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by Katie Allen and Jill Treanor on (#14RPG)
Credit ratings agency said the economic costs of Britain leaving the EU would outweigh the benefitsA vote to leave the EU in June’s referendum will threaten the UK’s strong credit score, potentially pushing up the cost of government borrowing, the ratings agency Moody’s has warned.On Monday the pound tumbled on growing fears of a Brexit, hitting a seven-year low against the US dollar and also weakened against other big currencies as investors pulled money out of UK assets. Currency experts said London mayor Boris Johnson coming out for the leave campaign intensified pressure on sterling.Related: Pound hits seven-year low after Boris Johnson's Brexit decision - business live Continue reading...
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| Updated | 2025-01-13 07:30 |
by Jill Treanor on (#14QME)
Treasury select committee chair says amendments ‘give the appearance of a minister trying to lean on the OBR’The Treasury select committee is concerned that the independence of the body set up by the government to provide economic forecasts is being compromised.In a report into the Office for Budget Responsibility (OBR) published on Monday, the Treasury select committee found that words such as “topslice†to describe spending cuts were removed – although concluded that in the end this did not change the analysis of the economic situation. Continue reading...
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by Guardian Staff on (#14QHX)
An exit from the European Union would mean huge economic costs for Britain and no political benefits whatsoeverAmong the multiple existential challenges facing the European Union this year – refugees, populist politics, German-inspired austerity, government bankruptcy in Greece and perhaps Portugal – one crisis is well on its way to resolution. Britain will not vote to leave the EU.This confident prediction may seem to be contradicted by polls showing roughly 50% support for “Brexit†in the June referendum. And British public opinion may move even further in the “Out†direction for a while longer, as euroskeptics ridicule the “new deal†for Britain agreed at the EU summit on 19 February.Related: EU referendum: a timetable for the UK Continue reading...
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by Larry Elliott Economics editor on (#14NG5)
Growth is tepid, productivity is poor, and inflation is too low: all is not going according to policymakers’ masterplansMembers of the Treasury select committee get the chance to grill the governor of the Bank of England on Tuesday. Mark Carney will make the short journey from Threadneedle Street to Westminster to face questions on the state of the economy. It should be an intriguing contest. The committee’s chairman, Andrew Tyrie, will treat the governor with the weary disdain of a headteacher ticking off a pupil for a substandard piece of homework. Carney will answer in sentences so long that MPs may feel the need for a drinks’ interval half way through them.
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by William Keegan on (#14MQB)
David Cameron is swimming in deep waters in Brussels: it may yet fall to his steady, broadly pro-European opposition to hand him a referendum victoryIn his Antimémoires, the French writer and politician André Malraux recalls a conversation with President de Gaulle after the second world war in which De Gaulle said he planned to nationalise the banks and public utilities.But he went on to emphasise that he was going to do this “not for the sake of the left but for the sake of Franceâ€.The question ‘who is the real David Cameron?’ intrigues me much more than ‘who is the real George Osborne?’ Continue reading...
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by Fintan O'Toole on (#14M3S)
Britain’s potential departure from the European Union marks yet another existential moment for the continent, but it is just at such moments of crisis that the true strengths and worth of the project come to the foreMost ideas prove themselves by working well. The idea of Europe, on the other hand, seems to be most powerful when it’s going disastrously wrong. Over the course of modern history, it appears that Europe becomes an urgent business only when it is threatened with disintegration. When things are OK, Europe bores us to tears. It is 28 shades of grey. But plunge Europe into existential crisis and it suddenly seems to matter. This is the great paradox of the idea: it grips the imagination only when it is in a dire state. The odd way in which the threat of Brexit makes the notion of Europe interesting again is actually quite familiar.Europe has always drawn energy from the proximity of catastrophe. The first modern conception of Europe – that of a Christian commonwealth of holy kingdoms – took hold because the Turks were at the gates of Vienna and the triumph of Islam in Europe seemed a real possibility. The religious wars in which Catholic and Protestant powers tore each other apart were ended by appealing to that same idea of European Christendom. Continue reading...
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by Phillip Inman Economics correspondent on (#14GMX)
The former French finance minister won praise from developing countries but criticism from Greece during first termThe International Monetary Fund has appointed Christine Lagarde for a second term as managing director after she rebuilt the Washington-based organisation’s reputation following the sex scandal that engulfed her predecessor.Lagarde, 60, who was the only candidate, was backed by the UK, Germany, China, and her home country, France, to stay on for another five years.Related: Christine Lagarde, IMF chief with a key role in the Greek debt talks - profile Continue reading...
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by Nick Fletcher on (#14EMQ)
Crude oil dips on renewed supply glut fears, with markets set to end positive week on downbeat note2.47pm GMTA slide in oil prices on concerns about oversupply - notwithstanding the recent proposal from producers to freeze output at January levels - continues to take the shine off this week’s stock market rally.US markets have followed Europe lower, with the Dow Jones Industrial Average down 70 points or 0.4% in early trading. As well as oil, investors were unsettled by higher than expected inflation numbers, which could prompt the Federal Reserve to raise rates sooner than forecast.2.42pm GMTAnother point about US inflation:Markets are focused on the black line (goods = 30% of core CPI). Fed should be focused on blue line (services = 70%) pic.twitter.com/3vbr3ftfIZ2.29pm GMTOver in Greece, protesting farmers have upped the ante, expanding roadblocks nationwide ahead of what some are calling make-or -break talks with prime minister Alexis Tsipras on Monday. Helena Smith reports from Athens:A month into their protests over pension and tax reforms, the powerful bloc of farmers that have brought chaos to Greece intensified their action, announcing that tractor blockades would be stepped up around Thessaloniki airport this afternoon.More than 66 % of Greece’s import and export trade is carried by road to Europe with the economy suffering huge damage as a result of the blockade.2.16pm GMTTurning back to the UK public finances, the Office for Budget Responsibility, the government’s independent economic analysts, said there was uncertainty over the outcome for the rest of the year:On the current data, meeting our full-year forecast for 2015-16 would require borrowing to fall by £18.4 billion in the year as a whole. That implies borrowing of £7.0 billion over the next two months, compared with £14.8 billion in the same period last year. Our November forecast does assume stronger growth in receipts in the remainder of the year (particularly income tax and stamp duty land tax) but local authority borrowing as measured in the statistical bulletin looks likely to exceed our November forecast. Considerable uncertainty remains over prospects for the remaining two months of the financial year, while data on local authority borrowing are often subject to substantial revisions over subsequent months.Public sector net debt (PSND) in January 2016 is estimated to have fallen by 0.1 per cent of GDP relative to January 2015. A major contributor to the drop over the past 12 months has been the Government’s programme of financial asset sales, including multi-billion pound sales of Lloyds shares and UK Asset Resolution mortgage assets. But the nominal GDP estimate used to calculate the debt ratio is in part still a forecast, so it remains to be seen if debt is still shown to fall on this basis in the year to January in future outturn estimates.2.03pm GMTStill, the higher than expected US inflation numbers may not prevent the Federal Reserve from sitting on its hands in terms of any imminent rate rises, says Rob Carnell of ING Bank:US CPI for January came in a little stronger than had been expected, with the headline rate unchanged on the month, and the core rate rising by 0.3% month on month. Headline inflation in January is now double that in December at 1.4% year on year, with the core rate now at 2.2% (up from 2.1%).Inflation has been one of the factors the Fed has cited for its cautious stance towards monetary policy changes. But despite these latest inflation increases, concerns over the ebbing strength of domestic activity may start to provide more of an excuse for further foot dragging, whilst external demand and financial market turbulence provides yet another excuse for the Fed to do nothing for the foreseeable future.1.49pm GMTThe US data does seem to show a trend:Beating estimates in past 2 wks:
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by Phillip Inman Economics correspondent on (#14F7Q)
Modest 4.7% rise in payments misses City forecast by £1.1bn and may thwart chancellor’s plan for dramatic cut in public borrowing this yearA modest rise in income tax receipts last month was not enough to salvage George Osborne’s plan for a dramatic cut in government borrowing by the end of the financial year.In the last report on the public finances before next month’s budget, the Office for National Statistics said income tax receipts jumped by 4.7% compared with January last year to help produce an £11.2bn surplus in January, which is traditionally a healthy month for tax receipts. Continue reading...
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by Joseph Stiglitz and Hamid Rashid on (#14EQS)
The real worry for the global economy is not just falling commodity prices but also huge capital outflows, which hold serious knock-on effects for growthDeveloping countries are bracing for a major slowdown this year. According to the UN report World Economic Situation and Prospects 2016, their growth will average only 3.8% this year – the lowest since the global financial crisis in 2009 and matched in this century only by the recessionary year of 2001. And what is important to bear in mind is that the slowdown in China and the deep recessions in the Russian Federation and Brazil only explain part of the broad falloff in growth.True, falling demand for natural resources in China – which accounts for nearly half of global demand for base metals – has had a lot to do with the sharp declines in these prices, which have hit many developing and emerging economies in Latin America and Africa hard. Indeed, the UN report lists 29 economies likely to be badly affected by China’s slowdown. And the collapse of oil prices by more than 60% since July 2014 has undermined the growth prospects of oil exporters.Related: What's holding back the world economy? Continue reading...
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by Tom Clark on (#14EEM)
The images used by politicians can simplify difficult theories, but they are also being used to mislead usBanks trembling, shares tumbling and gathering fears of a new slump. The start of 2016 has been chilling for a global economy that has still to shake off the crisis of 2008. Worse, there is no agreement on what to do should the worst happen again. The big ideas that might make a difference – targeting higher inflation, printing money to give consumers something to spend with, or ploughing serious public funds into infrastructure – remain too contentious for politicians to voice out loud. That is a shame, because history suggests that the words they use matter.Related: The Guardian view on the world economy: don’t drive on winding roads with a steering lock | EditorialFrom economics seminars to rage-pumped Trump rallies there is a consensus: we need to do better next time Continue reading...
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by Graham Ruddick on (#14D37)
The bosses of the two companies, Iain Conn and David Brown, have faced a barrage of questions about their treatment of customersIain Conn and David Brown should compare notes after the day they have just had.The two men are in charge of companies battling it out for the unofficial title of most-hated business in Britain. Conn is the boss of Centrica, owner of British Gas, while Brown is the head of Go-Ahead, which operates the Thameslink, Southern and Southeastern rail franchises through its subsidiary Govia. Continue reading...
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by Phillip Inman Economics correspondent on (#14CSZ)
Minutes of ECB governing council meeting indicate bank’s readiness to cut credit costs further to improve bank lendingThe European Central Bank is expected to take further action to stimulate the eurozone economy at its next meeting in March.Minutes of the ECB governing council’s last get-together show that without an improvement in the outlook for growth for the rest of the year and 2017, policymakers are ready to cut credit costs further to boost bank lending.Related: Draghi has financial markets hoping bad news is really good news Continue reading...
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by Lucy P Marcus on (#14C69)
As the Corruption Perceptions Index shows, there is still a long way to go but the process of change provides a roadmap for winning the battleCorruption is a global scourge, sometimes becoming so deeply ingrained in countries that combating it seems impossible. In January, Transparency International released its annual Corruption Perceptions Index, noting that the problem “remains a blight around the worldâ€.The International Monetary Fund, for example, has just warned Ukraine that its $40bn financial bailout could be cut off, owing to fears that corrupt officials will steal or squander the funds. During his recent visit to Mexico, Pope Francis called on the country’s leaders – several of whom (including the president and his wife) are embroiled in conflict of interest scandals – to fight endemic corruption. Continue reading...
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by Phillip Inman Economics correspondent on (#14BZB)
If the thinktank sticks to its guns over coordination between countries, there could enough fireworks to rival Chinese new year at G20At last, the OECD has converted to the teachings of John Maynard Keynes. The austerian non-believers, for so long the dominant force in the Paris-based thinktank, are banished to a distant land. Common sense has prevailed.As revolutions go, it has taken a while. Five years ago ago, the priority was public spending cuts. George Osborne was lauded. Then there was muted criticism. Now the austerity delusion, as the economist Paul Krugman called it, is no longer a central tenet of thinking at the Organisation for Economic Co-operation & Development, the club formed to provide advice to 34 wealthy countries.Related: OECD calls for less austerity and more public investment Continue reading...
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by Rob Johnson on (#14BMD)
The current bout of anxiety is a symptom of the fact that China’s transition from an export-led growth strategy is proceeding far less smoothly than hopedChina’s management of its exchange rate peg continues to rattle global financial markets. Uncertainty about renminbi devaluation is fuelling fears that deflationary forces will sweep through emerging markets and deliver a blow to developed economies, where interest rates are at, or near, zero and thus cannot be lowered to defend against imported deflation. Fiscal gridlock in Europe and the US is heightening the angst.But the current bout of exchange rate anxiety is really just a symptom of the fact that China’s transition from an export-led growth strategy to one propelled by domestic consumption is proceeding far less smoothly than hoped. For some people, visions of the wonders of capitalism with Chinese characteristics remain undiminished. They are certain that, after more than three decades of state-directed growth, China’s leaders know what to do to turn their slumping economy around. Continue reading...
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by Julia Kollewe on (#14BMF)
Tens of thousands of workers are being laid off in key sectors, prompting fears of a ripple effect through the British economyMajor UK-based companies have announced tens of thousands of job losses that are expected to ripple through the economy in the coming months, casting a shadow over Britain’s recovery.Affecting vast areas of the UK economy – from factories to the high street, banking, media and energy – the job losses announced in the past fortnight coincided with another wave of panic selling on stock markets and fears of a further global recession.Related: Job losses gather momentum across UK and EuropeRelated: Lloyds Banking Group to cut 1,755 jobs and close 29 branchesRelated: Boots to cut up to 350 jobs in bigger UK stores Continue reading...
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by Jill Treanor and Larry Elliott on (#14BJV)
Following the Bank of Japan’s launch of negative interest rates, we answer the key questionsNormally savers earn interest when they deposit their money in banks. Similarly, commercial banks that lodge money with central banks receive interest for doing so. Negative interest rates turn this arrangement on its head. Savers have to pay banks for holding their money and central banks penalise banks for depositing cash with them.Related: OECD calls for less austerity and more public investment Continue reading...
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by Larry Elliott Economics editor on (#14BBQ)
Growing gulf means UK workers produce significantly less per hour than G7 averageBritain’s poor productivity record has been highlighted by government figures showing the biggest gap with other leading western economies since modern records began in the early 1990s.Output per hour worked in the UK was 18 percentage points below the average for the remaining six members of the G7 group of industrial nations in 2014, the Office for National Statistics said.Related: UK's productivity plan is ‘vague collection of existing policies’ Continue reading...
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by Larry Elliott Economics editor on (#14B3W)
One-time deficit reduction supporter slashes growth forecasts and urges richer countries to exploit cheap borrowing to spend more on infrastructureThe OECD has called for its rich-country members to ease up on austerity and collectively agree to spend more on infrastructure projects to boost flagging growth.The Paris-based Organisation for Economic Cooperation and Development expressed concern about the state of the global economy as it cut growth forecasts made three months ago and warned that low interest rates and money creation by central banks were no longer enough for a lasting recovery. Continue reading...
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by Julia Kollewe on (#14B1D)
Major companies in energy to banking and retail to manufacturing have announced tens of thousands of job cuts in coming monthsBombardier has become the latest major company to announce job cuts in the UK, with 1,350 posts set to be axed. Cutbacks are being announced in virtually every sector, in the UK and across Europe, with tens of thousands of jobs due to go in coming months.Here’s a round-up of companies that are reducing their UK workforces.Related: UK wage growth slows as employment rises Continue reading...
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by Guardian Staff on (#1494F)
Neil Woodford says British EU withdrawal would have no lasting negative economic impact and attacks ‘bogus’ debateOne of Britain’s most influential fund managers has said a British withdrawal from the EU would have no long-term negative impact on the UK economy and could even benefit it in the short term.Neil Woodford, whose £8bn fund has large stakes in leading British companies such as GlaxoSmithKline, BT and BAE Systems, said much of the debate over British exit was “bogusâ€. Continue reading...
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by Nick Fletcher on (#146YP)
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by Larry Elliott Economics editor on (#147XR)
Immigration, low-skilled work and the squeeze on public sector pay explain the ongoing weakness of wage growthEmployment is at levels not seen since modern records began in the early 1970s. Hundreds of thousands of jobs are being created every year and most of them are full time. The jobless rate is half the European average. According to the Bank of England, wage settlements should be getting more generous as employers compete for a shrinking pool of workers.In fact, the opposite is happening. Despite a higher percentage of the population working than ever before, the annual rate of growth in earnings is falling not rising. Clearly, workers are not in such short supply as the Bank of England imagines.Related: UK wage growth slows as employment rises Continue reading...
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by Phillip Inman Economics correspondent on (#147SG)
Latest jobs figures also show that the unemployment rate remains at 5.1%A first UK interest rate rise since the financial crash appears to be even further away after official figures showed that wages growth last year dipped to 1.9%.
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by Shalailah Medhora on (#146QM)
Treasurer tells National Press Club sceptics are welcome to doubt the trade benefits but the government is convinced of themThe treasurer, Scott Morrison, has ruled out conducting “rear view†analysis of the Trans-Pacific Partnership (TPP) agreement, saying that the government is satisfied with its projected benefits.The only analysis done on the massive 12-country trade deal was conducted by the Department of Foreign Affairs and Trade. Consumer groups such as Choice had asked for independent review to be undertaken.Related: Trans-Pacific Partnership: four key issues to watch out forRelated: TPP trade deal will expand Australia's economy by less than 1%, World Bank reveals Continue reading...
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by Thomas Frank on (#143SY)
The Democratic party rejected the New Deal and its stress on working-class Americans in favour of a technocratic elite – is it time for a political revolution?Stunned by the rise of Bernie Sanders, Hillary Clinton has been at pains to assure the Democratic rank and file that she too understands their concerns; that just like her rival, she is capable of denouncing wealthy interests, of promising to break up big banks and even of hinting that she might prosecute powerful financiers.After her landslide defeat in New Hampshire last week, she conceded that “the way too many things were going just wasn’t rightâ€. There was a difference between her and the senator from Vermont, however: she was the candidate who would get things done, who could “actually make the changes that make your lives betterâ€.Related: Hillary Clinton aides' Wall Street links raise economic policy doubts Continue reading...
by Rupert Neate in New York on (#145FD)
Neel Kashkari, head of the Minneapolis Federal Reserve, said US’s biggest banks are still ‘too big too fail’ and Congress should consider ‘bold solutions’America’s biggest banks present a “nuclear†threat to the US economy and should be broken up, a Federal Reserve policymaker and architect of the 2008 banking bailout said Tuesday.Neel Kashkari, the head of the Minneapolis Federal Reserve, said the US’s biggest banks were still “too big too fail†and Congress should consider “bold transformational solutions to solve this problem once and for allâ€. Continue reading...
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by Reuters on (#1435Y)
Top oil officials from Saudi Arabia, Russia and several key Opec members to discuss supply glutOil prices surged temporarily on Tuesday, reaching their highest levels in more than a week after Russia and Saudi Arabia provided the markets with hope of an eventual deal to tackle a deep supply glut.Representatives from two of the world’s biggest oil producers agreed to freeze production levels, in what could be the first deal between an Opec and non-Opec country in 15 years.Related: Why the falling oil price may not lead to boomRelated: Talks about cutting oil output show Russians and Saudis feel the pain Continue reading...
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by Jill Treanor City editor on (#145CA)
CPI rises to 0.3% for January, up from 0.2% in December, and analysts believe it will stay below 1% for whole of 2016The prospects of a rise in interest rates from the Bank of England has receded after the latest official figures showed only weak upward pressure on the cost of living.The annual rate of consumer price inflation (CPI) rose to 0.3% in January, compared with 0.2% in the year to December.Related: Inflation rises, but we should still fear deflationRelated: Bank of Japan launches negative interest rates Continue reading...
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by Alec Luhn in Moscow on (#14543)
If the distinctive purple banknotes are scrapped, most Europeans won’t mind. But they keep Russia’s shadow economy afloatThe European Central Bank has said it may phase out the 500-euro note, news that most Europeans will probably greet with a shrug. But the distinctive purple bill has many fans abroad – especially in Russia, where it is popular among small-time savers and crooked officials.According to central bank board member, Yves Mersch, Russia is an “important market for euro cash†because the euro is “traditionally used as a stable store of value thereâ€, he said.Related: Crime, terrorism and tax evasion: why banks are waging war on cash | Paul Mason Continue reading...
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by Thomas Piketty for Le Monde on (#144N0)
The Vermont senator’s success so far demonstrates the end of the politico-ideological cycle opened by the victory of Ronald Reagan at the 1980 electionsHow can we interpret the incredible success of the “socialist†candidate Bernie Sanders in the US primaries? The Vermont senator is now ahead of Hillary Clinton among Democratic-leaning voters below the age of 50, and it’s only thanks to the older generation that Clinton has managed to stay ahead in the polls.Related: Sign up for the Campaign Minute - the election condensed every day Continue reading...
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by Larry Elliott Economics editor on (#143RT)
The annual inflation rate was always likely to rise in early 2016 – the surprise is that it has not risen by moreThe level of inflation poses a risk to the UK economy, but not in the way that you might think. Inflation is worryingly low, rather than worryingly high.That may seem a perverse idea at a time when the cost of living as measured by the consumer prices index has risen to its highest level in a year. But consider the following.Related: UK inflation rises on dearer alcohol and clothesRelated: UK inflation rises to 0.3% in January, but market rally fades on Opec news - live Continue reading...
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by Press Association on (#143F4)
Cost of living edged up to 0.3% in January, its highest rate for a yearInflation edged up to its highest rate for a year last month as rises in the price of alcohol and clothing pushed up the cost of living.The consumer prices index (CPI) rose to 0.3% in January from 0.2% in December, according to the Office for National Statistics (ONS).Related: Inflation rises, but we should still fear deflation Continue reading...
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by Reuters on (#14371)
Central bank encouraging banks to lend, businesses to invest and savers to spendThe Bank of Japan’s negative interest rates came into effect on Tuesday in a radical plan already deemed a failure by financial markets, highlighting Tokyo’s lack of options to spur growth as global markets sputter.The central bank, which announced the shock decision on 29 January, will charge banks 0.1% for parking additional reserves with the BOJ to encourage banks to lend and prompt businesses and savers to spend and invest. Continue reading...
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by Larry Elliott Economics editor on (#1422R)
Resolution Foundation points to rising employment and falling inflation as incomes pass 2009 peak – but warns pace of recovery likely to slowLiving standards in the UK have finally made up the ground lost as a result of the financial crash following the boost to incomes provided by rising employment and falling inflation, according to the Resolution Foundation.The thinktank said that the longest squeeze on households in living memory had finally come to an end, with incomes surpassing their previous 2009 peak.Related: Each generation should be better off than their parents? Think againRelated: Now Britain needs clothes banks too. What sort of society are we living in? | Frances Ryan Continue reading...
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by Larry Elliott and Jill Treanor on (#141P1)
Markets rise sharply in belief ECB president will move towards negative interest rates and further QE to ease deflation fearsMario Draghi, president of the European Central Bank, has helped calm jittery financial markets by saying he would not hesitate to take fresh action to boost eurozone growth and inflation.Stock markets across Europe, which were already rallying after a turbulent start to 2016, ended the day sharply higher in the belief Draghi would deliver on his pledge at the ECB meeting next month.Related: Draghi has financial markets hoping bad news is really good news Continue reading...
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by Paul Mason on (#141JK)
Governments would love to see the end of banknotes. But what would a cashless society mean for freedom?I can remember the moment I realised the era of cash could soon be over.It was Australia Day on Bondi Beach in 2014. In a busy liquor store, a man wearing only swimming shorts, carrying only a mobile phone and a plastic card, was delaying other people’s transactions while he moved 50 Australian dollars into his current account on his phone so that he could buy beer. The 30-odd youngsters in the queue behind him barely murmured; they’d all been in the same predicament. I doubt there was a banknote or coin between them.Related: It’s not enough that homeowners prosper. Everyone should Continue reading...
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by Larry Elliott on (#141H3)
Weak economic figures from Japan and China overlooked as European Central Bank chief hints at further stimulus activityJapan’s growth figures were bad. The data for Chinese exports was even worse. A signal for the financial markets to have another dose of the heebie-jeebies? Not a bit of it. This was one of those days when bad news was good news.The thinking goes as follows. If the Japanese economy shrank by 0.4% in the final three months of 2015 and Chinese exports fell by more than 11%, policymakers will sit up and take notice. Central banks will stimulate activity by cutting interest rates, even when they are already negative, and by expanding their quantitative easing (QE) programmes. Continue reading...
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by Saeed Kamali Dehghan on (#141EB)
Goods travel 6,462 miles in 14 days as part of efforts to resurrect ancient trade route connecting east with EuropeA long-distance cargo train has travelled from China to Iran as part of an attempted revival of the ancient Silk Road, a trans-Asian trade route connecting the east to Europe and the Mediterranean Sea.The 32-container train, which arrived in Tehran on Monday, took 14 days to complete the 6,462 mile (10,399km) journey from China’s eastern Zhejiang province through Kazakhstan and Turkmenistan – one month less than the sea route from Shanghai to the Iranian port of Bandar Abbas.Related: World's oldest tea remains discovered on ancient trade routeRelated: Eurasia is an idea whose time has come around again Continue reading...
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by Jill Treanor on (#140H5)
Economist lays out headaches for EU if UK voted to leave, including lower investment, more migration, smaller budget and less influence on global stageThe UK’s exit from the European Union could leave weak member countries exposed to a rise in migrants and reduce the influence of the remaining 27 states on the global stage, according to a leading economist.Jennifer McKeown, senior European economist at Capital Economics, said: “The EU is in a precarious state already, with GDP in most countries still below its 2008 level, refugee inflows adding to pressure on resources and policymakers struggling to respond.Related: German poll finds one in three firms would leave UK after Brexit Continue reading...
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by Justin McCurry on (#13Z69)
Economy shrank at an annualised rate of 1.4% in the last quarter of 2015 – a contraction that was more severe than many had forecastJapan’s economy shrank at an annualised rate of 1.4% in the last quarter of 2015, new figures showed on Monday, dealing a further blow to attempts by the prime minister, Shinzo Abe, to lift the country out of stagnation.
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by Phillip Inman and Jill Treanor on (#13YTB)
Sir John Vickers says UK banks are still at risk, with Beijing prepared to spend billions propping up Shanghai market as fears grow of new crashBritain’s banks are vulnerable to a global financial shock despite efforts to shore up their finances, according to the official who led the inquiry into the safety of UK banks following the 2008 crash.Sir John Vickers, who led the Independent Commission on Banking, said: “The Bank of England proposal is less strong than what the ICB recommended.â€Related: Seven-and-a-half years on, this is a distressingly fragile recoveryRelated: Are we heading for a crash? | Albert Edwards, Aditya Chakrabortty, Linda Yueh, Ruth Lea, Fred Harrison, Vicky Pryce, Dambisa Mayo, Yanis Varoufakis, Mariana Mazzucato Continue reading...
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by Larry Elliott Economics editor on (#13XTW)
From baby boomers through to generation X, the idea was that children would become better off than their parents. That dream is now dead – just ask generation rentPerpetual progress has been at the heart of western society for the past 150 years or more. The idea has been simple: each generation should be better off than their parents.
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by Phillip Inman on (#13XD3)
Osborne claims inequality is declining but the economy – and society – will suffer if he fails to invest in the younger generationGeorge Osborne is known for his helicopter trips to Tory dinners, his £4m trust-fund fortune and links to the aristocracy as heir to an Irish baronetcy. Cementing his reputation as a champion of the richest 1%, the chancellor cut the 50p top rate of tax, cut tax credits (despite making great play of not doing so) and handed bankers an escape clause by making it easier for them to dodge prosecution in the event of another financial crash.All these measures have boosted the income and power of the richest, while the poorest have seen basic public services squeezed and real wages flatline. Continue reading...
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by Phillip Inman Economics correspondent on (#13S4W)
Deputy Federal Reserve chair Bill Dudley said the US economy has momentum to withstand weakness from abroadA recovery in US consumer spending revived battered stock markets in Europe and New York on Friday, despite the latest eurozone GDP figures showing a broad slowdown across the currency union and Greece slipping back into recession.
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by Jennifer Rankin on (#13RYE)
Several European countries favour high-value banknotes, but law enforcement authorities are less convincedHe had the tastes of a typical millionaire. He owned a gold and silver Rolex and a fleet of expensive cars. He liked to dabble in modern art. But although this Chinese businessman had several companies and a palatial villa in the Madrid suburbs, he had almost no money in the bank, a detail that piqued the interest of Spanish authorities.
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by Jennifer Rankin on (#13RTR)
According to Europol, the high-value banknote accounts for a third of all the euro notes in circulationEU finance ministers have called for an investigation into the €500 note, amid growing concern it is making life easier for terrorists, money launderers and drug barons.The French finance minister, Michel Sapin, said it was right to ask questions about the use of the euro’s largest-denomination note. “The €500 note is more used to conceal then to purchase, more used for easing dishonest transactions than to allow you and I to buy something to feed ourselves,†he said.Related: Big bucks: high denomination bank notes - in pictures Continue reading...
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by Arthur Neslen in Brussels on (#13RMD)
Banking advisory group calls for risk disclosure and stress tests to protect against climate inaction should move to low carbon economy happen too lateThe EU’s financial watchdog has called for governments to consider imposing asset disclosures on industry and stress tests on banks as a guard against the economic crisis that could be caused by an emergency switchover to clean energy.The European Systemic Risk Board – set up by the EU in the wake of the 2008 crash to monitor risks to financial markets – has warned in a new report of economic “contagion†if moves to a low carbon economy happen too late and abruptly.
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by Larry Elliott Economics editor on (#13R2F)
More QE and rate cuts loom as poor figures from Finland, Germany and Greece reveal next phase of eurozone crisis is about to beginGreece is back in recession. Italy is barely growing. Portugal expanded but only at half the expected rate. The message could hardly be clearer: the next phase of the eurozone crisis is about to begin.On the face of it, the performance of the eurozone economy in the final three months of 2015 looks solid if unspectacular, with growth as measured by GDP up by 0.3%.Related: Eurozone recovery falters as Greece slips back into recession Continue reading...
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