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

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...