Leaving or remaining in the union is about politics, history and much more. Yet we keep on consulting economistsHouseholds in England can look forward to a 14-page booklet landing on their doormat this week, making the case for Britain’s remaining in the EU. Responding to criticism of the £9m publicity drive, which will eventually reach the whole of the UK, the government said a survey had shown that 85% of people wanted more facts about the referendum.If it is facts we get, fair enough. Voters are being asked to decide on something that until recently they knew little about, and probably cared even less. Now, with less than three months to go to the poll, it’s little surprise people want a crash course in the pros and cons of EU membership. Understandably, many simply want to know whether they will be better or worse off if we leave. Continue reading...

Financial secrecy represents a huge threat to the fragile global system, and we won’t solve the problem by politely asking tax havens to stop behaving badlyThe question of tax havens and financial opacity has been headline news for years now. Unfortunately, in this area there is a huge gap between the triumphant declarations of governments and the reality of what they actually do.

TUC finds young women earn on average only £8.50 an hour against £10 for men – a wider pay gap than for workers with academic qualificationsYoung women with vocational qualifications earn 15% less than their male peers, a significantly bigger pay gap than for those with academic qualifications, according to new research.Men aged between 22 and 30 with a vocational qualification above GCSE level earn on average £10 an hour, the Trades Union Congress (TUC) found in an analysis of official figures. Women with the same qualification level earn only £8.50 per hour.Related: The gender pay gap: how much would a feminist cupcake cost you? Continue reading...

The secretive wealth of public power has been exposed as never before. This poses a serious test for politicians, which Barack Obama passed but David Cameron failedSunlight, according to a cliche favoured by David Cameron, is the best disinfectant. Well, this week, the comparison might instead be with dangerously concentrated bleach. After a five-day outpouring of secrets from an obscure office in Panama, a prime minister is out in Reykavik, a president is on the ropes in Buenos Aires and the censors are putting in serious overtime in Beijing. A new regime in world football has been tainted with old-fashioned sleaze, Vladimir Putin has been moved to dismiss a paper trail linking his friends with billions of dubious dollars as a plot, and some big names from showbiz have discovered that they share a lawyer with the associates of gold bullion robbers.Considering a few of the stories that didn’t make the front pages – but could have done in any ordinary week – reaffirms the breathtaking volume of scandals that Mossack Fonseca kept discreetly under wraps. The lobbying and the tip-offs, for example, that HSBC provided to try and prevent the emerging Syrian war from separating President Bashar al-Assad’s cousin and intelligence chief, Rami Makhlouf, from his money. Then there were the disguised London property purchases and the hidden foundation planned for the daughters of Azerbaijan’s president, with the direct involvement of the minister of taxes in the latter scheme lending it a flavour of pre-revolutionary France. And don’t forget Petro Poroshenko, the Ukrainian president whose promise to “wipe the slate clean of business interests” was swallowed by the west, but who it transpires was – at the very hour of his troops’ gravest danger – concentrating instead on setting up offshore firms. Continue reading...

Japan’s currency has gained 12% against the dollar this year, increasing pressure on the Bank of Japan to take actionFears that Japan’s anti-deflation strategy is unravelling have intensified after a sharp rise in the value of the yen against the dollar prompted a concerted attempt by policymakers in Tokyo to talk down the value of the currency.Related: Japan's economic plan 'backfiring' as yen surges Continue reading...

Bernie Sanders’ and Donald Trump’s calls to cut free trade is not the way to reduce inequality in the US. Far better to improve the tax systemThe rise of anti-trade populism in the 2016 US election campaign portends a dangerous retreat from the United States’ role in world affairs. In the name of reducing US inequality, presidential candidates in both parties would stymie the aspirations of hundreds of millions of desperately poor people in the developing world to join the middle class. If the political appeal of anti-trade policies proves durable, it will mark a historic turning point in global economic affairs, one that bodes ill for the future of American leadership.Republican presidential candidate Donald Trump has proposed slapping a 45% tax on Chinese imports into the US, a plan that appeals to many Americans who believe that China is getting rich from unfair trade practices. But, for all its extraordinary success in recent decades, China remains a developing country where a significant share of the population live at a level of poverty unimaginable by western standards.Related: Central banks are still the only game in town Continue reading...

Crude steel production falls to lowest since December 2008 while manufacturing output drops 1.8% year on yearA slump in manufacturing output and drop in steel production to a seven-year low have fanned fears that the UK economy is losing steam and becoming increasingly unbalanced.Official figures showed factory output fell by 1.1% in February, a much sharper decline than economists had been expecting. Even before the UK’s steel crisis escalated last month, crude steel production weakened in January and February and was the lowest for seven years, the Office for National Statistics (ONS) said.0.3% fall in total #production in February, within which #manufacturing fell 1.1% https://t.co/dIwo44lVx1 #GDPRelated: Surprise slump in UK manufacturing - business live Continue reading...

How do we measure inequality? From some angles, things appear to be improving, but from others the situation is getting worse and worseIt’s familiar news by now. Oxfam’s figures have gone viral: the richest 1% now have more wealth than the rest of the world’s population combined. Global inequality is worse than at any time since the 19 century.For most people, this is all they know about global inequality. But Oxfam’s wealth figures don’t quite tell the whole story. What about income inequality? And – more importantly – what about inequalities between countries? If we expand our view beyond the usual metrics, we can learn a lot more about how unequal our world has become.

The currency hit a fresh high of 107.6 against the dollar, threatening government hopes of stronger growth and raising prospect of forex interventionJapan’s finance minister Taro Aso has ratcheted up the warning against a rapid rise in the yen as the country’s ultra-dovish monetary policy implodes and threatens to condemn the economy to continued stagnation.Related: Helicopter money is closer than you think Continue reading...

The world’s biggest provider of public finance to developing countries will refocus its financing efforts towards tackling climate change, group saidThe World Bank has made a “fundamental shift” in its role of alleviating global poverty, by refocusing its financing efforts towards tackling climate change, the group said on Thursday.The world’s biggest provider of public finance to developing countries said it would spend 28% of its investments directly on climate change projects, and that all of its future spending would take account of global warming. Continue reading...

Cutting prices on clothes is a good start for Marks & Spencer’s new chief executive but lots of hard work lies aheadThere is a secret to being the new broom in a company that has been struggling: dissociate yourself from past failures as fast as you can.In that respect, Steve Rowe has got off to the best possible start as the chief executive of Marks & Spencer. His comment that the performance of the key clothing division had been “unsatisfactory” is the sort of breezy honesty that works well when it is your first day in the job. Particularly when it has the merit of being true. Continue reading...

Extra consumer spending could kickstart economic recovery – in a perfect worldImagine that the world economy takes a turn for the worse and slips back into recession. Central banks double down on their quantitative easing programmes. That doesn’t boost growth or bring an end to deflation. They push interest rates deep into negative territory. That doesn’t work either.At this point, politicians opt for the helicopter money approach. That’s where central banks print money so finance ministries can hand it out to citizens in the hope that they will spend the unexpected windfall. Continue reading...

Biggest fall in productivity since financial crisis puts pressure on chancellor to prove plan to increase output can workA sharp drop in British productivity has cast further doubt over the country’s economic prospects and will add to pressure on the government to prove its productivity plan can bear fruit.Official figures show labour productivity, as measured by output per hour, fell by 1.2% in the fourth quarter of 2015 from the third quarter, the biggest fall since the financial crisis in 2008. Continue reading...

People ridiculed the Luddites for opposing technological change that ultimately created new work. Today’s economic indicators don’t offer that hopeIf you put water on the stove and heat it up, it will at first just get hotter and hotter. You may then conclude that heating water results only in hotter water. But at some point everything changes – the water starts to boil, turning from hot liquid into steam. Physicists call this a “phase transition”.Automation, driven by technological progress, has been increasing inexorably for the past several decades. Two schools of economic thinking have for many years been engaged in a debate about the potential effects of automation on jobs, employment and human activity: will new technology spawn mass unemployment, as the robots take jobs away from humans? Or will the jobs robots take over release or unveil – or even create – demand for new human jobs?Smart machines now collect our highway tolls, check us out at stores, take our blood pressure, massage our backs, give us directions, answer our phones, print our documents, transmit our messages, rock our babies, read our books, turn on our lights, shine our shoes, guard our homes, fly our planes, write our wills, teach our children, kill our enemies, and the list goes on.For several decades after World War II the economic statistics we care most about all rose together here in America as if they were tightly coupled. GDP grew, and so did productivity – our ability to get more output from each worker. At the same time, we created millions of jobs, and many of these were the kinds of jobs that allowed the average American worker, who didn’t (and still doesn’t) have a college degree, to enjoy a high and rising standard of living. But … productivity growth and employment growth started to become decoupled from each other. Continue reading...

Minutes from the meeting in which Fed voted to leave its rate unchanged showed some argued for ‘caution’ while others expressed concern over waitFederal Reserve policymakers were split at their last meeting over how to respond to a slowing global economy, with two officials supporting a rate hike in March even as an opposing group felt that even raising rates in April would be too soon.Minutes of the Fed’s 15-16 March meeting released Wednesday showed that several participants argued for “proceeding cautiously” with future rate hikes because of global risks such as weaker growth in China. This group said that even raising rates in April “would signal a sense of urgency they did not think appropriate”.Related: Fed officials hint at interest rate hikes but Janet Yellen urges caution Continue reading...

$160bn tie-up with Allergan, which would have been world’s biggest pharmaceutical deal, scuppered by US tax crackdownBarack Obama’s derailment of Pfizer’s $160bn (£114bn) merger with Allergan sparked immediate speculation on Wednesday that the US drugs company would turn its attention to another big pharmaceutical takeover.

Reforms include higher public spending to help the jobless find work, cutting benefits to encourage the jobless to take low-paid work and cutting taxesThe protracted weakness of the global economy has highlighted the need for lower taxes on employment and higher public spending to get the unemployed back into work, the International Monetary Fund has said.Expressing concern about sluggish growth in the west since the 2008-09 downturn, the Washington-based IMF said it was time for ultra-low interest rates and quantitative easing to be accompanied by a range of structural reforms. Continue reading...

Non-food prices drop by 2.6% year-on-year as retailers continue to respond to market conditions with bargains and promotionsConsumers have benefited from three years of continuously falling shop prices on non-food goods, according to the latest data from retailers.Excluding food, prices fell 2.6% in March from a year earlier, according to the BRC-Nielsen shop price index. Continue reading...

Falling oil prices, mounting concern over a possible UK exit from the EU and the IMF chief’s warning about faltering growth fuel jittersStock markets across Europe have fallen following weaker than expected economic indicators, falling oil prices, and a warning from the International Monetary Fund stoked fears of a slowing global recovery.All major European markets fell, with the FTSE 100 in London closing down 1.2% or 73 points at 6091.23, after new data indicated global economic uncertainty and concern over the EU referendum weighed on Britain’s services sector in March, in the latest sign that the UK recovery is losing momentum. Continue reading...

Dominic Grieve seems extraordinarily perplexed about the economy and people of the British Virgin Islands (David Cameron must come clean on tax, says Jeremy Corbyn, theguardian.com, 5 April). What about the economy and people of south Wales? Are we all equally perplexed about destroying the livelihoods of its inhabitants? Of course, how silly of me, self-evidently it’s harder for a handful of service sector workers in a Caribbean enclave to reinvent themselves successfully in another guise – as clergymen, perhaps – than it is for 15,000 industrial workers (and 25,000 more in the wider community) here in the UK. And after all, look how easy it proved to be for mining communities the length and breadth of the country back in the 80s.

Markit/Cips PMI suggests sector’s progress came to near standstill amid slowing global economy and EU referendum uncertaintyThe slowing global economy and uncertainty over the EU referendum weighed on Britain’s services sector in March, in the latest sign that the UK recovery is losing momentum.

For all the merits of Christine Lagarde’s warning of a sluggish recovery and need for policies for growth, there is a sense of driftThe pattern has become familiar. Every April, the International Monetary Fund comes up with a forecast for global economic growth. Within a few months, it becomes clear that the prediction was too optimistic. The IMF then cuts the forecast, adding a warning to its 188 member countries that they need to do more, individually and collectively, to boost activity.Christine Lagarde, the IMF’s managing director, has made it plain that another downgrade is anticipated when the Washington-based organisation publishes its World Economic Outlook next week. The IMF had been expecting a stronger performance from the advanced economies of the west to compensate for weaker growth in some of the leading emerging markets, such as China and Brazil. Continue reading...

Christine Lagarde warns of advanced economies’ ‘loss of momentum’ and credits emerging markets with driving recoveryGovernments must urgently pursue more growth-friendly policies to shore up a weakening global economy beset with risks, the head of the International Monetary Fund has said.Christine Lagarde also put governments on alert that they should prepare contingency plans in case threats to the fragile global economy materialise.

Acting permanent secretary due to leave in July for private sector after failing to land key Whitehall roleOne of the UK Treasury’s most highly experienced officials is leaving the civil service after missing out on a top Whitehall post.John Kingman, who is filling in as acting permanent secretary to the Treasury after Sir Nicholas Macpherson stepped down last month, is expected to return to the private sector later this year. Continue reading...

Construction firms say uncertain outlook ahead of EU referendum had curbed spending in the sectorHousebuilding in Britain slowed last month to the weakest pace for more than three years as construction firms said an uncertain outlook had curbed spending among clients.The slowdown in home construction overshadowed faster rises in commercial work and civil engineering activity and left overall growth in the building sector subdued, according to a survey. Continue reading...

Eight years on from the banking crisis, Thomas Piketty’s calls for financial reform are still ignored. This collection of articles finds him undiminished in his beliefsThomas Piketty depresses as much as inspires. Read him and you become convinced that western democracies have set themselves problems they no longer have the will to solve.Democracy’s superiority to dictatorship is not that democratic leaders are necessarily more virtuous than dictators are. Nor can anyone but a cockeyed optimist believe that democratic publics are by definition always clever and benevolent. Democracies’ great advantage is meant to be that they have a rubbish chute. When leaders and policies fail, we shove them through it and replace them with something better.Related: Why the 1% should pay tax at 80% | Emmanuel Saez and Thomas PikettyPiketty’s solution, that the eurozone countries share their debts and become a single state, strikes me as naiveRelated: Sign up to our Bookmarks newsletter Continue reading...

Survey of CFOs shows 75% support staying in EU but many are postponing key financial decisions as jitters spread through British economySupport for staying in the EU has risen among the finance bosses of big British firms, but they are also increasingly jittery as June’s referendum approaches.With opinion polls tight, a survey of chief financial officers (CFOs) indicates they are holding off hiring new staff and reluctant to spend on new equipment before the public vote. Risk appetite has fallen to a three-year low, according to the poll of 120 CFOs of FTSE 350 and other large private companies.

Statisticians want to track the new ways that people consume and trade goods and services, via online platformsStatisticians are exploring how to measure the UK’s rapidly growing “sharing economy”, where consumers trade time, assets and talents through platforms such as Airbnb and TaskRabbit.Amid criticism that official statistics fail to capture the full picture of Britain’s modern economy, the Office for National Statistics has been planning to update its surveys to better measure the new ways people consume and trade goods and services.Related: George Osborne has failed to deliver the business rates revolution Continue reading...

The laissez-faire economic model has proved a complete dud. A proper industrial strategy is needed, starting with better help for a foundation industry – steelLast week should have been a good one for George Osborne. The first day of April marked the day when the ”national living wage” came into force. The idea was championed by the chancellor in his 2015 summer budget when he said it was time to “give Britain a pay rise”.Unfortunately for the chancellor, the 50p an hour increase in the pay floor for workers over 25 was completely overshadowed by the existential threat to the steel industry posed by Tata’s decision to sell its UK plants.Related: The dogmas destroying UK steel also inhibit future economic growth | Will Hutton Continue reading...

The publication of the worst figures since the war should set alarm bells ringing. This is the deficit the austerity chancellor should have been concerned aboutA record balance of payments deficit of £96.2bn (5.2% of GDP) for 2015, and £32.7bn (7% of GDP) for the fourth quarter alone – both higher in percentage terms than in any year since the second world war – and the first, instinctive reaction of the government is to let what is left of our steel industry go hang, so that imports can be boosted even further.These latest figures are horrifying in both cash terms and as a percentage of GDP. During the war, when this country was, economically, on its uppers, the balance of payments deficit reached some 10%, financed by the Lend Lease arrangements with Washington and by running down our overseas assets.Related: Steel crisis: builders, manufacturers and carmakers urged to buy BritishThe crunch has now come with the impact austerity has had on business investment and the export sector Continue reading...

Bristol’s latest festival of ideas, in association with the Observer, offers an inspirational programme of debate, theatre and reasonAn ideas festival should be about debating ideas and promoting change. For the past 12 years Bristol has celebrated ideas in the arts and sciences. Our work has always taken place in the city, but has never been parochial: we seek the best ideas worldwide for debate. Continue reading...

Chris Riddell on the prime minister’s response to Port Talbot’s woes Continue reading...

Obama visited the ailing Indiana city four times in 16 months at the peak of the economic crisis, and pledged part of a $787bn stimulus package to help – but recovery was slow until US demand for RVs revived the city’s old stalwartThe Great Recession came as a wave of blows to Tom Bumpas.In 2008, he lost his job of 20 years in the recreational vehicle manufacturing capital of the world – Elkhart County, Indiana. Demand plummeted for what are popularly known as RVs, the wheeled apartments in which Americans tour their country, and unemployment in Elkhart surged to nearly 20%.Related: Elkhart travels Obama's slow road to recovery but struggles to feel the benefit Continue reading...

From his grand country house in Gascony, the Vote Leave champion tells why no cost is too great to achieve Britain’s exit from the European Union – not the EU’s total collapse, nor David’s Cameron’s jobThe journey from London to a remote corner of south-west France takes long enough for the thought to occur, more than once, that it is an unlikely location for a Brexit HQ. The man who hopes to lead us out of Europe lives alone in an extremely handsome country house – not quite a chateau, but several notches up from a maison – deep in rural Gascony. The pristine period chic of its reception rooms is flawlessly French, and unless you study its library shelves, which groan with British political tomes, or use the downstairs loo lined with framed and signed photographs of Downing Street cabinets, you would never guess who lived here. As his former boss once famously observed, it is a funny old world.The impression of improbability is compounded by Nigel Lawson’s expression as he receives me. It is one a courteous but very private gentleman might wear to greet someone who had broken down in his elegant driveway. Nothing about his bearing suggests a man bursting to make the case for changing the course of his country’s future. It seems to say something more like: “Well, you’d better come in while you wait for the RAC.”Related: Let’s be brutally honest: this remain campaign is failing | Jackie AshleyRelated: Britain’s values were founded in Europe – how can we leave? | Andrew Graham Continue reading...

Leak reveals worry that British poll on leaving union could paralyse EU decision-making just as IMF pushing through bailout terms, according to whistleblower

Sajid Javid finally made it to south Wales and said some important things, but government strategy has been badly exposed by the public reaction to the Tata sell-offSajid Javid said some important things on Friday when he finally made it to Port Talbot almost three days after Tata Steel decided to pull out of its UK steel operations. The business secretary said the steel industry is absolutely vital to UK manufacturing. He said there most certainly will be interested buyers of the Tata assets. He said that he was on the steel workers’ side. And he said the UK government supported tariffs against dumping. Warm words were needed and it was important Mr Javid uttered some.The problem, though, is that such assurances are too little, too late and too flimsy. If the business secretary was as serious as he now claims about finding long-term solutions for the UK steel industry he would have been proving it by trying to find them months ago, when the crisis that made landfall this week was still a gathering storm on the financial oceans, rather than now, when the damage is already being done. The fear, underpinned by Mr Javid’s disturbing infatuation with the libertarian individualist ideas of the American writer Ayn Rand and by his low-profile laissez-faire approach to the steel crisis generally – surely he must have known the Tata situation before he set off to Australia – is that what he brought to Port Talbot were crocodile tears. Continue reading...

Respected Markit/CIPS survey suggests sector recorded one of its weakest performances for three years as exports market toughensBritain’s manufacturers shed jobs and cut prices last month as they struggled with tough export markets amid a global economic slowdown.A closely watched survey of the sector suggested it made little contribution to the UK’s overall economic growth in the first quarter. Reflecting a crisis in Britain’s steel industry, a slowdown in the oil sector and sluggish demand overseas, manufacturing registered one of its weakest performances for three years, according to the Markit/CIPS UK Manufacturing purchasing managers’ index (PMI) report.#UK manufacturing output growth unchanged from Feb’s 7-month low. Job losses recorded for third straight month. pic.twitter.com/Tan5vULfRT#Eurozone manufacturing growth ticks slightly higher, but 'core' weakness weighs on sector https://t.co/S8DrjD7Reb pic.twitter.com/All3U0EPjB Continue reading...

Policymakers will have to continue their lonely fight with a new set of ‘unconventional unconventional’ monetary policiesWith most advanced economies experiencing anaemic recoveries from the 2008 financial crisis, their central banks have been forced to move from conventional monetary policy – reducing policy rates via open-market purchases of short-term government bonds – to a range of unconventional policies. Although the zero nominal bound on interest rates – previously only a theoretical possibility – had been reached and zero interest rate policy (ZIRP) had been implemented, growth remained anaemic. So central banks embraced measures that didn’t even exist in their policy toolkit a decade ago. And now they are poised to do so again.Related: Bank of Japan launches negative interest ratesRelated: Negative interest rates: what you need to knowRelated: ECB cuts interest rates to zero amid fears of fresh economic crash Continue reading...

The national living wage comes into force in the UK on Friday, but what is it and what difference will it make?It is a new national minimum wage of £7.20 per hour for everyone 25 and over. The rate is 50p higher than the previous minimum wage of £6.70 – although that lower rate will still apply for those aged 21 to 25. Continue reading...

The official PMI for March shows the huge manufacturing sector is expanding again, easing fears of a damaging slumpActivity in China’s manufacturing activity unexpectedly expanded in March for the first time in nine months, an official survey has shown, adding to hopes that downward pressure on the world’s second-largest economy is easing.Related: 'Not fit to lead': letter attacking Xi Jinping sparks panic in BeijingRelated: China's exchange rate trap Continue reading...

It is hard not to be too cynical about the government’s approach to the steel crisis (Nationalisation not the answer to steel crisis, says David Cameron, theguardian.com, 31 March). It is unwilling to make any long-term commitment to save the industry. Instead, it looks to a series of short-term fixes to stave off closure of plants such as Port Talbot until after the May elections. If as expected no saviour for the industry appears, the government will adopt its preferred option of allowing the industry to close, selling off those assets that can be sold and converting the old sites into shopping centres, warehouses or theme parks.The folly of this approach can be shown with reference to the trade deficit, which at 6% of GDP is the highest of any in the developed world. This will only worsen when all steel in future has to be imported. Continue reading...