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...

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...

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...

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...

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...

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...

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...

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 “bogus”. Continue reading...

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...

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%.

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...

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...

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 there”, he said.Related: Crime, terrorism and tax evasion: why banks are waging war on cash | Paul Mason Continue reading...

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...

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...

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...

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...

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...

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...

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...

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...

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.

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.”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...

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...

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.

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.

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...

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.

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...

Italy slows to near stagnation as eurozone GDP expands just 0.3% in final quarter despite ECB stimulus and cheap oilThe eurozone recovery remains disappointingly weak after Greece fell back into recession and Italy slowed to near stagnation.The single currency area grew by just 0.3% in the final quarter of 2015, statistics body Eurostat reported on Friday.Greek Q4 GDP contracts 0.6 pct QoQ, recession of 0.7 pct in 2015 https://t.co/vopG1HUAOG #Greece #economy #euro pic.twitter.com/mkw2DWmHbcRelated: Market turmoil: Stocks rally despite Greece falling back into recession - live updatesThe slowdown in emerging markets, particularly China, has dampened external demand for German products. The upside should come from the weaker euro, which should partially mitigate soft external demand“In particular, any slowdown of the US economy could turn out to be a double whammy for Germany.”0.4% => 0.3% => 0.2% => 0.1%...

Shinzō Abe was heralded for his plan to pull Japan out of deflationary spiral but programme is on brink after dismal weekNot long ago, Shinzō Abe was being heralded for the early success of his grand design to bring Japan out of a deflationary spiral that had haunted the world’s third-biggest economy for two decades.Soon after Abe became prime minister in December 2012, the first two of the three tenets of his “Abenomics” programme – monetary easing and fiscal stimulus – were having the desired effect.Related: Japanese stock market plunges 5% as global rout gathers paceRelated: Tokyo: the city that came out of the shadows Continue reading...

Price of Rapper’s YEEZY Boost Adidas trainers has risen 1,300% in two months on eBay, easily outperforming goldThe lack of safe investments in today’s febrile economic climate has led to rare whisky and even handbags being touted as the best place to stash your cash.But it turns out that the most profitable investment of the lot might be US rapper Kanye West’s snazzy trainers.Related: The Birkin bag: a better investment than stocks and shares Continue reading...

Gold and yen rise in value as weekly falls in Europe reach 6% and 11% in Japan, Tokyo’s biggest weekly drop since 2008A turbulent week in global stock markets is ending with Europe attempting to stage a recovery.Fears about a severe slowdown in the world economy have sent investors scurrying for safe havens such as gold and the Japanese yen, despite Tokyo trying to weaken the currency, and sent stock markets tumbling.Related: Market turmoil: Stocks rally despite weak Italian and Portuguese growth - liveGold pic.twitter.com/njMg8enh6tAs another nerve shredding week draws to a close there appears to be some mild relief for investors as equities try to drive higher. However, it may take some time before investors are truly convinced that a move back in to riskier assets is worthwhile, as the market turmoil emanating from Asia and the eurozone shows no sign of going away any time soon. Continue reading...

Federal Reserve chair Yellen has told senators that negative interest rates are being examined, as shares slide in Europe and the US

Investors buy gold and government bonds and sell shares in banks and companies exposed to lower commodity pricesPanicked investors sought refuge in the safe havens of gold and government bonds on Thursday as a fresh spasm of global selling sent share prices crashing in Asia, Europe and North America.Banks and companies exposed to lower commodity prices were among the biggest losers in London, where the FTSE 100 Index fell by 135 points, a drop of more than 2%. An index of Britain’s banks fell to levels not seen since the depths of the post-Lehman Brothers recession in early 2009.Related: Market turmoil: Wall Street falls; negative rates not off the table says Yellen - liveRelated: If there is another economic crash, Europe’s far right is ready for it | Owen JonesRelated: The five fears stalking the global banking industryRelated: What's holding back the world economy? Continue reading...

The Bank of England’s next move could be more QE or even interest rate cuts. But would Osborne ever consider the activity booster of infrastructure investment?A record was broken during the latest wave of selling on the world’s stock markets. As share prices plunged the yield on 10-year UK government gilts fell to levels never seen before.Should he wish to do so, George Osborne could borrow money in the markets more cheaply than any of his predecessors: neither Benjamin Disraeli nor William Gladstone (a particular hero of the chancellor) enjoyed interest rates as low as 1.29%. Continue reading...

Vehicles travelled 317.8bn miles in 2015, overtaking previous record from 2007, according to Department for Transport figuresBritain’s roads were at their busiest ever in 2015, when total traffic overtook the pre-financial crisis peak.

Morgan Stanley and Goldman Sachs, which agreed to pay $5.06bn last month, are two of the last big banks to pay up for their role in the 2008 economic crisisMorgan Stanley will pay $3.2bn to settle federal and state charges that it misled investors in residential mortgage-backed securities during the financial crisis, New York’s attorney general announced on Thursday.The deal comes a month after Goldman Sachs agreed to pay $5.06bn to resolve civil claims related to the firm’s securitization, underwriting and sale of residential mortgage-backed securities from 2005 to 2007. The Goldman Sachs settlement included $875m in cash payments and $1.8bn in consumer relief.Related: Goldman Sachs profit drops after $5bn mortgage-backed bond settlement Continue reading...

Children are truanting because they don’t have school uniforms, so entrenched is poverty. But clothing’s a need people don’t like to talk about, says Louise CookeLouise Cooke, a 46-year-old ex-teacher and community worker in Nottingham, has never been elected nor is her work funded by the taxpayer – but she is filling in the gaps left by the government.For the past two years, volunteering out the back of her local church, Cooke has been running Sharewear – what, in austerity’s language, we could dub a “clothes bank”. This isn’t packets of pasta or boxes of veg but winter coats and children’s shoes. Cooke describes the people who come through the doors as in “crisis”: anyone from job seekers to Syrian refugees, from low-paid workers to people on benefits (“We have people coming in on disabled people’s behalf because they’re housebound,” she adds).Related: Why should Rachel Watt have to sleep in her wheelchair? | Frances RyanIt’s like we’re living in the developing world – but it’s the UKRelated: Phil Brehaut has Parkinson’s. Threatening to cut his benefits won’t help | Frances Ryan Continue reading...

History should be warning enough: the left must prepare a coherent alternative to the slash and burn of austerity – and fastThe last economic crisis never ended, and another one may loom. Europeans have endured years of unemployment and underemployment, stagnating or falling living standards, and cuts to state services on a scale ranging from steep to decimation. The disintegration of Syria has sent a tidal wave of human misery crashing over the country’s borders, some of it lapping on the shores of the European continent. And already the populist, anti-immigration right is in a strong position, from Sweden to France, Greece to the Netherlands. So when Greece’s motorcycling former finance minister Yanis Varoufakis warns that Europe could be falling into “a modern 1930s”, it is time to sit up, listen – and prepare.Related: The five fears stalking the global banking industryRelated: UK industrial production shrank in 2015 Continue reading...

Scottish government accused of blocking cross-party plans to give Fiscal Commission authority to review Holyrood’s budgetsScotland’s finance secretary has been accused of killing off proposals in Holyrood to give a financial watchdog far greater powers to scrutinise his spending and borrowing plans.Labour and Conservative members of Holyrood’s finance committee said they were stunned after the Scottish National party’s MSPs on the committee suddenly rejected proposals they had helped draft to give the Scottish Fiscal Commission more independence and authority to review John Swinney’s budgets.Related: Scotland's debt mountain: Holyrood's borrowing could hit £50bn by 2020 Continue reading...