The Dow’s Trump-fuelled rally, the pound’s Brexit-led tumble, gold’s surge and Italy’s high youth unemployment – the year hasn’t been short of drama Continue reading...

London stock market hits its third record high in a row, on the final trading day of the year

Frances O’Grady calls for ‘new bargain’ and warns of threat to workers’ rights from BrexitWorking people in Britain must get a “new bargain” in 2017 that gives them a fairer share of the country’s economic gains and that turns the tide in an increasingly precarious jobs market, the head of the Trades Union Congress has urged.In her new year’s message, Frances O’Grady also pressed the government to ensure workers’ rights are maintained and expanded as the UK prepares to leave the EU, and warned of the threat of “bad bosses” using Brexit to water down rules such as protections from working excessive hours. Continue reading...

People will have less to spend on clothing and homeware as effects of sterling slump start to filter through to UK consumersRetailers will struggle in 2017 as rising food price inflation leaves shoppers with less to spend on discretionary items such as clothing and homeware, according to a leading industry thinktank.Prices could rise by between 2.5% and 3% next year, led by an expected 2.4% rise in the price of food and groceries, the highest level since 2013, according to the Retail Thinktank, a group backed by the British Retail Consortium (BRC) and analysts at advisory firms KPMG, Verdict, Nielsen and Ipsos Retail Performance.Related: British bosses at their most optimistic in 18 months, Deloitte finds Continue reading...

New recommendations will help companies to predict the impact of climate change on their finances – and give us more firepower to demand disclosureIt is vitally important for investors to understand the risks that climate change may pose to the businesses they have invested in – and the opportunities in transitioning to a low-carbon economy. It’s not an easy task. Climate change may be one of the world’s best-modeled processes in physics, but in finance, the information is scarce. The projections are opaque. There is no consensus on which data matters or how to interpret it.Related: Why is corporate America picking wind power over solar?Related: What businesses want Trump to know about climate change Continue reading...

Six of our 10 most-read articles concerned the EU referendum, but undistributed wealth and sugar-laden drinks also featured

Fourth-quarter survey finds CFOs confident, but wary of taking financial risks because of uncertainty about BrexitOptimism among Britain’s top business executives rebounded to an 18-month high at the end of 2016, but they say they are less willing to take risks in 2017 because of uncertainty surrounding Brexit.A Deloitte survey of chief financial officers (CFOs) at some of the UK’s biggest companies suggested that confidence had risen because of the unexpected resilience of the economy following the EU referendum in June. Continue reading...

IPPR says leaving EU will require painful trade-offs, adding to challenges of ageing population and automation of jobsBritain faces a decade of disruption after Brexit with low growth, stagnating incomes for the poor and the public finances at breaking point, according to a bleak analysis by a leading thinktank.

All the day’s economic and financial news, as the UK stock market hits a record closing high

Personal deposits grow £32.4bn over first 11 months of 2016 as people prepare for slower wage growthBritons are bracing themselves for a Brexit-related slowdown in 2017 by stashing away cash at increasing rates, according to the latest snapshot from the UK’s high street banks.Personal deposits grew by 4.8% year-on-year in November, figures from the British Bankers’ Association (BBA) showed, as people prepared for a tougher year of weaker economic growth and lower wage growth. Continue reading...

As the man charged with maintaining calm in the economy, the Bank of England governor has had a challenging 2016When Canadian Mark Carney accepted the job of Bank of England governor in 2012, he said he was honoured to accept the “important and demanding role”. It is doubtful he could have foreseen, however, quite how demanding it would turn out to be.As the man charged with maintaining calm in the financial markets and the economy, Carney had the most testing of years in 2016. The year started with wild swings in global markets. As the EU referendum campaign got under way, Carney’s Brexit recession warning drew calls for his resignation from pro-leave supporters. Continue reading...

The system has been safer since the Basel III regulations, but tensions are high between the US and the eurozone – which both have their own preoccupationsThe financial crisis of 2008 gave a big boost to the global standard-setters. Suddenly the Basel committee, which sets the standards for international banking supervision) was leading the financial news.Dinner parties in Manhattan and Kensington were consumed with the finer points of Basel II and the evils of procyclical capital requirements. Governments that had been suspicious of international interference were eager for tougher rules to prevent banking crises from spilling across borders and infecting others. Continue reading...

From bogus self-employment to automation, this year has been a turbulent one for UK workersIt has become popular to write off 2016 as one the worst years in recent history. In the world of work there has been both progress and setbacks. With ongoing issues such as the gender pay gap, workers’ rights, automation and Brexit we can expect even more turbulence in the workplace next year.Related: Uber drivers stage go-slow protest through central LondonRelated: Workplace discrimination: when a pregnant pause becomes more long-termRelated: Surgeons use robot to operate inside eye in world first Continue reading...

Survey finds 65% pessimistic about economic growth though many optimistic their own organisations will thriveA majority of managers in the UK believe Brexit-related uncertainty will hold back economic growth next year and almost half think leaving the UK will be a drag in the long term, according to a survey.The 2017 outlook from the Chartered Management Institute (CMI) paints a relatively downbeat picture of the UK economy, but managers appear optimistic about their own organisations’ ability to thrive despite worries surrounding Britain’s exit from the European Union and the global climate as Donald Trump takes over the US presidency. Continue reading...

Retail outlet footfall drops drastically as fewer shoppers make Boxing Day trips and prefer leisure experiences to spending on physical goodsRetailers are facing a tough close to the festive season amid signs that shoppers have ditched the traditional post-Christmas sales trip due to Brexit worries and the growing popularity of online stores.

Change Britain says UK could save £24bn a year by leaving single market, customs union and ‘burdensome regulations’A pressure group backed by a string of former Vote Leave campaigners from Michael Gove to Gisela Stuart has claimed that exiting the EU with a “clean Brexit” could save the country £450m a week.During the referendum campaign, Vote Leave controversially argued that leaving the EU would leave an extra £350m a week to spend on the NHS.Related: Brexit will set UK back £11bn in EU trade costs, research finds Continue reading...

Report by Lloyds suggests pound’s steep fall since Brexit vote is raising import costs and leading to higher prices for consumersHouseholds are being left with less cash to spend on treats or to stash away as savings as the rising cost of essentials like food and fuel take a bigger chunk out of family budgets.A new report on household finances from Lloyds bank echoed other signs that the pound’s steep fall since the Brexit vote is raising import costs for the UK and trickling through to higher prices for consumers.Related: Birds Eye and Walkers ask supermarkets for up to 12% price rises Continue reading...

Shopping centres report 15% decline in footfall while luxury retailers enjoy boom after drop in sterlingBritish bargain hunters have shunned high streets and shopping centres this Boxing Day, according to early indications that highlight the growing competition faced by traditional retailers from online stores.Retailers sought to put a positive spin on trade on one of their most crucial days of the year, but early estimates of Boxing Day footfall, a measure of shopper numbers, showed it was down 7.2% on a year ago by 4pm. Continue reading...

President of Germany’s Bundesbank questions wisdom behind rescuing Italy’s third-largest bank if it is in a bad financial stateA bailout of struggling Italian bank Monte dei Paschi should not be seen as a done deal, a key European Central Bank policymaker has said.Jens Weidmann, president of Germany’s Bundesbank, said the Italian government ought to consider whether it should rescue the bank if it is in a bad financial state. Continue reading...

Government proposals to deal with the care funding crisis in the local government finance settlement by allowing a small increase in council tax will not be nearly enough to plug the gap, and we are very clear that full reform of funding is needed (Council tax rise ‘not enough to fill funding gap in social care’, 16 December).The 2% increase in council tax this year brought in about £360m nationally, and still leaves a predicted gap of £2.2bn by 2020. This would suggest that council tax would need to increase by about 14% to deal with this problem, ignoring any other inflationary problems faced by any provider of services. Continue reading...

Manufacturers worried Brexit pressure on pound will intensify in 2017 and give rise to inflation, survey revealsBritain’s manufacturers are bracing for more swings in the exchange rate and rising costs, as the start of Brexit negotiations in 2017 threatens to keep the pound under pressure.

If we adapt quickly to the reality of the new world order, we can continue to fight for human rights and social justiceThis Christmas break, for anybody steeped in the assumptions that have underpinned non-mainstream political thinking, needs to be a moment of realisation. Brexit will happen. Globalisation will fall apart. Freedom of movement as an unconditional right in the EU will end. The concept of the west as upholder, and occasional enforcer, of human rights across the world is, at the very least, on hold.It is not pessimism that makes me write this, but optimism. Optimism that, if we adapt our thinking to the new reality fast enough, we can go on fighting for social justice and human rights, on behalf of that generation staring glumly at their touchscreens over the Christmas table. But that is a big if. This holiday season, I guarantee that you will hear older relatives repeatedly say the words “will never”. “Britain will never leave the EU.” “Donald Trump will never take office.” “Fascism will never return to Germany and Austria.” Since denial is the first stage of grief, it is forgivable for people to struggle through from Brexit to Boxing Day saying these things – but not beyond. When world-changing events happen, the denial reflex is strong because most rational people configure their principles around existing facts. Continue reading...

High street retailers braced for surge in sales as millions flock to snap up bargain deals on tech, home and consumer goodsMillions of Britons are expected to flock to the shops on Boxing Day as they make the most of the honeymoon period before Brexit-related price hikes trickle down to the high street.Some of the country’s biggest shopping centres are predicting bumper crowds as retailers slash the price of their winter clothing, TVs, laptops and furniture ranges. Continue reading...

Simon Jenkins says “Our libraries are in trouble …” (22 December) and suggests the solution is to make them places of “human congregation” run by town councils and other neighbourhood groups. Our local library is already a place where many groups meet and a variety of services are provided. It also performs a public good in providing computers and internet access for those who cannot afford their own – many more people than you would think.Our county council has resisted pressures to close its libraries but they are always potentially soft targets in an era of competing demands and central government cutbacks. Our library has raised its footfall by increasing the range of services it provides. As friends of the library we support it but in no way do we provide any substitute for the work of the public servants who deliver the service. Continue reading...

Productivity has barely grown in the UK since the financial crisis, and now lags 35% behind Germany and 30% behind the USThe shortfall in productivity compared with other developed economies has long been Britain’s economic achilles heel. It is a problem that Conservative and Labour chancellors have been grappling with for decades.Productivity is a guide to how good a country is at delivering the goods and services that are bought and sold. Technically, it is the rate of output per unit of input, measured per worker or by the number of hours worked. In layman’s terms, it is a measure of what goes in and what comes out. Continue reading...

Sir Charlie Mayfield says national living wage may encourage more automation, spurring economic growthThe boss of John Lewis and Waitrose has said the introduction of the “national living wage” could already be boosting productivity in Britain, despite criticism of the policy by senior retail figures.Sir Charlie Mayfield, chairman of the John Lewis Partnership and a government adviser on productivity, told the Guardian that the national living wage could be a “spur to productivity” because it could encourage more use of automation in workplaces. That could lead to fewer jobs in some industries, Mayfield admitted, but would also spur stronger economic growth. Continue reading...

The president-elect has made America hate again. The consequences for the world are genuinely disturbingDonald Trump’s election shook the world as no other event of 2016. His presidency is still four weeks away, so it would be wrong to pass a verdict on it before there is any evidence. Yet the world can be justifiably fearful. Mr Trump’s cabinet picks, an overwhelmingly white male cohort of low tax and small government obsessives, climate change denying oilmen, and career soldiers, add to the dismay. But it is Mr Trump who matters. This week, the president-elect has revived the idea of a ban on Muslims entering the US and has given the green light to a new nuclear arms race. For Americans to choose someone with Mr Trump’s prejudices and instincts remains as outrageous now as it did on 8 November. It will not be hard to stay shocked.Never before has a candidate tried so hard to make America hate again. That’s why the Trump election was bigger than Brexit, both in itself and because of its global impact. Never before has someone endorsed by the Ku Klux Klan prepared to enter the White House. Never before, if you believe the CIA, has a foreign power intervened so audaciously in a US election. The impact on America itself is already enormous. No elected president has been greeted with more overt hostility, more protests and, perhaps most important of all, more soul searching. Continue reading...

Three Christmas cheers for the Guardian and Observer’s appeal in aid of refugee children, for combining both the need for charity and change – and showing society that the two are not mutually exclusive.The seasonal concern for others – from restaurants opening for the homeless to toy and gift donations – is always uplifting. But before Boxing Day morning has even begun, consumers will be splurging cash at the sales and government policy continuing to create the kind of desperate need that a few pounds in the charity tin at Christmas can never solve. Continue reading...

ONS figures strengthen argument that Treasury and others miscalculated economic impact of vote, but still point to lopsided economyBritain’s economy grew faster than previously thought in the three months after the EU referendum, underlining the miscalculations by the Treasury and other forecasters who predicted that the UK would suffer a recession following a vote for Brexit.Official figures showed GDP growth in the third quarter rose by 0.6%, compared with initial estimates of 0.5%.Related: Brexit economy: inflation surge shows impact of vote finally beginning to bite Continue reading...

Paying silly prices, like Shanghai SIPG has for the Brazilian midfielder, is a sign of a bubble economy about to burstFine wines. Fast cars. Old masters. To the list of luxury goods that have been snapped up by China’s new rich, add Premier League footballers after Shanghai SIPG struck a deal to buy Oscar, Chelsea’s Brazilian midfielder.A transfer fee of some £52m meant the west London club made a tidy profit on a player they bought for £19m four-and-a-half years ago, but has set alarm bells ringing in the Premier League. Continue reading...

Britain’s economy was stronger than initially thought in the immediate aftermath of the EU referendum

The Welsh factory that produces crackers for the Queen is thriving thanks to diversifying, exports – and some old jokesWith deft accuracy, a design worker is sticking sparkles on a gift bag in an office festooned with crackers, wrapping paper swatches and shelves loaded with multicoloured glitter.Based near a former colliery in south Wales, a team of 45 designers work on new creations for IG Design Group – the world’s biggest producer of wrapping paper and crackers. The team started designing for next Christmas in August. One worker says she often gets home to find glitter in her car, on her hair, even on the dog: “It can be Christmas every day here.”

Revised GDP growth figures show Britain putting in a solid performance – but inflation could lead to a slowdownSo far, so good. That sums up the performance of the UK economy in the first three months after the Brexit referendum in June.In normal times, a quarterly growth rate of 0.6% would be wholly unexceptional for Britain and hardly worthy of comment. The economy has tended to expand by about 2.0% to 2.5% a year, so 0.6% over three months is about par for the course.Related: UK GDP growth better than expected in Brexit aftermath Continue reading...

Major central banks react inversely to US and will persist with ultra-low or negative interest rates in the hope banks will lend to people – they won’tAs Charles Dickens wrote of revolutionary France and Britain: “It was the best of times, it was the worst of times.” Economic conditions for the masses far lagged those of the aristocracy. Today’s elites include bankers and politicians. The masses are disillusioned citizens voting their frustration. That dichotomy is the difference between what central banks say and what people feel.Last week, the US Federal Reserve raised interest rates by a quarter point. The financial press applauded the start of a tightening phase as reflecting economic stability.

State media voices concern about the appointment of hawkish Peter Navarro to key trade postDonald Trump’s decision to hand a key spot in his administration to a scholar known for his “apocalyptic” attacks on China is further proof the American billionaire is spoiling for a fight with Beijing, a Chinese newspaper has claimed.

Ten years ago I studied for a masters in peace and development in Leeds. I used to rejoice as I walked through the municipal gardens near my home as we learned about the need for “capacity building” in the developing world. How grateful I was for all the local municipal provision that we lived with here: the parks, halls, toilets, youth centres, libraries.With central-government austerity policies (Cuts at catastrophic level, says Birmingham council chief, 13 December), they are now all vanishing, or hard-pressed local volunteers are struggling to deal with community-asset transfer, taking over the running and the management of such amenities, if they are not sold off to unaccountable private companies. Continue reading...

Broadcaster, who has 10% stake in firm, helps shares make their biggest rise in 10 months as she stars in ads for diet plansWall Street has rediscovered its appetite for Weight Watchers shares after the company’s most famous customer and investor, Oprah Winfrey, revealed the results of her new diet.Shares in Weight Watchers jumped by almost a fifth on Thursday following the news that the broadcasting titan had lost 18kg (40lb) by following the company’s latest guidance. Continue reading...

Ultra-low interest rates and quantitative easing were needed in 2008, but keeping them for too long may precipitate the next crisisA long, hard look at the way the Bank of England has conducted monetary policy since 2008 is long overdue so the announcement by the Treasury select committee that it is launching an inquiry into ultra-low interest rates, quantitative easing and forward guidance is welcome.It is worth recalling that when Threadneedle Street slashed the cost of borrowing to 0.5% and began using asset purchases to print money both were seen as temporary measures to deal with an immediate crisis. Continue reading...

Treasury select committee to examine impact on economy, which could lead to calls for changes to Bank’s remitThe Bank of England’s policy of near zero interest rates since the 2008 financial crash is to come under scrutiny by MPs in a far-reaching probe that could lead to calls for changes to the central bank’s remit, it was announced on Thursday.The influential Treasury select committee said it would also examine the damage to the Bank’s reputation from attacks on governor Mark Carney by senior politicians.Related: Bank of England leaves UK interest rates on hold at 0.25% Continue reading...

The increased scapegoating of institutions needs to stop. This notion that everyone but the establishment is losing out is fantasticalSome say: it’s the economy, stupid. People have finally had enough after years of little or no growth in their real incomes. And, especially after the global financial crisis, the elite that purportedly caused it seems to have sailed on while everybody else has suffered. Others look to unwanted cultural changes, specifically unprecedented levels of immigration.But ideas and narratives influence and inspire people, too. A common and winning one is anti-establishmentarianism: the scapegoating of senior and successful people – especially politicians, financiers and journalists – for coming together and pulling strings that cause social ills. Continue reading...

The bank’s private sector arm is accused of subsidising loans that funded the Indian firm’s Queensland exploration bidAdani’s Carmichael mine has been “covertly funded” by the World Bank through a private arm that is supposed to back “sustainable development”, according to a US-based human rights organisation.Adani Enterprises acquired exploration rights for Australia’s largest proposed coalmine in 2010 with a US$250m loan from banks including India’s ICICI, which was in turn bankrolled by the World Bank’s private sector arm, the International Finance Corporation, a report by Inclusive Development International says.Related: If Adani is not viable without public subsidies then the conservatives are backing the wrong horse | Ben OquistRelated: Adani coalmine: ANZ chief suggests bank would not finance Carmichael project Continue reading...

Weak pound and EU sales help British factories sell over 1.25 million cars abroad in 11 monthsBritain’s car industry reported record exports in the first 11 months of the year as a combination of the low pound and open access to Europe’s single market boosted sales.UK car exports jumped to 1.25m, the highest ever, after factories put on more shifts and increased overtime to meet the demand for British-made vehicles. Continue reading...

There is an unmistakable link between the squeeze on welfare and the rising number of people homeless or living in temporary accommodationFor a few days over Christmas, a massive effort by charities such as Crisis and the volunteers they recruit tries to offer something like festive cheer for thousands of people who might otherwise have been sleeping out on the cold, wet streets of Britain’s cities. Crisis at Christmas – Europe’s largest volunteer-run event – last year mobilised more than 10,500 volunteers and helped over 4,500 homeless people in centres in London, Birmingham, Coventry, Edinburgh and Newcastle. This year, they expect even more people to need their support. The generosity of individuals on this scale is a fine thing. But it is no answer to the perfect storm that now howls round housing policy, driving the surge in homelessness and the number of families in temporary accommodation.There is an easy, obvious, explanation for why this perfect storm has built up; and there is a less obvious but more immediate one. The easy, obvious explanation is the catastrophic shortage of new homes. That drives up prices while at the same time banks demand deposits of at least 5%. That often means upwards of £7,500, a fortune out of reach to many potential buyers. So they swell the demand for renting. Continue reading...

All the day’s economic and financial news, as Britain’s national debt hits a new all-time high and Italian bank Monte Dei Paschi fights for its future

Britain was only rich EU country to cut welfare as a proportion of GDP over four years – but it does spend more on subsidising housing, says EurostatBritain’s version of austerity is more aligned to the poorest nations of the European Union, according to figures from Brussels which reveal the UK was the only rich EU country to cut welfare spending as a proportion of GDP between 2011 and 2014.Related: The Tories will reduce UK public spending to Estonian levels Continue reading...

Figure of £12.6bn surprises economists as increase in income tax receipts slows to 1.1% after years of 3%-plus growthGovernment borrowing was higher than expected at £12.6bn in November as the growth in income tax receipts slowed on the previous month.Official figures showed that income tax receipts increased by only 1.1%, after several years of consistent 3%-plus growth, to prevent the UK’s budget deficit falling at the pace forecast by City analysts. Continue reading...

Two ex-members of the Bank of England interest rate-setting committee discuss what lies in store in 2017Professor of economics at Dartmouth College, New Hampshire, and former member of the Bank of England’s monetary policy committee (MPC) from June 2006 to May 2009Evidence mounting that Economics is a profession in crisis - people like @D_Blanchflower and the IMF consistently mugged by reality https://t.co/SKaJL9odhqRelated: The Brexit economy: impact of vote is finally beginning to bite Continue reading...

The latest monthly Guardian analysis finds the UK at a turning point as it heads into 2017• Help fund our journalism by becoming a Guardian supporterBritain’s vote to leave the EU is finally feeding through to the UK economy, according to a Guardian analysis that shows rising inflation is offsetting brisk trade for businesses.Buoyant consumer spending, a low unemployment rate, rising house prices and continued growth for the country’s dominant services sector point to a strong finish to the year, defying earlier forecasts from the Bank of England and others that the economy would grind to a standstill.

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...

Resolution Foundation predicts rising prices and stalling of jobs growth will hit real earnings next yearThe UK faces the risk next year of a return to the squeeze in real pay suffered earlier in the decade as higher prices and a stalling of jobs growth puts living standards under pressure, a thinktank has warned.The Resolution Foundation – which concentrates on the living standards of those on low to middle incomes – said 2015-16 had been the fastest year of real wage growth since 2001 but said the combination of low inflation and strongly rising employment would not be repeated.Related: Rising executive pay threatening reputation of big business – report Continue reading...