Federal Reserve is expected to announce two to three interest rate hikes this year after it increased rates in December for the first time in nearly a decadeFederal Reserve chair Janet Yellen had a message for Wall Streeters anxiously wanting to depart for the long weekend on Friday: interest rate hikes are coming.Analysts have been scrutinizing remarks by all Federal Reserve officials over the past few months for a hunt of when the next interest rate hike might occur. The US central bank is expected to announce two to three interest rate hikes this year after it increased rates in December for the first time in nearly a decade.Related: Interest rates could rise as soon as June, Federal Reserve suggests Continue reading...

Economists give strong critique of neoliberal doctrine ushered in by Ronald Reagan and Margaret Thatcher in the 1980sA strong warning that austerity policies can do more harm than good has been delivered by economists from the International Monetary Fund, in a critique of the neoliberal doctrine that has dominated economics for the past three decades. In an article seized on by the shadow chancellor, John McDonnell, the IMF economists said rising inequality was bad for growth and that governments should use controls to cope with destabilising capital flows.The IMF team praised some aspects of the liberalising agenda that was ushered in by Ronald Reagan and Margaret Thatcher in the 1980s, such as the expansion of trade and the increase in foreign direct investment. But it said other aspects of the programme had not delivered the expected improvements in economic performance. Looking specifically at removing barriers to flows of capital and plans to strengthen the public finances, the three IMF economists came up with conclusions that contradicted neoliberal theory. Continue reading...

Cross-party committee attacks both sides but is particularly scathing about assertion that Brexit would save £350m a weekVote Leave, Britain Stronger in Europe and the Treasury have all been accused of misleading voters in the EU referendum campaign in a report by a cross-party House of Commons committee.The Treasury committee was particularly scathing about the leave camp’s flagship assertion that exiting the EU would save £350m a week that could be spent on the NHS, saying that the public should discount the claim and that Vote Leave’s decision to persist with it was “deeply problematic”.Related: ‘I don’t want to go back with nothing’: the Brexit threat to Spain’s little BritainRelated: Vote Leave launches £50m football prediction competition Continue reading...

Thinktank report finds that most EU workers in Britain would not qualify for a work visa under current rulesLeaving the EU could cause catastrophic staff shortages in some sectors, as 88% of EU workers in Britain would not qualify for a visa under the current rules, remain campaigners have warned.A report from the Social Market Foundation thinktank has found that the majority of the 1.6 million EU workers in the UK do not meet the skills and earnings criteria that those from outside the bloc need in order to qualify for a work visa.Related: Boris Johnson as PM is 'horror scenario', says Juncker EU aide Continue reading...

George Osborne targets older voters with claim that leaving the EU would drive up inflation, hitting pensions and house pricesLeaving the European Union could wipe up to £32,000 off the average pensioner’s wealth, George Osborne claims, as the remain campaign seeks to woo older voters deemed more likely to turn out on 23 June.Treasury analysis suggests the uncertainty unleashed by a Brexit vote would rattle stock markets and undermine the value of pensioners’ homes. A sell off of the pound on the foreign exchanges could also drive up inflation, eroding the value of pension savings. Continue reading...

Even Athens’ creditors are now divided on whether it is worth carrying on with the farcical pretence that a bankrupt country is ever going to repay in fullAn agreement this week to release €10.3bn of bailout money to Greece was, in comparison with past negotiations, straightforward. That does not reflect well on the European officials and international creditors involved. It is a measure of how long the crisis has gone on and how low expectations have fallen.The achievement is in postponing a dispute between eurozone disciplinarians and pragmatists at the International Monetary Fund. Hawkish Europeans, chiefly Germany, take the view that softening conditions imposed on Athens undermines the financial credibility of the currency union. The IMF calculates that Greece cannot service its debts on the current trajectory; that even heroic efforts of fiscal tightening would not yield sufficient revenue and might suffocate the economy instead. The current bailout terms envisage Greece reaching a budget surplus of 3.5% of GDP. The IMF thinks 1.5% is a more plausible figure and wants “reprofiling” of Greek debts – easing the overall burden and softening the interest rate. Continue reading...

Those of a certain age may remember a BBC TV programme called Tomorrow’s World that reported on technological, scientific and medical innovations (If robots are the future of work, where do humans fit in? 24 May). The way these were described suggested an end to drudgery – soul-destroying jobs like stacking supermarket shelves. We’d all have shorter working hours and longer holidays; the production of abundant food would abolish famine; medical advances would eradicate deadly diseases like malaria and cholera. Science and technology would be used for the benefit of all humanity. We would all have longer, healthier, happier lives. It sounds like a utopian pipe-dream now that several of the advances talked about in Tomorrow’s World have come to pass. The patents and rights to these scientific, medical and technological advances have been acquired by big business and big pharma and used solely to make huge profits for the shareholders. Too many of us are now slaves to technology, working longer hours for less pay, with no holidays because of zero-hours contracts, living in glorified rabbit hutches, eating unhealthy, mass produced convenience foods and, in what free time we have, kept docile by TV talent shows, soap operas, football and endless repeats of Friends – the modern day equivalent of bread and circuses, the Roman emperors’ means of pacifying the plebs. Yes, the future may be brighter. But only for the few.

Full coverage as parliament discusses whether to cut the benefits due to Britain’s steel workers, to help Tata find a buyer

Data suggests global glut is easing due to fall in US output and supply disruption in Canada, Libya and NigeriaOil prices have broken through the $50 per barrel mark for the first time in almost seven months after storage figures suggested that the glut in global crude supplies was easing. Many analysts have predicted that the recovery, which will help the North Sea oil industry and could steady the global economy but hurt motorists through higher petrol costs, could be short-lived.The price of Brent crude edged up 0.9% to $50.2 a barrel, boosted by data from the US government showing a sharper than expected fall in crude stocks last week, and it later fell back slightly.Related: Shell to cut 2,200 more jobs in reaction to low oil prices Continue reading...

Religion itself thrives in places where liberal individualism fails. That’s the real clash of civilisationsThe so-called “masters of suspicion”, Nietzsche, Marx and Freud, all thought that religion would wither and die in the 20th century. Others enthusiastically backed the secularisation hypothesis. Intellectually, the enlightenment had punctured it below the waterline and it was sinking. Religion was dead. Except, of course, the reverse happened: it flourished. In 1900, the year that Nietzsche died, there were 8 million Christians in Africa. Now there are 335 million. And the growth rate continues to accelerate. God wasn’t dead. God was reborn. Indeed, far from being the century in which religion went away, for both Christianity and Islam, the 20th century was numerically the most successful century since Christ was crucified and Muhammad gave his farewell sermon on Mount Arafat. By 2010, there were 2.2 billion Christians in the world and 1.6 billion Muslims, 31% and 23% of the world population respectively. The secularisation hypothesis is a European myth, a piece of myopic parochialism that shows how narrow our worldview continues to be.But every now and then the secularisation thesis gets a shot in the arm by some little local news. This week, it emerged in a survey that people with no religion now outnumber Christians in England and Wales. And it’s true, of course. We are getting less religious in the UK. This is not exactly because atheism is having some hipsterish Hitchens-esque revival, but more because we in the west are less and less a society of joiners. And religion begins not with the metaphysics but with the taking part – belonging preceding believing. Which is why the communitarian spirit of religion is declining in places where liberal individualism thrives. And why religion itself thrives in places where liberal individualism fails. That’s the real clash of civilisations: the shopping centre (now moved online) versus the temple, a battle between those who are wealthy enough to think in terms of the first person singular and those forced to think in terms of the plural collective. There are only two globalisations: God and mammon. And they will never fully be reconciled. Imagine no religion, sang the man on a white Steinway with a net worth of $800m. Imagine no possessions he also sang. Though he obviously found that one a little harder. Continue reading...

Nearly a third of all Americans between age 18 and 34 currently live with parents – we want to hear about your experiences: the good, bad and expensiveWhat happens when your kids move home – or never move out? We want to hear from US parents whose nests have stayed full.For the first time in more than 130 years, young US adults are more likely to live with their parents than in any other housing situation.

Proportion of young people not in education, employment or training jumps to 12%, but total is down over five yearsThe number of young people in Britain not in education, employment or training increased for a second consecutive quarter between January and March, to 865,000.The proportion of so-called Neets among 16- to 24-year-olds edged up 0.1 percentage points – or 2,000 people – to 12%, compared with the previous quarter, according to the Office for National Statistics.Related: More youngsters shut out of work or training, study finds Continue reading...

George Osborne once pledged a balanced economy, with growth based on a march of the makers but instead a shocking imbalance of payments loomsLet’s hear it for the British consumer. The trade figures are dire. Business investment is looking a bit wobbly. Manufacturing is in a slump. But out there in the high street or in the private world of online shopping, it is spend, spend, spend.That’s the inescapable message from the government’s second stab at estimating the growth rate of the economy in the first three months of 2016. The headline figure – gross domestic product was up 0.4% on the final three months of 2015 – was unchanged. But the breakdown was deeply troubling. Continue reading...

Sir John Vickers accused Bank of stepping back from proposals on how much capital banks should hold to endure heavy lossesThe Bank of England has rejected criticisms from the architect of banking reforms that it has watered down its approach to ensuring the UK’s banking system is strong enough to withstand heavy losses.Sir John Vickers – appointed by the 2010 coalition government to design ways to avoid another taxpayer bailout of the system – has argued that Threadneedle Street is stepping back from his proposals for how much capital banks should hold.Related: The Guardian view on the big banks: shake them up, please | Editorial Continue reading...

Increases in business services and government spending propped up growth with worrying fall in business investment blamed on Brexit fearsBritain’s economy grew at 0.4% in the first three months of the year, despite a slump in manufacturing and construction output that has dragged down GDP growth over the last year.Tumbling business investment, which recorded its first annual fall in three years, also restricted growth and fuelled concerns that businesses are holding back on plans to expand ahead of the EU referendum.Related: UK economy dragged back by weak business investment and trade – live Continue reading...

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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