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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.