Boost in pensions is main driver of rising standards for low-income groups, ONS figures showThe gap between Britain’s rich and poor fell sharply last year after a boost to the incomes of the poorest 20% and a squeeze on the richest fifth.The Office for National Statistics said median disposable income for the poorest fifth of households had risen by £700, or 5.1%, in the year to April 2016, while the richest fifth of households saw their incomes fall by £1,000, or 1.9%, over the same period.

London index hits record high for ninth consecutive day, beating its eight-day run in May 1997 after Tony Blair swept to powerThe FTSE 100 reached another new peak on Tuesday and broke a near 20-year record for its longest run of closing highs.The index jumped 37.70 points or 0.52% to end the day at 7,275, its ninth consecutive day of closing highs, beating the eight-day run in May 1997 following Labour’s general election landslide under Tony Blair.

Industry figures add to signs that the economy ended 2016 strongly – although some analysts see slowdown aheadUK retail sales continued to grow at the end of last year as Britons made a late dash for Christmas gifts and festive foods, according to industry figures that add to signs the economy ended 2016 on a strong note.The British Retail Consortium (BRC) pointed to challenges ahead from rising costs and political uncertainty but said its members went into the new year having enjoyed solid sales growth over the crucial Christmas period.Related: Consumer spending slowed over Christmas period, Visa figures show Continue reading...

A booming Britain? Whose GDP do we mean, when the wealth gains of the past decade have all been in London and the south-east?There’s a lady I’ve been thinking about for the past few days, even though we’ve never met. She’s the central character in a true story told by the Europe expert Anand Menon. He was in Newcastle just before the referendum to debate the impact of Britain leaving the EU. Invoking the gods of economics, the King’s College London professor invited the audience to imagine the likely plunge in the UK’s GDP. Back yelled the woman: “That’s your bloody GDP. Not ours.”Subtle and learned this was not. But in all the squawking over the past few days about what’s wrong in economics and with the economy, her brutally simple criticism is closer to the mark than are most of the pundit class.Related: Economists have completely failed us. They’re no better than Mystic Meg | Simon JenkinsCameron’s legacy will be that there is no such thing as an economy Continue reading...

Which policies Trump will pursue remains unknown, to say nothing of which will succeed or what the consequences will beEvery January, I try to craft a forecast for the coming year. Economic forecasting is notoriously difficult but, notwithstanding the truth expressed in Harry Truman’s request for a one-armed economist (who wouldn’t be able to say “on the other hand”), my record has been credible.In recent years, I correctly foresaw that, in the absence of stronger fiscal stimulus (which was not forthcoming in Europe or the US), recovery from the great recession of 2008 would be slow. In making these forecasts, I have relied more on analysis of underlying economic forces than on complex econometric models.Related: Joseph Stiglitz: what the US economy needs from Donald Trump Continue reading...

Manufacturing and construction sectors air concern over rising import costs with companies facing ‘more risks than opportunities’ in 2017British companies are grappling with higher costs and bracing for further pressure in the months ahead as the start of Brexit talks threatens to drag the pound down further and ramp up the price of imports to the UK.Reports from the manufacturing and construction sectors on Monday point to a sharp rise in the prices paid for materials by firms in Britain and worries that their profit margins will be squeezed as they decide how much of those higher costs they can pass on to customers. Continue reading...

Spending fell 2.3% in December but was up for 2016 as a whole, with some raising concerns about mounting consumer debtConsumer spending slowed over the Christmasperiod, according to figures that suggest Britons shunned the high street in favour of online shopping and nights out.Spending fell back 2.3% in December from a strong November when Black Friday deals appeared to boost sales, figures from Visa show. That left consumer spending up 2.6% on the year, a slowdown from November’s growth of 3.1%.Related: Brexit worries and online stores hit shopping centre salesRelated: No one can afford to stop the new consumer credit crisisRelated: UK credit binge approaching levels not seen since 2008 crashRelated: No one can afford to stop the new consumer credit crisis Continue reading...

Wouldn’t today’s economists be better served by reading some economics history rather than relying on their models (Economics in crisis, admits Bank expert, 6 January)? JK Galbraith’s classic The Great Crash, 1929 details the things that contribute to a volatile, overheating economy, and in the foreword to the recent reprint, his son James, also an economist, notes the uncanny similarities in the build-up to 2007-08 to those before October 1929, particularly mentioning America, Britain and Iceland. But how far can economists be of help when the model is flawed and we have a government that is determined to sweep away all vestiges of Keynesianism and New Dealism and return our economy to the 19th century?

Economists have been found guilty of groupthink, guided by political ends and using error-prone gravity modelling. No wonder they crash back down to Earth

The Bank of England is too complacent about rising debt in households with stagnant incomes. But government dare not risk any slowdown in spendingConsumer debt has raised its ugly head again. According to the latest figures, the total has soared back to a level last seen just before the 2008 financial crash. To the untrained eye, the dramatic increase in spending using credit cards and loans might appear to prefigure a disaster of epic proportions.Excessive consumer debt played a big part in the collapse of Northern Rock, and looking back, this landmark banking disaster appears to have been the harbinger of an even bigger catastrophe when, a year later, Lehman Brothers fell over. Continue reading...

The Bank of England’s Andy Haldane is right to point to problems in economists’ training. But his capitulation to the critics went too farWhen the Bank of England looks around in a couple of years to replace Mark Carney as governor, Andy Haldane will need to work hard to win over the selection panel. The central bank’s chief economist can’t help attracting publicity, and not always in a good way.Last week he was in hot water following his capitulation to the bullying Brexiters and their claim that experts were dunces. He said it was “a fair cop” in answer to critics who accuse his profession of missing the financial crisis and misjudging the impact of the Brexit vote. Continue reading...

Former EU ambassador Sir Ivan Rogers ‘absolutely right to say replacement deal may take a decade to sort out’Britain risks a “catastrophic” Brexit because the government is so dismissive of the concerns of trade experts, according to one of the figures behind the EU-Canada trade deal which took a decade to negotiate.Related: As a trade negotiator, I’m shocked at Brexiters’ ignorance | Jason LangrishRelated: Sir Ivan Rogers quits civil service four days after leaving EU envoy role Continue reading...

In the final monthly update on US employment under President Obama, fewer jobs were created than forecasts suggested

The US job market is at least in better shape than it was in when he assumed office, just months after the collapse of LehmansSo that’s it. The last jobs report of Barack Obama’s presidency has been published and the figures encapsulate his eight-year presidency. Job creation in December was not bad at 156,000, simply a bit mediocre. Better was expected.In Obama’s defence, he was left the worse possible legacy. The world’s biggest economy was in freefall when he arrived in the White House in early 2009. Lehman Brothers had gone bust six weeks before the November 2008 presidential election and the Federal Reserve had taken emergency action to stimulate growth as fears grew that the clock was about to be turned back to the 1930s.Related: US wage growth shows Trump will inherit solid labour market Continue reading...

Barack Obama’s final figures show lower-than-expected job creation – but economy still added more than 2m jobs in 2016The US economy added more than 2m jobs in 2016 and finished the year with a pick-up in wages, suggesting Donald Trump will inherit a solid labour market from outgoing president Barack Obama.The news of the strongest wage growth since 2009 also raised expectations that the president-elect’s first year in office will be accompanied by a series of interest rate rises from the US central bank.Related: Obama's labour market report card: not bad, could have done betterPayroll employment rises by 156,000 in December; unemployment rate changes little (4.7%) https://t.co/1Y9cSWJUIB #JobsReport #BLSdata Continue reading...

Experts say employers will struggle to award pay rises if country cannot restore growth to pre-financial crisis levelsA slowdown in the UK’s already lacklustre productivity growth has prompted fresh warnings that households will face a squeeze on living standards this year.Jobs markets experts said employers will struggle to award pay rises that keep pace with mounting inflation unless the country can turn around its poor performance on productivity, a measure of what is produced per hour worked.Related: Chief economist of Bank of England admits errors in Brexit forecasting Continue reading...

The Bank of England’s chief economist has admitted errors in its Brexit forecast – how can the profession get out of its crisis?The Bank of England’s chief economist has admitted his profession is in crisis having failed to foresee the 2008 financial crash and having misjudged the impact of the Brexit vote. Andy Haldane said it was “a fair cop” referring to a series of forecasting errors before and after the financial crash which had brought the profession’s reputation into question.So what can the dismal science do to regain the trust of the public and politicians?Related: Chief economist of Bank of England admits errors in Brexit forecasting Continue reading...

On Brexit and the 2008 crash their predictions – distorted by politics – were utterly wrong. The profession owes the public an inquest and an apologyIt is official. Figures for the past six months show that the forecasts of instant Brexit catastrophe from the Treasury and the Bank of England were garbage. The Bank’s economist, Andrew Haldane, admitted yesterday that it was a repeat of the failure to predict the 2008 crash. It was another “Michael Fish moment”, when meteorologists failed to forecast the 1987 hurricane.Related: Chief economist of Bank of England admits errors in Brexit forecasting Continue reading...

The Bank of England’s chief economist Andrew Haldane describes the collapse of Lehman Brothers in 2008 as his profession’s ‘Michael Fish moment’. In 1987 BBC weatherman Fish dismissed suggestions that a hurricane would hit the UK. It went on to cause widespread damage to parts of southern England

Claims that we are tiring of selfish consumption aren’t supported by the evidence. Without a fundamental rethink, nothing will changeIs this the year we finally get to grips with all our stuff? If so, it has been a long time coming. Forecasters and commentators say we have entered a new era where people prefer to share rather than own, and prize experiences over possessions. Retailers worry about the implications for them of a public sated on “peak stuff”. Official figures suggest that Britons are consuming ever fewer resources. And witness the worldwide success of the rationalisation bible, Marie Kondo’s The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organising.Related: If having more no longer satisfies us, perhaps we’ve reached ‘peak stuff’ | Will Hutton Continue reading...

Andrew Haldane says his profession must adapt to regain the trust of the public, claiming narrow models ignored ‘irrational behaviour’The Bank of England’s chief economist has admitted his profession is in crisis having failed to foresee the 2008 financial crash and having misjudged the impact of the Brexit vote.Andrew Haldane, said it was “a fair cop” referring to a series of forecasting errors before and after the financial crash which had brought the profession’s reputation into question.Related: Why has the UK economy defied predictions of doom?Related: Treasury's Brexit job loss claim a hoax, says Boris JohnsonRelated: 'The lull before the tsunami': economists on the Brexit watch dataRelated: Mark Carney's year in quotes: 'We are actors in a play written by others' Continue reading...

The justice secretary has promised a review. But she needs to change the lawLiz Truss, the justice secretary, did the right thing in ordering an urgent review into the best way of stopping abusers tormenting their victims through the family courts. It is entirely unacceptable that, as the Guardian has been reporting, some women face aggressive cross-examination by an abusive former partner (one was even made to sit beside her ex while the court watched a police video of her reporting an assault). There is, simply, no justification for this. No justification: but there are explanations, and they point to a solution higher up the food chain than the courts themselves.The immediate problem was widely predicted before Ms Truss’s predecessor Chris Grayling took the axe to his department’s budget. Legal aid is now denied in most family cases. The main exception is for a victim of domestic abuse. Ms Truss, who has already beaten austerity to get more money to increase the number of prison officers, would win the gratitude of thousands of individuals if she could also get funding to roll back the worst aspects of austerity in the court system. Cuts of more than 30% are crippling access to all sorts of justice. But in the family courts it can mean a renewal of old traumas; worse, a mistake can see a vulnerable child being put at risk of further abuse. Continue reading...

Rolling coverage of the day’s political developments as they happen

There was talk of a Brexit vote plunging the UK straight into recession, but the economic news is upbeatFirst it was manufacturing. Then it was construction. Now the hat-trick of upbeat economic news has been completed by the strongest performance by the services sector in 17 months.It goes without saying that this is not what the Treasury or the Bank of England expected at the time of the EU referendum last June. At the time, there was talk of the economy plunging straight into recession.Related: UK services sector grows at fastest pace for more than a year Continue reading...

Survey finds new business and job creation picked up in December, but companies raised prices at fastest rate for five yearsBritain’s services sector grew at the fastest pace for 17 months in December, according to a survey that has raised hopes for a strong end to 2016 for the economy.There was also a pick-up in new business and job creation, according to the poll of firms from the UK’s biggest sector, which includes banks, hotels and transport. But news that companies increased their prices at the fastest pace for more than five years will intensify worries over the weak pound stoking inflation in the months ahead and raises the prospect of interest rates going up this year.The UK all-sector #PMI hit a 17-month high in Dec, signalling +0.5% GDP in Q4. Faster growth seen in services, manufacturing & construction pic.twitter.com/iFyKgiAxLs Continue reading...

Rise in EU steel tariffs among measures cited by ministry of commerce, amid fears that Donald Trump could hit Chinese goods with tariffs of up to 45%China has criticised “extreme” tariffs on its exports amid concerns in Beijing that Donald Trump will embark on a policy of protectionism as US president.Trump has pledged to hit Chinese goods with tariffs of up to 45% and said cheap imports are “killing” US manufacturers.Related: 'Brutal, amoral, ruthless, cheating': how Trump's new trade tsar sees China Continue reading...

The EU once thought big, introducing the euro and open borders, but now it’s the populists who are grabbing all the headlinesA few weeks ago, a significant anniversary in Maastricht slipped by almost unnoticed: 25 years ago, the historic treaty that ushered in the euro was drafted.But there was no fanfare, no commemoration in the European parliament, no mention at all by the commission. There was just a rather lacklustre speech by the EU president, Jean-Claude Juncker, in which he lamented that people were not sufficiently proud of what had been achieved on 9 December 1991. Continue reading...

While businesses in China are embracing the ‘pink economy’, their human resources policies aren’t embracing LGBT rightsRemember when the term “pink dollar” was first coined? It was one of the buzz phrases of the 1990s: a time of much change with regard to views on homosexuality in many countries. Lesbians were snogging on TV for the first time in Britain. In 1994, Australia passed a human rights act that finally scrapped the banning of gay sex. Meanwhile, there was a tornado of media coverage around the world of this “pink dollar”, as companies realised that a more open LGBT demographic was something they could lucratively market to.Twenty years later, China is finally sparking its own pink dollar moment. Last month China Daily, the state-run newspaper, ran a feature with the headline, “‘Pink Economy’ set to soar as companies target LGBT community”. It claimed the country’s estimated 70 million LGBT people represent a market worth $300bn per year. In comparison, according to Witeck Communications, a company specialising in analysing the LGBT market, the US equivalent is worth $790bn a year.Related: Why 2017 won't be the year women get paid the same as menRelated: Construction industry becoming increasingly gender-segregated, report findsRelated: Chinese transgender man wins landmark wrongful dismissal case Continue reading...

British businesses helped by fall in sterling, finds BCC survey, but inflation fears and Brexit uncertainty expected to slow growth this yearThe fall in sterling following the Brexit vote helped British business shake off a period of uncertainty to end 2016 on a high note as companies reported increases in export sales and orders. But the quarterly health check by the British Chambers of Commerce (BCC) found that business activity in the last three months of the year failed to rebound to historic levels, leaving companies worse off than a year ago.Related: Why the UK economy could fare better in 2017 than forecasters predictRelated: UK manufacturing growth at a 30-month high, says PMI surveyRelated: UK construction industry enjoys fast growth in new orders Continue reading...

Debt charities issue warning to government after unsecured consumer credit grew at fastest rate in more than 11 yearsA credit boom that is close to levels not seen since the 2008 financial crash should set alarm bells ringing in Theresa May’s government, debt charities have warned.The latest figures from the Bank of England show unsecured consumer credit, which includes credit cards, car loans and second mortgages, grew by 10.8% in the year to November to £192.2bn, picking up pace on the previous month to grow at its fastest rate in more than 11 years. Continue reading...

Shoppers are still pulling out the plastic, but borrowing may become less choice and more necessity as budgets are squeezedBritain went on a bit of a borrowing binge as Christmas approached. Unable to resist all the bargains on offer on Black Friday, shoppers pulled out the plastic. The rise in unsecured consumer debt in November was the biggest for more than a decade.News of the increase in consumer debt is not exactly a surprise. When the Bank of England cut interest rates in August last year, the aim was to making borrowing cheaper and therefore more attractive. The message came through loud and clear: UK households need little encouragement to buy on the never-never. Unsecured credit is growing at an annual rate just shy of 11%Related: UK credit binge approaching levels not seen since 2008 crash Continue reading...

Report follows strong manufacturing survey, painting better-than-expected economic picture after Brexit voteThe UK construction industry enjoyed the fastest growth in new orders in almost a year in December, according to a survey, but the weaker pound has driven up firms’ material costs to their highest in five-and-a-half years.The upbeat report from Markit/CIPS comes a day after a strong survey for the manufacturing sector, where activity hit a two-and-a-half-year high last month. Together they paint a better economic picture than many had expected following the Brexit vote in June. A third industry survey, for the dominant services sector, is due on Thursday.Related: UK manufacturing growth at a 30-month high, says PMI survey Continue reading...

Those annual pledges aren’t just about self-improvement – they’re also a mass economics experimentA very rare thing is happening this week: hundreds of millions of people across the world are undertaking a massive economics experiment. True, hardly any of us think of it as such. Instead, we pledge to lose weight, give up the demon weed or just to get along with our mothers-in-law. But each of these New Year resolutions are exercises in attempting to change what we do – and as such are voyages deep into social science.Your pledge to lead a healthier and happier life is terrain on which the economists have firmly planted their flag. The US professor and economics blogger Tyler Cowen claims: “Understanding economics can help you make better decisions and lead a happier life.” Wander into any bookshop and the economics section will be full of paperbacks promising to explain how and why single people choose to get married, send children to expensive private schools or deal drugs. Perhaps titles such as Freakonomics and the Undercover Economist can be accused of being pop. But consider the late Gary Becker, who received the Nobel prize for economics in 1992 for extending “the sphere of economic analysis to new areas of human behaviour and relations”. His trademark was to look not at “the economy” but to train his microscope on matters of daily life – racial discrimination, child-rearing, even suicide. Continue reading...

With prices at pumps starting the year at their highest since 2014, cost of food and other essentials is also predicted to go upHouseholds are being told to brace for more price rises on fuel, food and other essentials in 2017 after the new year started with petrol at a two-year high.The AA says motorists in the UK are paying 15p a litre, or an average of £8.25 a tank, more than a year ago, and economists say a higher oil price and weak pound will probably push prices up further this year.

Change Britain’s wild claim is either deeply ignorant or deliberately misleading. Brexit is not getting the serious debate it needsThe costs and benefits of the UK’s membership of the single market were widely debated before the referendum. However, the customs union was hardly mentioned. Yet it is the customs union that permits goods to circulate freely within the EU (and beyond, to a few other countries including, for the most part, Turkey) and which means the EU negotiates trade agreements with non-EU countries as a single entity.So does Brexit mean leaving the customs union? It seems obvious that it would – what’s the point of leaving the EU if we leave the EU in charge of UK trade policy? On the other hand, the Treasury is now taking a good hard look at the costs and logistical implications of having to reinstate at least some border checks for goods flowing between Dover and Calais, or Felixstowe and the continent (not to mention the thorny issue of the Republic of Ireland-Northern Ireland border).Related: Economists dispute claim that Brexit could create 400,000 jobs Continue reading...

Change Britain’s claim about benefits of post-Brexit free trade deals are based on ‘entirely fictional statistics’, one expert saysEconomists have disputed claims from a pro-Brexit campaign group that leaving the customs union and new free trade deals could create 400,000 jobs, arguing it takes no account of the risks to exports.Analysis by the Change Britain campaign group suggests that hard Brexit, where Britain leaves both the single market and the customs union, could ultimately be beneficial for the UK, citing reports that the US, India, the South American Mercosur group, China, Canada and South Korea have all expressed an interest in trade deals. Continue reading...

Markit poll shows the weak pound providing a boost for exports but cost pressures remainBritain’s manufacturers ended 2016 on a strong note, according to a survey that signalled the fastest growth in the sector for more than two years and indicated that the weak pound had boosted exports.Defying economists’ expectations for a slowdown, the manufacturing sector enjoyed stronger expansion and a pick-up in orders from home and abroad in December. But cost pressures persisted as the pound’s weakness since the referendum continued to make imports more expensive. Continue reading...

Service is designed to promote more growth in trade between Ireland and the UK after the referendum vote to leave the EUA new network to link up Irish and British trading partners has been formed to offset any negative Brexit impact on trade between the UK and Ireland.The British Irish Chamber of Commerce (BICC) has launched the British Irish Gateway for Trade service, which connects firms from either side of the Irish Sea. Continue reading...

The historical record is clear: protectionism, isolationism, and ‘America first’ policies are a recipe for economic and military disasterDonald Trump’s election as president of the United States does not just represent a mounting populist backlash against globalisation. It may also portend the end of Pax Americana – the international order of free exchange and shared security that the US and its allies built after the second world war.That US-led global order has enabled 70 years of prosperity. It rests on market-oriented regimes of trade liberalisation, increased capital mobility, and appropriate social welfare policies; backed by American security guarantees in Europe, the Middle East, and Asia, through Nato and various other alliances.Related: What the US economy doesn't need from Donald Trump | Joseph Stiglitz Continue reading...

Announcements expected soon on whether to implement contingency plans for access to remaining EU statesBrexit could have an impact on the City in the coming months as banks decide whether to implement contingency plans to ensure they retain access to the remaining 27 EU member states by moving business out of the UK.Theresa May, the prime minister, intends to trigger article 50 – the formal process of exiting the EU – in March and some senior officials in the financial district argue that the rest of Europe could lose out if operations are shifted out of London.

An urban artform that resurrects rebellion has gained credibility and popularity through mainstream indifference. It’s time to take noticeWhen the nominations for pop music’s Brit awards – an event considered so central to public life that it will be broadcast live on terrestrial television – are announced this month, there should be only one question that needs answering. Will the UK’s record industry finally acknowledge “grime” as this country’s most significant aural rebellion since punk? It certainly should. When last year’s Brit awards failed to nominate a single black artist in any major category, there was a chorus of outrage. Boycotts were threatened, and the hashtag #BritsSoWhite went viral. In his profanity-peppered rap One Take Freestyle, grime’s Stormzy splattered the music establishment with imprecations; “embarrassing” being the most printable. This year grime, wreathed in strong London accents and strobing bass lines, is officially the Next Big Thing. The Brits have recruited new judges who promise to be in tune with music’s changing face. Grime’s rise – from angry underground soundtrack to British pop royalty – became obvious last year when the artist Skepta’s Konnichiwa beat David Bowie to the £25,000 Mercury prize.Grime, with its recognisable staccato beats and machine-gun rapping, became popular in 2003 with rapper Dizzee Rascal’s debut album, Boy in da Corner, a shrewd breeze through the mini mean streets of London life. That precociously inventive album also won the Mercury prize in the same year. Despite the early plaudits, grime remained outside the mainstream, revelling in a playful revolt on crowded dancefloors. Its rebelliousness is encoded in its DNA. Born in London estates at the turn of the millennium, grime crackles with the high-rise tension of tower blocks amid shrinking opportunities and limited possibilities. Musically it builds up a sense of claustrophobia. But it has a message of freedom: that one can transcend narrowing horizons and overcome adversity by subverting the power of prejudice. Sometimes ethically problematic, grime is not easy listening. It stands accused of sexism, and stars admit they shouldn’t litter lyrics with the N-word. Continue reading...

Property agent JLL warns of closures this year for retailers already struggling with rise of online shoppingShops in Britain face a perfect storm of rising costs and falling consumer spending in 2017, one of the world’s leading commercial property agents has warned, raising the possibility of more closures after the demise of BHS last year.

Stock markets in Italy, Germany and France rise after thin trading as PMI index reaches highest level since 2011

John McDonnell accuses Philip Hammond of handing Britain’s biggest banks a rebate by not reversing cuts to the bank levyJohn McDonnell, the shadow chancellor, has accused Philip Hammond of failing to cancel a “tax giveaway” by his predecessor to Britain’s biggest banks, worth more than £1bn this year.In his summer budget after the 2015 general election, the then chancellor George Osborne announced deep cuts to the bank levy, which was introduced after the financial crisis and charged according to the size of banks’ balance sheets. Continue reading...

The great economist’s account of what went wrong at the Versailles conference after the first world war was polemical, passionate and prescientThe Economic Consequences of the Peace is one of those rare books that seem to exude brilliance, power and polemical passion from the opening page, propelled by the urgency and consequence of the subject. Unlike some other rhetorical classics in this list, it executes its argument with a rapier not a blunderbuss, using the clinical ferocity of hammered steel not wild, explosive irruptions of outrage.Reading Keynes in 2017, nearly a hundred years after first publication, you don’t have to know the diplomatic minutiae of the Versailles peace treaty, a notorious historical disaster, to appreciate that here is a brilliant writer (who would subsequently become a great economist) flexing his intellectual muscles for the first time on the world stage. Uniquely, too, this is a book whose subject is economics but whose message is geopolitical. It’s a book, moreover, suffused with a deep and compelling sense of imminent catastrophe: “In Paris, where those connected with the Supreme Economic Council received almost hourly the reports of the misery, disorder and decaying organisation of all central and eastern Europe, allied and enemy alike, and learned from the lips of the financial representatives of Germany and Austria unanswerable evidence of the terrible exhaustion of their countries, an occasional visit to the hot, dry room in the president’s house, where the Four fulfilled their destinies in empty and arid intrigue, only added to the sense of nightmare.”Keynes’s essay was bestseller worldwide. It rapidly became the source of conventional left-liberal wisdom on Versailles Continue reading...

In your report on IPPR’s analysis of the challenges facing Britain in the 2020s you rightly highlight some of the more alarming trends (UK in 2030, 29 December). But the report’s argument is that these trends are likely, but not inevitable. As a society there is little we can do about an ageing population or the growth of Asian economies, but there is everything we can do about rising inequality, pressures on health and social care services and the loss of jobs from automation. There are public policies which can meet these challenges if our democracy can summon the imagination and ambition to choose them.Over the next two years the IPPR Commission on Economic Justice will be seeking to show how this can be done.

From house prices to exports, there are reasons to be cheerful this year despite concerns over Brexit negotiationsNew Year: a time for resolutions, detox diets and predictions. But after the year forecasters had in 2016, who would be brazen enough to predict how 2017 will pan out?

The effect of voting to leave the EU will become all too clear as prices rise and earnings are hitThis is the year when our politicians and the so-called “people” – all 28% of the population who voted to leave the European Union – will reap what they have sown. Unfortunately, unless sense prevails, the rest of us will also suffer the product of their wild oats.The absurdity, indeed perils, of Brexit become more obvious by the month. Business is nervous; so is the City, which constitutes far more hundreds of thousands of employees than the small, avaricious band of bankers who made their notorious contribution to the financial crisis. Continue reading...

The Brexit vote and interest rate cut have piled pressure on the pound. However, the dip has proved to be a blessing for someUncertainty over the outlook for the UK economy after the Brexit vote in June has sent the pound plummeting to levels not seen since the 1980s.After the initial falls, Theresa May’s announcement that she would trigger article 50 by March and continuing talk of a hard Brexit piled more pressure on sterling. As did an emergency cut in interest rates from the Bank of England, the effects of which were exacerbated by the Federal Reserve’s move to raise US borrowing costs. Continue reading...

Five current and former chief executives receive OBEs in the 2017 honours list