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Updated 2025-01-13 02:15
EU referendum: top economic thinktank warns of post-Brexit shocks
NIESR forecasts sterling to plunge 20% with prices to soar, pay and growth to fall steadily but immigration unlikely to be cut sharplyThe pound would plunge 20% immediately after a Brexit vote in June, according to a leading economic thinktank.The National Institute of Economic and Social Research (NIESR) has also forecast that prices will soar and Britain’s growth rate will be 1% lower next year if there is a vote to leave the EU.Related: Brexit 'unlikely to mean deep migration cuts but may lead to 2p tax increase'Related: Business support for EU membership has fallen in run-up to vote Continue reading...
'Everyone’s outraged': angry Greeks foresee Grexit and drachma's revival
Greece faces its toughest austerity measures yet, with €5.4bn of budget cuts backed by the leftist government of Alexis TsiprasIn his tiny shop in downtown Athens, Kostis Nakos sits behind a wooden counter hunched over his German calculator. The 71-year-old might have retired had he been able to make ends meets but that is now simply impossible. “All day I’ve been sitting here doing the maths,” he sighs, surrounded by the undergarments and socks he has sold for the past four decades.“My income tax has just gone up to 29%, my social security payments have gone up 20%, my pension has been cut by 50 euros; they are taxing coffee, fuel, the internet, tavernas, ferries, everything they can, and then there’s Enfia [the country’s much-loathed property levy]. Now that makes me mad. They said they would take that away!”Related: Greek MPs approve toughest austerity measures yet amid riotingRelated: What do Greeks think of the latest austerity measures?Related: The choice for Europe: rescue Greece or create a failed state | Paul Mason Continue reading...
UK retailers suffer sharp drop in sales
Cold weather and more cautious shoppers dent sales as spending further shifts from goods to experiences, says the British Retail ConsortiumBritish retailers suffered the sharpest drop in sales for eight months in April as more cautious shoppers reined in spending and cold weather affected sales of spring and summer clothing, industry figures show.The British Retail Consortium (BRC) said like-for-like sales fell 0.9% in April on a year earlier, the biggest drop since last August. The weak April performance compounded pressure on retailers after a sales drop of 0.7% in March.Related: Inflation rate three times higher for millennials than for pensioners Continue reading...
Greek finance minister hails 'very good' meeting on debt relief - as it happened
Eurozone ministers have agreed to aim for a deal on Greece’s bailout, and a debt relief plan, by 24 May
Eurozone ministers to examine how to ease Greece's debt burden
Measures such as tweaking repayment terms over the next three years are being considered, but a write-off is off the tableEurozone finance ministers have promised to examine how to ease Greece’s colossal debt burden, with writing off bad loans remaining off the table.
Greece's latest financial emergency is both tragic and absurd
The Greek debt pile is larger than ever – and the solution seemingly ever more remoteIt’s that time of year again. Greece is running out of money. There are violent protests in Athens. Eurozone finance ministers are gathering in Brussels in an “emergency” conclave to decide what to do next.The International Monetary Fund has already made it clear what it thinks should happen. It says Europe should cut Greece some slack by easing the terms of its bailout agreement and offering a solid dose of debt relief.Related: Greek crisis: no deal on debt relief expected today - live updates Continue reading...
How did the media shape the debate about austerity?
As the EU referendum looms, a discussion on the reporting of the financial crisisAfter the financial crisis, governments in the UK and elsewhere in Europe adopted austerity policies to reduce public sector deficits.
Refugees hold key to German economic growth, IMF says
Policies to integrate migrants into labour market will help counter effects of ageing population, organisation saysThe International Monetary Fund has urged Germany to do more to help find work for the hundreds of thousands of refugees in the country, saying such moves would help counter the effects of an ageing population.Related: Germany unveils integration law for refugees Continue reading...
Greek crisis: Eurozone ministers to discuss debt relief - business live
Crunch meeting will consider Greece’s bailout progress today after MPs approved a €5bn package of austerity reforms
Inflation rate three times higher for millennials than for pensioners
Rate was 0.9% for under-30s in March but was just 0.3% for over-65s, says a report into financial pressures on young adultsYoung adults in the UK are facing inflation rates three times higher than those for pensioners, according to a new analysis that highlights the pressures of the cost of living on millennials.The widening generational inflation gap is being driven by under-30s spending proportionally more on things that are getting more expensive, such as education, dining out, rent and household bills, according to Fidelity International. At the same time, those in the demographic spend less of their budget on groceries compared with older generations, so they have not enjoyed the same boost from falling food prices.Related: 'I’d rather chill in and relax': why millennials don't go clubbing Continue reading...
RBA: limits on negative gearing would be good for the economy
Central bank officials see problems arising from ‘leverage speculation’, a document released under freedom of information showsReserve Bank officials have become unwitting players in the 2016 federal election after a freedom of information request revealed that they believe any policy which discourages negative gearing may be good for Australia’s financial stability.The revelation contradicts the dire warnings of the Turnbull government that any changes to negative gearing would destroy confidence in the economy and send house prices plummeting.Related: How negative gearing replaced the great Australian dream and distorted the economy | Greg Jericho Continue reading...
RBA: limits on negative gearing would be good for the economy
Central bank officials see problems arising from ‘leverage speculation’, a document released under freedom of information showsReserve Bank officials have become unwitting players in the 2016 federal election after a freedom of information request revealed that they believe any policy which discourages negative gearing may be good for Australia’s financial stability.The revelation contradicts the dire warnings of the Turnbull government that any changes to negative gearing would destroy confidence in the economy and send house prices plummeting.Related: How negative gearing replaced the great Australian dream and distorted the economy | Greg Jericho Continue reading...
Greek MPs approve toughest austerity measures yet amid rioting
Crucial meeting of eurozone finance ministers will be held on Monday amid backdrop of violence in Athens over cuts worth €5.4bnGreece’s leftist-led coalition will turn to the lightning rod issue of debt relief on Monday at a crucial meeting of eurozone finance ministers following the late-night approval in Athens of laws overhauling the country’s tax and pension system.Amid violence on the streets and a three-day general strike that had brought much of the country to a halt, the embattled government pushed the legislation through parliament with the backing of its 153 MPS. Addressing the 300-seat House, prime minister Alexis Tsipras said: “We are determined to make Greece stand on its two feet at any cost.”Related: Europe's liberal illusions shatter as Greek tragedy plays on Continue reading...
Saudi Arabia appoints Khalid al-Falih as new oil minister
Former Saudi Aramco chairman vows to strengthen kingdom’s position as ‘the world’s most reliable supplier of energy’The new energy minister of Saudi Arabia, the world’s biggest oil exporter, on Sunday pledged continuity in the kingdom’s oil policy, after being named in a major government overhaul.“Saudi Arabia will maintain its stable petroleum policies,” Khalid al-Falih said a day after King Salman appointed him to replace longtime former oil minister Ali al-Naimi.Related: Saudi Aramco – the $10tn mystery at the heart of the Gulf state Continue reading...
Saudi Arabia appoints Khalid al-Falih as new oil minister
Former Saudi Aramco chairman vows to strengthen kingdom’s position as ‘the world’s most reliable supplier of energy’The new energy minister of Saudi Arabia, the world’s biggest oil exporter, on Sunday pledged continuity in the kingdom’s oil policy, after being named in a major government overhaul.“Saudi Arabia will maintain its stable petroleum policies,” Khalid al-Falih said a day after King Salman appointed him to replace longtime former oil minister Ali al-Naimi.Related: Saudi Aramco – the $10tn mystery at the heart of the Gulf state Continue reading...
Bank of England meeting could discuss cutting interest rates
A recent run of bad news on the economy may have chipped away at Mark Carney and other policymakers’ certainty on the path for interest ratesThe Bank of England’s interest rate setters meet against a gloomy economic backdrop this week that could prompt at least one policymaker to push for a cut in borrowing costs to shore up stalling growth.
Bank of England meeting could discuss cutting interest rates
A recent run of bad news on the economy may have chipped away at Mark Carney and other policymakers’ certainty on the path for interest ratesThe Bank of England’s interest rate setters meet against a gloomy economic backdrop this week that could prompt at least one policymaker to push for a cut in borrowing costs to shore up stalling growth.
Donald Trump given a fighting chance by ailing US economy
Millions of Americans think they have been left behind in the recovery and the billionaire has managed to tap into this discontentThe experts said it could never happen. There was no way in which Donald Trump could win the Republican nomination for the US presidency. Could a billionaire who had never held office, was distrusted by the party hierarchy, lacked a political machine and seemed to take delight in upsetting large chunks of the electorate really survive the primaries and have a shot at the White House? Well, really.The smart money now says that Trump has no chance in a head-to-head presidential race with Hillary Clinton, who looks nailed-on as the candidate for the Democrats. Opinion polls suggest that Clinton would beat Trump by a margin of 10 percentage points were the election to be held now. Continue reading...
Donald Trump given a fighting chance by ailing US economy
Millions of Americans think they have been left behind in the recovery and the billionaire has managed to tap into this discontentThe experts said it could never happen. There was no way in which Donald Trump could win the Republican nomination for the US presidency. Could a billionaire who had never held office, was distrusted by the party hierarchy, lacked a political machine and seemed to take delight in upsetting large chunks of the electorate really survive the primaries and have a shot at the White House? Well, really.The smart money now says that Trump has no chance in a head-to-head presidential race with Hillary Clinton, who looks nailed-on as the candidate for the Democrats. Opinion polls suggest that Clinton would beat Trump by a margin of 10 percentage points were the election to be held now. Continue reading...
Osborne’s fairy godmother can’t make debts vanish forever
A succession of windfalls from privatisations, pensions and bank fines have created an illusion of prosperity in the chancellor’s Britain. It can’t lastGeorge Osborne has a fairy godmother who, with a wave of her wand, showers money over much of the population. It hardly seems possible in this age of austerity, but it happens all the time and soothes the anger of many who might otherwise protest at the closure of local amenities and cuts to welfare budgets.This godmother comes in several guises, but essentially always does the same thing: she steals from the future to pay for things today. Continue reading...
Osborne’s fairy godmother can’t make debts vanish forever
A succession of windfalls from privatisations, pensions and bank fines have created an illusion of prosperity in the chancellor’s Britain. It can’t lastGeorge Osborne has a fairy godmother who, with a wave of her wand, showers money over much of the population. It hardly seems possible in this age of austerity, but it happens all the time and soothes the anger of many who might otherwise protest at the closure of local amenities and cuts to welfare budgets.This godmother comes in several guises, but essentially always does the same thing: she steals from the future to pay for things today. Continue reading...
Brexit isn’t to blame for slowing UK growth. It’s more serious than that
The US economy is running at a sluggish pace, so there may be pressure for the Bank of England to lower interest rates even further this weekThe last time the Bank of England cut interest rates was in March 2009 and the decision was, in the modern idiom, a bit of a no-brainer. Official figures released later that month showed unemployment rising above two million for the first time since 1997, and the economy was in freefall.It was the nadir of the global slump and Threadneedle Street’s monetary policy committee had no hesitation in reducing the cost of borrowing to 0.5%, comfortably lower than it had ever been in the history of the Bank, which stretches all the way back to 1694. Continue reading...
Unhappy with the Obama economy, voters are buying what Trump's selling
Obama has overseen a remarkable turnaround in the jobs market, but with layoffs reaching a seven-year high, many have subscribed to Trump’s narrative
IMF threatens to pull out of Greek rescue
Christine Lagarde issues warning in letter leaked three days before eurozone finance ministers discuss help for AthensHopes of an end to the impasse between Greece and its creditors have appeared to evaporate after asurprise intervention from the International Monetary Fund.
Results show there is hope for Labour yet | Letters
Regarding the results of Thursday’s elections (Jeremy Corbyn allays coup fears after mixed election night for Labour, theguardian.com, 6 May), the successful Norwich Labour party leadership hit the nail on the head with its analysis. Labour actually did amazingly well, considering the constant poisonous press briefings made by many out-of-touch rightwing Labour MPs against Jeremy Corbyn ever since he was overwhelmingly elected leader. We even had Michael Dugher at PMQs effectively inviting David Cameron to agree with him that Corbyn was an idiot.Then we had John Mann and friends doing their bit to denigrate Corbyn’s leadership in the last two weeks before the election. It is interesting that Labour did less well in Scotland and Wales, where Corbyn was reportedly asked to stay away. Continue reading...
This is what the New Day was missing | Brief letters
EU austerity | Limited liability law | Leicester’s other achievements | Modal verbs | English royals | New DayLarry Elliott (Economics of Alice in Wonderland, 2 May) provides a test for Mr Cameron to do something to persuade people to support his EU stance: get Mrs Merkel and co to stop imposing more austerity on Greece – to show that the EU can equal mutual support – and we’ll vote to stay. Otherwise, what’s the point of the EU? The clock’s ticking, Dave.
Markets volatile after shock US jobs report - as it happened
The way we shop now: the revolution in British spending habits
Survey shows shoppers spend more on experiences such as holidays and eating out and less on productsThey call it the “experience economy”: a huge shift in consumer behaviour is said to be under way, from buying things to doing things.The demise of high street stalwarts BHS and Austin Reed, poor retail spending figures and a downturn in the number of people visiting high streets and shopping centres, are all being held up as evidence that Britons’ priorities are changing. Continue reading...
US economy adds just 160,000 jobs in April – further sign of a slowdown
Jobs figures were lower than predicted by economists with the percentage of the American labor force out of work holding steady at 5%
BT is just coasting with £6bn wave of broadband investment
Some of the spending would have happened anyway and the plan will not represent a technological revolutionIt’s a “further wave” of investment, says BT, conjuring visions of Britain surfing to a fast-speed broadband future while other nations splash in the shallows. Don’t believe the hype: £6bn is a large sum, but not quite as it seems.About a third probably covers newly arrived EE’s expansion of its 4G mobile network, which is spending that would have happened anyway. The Openreach broadband element – call it £4bn – equates to £1.33bn a year since this is a three-year programme. That’s an upgrade from a current rate of £1bn a year, but we’re not talking tsunamis.Related: BT to spend £6bn on superfast broadband and 4G rollout Continue reading...
Donald Trump says he'd probably replace Fed chair Yellen - as it happened
Presumptive presidential nominee says he’s ‘most likely’ to pick a new Fed chair when Yellen’s time is up
US job cuts hit highest level since 2009 according to new study
61,582 people lost their jobs between 1 and 30 April – a worrying sign of a slowdown in the pace of the jobs market’s recoveryJob cuts are at their highest level since 2009 according to a new study from outplacement firm Challenger, Gray & Christmas, up 35% in April against figures from March and 5% from the same time the year previous.Some 61,582 people lost their jobs between 1 April and 30 April, according to employer announcements of staff reductions polled by analysts. Continue reading...
Osborne's 'cocktail of threats' excuse for the UK's ills has lost its fizz
The chancellor blames Brexit jitters and the global slump for Britain’s economic woes – but the truth lies closer to homeLast summer the UK economy was zipping along and the chancellor, fresh from an election victory, was boasting of the best GDP growth in the G7.Inside the Treasury, it was unthinkable that growth would evaporate within a year, and yet this week’s surveys of the construction, manufacturing and services industries, which cover just about all economic activity, show output flattening going into the second quarter.Related: Services sector slump fans fears of UK economic slowdown Continue reading...
The Fed's new global mandate is not without risk
If the US Federal Reserve feels beholden to financial markets, the risk of sharper rate hikes will increase“There are only two tragedies in life,” Oscar Wilde wrote. “One is not getting what one wants, and the other is getting it.” As the US Federal Reserve inches closer to achieving its targets for the domestic economy, it faces growing pressure to normalise monetary policy. But the domestic economy is no longer the Fed’s sole consideration in policymaking. On the contrary, America’s monetary authority has all but explicitly recognised a new mandate: promoting global financial stability.The US Congress created the Fed in 1913 as an independent agency removed from partisan politics, tasked with ensuring domestic price stability and maximising domestic employment. Its role has expanded over time, and the Fed, along with many of its developed country counterparts, has engaged in increasingly unconventional monetary policy – quantitative easing, credit easing, forward guidance, and so on – since the 2008 global financial crisis. Continue reading...
Services sector slump fans fears of UK economic slowdown
PMI/Markit survey shows business activity at lowest level since February 2013 as EU referendum and global slowdown fears take holdA sharp slowdown in Britain’s vast services sector, which covers everything from banking to hotels, has fanned fears that economic growth is stalling, hurt by a downturn in global trade and jitters ahead of June’s knife-edge EU referendum.A closely watched survey of businesses in the UK’s biggest sector showed activity slumped in April to its slowest pace for more than three years. That followed polls earlier in the week showing the smaller construction and manufacturing sectors had also lost momentum last month.
Scottish economy grows far more slowly than UK as a whole
Analysis finds Scottish GDP has grown by 4% in cash terms since 2008, compared with 23% for Britain as a wholeThe Scottish economy is growing at a far slower rate than the UK as a whole, with the North Sea oil slump leading to a fall in GDP last year, the latest data shows.
Markes nervous amid weak UK construction and US jobs figures - as it happened
UK construction growth hits three-year low as 'Brexit fog' hurts confidence - business live
Building firms hit by falling confidence ahead of June EU referendum
UK construction sector reports slowest expansion since mid-2013
Firms blame decline on lack of new orders stemming from weaker outlook for UK economy as a wholeA boom in office building in London has failed to prevent Britain’s construction industry from reporting its worst month in almost three years in April.Related: Brexit jitters set to weigh on foreign demand for London office spaceRelated: UK manufacturing sector suffers worst month in three years Continue reading...
UK construction sector sees slowest expansion since mid-2013
Firms blamed the decline on a lack of new orders that stemmed from the weaker outlook for the UK economy as a wholeA frenzy of office building in London failed to prevent Britain’s construction industry from reporting its worst month in almost three years in April.Firms blamed the decline in the sector’s fortunes on a lack of new orders that stemmed from the weaker outlook for the UK economy as a whole.Related: UK manufacturing sector suffers worst month in three years Continue reading...
Global water shortages to deliver 'severe hit' to economies, World Bank warns
The Middle East, north Africa, central Asia and south Asia due to suffer biggest economic hit from water scarcity as climate change takes hold, report findsWater shortages will deliver a “severe hit” to the economies of the Middle East, central Asia, and Africa by the middle of the century, taking double digits off their GDP, the World Bank warned on Tuesday.By 2050, growing demand for cities and for agriculture would put water in short supply in regions where it is now plentiful – and worsen shortages across a vast swath of Africa and Asia, spurring conflict and migration, the bank said. Continue reading...
HSBC profits fall sharply as global volatility hits bottom line
Britain’s biggest bank hails ‘resilient performance’ amid challenging market conditions as dividend policy is questionedProfits at HSBC fell in the first three months of 2016 as a result of volatility on the global markets in January and February, raising questions about the dividend policy at Britain’s biggest bank.Statutory pre-tax profits in the three months to the end of March fell by 14% to $6.1bn (£4.2bn), which the bank described as “a resilient performance despite challenging market conditions”. If currency movements and other one-off items were excluded, profits fell by 18% to $5.4bn.Related: HSBC chairman says scandals show banks must raise standardsRelated: HSBC accused of censorship for refusing Hong Kong student leader's account Continue reading...
HSBC profits fall sharply as global volatility hits bottom line
Britain’s biggest bank hails ‘resilient performance’ amid challenging market conditions as dividend policy is questionedProfits at HSBC fell in the first three months of 2016 as a result of volatility on the global markets in January and February, raising questions about the dividend policy at Britain’s biggest bank.Statutory pre-tax profits in the three months to the end of March fell by 14% to $6.1bn (£4.2bn), which the bank described as “a resilient performance despite challenging market conditions”. If currency movements and other one-off items were excluded, profits fell by 18% to $5.4bn.Related: HSBC chairman says scandals show banks must raise standardsRelated: HSBC accused of censorship for refusing Hong Kong student leader's account Continue reading...
Brexit fears weighing down UK manufacturing? Dream on
George Osborne will no doubt blame bad economic news on the EU referendum but the crisis in British factories is chronic and part of a global trendFor the next couple of months – and probably longer – George Osborne has a ready-made excuse if the economic numbers look a bit grim: blame it on the uncertainty caused by the EU referendum.The weakest report on manufacturing from purchasing managers for three years? That would be the result of Brexit fears. A downgrade of the UK’s growth forecast for 2016 from the European commission? Investment plans are being mothballed until businesses see the way Britain has voted on 23 June. Continue reading...
UK manufacturing sector suffers worst month in three years
Lack of demand for consumer goods hits output during April as employment in factories fallsBritain’s factories suffered their worst month in three years in April as falling export orders and a lack of domestic demand for consumer goods squeezed manufacturing output.Growth in factory output has been on the slide for a year, but last month the manufacturing sector contracted for the first time since March 2013. Economists believe the decline will drag on GDP growth this year.Related: Most business leaders will vote to stay in EU, polls find Continue reading...
UK manufacturing sector suffers worst month in three years
Lack of demand for consumer goods hits output during April as employment in factories fallsBritain’s factories suffered their worst month in three years in April as falling export orders and a lack of domestic demand for consumer goods squeezed manufacturing output.Growth in factory output has been on the slide for a year, but last month the manufacturing sector contracted for the first time since March 2013. Economists believe the decline will drag on GDP growth this year.Related: Most business leaders will vote to stay in EU, polls find Continue reading...
Poll shows UK business confidence at four-year low
Survey of chartered accountants says Brexit fears, budget fallout, slowdown in China and weak UK sales denting companies’ ability to plan aheadWorries about the EU referendum in June, rising labour costs and China’s slowdown have knocked UK business confidence to a four-year low, according to a report that will fan fears the economy is losing momentum.A poll of 1,000 chartered accountants by their professional body, the ICAEW, echoed other recent surveys pointing to fragile consumer and business confidence as the referendum approaches. The poll also noted a slowdown in domestic sales and nervousness about hiring new staff. Continue reading...
Is Craig Wright the reluctant multimillionaire behind Bitcoin?
An Australian computer scientist claims to have created the digital currency – but doesn’t seem very keen to take the credit
Has the global economic growth malaise become the 'new normal'?
Structural reforms are needed to bolster growth but their upfront costs further strengthen opponents of changeThe International Monetary Fund and others have recently revised down their forecasts for global growth – yet again. Little wonder: the world economy has few bright spots – and even those are dimming rapidly.Among advanced economies, the US has experienced two quarters of growth averaging 1%. Further monetary easing has boosted a cyclical recovery in the eurozone, though potential growth in most countries remains well below 1%. In Japan, so-called Abenomics is running out of steam, with the economy slowing since mid-2015 and edging close to recession. In the UK, uncertainty surrounding the June referendum on continued EU membership is leading firms to keep hiring and capital spending on hold. And other advanced economies – such as Canada, Australia and Norway – face headwinds from low commodity prices.Related: Could Italy be the unlikely saviour of Project Europe? Continue reading...
The Guardian view on the state and the market: the end of ‘hands-off’ economics | Editorial
The financial crisis exposed how public guarantees underpinned private profits in banking. Now the BHS saga reveals how the rewards for owning businesses of other sorts are also unmatched by payment of a proper price for failureThe penalty for running a bad business is supposed to be failure. A free market system relies on the incentive of reward earned through enterprise, but it must also contain risk. The theory holds that evolution is at work, as good business thrives by innovation and competition, while the weak fall away. Meanwhile, democratic governments provide social guarantees so that this natural selection does not inflict cruelty on the citizens who depend on the economy for their livelihoods. That is why the ruin of BHS is a story of political failure as well as a product of commercial mismanagement.The collapse of the famous high street chain, leaving 11,000 jobs in jeopardy and a staff pension fund with a £571m deficit, has been widely reported as a case study of corporate greed. There have been calls for Sir Philip Green, who owned the company for 15 years, to be stripped of his knighthood. Sir Philip, his wife and Dominic Chappell, who heads Retail Acquisitions – the consortium that later bought BHS – look set to be summoned by parliament’s business and work and pensions committees, as part of twin inquiries into the affairs of what is now a hollowed-out shell of a company in administrators’ hands. If these probes go ahead, they might shed some light on the mechanisms by which the value that there once was in BHS was apparently turned to cash and siphoned off. That is if Sir Philip and others deign to attend the committees. They might, like Mike Ashley – the founder of Sports Direct, who now offers himself as an unlikely saviour of the BHS workforce – defy a summons to appear. MPs want to speak to Mr Ashley about low pay and alleged worker exploitation. He dismisses them as “a joke”. Continue reading...
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