First cuts not expected until late summer or early autumn despite evidence jobs market is cooling

Latest UK labour market report shows signs of cooling, as jobless rate hits highest since 2021

International cooperation that allowed poorest countries to close gap with wealthiest has fractured, says report

Bank of England will want to delay rate reduction until level of pay increases eases

Thirteen leading businesswomen back Labour's shadow chancellor and her commitment to a genuine plan for economic growth'In our lifetimes, we have seen incredible progress for women - in business, politics and all across society. We have been part of that change, and been supported and inspired by women who went before us.There are, however, telling gaps in the area of economic policymaking. There has still been no woman governor of the Bank of England, or permanent secretary to the Treasury. Damningly, the post of chancellor of the exchequer is more than 800 years old - and every one has been a man. Continue reading...

Investors are rattled after far right parties make gains in European elections, while analysts at JP Morgan say a Labour win would support UK stocksThe euro continues to bob around a one-month low this morning, at $1.0763 against the US dollar:French banks are being hit by the political uncertainty created by Emmanuel Macron's snap election.Investors are assessing Macron's gamble in attempting to reassert his authority after voters shifted en masse to the Far-right during the EU elections, in both France and Germany. The euro has dropped sharply against the dollar, to $1.074, the lowest in a month amid the surprise turn of events. Continue reading...

Antonio Soprano says he was told to walk to a McDonald's for food as there was none at SevingtonAn Italian lorry driver has described the UK's new post-Brexit controls as a mess" after his lorry was held at a government-run border post for more than two days.Antonio Soprano, 62, who was stopped while bringing plants into the country from central Italy, said he was offered nothing to eat during his 55-hour ordeal and instead was told by border officials that he should walk to a McDonald's more than a mile away to get a meal. Continue reading...

Underlining his credentials as a creative thinker, the economist and Labour candidate for Swansea West offers a hopeful vision of the nation's future - spurning leftwing utopianism as well as tackling 14 years of creeping declineAs proposed national rallying cries go, perhaps this one lacks swagger. But its modesty is deliberate, as the economist and Observer columnist Torsten Bell's surprisingly hopeful new guide to halting this country's crumbling decline explains. Chest-beating political promises to put the Great back into Great Britain are, he writes, really just distracting from the real issue, which is that the British are exceptional all right - only not in a good way. We stand out from our pack of medium-sized, richer-than-average countries for our low productivity, chronic wage stagnation and American-style high inequality (but sadly without the higher growth of the US).We have truly world-beating housing costs, higher than any other Organisation for Economic Co-operation and Development (OECD) country but Finland, but magically still deliver less living space per capita in return than famously cramped New York; we boast, if that's the word, fewer hospital beds than all bar one other OECD nation. Continue reading...

TUC says only Costa Rica had similar increase in first quarter as ONS data expected to show further rise in AprilUnemployment is rising in the UK at the fastest pace among 38 of the world's richest countries, according to an analysis by the Trades Union Congress (TUC).In a release a day before official labour market figures are expected to show another increase in joblessness in Britain, the union body looked at data from the Organisation for Economic Cooperation and Development (OECD) covering the first three months of this year. Continue reading...

Experts believe Beijing will retaliate with measures that could hit European exports from cheese to cognacThe EU is expected to notify China that it will impose tariffs on electric vehicle imports this week, firing the starting gun on a potential summer trade war with Beijing.A formal pre-disclosure of tariffs could happen as early as Wednesday, after a lengthy investigation into China's state subsidies for its car manufacturing, which is predicted to conclude that massive support continues to be concentrated on the EV sector. Continue reading...

First men's summer tournament since pandemic plus favourable European kick-off times will boost long-struggling UK pubs and bars

Data shows that when Americans' preferred party is in the White House, they're more likely to boast of a booming economy - even if it's untrueWhen he delivered his State of the Union address in March, Joe Biden framed the state of the American economy as a true success story, pointing to the historically low unemployment rate and falling inflation as signs of the country's robust recovery from the early days of the coronavirus pandemic.I inherited an economy that was on the brink. Now, our economy is literally the envy of the world," the US president said. And it takes time, but the American people are beginning to feel it." Continue reading...

Tax bombshell' claims undid Labour in 1992 but the Conservatives' catalogue of chaos' and the PM's actions mean fears are misplaced

With Brexit fast becoming a tragedy, Keir Starmer needs to forge a closer relationship with EuropeOn the day before the 1992 general election, the bookmakers at Ascot were offering odds of 6-1 against John Major's Conservatives winning. I was with the economist Roger Bootle, and we agreed that Labour, well ahead in the polls, was bound to win. It was pointless betting on the Tories, even at those odds. When the results came in we kickedourselves.When I told Lord Kinnock, the Labour leader at the time, this story years later, he jokingly said I should have telephoned him from Ascot. He said that on driving back from canvassing in south Wales the previous week he and his wife, Glenys, had had an uneasy feeling that, notwithstanding the polls, the election was slipping away" from them. Continue reading...

Resolution Foundation report suggests parties are dodging the economic challenges facing the countryRishi Sunak's pre-election claim that the UK economy is now going gangbusters" is undermined today by a report which argues that growth since 2010 has been unspectacular" and has been the result of a rising population, caused principally by high levels of immigration.The study, Life in the Slow Lane, from the politically independent Resolution Foundation, will add to the consensus among economists and academics that the fundamentaleconomic problems and challenges facing this country are being dodged by the parties during the general election campaign. Continue reading...

Neither Labour nor Tories have committed to axing already announced rises, Resolution Foundation warns

The ruling ANC is on a pioneering path to transform the Covid grant into a scheme that aims to combat povertySouth Africa is facing the most dramatic political shift since the end of apartheid after the African National Congress lost its majority in the general election of 29 May. Weeks of difficult negotiations between the ANC and its rivals on how best to form a governing coalition are expected.One commitment that unites most parties - including the incumbent ANC and its biggest rival, the Democratic Alliance - is to maintain or increase income support for adults, which includes monthly Covid payments to the poorest households. Continue reading...

Figures show unexpected resiliency of job market as Fed keeps interest rates high try to tamp down 3.4% inflationThe US economy added 272,000 jobs in May, a sign the labor market remained strong amid high interest rates, the Bureau of Labor Statistics announced on Friday.The number of May jobs was far higher than the 190,000 economists had expected and topped April's gains, when a revised 165,000 jobs were added to the economy. The report offered a mixed view of the jobs market. The unemployment rate rose to 4% for the first time since January 2022, up from 3.9% in April. Continue reading...

Average price of a home dipped by 0.1%, says Halifax, bringing cost of typical property down to 288,688

Institute for Government calls for credible vision' to tackle crisis engulfing NHS, prisons and local councilsPolitical parties must be honest with Britain about the immediate crisis of collapsing public services facing the next government, according to a hard-hitting report that lays bare the crisis affecting the NHS, criminal justice system, prisons and local government.In a direct challenge to Rishi Sunak and Keir Starmer to come clean with voters, the Institute for Government thinktank said most state services are performing worse than at the time of the 2019 general election, and substantially worse" than when the Conservatives first took office in 2010.NHS waiting times had been the longest on record, and targets for elective care, A&E and cancer treatment have not been met since 2016. The number of people waiting for more than 12 hours in A&E has tripled to 1.5m since 2019.People are struggling to see their doctor, despite more appointments being delivered than ever. The numbers of patients per GP had risen by 18% since 2015.Prisons were at a crisis point. Capacity would be used up shortly after the election, resulting in further early releases of prisoners and delayed court cases. Even so, funding was set to fall by 5.9% each year relative to demand in the next parliament.In the last six years, there had been six times the number of section 114 (bankruptcy") noticed filed by local authorities than in the previous three decades, forcing cuts to key services. Residents in those areas face rising council tax bills and vastly reduced services such as libraries, waste collection and adult and children's social care. Continue reading...

Rishi Sunak failed during TV debate to make clear how he had calculated Labour's spending policies, says OSRThe UK's statistics watchdog has warned the Conservatives over Rishi Sunak's claim that Labour would raise taxes by 2,000, saying it failed to make clear how the figures were calculated.In a rap over the knuckles for the prime minster, who made the claim during a leadership debate on ITV on Tuesday evening, the Office for Statistics Regulation (OSR) said the case demonstrated how all party campaigners needed to offer the public a transparent view of tax and spending policies. Continue reading...

Exclusive: ONS official's remarks, not intended as comment on overall state of the economy, were later used by SunakThe UK's statistics watchdog has closed an investigation into remarks made by an official about the economy going gangbusters" that were cited by Rishi Sunak.It was looking into the comments made by chief economist of the Office for National Statistics (ONS) last month amid concerns that politicians could misuse economic data in the run-up to the election. Continue reading...

European Central Bank lowers borrowing costs for first time in almost five years, but won't pre-commit to further cuts

ECB reduces rate to 3.75% across eurozone, putting it ahead of US Federal Reserve and Bank of EnglandThe European Central Bank has eased the pressure on borrowers across the eurozone after cutting its main interest rate for the first time in almost five years.Citing a sustained fall in inflation, the ECB said its deposit rate would be cut to 3.75% from a record high of 4%, putting it ahead of the US Federal Reserve and the Bank of England, which have yet to cut interest rates. Continue reading...

Exclusive: After ruling out rises in VAT, income tax or NICs, shadow chancellor said to be weighing other options to raise cash in an autumn budget

A 0.25 percentage point cut to main lending rate is forecast amid growth in Germany, Italy and SpainThe European Central Bank is expected to cut interest rates for the first time in almost five years at its meeting on Thursday after a survey of private sector businesses showed activity expanded at the fastest pace in a year while inflation cooled.The latest HCOB purchasing managers' index (PMI) data, compiled by S&P Global, showed private sector output expanded in most economies covered by the euro currency after growth in Germany, Italy and Spain was only marginally offset by a downturn in France. Continue reading...

All you need to know about Rishi Sunak's tax claim, from who costed the figures, and how, to why it's so controversialTax dominated the first head-to-head debate between Rishi Sunak and Keir Starmer with the prime minister making an eye-catching claim about what Labour's plans would involve.Sunak claimed independent Treasury officials" had costed Labour's policies and they amount to a 2,000 tax rise for everyone". Starmer dismissed the claim as absolute garbage". Today, Labour's frontbench have gone further, accusing Sunak of telling a big desperate lie". Continue reading...

Small and medium-sized firms badly hit as huge drop in apparel sales helps fuel 18% slide in all-non food exportsUK exports of clothing and footwear to the EU have dived since Brexit, according to a new study that shows the extent to which complex regulations and red tape at the border have deterred firms from sending goods across the Channel.Exports of clothing and footwear sold to EU countries have fallen from 7.4bn in 2019 to 2.7bn in 2023, helping fuel an 18% slump in sales of all non-food goods exports to countries covered by the EU single market, according to the consultancy Retail Economics and online marketplace Tradebyte. Continue reading...

Firms that employ millions in manufacturing, hospitality and construction already struggling to plugs gaps after BrexitThe battle between the Conservatives and Labour to show they are tough on migration risks damaging sectors that are vital to the economy, industry figures have warned.Rishi Sunak unveiled a Conservative pledge to cap visas awarded to migrant workers on Monday, promising bold action to reduce immigration" amid pressure from a Reform party reinvigorated by the return of Nigel Farage as leader. Continue reading...

Labour and the Conservatives want to reduce national debt, but Resolution Foundation says promises detached from reality'Britain's next government will need to fill a shortfall of up to 33bn in the public finances unless it is prepared to push through a fresh round of severe austerity measures, a thinktank has warned.The Resolution Foundation said the debate between Labour and the Conservatives over the funding of specific pledges was detached from reality", with election promises based on cuts that would be hard to deliver. Continue reading...

May recorded the lowest spending growth since February 2021, Barclays' snapshot of card activity showsConsumer spending growth is at its weakest in more than three years as higher council tax bills and the rising cost of broadband and mobile phones eat into household budgets, a report has said.The monthly snapshot of credit and debit card activity from Barclays found an improvement in consumer confidence as a result of falling inflation was not leading to a pickup in spending. Continue reading...

Rolling coverage of the latest economic and financial news, as wholesale gas prices rise after disruption to supplies from NorwayJust in: UK factories have returned to growth, with the most rapid expansion in output in over two years.The latest poll of purchasing managers across UK manufacturing found that activity grew across the sector in May.All three product categories covered by the survey (consumer, intermediate and investment goods) and all three size definitions (small, medium and large) registered concurrent expansions for the first time in over two years.Rates of [price] increase accelerated in the consumer and intermediate goods sectors, but eased at investment goods producers. Continue reading...

New lower rates of 3.75% and 4.75% respectively are likely to be introduced this week after drops in inflationBorrowers in the eurozone and in Canada are expected to get some relief from high interest rates this week.After recent drops in inflation, the European Central Bank (ECB) and the Bank of Canada (BoC) are forecast to lower their benchmark rates in the coming days. Continue reading...

Exclusive: level at highest in more than 30 years, say campaigners, who want rapid and effective' relief schemeDebt payments by the 50 countries most vulnerable to the climate crisis have doubled since the start of the coronavirus pandemic and now stand at their highest level in more than three decades, campaigners have warned.The Debt Justice charity said countries at the highest risk of being affected by global heating were paying 15.5% of government revenues to external creditors - up from less than 8% before Covid-19 and 4% at their lowest recent point in 2010. Continue reading...

Net migration has benefits but has done nothing to address downward trend in per capita GDPImagine that during the election campaign Rishi Sunak announced that by 2038 he expected migration to boost the population by 3.7m - more than the current number of people living in Wales. What would your response be?It's a question worth asking, because such an increase is precisely what has been seen since David Cameron pledged in 2010 to reduce net immigration to the tens of thousands annually. In the current parliament alone, net migration to the UK has been 2m. Continue reading...

Senior adviser who worked for Tony Blair and Gordon Brown says there is an urgent imperative' for a new government to address wealth inequality in Britain Why Labour must adopt radical new tax policies - including on wealth and capital gainsA key New Labour adviser who worked for Tony Blair and Gordon Brown in Downing Street says there is an overwhelming economic and ethical case" for Keir Starmer's party to impose higher taxes on wealth if it wins the general election.Writing in the Observer Patrick Diamond, professor of public policy at Queen Mary University of London, and his colleague Colm Murphy, a lecturer in British politics, say a Labour government will need to look at radical ways to raise money, not least because the plans for higher economic growth that the party is relying on may never materialise. Continue reading...

The Brown-era adage Prudence with a purpose' could be the way to obtain the economic stability that has eluded every UK government since the 2008 financial crisis Read more: Starmer must introduce wealth tax after Labour wins election, top Blair aide saysKeir Starmer appears destined for Downing Street. Even so, as the election campaign rumbles on, his party will be challenged to articulate a compelling platform that secures not only the keys to Number 10 but also the economic stability that has eluded every UK government since the 2008 financial crisis. That will demand fiscal discipline delivered not only through a prudent approach to public spending but also fundamental reform of our tax system.In headline policy, Labour is committed to fiscal rules on spending and debt. Rachel Reeves promises to move towards balanced current spending and to secure a falling debt-to-GDP ratio by the fifth year of the forecast. As her speech on Tuesday argues, Labour believes such rules will underpin stability" and growth". Continue reading...

There is still an expensive war to fight, and if EU and UK politicians insist on using taxpayer funds for it, there will be little left to spend on public servicesThere were hopes that 2024 would be a good year. Economists talked of a soft landing, by which they meant a solid rebound from last year's high-inflation, high-interest shock. A drop in inflation would spark cuts to the cost of borrowing while trade expanded, unemployment stayed low, and household disposable incomes increased.This cheerful scenario was going to be played out across Europe and allow the EU and UK to pursue many of the goals, not least tackling climate change, that were delayed as ministers sought to protect business and household finances from the fallout from the pandemic and the Ukraine war. Continue reading...

Dublin does not seem a fair city to those who move there to work but can't afford a home. Ireland's coalition government says it is acting on housebuilding, but bosses and staff say it must try harderIreland's economy is absolutely booming," says Stephen O'Dwyer, the founder and owner of Dublin's Tang cafe/restaurant chain. But it has left people facing a very unequal and difficult society to work in."At the top of O'Dwyer's concerns is housing, which is cited by businesses large and small as a significant barrier to Ireland's economic growth. The capital is not alone: cities from Cork to Limerick report acute housing shortages and rising levels of homelessness. Continue reading...

The two Tory PMs both told voters the economy had turned a corner - but there is little comparison now with 27 years agoWith a Labour victory looking increasingly probable, John Major's pitch to voters in 1997 was simple. Britain had come a long way, the then prime minister said in his foreword to his party's manifesto. We must be sure that we do not throw away what we have gained, or lose the opportunities we have earned."Sound familiar? It should, because it is exactly the same argument Rishi Sunak is deploying as he seeks to defy the opinion polls and win a fifth successive general election victory for the Conservatives. Continue reading...

BCC calls for improved relations with the EU to cut the costs for business, while sticky inflation worries marketsThose IT problems at TSB appear to be solved!A TSB spokesperson tells us:We're aware some customers had issues logging into our app and online banking this morning. This issue is now resolved and we're sorry for any inconvenience it caused." Continue reading...

Central banks may not aim for such an outcome but will probably adjust interest rate decisions in a way that makes it more likely than deep recessionListening to central bankers, one would think that the recent bout of high inflation was merely an excusable post-pandemic forecasting error made under extreme uncertainty. But while this narrative now prevails in markets and the financial press, it presumes a level of central-bank independence that is simply unrealistic in today's volatile economic and political environment. And even if central banks manage to get inflation back down to 2% in the foreseeable future, the likelihood of another inflationary surge within the next five to seven years has significantly increased.This is not to say that individual central bankers are untrustworthy. The problem is that most central banks are not as independent as many believe. In a global environment marked by political polarisation, onerous government debt burdens, geopolitical tensions, and deglobalisation, central-bank autonomy cannot be absolute. As unelected technocrats, central bankers may have short-term operational independence but governments ultimately control appointments and oversee budgets. In many countries, the government also has the power to reset monetary mandates. Continue reading...

Sticking to the Tories' nonsensical fiscal rules, as it says it will, would be a political and economic mistakeLabour knows what it is like to inherit an economic mess. It did so in 1974, when Britain was on the verge of a period of high inflation and rising unemployment. It did so in the even tougher circumstances of 1945, and it will do so again if it wins on 4 July.Things are not as bleak as they were when the second world war ended, but coping with the twin shocks of the past five years - a pandemic and a European war - has been a struggle. Repairing the damage will be costly and time consuming.Larry Elliott is the Guardian's economics editor Continue reading...

Royal Mail's parent company IDS agrees takeover offer but BHP's pursuit of Anglo fails

It's worth remembering the RBA's 2% to 3% inflation target is an arbitrary goal. Do we really need to hit households again with higher rates?

Thinktank says proposal to pay for scheme by scrapping shared prosperity fund would downgrade efforts to level up country

An incisive analysis of how the controversial ideology has permeated modern lifeIn 1945, Antony Fisher visited the neoliberal economist Friedrich Hayek at the London School of Economics. Fisher, an old Etonian whoworked in the City, shared the Austrian's belief that the nascent postwar welfare state would eventually lead to totalitarianism. Fisher wanted Hayek's advice. Should he go into politics? No, the professor said, something like a thinktank would have far more decisive influence in the great battle of ideas".Fisher went on to found the Institute of Economic Affairs (IEA), the outfit widely credited, among other things, with incubating Liz Truss's disastrous premiership. Fisher later moved to the US, where he set up the Atlas Network, an umbrella organisation that now covers more than 450 thinktanks, including influential groups such as the Cato Institute and the Heritage Foundation. Many are charities. Few name their donors. Continue reading...

Democrats try to connect the dots as some in Saginaw wonder if Trump is just a better fit with the economy'Less than six months before the US presidential election on 5 November, anxiety over the economy looms large. While official figures show a significant recovery since the pandemic, many Americans aren't buying it. As election day approaches, the Guardian is dispatching reporters to key swing counties to gauge how they are feeling - and how they might vote.Joe Biden should be worried about Janel Turner, owner of Kreole Qweenz, a gumbo shop in downtown Saginaw, Michigan. Continue reading...

This live blog is now closed, you can read more on this story hereRachel Reeves, the shadow chancellor, is giving a speech on the economy in Derby.She says her proposition is that Labour is the natural party of British business".Yes, I would describe myself as a Christian socialist in the best traditions of that [term] because that's about putting people first and to do that, you've got to have a set of policies that will deliver for people.I think it's the best tradition of the things that have been delivered in the UK, whether it's the national parks or the NHS, have come from people with a similar background to mine. Continue reading...

CBI data for May suggests slowdown in price growth is encouraging shoppers in Britain to buy moreSales in British shops have bounced back in May, according to retail data that suggests slowing inflation is encouraging customers to buy more.A net balance of +8% of retailers told a Confederation of British Industry (CBI) survey that sales volumes were up this month compared with the same period a year earlier - a sharp improvement on the -44% year-on-year figure for April. The balance is the difference between companies who answered that the number of items was up" or down". Continue reading...