Consumer spending and retail growth are stronger but manufacturing is falling back, figures showBritish businesses are becoming more reluctant to spend, according to the Office for National Statistics, as the UK relies heavily on consumers to prop up the post-Brexit vote economy.In its latest monthly snapshot of the UK economy, the ONS said there were signs that business investment growth was starting to slow. Investment by companies grew by 0.9% in the third quarter, down from 1% in the previous quarter. It fell by 1.6% on an annual basis.Related: UK office construction forecast to plunge after Brexit vote Continue reading...
You’d need to go back 150 years to find the last time wage growth was this stagnant, according to the governor of the Bank of England. But even then there were a few reasons to be cheerfulWhen Mark Carney insisted in a speech at Liverpool John Moores University that the conditions through which we are now living are “exactly the same†as those that British citizens endured during the “lost decade†of the 1860s, he was taking a bit of rhetorical licence. The past is never simply the present dressed up in funny clothes, and the analogy between today’s painful realities and those of 150 years ago doesn’t quite hold. And yet, the governor of the Bank of England had a point.When Overend Gurney collapsed in 1866, it undid once and for all the sense that, give or take a few individual misfortunes, capitalism was a moral force that rewarded skill and hard work. Toppling under a mountain of unsecured debt, the joint stock bank dragged down 200 businesses and a broad tranche of private investors with it, from courtiers to grocers. As with the Northern Rock crisis in 2007, there were queues of panicky investors lining the streets. More profoundly, now came a dawning realisation that bad things could happen to good people. Thanks to the publication of Charles Darwin’s Origin of Species in 1859, the universe increasingly seemed not only godless but, what was perhaps even worse, indifferent to the sufferings of ordinary folk.Related: Mark Carney: we must tackle isolation and detachment caused by globalisation Continue reading...
Wonderful news that Rob Wilson, the junior minister responsible for libraries, has recognised that libraries provide a vital public service to communities and has made an extra £4m available (Libraries to get £4m to diversify, 2 December).Here in Suffolk, our Industrial Provident Society (IPS) has been incredibly successful in managing its reducing budget for the county libraries. However, this is likely to change in the light of proposed cuts. Suffolk Libraries IPS will have to save a further £230,000 in the next financial year (2017/2018). This is on top of the previous year’s cut of £350,000. Over the past five years the total budget will have shrunk from almost £9m to a little over £5m if these latest cuts go ahead. Continue reading...
Market expert says move could signal end of record low interest ratesThe first evidence has emerged that the era of record-low fixed-rate mortgages may be coming to an end after HSBC withdrew its “cheapest-ever†deal and increased rates on other products.
Bank of England governor urges policymakers to do more to share out the gains from global trade and technologyThe governor of the Bank of England has issued a rallying cry to policymakers across advanced economies to tackle the causes of a growing sense of “isolation and detachment†among people who feel left behind by globalisation.Warning that the UK was suffering its “first lost decade since the 1860sâ€, Mark Carney said that one of the reasons for the Brexit vote was a sense among people that they had lost control of their futures.Related: Mark Carney: European economies face hit if cut off from City of London Continue reading...
Asian Infrastructure Investment Bank releases draft energy strategy prioritising renewable projectsThe Australian government is lobbying for the Asian Infrastructure Investment Bank to put more emphasis on coal and nuclear after concerns renewable energy projects were being prioritised.Draft guidelines were circulated by the bank that suggest it should prioritise investments in renewable energy projects across Asia while the Turnbull government has argued fossil fuels will play a significant role in energy generation in the region for decades to come..Related: The new China-led Asian bank is a global financial system shake up Australia should be part of | Matt ThistlethwaiteRelated: World Bank welcomes China's new bank as means to fight poverty Continue reading...
With eurozone authorities willing to bend their own rules, a solution could be at hand – though it would fix few long-term issuesInvestors’ ability to look on the bright side on political turmoil is remarkable. In the case of Italy, the departure of Matteo Renzi, the market-friendly centre-left prime minister, was followed quickly by the thought that the crisis in the country’s banking system may, counterintuitively, become easier to address.That wasn’t last week’s theory, of course. Back then, Renzi’s survival was seen as critical to encouraging private sector investors to cough up billions of euros of new capital to refinance the likes of Banca Monte dei Paschi di Siena and UniCredit.Related: How Italy became this century's 'sick man of Europe' Continue reading...
The Bank of England governor’s look back at previous crises suggests action needs to be taken to stop capitalism from eating itselfHistory repeats itself. That was the message from Mark Carney as the governor of the Bank of England sought to draw some conclusions about the future of globalisation at the end of a turbulent year.Carney’s argument was that the current lost decade is not the first. The 1860s had its own financial crisis: the run on Overend, Gurney & Co was the last to befall a UK high street bank until the queues formed outside Northern Rock in 2007. It was a time of rapid technological change and a prolonged period of falling real wages.Related: Mark Carney: we must tackle isolation and detachment caused by globalisation Continue reading...
by Rowena Mason Deputy political editor on (#243KE)
Chancellor and Brexit secretary say meeting aimed to examine impact of UK vote to leave the EU on financial sectorBanking leaders from Goldman Sachs and HSBC were among those who met the chancellor and the Brexit secretary to discuss how to keep financial services in the UK after leaving the European Union.Philip Hammond and David Davis hosted a gathering at the Shard tower in central London on Monday, amid concern among many banks about losing “passporting†rights and the potential shock of Brexit if there is no transitional deal to cushion the impact of leaving the EU.Related: Brexit leaves London-based banks facing 'nightmarish' choicesRelated: Hard Brexit will cost City of London its hub status, warns Bundesbank boss Continue reading...
Joining the euro removed the country’s only means of overcoming economic troubles and restoring competitivenessOn New Year’s Day in 2002, Italians gathered in Rome to throw their lire into the Trevi fountain. There were celebrations as Italians took possession of the new euro notes and coins that became legal tender as the clocks struck midnight.But hopes that the advent of the single currency would provide a fresh start for Italy’s economy were misplaced. The growth performance of the eurozone as a whole has been poor, but Italy’s has been dismal. Greece and Spain at least had booms before their painful busts; Germany and France have managed to claw back the ground lost in the deep recession of 2008-09.Related: Euro falls to 20-month low after Italy government's referendum defeat Continue reading...
World’s oldest bank is seen as most at risk from economic fallout of Prime Minister Matteo Renzi’s poll defeatA rescue deal for the world’s oldest bank – Banca Monte dei Paschi di Siena – hung in the balance on Monday after Italian voters rejected constitutional changes and plunged the government into crisis.Shares in MPS, which was founded in 1472 , fell amid fears the resignation of Prime Minister Matteo Renzi will affect its attempts to clinch a €5bn (£4.2bn) lifeline from investors.Related: Will Italy’s failing banks trigger financial collapse across Europe? | Philip Molyneux Continue reading...
PMI survey shows fastest rate of growth since January but business confidence has been shaken by spectre of inflation and political uncertaintyBritain’s economy looks on course for a solid finish to the year after a closely watched business survey for last month smashed expectations, although worries about inflation and political uncertainty are making firms nervous about 2017.Companies in the UK’s services sector, which spans banking to hotels, enjoyed the fastest growth in activity since January as they continued to recover from a short, sharp downturn following the Brexit vote. The report chimed with other indicators suggesting businesses and consumers have shrugged off the referendum result for now.Related: Demand is weak and investment’s faltering. That’s OK thenUK firms' input costs have risen at the fastest rate for 5 years so far in Q4. Either margins will be squeezed or consumer prices will rise pic.twitter.com/Mjcs5JwC4n Continue reading...
Company purchases and cheap finance deals drive surge but economists warn private demand is falling as consumers are put off by Brexit vote uncertaintyNew car sales in the UK continued to rise last month as growing demand from businesses made up for falling demand from private buyers.A total of 184,101 vehicles were registered in November, a rise of 2.9% from a year earlier, according to the Society of Motor Manufacturers and Traders. So far this year, more than 2.5m new cars were registered – a record for the 11-month period. Continue reading...
The single currency could sink to US80c, according to analysts, as a vital rebooting of Italy’s fragile banking sector is set be delayed againThe euro has fallen to a 20-month low against the dollar and investors fled riskier assets after Italian prime minister Matteo Renzi said he would resign on Monday following a crushing defeat on constitutional reform.Renzi’s defeat threatens to undermine efforts to stabilise the country’s shaky banking system and deals a wider body blow to the European Union, which is already reeling under anti-establishment anger in the wake of June’s Brexit vote.Related: Italy referendum: Matteo Renzi to resign after defeat as Austria rejects far right – liveEU28: Euro reacts to exit polls in Italy's constitutional referendum. #referendumcostituzionale #ExitPolls #maratonamentana #Euro pic.twitter.com/TV3mGJVIdMIm going to keep ReTweeting this post I made on July 5th after #Brexit until people get it. The EU is in a much worse position than UK #EURO https://t.co/xTU7eoRzTCRelated: Referendum result may lead nowhere for Italy's Five Star and Northern LeagueNigel Farage: Hope the exit polls in #Italy are right. This vote looks to me to be more about the #Euro than constitutional change. pic.twitter.com/WBIUVsC5Hj Continue reading...
Sector regaining ground after sluggish 18 months but will still contract in 2017, industry report saysManufacturers are enjoying a “delayed recovery†with increased output and orders and optimism for jobs, according to a report published on Monday.The manufacturers’ organisation the EEF said the sector was now regaining ground after a “sluggish†18 months. Despite the improvement in conditions, the EEF said it was still forecasting that manufacturing will contract in 2017. Continue reading...
Sunday’s referendum has become a vote on a cocktail of problems and pressing national issues. But its most far-reaching impact will be a financial one‘All Italians know the government has a problem when it comes to making decisions. It’s just that people are divided over how to make the situation better.†So said one Italian government official last week as he denied that Sunday’s referendum was a verdict on Matteo Renzi’s government, the euro or the European Union.Unfortunately, the referendum has become a judgment on all three, along with the constitutional amendments it is supposed to be about, making it difficult to unpick the views of voters when all the votes are finally counted. Continue reading...
The government is hoping low inflation will keep the electorate from getting restive. But it will only be achieved thanks to feeble consumer and public spendingAs the nation’s shoppers turn their thoughts to Christmas, a dark cloud looms. Could it be that rising inflation will spoil the party? Only a few weeks ago, Theresa May, Philip Hammond and the rest of the cabinet could have been forgiven for worrying about the impact of inflation after most economic forecasters predicted it was about to send shop prices sky-rocketing. And, worse, more of the same is expected next year, with rising prices eating into disposable incomes to more than halve Britain’s GDP growth rate.In recent days the news has been better. Comments by Hammond and Brexit minister David Davis holding out the possibility of a more accommodative stance towards the European Union have pushed up the value of sterling against the dollar and euro and cut the chances of a much more expensive festive period. Continue reading...
Theresa May is leading the country towards a total and economically calamitous EU divorce in 2018By any measure, it has been a bad week for hard Brexiters and Theresa May’s government. Problem is, the two have become all but synonymous. Thursday’s shock byelection result in Richmond Park showed that the pro-Europe convictions of nearly half the country’s voters cannot wisely be ignored. Conservative supporters were alienated by May’s “pandering†to hardline party zealots and Ukip fellow travellers, the victorious Liberal Democrats claimed. “One of the things that concerns a great deal of people in this constituency is… the Conservative government seems to be shifting very rapidly towards the right,†said Sarah Olney, the unashamedly Europhile winning candidate.There is a widely shared perception that May, far from reuniting the country in the wake of the EU referendum, as she promised, is cementing and entrenching divisions. It would be wrong to see in the byelection outcome definitive proof that the national mood has radically shifted in the past six months. Most Richmond voters favoured Remain in June. But the scale of Tory defections suggests deep unhappiness with May’s subsequent, lopsided approach. It is as though she and her ministers have wholly dismissed the views of the 48% who rejected Brexit, just as they arrogantly rejected last month’s impartial, legally sound high court judgment that parliament must be consulted prior to the triggering of article 50.Related: We’re marching towards a mad Brexit. Someone must speak for the 48% | Jonathan FreedlandRelated: Brexit: rising frustration across EU at Britain's unclear exit strategy Continue reading...
He made the company a punchbag during his anti-globalisation election crusade, and now takes credit for saving jobs. But how did it happen, and who really won?Donald Trump scored an early public relations win this week as he took the credit for persuading a US firm not to outsource jobs to Mexico. But the case – and its implications – are more complex than they first appeared.Related: Carrier deal saves Indiana jobs, but Trump critics fear dangerous precedentThe vast majority of Americans will see nothing more than the headline that just says Trump saved 1,000 jobsIt's terrible if businesses make decisions to please politicians rather than customers and shareholders Continue reading...
Unemployment rate falls to lowest level in nine years but concerns remain over slow pace of wage growth in US economyAn interest rate rise in the US looks a near certainty after another solid month of job creation in the world’s largest economy.In a boost to Donald Trump as he prepares to move into the White House next month, government figures showed the unemployment rate dropped to a nine-year low in November and employers hired new workers at a faster pace as they banked on a rebound in economic growth.Related: Prepare for a US interest rate rise before Christmas Continue reading...
Donald Trump and Theresa May are not flagbearers in the distance. We are already some years into a phase of deglobalisationThe world is getting smaller. That is the unbidden meme of our generation, thanks to the juggernaut of growth unleashed by an outpouring of global bodies, free trade agreements, technology and international capital. Every business and person now has a global reach and audience.Today’s paradigm is globalisation and free trade is its evangelical mantra.The hand-wringing is half a decade too late, because globalisation is already dead and we are already some miles into the journey back. Continue reading...
Andy Haldane says UK at risk of sharp slowdown as BoE weighs up conflicting forces of inflation from weak pound and the Brexit vote denting confidenceThe Bank of England should be wary of rushing into interest rate rises to curb inflation, according to its chief economist, in a warning that the UK economy is vulnerable to a sharper slowdown next year than forecasts would suggest.Andy Haldane said he was comfortable with the Bank’s current wait-and-see stance on borrowing costs as it weighs up the conflicting forces of a lower pound stoking inflation and the Brexit vote denting business confidence. Continue reading...
With an extra 178,000 jobs created in November and growth accelerating fast it seems unlikely the Federal Reserve can delay a rate rise any longerInterest rates in the world’s biggest economy are going up before Christmas. That was the clear message from the latest set of US employment figures measuring job creation in November.Non-farm payrolls – the bellwether of demand for labour in the US – rose by 178,000, almost bang in line with what Wall Street was expecting. This was solid rather than spectacular, but good enough to trigger a move from the Federal Reserve, America’s central bank, when it meets later this month. Continue reading...
President Michel Temer is aiming to enshrine 20 years of austerity in the constitution. It amounts to a coup against the poor – and against democracy itself
Soaring costs indicate pound’s fall since Brexit vote is increasing import costs for British businessesBritish construction firms continued to rebound from their post-referendum soft patch last month but reported the steepest rise in prices for more than five years.In the latest sign that the pound’s sharp fall since the Brexit vote is raising import costs for UK businesses, the poll of construction firms (pdf) showed they reported a “steep and accelerated rise†in what they were paying for building materials in November. That put the rate of inflation in the sector at the highest since April 2011, according to the survey’s compilers IHS Markit.Related: London's 73-storey Trellis skyscraper gets green light Continue reading...
Calls to turn the bailed-out Royal Bank of Scotland into a network of local lenders are bound to intensify now that it has failed its annual health checkEight years after the banking crisis, Royal Bank of Scotland (RBS) has failed its annual health check. If this were a medical before getting life insurance, it would be like a doctor telling the patient to get fit; it is not notice of sudden death.Related: RBS fails Bank of England stress testRelated: RBS may be fined more than $12bn to settle US mis-selling scandal Continue reading...
Italians vote on Sunday in a referendum that could seal Matteo Renzi’s fate as PM. We look at why the markets are worriedItalians are voting in a referendum on 4 December that is causing concern across Europe after the UK’s vote to leave the EU and Donald Trump’s US presidential election victory. The vote could lead to the resignation of Matteo Renzi, the prime minister. However, the fallout from a no vote on Sunday could be economic and financial as well as political.Related: After Trump victory, Italy referendum is seen as test of populism's riseRelated: Italy referendum: all you need to know about Renzi's crunch vote Continue reading...
Latest industry figures show consumers face rising costs for food and household goods in coming monthsGrowth in the UK’s manufacturing sector has eased and the weak pound is further driving up firms’ prices, according to an industry survey.The closely watched manufacturing purchasing managers’ index fell to 53.4 in November from 54.2 in October, according to the latest monthly snapshot from Markit/CIPS. A reading above 50 signals expansion; a reading below points to contraction. Continue reading...
Voters warmed to the idea of spending our own money on our own priorities – now the chancellor is showing the wayAs we leave the EU, the UK can turn its back on the austerity policies that have been the hallmark of the euro area. My main argument against staying in the EU has been the poor economic record of the EU as a whole, and the eurozone in particular. The performance has got worse the more the EU has developed joint policies and central controls.Related: Housing gets £4bn boost to increase number of new homesWhy do we have a balance of payments surplus with the rest of the world but a deficit with our EU neighbours? Continue reading...
A draconian regime could deprive British firms of vital workers, says CBI director general Carolyn Fairbairn as report on regions is unveiledTheresa May must avoid making any new immigration system too bureaucratic or risk harming Britain’s businesses, the CBI director general Carolyn Fairbairn has warned.Sources suggest ministers hope to negotiate a Brexit deal that would allow the government to control high- and low-skilled immigration. Continue reading...
Katie Allen poses three crucial questions on how to improve Britain’s productivity (The road to greater productivity is via pay and flexibility, 28 November). Namely how it links in with low pay, how it interacts with working hours, and what it tells us about the importance of staff taking ownership of their work.I have put a proposal to the government that sets out to cover each of these points. I have proposed a network of public employment services, driven locally by Jobcentre Plus and sustained by City Deal funding, with the specific aim of helping low-paid workers to climb the earnings ladder and craft their jobs to match their skills and circumstances. Continue reading...
Taxpayer-backed bank unveils plan to bolster its capital by £2bn after faltering in annual health check of UK banking systemRoyal Bank of Scotland was the biggest failure in the Bank of England’s annual health check of the UK banking system and has embarked on a new plan to bolster its financial strength by £2bn.The Edinburgh-based bank, which is 73% owned by taxpayers, is to cut costs and reduce its exposure to risky assets after the results of the toughest tests yet on the banking system were published on Wednesday.Related: Bank of England stress tests released – business live Continue reading...
by Rupert Neate and Edward Helmore New York on (#23FCZ)
Donald Trump appoints ex-Goldman Sachs banker who says he will oversee ‘the largest tax change since Reagan’Donald Trump has nominated Steven Mnuchin, a Goldman Sachs banker-turned-Hollywood movie financier with no government experience, as US Treasury secretary.Mnuchin, a multimillionaire who was dubbed a “foreclosure king†for buying up distressed mortgages and evicting thousands of homeowners during the financial crisis, immediately announced he would oversee “the largest tax change since Reagan†and said his “No 1 priority is tax reformâ€.Related: 10 economic consequences of Donald Trump's election winRelated: Donald Trump claims he is leaving his business interests 'in total' Continue reading...
by Phillip Inman Economics correspondent on (#23DY2)
Consumers view economy with increasing despondency as businesses worry recovery after Brexit vote is starting to recedeConsumer and business confidence tumbled in November amid concerns the UK economy would struggle to grow after a post-referendum slowdown, two surveys have found.Consumers were “resolutely gloomy†and viewed the economy with increasing despondency, while a broad range of businesses said they were worried the economic recovery after the Brexit vote was starting to recede. Continue reading...
Zoe Williams (Forget Fidel Castro’s policies. Above all, he was a dictator, 28November) bases her judgment of Castro on a frighteningly simplistic division of states into democracies, by implication multiparty ones, and dictatorships, by implication any state that is not multiparty. She then makes a blanket assertion that the latter are so inherently bad that their actual record of government is irrelevant. This is to ignore all the complex details of political structures by which a population can be oppressed or empowered. For us, from a practical point of view, the worst danger of such thinking is to exaggerate the benefits of our political system.While Castro may be rightly criticised for executing Batista supporters, even those guilty of torture and multiple murder, it may be salutary to remember that back then, in 1959, Britain executed people accused of a single murder. It was also a time when British forces were imprisoning and torturing Kenyans, and those of the French multiparty democracy were torturing and killing Algerians. Even those crimes pale before the horrors the US multiparty democracy was shortly to unleash on Vietnam. Continue reading...
Companies run like piggy banks for a select few are crippling our economy. The practice must stopAs important as the detail of the government’s proposals to change the way big businesses are run is the context. Today’s green paper comes in the year of Brexit and Donald Trump, at a time when voters, as Theresa May recently said, “see the emergence of a new global elite who sometimes seem to play by a different set of rules and whose lives are far removed from their everyday existenceâ€. Well ensconced in that global elite are the chief executives of major companies. Think of Philip Green, whom MPs have accused of letting BHS die. Think of Mike Ashley, apologising for staff mistreatment at Sports Direct. Think of all those bumper pay deals at FTSE 100 firms.As the High Pay Centre points out, the average FTSE 100 CEO is now earning as much as 147 of their own employees. The average CEO pay package comes in at £5.5m a year. Those are just the front-page stories: leaf through the business section of any paper and chances are it will contain some tale of fat-cattery. Crucially, all this is happening in the middle of the sharpest pay squeeze for 70 years and historic spending cuts. Continue reading...
Theresa May and her cabinet refuse to move on from ideas that hurt the poor and help the rich. It’s a collective death wishOn 11 September 1929 the Wall Street Journal quoted Mark Twain for its thought of the day: “Don’t part with your illusions; when they are gone you may still exist, but you have ceased to live.†Whatever that day’s subeditors thought they were doing, their choice now sounds as falsely confident as a rambler about to step off a ledge.Markets were already in turmoil, America was sinking into economic depression and running through the daily news was a thin, high note of hysteria. Still, Irving Fisher and the other wise men foresaw only the slightest of setbacks, and the brokers couldn’t take the cash fast enough. As John Kenneth Galbraith writes in his classic, The Great Crash 1929: “The end had come, but it was not yet in sightâ€.Related: George Osborne made more than £300,000 in a month from speechesThe Theresa May modus operandi can be summed up as: Cameroonism with a very quick paint job. Continue reading...
PA Consulting accused of overcharging the taxpayer and lack of clarity about invoices relating to £19m of government contractsA management consultancy firm that provided experts to a government agency has been accused by MPs of “potential sharp practices†that resulted in the cancellation of a £19m government contract.PA Consulting was also blamed by a parliamentary committee on Monday of breaches of corporate governance after appearing to mislead the government agency UK Trade and Investment when providing trade specialists to attract overseas investors. Continue reading...
Disclosing the difference between the chief executive’s pay and a company’s median earner is a modest proposal whose time has comeExecutive pay reforms do not come much more modest than the idea of requiring public companies to say how much the chief executive is paid relative to the firm’s median earner. Nothing would have to happen as a consequence. Shareholders would not be asked formally if the ratio is too high or too low. The boss’s pay would not have to be capped at a fixed multiple. Instead, the hope is that boards, occasionally, might be embarrassed into exercising a little discipline.Yet even this gentle proposal, likely to be included in the government’s green paper on corporate governance on Tuesday, is running into resistance. Pay ratios are too crude and could mislead, runs one argument, because an investment bank, where lots of people tend to earn megabucks, could seem to be a “fairer†employer than a supermarket chain employing tens of thousands of shelf-stackers and checkout assistants. Worse, pay ratios could prove inflationary if bosses demand a higher place in a theoretical league table, runs another objection. Continue reading...
President of European Central Bank says Britain should address uncertainty over how withdrawal from EU will play outMario Draghi, the president of the European Central Bank (ECB), has urged the British government to disclose more information about its plans to leave the EU.He told the European parliament’s committee on economic and monetary affairs that the UK should address the uncertainty over how Brexit will play out.Related: Bank of England prepares to protect City firms from hard Brexit Continue reading...
The new president should seize the chance to tackle issues such as investment, tax reform and job creationDonald Trump’s victory in the US presidential election surprised most of the world. But the president-elect is not finished defying expectations. Contrary to the predictions of many experts, stock markets have rallied strongly since his victory, with the three major US indices reaching record highs while the dollar has soared. Explaining these unexpected responses could provide a glimpse of what the next few months have in store for markets.Before the election, most analysts predicted that a Trump win would trigger a large stock-market selloff and a rush into low-risk government bonds. And, indeed, when the results began rolling in, that is what happened, beginning with Trump’s dramatic victory in Florida and gaining traction as his lead in the electoral college grew. By the time that lead appeared insurmountable, the Dow Jones index of US stocks had fallen by 800 points, and the broader S&P 500 was “limit downâ€. Moreover, the dollar began to slide, and a flight to quality in US Treasury markets caused bond yields to plummet.Related: 10 economic consequences of Donald Trump's election win Continue reading...
From the French right’s selection of Fillon to the Italian referendum and Austrian election, Europe’s centre is oblivious to its own existential crisis. They might want to dust off their copies of Thomas Mann’s Death in Venice‘Good news for Europe,†read the first line of the analyst note. If I tell you it was from an investment bank that backed eurozone austerity to the hilt, you might guess what the good news is. Yes, François Fillon (the French Thatcher) stands poised for a runoff with Marine Le Pen (the French Mussolini) in next year’s presidential election.What could be better news for the investment banking community than having all non-fascist voters, left, right and centre, obligated to vote for a politician who wants to slash the welfare state, sack workers and extend the working day?Related: François Fillon is as big a threat to liberal values as Marine Le Pen | Natalie Nougayrède Continue reading...
The IMF and the OECD’s predictions of economic gloom went awry, and continued fallbacks may see them lose credibilityIn the months leading up to the EU referendum in June, George Osborne had two people he could always rely on to back the argument that Brexit would have immediate, dire consequences for the UK economy. One was Christine Lagarde, the managing director of the International Monetary Fund. The other was Ãngel GurrÃa, the secretary general of the Organisation for Economic Co-operation and Development.Osborne’s belief that voters would be swayed by fears of recession meant Lagarde and GurrÃa popped up regularly during the campaign. In the event, the plan did not work. Those who voted to leave the EU appeared sceptical about the forecasts produced by the IMF and the OECD – and those from the Treasury and the Bank of England, for that matter.Related: The IFS was not wrong to describe shrinking UK pay packets as dreadful Continue reading...
The US president-elect’s policies are likely to be good for domestic growth – but rhetoric on trade is likely to have global implicationsFor those of us who were wrong about the US presidential election, it is worth suppressing emotional reactions, at least for a month or two, and attempting a dispassionate judgment about what Donald Trump’s administration may mean for the world. So here are 10 likely consequences of the Trump presidency, divided equally between the good and the bad.The good news starts with US growth, which will almost surely accelerate above the 2.2% average annual rate during Barack Obama’s second term. This is because the Republican aversion to public spending and debt applies only when a Democrat like Obama occupies the White House. With a Republican president, the party has always been glad to boost public spending and relax debt limits, as it was under Presidents Ronald Reagan and George W Bush. Thus, Trump will be able to implement the Keynesian fiscal stimulus that Obama often proposed but was unable to deliver.Related: World trade hangs in the balance as Trump prepares plan of action Continue reading...
In its first forecasts since Donald Trump’s election, thinktank says jobs will suffer if politicians row back on globalisationA new wave of protectionism and trade tensions risks denting global growth, stoking inflation and harming living standards, the west’s leading economic thinktank has warned in its first in-depth forecasts since Donald Trump won the US election on an anti-globalisation platform.The Paris-based Organisation for Economic Co-operation and Development (OECD) said it was optimistic that expected spending measures and tax cuts under the new US administration would boost growth there and in other countries. But it said global trade growth was already “exceptionally weak†and jobs would suffer if politicians rolled back the clock on trade liberalisation.Related: World trade hangs in the balance as Trump prepares plan of action Continue reading...
by Phillip Inman Economics correspondent on (#235TK)
Survey latest to show decline in businesses optimism, with many expecting slowdown to replace robust growth since Brexit voteThe strain of sluggish consumer spending and rising wages hit profits and dented the optimism of the UK’s services sector in November, according to the Confederation of British Industry.Predictions of a healthy Christmas failed to lift the sector’s spirits after falls in the pound and a rise in the government national living wage increased costs, a survey by the CBI found. Continue reading...
