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Updated 2025-07-02 22:15
Labour has big spending ideas, but no plan to earn our trust | Phillip Inman
However much extra public investment is justified, the current Labour party can’t convince people it is capable of using it wiselyThe Labour manifesto is a stark reminder of the havoc a Tory government will create over the next five years if it wins a sizable majority next month.From the holes it identifies in NHS funding to the need for an investment bank to promote infrastructure spending, the document has something to say about many of the areas crying out for government intervention. It works as a handy guide to those parts of the economy, the welfare system and public services the next administration must address – or risk the foundations being further undermined. Continue reading...
US ‘fear index’ shows stock markets eerily calm in stormy times
The Vix measures how fearful share traders are. The scary thing is that they’re not – and the index is down at levels seen in, er, 2007A tool that measures fear may sound like something out of a horror movie, but the Vix index has nothing to do with the entertainment industry. Also known as the fear index, the Vix is a key indicator of stock market health.The Chicago Board Options Exchange Volatility Index, to give it its proper name, tracks the extent to which traders are optimistic or fearful about the future performance of US stocks – and last week it fell to 9.77, its lowest level since 1993. Continue reading...
Mohamed El-Erian: ‘we get signals that the system is under enormous stress’
The leading economist and investor believes world leaders, and global capitalism, have reached a decisive fork in the road between equality and chaosThe bad news is that another economic crisis could strike within two years. The good – or better – news is that such a shock is not nailed on. It’s a 50% chance. But the developed world is approaching a T-junction. One road leads to higher growth and a more inclusive form of capitalism while the other turns towards recession, instability and turmoil.The speaker is Mohamed el-Erian, one of the biggest names in financial markets, who advised President Obama. Born in New York to Egyptian parents, he spent 14 years at Pimco, the world’s biggest bond fund manager. Six of those years were as chief executive before he quit, citing the need to have a different perspective on life and spend more time with his family. His daughter, when she was 13, handed him a 22-item list of key moments in her life he had missed. Continue reading...
Just do it: the experience economy and how we turned our backs on ‘stuff’
New figures show we are continuing to spend less money on buying things, and more on doing things – and telling the world about it online afterwards, of course. From theatres to pubs to shops, businesses are scrambling to adapt to this shiftIt was an audacious plan for an unloved bit of Manchester. A £25m arts centre to be built on a derelict plot that had not felt a cultural pulse since the closure, 15 years earlier, of the legendary Haçienda nightclub. It would be called Home, formed by the merger of two proud but financially imperilled institutions – the Cornerhouse cinema and gallery, and the Library Theatre Company – and would, its backers hoped, revive a forgotten corner on the city’s southern edge.“There was confidence from the city leadership that it would work, but a lot of my peers and colleagues in the arts were saying to me, ‘Who’s going to go there?’” says Sheena Wrigley, executive director of Home, which includes two theatres, five cinema screens, an art gallery and a restaurant and bar. “It was a very unprepossessing area with a big car park and one large office block. It wasn’t visible or on a main thoroughfare.”Related: The way we shop now: the revolution in British spending habits Continue reading...
Theresa May will cause more poverty than Thatcher, Gordon Brown warns
Former prime minister says Tory policies will reverse progress made in tackling poverty under LabourThe former prime minister Gordon Brown has strongly attacked Theresa May’s claim to be the champion of Britain’s struggling families, warning that the Conservative government’s welfare cuts would leave more people in poverty than under Margaret Thatcher in the 1980s.In his first major intervention in the election campaign, Brown said May’s policies would reverse the progress made in tackling poverty under Labour and leave the country more “economically divided and socially polarised than any other prime minister in living memory”.Related: What do you think of the Labour manifesto? Catch up on our live discussionRelated: Theresa May is creating an epidemic of poverty. Don’t give her a free hand | Gordon Brown Continue reading...
Germany accelerates with 0.6% growth; US consumer confidence rallies – as it happened
All the day’s economic and financial news, as Germany posts strong growth figures at the start of 2017
The German economy is unbalanced –but Trump has the wrong answer
The US president thinks currency manipulation is behind Germany’s massive surplus – but the best way to tackle it isn’t the exchange rate or trade policyFor Donald Trump, the measure of a country’s economic strength is its current-account balance – its exports of goods and services minus its imports. This idea is of course the worst kind of economic nonsense. It underpins the doctrine known as mercantilism, which comprises a hoary set of beliefs discredited more than two centuries ago. Mercantilism suggests, among other things, that Germany is the world’s strongest economy, because it has the largest current-account surplus.In 2016, Germany ran a current-account surplus of roughly €270bn (£228bn), or 8.6% of GDP, making it an obvious target of Trump’s ire. And its bilateral trade surplus of £51bn with the US presumably makes it an even more irresistible target. Never mind that, as a member of the eurozone, Germany has no exchange rate to manipulate. Forget that Germany is relatively open to US exports, or that its policymakers are subject to the EU’s anti-subsidy regulations. Ignore the fact that bilateral balances are irrelevant for welfare when countries run surpluses with some trade partners and deficits with others. All that matters for Trump is that he has his scapegoat.Related: Germany outpaces UK, US and France with 0.6% quarterly growth – business live Continue reading...
BT deserves credit – clawing back boss's bonus is common sense | Nils Pratley
It would have been outrageous for Gavin Patterson to get rewarded after BT’s Italian scandal and a big fine for overchargingCredit where it’s due. After the accounting catastrophe in Italy and a big fine from Ofcom for overcharging for broadband access on the home front, BT’s remuneration committee has done the decent thing. It has awarded no bonus to chief executive Gavin Patterson and the outgoing finance director. It has clawed back bonuses from both men for past years because the Italian scandal caused a £268m overstatement of profits. That penalty will cost Patterson £338,000. His incentive package for this year has also been reduced because the share price is 25% lower than a year ago.In a rational world, praise would be unnecessary. After BT’s hellish year, any bonus would have been outrageous, as Patterson happily agreed. Yet too many other companies, confronted by equal share-price disasters for investors, fail to apply common sense.Related: BT chief's pay package slashed by £4m over Italian accounting scandal Continue reading...
An unacceptable price for low business taxes | Letters
How the Tory policy of cutting corporation tax has given rise to a dangerous short-termism, which is harming British industry and wider societyThe Labour pledge to raise corporate taxes (Report, 10 May) is the economically responsible reaction to the failures of corporate tax competition. The deductive mathematical models from supply-side economics that justify low corporate taxation assume that “the state” is purely self-seeking and “the firm” an efficient bundle of contracts that creates wealth. They ignore the historical functions of actual states as the primary force for social integration and development in capitalist systems. They ignore the shift of actual large corporations away from the “retain and reinvest” model of the post-war period to the extractive “downsize and divest” model of the present, to use William Lazonick’s terms.Supply-side theory insists that reduced corporate taxation equals increased productive investment and long-term wage growth, but where is the evidence for this outcome? The “competitively” lower taxed UK has seen slower improvements in productivity than Germany, France, Sweden, Norway or the US, which retains the highest corporation tax of all. British business expenditure on R&D as a proportion of GDP has declined in the last decade and the UK has suffered a historic drop in real wages. In an era of unprecedented corporate profits and high cash holdings the evidence for the redundancy of tax relief is remarkable: UK corporate tax cuts have apparently translated straight into higher shareholder payouts and share repurchases to further inflate the share price: ie they have been absorbed into the prevailing US and UK dynamic of financial value extraction that underpins the escalating wealth of the 1%, not an investment dynamic. Continue reading...
Bank of England governor Mark Carney: real wages will fall this year - as it happened
UK central bank warns that households will be squeezed this year as inflation rises faster than previously forecast
Bank of England warns Brexit vote will damage living standards
Bank of England hints interest rates may increase sooner than markets think but warns of near-term squeeze on consumersThe Bank of England has warned households that living standards will fall this year as the effect of the Brexit vote works its way through to higher prices and meagre pay deals.Presenting a sober assessment of the economic outlook just weeks before the general election on 8 June, the Bank’s governor Mark Carney predicted living standards could start to recover in 2018 but , in the meantime, inflation would be higher than pay growth this year making it a “more challenging time” for households.Related: Brexit slowdown fears as industrial output falls and trade deficit grows Continue reading...
Number of zero-hours contracts stalls at 'staggering' 1.7m
ONS statistics suggest faltering popularity in UK, but campaigners warn of rise of short-hours contracts for workersGrowth in zero-hours contracts has stalled in the UK, according to the latest official figures, but campaigners have warned that insecure work is still a problem in Britain.There were 1.7m zero-hours contracts in the UK in November 2016, representing 6% of all employment contracts – unchanged from a year earlier. The Office for National Statistics said the number of firms using zero-hours contracts had fallen.Related: Labour party pledges to outlaw all zero-hours contractsRelated: McDonald’s offers fixed contracts to 115,000 UK zero-hours workers Continue reading...
Brexit slowdown fears as industrial output falls and trade deficit grows
Sharp fall in pound since EU referendum did little to boost exports in March, ONS figures suggestIndustrial output shrank more than expected and the trade deficit widened in March in the latest signs that uncertainty surrounding Brexit is beginning to weigh on the economy.Industrial output dropped by 0.5% in March, sharper than the 0.3% fall predicted by economists. It followed a 0.7% fall in February and brought the sector to a virtual standstill in the first quarter overall, with growth of just 0.1%, according to the Office for National Statistics figures. Continue reading...
Labour corporation tax hike could help schools but dent economy, says IFS
Jeremy Corbyn’s policy could boost educational performance but have long-term effects on growth, says thinktankLabour’s plan to fund higher school spending through increases in corporation tax could boost educational performance but would risk damaging the economy’s long-term growth prospects, the Institute for Fiscal Studies has said.The thinktank’s analysis of one of Jeremy Corbyn’s flagship policies shows that reversing the government’s planned cuts to schools’ budgets would be comfortably paid for by the extra revenue raised by increasing the main rate of corporation tax to 26%. Continue reading...
Dramatic minimum wage rises will put low-paid jobs at risk, says IFS
Thinktank says planned pace of increase for rest of decade could price workers out of a job, with young people worst affected• General election 2017 – latest updatesDramatic increases in the minimum wage planned by Labour and the Conservatives after the general election will put the jobs of low income workers in danger, a leading tax and spending thinktank has warned.The Institute for Fiscal Studies said accelerating the pace of rises in the minimum wage and the “national living wage” (NLW) for the rest of the decade could price workers out of a job, with young people the worst affected. Continue reading...
US markets weaken after FBI director's firing; ECB's Draghi defends stimulus –as it happened
All the day’s economic and financial news, as Donald Trump’s sacking of James Comey undermines the US dollar
UK pay growth outlook is 'among gloomiest in advanced economies'
Only Greece, Italy and Austria are forecast to suffer bigger falls in real wages by end of 2018, analysis findsThe prospects for pay growth in the UK are among the gloomiest in advanced economies, with only Greece, Italy and Austria forecast to suffer bigger falls in real wages by the end of 2018, according to a TUC analysis.The trades union group said UK real wages – pay adjusted for the effects of inflation – were on course to fall by 0.5% between the start of 2016 and the close of 2018, based on forecasts from the Organisation for Economic Co-operation and Development. Continue reading...
John McDonnell or Theresa May: will the real Marxist please stand up? | Ellie Mae O’Hagan
Claims that there’s anything ‘Marxist’ about the prime minister’s plan for a cap on energy bills are a sign we are living in an intellectual dead zoneLadies and gentlemen, it’s time to clutch your privately owned pearls, for the shadow chancellor, John McDonnell, has had the audacity to acknowledge – live on TV, no less – that there is a lot to learn from Karl Marx. Judging by the horrified reaction McDonnell’s comments unleashed, you’d think he had ridden into BBC studios on a Soviet tank, shouting “Death to the bourgeoisie!”It doesn’t end with McDonnell, of course. When Jeremy Corbyn was asked whether he was influenced by Marx’s ideas, he said that “all great economists influence all of our thinking”. And, of course, when Ed Miliband was leader of the Labour party, an intrepid reporter from the Daily Mail went into full reds-under-the-bed mode, by printing the ideas of the Marxist academic Ralph Miliband (Ed’s father) that are already publicly available in books. No word from the Pulitzer prize board yet, but it’s surely only a matter of time.Related: Yanis Varoufakis: How I became an erratic Marxist Continue reading...
UK will face pay squeeze this year as inflation spikes, warns thinktank
NIESR says inflation will rise to 3.4%, well above OBR forecast, prompting real-terms cut in takehome pay
Austerity, inequality and debt still a threat | Letters
Guardian readers share their thoughts on the state of the economy
German trade hits record high and volatility eases as markets look beyond Macron victory –as it happened
All the day’s economic and financial news, as Germany imports and exports more than ever before
Mike Bowers' best photographs from Australian budget day – in pictures
Our photographer’s best pics following the lock-up in Canberra as the government announces various measures, including an increase in the Medicare levy for most Australians as well as hits for businesses and banks.• Federal budget 2017: Morrison hits banks with $6bn tax rise and promises ‘better days ahead’ Continue reading...
Federal budget 2017: the 10 graphs you need to see | Greg Jericho
After nearly a decade of saying the problem was all on the spending side, the Liberal party has finally admitted that there is a revenue problem
UK high street sales weak as shoppers focus on buying essentials
Spurt in spending in April was result of late Easter not upward trend, say Barclaycard and British Retail ConsortiumBarclaycard and the British Retail Consortium have warned that a spurt in spending in April was the result of the late timing of Easter and said the growing squeeze on incomes meant the underlying trend in high street activity was weak.The two surveys found that rising inflation had resulted in consumers devoting an increasingly share of their pay packets on household essentials.Related: Sainsbury's weighs up franchise deals to boost Local network Continue reading...
UK firms struggle to find employees – even before Brexit bites
Snapshot of the jobs market by Recruitment and Employment Confederation finds there are fewer people available to fill vacanciesEmployers in the UK are struggling to fill vacancies after the sharpest drop for more than a year in the number of available candidates, according to a report that points to more recruitment difficulties ahead once Brexit bites.Even before the potential restrictions on immigrants once the UK leaves the EU, firms are reporting skills shortages across a range of more than 60 roles, including engineers, IT specialists, care workers and accountants.Related: City banks could move at least 9,000 jobs from UK due to BrexitRelated: City firms say they won't be ready for Brexit in two years Continue reading...
Enemies of the state: the 40-year Tory project to shrink public services
From schools to health inspectors, the institutions that ensure our wellbeing are under unprecedented attack. This political poison harms us all, say the authors of the new book DismemberedJust as he reaches the end of his inspection, the environmental health officer spots the meat pies. A stack of them have tumbled on to a shelf on the floor of the storeroom, not in the chiller. A flicker of alarm crosses the transport cafe owner’s face. Pies are big on his menu. He sighs. “Well, it’s complicated,” and the story unfolds. The pies used to be made by so-and-so but the company owners split acrimoniously and it’s all a bit chaotic now.“Ah, yes,” says the inspector. “I know this one.” He has the local background and, as he probes and prods, the cafe proprietor admits sheepishly that the pies arrive with a scrappy piece of paper, no official invoice, dubiously labelled “organic” with no list of contents, paid for in cash to an old chap called Gramps off the back of a lorry.Related: George Osborne's benefit cuts legacy set to come into effectRelated: The battle for the BBC | Charlotte HigginsWhat we do together through our taxes … is worth more than any private gain through market transactionsRelated: Feet first, our NHS is limping towards privatisation | Polly Toynbee Continue reading...
The need to find a fairer system of taxing and spending in the UK | Letters
Letters from Terry Kelly, Ruth Lister, Dr David Griffith, David Beard, Peter Fieldman and Richard Cooper in response to Guardian reports and Paul Mason’s articleIt did not take long in the current election campaign for the Conservatives to trot out the old myth of Labour being the party of high taxation while the Tories are “tax cutters by instinct” (Tories redeploy the ‘bombshell’ against Labour tax plans, 4 May).It may be true to say the Tories favour unfair cuts in direct taxation, but this certainly cannot be said of their less progressive and equitable “instinct” of increasing indirect taxation. Let’s not forget it was Margaret Thatcher who raised VAT from 8% to 15% only weeks after denying there were any plans to do so during the 1979 election campaign, and it was George Osborne who raised it from 17.5% to 20% following similar denials in 2010. Continue reading...
Impact of UK foreign aid diluted by pursuing national interest, says IFS
Thinktank estimates ODA spending will rise by £1bn during the course of next parliamentPoverty reduction in the world’s poorest countries risks being diluted by the government’s increasing tendency to devote a bigger slice of Britain’s aid budget to pursuing the national interest, the Institute for Fiscal Studies has warned.The thinktank estimated that overseas development assistance would rise by £1bn during the course of the next parliament as a result of Theresa May’s pledge to continue meeting the United Nations 0.7% aid target.Related: Foreign aid 0.7% pledge will remain, says Theresa May Continue reading...
Stock markets slip back and euro dips despite France rejecting Le Pen - as it happened
Emmanuel Macron’s victory in the French presidential election has reassured investors, although profit taking has pushed shares down
Macron’s tragedy is that he still believes in a discredited economic system | Olivier Tonneau
The new president sincerely wishes to improve life for the French people. But he cannot see that without radical, far-reaching change it will be impossibleFrom the outset, the motto of Emmanuel Macron was “rassemblement” (coming together): he aimed to unite a divided nation. Political divisions, he claimed, were artificial: the left/right divide was perpetuated by parties whose sole objective was to beat their rivals to power. Beneath theatrical politics, there must be a population with common, liberal aspirations, who felt constrained by regulation and especially labour laws, crushed by taxation, burdened by the state. By creating a new, grassroots movement, Macron would gather the energies dormant in civil society, transcend political divides and effect no less than a “revolution” (to quote the title of his book).No doubt, many in the professional classes and the media enthusiastically embraced the great liberal dream of a passionately moderate society. Ever since the bourgeoisie rose to prominence at the end of the 18th century, it has aspired to being perceived as the bearer of universal values. Once again, this aspiration has been thwarted.Related: Brexit campaign group insults Macron after presidential winUnder an unbridled capitalist regime, profit-making is not fuelled only by greed, but by economic necessity Continue reading...
May could meet net migration target – by crashing the economy | Alan Travis
The prime minister knows the ‘tens of thousands’ target is unrealistic, and she must be hoping she never meets it
Why the global markets are ignoring the global turmoil | Nouriel Roubini
Stock markets can deal with crisis but have trouble pricing the ‘black swan’ unknown unknowns such as 9/11. None have surfaced … yetWith Emmanuel Macron’s defeat of the rightwing populist Marine Le Pen in the French presidential election, the EU and the euro have dodged a bullet.But geopolitical risks are continuing to proliferate. The populist backlash against globalisation in the west will not be stilled by Macron’s victory, and could still lead to protectionism, trade wars, and sharp restrictions to migration. If the forces of disintegration take hold, the UK’s withdrawal from the EU could eventually lead to a breakup of the trade bloc – Macron or no Macron.Related: Trump tax cut plan will be as big a flop as failed healthcare reforms | Nouriel Roubini Continue reading...
Bank of England walks the tightrope over interest rates
Rising inflation is pressuring Bank governor Mark Carney to raise the current 0.25% rate even as UK economic growth slowsSlower economic growth and higher inflation present Bank of England policymakers with a delicate balancing act when they meet this week to set interest rates and agree new forecasts for the UK as it goes through an election and Brexit talks.The Bank’s monetary policy committee (MPC) is widely expected to keep interest rates at their record low of 0.25% to offer continued support to the economy and the jobs market.Related: Higher interest rates. Great idea. Here’s why it won’t happen Continue reading...
Where have all the big political ideas gone? | Phil McDuff
Our economic model has reached its natural limits – it will never get better. Instead of managing the status quo it is time for centrists to overhaul the systemSay what you want about Tony Blair, and believe me I most certainly will, but the early years of the New Labour government at least had a sense of energy to them. Policies both good and bad were pushed with passion and certainty. You could disagree with them, but there was something to disagree with.Yet over the last decade since the financial crisis the centre ground has been markedly bereft of ideas. The right has assumed its natural mantle as the party of authority and nostalgia, standing athwart history shouting “Stop, in fact reverse, go back, we don’t like any of this!”Related: The hidden threat of a liberal centre-ground moderniser | Steve RichardsHigh levels of private debt could be a problem for the British economy, says @MazzucatoM #Newsnight pic.twitter.com/oVbjn9o6XKRelated: Finally, a breakthrough alternative to growth economics – the doughnut | George Monbiot Continue reading...
Candour deficit: why McDonnell's tax sums don't add up | Philip Inman
John McDonnell is caught in same trap as his Conservative counterpart, because only rise on basic rate will dent public deficitThe shadow chancellor, John McDonnell, needs only to cast his mind back to the March budget to judge the public’s reaction to higher taxes. Philip Hammond’s proposal to raise the rate of national insurance paid by the better off among the self-employed was widely condemned, not least by McDonnell himself.Labour says its plan to raise “a bit more” income tax on those earning more than £80,000 overcomes the objections of all but an elite, who have fared well enough since the 2008 crash while ordinary working women and men have seen their incomes barely recover. Continue reading...
Labour looks at new tax bracket for those earning £80k-£150k
Shadow chancellor says highest increases would be for top 1%, and only top 5% of earners would face riseJohn McDonnell hinted that a Labour government would introduce tax rises on those paying the top rate of tax – at £150,000 and above – and that Labour’s biggest tax increases would be reserved for the richest.
Falling real pay shows the British economy is still struggling | Larry Elliott
The decline in real pay since the financial crisis gives the lie to the Tories’ election claims of sound economic managementIt is a truth universally acknowledged that a prime minister in possession of a strong economy wins elections. Governments lose when the country has been put through the wringer, as in 2010, and win when everything’s going well, as it is now.There’s only one thing wrong with this theory. The economy is not booming – it’s struggling. The problems that the Conservatives inherited as part of a coalition in 2010 have not been eradicated. In many cases, they have got worse. Policy mistakes have gone unpunished. Yet the only logical conclusion from last week’s local elections is that the Conservatives are on course for a thumping victory in the big one next month. Continue reading...
What’s it like to lose £350m? A rogue trader confesses
By investing in precarious deals and covering up his losses, Alexis Stenfors cost one of the world’s biggest banks a fortune. Andrew Anthony asks why doesn’t he feel more remorseIn 2009, shortly after the global markets had suffered their worst crisis for 90 years, Alexis Stenfors was working as a currency trader for Merrill Lynch in London. With 15 years’ experience, he was good at his job and he prided himself on his ability to read the markets. His view was that the whole financial system was going to go “belly up”. That was what he was betting on.And boy did he bet. He took increasingly extreme positions and when they failed to return dividends, he covered up losses in his trading books that he estimated to be around $100m (£78m). Then he went on holiday to India. Stenfors didn’t realise it at the time, but it was the end of his career as a trader, and the beginning of his notoriety as a rogue trader. Merrill Lynch later announced that his actions had resulted in the loss of $456m (£356m).Why did I do it? I am not sure if I have come any closer to a definitive answerI didn’t think about the system as a whole. You never say: ‘Hang on, what happens if the whole things explodes?’I wouldn’t go back to trading simply to make money. I know what I would become Continue reading...
The secret history of inflation, from Black Wednesday to Brexit
Britain’s struggle with monetary policy has not just had economic consequences: it is also a key source of the Euroscepticism that has brought us to crisisThis month sees the 20th anniversary of the granting by New Labour of independence to the Bank of England.It was not full-scale independence but “operational independence” in monetary policy: that is, the freedom to change interest rates without having to consult the chancellor. The Bank is still the Treasury’s agent in other matters, such as decisions about the nation’s currency reserves. Continue reading...
US jobs figures beat expectations, while oil prices remain volatile - as it happened
The left should just admit it: victims aren’t always good people | Deborah Orr
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...
Puerto Rico files for bankruptcy in last-ditch attempt to sustain public services
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”.
How do we fix our 21st century economy? Look to Darwin | Robert Neild
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...
A Labour tax bombshell is a very good idea: the rich should pay their share | Paul Mason
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...
Service sector surge boosts UK economy to four-month high
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...
The Guardian view on the Bank of England: independence and accountability | Editorial
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...
UK service sector growth hits four-month high, but car sales slump – as it happened
Britain’s dominant services sector has posted its strongest growth of the year
Brexit talks uncertainty 'leaves 45% chance of no deal', says article 50 author
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”.
We need to track more than GDP to understand how automation is transforming work
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...
Federal Reserve leaves rate on hold, as UK construction and eurozone growth pick up - as it happened
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