainsAs Donald Trump’s administration throws sharp elbows in trade negotiations and systematically rescinds regulations introduced by Barack Obama, one casualty is likely to be efforts to fight the global obesity epidemic. Left unchecked, rapidly rising obesity rates could slow or even reverse the dramatic gains in health and life expectancy that much of the world has enjoyed over the past few decades. And by forcing its food culture on countries like Mexico and Canada, the United States is making the problem worse.One of the paradoxes of modern global capitalism is that whereas more than 800 million people in the world do not have enough to eat, an estimated 700 million people (including 100 million children) are obese. Of course, the two are not necessarily directly related. A considerable proportion of world hunger occurs in countries suffering from domestic strife or severe government dysfunction.Related: More than half of American children set to be obese by age 35, study finds Continue reading...
A push on pensioners’ issues won’t put Labour into power, some readers say, though others disagree. Electoral reform? A rational economic policy? A new shadow chancellor? Morgan Stanley?Owen Jones suggests that in order to win the next election Labour has to appeal to pensioners (Why isn’t Labour surging?, 30 November). He reminds us of the government’s “chaotic Brexit process†yet fails to consider that Labour’s own Brexit ambiguities have created a serious problem.In the big cities Labour failed to mention Brexit and received massive majorities; in the small towns where Labour emphasised its pro-Brexit credentials their vote barely increased. The vast majority of Labour voters do not want Brexit, yet Labour appears to take them for granted. Continue reading...
Bank for International Settlements’ quarterly health check warns global economy resembles era just before financial crashInvestors are ignoring warning signs that financial markets could be overheating and consumer debts are rising to unsustainable levels, the global body for central banks has warned in its quarterly financial health check.The Bank for International Settlements (BIS) said the situation in the global economy was similar to the pre-2008 crash era when investors, seeking high returns, borrowed heavily to invest in risky assets, despite moves by central banks to tighten access to credit.When economists talk about financial markets overheating, they are typically saying asset prices - given to shares, bonds or commodities - are rising too fast or have reached levels that don't justify the usability or profit-making capacity of the companies or goods that they represent. Overheating can occur when investors are overly confident that prices can rise further. But should that confidence evaporate, over-inflated asset prices will have further to fall than most.Related: Bitcoin: UK and EU plan crackdown amid crime and tax evasion fearsRelated: Philip Hammond could be putting the UK on course for another recession Continue reading...
The Tories say the income gap is not growing and cite data that ignores key contributors to the wealth of the top 1% such as capital gains and inheritanceForget all that guff about a growing gap between rich and poor, says Philip Hammond. Pay no heed to Jeremy Corbyn when he talks of how he will deliver for the many not the few, Theresa May says. The chancellor and the prime minister might not always see eye to eye, but on this at least they are in unison: income inequality is at its lowest since the mid-1980s.May regularly makes this point when she is fending off attacks on inequality from Corbyn at prime minister’s questions. Buried away in the depths of the budget speech, Hammond said exactly the same. It’s not hard to see why. The Conservatives are uncomfortable with the idea that they are the party of the 1%, so evidence to the contrary is mighty useful.Related: Living in cars, working for Amazon: meet America's new nomads | Jessica BruderRelated: If you tax the rich, they won't leave: US data contradicts millionaires' threats Continue reading...
Those who seek a hard exit from the EU do so in defiance of old allies in Europe and beyond, and of long-held principles of UK foreign policyPhilip Hammond’s recent budget – are you old enough to remember it? – was completely overshadowed by the gloomy analysis of our economy, present and future, presented by the Office for Budget Responsibility on the same day.Politically, the chancellor was constrained by the knowledge that the minority of deranged Brexiters who seem to be running this government were out for his blood. However, he managed, with limited room for manoeuvre, to ward off the hyenas for the time being. Why, the prime minister – who had earlier contemplated sacking him – even turned up for the Treasury’s post-budget drinks. Continue reading...
From the tulip craze to the South Sea and dotcom bubbles, the past teaches us to beware too strong a dose of irrational exuberanceBitcoin is drawing comparisons with past economic bubbles, owing to its meteoric rise this year. Here are some perhaps poignant history lessons:Bitcoin is the first, and the biggest, "cryptocurrency" – a decentralised tradable digital asset. Whether it's a bad investment is the $97bn question (literally, since that's the current value of all bitcoins in existence). Bitcoin can only be used as a medium of exchange and in practice has been far more important for the dark economy than it has for most legitimate uses. The lack of any central authority makes bitcoin remarkably resilient to censorship, corruption – or regulation. That means it has attracted a range of backers, from libertarian monetarists who enjoy the idea of a currency with no inflation and no central bank, to drug dealers who like the fact that it's hard (but not impossible) to trace a bitcoin transaction back to a physical person.Related: Bitcoin: is it a bubble waiting to burst or a good investment? Continue reading...
by Richard Partington Economics correspondent on (#39K8W)
Disciples of the cryptocurrency plan to hold on for dear life but traditional finance is getting twitchyBitcoin is the fastest-growing asset in the world this year, but the virtual currency does not appear to have many users in London’s tech district. It has been more than a month since bitcoin was used to buy a flat white or craft beer sold at the Old Shoreditch Station, according to the hospitality manager at the east London bar.Bitcoin is the first, and the biggest, "cryptocurrency" – a decentralised tradable digital asset. Whether it's a bad investment is the $97bn question (literally, since that's the current value of all bitcoins in existence). Bitcoin can only be used as a medium of exchange and in practice has been far more important for the dark economy than it has for most legitimate uses. The lack of any central authority makes bitcoin remarkably resilient to censorship, corruption – or regulation. That means it has attracted a range of backers, from libertarian monetarists who enjoy the idea of a currency with no inflation and no central bank, to drug dealers who like the fact that it's hard (but not impossible) to trace a bitcoin transaction back to a physical person.Related: Everything you wanted to know about bitcoin but were afraid to askRelated: Bitcoin bubble? The warnings from history Continue reading...
Economics | The Guardian