Nothing – not even policies for which Labour was excoriated two years ago – is too much to swallow for a party, and a leader, determined to rise above the frayJeremy Corbyn may score badly with the wider public, but for as long as I can remember the press have given even the most admired Labour leaders a hard time during election campaigns. A recent exception was Tony Blair, who – for a time – achieved rock star status with the media.Many reports have suggested that when presented with individual Labour policies – in what one might call a “blind tasting” – respondents have been much more enthusiastic than when the names of Corbyn and some of his colleagues come up. Continue reading...

Weakened pound pushes Swedish furniture chain to look at making and sourcing more than the odd mattress or sofa in UKIkea is considering making more products in the UK as the Swedish furniture chain bids to fend off Brexit-led price rises.The retailer already makes some sofas and mattresses in Britain, but UK boss Gillian Drakeford said it was actively examining how it might increase that work while looking at other products that can be sourced domestically.Related: Ikea to create 1,300 UK jobs in three new stores Continue reading...

Institute for Fiscal Studies warns of less generous system, as Labour says ‘savage attack’ on pensioners could sway electionTheresa May’s flagship manifesto proposal to shake up the funding of social care for older people has come under fire from the independent Institute for Fiscal Studies and opposition parties.The IFS warned on Friday that the complex new system outlined in the Conservative party’s manifesto, which would force more elderly people to pay for their own care, “makes no attempt to deal with the fundamental challenge of social care funding”.Related: Social care funding: what are the Conservatives proposing?Related: Tory manifesto: more elderly people will have to pay for own social care Continue reading...

A proposal to shed linguists and cross-cultural experts is clearly against the best interests of the UK, write 15 senior representatives for modern languages in the UKAs senior representatives for modern languages in the UK, we are surprised and disturbed to hear that the University of Manchester plans to cut 35 posts in its School of arts, languages and cultures, alongside further jobs in business and in biology, medicine and health. Staff in German, French, Italian, Hebrew and Spanish have been told that their jobs are “at risk” because these areas supposedly recruit fewer and lower quality students than the Russell Group tariff average. We have not seen hard evidence of this claim; we do know that modern languages at Manchester have a stellar reputation nationally and internationally, and that the areas targeted for radical reduction have excellent student ratings for teaching quality as well as very significant research power. Recent harsh marking in modern languages A-levels has led to a mistaken perception of applicants as being of “lower quality”; and at a time when there is a clear need to stimulate recruitment for modern languages across higher education, we urge the university to address the issue positively and proactively in the context of a proven and urgent need for graduates with languages in the UK (see, for example, the British Chambers of Commerce and British Council reports).It is worth recalling that over £3m has been awarded to Manchester precisely to support and encourage research in modern languages 2016-2020. The university signed a letter of support for modern languages which was received by the Arts and Humanities Research Council in connection with Manchester’s Open World Research Initiative (OWRI) application in 2015. Continue reading...

CBI finds orders at highest level since December 2013 but analysts say few firms are investing and dearer imports may force higher selling prices soonUK factories have cashed in on the sharp fall in the pound since the Brexit vote, with export orders at the joint highest level in three and a half years.The stronger than expected findings from a survey by the CBI, the UK business trade body, suggest manufacturers had a decent start to the second quarter, boosting hopes that the sector will help prop up the wider economy as a consumer slowdown takes hold.Related: 'People still want to work here': can British business survive Brexit?Related: UK inflation jump means the 2017 voter is getting poorer | Larry Elliott Continue reading...

Head of employers’ federation says integrity of single market more important than making good business with BritainGerman industrialists have warned that British hopes of their support in Brexit negotiations are misplaced and could backfire with dangerous consequences for international trade.

Four out of five fear rising expense of household essentials such as food, drink and clothing, according to Mintel reportBritish consumers are bracing themselves for an expensive and uncertain post-Brexit future, with four out of five fearing price rises on household essentials such as food, drink and clothing, a survey has revealed.Eighty-three percent of Britons admit they are concerned about price hikes in goods and services, while 59% are most worried about the soaring cost of groceries, according to a poll for Mintel’s 27th annual British Lifestyles report. Spiralling holiday costs are a concern for 35%, with 26% fearing higher prices for clothing and shoes.Related: Energy price rises help drive UK inflation up to 2.7% Continue reading...

High street sales have beaten predictions, but that doesn’t mean the economy is a sunny picture of healthBritain went on a spending spree in April. The shops were full of punters. Online retailers coined it in. Spring brought with it an end to the winter consumer spending blues.That at least is what the official figures suggest. The Office for National Statistics reported that the volume of retail sales rose by 2.3% last month, smashing City expectations. It was enough, in combination with Donald Trump’s political woes in Washington, to send the pound back through the $1.30 level to its highest since last September.Related: UK retail sales surge despite pay squeeze Continue reading...

Stronger-than-expected rise defies predictions of slowdown in consumer spending as UK pay squeeze continuesA surprise surge in retail sales in April helped push the pound to its highest level in eight months as Britain’s consumers shrugged off concerns over falling living standards.Warm weather and the Easter holidays encouraged shoppers back onto UK high streets, with retail sales up 2.3% over the month according to the Office for National Statistics. It was more than double the 1% rise forecast by economists, and the biggest monthly rise since January 2016.

Everything you need to know about Theresa May’s proposals to change the funding of social care

My generation is the last to remember the destitution of life in Britain before the NHS and the welfare state. Heed our warnings, before we are goneIt was at Bradford University on Tuesday that Jeremy Corbyn unveiled the Labour party’s election manifesto. In the grand hall, Corbyn spoke to an enthusiastic gathering of students and party faithful about the concrete plans Labour has to transform Britain into a country where the many will prosper instead of the few. Corbyn spoke about the need to properly fund the NHS, provide free tuition to students, end the blight of zero-hours contracts, and raise the living wage to £10 an hour.For me, a man who was born and bred in the harsh poverty of Britain after the first world war, it was inspiring. But what moved me most was the venue he chose to announce this manifesto of equality and fairness – because Bradford University is built on ground that, in my youth, was a site of great suffering and death.Related: Theresa May is creating an epidemic of poverty. Don’t give her a free hand | Gordon BrownI can tell you as a very old man: I am afraid for the future of ordinary people in Britain Continue reading...

Pay growth lags behind inflation for the first time in two-and-a-half years, highlighting impact of Brexit uncertaintyLabour and the unions accused the government of ignoring the plight of ordinary workers after UK pay growth fell below inflation in early 2017 for the first time in two-and-a-half years.Official figures showed that workers’ average earnings rose by 2.1% year on year in the three months to March, the weakest increase since July of last year.Related: UK unemployment rate hits 42-year low but real wages shrink – business live Continue reading...

The economic fates of diverse cities such as San Francisco, New York and Detroit would seem to be vastly different – but they share a common threadOver the last half-century, the story of America’s cities is a tale of booms and busts. New York and tech hubs like San Francisco – once cities in financial distress – have transformed into economic powerhouses. At the other extreme, one-time prosperous manufacturing cities like Detroit now find themselves in economic turmoil.Viewed in isolation, the economic fates of these cities would seem to bear little resemblance to each other. However, they all share a common thread: since 1970 these cities, like nearly every other major American city, have experienced a “hollowing out” of the middle class. Continue reading...

Low wage growth and the gig economy have made the labour market look better on paper than it feels in the pocketBritain looks like a full employment economy. A bigger slice of the population is in work than at any time since modern records began. The unemployment rate is at its lowest since 1975. There are hundreds of thousands of job vacancies.But Britain doesn’t feel like a full employment economy. When the jobless rate was this low in previous economic cycles, wages were rising because employers were competing for scarce labour. Firms were investing in new capital equipment because workers were becoming more expensive. Productivity was increasing.Related: UK faces pay squeeze as unemployment rate sinks to 42-year low Continue reading...

Treasury injected £20.3bn to prop up bank in 2008 after its troubled takeover of HBOS but now public stake stands at zeroThe government has sold its remaining shares in Lloyds Banking Group in a landmark moment for the banking sector almost a decade after the £20.3bn bailout of the high street lender.It will be confirmed on Wednesday that the Treasury has finally extricated itself from its shareholding in the bank – owner of Halifax, Bank of Scotland and Scottish Widows –which it rescued during at the depths of the financial crisis.Related: Noel Edmonds accuses Lloyds of 'foot dragging' over HBOS payouts Continue reading...

Rising air fares, clothing and food costs have driven the cost of living up at its fastet rate in nearly four years, faster than earnings

Corbyn thinks changing attitudes mean we will back tax rises and borrowing, although the sums involve some sleight of handLabour’s manifesto has an old-fashioned feel about it. It has been many a year since one of the two main political parties has gone into an election on a platform that is unashamed about the virtues of tax and spend.The document sketches out a picture of Britain in which the size of the state is bigger – apart from during the special circumstances of the financial crisis – than at any time since the 1980s. You would have to go back even further – to the early 1950s – to find a time when tax as a share of the economy will be as high as it would be under Labour’s plan for 2021-22.Related: Election 2017: Jeremy Corbyn launches Labour manifesto with plan to raise £48.6bn in tax – politics liveRelated: Is Labour's manifesto living in fantasy land? Quite the opposite | Larry Elliott Continue reading...

Increases in clothing, car tax and air fares also blamed as pressure grows on living standards and consumer spendingThe rising cost of electricity contributed to inflation’s rise to 2.7% in April, its highest level in three and a half years.Increases in the cost of clothing, car tax and air fares were also blamed by the Office for National Statistics for the rise in consumer price inflation (CPI) that exceeded City forecasts of 2.6%, and soared above the previous month’s figure of 2.3%.Related: UK inflation jumps to 2.7% as real wage squeeze worsens - business live Continue reading...

Surprise ruling confirms EU officials have key negotiation powers in trade talks with approval of state parliaments not neededThe European court of justice has raised a ray of hope for British trade negotiators with a surprise ruling that will make it harder for national parliaments to block key components of any future post-Brexit deal between the EU and the UK.In a long-awaited test case that had been expected to complicate the Brexit process, the court instead ruled that EU officials had exclusive powers to negotiate international trade deals without ratification by national and regional parliaments.Related: Brexit weekly briefing: Tory election bombast means reality must wait Continue reading...

From China’s investment boost to Trump trade, we explain why investors are shaking off concerns and snapping up sharesGlobal stock markets are hitting new peaks, with the FTSE 100, Germany’s Dax, the S&P 500 in the US and MSCI’s World Index, which tracks equities across the globe, all at record highs.Investors are shrugging off worries about flashpoints such as North Korea, the uncertainty over the global political situation and latterly the WannaCry cyber-attack to snap up shares.

There will be no feelgood factor driving voters to the polls – living standards are falling as the gap between price rises and wage increases widensThe 2017 general election will be fought at a time when voters are getting poorer. That was the big message from the latest official figures for the cost of living showing that the annual inflation rate has reached 2.7%.Earnings growth is running at around 2%, which means that living standards are going down. And there is worse to come. The gap between price increases and wage rises is going to get wider over the coming months.Related: UK inflation jumps to 2.7% as real wage squeeze worsens - business liveRelated: Energy price rises help drive UK inflation up to 2.7% Continue reading...

In 2012, Kansas did what Donald Trump wants to do: it introduced huge tax cuts to try to boost growth. Today, the state is out of money – and residents are angryKansas is broke – but you wouldn’t guess it looking at its shining state capitol in Topeka. The imposing limestone monument, crowned by a shiny copper dome and limned with John Steuart Curry’s luminous murals, has just undergone a $325m facelift. What’s happening inside the state house is a lot less pretty, and may well foreshadow the far uglier battle looming over the future of taxation in the United States.

‘Significant proportion’ of UK workers face falling living standards, with lower pay rises and higher unemployment predictedBritish workers should brace themselves for rising unemployment and falling real pay in the year ahead as the impact of a Brexit slowdown is increasingly felt in the jobs market, reports have warned.The era of rapidly increasing employment is over, according to the forecasting group EY Item Club, which on Monday predicted the unemployment rate will rise from 4.7% now to 5.4% in 2018 and 5.8% in 2019.Related: Bank of England warns Brexit vote will damage living standards Continue reading...

Government plans to sell last remaining shares this week eight years after pumping in £20bn to prevent bank’s collapseThe government is expected to sell off its remaining shares in Lloyds Banking Group in the coming week, marking a watershed moment for the sector after the financial crisis.Eight years after pumping in £20bn to prevent the bank from collapsing, taxpayers will no longer own any shares in an institution that was created in the depths of the financial crisis when Lloyds TSB rescued HBOS.Related: Lloyds profits double to £1.3bn despite PPI and fraud payouts Continue reading...

Imperfect it may be, but Labour’s manifesto recognises the economic status quo can’t be kept going for much longerTen years ago this month, Britain was on the cusp of change. Two things were about to happen, one planned and one unexpected.The change everybody knew about was that Tony Blair was going to stand down as prime minister after 10 years in the job, during which time he had won three elections on the trot.Related: Mohamed El-Erian: ‘we get signals that the system is under enormous stress’ Continue reading...

Chancellor tells summit Beijing’s vast $990bn infrastructure plan is an ‘opportunity to strengthen ties’ with China

Global leaders attend ‘Belt and Road’ infrastructure summit to praise plan Xi Jinping says will bring a new ‘golden age’ of globalisation

If centre-left parties wish to escape the poison of trickle-down policies, they should look to the real outcomes of policies implemented from 1983 onwardsLanguage in politics is a fraught business. Certain terms and words are thrown around so often and so easily that they can lose their punch, if not their meaning.Guardian Australia’s recent article “Australian Labor led centre-left parties into neoliberalism. Can they lead it out?” had at its core a grossly erroneous claim – that the Hawke-Keating governments were the tip of the arrow for neoliberalism, globally and at home.Related: Neoliberalism 'has run its course', says ACTU boss Sally McManusRelated: As the trickledown juggernaut rolls on, it's time to rejuvenate the middle class | Wayne SwanRelated: Flogging the dead horse of neoliberalism isn't going to improve the economy | Greg Jericho Continue reading...

May is announcing the proposal to create a new generation of housing to rent as Labour reveals its Robin Hood taxTheresa May will vow to “fix the broken housing market” and arrest a decline in social housing by announcing a scheme designed to boost the number of new council homes for rent.In an attempt by the prime minister to reach out to low-paid workers, she will announce a plan to offer funds, loans and new powers to councils and housing associations to help them build a new generation of social housing for renters. She will also pledge to give the new tenants the option to buy the property after 10 to 15 years.Related: Tories ahead by 15 points despite gain for Labour, poll findsRelated: Labour hints that it will pledge to abolish university tuition fees Continue reading...

However much extra public investment is justified, the current Labour party can’t convince people it is capable of using it wiselyThe Labour manifesto is a stark reminder of the havoc a Tory government will create over the next five years if it wins a sizable majority next month.From the holes it identifies in NHS funding to the need for an investment bank to promote infrastructure spending, the document has something to say about many of the areas crying out for government intervention. It works as a handy guide to those parts of the economy, the welfare system and public services the next administration must address – or risk the foundations being further undermined. Continue reading...

The Vix measures how fearful share traders are. The scary thing is that they’re not – and the index is down at levels seen in, er, 2007A tool that measures fear may sound like something out of a horror movie, but the Vix index has nothing to do with the entertainment industry. Also known as the fear index, the Vix is a key indicator of stock market health.The Chicago Board Options Exchange Volatility Index, to give it its proper name, tracks the extent to which traders are optimistic or fearful about the future performance of US stocks – and last week it fell to 9.77, its lowest level since 1993. Continue reading...

The leading economist and investor believes world leaders, and global capitalism, have reached a decisive fork in the road between equality and chaosThe bad news is that another economic crisis could strike within two years. The good – or better – news is that such a shock is not nailed on. It’s a 50% chance. But the developed world is approaching a T-junction. One road leads to higher growth and a more inclusive form of capitalism while the other turns towards recession, instability and turmoil.The speaker is Mohamed el-Erian, one of the biggest names in financial markets, who advised President Obama. Born in New York to Egyptian parents, he spent 14 years at Pimco, the world’s biggest bond fund manager. Six of those years were as chief executive before he quit, citing the need to have a different perspective on life and spend more time with his family. His daughter, when she was 13, handed him a 22-item list of key moments in her life he had missed. Continue reading...

New figures show we are continuing to spend less money on buying things, and more on doing things – and telling the world about it online afterwards, of course. From theatres to pubs to shops, businesses are scrambling to adapt to this shiftIt was an audacious plan for an unloved bit of Manchester. A £25m arts centre to be built on a derelict plot that had not felt a cultural pulse since the closure, 15 years earlier, of the legendary Haçienda nightclub. It would be called Home, formed by the merger of two proud but financially imperilled institutions – the Cornerhouse cinema and gallery, and the Library Theatre Company – and would, its backers hoped, revive a forgotten corner on the city’s southern edge.“There was confidence from the city leadership that it would work, but a lot of my peers and colleagues in the arts were saying to me, ‘Who’s going to go there?’” says Sheena Wrigley, executive director of Home, which includes two theatres, five cinema screens, an art gallery and a restaurant and bar. “It was a very unprepossessing area with a big car park and one large office block. It wasn’t visible or on a main thoroughfare.”Related: The way we shop now: the revolution in British spending habits Continue reading...

Former prime minister says Tory policies will reverse progress made in tackling poverty under LabourThe former prime minister Gordon Brown has strongly attacked Theresa May’s claim to be the champion of Britain’s struggling families, warning that the Conservative government’s welfare cuts would leave more people in poverty than under Margaret Thatcher in the 1980s.In his first major intervention in the election campaign, Brown said May’s policies would reverse the progress made in tackling poverty under Labour and leave the country more “economically divided and socially polarised than any other prime minister in living memory”.Related: What do you think of the Labour manifesto? Catch up on our live discussionRelated: Theresa May is creating an epidemic of poverty. Don’t give her a free hand | Gordon Brown Continue reading...

All the day’s economic and financial news, as Germany posts strong growth figures at the start of 2017

The US president thinks currency manipulation is behind Germany’s massive surplus – but the best way to tackle it isn’t the exchange rate or trade policyFor Donald Trump, the measure of a country’s economic strength is its current-account balance – its exports of goods and services minus its imports. This idea is of course the worst kind of economic nonsense. It underpins the doctrine known as mercantilism, which comprises a hoary set of beliefs discredited more than two centuries ago. Mercantilism suggests, among other things, that Germany is the world’s strongest economy, because it has the largest current-account surplus.In 2016, Germany ran a current-account surplus of roughly €270bn (£228bn), or 8.6% of GDP, making it an obvious target of Trump’s ire. And its bilateral trade surplus of £51bn with the US presumably makes it an even more irresistible target. Never mind that, as a member of the eurozone, Germany has no exchange rate to manipulate. Forget that Germany is relatively open to US exports, or that its policymakers are subject to the EU’s anti-subsidy regulations. Ignore the fact that bilateral balances are irrelevant for welfare when countries run surpluses with some trade partners and deficits with others. All that matters for Trump is that he has his scapegoat.Related: Germany outpaces UK, US and France with 0.6% quarterly growth – business live Continue reading...

It would have been outrageous for Gavin Patterson to get rewarded after BT’s Italian scandal and a big fine for overchargingCredit where it’s due. After the accounting catastrophe in Italy and a big fine from Ofcom for overcharging for broadband access on the home front, BT’s remuneration committee has done the decent thing. It has awarded no bonus to chief executive Gavin Patterson and the outgoing finance director. It has clawed back bonuses from both men for past years because the Italian scandal caused a £268m overstatement of profits. That penalty will cost Patterson £338,000. His incentive package for this year has also been reduced because the share price is 25% lower than a year ago.In a rational world, praise would be unnecessary. After BT’s hellish year, any bonus would have been outrageous, as Patterson happily agreed. Yet too many other companies, confronted by equal share-price disasters for investors, fail to apply common sense.Related: BT chief's pay package slashed by £4m over Italian accounting scandal Continue reading...

How the Tory policy of cutting corporation tax has given rise to a dangerous short-termism, which is harming British industry and wider societyThe Labour pledge to raise corporate taxes (Report, 10 May) is the economically responsible reaction to the failures of corporate tax competition. The deductive mathematical models from supply-side economics that justify low corporate taxation assume that “the state” is purely self-seeking and “the firm” an efficient bundle of contracts that creates wealth. They ignore the historical functions of actual states as the primary force for social integration and development in capitalist systems. They ignore the shift of actual large corporations away from the “retain and reinvest” model of the post-war period to the extractive “downsize and divest” model of the present, to use William Lazonick’s terms.Supply-side theory insists that reduced corporate taxation equals increased productive investment and long-term wage growth, but where is the evidence for this outcome? The “competitively” lower taxed UK has seen slower improvements in productivity than Germany, France, Sweden, Norway or the US, which retains the highest corporation tax of all. British business expenditure on R&D as a proportion of GDP has declined in the last decade and the UK has suffered a historic drop in real wages. In an era of unprecedented corporate profits and high cash holdings the evidence for the redundancy of tax relief is remarkable: UK corporate tax cuts have apparently translated straight into higher shareholder payouts and share repurchases to further inflate the share price: ie they have been absorbed into the prevailing US and UK dynamic of financial value extraction that underpins the escalating wealth of the 1%, not an investment dynamic. Continue reading...

UK central bank warns that households will be squeezed this year as inflation rises faster than previously forecast

Bank of England hints interest rates may increase sooner than markets think but warns of near-term squeeze on consumersThe Bank of England has warned households that living standards will fall this year as the effect of the Brexit vote works its way through to higher prices and meagre pay deals.Presenting a sober assessment of the economic outlook just weeks before the general election on 8 June, the Bank’s governor Mark Carney predicted living standards could start to recover in 2018 but , in the meantime, inflation would be higher than pay growth this year making it a “more challenging time” for households.Related: Brexit slowdown fears as industrial output falls and trade deficit grows Continue reading...

ONS statistics suggest faltering popularity in UK, but campaigners warn of rise of short-hours contracts for workersGrowth in zero-hours contracts has stalled in the UK, according to the latest official figures, but campaigners have warned that insecure work is still a problem in Britain.There were 1.7m zero-hours contracts in the UK in November 2016, representing 6% of all employment contracts – unchanged from a year earlier. The Office for National Statistics said the number of firms using zero-hours contracts had fallen.Related: Labour party pledges to outlaw all zero-hours contractsRelated: McDonald’s offers fixed contracts to 115,000 UK zero-hours workers Continue reading...

Sharp fall in pound since EU referendum did little to boost exports in March, ONS figures suggestIndustrial output shrank more than expected and the trade deficit widened in March in the latest signs that uncertainty surrounding Brexit is beginning to weigh on the economy.Industrial output dropped by 0.5% in March, sharper than the 0.3% fall predicted by economists. It followed a 0.7% fall in February and brought the sector to a virtual standstill in the first quarter overall, with growth of just 0.1%, according to the Office for National Statistics figures. Continue reading...

Jeremy Corbyn’s policy could boost educational performance but have long-term effects on growth, says thinktankLabour’s plan to fund higher school spending through increases in corporation tax could boost educational performance but would risk damaging the economy’s long-term growth prospects, the Institute for Fiscal Studies has said.The thinktank’s analysis of one of Jeremy Corbyn’s flagship policies shows that reversing the government’s planned cuts to schools’ budgets would be comfortably paid for by the extra revenue raised by increasing the main rate of corporation tax to 26%. Continue reading...

Thinktank says planned pace of increase for rest of decade could price workers out of a job, with young people worst affected• General election 2017 – latest updatesDramatic increases in the minimum wage planned by Labour and the Conservatives after the general election will put the jobs of low income workers in danger, a leading tax and spending thinktank has warned.The Institute for Fiscal Studies said accelerating the pace of rises in the minimum wage and the “national living wage” (NLW) for the rest of the decade could price workers out of a job, with young people the worst affected. Continue reading...

All the day’s economic and financial news, as Donald Trump’s sacking of James Comey undermines the US dollar