The US president, who said countries ‘play the market while we sit like a bunch of dummies’, signals possible retreat from strong dollar policyJapan has rejected Donald Trump’s claims that Tokyo was deliberately weakening the yen to gain an unfair trade advantage over the US.

Leading economic thinktank the NIESR expects 1.7% growth this year but says Brexit will hit trade in the long termThe surprising resilience of consumer spending in the months since the Brexit vote has forced one of the UK’s leading economic thinktanks to revise up its growth forecasts for the second time since the referendum.In its quarterly health check of the economy, the National Institute for Economic and Social Research (NIESR) said it now expected growth of 1.7% this year – only slightly down on the 2% recorded in 2016.Related: UK GDP figures show solid end to 2016 despite Brexit vote Continue reading...

Resolution Foundation says inflation, welfare cuts and squeeze on pay will punish least well-off hardestPressure on the government to help struggling Britons has intensified after a leading thinktank warned that falling living standards for the poor threatened the biggest rise in inequality since Margaret Thatcher was prime minister.The Resolution Foundation said Theresa May would need to make good on her pledge to support “just about managing” households as it released a report showing that rising inflation and an end to recent strong jobs growth would hit the least well-off hardest. Continue reading...

Peter Navarro, head of new National Trade Council, claims currency is ‘grossly undervalued’, sending it to eight-week highDonald Trump’s top trade adviser has hit out at Germany and accused the country of gaining an unfair trade advantage from the “grossly undervalued” euro.In a sign that the Trump administration is targeting currencies in its approach to trade deals, Peter Navarro, the head of the US president’s new National Trade Council, told the Financial Times (£) that the euro was like an “implicit Deutsche Mark”.Related: 'Brutal, amoral, ruthless, cheating': how Trump's new trade tsar sees China Continue reading...

All the day’s economic and financial news, including new growth and unemployment data from the eurozone

Europe will suffer if it punishes leavers and restricts free trade. It must transform itself so all states gain from membership

From advertising to workplaces, in 2017, let’s endeavour to recognise the enormous opportunity that diversity offers all of us

All the day’s economic and financial news, as president Trump’s ban on citizens from seven countries entering the US worries investors

Hostility in the UK and US to structures such as the EU, World Bank and IMF will lead to increasing instability for everyone

Leading MP launches suggested guidelines for article 50 talks designed to bridge divide between leave and remain votersBritain’s exit from the EU must make the country more prosperous and fair, maintain an open economy and increase people’s democratic rights, a group of academics has urged in a list of four tests for making a success of Brexit.

British cities would need to dramatically increase trade with other markets to compensate for hard Brexit, says Centre for Cities

Part-time jobs paying more than £40,000 a year have increased by more than 5% in the past year, with traditional nine-to-five structure being remodelledMore than 770,000 high earners now work part-time, according to a report that shows how employers are becoming more open to using job shares in senior roles.The number of part-time staff on salaries over £40,000 has increased by 5.7% in the past year, said flexible-working group Timewise. Continue reading...

Failure of Greece and the EU to reach compromise by 20 February ‘would bring back Grexit with a vengeance’Greece’s embattled government has three weeks to break the deadlock in increasingly difficult talks with creditors or risk the country’s debt crisis resurfacing with renewed vigour.

The City rigged markets, laundered money and mis-sold products, but has diverted attention by threatening to leave LondonIt is almost a decade since the financial crisis and barely a day has gone by without banks being in the headlines, invariably for the wrong reasons.Only last week, RBS – 73% owned by the state since its bail out in 2008 – announced it was taking a £3.1bn hit as a result of a case brought by the US Department of Justice over the way the bank packaged and sold mortgages during the great housing bubble that preceded the crash.Related: This belated Tory conversion to industrial strategy is tragic Continue reading...

President Trump wants Perdue to lead the agriculture department – but the head of a global agribusiness could favor big ag over many family farmersAfter keeping the rural voters who put him in office on edge until the last moment, President Trump nominated Sonny Perdue, a former Georgia governor now heading a global agribusiness trading company – Perdue Partners LLC – to be his agricultural secretary. The night following Trump’s announcement, Perdue took the stage at the Bipartisan Inaugural Gala Celebrating American Agriculture and promised to “make American agriculture great again”.The good news is that Perdue clears a bar far too few Trump cabinet nominees seem to meet – he has experience in government and management, as well as knowledge about the department he’s been selected to lead. This is a relief, given the breadth of authority of the US Department of Agriculture (USDA), an agency of nearly 100,000 employees with an annual budget over $140m. The bad news is, Perdue also has a great deal in common with other cabinet nominees: a whole lot of money, close ties to big industry and a track record that bodes poorly for the interests of the broader constituency of the USDA: the American people.Related: Why oysters, mussels and clams could hold the key to more ethical fish farmingRelated: Will 2017 be the year we get serious about sustainable food? Continue reading...

Community groups join forces to protest over soaring level of rents fuelled by a big rise in visitor numbersBehind banners reading “Barcelona is not for sale” and “We will not be driven out”, some 2,000 people staged an “occupation” of the Rambla, the city’s famed boulevard, on Saturday.The protest was organised by a coalition of more than 40 resident and community groups from all over the city, not just the neighbourhoods most directly affected by mass tourism. Continue reading...

Higher consumer spending and rising business investment fails to offset fall in exports and rise in importsThe US economy slowed last year to register its worst performance since 2011 after the strong dollar sent exports tumbling and encouraged American businesses to import cheaper components from abroad.But the worsening trade position was offset by increases in consumer spending and business investment that analysts said would hand President Donald Trump a strong and growing economy.Related: Final US growth figures under Obama are a triumph – for Trump | Larry Elliott Continue reading...

With 57% of maintained nursery schools rated ‘outstanding’, it seems madness for them to face cuts. If anything, their remit ought to be extendedThe prospect of state-maintained nurseries closing en masse sounds the lowest note of the austerity politics. Maintained nurseries have enjoyed a level of Ofsted success that the rest of the education sector might look upon with envy. In 2015, 57% of those nurseries achieved an outstanding rating, compared with just 12% of the sector as a whole. So my wife and I were more than happy to move our youngest adopted child from his private nursery when he became eligible to attend. Six months later, I would say that that our experience of his new nursery has been similarly outstanding.

News that pace of growth slowed in last three months of 2016 by more than Wall Street expected is a boon for new presidentThe last set of growth figures for Barack Obama’s eight years in the White House could hardly have been better. For the new president, that is.Judging by the preliminary estimates, the pace of US growth slowed in the final three months of 2016 – and by more than Wall Street had been anticipating. Activity expanded at an annualised rate of 1.9% in the fourth quarter, down from 3.5% in the previous three months.Related: US economic growth slows to lowest rate since 2011 Continue reading...

Growth slowed to 1.9% in the fourth quarter of 2016 from 3.5% in the third, as weak exports weighed on the world’s largest economy

Crude financial instruments dominate the headlines, but it’s metrics like grain price and inequality ratio that really reflect the world we live in

Donald Trump says he’ll bring back full employment. But maybe no politician has the power to deliver thisThe story has rather got lost in the midst of Donald Trump’s statements this week about his fabled wall, the merits of torture, and all the other stuff that has underlined the frightening nature of his arrival in power – but on Monday, the new president hosted a remarkable meeting.In the Roosevelt Room of the White House, Trump held talks with the leaders of US trade unions: among them, the presidents of the Laborers’ International Union of North America, the Smart (it stands for sheet metal, air, rail and transportation) Union, and the United Brotherhood of Carpenters. Despite US unions overwhelmingly backing Hillary Clinton – the carpenters, for example, recently warned that “Trump’s legacy will ruin America” – all was apparently warmth and cordiality.Related: On her flight May should read Trump’s book: the other guy is always shafted | Polly ToynbeeRelated: The Trump effect has rallied US markets – but it's based on illusion | Robert Shiller Continue reading...

Polly Toynbee’s article in praise of the leader of Surrey county council misses some fundamental points (It’s a crisis indeed when the social care rebels are Tories, 24 January). While David Hodge’s stance may be well-intentioned, it makes him an accessory to his party’s cuts, rather than a rebel against them. Transferring responsibility to local level is a key part of the government’s strategy, so that the blame for its austerity policies can be shifted to others. This is true across the spectrum of local authority and health services.The notion that it is appropriate to transfer the burden of cuts to local council tax-payers should be challenged. Local Government Association and Cipfa leadership might be more usefully directed to this as a campaign focus of national interest. Continue reading...

UK defies downturn fears thanks to another strong performance by service sector firms, but economists fear a slowdown in 2017

Justice department charge for mis-selling scandal in US puts bailed-out bank on course for ninth consecutive annual lossThe chancellor has ruled out reducing the government’s stake in Royal Bank of Scotland after it took a £3.1bn hit towards the cost of a bond mis-selling scandal in the US.The charge for the latest regulatory failure will push RBS to its ninth consecutive annual loss and was blamed by Ross McEwan, the bank’s chief executive, on the bank having “lost its way” into the run-up to the 2008 crisis. RBS has already incurred £50bn of cumulative annual losses since taxpayers pumped in £45bn to keep it afloat.Related: RBS investors call for governance changes to improve transparency Continue reading...

TUC chief warns against government complacency as economy expands by 0.6% in the final three months of yearBuoyant consumer spending kept the UK economy growing at the brisk pace of 0.6% in the final quarter of 2016, marking a strong finish to the year despite the Brexit vote.The initial estimate for fourth-quarter GDP from the Office for National Statistics matched the 0.6% growth recorded in the third and second quarters. It was a touch better than the 0.5% rise expected by City economists. The pound hit a fresh six-week high of $1.2673 just before the data was released.Related: UK GDP growth shows consumers spending despite Brexit worriesRelated: Britain's economy beats forecasts with 0.6% growth in the last quarter - live updates Continue reading...

George Osborne has been proved wrong in his forecasts of doom – the economy has stayed afloat thanks to the service sectorIt was supposed to be the moment of truth. Had the economy performed as George Osborne predicted it would in the fevered days before the referendum, late January 2017 would have been the moment when official data showed that output in the UK had contracted in both the third and fourth quarters of 2016 – the technical definition of a recession.Instead, Philip Hammond was in the happy position of being able to use a visit to Microsoft’s UK headquarters in Reading to announce that growth in the final three months of 2016 had been 0.6% – exactly the same as in the previous two quarters.Related: UK GDP figures show solid end to 2016 despite Brexit voteRelated: Britain's economy beats forecasts with 0.6% growth in the last quarter - live updates Continue reading...

British PM could struggle to negotiate good trade deal with president who has pledged to put America firstAppetite for a US trade deal with Britain appears as high in Washington as it is in London, according to interviews with politicians, with both governments anxious to demonstrate there is more to economic populism than simply a desire for protectionism.But despite the political convergence indicated by Donald Trump’s election and the Brexit vote, Theresa May will discover the special relationship still has plenty of cracks and contradictions when she visits the White House on Friday.Related: Theresa May to seek special deal with Trump in White House visit Continue reading...

The cost of government cuts isn’t always visible. But there is no escaping it in Sunderland, where services to vulnerable women are under threatYou’ve read the headlines about the council services facing death by a thousand cuts, from nursery schools to libraries and community transport for disabled school pupils. After a real-terms cut of 40% in core government grants since 2010, the Chartered Institute of Public Finance and Accountancy (Cipfa) says we are now at the point where councils are “close to the brink” of insolvency. If further proof were needed, look over to Surrey and its council tax referendum, where a council is effectively admitting to voters it can no longer afford to help elderly residents get dressed, or to keep learning disabled adults safe. This is only the beginning. Local government is estimated to be facing a funding black hole of £5.8bn by 2020. If there is any doubt about the brutal impact of these cuts on the ground, just take a look at Sunderland, which is likely to become the only major city in the UK with no refuges for domestic violence victims.Related: Northumbria police chief leads fight against cuts to women's refugesUnless Phillipson is told that the funding will be protected, it will mean closed signs on Sunderland’s refuge doors Continue reading...

Chris Patten says Britain has prioritised trade deals with China over defending freedoms guaranteed in 1997 handoverThe UK is guilty of a dereliction of its duty to Hong Kong and is “selling its honour” to secure trade deals with China, the territory’s former governor Chris Patten has warned.He said Britain had let down pro-democracy activists who have been fighting to maintain freedoms guaranteed to Hong Kong as part of the deal to hand the territory back to China after more than a century of British rule.Related: Hong Kong human rights situation 'worst since handover to China' Continue reading...

Nicola Sturgeon will ask Holyrood to vote on symbolic Brexit motion as talk once again turns to independence referendumNicola Sturgeon’s government is preparing for a fresh constitutional battle over Brexit by tabling a motion calling on Holyrood to reject the UK government’s article 50 bill.Mike Russell, the Scottish government’s Brexit minister, told MSPs the refusal by Theresa May’s government in London to countenance Sturgeon’s demands for a special Scottish deal was pushing the country closer to a second independence referendum. Continue reading...

All the day’s economic and financial news, as shares rally in Asia and Europe after US markets hit fresh record highs

Building experts estimate barrier could cost $31bn, with most of 40,000-strong workforce from Mexican side of borderThe biggest winners from the construction of Donald Trump’s “big, beautiful, powerful” wall along the US-Mexico border are likely to be Mexican cement companies and construction workers.

A public vote to decide which scholarly book has had the greatest impact on Britain has chosen The General Theory of Employment, Interest and MoneyAcademic texts that have shaped our society may range from John Berger’s landmark study of visual culture Ways of Seeing to Germaine Greer’s 1970 feminist classic The Female Eunuch, but when it comes to a vote to decide which was the most influential book for modern Britain, the public echoed America’s Bill Clinton: it’s the economy, stupid.From a list of the 20 texts that shaped our times, curated by leading British academics as part of Academic Book Week, John Maynard Keynes’s The General Theory of Employment, Interest and Money was voted the most significant for modern Britain.Related: John Maynard Keynes died 70 years ago. We ignore his wisdom at our peril | Justin Talbot Zorn and Merle Lefkoff Continue reading...

Every twitch in the stock market is taken as a positive or negative sign, but the truth is we do not know what will happen nextWill Donald Trump as president be good or bad for stock markets? Should investors run for the hills in fear of 1930s-style protectionist policies that may damage global trade? Or should they hang around to enjoy the possible fruits of promised tax cuts and massive infrastructure spending in the US?The debate rages fiercely and daily. Each twitch in the stock market is taken as support for one side of the argument or the other. The Dow Jones industrial average in the US has passed 20,000 for the first time because it is anticipating goodies in store; alternatively, it hasn’t moved terribly far since mid December. Both statements are accurate. Continue reading...

Attempts to secure free-trade agreements before UK actually leaves EU could rapidly sour Brexit negotiations, officials warnBritain’s apparent determination to pursue trade talks with countries outside the EU could significantly undermine its efforts to negotiate a favourable Brexit deal and may well be illegal, diplomats and officials have warned.Theresa May meets Donald Trump on Friday to discuss a post-Brexit transatlantic trade deal the president has said he would like drawn up “quickly”, while Australia has said talks this week should “begin to lay the foundations” of a similar pact with the UK.Related: Brexit: government to publish white paper, Theresa May tells MPsRelated: Citigroup plans new operations away from London after BrexitRelated: EU parliament will be 'very difficult' in Brexit talks, says leading MEP Continue reading...

The Dow, which tracks the largest publicly owned companies in the US, finally breaks record after a sudden rise in the past monthThe Dow Jones industrial average finally broke through the 20,000 barrier on Wednesday morning – a historic high for the leading stock market index and one it has been close to breaching since Christmas.The Dow, which first nearly topped 20,000 on 13 December and again on 6 January, when it came within 0.37 points of the landmark, finally broke through after the opening bell was rung on Wall Street by Ashton Poole, CEO of lender Triangle Capital. When the closing bell was rung by executives from InBev, brewers of Stella Artois, traders whooped and cheered a new milestone in the index, which closed at a record high of 20,068.Great! #Dow20K https://t.co/wXFhXBLgagRelated: Dow Jones hits record high – is Trump good for stock markets? Continue reading...

Two former members of the Bank of England interest rate-setting committee discuss the outlook for the UK economyProfessor of economics at Dartmouth College, New Hampshire, and former member of the Bank’s MPC from June 2006 to May 2009Related: How has the Brexit vote affected the UK economy? January verdictRelated: Brexit economy: weak pound stokes inflation as jobs market cools Continue reading...

The latest monthly Guardian analysis finds a spending slowdown and article 50 jitters pointing to a challenging year• Help fund our journalism by becoming a Guardian supporterThe pressure on the pound from Britain’s vote to leave the EU is stoking inflation, denting household finances and putting a brake on spending, according to a Guardian analysis.Official figures this week are expected to confirm the economy enjoyed a strong finish to 2016 as companies and consumers continued to shrug off the shock of the Brexit vote. But signs of a spending slowdown, corporate jitters around the triggering of article 50 and rising prices point to a more challenging growth outlook in 2017.Related: How has the Brexit vote affected the UK economy? January verdictRelated: 'It's a crisis that keeps on hurting' - experts debate Brexit watch data Continue reading...

How has the economy reacted to the vote to leave the EU? <a href="https://www.theguardian.com/business/series/brexit-data-snapshot">Each month</a> we look at key indicators to see what effect the Brexit process has on growth, prosperity and trade in the UK Continue reading...

Despite spending the world’s second-largest amount on automation, Australian companies are not ready for robots – or for retraining staffA survey of business leaders has found Australian companies are the worst prepared for the arrival of artificial intelligence (AI) technologies among selected major economies, despite spending the second-largest amount of money on automation.

Donald Trump is right to dump the 12-nation trade pact – for all the wrong reasonsIn tone and substance Donald Trump is a divider, not a unifier. His grating bombast at last Friday’s inauguration presaged a few days of overbearing, preening speeches that have alienated sceptics and enthralled supporters. The new US president is intent on pressing the buttons of his electoral base by peddling crude nationalism. He’s not building bridges, but walls. Such sentiments lace President Trump’s pronouncements on trade in which he – and his advisers – appear to hold pungent views, infused with a distinctly late-19th-century scent of economic nationalist politics. It’s often forgotten that the Republican party discarded what remained of its anti-slavery and free-trade roots to become the party of protectionism in the 1880s. But not by Mr Trump. Like his predecessors of yesteryear the president views the world as being at perpetual war – whether economically with other nations or militarily with “radical Islam” – and espouses a doctrine that combines protectionism with coercive foreign market expansion to secure regionalised economic integration.Yet on one narrow issue, President Trump is right. Withdrawing the United States from the 12-nation Trans-Pacific Partnership is a good move. Conventional thinking is that trade allows nations to gain by doing what they do best and importing the rest. However, recent decades of US-championed globalisation have left a country with record weak productivity and ballooning wealth inequalities, with one in eight working-age men outside the labour force. President Trump stokes and taps this rage at the machine. Barack Obama did make efforts to make elements of trade justice – such as fairer labour and environmental rights – part of the Asian trade pact. But this was undone in the TPP by giving the right to corporates to sue often poorly financed governments in private international tribunals when they believe government regulations, including environmental ones, contravene the pact’s terms. Continue reading...

Thinktank warns over planned tax cuts and infrastructure investment as Congressional Budget Office says current spending plan will add $10tn to debtDonald Trump’s tax-cutting and spending plans could add another $6tn to the US public debt over the next 10 years, independent budget analysts have calculated, as the Congressional Budget Office warned the US’s current spending plans alone could trigger a financial crisis.

Writer and professor, Ashley Dawson, argues in his new book that capitalism is behind our current mass extinction crisis. But installing universal guaranteed income in biodiversity hotspots may be one remedy.

In the teeth of recession, a spirit of entrepreneurialism can take hold. Firms explain how they found opportunities in tough times“The financial crisis was a great time for startups,” says Vikas Shah, a professor of entrepreneurship at the Massachusetts Institute of Technology Sloan School of Management, and adviser to the UK government.

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

All the day’s economic and financial news, as Donald Trump’s protectionist approach alarms the markets.

Prime minister’s offer of support to five key sectors will exploit post-Brexit lifting of EU state aid rulesTheresa May is to signal an era of greater state intervention in the economy as she launches her industrial strategy with a promise of “sector deals”, a new system of technical education and better infrastructure.The prime minister will publish the strategy at a cabinet meeting in the north-west of England, naming five sectors that could receive special government support: life sciences, low-carbon-emission vehicles, industrial digitalisation, the creative sector and nuclear industry.Related: 'Northern powerhouse' to get £556m boost amid warnings of east-west divideRelated: Hurrah for the industrial strategy. At last Britain has a plan Continue reading...

A true march of the makers will turn the tables on our abusive consumer culture and deliver the richer relationship with ‘stuff’ that our economy is crying out forMaterialism has become synonymous with consumerism – wasteful, debt-fuelled and ultimately unsatisfying. But what if we’ve not been looking in the wrong place for happiness, and we’ve just got the relationship badly wrong? Like an abusive relationship, we voraciously acquire things we barely use to fill acres of storage space while underpaid workers sleep in tents outside warehouses that feed our seemingly insatiable desire for more. There must be a better way.This is a vital step if we are to find ways for everyone to thrive while living within environmental meansRelated: The big orange shed that holds the key to Britain’s economic recovery | Aditya Chakrabortty Continue reading...

Growth figures this week are expected to confirm resilience of UK economy. But weaker sterling and higher inflation will dent that, warn economistsOfficial figures this week are expected to provide fresh evidence that the UK economy remained resilient in the face of Brexit uncertainty at the close of 2016 but economists warn Britain is headed for a sharp slowdown this year.