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...

The former deputy PM and the Nobel prize winner discuss the EU, business and Trump

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...

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...

Exclusive: EU could impose punitive tariffs on key British exports such as beef if UK seeks to lower regulatory standardsThe EU is exploring the inclusion of a “punishment clause” in any future trade deal with the UK to allow Brussels to slap tariffs on key British exports to the bloc if the UK government seeks to gain a commercial advantage by lowering regulatory standards.In a move that would torpedo the post-Brexit plans of the British cabinet’s key Brexiters, any significant attempts by Whitehall to lower regulatory costs to British businesses in one part of the economy could be met by tariffs from Brussels on another.Related: Ireland will have final say on progress of Brexit talks, says EUWhat is the EU withdrawal bill? Continue reading...

Green Party MP Caroline Lucas argues that we need a new measure of success and wellbeing, while Ian McCalman says the productivity debate focuses too much on manufacturingLarry Elliott (Opinion, 30 November) is absolutely right to question a fixation on growth at all costs. We know that infinite economic growth simply isn’t compatible with a planet of finite resources, and we also know that the treatment of environmental concerns as “externalities” in pursuit of never-ending GDP increases is incredibly damaging. So if we know that growth is environmentally damaging, and not a guarantee of increased wellbeing, how do we shift our focus towards a new measure of a good society?We need a new set of indicators that better reflect genuine wellbeing. For a start I would suggest we should aim to share out paid work more widely and evenly, and increase the amount of positive leisure time people have, giving them more choice about time with their communities, friends and family. The Green party’s calls for a shorter working week are often attacked as being anti-growth, but that misses the point of policymaking that should surely be to serve people rather than worship at the altar of GDP. Continue reading...

Survey reveals manufacturing growth rebounding with surge in orders across the sector in November despite Brexit concerns

Against the £435bn Britain already owes itself as a result of printing money, a sum this size shouldn’t be an issue – but the government has made it oneThe UK government’s crack negotiating team, after much bluster, has finally agreed to pay our EU “divorce bill”. It was never in doubt, really. The hard talk has always failed to comprehend that you can’t “just walk away” from a contract you’ve already signed.Sums such as £50bn sound huge, but it’s always a good idea to look at big-sounding numbers in context. For a whole economy to spend as a one-off capital investment in order to preserve access to some key international institutions, it isn’t such a terrible deal. Over 10 years, that’s just 0.25% of GDP per year, which is significantly less than the potential impact a badly negotiated Brexit deal would have on the economy.What is the EU withdrawal bill?Related: Brexit divorce bill: how much is it and what is it for?Related: Quantitative easing is a costly habit we should have kicked long ago | Larry Elliott Continue reading...

Opec and non-Opec energy ministers extend their output curbs to the end of 2018, after they met in Vienna today

The most socially destructive chancellor of modern times can apparently see the damage he’s done. But unlike Scrooge, there’s no hint of remorseHere’s a shocking fact. About 70,000 children go to school hungry in a city dripping with the world’s mostly unearned, undeserved, under-taxed, obscene wealth. One in four parents in London worry about being able to feed their children.Almost a fifth of families in the capital choose between heating their homes or feeding their children, according to the latest research by YouGov, with one in seven families relying on charities and food banks. Even if their children aren’t going hungry, a third of parents feel they can’t afford the healthier food they know they should have. Food charity the Felix Project says, “Hungry children are held back in their development – they don’t do as well at school as their well-fed peers, and are more likely to get into trouble.”The cuts now raining down yet harder on the poorest were designed by him, and left in place by Theresa MayRelated: Hundreds of rough sleepers in Manchester to be offered homes Continue reading...

We have to challenge the tyranny of GDP – the metric that lists speculation, pollution and gambling as being good for the economyThere had never been anything quite like the thick “pea-souper” fog that blanketed London 65 years ago. The wind dropped and the air grew damp. For five days, smoke from coal fires and power stations was trapped, making it hard to breathe. For the frail and elderly what became known as the Great Smog was deadly. Initial estimates put the death toll at 4,000.The coal burned in the capital in 1952 turned the city into a deathtrap, but it was good for growth. It was cold and damp as well as foggy, and the more fuel that was bought, the better it was for the economy.Related: Is the reign of GDP as the only measure of wealth coming to an end? | Jane Gleeson-WhiteSimon Kuznets, who first came up with the idea of GDP, had a point when he said it should exclude harmful thingsRelated: The economy is failing. We need to think radically about how to fix it | Liam Byrne Continue reading...

Helen Channer Aupperlee thanks Robert Peston for what he said in his Guardian interview. And Linda Fairbrother’s husband knows what to say when they’re accused of being ‘champagne socialists’Thank you, Robert Peston, for saying the sanest thing I’ve yet to hear about how we might get ourselves out of this mess: “Maybe we [the middle class] should make some sacrifices and be a bit poorer” (Interview: ‘I’m not saying Britain is finished, but our current problems are not a blip’, 25 November).The whole interview had me making connections with other Guardian writers. Sure, we can keep living the way we do, consuming what we want, as long as we’re somewhat altruistic (Giles Fraser: It’s called effective altruism – but is it really the best way to do good?, 24 November), but we’d not be making any significant changes to the system that keeps so many humans and so much of our environment enslaved to our desires (George Monbiot: Our annual festival of relentless consumption is trashing the planet, 22 November). Continue reading...

Decline will soothe Bank of England fears about reckless lending while household incomes are being squeezedThe UK’s consumer debt boom has eased back after growth in lending on credit cards and loans fell to an 18-month low.The Bank of England said unsecured consumer credit grew by 9.6% year on year in October, down from 9.8% in September, soothing fears that banks were lending recklessly at a time when household incomes have come under pressure from stagnant pay growth and high inflation.

It has been the greatest money-making opportunity of our lifetime. So when will the biggest bubble in human history burst?Few, beyond the most outlandish prognosticators, would have ever thought such a thing possible, even just a few months ago. But the internet cash system bitcoin has burst the psychological $10,000 barrier. As I write this, it is closing down on $11,000.At the beginning of the decade the price of a bitcoin was barely a penny. It has been the greatest money-making opportunity any of us will see in our lifetime. A $100 bet in July 2010 is now $16m. If you were one of the libertarian geeks who got in close to the start back in 2009 and managed to hold on, you have made millions of times your money. It is up 1,000% this year alone. Bitcoin has created fortunes beyond anyone’s wildest dreams.Related: Bitcoin nears $10,000 mark as hedge funds plough inBitcoin 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: The trouble with big data is the huge energy bill | John Naughton Continue reading...

We provide a lifeline for black and minority ethnic women fleeing domestic abuse, but if government funding changes go through, I don’t know how long we’ll last

The UK faces the longest period of falling living standards since the 1950s – and that grim forecast is based on Brexit going wellThat was the budget that wasn’t. There was a little fiddling at the edges; the cut in stamp duty designed to help first-time buyers amounted to nothing as it will cause house prices to rise and wipe out any benefit. In the end, it will help only existing homeowners. Same old, same old, in terms of austerity, with more cuts still to come for years ahead.Not unrelated to that was the downgrade in the Office for Budget Responsibility (OBR) forecast of productivity growth and consequently economic growth. Continue reading...

Thinktank downgrades growth forecast for 2017, saying Brexit uncertainty will mean Britain missing global upswing next yearRising household debt and flatlining wages are becoming a major financial stability risk as Britain slows as a consequence of Brexit, the Organisation for Economic Co-operation and Development has said.The warning from the Paris-based thinktank on Tuesday came as it argued Brexit uncertainty will result in Britain missing an upswing in global growth next year. The OECD forecasts UK growth will be the slowest among G7 nations next year, down from 1.5% this year to 1.2% in 2018 and 1.1% in 2019, when only Japan will grow at a slower rate.Productivity 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...

Stress tests show impact would be ‘no worse’ than this year’s tests, which were at extreme of what might be expectedMark Carney, the governor of the Bank of England, described the result of this year’s stress tests on seven major lenders as evidence they can withstand a disorderly Brexit.Carney said the Bank had reached this judgment after considering a variety of factors, including the logistical impact faced by airlines and customs, as well as issues the City faces from processing complex derivatives transactions without a transition deal.Related: High street banks 'can cope with disorderly Brexit'Related: London house prices fall for first time in eight years as rest of UK rises Continue reading...

Has Brexit caused the recent slowdown in the UK economy? Two former MPC members discuss the economic indicatorsSenior economic adviser at the PwC consultancy and member of the Bank of England’s monetary policy committee from October 2006 to May 2011Related: The Brexit economy: is the worst of the 2017 slowdown over?Related: How has the Brexit vote affected the UK economy? November verdict Continue reading...

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...

UK economy has been steadied by static inflation and rising exports as uncertainty of Brexit looms larger and largerBritain’s economy is showing signs of coming through the worst of its 2017 slowdown, according to a Guardian analysis, as exporters benefit from an improving global economy and inflation remained steady.In the week after Chancellor Philip Hammond’s budget outlined the biggest growth downgrade for the UK since the Conservatives came to power in 2010, the Guardian’s monthly tracker of economic indicators nonetheless shows Britain’s immediate economic situation to be an improvement on earlier this year.Related: How has the Brexit vote affected the UK economy? November verdictRelated: How has the Brexit vote affected the UK economy? November verdict Continue reading...

The chancellor is turning to universities to bail out the economy. But businesses in the UK need to greatly improve their spending on researchThe bar for success for Philip Hammond’s budget last week was quite low. In the end it met the basic criteria of not being a disaster – unlike the prime minister’s party conference speech or the recent cabinet resignations. Even though the chancellor said UK growth would not exceed 2% in the next five years, this was not deemed to be a calamity.With inflation at 3%, growth stalling and the unprecedented economic effects of Brexit not even factored into the figures, this is the sort of performance that in normal times would cost a chancellor their job. But these are not normal times and it is in this context that the government is turning to universities to help bail out the economy.Related: Universities abroad headhunting 95% of UCL’s top EU researchers, provost saysRelated: Brexit threatens UK's reputation for scientific research, watchdog says Continue reading...

Employers’ groups say it is vital the new industrial strategy is underpinned by a powerful overseer to monitor progressBusiness leaders have warned that the government’s new industrial strategy risks being blown off course unless ministers create a powerful independent watchdog to monitor progress in boosting Britain’s weak productivity.While welcoming a white paper detailing five areas where the UK’s economic performance needs to improve, employers’ groups said it was vital Greg Clark, the business secretary, gave “teeth” to a planned advisory council.Related: White paper to set out industrial strategy in bid to boost UK productivityRelated: Industrial strategy is welcome, but good intentions are never enough Continue reading...

Yes, there are flaws and omissions, but in accepting that government has a vital role to play in creating a healthy economy, this is a big step forwardPraise be. A Conservative government has published a comprehensive industrial strategy which explicitly acknowledges that the state has a key role to play in steering and coordinating economic activity. So let’s give credit to Theresa May and Greg Clark for facing down their own backbench (and several frontbench) free marketeers who deny this fundamental principle of successful economic policy. And then let’s hope this white paper finally lays to rest the political and media orthodoxy that the economy grows best when “free enterprise” is left to itself; and that government helps the economy most when it intervenes least.The UK’s economy has been systematically underperforming on almost every key measureRelated: Life is going to turn very nasty if we can’t solve the growth puzzle | Andrew Rawnsley Continue reading...

Cuts to legal aid and disability benefits are costing more than they save. The refusal to abandon austerity looks increasingly irrationalIn our everyday lives, most of us are familiar with the idea of false economy. Ignoring a burst pipe might save you money on a plumber, but it’ll cost far more to deal with the damage caused by flooding. And I’ve lost count of the number of times I’ve purchased a tantalisingly cheap pair of shoes, only to see them fall apart three times as fast as a pair for double the price. Better quality products cost more upfront but often save you money in the long run – yet another way that people on low incomes are penalised.Related: The fightback against the Conservatives’ legal aid desert begins today | Richard BurgonLast month it was revealed that £40m was spent trying to deny sick and disabled people benefits they’re entitled to Continue reading...

Life in South America’s largest metropolis is anything but uniform – the city’s core and its periphery are worlds apart

Social protections can best be upheld through international cooperation. Labour should clearly back the single market and the customs unionBritish politics is polarised on nearly every axis, so it is strange how little conflict there is between Labour and the Conservatives on the biggest issue: the terms of departure from the EU. Jeremy Corbyn’s challenges to Theresa May over Brexit negotiations at prime minister’s questions last week felt remarkable because he so rarely opens battle on that front. Labour has not obstructed Tory legislation enabling the very hardest of Brexits. The frontbench say they would pursue a different model, putting “jobs first”. But whips have instructed Labour MPs to sit on their hands as the Tory agenda is enacted.Mr Corbyn’s views in the area are vague, except to insist that for democracy’s sake, the referendum verdict must be honoured. That is a sensible starting point for the leader of a national party, especially one that represents many areas that voted leave. But ending EU membership leaves a spectrum of options, notably in the question of the single market and customs union. The Tories are dedicated to rupture from both; Labour equivocates. Continue reading...

Readers respond to the advance in robotics, and what it means for our economy, social fabric and the planetThe difference between the robots of today and all previous forms of automation is that they are so flexible (Editorial, 25 November). Intelligent robots will be utilised in any new enterprise rather than people now because the financial returns are likely to be so much greater, given that there will be no recruitment difficulties, wage demands, overtime claims, strikes, sickness absence, pensions, transport or housing problems to take care of. Factories can be situated anywhere, and HS2 could be redundant before it becomes operational.In the past, workers displaced by automation could rely on new industries springing up to take them on, but in future these will create far more jobs for robots than people across the board. Our whole economic system, which concentrates on profitability and economics rather than the welfare of the population, can only encourage this trend. What we need is a new economic system.

In an interview with the Guardian, the shadow chancellor attacks the belief that ‘government borrowing is akin to burning money’John McDonnell has said Labour will win the argument for more borrowing for investment, saying the Conservatives and much of the media has failed to engage with the arguments for government spending.The shadow chancellor also attacked “media outriders using trite journalistic tactics” in an article in the Guardian, after a series of interviews where he said he would not engage with how much extra it would cost to service public debt under Labour.Related: Borrowing to invest isn’t burning money – it’s how Labour will fix the economy | John McDonnellRelated: John McDonnell had a chance to shine with the budget, but he blew it | Nicola MurphyRelated: Hammond to borrow extra £90bn after lower productivity forecast Continue reading...

While the Tories have strangled the life out of the economy, we will support the new infrastructure, technology and ideas that are vital to growthThis is the pivotal period in which the battle of ideas over the future of our economy will be lost or won. All the evidence of the failure of austerity has been exposed, and the neoliberals are fighting for their ideological survival. The terrain they have chosen is over state intervention in the economy; they deploy media outriders using trite journalistic tactics to sow fears over the costs of state investment. Since I became shadow chancellor my aim has been to raise the level of economic debate and challenge the hegemony of this egregious ideology.The budget gives us the opportunity to confront and overrun the bogus economic arguments that have dominated political and economic policymaking for so long. The official figures released alongside the budget this year were utterly damning, a litany of failure not only for this government but for the entire economic philosophy it lives and will die by.There lurks a belief that government borrowing is akin to burning moneyRelated: Philip Hammond must ditch deficit reduction and invest. But he won't | Larry Elliott Continue reading...

Falling real incomes, rising debt and low productivity are pushing us towards the danger zone – and measures announced in the budget may not be enoughOn the historical average, Philip Hammond should be worried. Recessions have tended to occur once in every decade since the 1970s, and we’re now almost 10 years from the start of the last one.But while Brexit might be the obvious catalyst – for which the chancellor earmarked £3bn in emergency funding at the budget – two lost decades of earnings growth and more austerity to come should be just as troubling. In this regard, Hammond may be putting us all on course for another crash.Related: Brexit has created a political climate no budget can fix | Martin KettleProductivity 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...

Press and broadcasting experts should look behind the gloomy OBR forecasts and tell us if the UK really is in a hole this big – and what we can we do about itWhat are political correspondents – from Laura, Nick and Robert on down – there for? Not to go to the same old briefings and sing the same old song? Independent judgment is a coverage pearl beyond price?And what are economics correspondents there for on the big budget outing? Not merely to take the latest Office of Budget Responsibility growth figures and turn them into a uniform tale of woe. As Alex Brummer of the Mail (and before that the Guardian) very reasonably pointed out, the OBR has “a flawed track record” on forecasting– and is glooming a damned sight harder than the Bank of England and IMF. Continue reading...

Trade secretary’s vision of entrepreneurial Britain fails to account for under-skilled workers, lack of training and opportunitiesBritain outside the European Union will enjoy much cheaper imports. That’s one of the threads running through arguments for Brexit.Outside the high walls of the EU’s economic fortress, we can scour the Earth for the cheapest stuff on offer, buy it and and bring it home to consume, saving ourselves billions of pounds. Continue reading...

The rise of the machines will make us richer. But to keep our humanity we need fundamental changes to our economic systemA country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker. That’s why Nobel laureate Paul Krugman concluded that productivity isn’t everything – but in the long run it is almost everything. Instead of wasting the nation’s time focusing on the non-existent threat of the deficit, the chancellor, Philip Hammond, this week conceded the “everything” that Mr Krugman had identified: British productivity has stalled and as a result workers’ real wages will be lower than when the recession began. Before the crash, we would have expected living standards to double every 40 years. Now that will take 80. That means lost decades for millions of ordinary people.It’s easy to become overly pessimistic. The epoch of enormous economic progress that characterised the 20th century is not over; we are suffering from seven years of government failure where ministers thought their job was to watch the economy and suffer passively from capitalism’s inevitable cycles. Rather than take a view of the economy and by fiscal action seek to secure prosperity for all, ministers embarked on a highly ideological agenda of dismantling the state and the protections afforded to workers – arguing erroneously that these were holding back the state. Mr Hammond has been forced to alter course because his party’s reckless policies had jeopardised the long-term improvement in the national standard of life. Continue reading...

The Bank of England’s interest rate rise has made Britons gloomier about economic prospects

Trump has promised a deal ‘very, very quickly’. If talks proceed as slowly as they are for a revised US agreement with Canada and Mexico, that won’t happenBeing a Canadian sabbatical visitor in the United Kingdom this year has allowed me to witness Brexit politics at close hand. As an economist, I’ve found it fascinating.Some Britons feel that Brexit sets the stage for a bright future for the UK, including a potential trade deal with the United States, while others are deeply concerned about the consequences of Brexit for both the economy and the country’s stature in the world.Related: Singapore-on-Thames? This is no vision for post-Brexit Britain | Jeevan VasagarRelated: Corbyn has seen the light on Brexit. Now he’s taking the fight to the Tories | Polly Toynbee Continue reading...

CBI survey of retailers comes before Black Friday discounting period, which is likely to drive sales furtherHigh street sales are staging a recovery after a sharp slowdown last month, overcoming the steepest growth in selling prices in almost 25 years.Grocers and clothing retailers fuelled stronger sales in November in the Confederation of British Industry’s survey of retail activity, which had recorded sales for October falling at the fastest rate since the height of the recession in 2009. While the study comes before the key Christmas shopping period, the early indications are likely to cheer the industry.Related: UK shoppers forecast to spend £10bn in Black Friday sales Continue reading...

This year, Australia is joining in on the most overtly avaricious retail event. And it’s sickeningOn Tuesday night I was chatting to the founder of a newly launched US footwear brand, who was eagerly anticipating Black Friday.

Thinktank’s budget analysis says forecasts for lower productivity, earnings and growth until 2022 were ‘pretty grim reading’Britain’s leading financial thinktank has warned workers to expect an unprecedented two lost decades of earnings growth and many more years of austerity as a result of the marked slowdown in the economy announced in Philip Hammond’s budget.The Institute for Fiscal Studies said in its traditional post-budget analysis that forecasts slashing productivity, earnings and growth in every year until 2022 made “pretty grim reading”, and predicted that even by the middle of the next decade, Britain’s public finances would still be in the red.Related: Public services face real-terms spending cuts of up to 40% in decade to 2020Productivity 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...

Mainly grim news from thinktank, painting a picture of doom and gloom including predictions of a £35bn deficit in 2019-20Seven years after George Osborne ushered in a tough new age of spending cuts and deficit reduction, the Institute for Fiscal Studies had a grim message for the long-suffering British public yesterday: the age of austerity is not over.The IFS is to the budget what the pundits are to Match of the Day. It pores over the highlights, dissects why things have gone wrong (and more rarely why they have gone right), and takes delight in telling it the way it is.Related: Chancellor, keep a million children out of poverty. Fix universal credit | Debbie AbrahamsRelated: UK faces two decades of no earnings growth, IFS warns Continue reading...

Professor Wendy Burn on fears that promises of spending on mental health services will be broken; Colin Dyer of WellChild on the failure to prioritise the wellbeing of the young; Rev Paul Nicolson on inadequate benefits, poverty and ill health; plus, letters on housing and economic growthThere is a real and imminent danger that the promises made to improve mental health services for the millions of people who need them are about to be betrayed. This is because the chancellor failed to give the NHS the money it needs to continue to deliver current levels of care (Extra cash ‘plugs some gaps but not all’, warns top doctor, 23 November). Before the budget, the head of NHS England, Simon Stevens, warned that a cash shortfall would make it “increasingly difficult” to deliver on the government’s promise to improve mental health services in the coming years.The chancellor’s failure to heed that warning means difficult choices will have to be made when NHS England’s leaders meet to consider the budget next week. We are seeking an urgent commitment from NHS England and the government that the promised improvements to mental health services will be honoured. As shown by the case of girl X, highlighted by Sir James Munby this summer (Bed found for suicidal girl after judge’s fury, 5 August), this is a matter of life and death for many of our most vulnerable citizens. Continue reading...

In a dark room in central London, the Institute for Fiscal Studies pores over the figures behind Wednesday’s budget and finds little actually thereCall it the revenge of the geeks. On every other day of the year, politicians feel free to play fast and loose with the figures. Anything to massage them towards their own ends. But having stayed up all night going through Treasury forecasts, the day after the budget belongs to the experts. This is when they get to have their say on the government’s competency, and the chancellor can do little but sit back and suck it up.Philip Hammond is quite happy to kick back his heels and listen to MPs from all parties delivering their verdicts in the Commons in the post-budget debate, as he knows that almost all of them are totally innumerate. So even if one of them does happen upon an accounting error there’s a fair chance no one will know if it’s accurate or not. But a big thumbs down from the nerds can be career ending. And there’s no one the chancellor fears more than the Institute for Fiscal Studies, an independent thinktank that has a far better track record of getting things right than anyone in the Treasury. Continue reading...