Almost 200 countries sign historic pledge to hold global temperatures to a maximum rise of 1.5C above pre-industrial levelsA historic, legally binding climate deal that aims to hold global temperatures to a maximum rise of 1.5C above pre-industrial levels, staving off the worst effects of catastrophic global warming, has been secured.The culmination of more than 20 years of fraught UN climate talks has seen all countries agree to reduce emissions, promise to raise $100bn a year by 2020 to help poor countries adapt their economies, and accept a new goal of zero net emissions by later this century.Related: Obama praises Paris climate deal as 'tribute to American leadership'Related: Grand promises of Paris climate deal undermined by squalid retrenchmentsRelated: Ed Miliband pushes for zero carbon emissions target following COP21 Continue reading...

If, as expected, the Federal Reserve raises US borrowing costs this week, the reverberations will be felt not just in America, but the global economy tooWall Street watchers are calling it the most seminal moment for the global economy since the collapse of Lehman Brothers unleashed a savage financial and economic crisis in 2008. This week, policymakers at the US Federal Reserve are finally expected to begin reversing the emergency measures they took as the world slid into recession.Janet Yellen, the Fed’s chair, had signalled that the central bank could raise interest rates from their record low of 0.25% in September; but the downturn in the Chinese economy, and the resulting turmoil in financial markets, persuaded the Fed to stay its hand. Continue reading...

It looked like 2015 would break all merger and acquisition records – and it didBankers call them “elephant deals” – blockbusting takeover bids that slam together vast global businesses. And when the corporate history books are written, 2015 will be remembered as the year of the elephant.A cluster of massive deals have made 2015 a record-breaking year for mergers and acquisitions globally, with the total value of deals breaking the record set in 2007, before the financial crash. According to data from Dealogic, there have been nine deals worth more than $50bn (£33bn) in 2015, five more than in 2014. Continue reading...

The Federal Reserve looks poised to raise borrowing costs for the first time in year. The move is widely expected – but not everyone agrees it’s the right moveThe FOMC looks set to raise rates this week. That will likely be a major macro error at a time when oil and commodity prices are tumbling and there is no inflation. Most of the growth in the US economy is driven by the monetary stimulus; tightening now will rapidly have adverse effects, including on the manufacturing sector from the strengthening dollar. Continue reading...

The economy may be growing, but workers aren’t experiencing the prosperity they’re used toSince 2001 the British economy has expanded in real terms by around a quarter, even taking into account the great recession of 2008-2009. But are British households 25% better off? Not at all. The reality is that they have become worse off, with the evidence coming from the ONS’s Family Expenditure Survey. In the past economic growth translated into personal prosperity – but now we live in an era where the economy expands but we don’t get any better off.In 2001 the average household in Britain spent £542.50 a week. Zip forward 13 years to 2014 and how much did they have to spend, after taking inflation into account? Just £531.30 a week, or £10 less, despite the much-trumpeted growth. In some ways it’s actually worse than that – back in 2001 we spent proportionately less on rent, gas, electricity, rail fares and the other humdrum banalities of modern life. An analysis of the data by Savills reveals that the amount being sucked out of households by rent has gone up by 36% since 2008 alone.We may be falling into the same trap as US workers who have seen their real incomes flatline or fall for a generation Continue reading...

George Osborne welcomes upbeat assessment of UK economy from Washington-based organisationThe managing director of the International Monetary Fund has said she wants Britain to stay in the EU, warning that a looming Brexit referendum posed a risk to the UK economy.In an upbeat assessment, Christine Lagarde said the UK was enjoying strong growth, record employment and had largely recovered from the global financial crisis.Related: IMF chief Lagarde highlights Brexit referendum as risk to strong UK economy - liveIntroduced @Lagarde at press conference for IMF’s article IV update on UK economy @hmtreasury today https://t.co/H9vWCzVJwW Continue reading...

Sports Direct seems to be a metaphor for the modern British economy. “The conscious strategy would seem to be to rely on cheap labour rather than costly investment,” as your editorial (11 December) says. It also illustrates the epidemic growth of workforce insecurity which plagues a nation scarred by the rise of the precariat. Britain is rapidly becoming the sweatshop of Europe, and this, along with bubbles in consumer debt and house prices, has been a major part in such anaemic recovery as we have seen over the past five years.All credit to the Guardian for bringing this to public notice, and can we have more, please? But given all this, surely we have an open goal for Labour? No – once again they get it wrong, as Ed Miliband did when talking about “predatory capitalism” rather than highlighting the value of businesses that are run ethically and setting out plans to protect them from race-to-the-bottom firms such as Sports Direct and Amazon. John McDonnell’s reported remarks are in the same vein: quite rightly outraged about abuses, but adopting a negative, accusatory tone rather than emphasising that most businessmen are not like Mike Ashley and do not need government to keep them in check. Continue reading...

The surveillance culture confronting the low-wage workforce at one retailer is disturbing. It is also a symbol of much that is wrong with the British way of businessCogs in the machine would be the cliche, but that really doesn’t capture the disdain of Sports Direct towards its workers. The staff, who sometimes arrive on day one clutching letters from employment agencies about just how readily they can be sacked, would better be described as disposable kit.Some in blue jackets marshal the movements of others in yellow jackets around a Derbyshire warehouse, and neither caste is allowed to wear any of the brands sold by the firm – because it doesn’t trust the staff not to steal. Slipping inside this panopticon, the Guardian uncovered a surveillance culture, with sticklerish clocking-in, intrusive searches and a disciplinary system where an unduly long trip to the loo can earn one of the black marks that tot up to dismissal. The dead time involved in turning out pockets, plus penalties for minor lateness, drags effective pay below the minimum wage. If staff are pushed to the point where stealing can become a temptation, then there are going to be costs in policing the risk. The staff end up shouldering some of these. Continue reading...

Minutes from rate-setting meeting show MPC thought domestic demand and international activity had barely changed since its last decisionThe Bank of England has kept interest rates on hold this month amid expectations that inflation will remain low after another sharp fall in the oil price and a levelling off in wage growth.Members of the Bank’s nine-member monetary policy committee (MPC) voted eight to one to leave rates at 0.5%, where they have been since March 2009, in a repeat of voting numbers seen in recent months. Sticking to his recent stance, only Ian McCafferty voted for a rise to 0.75%. Continue reading...

Chancellor’s northern powerhouse ambitions unlikely to bear fruit until 2020 as London continues to grow faster than UK average, EY predictsLondon’s economy will continue to outpace the rest of the UK for at least the next three years, exacerbating the north-south divide, despite the chancellor’s “northern powerhouse” initiative, a study shows.Related: The Guardian view on the UK economy: the foundations are looking shaky | EditorialRelated: I feel like a wally for believing George Osborne’s promises to the north Continue reading...

On Thursday we launch Open Labour, a forum bringing together activists to build a Labour left which is committed to a better quality of debate and political culture within Labour, while focusing on the question of how to win power. Labour’s democratic left has for too long been defined by other currents in the party and has been without any form of organisation. The elections of Ed Miliband and now Jeremy Corbyn have not changed that. Now is the time for those who believe in equality, democracy, solidarity and the emancipating power of the left to come together. Open Labour believes that there must be a place within Labour to debate and shape these values in a respectful way, free from the divisive and intolerant voices that have come to dominate Labour debate, especially on social media.Related: Labour activists launch new group on party's left Continue reading...

Commodity crisis continues to dog Anglo American, as German carmaker releases some rare good news

Financial market turmoil sees fresh slide in crude, lowest iron ore prices for a decade and losses on global stock marketsThe world’s leading oil producers are preparing for the possibility of oil prices halving to $20 a barrel after a second day of financial market turmoil saw a fresh slide in crude, the lowest iron ore prices in a decade, and losses on global stock markets.Benchmark Brent crude briefly dipped below $40 a barrel for the first time since February 2009 before speculators took profits on the 8% drop in the cost of crude since last week’s abortive attempt by the oil cartel Opec to steady the market.

The Office for National Statistics family spending survey gives a fascinating breakdown of shopping habits – and reveals ongoing pressure on budgetsThe continuing pressure on household budgets is revealed by official figures which show that families across the UK are spending less than they were at the start of the century.The typical household in Britain spent £531.30 a week in 2014, according to the annual family spending survey from the Office for National Statistics, £7 higher than the year before. But the figure remains lower than the inflation-adjusted £542.50 average in 2001 and significantly below the peak of 2006.Related: Spending review will still leave poor families worse off, say experts Continue reading...

Year-on-year growth at 9% despite slight decrease last month, says lender as Bank of England reports further fall in rates on gross mortgage advancesThe Halifax has warned that house prices will continue to rise strongly after the Bank of England reported that homebuyers are taking advantage of record low interest rates to secure mortgages.Britain’s biggest mortgage lender said on Tuesday that house prices rose by 1.4% in the past three months and by 9% at an annual rate, despite a small 0.2% fall in November alone.Related: There’s no place like home – if you can’t afford one | Peter Hetherington Continue reading...

Core manufacturing output falls 0.4% on the monthBritain’s manufacturers cut back output by 0.4% in October, partly reversing a strong performance the previous month, and underlining warnings of a tough winter for the sector.Official figures showed that while George Osborne has pledged to unleash a “march of the makers”, manufacturing output in October stood 0.1% lower than the same month in 2014 — and remains 6.1% below its pre-recession peak. Continue reading...

Life expectancy is now declining for middle-aged white Americans, especially those with a high school education or lessThis week, Angus Deaton will receive the Nobel Memorial Prize in Economics “for his analysis of consumption, poverty, and welfare.” Deservedly so. Indeed, soon after the award was announced in October, Deaton published some startling work with Ann Case in the Proceedings of the National Academy of Sciences – research that is at least as newsworthy as the Nobel ceremony.Analysing a vast amount of data about health and deaths among Americans, Case and Deaton showed declining life expectancy and health for middle-aged white Americans, especially those with a high school education or less. Among the causes were suicide, drugs, and alcoholism. Continue reading...

Figures suggest continued weak domestic demand from the world’s biggest energy user, driving the price of oil, iron ore and other metals lowerThe accelerating rout in commodity prices has piled pressure on energy and resources shares in Asia Pacific amid more signs of slowing demand from China.

Oil falls by $2 a barrel with energy shares as Opec refusal to stop flooding the market with cheap oil and likely US rate hike sends Brent crude tumblingOil prices have slumped by 5% after the latest attempt by Saudi Arabia to kill off the threat from the US shale industry sent crude to its lowest level since the depths of the global recession almost seven years ago.Signs of disarray in the Opec oil cartel prompted fears of a global glut of oil, wiping $2 off the price of a barrel of crude on Monday and leading to speculation that energy costs could continue tumbling over the coming weeks. Continue reading...

The Brent crude price has fallen below $42/barrel after Opec fails to agree production cuts

Survey finds manufacturers expect 2015 will be worst year for growth since 2009, with interest rate rise likely to hit exportsBritain’s manufacturers expect 2015 to be their worst year for growth since 2009 and next year will be little better, according to a survey which highlights the dilemma that the Bank of England faces as it considers whether to raise interest rates.A survey by the EEF, the manufacturers’ association, found that only car companies and chemicals firms remained buoyant while the rest of the manufacturing sector warned it expected output and employment to stagnate.Related: UK manufacturing growth slows in November Continue reading...

Secretary of state for business Sajid Javid thinks his new £5m funding package will do just that. Sounds like a tall orderName: The Midlands EngineAge: Newborn. Continue reading...

Consumer spending is driving economic growth but household debt and the house price-income ratio is at a record high. Be afraidWe are fixing the roof while the sun is shining. It’s a soundbite that has served George Osborne well down the years and he’s still using it as the rationale for the government’s deficit reduction plan. The chancellor says he is taking advantage of the good times, putting the public finances in the sort of shape that would make the UK more resilient to recession than it was back in 2008.This proved to be a powerful message during the election campaign because Labour’s lack of economic credibility with voters stemmed from the idea that Gordon Brown spent and borrowed too much, leaving the economy vulnerable when the financial crisis broke. Continue reading...

Bank for International Settlements says restrained reaction, especially from emerging markets, to signals from US Federal Reserve is encouragingAn uneasy calm prevails in financial markets over the first increase in US interest rates in almost a decade, which is widely expected later this month, according to a leading group of central bankers.The restrained reaction, especially from emerging markets, to signals from the US Federal Reserve that rates will start to rise have been encouraging, the quarterly update from the Switzerland-based Bank for International Settlements (BIS) said. However, it said it expected volatility to return. Continue reading...

The chancellor’s measures will not help calm our mad property market. We need a radical change of policyDrawing lessons about the real world of business from The Apprentice would be a mistake. But last week’s vintage episode, in which the wannabe entrepreneurs flogged flats in London, carried a clear message about the capital’s property market: it is now so unhinged that literally anyone can make money out of it.It’s hardly news that homes in London are not cheap, but the parade of buy-to-let cash purchasers who trooped in and out of the half-finished high-rise show flats, nodded sagely at the drivel from Lord Sugar’s victims and signed on the dotted line, were flesh-and-blood representatives of a market gone mad. Continue reading...

Economists are proposing two radically opposed forecasts for global growth. Considering the evidence, it’s hard to side with the optimistsEconomists are split between those who see the world economy coming together and those who believe its major trading blocs are heading in opposite directions. It might only be a couple of weeks before we find out who is right.On 16 December Janet Yellen, the head of the US central bank, is expected to push up interest rates for the first time since 2006. The nudge upwards from 0.25% to 0.5% may not seem like the Federal Reserve’s most momentous financial intervention, but 18 months ago even the thought of such a move caused panic across the world. Continue reading...

Rolling coverage of the latest economic and financial news, as the crucial American non-farm payroll report is released

With the jobs market growing it looks increasingly likely the Federal Reserve will end its dithering and raise the cost of borrowing before ChristmasPlenty could happen between now and 16 December when the Federal Reserve has to decide whether to raise interest rates for the first time since 2006. Stuff happens. As Harold Wilson once famously said, a week is a long time in politics.But barring something completely unexpected, it now looks increasingly likely that the US central bank will end its dithering and raise the cost of borrowing just before Christmas.Related: US economy adds 211,000 jobs as interest rate hike nears Continue reading...

Mario Draghi’s authority has been dented after he dashed investors’ hopes. It would seem a central banker is only as trustworthy as his last statementIt’s hard to know who is most to blame: Mario Draghi, for leading investors up the garden path; or investors, for believing that the European Central Bank president’s talk of doing “what we must” equated to a firm promise of a bigger dose of quantitative easing.Either way, the marriage of a teasing central banker and a gullible set of investors produced an ugly stock market on Thursday. The French and German markets fell 3.6% and even the FTSE 100 shed 146 points, or 2.3%. Continue reading...

Shares slump as Mario Draghi dashes expectations that the European Central Bank would pump more new money into the eurozone economy each month

The markets expected a lot more – an expansion of QE and deeper deposit rate cuts. Simply put, the ECB president failed to live up to his own hypeThe currency markets and share prices spoke volumes. Financial markets waited for Mario Draghi to fire his big bazooka and when it became clear he was holding a peashooter instead, they bought the single currency and dumped stocks. The euro rose against the dollar and screens showing equity prices went red.The reason for the reaction was simple: markets had expected a lot more. They had been looking for the European Central Bank to announce it was cutting its deposit rate from -0.2% to -0.4%, making it more expensive for commercial banks to hold deposits with the central bank. They got a cut to -0.3%.

Central bank’s modest moves to revive eurozone economy, including minor reduction in deposit rate paid on reserves, sends markets tumblingEurozone markets have plunged after the European Central Bank president dashed investors’ hopes of aggressive new measures to boost the flagging economy.Mario Draghi had sent strong signals in recent weeks that he and his colleagues on the ECB’s governing council were prepared to “do what we must to raise inflation as quickly as possible”, and news that inflation remained at just 0.1% in November had intensified expectations of decisive action.Related: Eurozone stock markets tumble as ECB stimulus disappoints investors - live updates Continue reading...

International Monetary Fund suggests prolonged period of low oil, coal and gas prices could discourage further adoption of cleaner energy sourcesThe International Monetary Fund has issued a warning before a meeting of the Opec oil cartel that permanently low fossil fuels are choking off investment in renewable sources of energy and hindering the fight against climate change.Oil prices rallied slightly amid reports – later denied – that Saudi Arabia plans to announce a 1m barrels a day production cut at the talks in Vienna on Friday. The price of Brent crude was up more than 2% at just under $43.50 in early trading on Thursday. Continue reading...

Growth in purchasing managers’ index, a guide to health of service sector, has been a key engine of Britain’s economic recovery, say analystsBritain’s key services sector continued to expand at a healthy pace in November, according to a closely watched survey.The purchasing managers’ index, compiled by the Chartered Institute of Purchasing and Supply, rose for the second consecutive month, from 54.9 in October to 55.9 – the fastest growth since July, and well above the 50 mark that signals expansion in the sector.

Report says increasing inability to tax corporate profits means governments are forcing workers and consumers to plug the revenue gapIndividual workers and consumers have shouldered an increasing share of the tax burden in industrialised countries as governments have been forced to become less reliant on taxing corporate profits, according to a report from the OECD.“Corporate taxpayers continue finding ways to pay less, while individuals end up footing the bill,” said Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration.Related: OECD hopes tax reforms will end era of aggressive avoidance Continue reading...

Faced with flat growth and prices in the eurozone, the European Central Bank is expected to cut rates and expand QE, but the Fed is likely to raise rates in the USA critical few weeks for the global economy will begin on Thursday when the European Central Bank (ECB) decides whether to take fresh steps to boost growth and stimulate inflation in the 19-country eurozone.Financial markets are convinced the ECB’s president, Mario Draghi, will announce cuts in interest rates and a stepping up of the bond-buying programme known as quantitative easing (QE) after its latest policy meeting in Frankfurt.Related: Eurozone inflation data raises prospect of fresh ECB stimulus Continue reading...

The European Central Bank president is poised to take action to tackle inflation in the single currency bloc. Here are some of his optionsAfter October’s meeting of the European Central Bank’s governing council, the bank’s president, Mario Draghi, said it was “willing and able to act by using all the instruments available within its mandate, if warranted”. Here are some of the options it might take to fulfil that promise on Thursday: Continue reading...

Janet Yellen says US economy has seen substantial recovery since Great Recession as she signals what would be first rate increase since 2006A historic rise in US interest rates later this month is almost certain, Janet Yellen signalled on Wednesday. The chair of the Federal Reserve said that the US economy had “recovered substantially since the Great Recession” and she was “looking forward” to increasing rates, which have been held at near zero since the 2008 financial crisis.“The economy has come a long way toward the FOMC’s [Federal Open Market Committee] objectives of maximum employment and price stability,” she said in a speech to the Economic Club of Washington. “When the committee begins to normalize the stance of policy, doing so will be a testament, also, to how far our economy has come in recovering from the effects of the financial crisis and the Great Recession. In that sense, it is a day that I expect we all are looking forward to.”Related: The Fed and the ECB: when monetary policy divergesRelated: A December rate rise may be a mistake by the Fed Continue reading...