Guardian readers share their thoughts on the state of the economy

All the day’s economic and financial news, as Germany imports and exports more than ever before

Our photographer’s best pics following the lock-up in Canberra as the government announces various measures, including an increase in the Medicare levy for most Australians as well as hits for businesses and banks.• Federal budget 2017: Morrison hits banks with $6bn tax rise and promises ‘better days ahead’ Continue reading...

After nearly a decade of saying the problem was all on the spending side, the Liberal party has finally admitted that there is a revenue problem

Spurt in spending in April was result of late Easter not upward trend, say Barclaycard and British Retail ConsortiumBarclaycard and the British Retail Consortium have warned that a spurt in spending in April was the result of the late timing of Easter and said the growing squeeze on incomes meant the underlying trend in high street activity was weak.The two surveys found that rising inflation had resulted in consumers devoting an increasingly share of their pay packets on household essentials.Related: Sainsbury's weighs up franchise deals to boost Local network Continue reading...

Snapshot of the jobs market by Recruitment and Employment Confederation finds there are fewer people available to fill vacanciesEmployers in the UK are struggling to fill vacancies after the sharpest drop for more than a year in the number of available candidates, according to a report that points to more recruitment difficulties ahead once Brexit bites.Even before the potential restrictions on immigrants once the UK leaves the EU, firms are reporting skills shortages across a range of more than 60 roles, including engineers, IT specialists, care workers and accountants.Related: City banks could move at least 9,000 jobs from UK due to BrexitRelated: City firms say they won't be ready for Brexit in two years Continue reading...

From schools to health inspectors, the institutions that ensure our wellbeing are under unprecedented attack. This political poison harms us all, say the authors of the new book DismemberedJust as he reaches the end of his inspection, the environmental health officer spots the meat pies. A stack of them have tumbled on to a shelf on the floor of the storeroom, not in the chiller. A flicker of alarm crosses the transport cafe owner’s face. Pies are big on his menu. He sighs. “Well, it’s complicated,” and the story unfolds. The pies used to be made by so-and-so but the company owners split acrimoniously and it’s all a bit chaotic now.“Ah, yes,” says the inspector. “I know this one.” He has the local background and, as he probes and prods, the cafe proprietor admits sheepishly that the pies arrive with a scrappy piece of paper, no official invoice, dubiously labelled “organic” with no list of contents, paid for in cash to an old chap called Gramps off the back of a lorry.Related: George Osborne's benefit cuts legacy set to come into effectRelated: The battle for the BBC | Charlotte HigginsWhat we do together through our taxes … is worth more than any private gain through market transactionsRelated: Feet first, our NHS is limping towards privatisation | Polly Toynbee Continue reading...

Letters from Terry Kelly, Ruth Lister, Dr David Griffith, David Beard, Peter Fieldman and Richard Cooper in response to Guardian reports and Paul Mason’s articleIt did not take long in the current election campaign for the Conservatives to trot out the old myth of Labour being the party of high taxation while the Tories are “tax cutters by instinct” (Tories redeploy the ‘bombshell’ against Labour tax plans, 4 May).It may be true to say the Tories favour unfair cuts in direct taxation, but this certainly cannot be said of their less progressive and equitable “instinct” of increasing indirect taxation. Let’s not forget it was Margaret Thatcher who raised VAT from 8% to 15% only weeks after denying there were any plans to do so during the 1979 election campaign, and it was George Osborne who raised it from 17.5% to 20% following similar denials in 2010. Continue reading...

Thinktank estimates ODA spending will rise by £1bn during the course of next parliamentPoverty reduction in the world’s poorest countries risks being diluted by the government’s increasing tendency to devote a bigger slice of Britain’s aid budget to pursuing the national interest, the Institute for Fiscal Studies has warned.The thinktank estimated that overseas development assistance would rise by £1bn during the course of the next parliament as a result of Theresa May’s pledge to continue meeting the United Nations 0.7% aid target.Related: Foreign aid 0.7% pledge will remain, says Theresa May Continue reading...

Emmanuel Macron’s victory in the French presidential election has reassured investors, although profit taking has pushed shares down

The new president sincerely wishes to improve life for the French people. But he cannot see that without radical, far-reaching change it will be impossibleFrom the outset, the motto of Emmanuel Macron was “rassemblement” (coming together): he aimed to unite a divided nation. Political divisions, he claimed, were artificial: the left/right divide was perpetuated by parties whose sole objective was to beat their rivals to power. Beneath theatrical politics, there must be a population with common, liberal aspirations, who felt constrained by regulation and especially labour laws, crushed by taxation, burdened by the state. By creating a new, grassroots movement, Macron would gather the energies dormant in civil society, transcend political divides and effect no less than a “revolution” (to quote the title of his book).No doubt, many in the professional classes and the media enthusiastically embraced the great liberal dream of a passionately moderate society. Ever since the bourgeoisie rose to prominence at the end of the 18th century, it has aspired to being perceived as the bearer of universal values. Once again, this aspiration has been thwarted.Related: Brexit campaign group insults Macron after presidential winUnder an unbridled capitalist regime, profit-making is not fuelled only by greed, but by economic necessity Continue reading...

The prime minister knows the ‘tens of thousands’ target is unrealistic, and she must be hoping she never meets it

Stock markets can deal with crisis but have trouble pricing the ‘black swan’ unknown unknowns such as 9/11. None have surfaced … yetWith Emmanuel Macron’s defeat of the rightwing populist Marine Le Pen in the French presidential election, the EU and the euro have dodged a bullet.But geopolitical risks are continuing to proliferate. The populist backlash against globalisation in the west will not be stilled by Macron’s victory, and could still lead to protectionism, trade wars, and sharp restrictions to migration. If the forces of disintegration take hold, the UK’s withdrawal from the EU could eventually lead to a breakup of the trade bloc – Macron or no Macron.Related: Trump tax cut plan will be as big a flop as failed healthcare reforms | Nouriel Roubini Continue reading...

Rising inflation is pressuring Bank governor Mark Carney to raise the current 0.25% rate even as UK economic growth slowsSlower economic growth and higher inflation present Bank of England policymakers with a delicate balancing act when they meet this week to set interest rates and agree new forecasts for the UK as it goes through an election and Brexit talks.The Bank’s monetary policy committee (MPC) is widely expected to keep interest rates at their record low of 0.25% to offer continued support to the economy and the jobs market.Related: Higher interest rates. Great idea. Here’s why it won’t happen Continue reading...

Our economic model has reached its natural limits – it will never get better. Instead of managing the status quo it is time for centrists to overhaul the systemSay what you want about Tony Blair, and believe me I most certainly will, but the early years of the New Labour government at least had a sense of energy to them. Policies both good and bad were pushed with passion and certainty. You could disagree with them, but there was something to disagree with.Yet over the last decade since the financial crisis the centre ground has been markedly bereft of ideas. The right has assumed its natural mantle as the party of authority and nostalgia, standing athwart history shouting “Stop, in fact reverse, go back, we don’t like any of this!”Related: The hidden threat of a liberal centre-ground moderniser | Steve RichardsHigh levels of private debt could be a problem for the British economy, says @MazzucatoM #Newsnight pic.twitter.com/oVbjn9o6XKRelated: Finally, a breakthrough alternative to growth economics – the doughnut | George Monbiot Continue reading...

John McDonnell is caught in same trap as his Conservative counterpart, because only rise on basic rate will dent public deficitThe shadow chancellor, John McDonnell, needs only to cast his mind back to the March budget to judge the public’s reaction to higher taxes. Philip Hammond’s proposal to raise the rate of national insurance paid by the better off among the self-employed was widely condemned, not least by McDonnell himself.Labour says its plan to raise “a bit more” income tax on those earning more than £80,000 overcomes the objections of all but an elite, who have fared well enough since the 2008 crash while ordinary working women and men have seen their incomes barely recover. Continue reading...

Shadow chancellor says highest increases would be for top 1%, and only top 5% of earners would face riseJohn McDonnell hinted that a Labour government would introduce tax rises on those paying the top rate of tax – at £150,000 and above – and that Labour’s biggest tax increases would be reserved for the richest.

The decline in real pay since the financial crisis gives the lie to the Tories’ election claims of sound economic managementIt is a truth universally acknowledged that a prime minister in possession of a strong economy wins elections. Governments lose when the country has been put through the wringer, as in 2010, and win when everything’s going well, as it is now.There’s only one thing wrong with this theory. The economy is not booming – it’s struggling. The problems that the Conservatives inherited as part of a coalition in 2010 have not been eradicated. In many cases, they have got worse. Policy mistakes have gone unpunished. Yet the only logical conclusion from last week’s local elections is that the Conservatives are on course for a thumping victory in the big one next month. Continue reading...

By investing in precarious deals and covering up his losses, Alexis Stenfors cost one of the world’s biggest banks a fortune. Andrew Anthony asks why doesn’t he feel more remorseIn 2009, shortly after the global markets had suffered their worst crisis for 90 years, Alexis Stenfors was working as a currency trader for Merrill Lynch in London. With 15 years’ experience, he was good at his job and he prided himself on his ability to read the markets. His view was that the whole financial system was going to go “belly up”. That was what he was betting on.And boy did he bet. He took increasingly extreme positions and when they failed to return dividends, he covered up losses in his trading books that he estimated to be around $100m (£78m). Then he went on holiday to India. Stenfors didn’t realise it at the time, but it was the end of his career as a trader, and the beginning of his notoriety as a rogue trader. Merrill Lynch later announced that his actions had resulted in the loss of $456m (£356m).Why did I do it? I am not sure if I have come any closer to a definitive answerI didn’t think about the system as a whole. You never say: ‘Hang on, what happens if the whole things explodes?’I wouldn’t go back to trading simply to make money. I know what I would become Continue reading...

Britain’s struggle with monetary policy has not just had economic consequences: it is also a key source of the Euroscepticism that has brought us to crisisThis month sees the 20th anniversary of the granting by New Labour of independence to the Bank of England.It was not full-scale independence but “operational independence” in monetary policy: that is, the freedom to change interest rates without having to consult the chancellor. The Bank is still the Treasury’s agent in other matters, such as decisions about the nation’s currency reserves. Continue reading...

Liberals appear naive when they claim all food bank users are ‘deserving’. The real scandal is that this safety net has to exist at allOn the BBC’s Question Time this week, a man in the audience claimed that people used food banks because they spent all their money on fags, booze and telly. The rest of the audience was scandalised. The gist of their annoyance was that the claim wasn’t true.You could characterise the man as having a rightwing view, and his critics as having a leftwing view. If the banality didn’t make your teeth ache, that is.People like to moralise. I like doing it myself, as much as I like booze, nicotine and telly. Which is a lotRelated: Food banks report record demand amid universal credit chaos Continue reading...

Experts applaud decision that could protect vulnerable and return public debt of more than $70bn to manageable levels, but creditors cry foulPuerto Rico has filed for a form of bankruptcy in a desperate bid to stave off creditors and maintain essential services to its 3.4 million citizens, nearly half of whom live in poverty.Analysts lauded the decision by the insolvent US territory, which owes more than $70bn (£54bn) in public debt, as a way for the island to “bring the debt back to sustainable levels, protect vulnerable communities and promote transparency”.

The current vision of capitalism no longer works, neglecting the society it is meant to serve. Darwinism would bring a dose of reality and moralityIn recent decades the world economy and society have been changing at an unprecedented rate. According to Unesco, the total number of qualified scientists and engineers undertaking research has soared to about 10 million, of which a fifth are in China. Technical inventions have emerged ever faster, providing us with new gadgets and machines, along with new ways of engaging with one another and organising the institutions within which we live.This has brought us great benefits, but it has also brought dangers and damage: weapons of mass destruction, global warming, the economic bubble and collapse caused by new financial tricks, global tax evasion and tax avoidance, high-tech monopolies, and the diffusion of powers of information and misinformation resulting from new means of communication.We need to put aside the long-established Newtonian vision of a harmonious economy with negligible innovationsRelated: Finally, a breakthrough alternative to growth economics – the doughnut | George Monbiot Continue reading...

To properly fund schools and hospitals, the left must commit to bold and clear ways of raising extra moneyThis week the Tories unveiled a poster warning of a Labour “tax bombshell”, alleging that Jeremy Corbyn would deprive the army of munitions. But there’s irony there; thanks to their own cuts to defence spending, British warships will have to sail without anti-ship missiles from 2018. Frigates without missiles, hospitals without doctors: that’s what happens if you try to shrink the state but end up suppressing economic growth instead.Related: Tories lay into Jeremy Corbyn with 'tax bombshell' advertRelated: Voter registration soars among students with 55% backing Labour Continue reading...

Bigger-than-expected rise in April follows similar improvements for manufacturing and construction industriesThe UK economy has shown signs of picking up over recent weeks as strong demand from overseas helped offset moribund consumer spending at home, according to a survey that will welcomed by Theresa May’s government as next month’s election approaches.News that Britain’s services sector enjoyed its fastest growth for four months in April follows surveys earlier this week signalling similar improvements for the smaller manufacturing and construction industries. Together they will soothe fears around the UK economic outlook after official figures showed GDP growth slowed markedly in the first quarter.Related: UK manufacturing records fastest growth for three years, figures show Continue reading...

Two decades after Gordon Brown allowed the Bank to set interest rates, it must answer new questions about its role and responsibilitiesIt is 20 years since the Bank of England was given the right to set interest rates by Gordon Brown. In the two decades since, the power wielded by Threadneedle Street has increased as its performance has got worse. It is hard now to remember how serene life was for the Bank in the early days after it was granted operational independence. Stripped of its role as supervisor of the UK’s banks, the Bank effectively became a monetary policy institute, with the nine members of its monetary policy committee tweaking the cost of borrowing to hit the government’s inflation target. With cheap Chinese goods keeping prices low, this was not especially hard to do. Mervyn King, the Bank’s governor from 2003 to 2013, called the late 1990s and the early 2000s the Nice decade – as in non-inflationary consistent expansion – and it was an apt description.Apt, but incomplete, because while the Bank was congratulating itself on hitting the inflation target, it failed to do anything to prevent the biggest speculative bubble since the 1920s. To be fair, this was not entirely the Bank’s fault. The crisis exposed the weaknesses of Labour’s tripartite system of financial supervision, with responsibility shared between the Treasury, the Bank of England and the Financial Services Authority. But the Bank did not realise until it was far too late that crises can erupt even when inflation is low. Like other central banks, it was guilty of groupthink. Continue reading...

Britain’s dominant services sector has posted its strongest growth of the year

Lord Kerr, who helped draft EU legislation, says uncertainty over who will lead negotiations for UK is ‘very real problem’Uncertainty about who will lead Brexit divorce talks for Britain is a “very real problem”, the diplomat who helped draft article 50 has said, as he warned the UK faces a 45% chance of crashing out of the EU with no deal.John Kerr, a crossbench peer who served as the UK’s ambassador to the EU, said there was “a very real problem in the United Kingdom ... that it is not clear who the negotiators are going to be”.

Governments and business don’t have the right information to understand what the future of work really looks likeA new report by the US-based National Academies of Science Engineering and Medicine suggests that not only has the automation of work barely begun but that the ways in which we measure the effects of technology on employment are inadequate to the task.The authors argue that to understand how automation is transforming our workplaces, we need better ways of tracking technological change. Put simply, they are saying that if we are what we measure – that is, if policy is driven by the information we collect – then we are collecting the wrong information.Related: Cybersecurity: is the office coffee machine watching you?Related: Seventeen jobs, five careers: learning in the age of automation Continue reading...

Unions vow strike action after leftist-led government agrees to further slash pensions and cut tax breaksThe long road to Greece emerging from its worst financial crisis in modern times reached another milestone on Tuesday as the country concluded a crucial compliance review that will allow it to avert default in July.At the cost of yet more painful austerity – in the form of extra pension cuts and tax increases – international creditors agreed to disburse €7.5bn (£6.3bn) in emergency loans to enable Athens to honour maturing debt repayments. More importantly, lenders accepted to set talks in motion on making Greece’s debt mountain more manageable – vital if the country is to gain access to the capital markets from which it has been almost completely exiled since 2009.Related: Greece reaches deal with creditors to pave way for bailout talks Continue reading...

All the day’s economic and financial news, including new PMI healthchecks on the world’s factory sectors and the latest on Greece’s debt talks

Tory austerity drive has made little difference to public spending as a share of national income, leading thinktank findsIt will take an extra £15bn of spending cuts or tax rises to eliminate the budget deficit by the time of the 2022 election, a leading thinktank has said as it laid bare the damaging legacy of the financial crisison UK living standards and public finances.The Institute for Fiscal Studies said that despite “two parliaments of pain”, the Conservative-led austerity drive had made little difference to public spending when measured as a share of national income and compared with pre-downturn levels.Related: UK government borrowing at lowest level since 2008 financial crisis Continue reading...

April data records strong demand at home and abroad that will calm concerns about a Brexit slump in the economyBritain’s factories enjoyed their fastest growth for three years last month on the back of strong demand at home and abroad, according to a survey that will temper worries about a Brexit-driven economic slowdown this year.The manufacturing sector, which makes up about a tenth of the UK economy, enjoyed the strongest pick-up in new work since the start of 2014 and smashed expectations in April. Firms also took on new workers at a faster pace and ramped up production, the closely watched Markit/CIPS UK Manufacturing PMI (pdf) showed. Continue reading...

In every political system, the rich tend to hold more power – but the relationship between politics, economics and inequality is complex. To better understand these critical issues, we must look to Big Data

Between David Cameron’s £25,000 posh shed and Theresa May’s comments about food banks, Tory attitudes to wealth have been shameless this weekendThere he sits, flaunting his newly acquired curves. The curves of his new shed. Not any old shed. David Cameron has, of course, acquired a shepherd’s hut for £25,000. I have no idea if a shepherd comes installed or you have to pay extra. The hut has been decorated by Sam Cam in the Farrow & Ball colours of Clunch, Rat’s Arse and Obviously White because posh people can only use Farrow & Ball – they’re afraid of colour so find the Traditional Neutrals range just scrummy. Cameron needs a writing room as he presumably doesn’t have enough space in either of his houses. Sheds are now trendy. Man caves. Offices. Spare rooms. Who could begrudge a man a shed?Well, me, obviously. This is the man who decided to become prime minister for a while simply because he could. His government deliberately targeted some of the poorest people in the country in the name of paying off debts that they blamed on the previous government rather than the actions of their banker mates. Cameron also called a referendum on the EU, assuming he would win it easily, like everything else in his life. Now we are living with the consequences of that while he cogitates in a fake folksy “hut” in the Cotswolds.Theresa May doesn’t do the 'I feel your pain' thing, while Cameron did masquerade a bovine empathy on occasionRelated: Downing Street to garden retreat: David Cameron spends £25,000 on luxury hut Continue reading...

Hamptons says re-emergence of higher loan-to-value mortgages combined with lower lending rates and cooling prices have boosted purchase prospectsEasier access to mortgages with a small deposit has offered some glimmers of hope for first-time buyers struggling to get on to Britain’s housing ladder, according to a new report.Research on the amount of time it takes to save for a down payment on a home suggests buyers have been helped by the greater availability of mortgage loans at higher loan-to-value (LTV) ratios. Continue reading...

Work and pensions committee says employers force workers into bogus self-employment and free-ride on welfare stateCompanies in Britain’s growing gig economy are forcing workers into bogus self-employment and free-riding on the welfare state, an influential committee of MPs has said.In a damning assessment of modern employment practices, the parliamentary work and pensions committee calls on the next government to bring laws up to date so that workers are better protected from exploitation. Given concerns about the rising number of workers classed as self-employed contractors with no access to sick benefit or holiday pay, it wants the default status for people in the gig economy to be “worker” rather than “self-employed”.Related: Uber to offer UK drivers sickness cover in return for £2-a-week fee Continue reading...

New Labour was a product of its time. History may judge it more kindly than many of today’s criticsIt was a perfect May dawn, that moment 20 years ago when the scale of New Labour’s victory became settled beyond dispute. The beauty of the sunrise, the comprehensive wipeout of the Conservatives after 18 years, four defeats and a long and tightly choreographed election campaign produced a sense of euphoria. However hard Tony Blair and the people around him tried to suppress triumphalism, however cool the new prime minister sounded as he announced that he had been elected as New Labour and he would govern as New Labour, it seemed as if everything had changed, for ever. The Guardian reflected this enthusiasm: this election, the editorial at the time decided, “now joins 1945 and 1906 as the third great progressive electoral landslide of the 20th century”.Like 1945, 1997 was a landslide that had been nearly a generation in the making. Labour had survived an existential struggle between social democracy and the Bennite left. And it had survived defeats – none more painful or damaging than Neil Kinnock’s unanticipated failure in 1992. The monstering of the party leader by the press shaped a party of extreme caution and obsessive media management. Continue reading...

Wolfgang Schäuble says eurozone could conclude review into reform demands in May and release next tranche of bailout fundsGreece has received some rare praise for its reform push from Germany’s finance minister, who has raised hopes that the debt-stricken country will get more bailout funds soon.

Manufacturing and services fall as Beijing tries to rein in property and credit boomChina’s economy has shown more signs of cooling with key barometers from its manufacturing and services sectors dipping in April. The latest data comes as Beijing attempts to rein in a booming property market and rapid credit growth.

If the radical centrist frontrunner blames France’s problems solely on the lack of supply-side reform he is setting himself up to failThere is a familiar rhythm to French politics. President gets elected amid a wave of optimism. President says root and branch reform of the economy will lead to stronger growth and falling unemployment. President fails to deliver the promised transformation. Economy continues to struggle. President gets booted out of office.In the past 30 years, François Mitterand, Jacques Chirac, Nicolas Sarkozy and François Hollande have won elections for the mainstream parties of the centre left and centre right but France’s economic problems have not been resolved. It says something about how poor performance has been under Hollande that growth of barely more than 1% in 2016 was good by recent standards. Continue reading...

Shadow chancellor John McDonnell says Labour will put an end to the ‘rigged economy’ after election winLabour has pledged to ban all zero-hours contracts, put a halt to unpaid internships and end the pay cap on public sector staff in an unashamedly leftwing pitch to British workers.In a move welcomed by union leaders but that will be attacked as “anti-business” and unaffordable by opponents, the 20-point blueprint also includes commitments to double paid paternity leave to four weeks, increase paternity pay and guarantee temporary and part-time workers the same rights as full-time employees. Continue reading...

Without government investment in care and housing, the baby boomers will naturally hold on to their moneyThe row brewing over the state pension triple lock plays into a wider debate about incomes and wealth in old age and how, as a society, we adapt to the escalating costs of improved life expectancy, increasing care costs and, crucially, property prices.It is becoming clear that the answer for many people is to take the Italian approach. In addition to eating pizza and pasta, they do everything to avoid paying higher taxes and hoard whatever assets they have accumulated. Continue reading...

In the no-man’s land between a referendum and a snap election, what are the key economic indicators telling us?Elections have long been won and lost on the state of the economy. So Theresa May’s decision to call a snap poll just as UK growth appears to be slowing has raised eyebrows. But with the Brexit vote predicted to put more pressure on households as the year goes on, the prime minister may well believe this is as good as it gets for economic news.With less than six weeks to go to the election, a look at the economic backdrop reveals there is both good news and bad for the government. Continue reading...

Growth figures from America, Britain and France have all been weaker than expected today

Households facing financial pressure from debt, weak pay growth and inflationThe number of individuals applying for insolvency jumped to the highest level in almost three years in the first three months of 2017, in a further sign of the mounting financial pressure facing UK households.Personal insolvencies in England and Wales totalled 24,531 between January and March, up 6.7% on the previous quarter and 15.7% higher than the same period a year earlier. It was the highest number of individual cases since the second quarter of 2014, according to the Insolvency Service, which published the figures.Related: Debt charities urge struggling consumers to seek advice early Continue reading...

Figures suggest shops and hotels have been hurt by squeeze on spending power from pound’s plunge since Brexit voteThe UK economy suffered a sharp slowdown in the opening months of this year, as the post-referendum rise in living costs took its toll on British households and hit consumer spending.GDP growth fell more than expected to 0.3% in the first quarter from 0.7% in the previous quarter, the Office for National Statistics said.