There will be no feelgood factor driving voters to the polls – living standards are falling as the gap between price rises and wage increases widensThe 2017 general election will be fought at a time when voters are getting poorer. That was the big message from the latest official figures for the cost of living showing that the annual inflation rate has reached 2.7%.Earnings growth is running at around 2%, which means that living standards are going down. And there is worse to come. The gap between price increases and wage rises is going to get wider over the coming months.Related: UK inflation jumps to 2.7% as real wage squeeze worsens - business liveRelated: Energy price rises help drive UK inflation up to 2.7% Continue reading...

In 2012, Kansas did what Donald Trump wants to do: it introduced huge tax cuts to try to boost growth. Today, the state is out of money – and residents are angryKansas is broke – but you wouldn’t guess it looking at its shining state capitol in Topeka. The imposing limestone monument, crowned by a shiny copper dome and limned with John Steuart Curry’s luminous murals, has just undergone a $325m facelift. What’s happening inside the state house is a lot less pretty, and may well foreshadow the far uglier battle looming over the future of taxation in the United States.

‘Significant proportion’ of UK workers face falling living standards, with lower pay rises and higher unemployment predictedBritish workers should brace themselves for rising unemployment and falling real pay in the year ahead as the impact of a Brexit slowdown is increasingly felt in the jobs market, reports have warned.The era of rapidly increasing employment is over, according to the forecasting group EY Item Club, which on Monday predicted the unemployment rate will rise from 4.7% now to 5.4% in 2018 and 5.8% in 2019.Related: Bank of England warns Brexit vote will damage living standards Continue reading...

Government plans to sell last remaining shares this week eight years after pumping in £20bn to prevent bank’s collapseThe government is expected to sell off its remaining shares in Lloyds Banking Group in the coming week, marking a watershed moment for the sector after the financial crisis.Eight years after pumping in £20bn to prevent the bank from collapsing, taxpayers will no longer own any shares in an institution that was created in the depths of the financial crisis when Lloyds TSB rescued HBOS.Related: Lloyds profits double to £1.3bn despite PPI and fraud payouts Continue reading...

Imperfect it may be, but Labour’s manifesto recognises the economic status quo can’t be kept going for much longerTen years ago this month, Britain was on the cusp of change. Two things were about to happen, one planned and one unexpected.The change everybody knew about was that Tony Blair was going to stand down as prime minister after 10 years in the job, during which time he had won three elections on the trot.Related: Mohamed El-Erian: ‘we get signals that the system is under enormous stress’ Continue reading...

Chancellor tells summit Beijing’s vast $990bn infrastructure plan is an ‘opportunity to strengthen ties’ with China

Global leaders attend ‘Belt and Road’ infrastructure summit to praise plan Xi Jinping says will bring a new ‘golden age’ of globalisation

If centre-left parties wish to escape the poison of trickle-down policies, they should look to the real outcomes of policies implemented from 1983 onwardsLanguage in politics is a fraught business. Certain terms and words are thrown around so often and so easily that they can lose their punch, if not their meaning.Guardian Australia’s recent article “Australian Labor led centre-left parties into neoliberalism. Can they lead it out?” had at its core a grossly erroneous claim – that the Hawke-Keating governments were the tip of the arrow for neoliberalism, globally and at home.Related: Neoliberalism 'has run its course', says ACTU boss Sally McManusRelated: As the trickledown juggernaut rolls on, it's time to rejuvenate the middle class | Wayne SwanRelated: Flogging the dead horse of neoliberalism isn't going to improve the economy | Greg Jericho Continue reading...

May is announcing the proposal to create a new generation of housing to rent as Labour reveals its Robin Hood taxTheresa May will vow to “fix the broken housing market” and arrest a decline in social housing by announcing a scheme designed to boost the number of new council homes for rent.In an attempt by the prime minister to reach out to low-paid workers, she will announce a plan to offer funds, loans and new powers to councils and housing associations to help them build a new generation of social housing for renters. She will also pledge to give the new tenants the option to buy the property after 10 to 15 years.Related: Tories ahead by 15 points despite gain for Labour, poll findsRelated: Labour hints that it will pledge to abolish university tuition fees Continue reading...

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...

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...

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...

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...

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...

All the day’s economic and financial news, as Germany posts strong growth figures at the start of 2017

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...

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...

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...

UK central bank warns that households will be squeezed this year as inflation rises faster than previously forecast

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...

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...

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...

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...

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...

All the day’s economic and financial news, as Donald Trump’s sacking of James Comey undermines the US dollar

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...

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...

NIESR says inflation will rise to 3.4%, well above OBR forecast, prompting real-terms cut in takehome pay

Guardian readers share their thoughts on the state of the economy

All the day’s economic and financial news, as Germany imports and exports more than ever before

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...

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

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...

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...

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...

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...

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...

Emmanuel Macron’s victory in the French presidential election has reassured investors, although profit taking has pushed shares down

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...

The prime minister knows the ‘tens of thousands’ target is unrealistic, and she must be hoping she never meets it

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...

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...

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...

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...

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.

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...

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...

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...