Focusing more on appearances than outcomes is perilous. The Grenfell Tower fire has shown up the shortcomings of stretched public authorities putting up a frontAs the flames that engulfed Grenfell Tower died down, the blame game had already begun. One thing everyone has pointed to is the new facade on the building. Residents called it “the plastic”. It has since emerged that similar cladding was a factor in fires in tower blocks in France, and is banned from use in tall buildings in the US – and the UK, according to the chancellor (though this is denied by those who installed it).But “the plastic” was not the only potentially dangerous facade at Grenfell Tower. Residents saw the installation of the cladding as part of deeper processes of gentrification and even racial and class cleansing. Lacklustre concerns around fire safety were another facade. Following a fire at Lakanal House in 2009 in Camberwell, London, which killed six people, the authorities knew there were potential fire risks in tower blocks. Instead of responding immediately, the government created another facade – an inquiry that took four years and came to conclusions that were not fully acted on. And then there was the facade of accountability, such as forums set up by the local council to listen to local residents. The council did very little listening and, as a consequence, repeated concerns about fire safety went unheeded. Continue reading...

Governor Mark Carney holds fire as he monitors business and consumer response to Britain’s departure from EUFears that the start of Brexit negotiations will damage the economy mean that interest rates should remain at their record-low level, the governor of the Bank of England has said.Mark Carney said he would want to see how businesses, financial markets and consumers reacted to the reality of the UK’s looming departure from the EU before changing his view. Continue reading...

Business group says growth will be subdued over the next two years but increases forecasts after strong 2016Business group the CBI has warned the UK economy will shift down a gear as Brexit talks get under way and households are squeezed by rising prices.However, the cautious outlook was accompanied by an increase in the CBI’s growth forecasts for this year and next, due to a stronger than expected performance in 2016 when the economy defied expectations to grow strongly in the wake of the vote.Related: Business Today: sign up for a morning shot of financial news Continue reading...

Younger people have been priced out of home ownership as baby boomers have benefited, says Resolution FoundationA £2.3tn windfall for those lucky enough to own their own homes during the property boom of the 1990s and early 2000s has opened up a deep and widening inequality gap between the generations, a thinktank has warned. Rising house prices that have enriched older generations have priced the young out of home ownership, said the Resolution Foundation, adding that the pattern whereby each generation was wealthier than the previous one had broken down.In a new report, the thinktank noted that the baby boomers born in the 20 years after the second world war were the big beneficiaries of rapidly rising house prices, but had amassed most of the wealth through no skill of their own. Wealth disparities would have “worrying consequences” for the living standards of younger generations, it added.Related: Wealth gap rises as home ownership falls, says study Continue reading...

Philip Hammond appoints LSE economics professor Silvana Tenreyro, who said leaving EU was a ‘major mistake’An economics professor from the London School of Economics who warned against Brexit has been appointed to the Bank of England’s interest rate-setting committee.Silvana Tenreyro was one of 280 economists who signed a public letter ahead of the referendum last year stating it would be a “major mistake” for Britain to leave the EU. She will replace the US economist Kristin Forbes who leaves the monetary policy committee (MPC) this month.Related: Business Today: sign up for a morning shot of financial news Continue reading...

The Resolution Foundation’s forthcoming research into the socioeconomics of Britain is likely to be no laughing matterThere’s a joke, beloved of American economists, that has a chief executive, a member of the conservative Tea Party movement and public-sector employee sitting at a table eyeing a plate of 12 biscuits.The chief exec grabs 11 of them, before turning to the Tea Party member and warning: “You better watch him. He wants your cookie.” Continue reading...

The community in my family’s block was warm, thriving and diverse. But because residents are often poor, their concerns are frequently ignoredAt the foot of this blackened and devastating emblem of austerity, privatisation, and prejudice it was local residents, not the council, who assembled to support the survivors burned out of their homes. Their strength of community, their empathy and their tireless commitment to step in when the state did not, will come as no surprise to anyone who has lived in one of the UK’s many high-rises, council blocks, or so-called “sink estates”. Because while many denigrate them as “antisocial, high-maintenance, disempowering, unnecessary, mostly ugly”, the reality inside is very different.At a time when many of the millions of people in the UK who live in high-rises and blocks will be looking around their homes with a new sense of fear, it has never been so necessary to celebrate them, and the communities that live within them.Related: MPs demand help for terrified high-rise residents after London firePeople were killed in a horrific fire that could have been prevented had their communities been taken seriously Continue reading...

Merkel and Macron are planning for a ‘golden decade’ and won’t let Brexit negotiations derail themThat Helmut Kohl, the man who oversaw the reunification of Germany and was for so long a giant on the European stage, should die on the eve of negotiations leading to Britain’s withdrawal from the EU seems symbolic. The former German chancellor made the best of the extraordinary circumstances and public mood that followed the collapse of communism and the opening up of eastern Europe.Today’s European leaders are, by contrast, confronted with an especially adverse set of circumstances. Trump, Putin, Erdoğan, terrorism, unprecedented flows of migration, unemployment, the rise of populism and, of course, Brexit. But, just as Kohl and his French contemporary François Mitterrand relaunched the European project in the early 1990s, Angela Merkel and Emmanuel Macron are, as Britain prepares to leave, readying their ambitions and vision for the continent.Related: Macron and Merkel signal new move to strengthen eurozoneRelated: Macron victory gives Brussels confidence boost over EU's future Continue reading...

International body claims closer cross-border ties are not to blame for within-country inequality and urges cooperation with governments to manage risksThe international body that represents the world’s central banks has claimed that globalisation has been made a “scapegoat” for rising inequality, as it launched a defence of closer cross-border ties.Against the backdrop of protectionist rhetoric in many countries, including from US president Donald Trump, the Bank for International Settlements used its annual report to argue that globalisation has cut global poverty and will continue to lift living standards around the world. Continue reading...

The Conservative project has left productivity and prosperity in tatters while plunging us into ever more debtThere are few people in the developed world who still cling to the maxim that “home life ceases to be free and beautiful as soon as it is founded on borrowing and debt”.

Prioritise early agreement on rights of EU and UK citizens, and transition period preserving access to single market, Theresa May toldBritain’s biggest business groups have made a joint plea to the government to put the economy first in Brexit talks and to secure a transitional deal that preserves access to the European single market.The five lobby groups, including the British Chambers of Commerce and the CBI, have also called on ministers to prioritise an early deal on guarantees for EU 27 citizens in the UK and for UK citizens in other EU countries. Continue reading...

Chancellor says Tories ‘not deaf’ to election result, and left open possibility of raising taxes to fund more generous spendingThe chancellor, Philip Hammond, hinted on Sunday that the government would ease up on its austerity programme, saying the Conservatives were “not deaf” to the message delivered by the election result.In interviews in which he also criticised Theresa May’s team for sidelining him during the election campaign, Hammond said that he accepted that “people are weary of the long slog”.Related: Who will win the Conservatives’ battle of Brexit? Continue reading...

With living standards already stagnating or declining, the remorseless reaction of the international markets to the referendum vote is starting to make itself feltWhen I suggested before the election that an ideal outcome would be a hung parliament and a coalition to think again on Brexit, I was certainly not thinking of the DUP. But, as Harold Macmillan once said: “Here we are, and the question is: where do we go from here?”It seems to be generally agreed that the election result boiled down to a vote against austerity and a vote against a so-called “hard Brexit”, with the young – predominantly Remainers and angry about austerity – in full swing. Continue reading...

Resolution Foundation finds that half the nation’s wealth belongs to a tenth of adults as property ownership declinesA fall in home ownership is fuelling the return of rising wealth inequality across Britain, it has emerged.Booming house prices in the run-up to the financial crisis had led to a decade-long fall in the uneven distribution of the country’s wealth. However, comprehensive new analysis of the UK’s wealth divisions has now found that the trend has gone into reverse. Continue reading...

Some Conservatives blame austerity for handing seats to Labour in the general election but the chancellor is reluctant to borrow to match popular policiesPhilip Hammond is resisting Theresa May’s demands for an end to austerity amid Treasury concerns that loosening the purse strings will lead to a black hole in the government’s finances.The chancellor has used discussions with the prime minister since the election to press the case for a cautious approach to the public finances, despite the widespread view among Conservative MPs that seven years of spending cuts and pay restraint handed seats to Jeremy Corbyn’s Labour party. Continue reading...

Austerity has fed rapacious cost-cutting, with devastating consequencesHow apt that a biography of Attlee won the Orwell prize for political writing as art (Tribute to NHS founder Clement Attlee wins Orwell prize, 16 June). Such reminders of Labour’s totemic achievements are essential in challenging Tory doublethink. Indeed even your leader this week (May’s coalition of chaos stumbles through another day, 14 June) suggested that “in rhetorical terms, austerity has been over for a year”. Beware this Tory doublethink. Austerity is alive and kicking, harming national growth and living standards, and spreading poverty. It has fed rapacious cost-cutting, with devastating consequences – which fill your pages this week. The architect of this austerity, George Osborne, now London Evening Standard editor, suggests the misery should continue. He is profoundly wrong. More doublethink, I fear.In any democracy, if you impoverish the nation, you will lose the right to govern. But for this to work, we must champion the George Orwell of truth and challenge the George Osborne of austerity. The Tories’ ideology that “ignorance is strength” is an ever present danger for which they should pay the ultimate electoral price.

What role did deregulation, regeneration, inadequate legislation and cuts play in this tragedy? Is Gavin Barwell’s position tenable?

Symbolism is everything in politics and nothing better signifies the austerity of May-Cameron-Osborne era than North Kensington’s ghastly tomb

If the supermarket wants investors to back its executives’ pay, it shouldn’t annoy them with a top-up that looks greedyWhen 48% of shareholders rebel against a company’s remuneration report, most chairmen scuttle into the shadows muttering empty words about seeking further engagement with investors. So Andy Higginson, chairman of Morrisons, deserves some credit for coming out fighting after more than half of investors either voted against the proposal or withheld their vote. Morrisons “fundamentally disagrees” with the assessment by proxy voting agency ISS that executives’ new performance targets aren’t stretching.The argument here is slightly technical. Chief executive David Potts is being incentivised to get Morrisons to produce £800m of cash over the next three years. Is that demanding? It’s hard to tell, since comparisons are distorted by disposals and one’s view of how past working capital improvements should be regarded.Related: UK retail sales dive as consumers feel Brexit inflation pinch Continue reading...

EU and IMF thrash out deal following months of disagreements, with funds to be released in July once European parliaments ratify the dealFor the best part of a decade, Greece has wanted to become a “normal” country, and late on Thursday it appeared to begin that process, after creditors agreed to disburse €8.5bn (£7.4bn) of bailout funds aimed at putting the debt-stricken nation back on the road to recovery.The money, signed off after months of disagreement between the European Union and International Monetary Fund over how to reduce Athens’ staggering debt pile, will be released in July, once European parliaments ratify the deal.Related: Greek bailout deal agreed as creditors approve €8.5bn loan - as it happened Continue reading...

This is a win-win situation, for individuals and countries receiving remittances and for a more financially and socially inclusive UK, writes Dipti PardeshiFriday is the International Day of Family Remittances, a day dedicated to recognising the significant contribution that migrants make to the wellbeing of families back home and to the development of their countries of origin.We at the International Organization for Migration call for a wider and more active recognition of the many potential benefits of remittances for those who receive them, and financial inclusion for the many migrants who now form part of our community. Continue reading...

The three dissenting members of the monetary policy committee have a case, but not a compelling oneThe economy is looking wobbly. Living standards are being squeezed. A week after the general election Britain lacks an effective government. Is this the right time for the Bank of England to be thinking about raising interest rates?Well, three members of the Bank of England’s monetary policy committee think it is – the first time there has been a triumvirate in favour of dearer borrowing costs in six years.Related: Bank of England edges closer to increasing UK interest rates Continue reading...

Three of eight-member monetary policy committee vote for increase after figures show further rise in inflationThe Bank of England has edged closer to raising interest rates as a deeper split emerged among its committee of policymakers, with three out of eight voting for an immediate rise to keep inflation in check.The 5-3 split to keep interest rates at their record low of 0.25% surprised financial markets and the pound rose against the dollar on the news. Most City economists had expected a larger majority of the committee to opt to keep borrowing costs low to ease the pressure on households from a drop in living standards in the wake of last summer’s Brexit vote. It was the committee’s widest split since May 2011.Related: Business Today: sign up for a morning shot of financial newsRelated: Bank of England leaves interest rates on hold in shock 5-3 split - business live Continue reading...

America’s central bank has taken another step towards normalising monetary policy, by increasing interest rates to a 1% to 1.25% range

The Treasury says Britain has to save for a rainy day. But the skies are about to open and it’s time to spendThere could hardly be a worse time for the economy to be starting Brexit negotiations. That thought will be uppermost in the mind of Philip Hammond when he stands up on Thursday to make the annual address by the chancellor to the City’s elite at London’s Mansion House. Mr Hammond has been warning of the dangers of Britain being outside both the single market and the customs union since entering 11 Downing Street last summer. Until now, his counsel has not been sought by Theresa May, and there was plenty of talk about the chancellor losing his job in a post-election reshuffle. But that was then, when the expectation was of a Conservative landslide. This is now, and Mr Hammond is unsackable at a time when the economic skies are darkening. His position has unquestionably been strengthened by the election result. The question is what the chancellor does with his newfound power.Anything the chancellor can do to haul the UK back from the brink of a chaotic departure from the EU would certainly be welcome, but Brexit is only part of the story. Mr Hammond also needs to recognise that the economic approach of the past seven years has been a failure. None of the recent data has been good. Growth has slowed. Inflation is rising. Wages when adjusted for prices are lower than they were when the last recession began in early 2008. Britain has a cost-of-living crisis at the same time that it has a political crisis. The only reason it is not having a sterling crisis as well is because the financial markets are clinging to the hope that the inconclusive result of the election makes a softer Brexit more likely. Should that hope proved unfounded, the pound will drop sharply, adding to the squeeze on living standards. Continue reading...

ONS data signals further decline in living standards for UK households as unemployment rate stays at 42-year lowBritain is experiencing a rapid decline in living standards with the biggest squeeze in workers’ pay since 2014, according to the latest official data.Regular pay adjusted to account for the impact of inflation fell by 0.6% year on year in the three months to April. It was the weakest data since the summer months in 2014, according to the Office for National Statistics. The decline followed a 0.4% drop in the three months to March.

There has been nothing like the current wage squeeze in living memory – and there is no immediate prospect of recoveryCast your mind back to March 2008. The financial markets have been in turmoil since the previous summer and in the previous month the Labour government has been forced to nationalise the troubled bank Northern Rock. Few realised it at the time but the economy had peaked. A deep and brutal recession was about to begin. In that month, the average basic weekly wage, excluding bonuses, was £473.The recession officially came to an end by late 2009 and after a couple of years of weak and patchy growth, the worst seemed to be over. Activity picked up, unemployment started to come down. Yet more than nine years after the slump of 2008 began, wages – the yardstick by which most people judge whether the economy is doing well or not – have not recovered. In fact, according to the Office for National Statistics, they have gone backwards. The average basic weekly wage, adjusted for movements in prices, now stands at £458.Related: Pay squeeze intensifies as wages growth falls further behind inflation Continue reading...

Brussels has retained a nuclear option: the possible relocation of the £880bn-a-day euro clearing businessIt was billed as the first big Brexit battle for the City of London. Would Brussels launch a raid on London’s lucrative business of clearing €1tn (£880bn) a day of euro-denominated trades, which is what former French president François Hollande wanted when he said “those who seek the end of Europe” needed to be taught “a lesson”? Or would the European commission take the grown-up view that, actually, forcing all this financial activity to take place within the borders of the EU would do more harm than good, even for the EU itself?The answer – as with most things Brexit-related – is messy. The keenly awaited report from the commission booted the important decisions into the long grass of technical assessments. Yet the commission has also retained the nuclear option of enforced relocation for clearing houses, bodies that stand between two parties to a financial trade, when they’re dealing in euro-denominated derivatives.Related: Brussels plan could force euro clearing out of UK after Brexit Continue reading...

Britain’s cost of living is rising at the fastest pace in four-year high, intensifying the squeeze on households

With inflation at a four-year high and real wages shrinking, the Conservatives need to show the age of austerity is overAnyone seeking an explanation for the bloody nose received by the government in the election should start with wages, prices and living standards.Sure, the Conservatives fought a terrible campaign. True, Theresa May’s shortcomings were exposed. No question, the mobilisation of young voters by Labour played a big part in the result.Related: Britons feel the squeeze as inflation rises to four-year high of 2.9% Continue reading...

Rising cost of package holidays one factor in unexpected May increase, with inflation continuing to outpace UK wage growthUK inflation rose to a four-year high in May as the pound’s sharp fall since the Brexit vote worked its way through the economy, intensifying the squeeze on household budgets.The increasing cost of computer games and package holidays helped push up inflation to 2.9% last month, above the expectation of economists that it would remain at the 2.7% rate seen in April. The year-on-year rise in the consumer prices index (CPI) means prices continue to go up faster than wages for many workers, further denting living standards.Related: Business Today: sign up for a morning shot of financial news Continue reading...

Tom Perriello’s progressive campaign for governor could be a model for Democrats preparing to run against Trump in the midterm elections“The state ends at Roanoke, we are the forgotten corner of Virginia,” says local Democratic activist Oliver Keene of Tazewell, where 20% of the town lives in poverty. “In our eyes, past Roanoke, nobody cares about us. We don’t exist.”Campaigning for statewide office, most Democratic candidates have typically ignored the deep red Appalachian corner of the state where Trump won many of the counties by 70% margins.

Lack of majority means government will need to compromise on public services and Brexit, environment secretary says

Unless the political class faces up to our economic failure, there will be no recovery from this crisisEven as their world came apart, the bankers clung to denial. By August 2007, the flagship hedge fund of Wall Street’s most prestigious firm was tanking fast – and what explanation came from the man at Goldman Sachs? “We were seeing things that were 25-standard deviation moves, several days in a row.” The bank was getting hit by events that were only meant to happen once every 100,000 years – and they were happening every day of the week. Given a choice between blaming their models or reality, Goldman’s bosses held the world at fault.You know the rest because, a decade later, you and I are still paying for it. How the banks died, the world economy collapsed and most of us got poorer. How the financiers, mainstream economists and regulators were so detached from reality that they swore blind that such a catastrophe was impossible – even while it was under way.Related: Remember, kids: only the strong and stable Tories can fix this mess | Marina HydeRelated: Our manifesto changed the campaign. The tide is now turning against austerity | Emily ThornberryRelated: Forget culture wars, the election was about power, cash and opportunity | Tim Bale Continue reading...

Manufacturers are most optimistic about recruiting but public sector looking to cut jobs, ManpowerGroup poll findsEmployers in Britain are planning to take on new workers over coming months despite looming Brexit negotiations and slower economic growth, according to a survey.A poll of 2,109 employers by recruitment agency ManpowerGroup found that a net balance of 5% were planning to increase staff levels rather than cut them over the July-to-September quarter. That was unchanged from the previous poll three months ago but down slightly from a +7% reading at the end of 2016 when the UK economy was still growing strongly.Related: Business Today: sign up for a morning shot of financial news Continue reading...

UK political instability will harm economic growth and debt rating, say two main credit rating agenciesThe inconclusive outcome of Britain’s snap election will complicate and probably delay Brexit negotiations that were due to start next week, a leading credit rating agency has warned.Moody’s, one of the big financial bodies that assigns credit scores to governments, said Theresa May’s failure to secure an outright majority would also hurt the UK’s standing on international debt markets because it was likely to result in more public borrowing.Related: Business Today: sign up for a morning shot of financial newsIn terms of the outlook for growth, it's clear that things are not going in the right direction Continue reading...

Predictions of gloom after the Brexit vote didn’t materialise – but this time we face an income squeeze and an EU ticking clock“It is hard to overstate what a dramatic impact the current political uncertainty has on business leaders, and the consequences could – if not addressed immediately – be disastrous for the UK economy,” says Stephen Martin, director general of the Institute of Directors, pointing to a poll of members that showed 57% were quite or very pessimistic about the economy over the next 12 months.We heard similar predictions of gloom from the business world after last year’s referendum, of course. They did not materialise, or at least not in the style imagined. The Brexit flunk was a brief affair and the Bank of England and almost every other forecaster was obliged to admit that Armageddon would not be arriving as previously advertised. Could the plot run so happily again?Related: Bad EU trade deal 'disastrous' for UK jobs, investment and growth Continue reading...

Ricard Rosselló to push Congress to admit Puerto Rico as America’s 51st state, but experts suggest referendum result will have little impact on US lawmakersThe governor of Puerto Rico, Ricard Rosselló, has announced that he is to visit Washington in the next phase of his campaign to turn the island into the 51st state of the United States.Rosselló will go to the US capital armed with a 97% backing for statehood from voters in Sunday’s plebiscite on the future of the stricken US colony. But he faces an uphill struggle impressing his case on the US Congress, which holds ultimate power over Puerto Rico, given the historically low turnout of the vote and the boycott staged by opposition parties.Related: Puerto Ricans vote in favour of being 51st US state, but doubts remain Continue reading...

Just a few days ago, the chancellor’s days seemed numbered – now he is to speak on the economy with Mark CarneyDespite everything that has happened over the past few days, the Mansion House speeches are still scheduled to take place this week – with the difference this year being that guests had been preparing for the showpiece by speculating who might be the star mystery guest.It was always going to be the chancellor, of course, but the mystery was who might be holding that great office of state come Thursday, when the City’s finest minds (plus the usual load of bankers and fund managers) gather to hear what the second lord of the Treasury and the governor of the Bank of England have to say about the state of the UK economy. Continue reading...

Business reject Brexiters’ claims UK can thrive without EU trade deal in place, report by Ed Balls and Peter Sands saysBritish businesses have rejected claims by leading Brexiters that trade with the rest of the world can replace free access to European markets, arguing that quitting the single market and customs union without a trade deal with the EU will harm their growth prospects.In a report by the former shadow chancellor Ed Balls and Peter Sands, senior fellows at Harvard University’s Mossavar-Rahmani Center for Business and Government, UK businesses owners warned that a bad deal, or no deal, on Brexit would be disastrous for British jobs, investment and growth.Related: Business Today: sign up for a morning shot of financial news Continue reading...

Pressures from rising prices and political uncertainty see drop in spending across clothing, household goods, food and transportSqueezed British households have cut back their spending for the first time in almost four years, according to figures that underscore the pressures from rising prices and political uncertainty.Visa, the credit and debit card processing business, said its vast database of spending patterns shows there was a drop in spending across a broad range of categories last month, including clothing, household goods, food and transport. Continue reading...

All Labour needs to do is sit back and watch as the Tory party tries to clean up its own mess for a changeWhen Theresa May called the general election at the end of April, the UK economy was struggling, inflation was on the rise and Brexit talks were looming. Seven weeks later, seemingly nothing has really changed.The economy is still struggling. May went to the country when Britain was officially the slowest-growing country in the European Union for the first time since the mid-1990s. It was announced during the campaign that inflation had edged up to 2.7%, and Brexit negotiations are supposed to start in a week’s time.Related: Election 2017: Theresa May starts work on government reshuffle as Osborne calls her 'dead woman walking' – liveRelated: 'Confidence and supply': what does it mean and how will it work for the new government?Related: Jeremy Corbyn: Labour will call on other parties to defeat government Continue reading...

Deprived students found a natural champion in Labour – but we should remember the party has made expensive promises to pensioners tooThe YouTube video artist Cassetteboy made his anti-Brexit stance clear last week when he mocked the prime minister with the words: “It is wrong to believe the fable that Theresa May belongs at the negotiating table.”It is a sentiment echoed by millions of voters, many of them newly registered millennials, who used the general election to demand many things from MPs, including a softer Brexit than the one planned by May. Continue reading...

The US territory is voting once more on whether to become America’s 51st state – but many islanders are questioning the timing of the referendum, and the costThe hall is a sea of pink and white. About 350 Puerto Ricans, mostly women, have come to hear their First Lady speak in what they hope will be the final push towards a new relationship between their island and the United States.When Beatriz Rosselló, the 32-year-old wife of the governor of Puerto Rico, finally appears at the rally outside the capital San Juan, the room erupts into a frenzy of flag-waving. The American Stars and Stripes with its 50 stars, and the Puerto Rican emblem, with its single one, intertwine amid the flurry, giving the illusion that they have fused: 51 stars in a single banner of red, white and blue.Related: Colony, state or independence: Puerto Rico's status anxiety adds to debt crisisRelated: Hedge funds tell Puerto Rico: lay off teachers and close schools to pay us backRelated: Puerto Rico's economic migrants escape to US mainland in search of stability Continue reading...

Immutable truths about British political culture have been breezily overturned by the electorate, confusing pundits and politicians alike. What next?

Sterling crashed to eight-week low but analysts say possibility of softer Brexit may eventually work in UK currency’s favourThe pound fell to an eight-week low and shares in housebuilders, banks and retailers lost ground after the shock election result, which increased uncertainty over both the forthcoming Brexit talks and the UK’s economic prospects.But the currency recovered from its worst levels as Theresa May announced she was forming a new government with the help of the Democratic Unionist party and vowed to press ahead with Brexit negotiations. So after falling 2.5% to $1.2635, its lowest since 18 April, sterling stood at $1.2737, down 1.65%, when London trading closed. Against the euro, it slumped to a seven-month low of €1.1289 but recovered to €1.1380, down 1.5%. Continue reading...

Small gains in industrial output and hung parliament add to fears that uncertainty will further dent already weak prospects

Somehow, the Tories convinced us that relentless belt-tightening was the only way forward. But this election has sounded the death knell for debilitating cutsAusterity has been failing as an economic idea for years. The result of the general election shows that it has now failed politically as well. Deficit reduction continues, but will no longer dominate the agenda. Theresa May’s failed gamble marks the end of a seven-year experiment.Related: A five-point plan to bring about a Labour victory – and soon | Paul MasonRelated: Young people voted because Labour didn’t sneer at them. It’s that simple | Maya Goodfellow Continue reading...

Concerns over Brexit and economic outlook push sterling to lowest level since Theresa May called snap pollThe pound slumped and shares in major banks, housebuilders and construction companies tumbled after the shock election result raised questions over the pace of Brexit talks and prospects for the UK economy.Sterling fell 2% to $1.2670 while shares in Lloyds Banking Group were down, along with those in Royal Bank of Scotland and the housebuilders Barratt and Taylor Wimpey. Shares in the fashion retailer Next were also lower on fears that consumer confidence would take a knock.Related: Pound tumbles but FTSE 100 rises as hung parliament spooks the City – business liveRelated: Business Today: sign up for a morning shot of financial news Continue reading...