Agreement to issue €10.6bn in two tranches represents climbdown for IMF and comes as Greek unions threaten strikesEuropean officials have hailed a late night deal to unlock €10.3bn (£7.8bn) of much needed bailout cash for Greece as a major breakthrough.However, in Athens unions threatened further strikes in protest aagainst the contentious pension and tax reforms which paved the way for the agreement to be reached.Related: Eurozone unlocks €10.3bn bailout loan for Greece Continue reading...

Greece’s creditors have finally agreed to unlock billions of bailout loans, but Jubilee Debt Campaign says IMF has backed down

Rolling coverage of all the day’s political developments as they happen, including George Osborne and Angela Eagle at PMQs

The International Monetary Fund claims to support health, education and welfare programmes. Yet our research shows enforcing fiscal austerity remains its real concernThe International Monetary Fund (IMF) seeks to promote growth and reduce poverty, but the social consequences of its reforms in the developing world have drawn much criticism.Yet, factsheets, discussion notes (pdf) and public statements tell us that the IMF is now a changed institution. Taking on board the many criticisms of its practices, the organisation reformed itself: social spending is protected, health and education are prioritised, and welfare programmes are supported.Related: IMF and World Bank are losing clout in developing countries | Mark Weisbrot Continue reading...

The International Monetary Fund claims to support health, education and welfare programmes. Yet our research shows enforcing fiscal austerity remains its real concernThe International Monetary Fund (IMF) seeks to promote growth and reduce poverty, but the social consequences of its reforms in the developing world have drawn much criticism.Yet, factsheets, discussion notes (pdf) and public statements tell us that the IMF is now a changed institution. Taking on board the many criticisms of its practices, the organisation reformed itself: social spending is protected, health and education are prioritised, and welfare programmes are supported.Related: IMF and World Bank are losing clout in developing countries | Mark Weisbrot Continue reading...

Campaigners slam Institute for Fiscal Studies as ‘paid-up propaganda arm’ of EU after it predicted hole in UK public financesThe Vote Leave campaign has dismissed the respected Institute for Fiscal Studies as a “paid-up propaganda arm” of the European Union after the thinktank said that leaving the EU would extend austerity by two years.In a report, the IFS, which has built a reputation for independence, said Brexit would result in lower GDP growth and extra borrowing costs that would knock a £20bn-£40bn hole in the government’s finances by 2020.Related: Vote to leave EU would 'condemn Britain to irrelevance', say historians Continue reading...

Campaigners slam Institute for Fiscal Studies as ‘paid-up propaganda arm’ of EU after it predicted hole in UK public financesThe Vote Leave campaign has dismissed the respected Institute for Fiscal Studies as a “paid-up propaganda arm” of the European Union after the thinktank said that leaving the EU would extend austerity by two years.In a report, the IFS, which has built a reputation for independence, said Brexit would result in lower GDP growth and extra borrowing costs that would knock a £20bn-£40bn hole in the government’s finances by 2020.Related: Vote to leave EU would 'condemn Britain to irrelevance', say historians Continue reading...

The only way to ensure that ‘new money’ is put into circulation is to have the government spend it on building houses and upgrading infrastructureAs a biographer and aficionado of John Maynard Keynes, I am sometimes asked: “What would Keynes think about negative interest rates?”It’s a good question, one that recalls a passage in Keynes’s General Theory in which he notes that if the government can’t think of anything more sensible to do to cure unemployment (say, building houses), burying bottles filled with bank notes and digging them up again would be better than nothing. He probably would have said the same about negative interest rates: a desperate measure by governments that can think of nothing else to do.Related: John Maynard Keynes died 70 years ago. We ignore his wisdom at our peril | Justin Talbot Zorn and Merle Lefkoff Continue reading...

The only way to ensure that ‘new money’ is put into circulation is to have the government spend it on building houses and upgrading infrastructureAs a biographer and aficionado of John Maynard Keynes, I am sometimes asked: “What would Keynes think about negative interest rates?”It’s a good question, one that recalls a passage in Keynes’s General Theory in which he notes that if the government can’t think of anything more sensible to do to cure unemployment (say, building houses), burying bottles filled with bank notes and digging them up again would be better than nothing. He probably would have said the same about negative interest rates: a desperate measure by governments that can think of nothing else to do.Related: John Maynard Keynes died 70 years ago. We ignore his wisdom at our peril | Justin Talbot Zorn and Merle Lefkoff Continue reading...

Meeting in Brussels ends in agreement at 2am after IMF waters down its demands to placate Germany and payment is split into two tranchesGreece’s ‘breakthrough’ debt deal – business liveEuropean officials have agreed to unlock €10.3bn in bailout money for Greece as the International Monetary Fund made a significant climbdown in its demand for upfront debt relief for the recession-hit country.

Meeting in Brussels ends in agreement at 2am after IMF waters down its demands to placate Germany and payment is split into two tranchesGreece’s ‘breakthrough’ debt deal – business liveEuropean officials have agreed to unlock €10.3bn in bailout money for Greece as the International Monetary Fund made a significant climbdown in its demand for upfront debt relief for the recession-hit country.

After a marathon meeting, the Eurogroup has agreed to extend bailout loans to Greece... and the IMF are on board too.

After a marathon meeting, the Eurogroup has agreed to extend bailout loans to Greece... and the IMF are on board too.

Long-term analysis says official statistics underplay larger proportion of young people shut out of work, education and trainingOne in six young people in the UK are spending six months out of work, education or training, according to new research that suggests government figures are underplaying youth unemployment.Official figures have shown a drop in the proportion of Neets – young people not in education, employment or training – as the economy has recovered from recession since mid-2011. Continue reading...

Thinktank says lower growth and extra borrowing would offset any benefits from halting what it claims is the £150m a week UK contribution to BrusselsBritain’s leading tax and spending thinktank, the Institute for Fiscal Studies, has warned that leaving the European Union would force ministers to extend austerity measures by up to two years to achieve a budget surplus.In a blow to the Vote Leave campaign, the fiercely independent IFS said the impact of lower GDP growth and extra borrowing costs would knock a £20bn to £40bn hole in the government’s finances by 2020 and leave ministers struggling to balance the books before 2022, two years later than forecast. Continue reading...

Long-term analysis says official statistics underplay larger proportion of young people shut out of work, education and trainingOne in six young people in the UK are spending six months out of work, education or training, according to new research that suggests government figures are underplaying youth unemployment.Official figures have shown a drop in the proportion of Neets – young people not in education, employment or training – as the economy has recovered from recession since mid-2011. Continue reading...

Outgoing boss Richard Banks will benefit to the tune of £211,750 after agreement to sell off mortgage processing operationA deal to outsource mortgage processing at the government-owned Northern Rock and Bradford & Bingley will trigger bonuses for nearly 2,000 employees, including more than £200,000 to the outgoing chief executive, Richard Banks.Banks, whose pay rose by a third to almost £1m last year, has been leading the move to wind down the mortgage books of Northern Rock and B&B, which were bailed out in 2008. At the time the two businesses had 800,000 mortgage customers, now reduced to 238,000 as people have repaid loans or their mortgages have been sold off. Continue reading...

ONS reveals government borrowing at £600m more than expected for April with deficit figures for March also revised upThe chancellor, George Osborne, has fallen behind in his deficit-reduction programme just a month into the new financial year, with the government borrowing more than expected in April.The UK government had to borrow £7.2bn last month to plug the gap between spending and earnings, according to the Office for National Statistics. Continue reading...

David Cameron says falling pound could hit holiday spending and accommodation in latest warning about Britain leaving EUThe cost of a family holiday could rise by £230 and new limits on duty free could put an end to “booze cruises” to the continent if Britain votes to leave the EU, David Cameron is to claim.In the latest warning about the price of Brexit, the prime minister will argue that the cost of holiday spending and accommodation could go up because of the falling pound.Related: Cameron warns against 'self-destruct' vote to leave EURelated: Brexit could risk tourists' safety and push up flight prices, say top travel figures Continue reading...

Desperate for short-term cash, George Osborne is causing long-term damage by selling off Britain’s most prized assets. ‘Everything must go’ is now public policyAlmost everyone who gives the matter serious thought agrees that George Osborne and David Cameron want to reshape Britain. The spending cuts, the upending of the NHS, even this month’s near-miss over the BBC: signs lie everywhere of how this will be a decade, maybe more, of massive change. Yet even now it is little understood just how far Britain might shift – and in which direction.Take austerity, the word that will define this government. Even its most astute critics commit two basic errors. The first is to assume that it boils down to spending cuts and tax rises. The second is to believe that all this is meant to reduce how much the country is borrowing. What such commonplaces do is reduce austerity to a technical, reversible project. Were it really so simple all we would need to do is turn the spending taps back on and wash away all traces of Osbornomics.Related: Privatisation isn't working. It's time for a public service users bill | Cat HobbsRelated: Why do the Tories want to hide who owns our country’s land? | Charles Arthur Continue reading...

Little progress made despite warnings to employers facing skills shortages that they are failing to tap into large pool of talentLess than 9% of vacancies for decently paid jobs in the UK offer flexible working, according to research that claims the lack of such options is keeping millions of people in dead-end jobs or shut out from the labour market.Analysis of more than 5m job adverts found little progress in the past year on offering more flexible options to jobseekers, despite warnings to employers who face skills shortages that they are failing to tap into a large pool of potential workers. Continue reading...

Larry Elliott (Brexit may be the best answer to a dying eurozone, 19 May) paints a grim picture of the European future in making a case for Brexit. But he fails to explain how the UK leaving the EU will help us, or the wider continent. The UK, by virtue of geography and its economic and political structures, is fully impacted by whatever happens in Europe.Related: Brexit may be the best answer to a dying eurozone | Larry Elliott Continue reading...

Fund’s debt assessment calls for ‘upfront and unconditional’ debt relief for Athens or it will refuse to part-fund latest bailoutThe International Monetary Fund has called for “upfront” and “unconditional” debt relief for Greece as it warned that without immediate action the financial plight of the recession-ravaged country would deteriorate dramatically over the coming decades.In a strongly worded assessment, the IMF said that there was no prospect of Greece meeting the draconian terms of its current bailout plan and that interest payments on the soaring national debt would eat up 60% of the budget by 2060 in the absence of debt forgiveness.Related: Greece close to bailout funds after austerity vote, but IMF warns on debt - as it happened Continue reading...

Greek bonds and shares are rallying on hopes that the eurozone will hand over billions in loans tomorrow

The right’s attitude to migration could get even nastier, but a Remain vote will offer Labour a fresh chance to reconnect with ‘red Ukip’Something is happening in the Brexit debate that the polls and the demographic breakdowns are not catching. We know that rightwing Tory grandees are using the campaign as a proxy leadership contest against Cameron. What we don’t know is how the plebeian end of the Leave campaign will react if they lose. My instinct says: badly.The incessant focus of the media on the Brexit debate has made the issue, for some Brexiteers, a visceral, life-defining cause. This is particularly true among younger pro-Brexit people, for whom – as in Scotland – this is the first political thing they’ve ever done. Continue reading...

UK chancellor’s dire warnings are based on worst-case scenarios modelled on best guesses. They are economically flawed but politically powerfulWith one month to go to the referendum, George Osborne is pulling out all the stops. The chancellor has a clear message: a vote to leave the EU is a vote for recession, a house price slump, soaring food prices and hundreds of thousands of lost jobs.The chancellor has been shouting out numbers and lamenting the fate of the “working people of Britain who will pay the price if we leave the EU”. He even talked about “evidence” Britain will spark its own downturn. Continue reading...

Official CPI figures for the price of food and drink are vastly different from those unearthed by an ONS project which ‘scrapes’ supermarket website price dataThe price of food and drink may have fallen faster than official estimates, according to the government body charged with collecting the data.The Office for National Statistics said the official consumer prices index (CPI) figure for food shows that prices have fallen by 3.3% since June 2014, while alcoholic drinks have dropped by 3%.Related: The surprising fall in the cost of the UK’s food Continue reading...

PM and chancellor unveil Treasury report predicting falls in GDP, sterling, house prices and wages in event of BrexitBritish people would be voting to “self-destruct” if they chose to leave the EU because it would cause either a shock or severe shock to the economy, David Cameron has said.The prime minister said voting to stay in the EU was the “moral” thing to do because the financial consequences of leaving could be very bad for UK families.Related: EU referendum: Cameron outlines 'shock' and 'severe shock' scenarios - Politics live Continue reading...

Leave campaigners conjure up a scenario in which the UK can design its own economic environment. But the impact of an EU exit is complexOne reason why the arguments for Brexit are so beguiling is because it’s easy to imagine an alternative world where some of the current laws of economics or politics don’t apply.Leave campaigners have tried to conjure up such a fantasy world in which, after leaving the EU, Britain has an opportunity to design its own economic environment with its ideal configuration of free trade, limited labour mobility, less regulation and foreign investment. They talk of a sovereign nation that will dominate post-Brexit negotiations with our former EU partners and the rest of the world. With the odd unicorn and fairy thrown in for good measure.More worryingly, non-tariff barriers might actually increase following BrexitRelated: Bank's warning of a Brexit double whammy is very handy for Osborne Continue reading...

Inflation would rise and house prices and GDP would fall if Britain leaves EU, chancellor arguesGeorge Osborne is warning that Britain would face a year-long “DIY recession” following a vote to leave the European Union, as he raises the stakes in the referendum battle on Monday with one month until polling day.The chancellor and David Cameron will present a Treasury analysis into the short-term economic impact of Brexit, which claims GDP will be 3.6% lower after two years than it would be if Britain votes to remain.Related: David Cameron suggests defence minister is lying over Turkey joining EU Continue reading...

Report finds planned privatisation of agency and other assets would deprive British public of future incomeSelling off UK public assets such as the Land Registry will leave the government’s finances worse off in the long term as cash from the sale is outstripped by future profits, a new report warns.Before a consultation closing later this week on the Land Registry’s planned privatisation, a leading economic thinktank said the benefits to the exchequer from a one-off sale of the agency would pale in comparison to the income sacrificed in future years. Continue reading...

Fewer than half of consumer payments were cash in 2015, while direct debits were worth £1.22tnBritain has passed another milestone on the path to a cashless society, with 2015 the first year that cash was used for fewer than half of all payments by consumers.Cash usage will be eclipsed by debit cards and contactless payments by 2021, according to Payments UK, which represents the major banks, building societies and payment providers.Related: Contactless payments mean card fraud now happens after cancellation Continue reading...

Alexis Tsipras gained approval by 152 of 153 of his deputies, despite many of them having previously rejected the proposalsThe Greek parliament has approved a fresh round of austerity incorporating €1.8bn (£1.3bn) in tax increases – widely regarded as the most punitive yet – amid hopes the move will lead to much-needed debt relief when eurozone finance ministers meet this week.Alexis Tsipras, the prime minister, mustered the support of 152 of his 153 deputies on Sunday to vote through policies that many have previously rejected.Related: This time in the euro debt crisis, the IMF will come bearing gifts for the GreeksRelated: The choice for Europe: rescue Greece or create a failed state | Paul Mason Continue reading...

Like some of his predecessors, Osborne has to cope with a trade deficit and budget deficit at the same timeBritain’s economic problem is easy to identify. As a nation, we live beyond our means. Consumption exceeds production. Exports are lower than imports, resulting in a balance of payments deficit that has got bigger over time.

Like me, you might be a liberal who loves Uber and Airbnb. But the darker side of the new economy isn’t something we can simply ignoreAs I write this, I’m about to travel to beautiful, sunny Puerto Rico for a brief vacation. If all goes according to plan, there will be keys waiting for me in a mailbox outside an apartment in San Juan, which will hopefully look like the pictures I saw on the Airbnb website.To get to the airport, I’m probably going to take an Uber, partly because I just moved to New York and still feel like a fool trying to wave down a cab, but mostly because calling an Uber is really, truly, ridiculously easy to do.Trading ethics for comfort is par for the course in America Continue reading...

Globalisation is often blamed for falling living standards. But the role of flexible working and self-employment in blighting people’s lives is being overlookedThe rise of Nigel Farage, Donald Trump and Marine Le Pen is often blamed on the angry, reaction of blue-collar workers to decades of falling living standards.The financial crash of 2008 only served to make the situation worse. And so the west finds itself in the grip of powerful protest movements that seek to brush aside failing, sclerotic institutions like the US congress and EU parliament in favour of more locally democratic administrations (or possibly right-of-centre governments with autocratic leaders). Continue reading...

Athens is at another pinch point. But the proponents of austerity ranged against it are starting to turn on each other – and suddenly there is a glimmer of lightAnother Sunday, another vote in the Greek parliament, another self-imposed punishment beating as the parliament in Athens votes through fresh austerity measures. There will be higher VAT and an increase in taxes on all the pleasures of life: coffee, booze, fags, gambling, even pay TV.And just in case Greece might need to tighten its belt by another couple of notches to meet stringent budget targets, there will be additional measures that will kick in if there is any fiscal slippage over the next couple of years. George Harrison started his song Taxman with the words: “Let me tell you how it will be/There’s one for you, nineteen for me.” The Greeks know exactly what he meant. Continue reading...

The inequality that is feeding the bitter, divisive and populist politics now sweeping the westCrisis always brings opportunity. And right now, we are having a crisis of capitalism unlike anything experienced during the last four decades, if not longer. The evidence is everywhere – in rising inequality, in the division of fortunes between companies and workers, and in lethargic economic growth despite unprecedented infusions of monetary stimulus by the world’s governments (a huge $29tn in total since 2008). Eight years on from the financial crisis and great recession, the US, UK and many other countries are still experiencing the longest, slowest economic recoveries in memory.This has, of course, diametrically shifted the political climate, creating a paradigm of insiders versus outsiders. In the US, Donald Trump and Bernie Sanders are different sides of the same coin; in Britain, Jeremy Corbyn is an equally dramatic response to establishment politics. The challenges to the political and economic status quo are not going away anytime soon. A recent Harvard study shows that only 19% of American millennials call themselves capitalist, and only 30% support the system as a whole. Perhaps more shocking, the numbers are not much better among the over-30 set. A mere half of Americans believe in the system of capitalism as practised today in the US, which is quite something for a nation that brought us the “greed is good” culture.We speak about social “capital” and securitise everything from education to critical infrastructure to prison termsHow do we curb the 40-year trend of financialisation and its perverse effects on business and society? Continue reading...

Labour leader Jeremy Corbyn calls for a serious debate about the creation of wealth in Britain as he delivers a speech at his party’s state of the economy conference in London on Sunday. While agreeing that wealth creation is a good thing, Corbyn says there should be greater discussion on how that wealth is shared. He also condemns the gender pay gap, saying that it is ‘quite simply wrong’ Continue reading...

Opposition leader says growth demands major change in way economy is run, as shadow chancellor vows to rewrite rulesJeremy Corbyn said the UK needed a serious debate about wealth creation, as he called for a new style of economics to tackle Britain’s “grotesque inequality”.Closing a Labour state of the economy conference in central London on Saturday, the party’s leader said: “Wealth creation is a good thing: we all want greater prosperity. But let us have a serious debate about how wealth is created, and how that wealth should be shared.”Related: Would a rent cap work for tenants facing £1,000-a-month rises?Related: Osborne's focus on UK's deficit deters scrutiny of his weak economic plan Continue reading...

Perez has spent his years at the helm of the labor department fighting for paid leave, overtime pay and visiting workers on the ground – and he’s not done yetIt’s been a busy week for the US labor secretary, Tom Perez.On Tuesday night, the White House announced that the Obama administration had finalized a new rule that could potentially expand overtime benefits to 4.2 million more Americans. On Wednesday morning, Perez boarded Air Force Two and with Vice-President Joe Biden and flew to Columbus, Ohio, where they made the official public announcement inside Jeni’s Splendid Ice Creams.Related: Millions could get a raise under Obama administration's new overtime rulesRelated: The jobs doctor is in: US Labor secretary makes unemployment 'house calls' Continue reading...

Chancellor predicts Brexit would cause an ‘economic shock’ but pro-leave minister dismisses ‘extraordinary claim’House prices could take an 18% hit over the next two years and there will be an “economic shock” that will increase the cost of mortgages if the UK votes to leave the EU, George Osborne has warned.Related: Rents and property values would drop after Brexit, say landlordsRelated: Third of Tories could defect to Ukip if UK stays in EU, says FarageRelated: Will staying in EU really lead to an influx equal to Scottish population? Continue reading...

While technology has undoubtedly improved our lives, history shows we need rules and regulations to ensure workers can share in the gig economy’s wealthAcross the country, new companies are using the internet to transform the way Americans work, shop, socialize, vacation, look for love, talk to the doctor, get around, and track down a 10ft feather boa – which was my latest Amazon search.These innovations have improved our lives in countless ways, reducing inefficiencies and leveraging network effects to help grow our economy. This is real growth.Related: Left-leaning users veer right on regulating Uber and Airbnb, study findsLaws helped make sure that the increased wealth generated by innovation would be used to build a strong middle classWorkers deserve a level playing field and some basic protections, no matter who they work for or where they work Continue reading...

Food and drink production up after localised floods and orders on the rise particularly from domestic market, says CBI reportBritain’s manufacturers have enjoyed a pick-up in output, largely thanks to food and drink production getting back up and running after flooding hit factories earlier this year.The business group CBI said its latest poll of manufacturers suggested orders had improved in recent weeks, particularly from the domestic market, bringing respite to a sector that has been hurt by weak export demand and an uncertain UK outlook. Continue reading...

Times were good in the last years of Bill Clinton’s presidency. But to put the arch-deregulator in charge of an economy wrecked by financial bubbles is sheer follyDonald Trump’s campaign to “Make America Great Again” is one big, flatulent exercise in delusional nostalgia, as so many have noted. Given the likely outcome of the American presidential contest, however, it is Hillary Clinton’s delusional nostalgia that may ultimately prove more harmful for the country.Campaigning in Kentucky recently, she promised that, should she be elected, she would task former president Bill Clinton with “revitalizing the economy, because he knows how to do it”. A few minutes before, she had recited her husband’s qualifications for this job: “In the 90s, everybody’s income went up, not just people at the top. We lifted more people out of poverty than at any time in our recent history.” And so on.Bill Clinton took some time out to dynamite the federal welfare system, then he came back and deregulated the banks Continue reading...

French finance minister calls on European commission to intervene, saying that resulting group would stifle competitionA planned £20bn merger between the London Stock Exchange and Deutsche Börse poses a threat to competition and the European economy, the French finance minister has claimed.Michel Sapin said a combination of the two would make it too dominant and called on the European commission to intervene. He told Reuters: “I want to express the concern of the French government on this tie-up. We have doubts about the consequences this could have for the financing of the real economy in France and Europe.Related: LSE's merger with Deutsche Börse will trouble shareholders Continue reading...

Chancellor’s tax and government spending cuts do not amount to a long-term strategy: Labour has a chance to take the initiativeDespite repeatedly missing his own targets, George Osborne has so far done well out of his decision to focus attention on the deficit. In keeping the spotlight on the public finances, the chancellor has avoided scrutiny of his broader economic strategy.The masterstroke was to convince the public that excessive spending by Labour caused the financial crisis. This was an impressive feat of persuasion: when the crisis began in 2007, public debt was lower as a share of GDP than when Labour took power a decade earlier. Despite finding little support in the facts, the story stuck, thanks in part to a media that failed to question Osborne’s narrative.Related: Making things matters. This is what Britain forgot | Ha-Joon Chang Continue reading...

While a rise would suggest growing confidence in the US economy, it risks giving global investors a chillBang, there goes 100 points off the FTSE 100. Suddenly, the index is within 60 points of 6,000, a level last seen in late-February, which was roughly when investors recovered from their new year fretfulness and decided the gloom, perhaps, had been overdone.

Underlying weakness in British economy may necessitate ‘additional monetary stimulus’, says policymaker Jan VliegheA top Bank of England policymaker has warned that even if Britain votes to stay in the EU, underlying weakness in the economy could mean that more support is required from the Bank.Jan Vlieghe, one of the nine policymakers who vote on interest rates, has previously floated the idea of them being cut below zero. Speaking on Thursday, he again raised the prospect of rates coming down further from their record low of 0.5%, when he said the economy could require “additional monetary stimulus” if it does not rebound after a remain vote in the EU referendum on 23 June. Continue reading...

Revolt over lack of bill to protect NHS from EU trade deal threatened PM with first defeat on Queen’s speech since 1924David Cameron has moved to quell a rebellion by Conservative Eurosceptics over a controversial trade deal between the EU and US, after he faced the first government defeat on a Queen’s speech since 1924.The prime minister has been forced to accept a critical amendment about the Transatlantic Trade and Investment Partnership (TTIP) after it was signed by 25 Tory backbenchers, and backed by Labour, SNP and Green MPs.