Unions say industrial strategy now more important than ever as two regions will account for 40% of GDP by 2022The TUC has called on political parties to spell out plans to spread prosperity to all Britain’s regions after warning that economic activity is becoming ever more concentrated in London and the south-east.On current trends, the TUC said, the two most prosperous regions would account for 40% of national output by the end of the next parliament in 2022. Continue reading...

YouGov’s monthly measure of consumer mood hit by fears about job security and living costsRising inflation is taking its toll on British households, knocking consumer confidence to its lowest level since the aftermath of last summer’s Brexit vote.Pollsters YouGov said worries about job security and living costs pushed its monthly measure of consumer mood down a further 1.5 points to 108 in April, the weakest reading since last July. Continue reading...

Nearly 3m working households with children on tax credits face average loss of £2,500 a year, according to thinktankLow-income working families face significant reductions in income as a result of planned cuts to benefits, according to the Institute for Fiscal Studies (IFS).The thinktank says the freeze in benefit rates and cuts to child tax credit, coupled with the rollout of universal credit, which has become less generous as a result of changes to work allowances, signal “large losses” for low-income households. Continue reading...

European Central Bank meeting has voted to leave borrowing costs unchanged across the eurozone

Scrapping payments to wealthiest 5% to 10% would allow government to give more to people in greater need, says thinktankBritain should stop giving the state pension to the rich and instead spend the money on benefits for the poor, according to the Organisation for Economic Co-operation and Development.The Paris-based thinktank said that ending payments to the wealthiest 5% to 10% would allow the government to give more to people in greater need of support.Related: The baby boomers have enjoyed the good times – now a tax hike is due | Phillip InmanRelated: Theresa May weighing up cheaper 'double lock' for pensions Continue reading...

Edmund King hoping his annual allowance idea will win £250,000 Wolfson Economics prize, which sought ideas from around the world on improving roadsA proposal from the boss of the AA for drivers to receive an annual “road miles” allowance is among the ideas shortlisted for a £250,000 competition to find new ways of funding the UK road network.Edmund King, the president of the motoring organisation, has appeared on a shortlist of five entries to win the Wolfson Economics prize, this year awarded for ideas on how to fund better, more reliable roads. Continue reading...

The White House says the president will ‘renegotiate’ the controversial deal with Canada and MexicoThe White House has announced that the United States will not unilaterally withdraw from Nafta, the landmark free trade agreement with Canada and Mexico, after multiple reports that Donald Trump was planning to pull out of the deal.In a readout of calls between Trump, Canadian prime minister Justin Trudeau and Mexican president Enrique Pena Nieto on Wednesday, the White House said: “President Trump agreed not to terminate Nafta at this time.”Related: Trump under fire over 'huge tax cut for the rich' Continue reading...

US president’s team outlines ‘massive’ tax cuts and reforms, but won’t say whether Donald Trump pay more or less under the plan

Tony Greaves, deputy leader of Pendle borough council, says its basic services are now at risk; while Andrew Purkis calls on John Harris to keep on givingIn areas with both county and district councils, districts are under huge stress (Cuts decimating services, research finds, 25 April). Here in Pendle, in the Lancashire Pennines, our spending ability in the 10 years up to 2020 is being slashed by about half. With a net budget of about £14m, we face another £5m of cuts in the next three years.In 2010, we employed 450 people, a number that is now down to about 260. We have cut all useful but non-essential jobs, slashed the top management structure and pay, and seen many staff take a voluntary cut in working hours. We have refinanced some of our main buildings, turning dearer rents into cheaper mortgages. Continue reading...

President’s plan to slash corporation tax may have short-term benefits but Congress will want to know how he intends to make up lost revenueDonald Trump’s corporation tax cut is straight out of the Ronald Reagan playbook. According to the current occupant of the White House, the reduction from 35% to 15% will pay for itself because US companies will invest more.The argument is that higher levels of investment will raise the growth rate and, in turn, raise corporate profits. Consequently, the tax take will be no different at 15% than it was at 35%. Continue reading...

In November, America’s beleaguered rural citizens voted against the status quo – but that’s exactly what Trump’s new agriculture secretary looks set to ensureDonald Trump owes his election in no small part to the support of farm country. But since entering office, almost all his actions and pronouncements have betrayed an abysmal understanding of farm and rural concerns. No surprise, then, that food and farm advocates have looked eagerly to Sonny Perdue, who was sworn in as agriculture secretary on Tuesday, to educate and temper the president on their issues.The new secretary has his work cut out for him. The president unveiled a budget blueprint last month that slashed funding for the US Department of Agriculture (USDA) by 21%.Related: Young midwestern farmers want to grow sustainable food – but they need helpRelated: Is Boston the next urban farming paradise? Continue reading...

Relief over the French elections and Trump’s tax cuts plan are pushing shares higher across the globe

Boost for chancellor as borrowing falls by £20bn to £52bn – but analysts say it is too soon to be complacentGovernment borrowing fell to the lowest level since the financial crisis in the year to the end of March as the economy proved more resilient than expected in the aftermath of the Brexit vote.Borrowing fell by £20bn to £52bn in the 2016-17 financial year after economic growth helped drive tax receipts higher, narrowing the gap between what the government spends and earns. Continue reading...

Bringing more countries into Nafta will ease disputes and boost trade. Trouble is, the US had all those benefits – it was called the Trans Pacific PartnershipDonald Trump’s administration says it is sticking with its campaign promise to renegotiate the North American Free Trade Agreement (Nafta). Indeed, Trump has now reiterated his intention to invoke the procedures for renegotiating Nafta soon (within “the next two weeks”), triggering a 90-day consultation period with Congress, before talks with Mexico and Canada commence. Assuming that happens – a very big if – it is worth asking how renegotiation could be done right.Of course, the US president could simply decide to abandon his promise to renegotiate Nafta, which may be unpopular with many Americans, but is considered by economists to have been beneficial. After all, he has dropped many other campaign pledges, including (fortunately) his oft-repeated vow to label China a currency manipulator “on day one” of his administration.Related: Trump is reckless – but he knows he can't afford to antagonise China | Barry Eichengreen Continue reading...

Two former members of the Bank of England’s interest rate-setting committee discuss the outlook for this yearSenior economic adviser at the PwC consultancy and member of the Bank’s MPC from October 2006 to May 2011

New mayors will be elected on 4 May in England. But what good are they in the face of chronic local government cuts?City parks lie overgrown and abandoned; swimming pools and leisure centres shuttered; libraries locked up; local bus services axed; youth services scrapped; roads so badly potholed that hundreds of miles face closure. If the list of cutbacks is endless across the country, you can be sure of one thing. There’s worse to come.Related: England's new metro mayors will have influential role in NHS | Richard Vize Continue reading...

How has the economy reacted to the vote to leave the EU on 23 June? Each month we look at key indicators to see what effect the Brexit process has on growth, prosperity and trade in the UK Continue reading...

The latest monthly Guardian analysis finds rising prices, sluggish wage growth and a mood of uncertainty among employers as the UK heads to the pollsThe pound’s sharp fall since the Brexit vote and a mood of uncertainty among employers has hit household budgets, creating a tough economic backdrop for Theresa May’s snap election, a Guardian analysis shows.The prime minister will be hoping the resilience seen in the UK economy will hold over the coming months now that she has called an election for this June. But the Guardian’s monthly tracker of economic news shows living standards are already falling as rising prices outpace meagre pay growth.Related: How has the Brexit vote affected the UK economy? April verdict Continue reading...

With its modestly paid bosses and impressive health statistics, Japan is widely hailed as the most equal major economy in the world. But, reports Justin McCurry, this edifice of egalitarianism is beginning to crumble

Polling days as public holidays | Wales coverage | Redundant machines | Toasting the mole | Cemetery dangersInstead of new bank holidays for each of the nations of the UK to coincide with saints’ days (as proposed by Labour), why not make national elections a public holiday as in many other countries? This would help to make it as easy for many people in employment to vote, as it is for people who are retired or not in work. Alternatively, voting should take place at weekends, thereby avoiding disruption to schools. Improving turnout and making the voting process just as convenient for everyone would be a step towards a healthier democracy.

We import poor countries’ health workers, we extract their raw materials on unfair terms, and we exploit their cut-price labour, writes Richard MiddletonMost defences of development aid are, well, too defensive (Editorial, 21 April). What is classed as “aid” is more properly described as a small repayment towards the much greater sums we extract from poor countries. We free-ride on their education systems, especially by importing health workers. We extract raw materials under trade terms that systematically disadvantage them. We boost our corporate profits (some of which find their way into tax revenues) by exploiting their cut-price labour, exporting carbon emissions as a bonus. Our banks launder the proceeds of corruption among their elites (and again our treasuries benefit – at least some of the time). Our industrial fishing fleets decimate their waters. The list is endless. And all this before even considering historical factors such as colonial looting, slavery and past greenhouse gas emissions (now contributing to the very environmental and food crises which some of our “aid” then attempts to ameliorate). It’s not a question of “generosity”; it’s a question of justice.

Amid the rise of populism and nationalism, some are asking if revamping the SDR could re-energise multilateralismThe rise of anti-globalisation political movements and the threat of trade protectionism have led some people to wonder whether a stronger multilateral core for the world economy would reduce the risk of damaging fragmentation. After all, lest we forget, the current arrangements – as pressured as they are – reflected our post-world war two forebears’ strong desire to minimise the risk of “beggar-thy-neighbour” national policies, which had crippled growth, prosperity and global stability in the 1930s.Similar considerations fuelled the launch, nearly 50 years ago, of the International Monetary Fund’s special drawing right as the precursor to a global currency. And with renewed interest in the stability of the international monetary system, some are asking – including within the IMF – whether revamping the SDR could be part of an effective effort to re-energise multilateralism.Related: Whatever the IMF thinks, we are a long way from the boom time of 2007 | Larry Elliott Continue reading...

The presidential candidate has taken risks on many issues, not least by being proudly pro-EU. We must ensure that it is his vision that triumphs on 7 MaySunday 23 April was a historic day for France. Neither the main rightwing party (Les Républicains) nor the leftwing Parti Socialiste are through to the second round of the presidential election, which takes place on 7 May. It is also historic because the lead candidate going into the second round is the young head of a groundbreaking new political movement, En Marche! (Onwards!), which was launched only a year ago.Emmanuel Macron and En Marche! have made it to the second round because over the past year they have been bold enough to take risks on many issues. Macron has dared to challenge the established French party-political system in order to find ways of meeting citizens’ expectations in a globalised 21st century.Related: 10 things we’ve learned from the French presidential elections | Suzanne Moore Continue reading...

First-round victory by ex-banker Emmanuel Macron powers French index to nine-year high as global markets gainStock markets surged and the euro jumped sharply after centrist candidate Emmanuel Macron won the first round of the weekend’s French presidential election, easing fears of a victory by the far-right Front National.France’s Cac index climbed more than 4% to a nine-year high, its best daily performance since August 2015, as investors bet that Macron would defeat the other runoff candidate, the FN’s Marine Le Pen on 7 May. The first vote put Macron on 23.75% with Le Pen on 21.53%. The result was seen as the most market-friendly outcome, putting the independent former investment banker in pole position to fend off the anti-EU Le Pen.Related: France's stock market hits nine-year high as election cheers investors - business live Continue reading...

Older generations complain of interest rates that reached 17%. But today’s record lows have contributed to house prices soaring out of reach of the youngIf you’ve ever made the mistake of trying to debate generational inequality with a baby boomer – by pointing out, say, that they benefited from cheap housing, generous welfare and free university places, before voting consistently for governments that have denied those things to their children, all the while calling millennials lazy and entitled in an infuriatingly faux-indulgent way, as if their kids’ requests that their salaries bear some sort of relation to their actual living costs makes them the sort of spoiled divas who’d call a gold-plated Uber to take them to the lavatory ...Anyway. If you’ve ever had this annoying row with an ageing relative, then you’ll know that they have one last trump card, one last line of defence for their privileges. Interest rates, they’ll say. None of this 0.25% Bank of England rate in our day. We had proper interest rates. You don’t know you’re born.Related: Higher interest rates. Great idea. Here’s why it won’t happenBubbles tend to burst. Prices can’t rise forever: one day, interest rates must surely rise Continue reading...

Amounts demanded by sellers are up by 2.2% year-on-year across England and Wales, according to RightmoveThe housing market continues to defy fears of a post-referendum slump after sellers’ asking prices hit a new record high of more than £313,000 on average in April.Across England and Wales, the average price tag on a property being put on the market increased by £3,547 – or 1.1% month-on-month – to reach £313,655.Related: Estate agents struggling to find homes to sell, says reportRelated: The Guardian view on house prices: the government lacks the political will to fix the broken market | Editorial Continue reading...

Official GDP estimate – due on Friday – will reflect how weaker pound has pushed up the cost of imported goods

Christine Lagarde may be optimistic about the global economy but there are good reasons why the heady growth seen before the financial crisis won’t come backWhen the International Monetary Fund met for its spring meeting in Washington 10 years ago the global economy was booming. The world was experiencing the strongest period of sustained growth since the late 1960s and early 1970s and the fund thought the good times would continue.There was a bit of concern about the rip-roaring US housing market, but no suggestion that a crisis in the sub-prime mortgage market would be the catalyst for the biggest recession since the 1930s. Even when the trickle of foreclosures turned into a flood the assumption was that it was merely a localised problem that would soon be sorted out. Only when the entire global financial system froze up a year later did everything become horribly clear.Related: The Guardian view on the IMF: a global institution in an age of protection | Editorial Continue reading...

Of all the reasons for Theresa May to go for an immediate vote, the clearest is that the future prospects for Britain are darkening all the timeMy friend Paul Whitehouse told me the news in my local cafe. At first I thought he was practising a sketch for a re-run of the much-missed Fast Show.Sadly, he wasn’t. Theresa May’s repeated denials of an intention to call a snap election had gone the way of so many of her inconsistent and often fatuous pronouncements. There was going to be an election after all.If she ploughs on, she could end up by 2020 as the most unpopular prime minister since records began Continue reading...

Talks with IMF and eurozone have dragged on for months, but fresh funds needed so Greece can pay debt due in JulyIt is “urgent” to reach an agreement on a loan program for Greece but a commitment is still required from Athens on reforms and from Europe on debt relief, a senior IMF official said on Friday.

When the IMF and World Bank meet this week, they must work to restore faith in globalization – or risk that it falls prey to isolationistsGlobalization and the international rules-based order that underpins it are under siege. Bunkering down and hoping the flames of populism burn out as economic growth picks up is not a winning strategy. The crisis of confidence in the benefits of globalization and multilateralism likely will persist as long as rates of social and economic inequality remain stubbornly high.The best defense of multilateralism and the rules-based order is a good offense. Addressing inequality and updating the rules of the global economy to reflect the needs of the 21st century must guide the agenda for this week’s International Monetary Fund (IMF) and World Bank spring meetings. Continue reading...

The International Monetary Fund’s boss, Christine Lagarde, needs an answer for the car worker in MichiganAfter the most difficult decade in its history, life should be looking up for the International Monetary Fund as it hosts the world’s finance ministers and central bankers in Washington DC this week. The global economy is at last picking up speed. Financial markets look more stable. The US is running at full employment, China is expanding strongly, and the eurozone is going through one of its better periods. Spring is in the air, according to the Fund’s managing director, Christine Lagarde.Privately, the mood in Washington is less ebullient. The IMF has its doubts about whether the pick-up in activity – which has only been possible because central banks have kept interest rates at record lows since the deep slump of 2008-09 – will endure. It points to the vulnerability of debt-laden American companies to rising borrowing costs, to the credit bubble that has kept China’s economy booming, and to the €1tn of non-performing loans weighing down banks in the eurozone.The IMF exemplifies the sort of elitist global organisation that Trump has railed against on the campaign stump Continue reading...

Rumours abound that the Tories will abandon the UK’s aid target. It would come at a heavy costOne of the real achievements of the coalition government was setting and reaching the target of spending 0.7% of GDP on development aid. UK aid spending has played a significant role in halving the number of people living in extreme poverty and delivering the great improvements in global health and education that have been achieved over the past decade.Britain’s lead has encouraged others to follow: earlier this year, Germany joined the elite club of countries that had reached the UN-set target. It has enhanced British status and influence across the world. In a report earlier this month, MPs on the cross-party committee on international development concluded, after a lengthy inquiry, that “ODA [official development assistance] spending is in the national interest and is a strong investment contributing to create a more prosperous world, which pays far-reaching dividends including to UK taxpayers at home”. Continue reading...

Jim Yong Kim says reneging on UK commitment to spend 0.7% of GDP on aid could lead to rise in conflict and migrationThe president of the World Bank has told Theresa May that cutting the UK’s aid budget could lead to an increase in conflict, terrorism and migration and would damage Britain’s international reputation.In a strongly worded response to reports that the government was considering dropping its commitment to devote 0.7% of national income to aid each year, Jim Yong Kim said the money the UK provided was vital not just for developing countries but for the future of the world.Related: Lives at risk if Tories choose to ditch UK foreign aid pledge, says Bill GatesRelated: Everything you need to know about UK aid and the 0.7% spending pledge Continue reading...

All the day’s economic and financial news, as political events continue to dominate the markets

There is no greater indictment of British society than soaring rates of mental distress in children. No wonder politicians cling to a simplistic ‘illness’ modelThe public profile of mental health experienced another boost this week, thanks to some moving comments made by Prince Harry and the Duke of Cambridge about the impact of their mother’s death, nearly 20 years ago. The two royals are working for the Heads Together campaign, which seeks to combat the stigma surrounding mental health issues, and to encourage people to speak more openly about their difficulties.Harry’s admission that he had ignored his own emotional distress for several years before eventually having counselling was a valuable contribution, from a figure more commonly associated with laddish machismo. William’s focus on male suicide statistics was also a good use of his celebrity.There is no more damning indictment on British society in 2017 than the prevalence of mental distress among childrenRelated: The stiff upper lip: why the royal health warning matters Continue reading...

Devious, cunning and cruel, as Tory chancellor he imposed his mendacious mantras on the national psyche. His legacy is a poisoned political landscapeMost politicians intend to do good, as they see it. It’s an odd quirk in public attitudes that the idea of democracy is revered but its practitioners are, mostly, reviled: from graffiti in ancient Rome, it was ever thus. Political commentators need to appreciate the practitioners, however opposing their views.Related: George Osborne: history will not be kind to a man whose flaws led to BrexitRelated: George Osborne is laughing at us as he takes his Evening Standard job | Aditya Chakrabortty Continue reading...

Latest IMF world outlook is most positive in years – although that’s not saying much – and it’s looking closely at falling shares of income to labourThe latest IMF world economic outlook released on Tuesday is the most positive for years, but it also highlights the continued risks from nationalistic and protectionist policies and the impact of policies and technology changes that reduce the share of income going to workers.For the past eight or nine years, the IMF world economic outlook has been pretty soul crushing. Dismal doesn’t begin to convey the mood. Consider that the titles for the outlook have been such joyous reads as “Financial Stress, Downturns, and Recoveries”, “Crisis and Recovery”, “Slowing Growth, Rising Risks”, “Legacies, Clouds, Uncertainties” and the one from April last year, “Too Slow for Too Long”. So it is with some relief to see a bit of positivity infect the IMF. The most recent update, is titled, “Gaining Momentum?”Related: Malcolm Turnbull's myth of 'middle Australia' ignores both gender and reality | Greg JerichoRelated: Does earning $180,000 make you rich? Let's not pretend about who's rich and who's poor | Greg Jericho Continue reading...

Britain’s blue-chip stock index has fallen for the second day running, and sterling is dipping too

Organisation also says financial stability is threatened by US corporate debt, China’s credit bubble and weak EU banksThe International Monetary Fund has warned that Brexit’s unpredictable outcome poses a risk to global financial stability at a time when it is already challenged by heavily-indebted US corporations, China’s credit bubble and weak European banks.Warning that banks were likely to be the sector of the City hardest hit by Britain’s departure from the European Union, the IMF said the costs of doing business would rise and regulation would become more complex.Related: IMF ratchets up UK economic growth forecast to 2% Continue reading...

The world recovery is gaining momentum which is a bonus for Australia as a commodity exporterThe global economy is gaining momentum which should be good news for Australia’s commodities-based economy.But the International Monetary Fund has again raised concerns about a growing shift towards trade protectionism and a breakdown of international economic collaboration which took root after the second world war.Related: America owes China $1tn. That’s a problem for Beijing, and Trump knows it Continue reading...

Theresa May may have won herself room to compromise on the UK’s exit from the EU – but don’t get too carried awayIgnore the 180-point fall in the FTSE 100 index. Part of the decline occurred before the lectern had even been placed in Downing Street. Part of the rest can be explained by a stronger pound, which tends to depresses the value of the many big dollar-earners in the index. The real question is why sterling, which hit a six-month high, reacted so strongly to an early general election.It was because investors calculated – counter-intuitively at first glance – that a bigger Tory majority in the Commons, if that’s what follows, will mean a softer form of Brexit. This argument was best expressed by Deutsche Bank’s analysts, who reckon the election is “a game-changer” for the pound and the Brexit negotiations. A bigger majority would set Theresa May free from the “unrealistic timetable” set by the eurosceptics in her party, they argue.Related: FTSE 100 suffers worst day since Brexit vote after May calls election Continue reading...

Sterling has rallied strongly as analysts predict Theresa May will secure a larger majority in the June 8 general election

Fund notes stronger-than-expected performance since Brexit vote but warns protectionism may hold back growthThe International Monetary Fund has revised up its UK growth forecast for the second time in three months after admitting that the performance of the economy since the Brexit vote last year had been stronger than expected.In its half-yearly World Economic Outlook, the IMF said it now envisaged the British economy expanding by 2% in 2017 – making it the second fastest-growing advanced economy after the US..Related: IMF chief warns that euro stability is threatened by French election – business liveRelated: Trump, trade, interest and aid make for a challenging IMF summit Continue reading...

Frances O’Grady says Brexit talks can stop EU’s arbitration court treating workers and consumers as second-class citizensA post-Brexit trade deal should be governed by a new court system that is fairer to workers, the TUC’s general secretary has said.Frances O’Grady said Britain and the EU had a chance to take a different approach to arbitration courts that make judgments on trade disputes.

The UK has had three grand plans in 10 years. It’s time to get everyone to agree on the targets and stick to themFor many years, the idea that a government of the right should have an industrial policy was heresy. The state’s role was to keep inflation and taxes low, then stay out of the way so that market forces could operate. Ronald Reagan summed up the philosophy when he said the nine most dangerous words in politics were: “I’m from the government and I’m here to help.”The idea that Reagan pursued a form of pure laissez-faire is, of course, nonsense. Plenty of US firms reaped the benefits of vastly increased defence spending in the 1980s, a form of military Keynesianism, that had plenty of technological spin-offs.Related: Theresa May's industrial strategy: what took them so long?Related: The Guardian view on industrial strategy: hot air but no liftoff | EditorialRelated: Beware the unintended consequences of a robot revolution Continue reading...

Trump has promised a ‘phenomenal’ plan to reform America’s labyrinthine tax system, but it’s a feat no president has achieved since Reagan

The Bank of England, IMF and other policymakers see ongoing low rates as dangerous but can’t see how to change things. There is a way, of course …For some time now savers have campaigned for a return to normal interest rates, by which they mean central bank rates more like 4%-5%. And it’s not just about earning more on their savings. This protest against the current 0.25% base rate also has a broader, altruistic bent. At least that is what they honestly believe.They argue that higher interest rates will restore a lost balance in the economy – taking it back to the way it was before the financial crisis, when things were so much better. Continue reading...

With world tensions rising and globalisation in retreat, ministers and business leaders have much to discuss this week in WashingtonGeopolitical tensions, uncertainty about the future of the EU and an increasingly unpredictable US president form the fraught backdrop to this year’s spring meetings of the International Monetary Fund (IMF) and World Bank this week.The prospect of rising protectionism also looms large for the IMF, a multilateral organisation set up during the second world war to foster cooperation between economies. Its co-host, the World Bank, faces similarly daunting challenges to its mission to cut poverty and inequality. Continue reading...

Investment in education and retraining is needed to equip people to adapt as automation shakes up their workplacesAsk an economist or a technology expert and they will happily tell you that decades of data reliably show automation has created more jobs than it has destroyed.Far fewer of us now work on farms, for example, thanks to super-efficient machines that do the bulk of the work. Such technology has boosted productivity and, with it, living standards. As a result, more people work in leisure industries such as hospitality or hairdressing, serving all those people with higher disposable incomes and more free time.Related: The Guardian view on the automated future: fewer shops and fewer people | EditorialRelated: The robots are coming. Will they bring wealth or a divided society? Continue reading...