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...

While Mario Draghi considers more stimulus measures, Fed chair Janet Yellen could soon raise borrowing costs

European Central Bank could expand quantitative easing and cut deposit rate further, while Fed is expected to raise US rates after strong job growth figuresThe European Central Bank president, Mario Draghi, is widely expected to unleash a fresh round of economy-boosting measures on Thursday, after inflation in the eurozone remained at just 0.1% in November.City analysts had expected the inflation rate to increase modestly to 0.2% in line with forecasts with a slow but robust recovery in the eurozone’s fortunes.Related: Markets rally as weak eurozone inflation boosts stimulus hopes - business liveRelated: The Fed and the ECB: when monetary policy diverges Continue reading...

In a perfect world, policymakers would put in place a range of instruments to ensure a better alignment of domestic and global objectivesOver the next few weeks, the US Federal Reserve and the European Central Bank are likely to put in place notably different policies. The Fed is set to raise interest rates for the first time in almost 10 years. Meanwhile, the ECB is expected to introduce additional unconventional measures to drive rates in the opposite direction, even if that means putting further downward pressure on some government bonds that are already trading at negative nominal yields.In implementing these policies, both central banks are pursuing domestic objectives mandated by their governing legislation. The problem is that there may be few, if any, orderly mechanisms to manage the international repercussions of this growing divergence.Related: Eurozone inflation data raises prospect of fresh ECB stimulus Continue reading...

Don’t shoot the messenger – whatever happens over Syria, the party leader’s voice needs to be heard, especially on austerity, and he is far from isolatedJeremy Corbyn’s difficulty in carrying his parliamentary colleagues with him in his opposition to bombing in Syria will be seen by his supporters as a decent man struggling to reconcile his deeply held principles with the exigencies of political leadership, in a society that is easily persuaded that action counts for more than reason. Others, no doubt, will see his willingness to alienate centrist opinion on this and other issues as further evidence of his unfitness to lead.Even those who wish him well, however, will recognise that, after a lifetime of endorsing minority or unpopular causes, bombing in Syria is just one of a number of similar issues, each of which will run the risk of further eroding his precarious support in the parliamentary party, encouraging further outrageous attacks on him from the rightwing media, and discomforting even some of those who voted him into the party leadership.Related: Labour urgently needs to turn its fire on the Tories, not foment civil war | Owen JonesRelated: There is no obvious escape route for Labour from the party’s agonies | Andrew Rawnsley Continue reading...

Non-food shop prices tumbled by 3.3% over the period, driven by reductions in clothing, footwear, electricals, DIY, gardening and hardwareShop prices slumped by a record level last month, driven down by the supermarket price war and fierce competition across the rest of the high street, according to a report.The British Retail Consortium-Nielsen Shop Index said retail prices fell 2.1% in the year to November compared with a year ago, a joint low with March this year. Continue reading...

As territory grapples with $72bn debt and a payment due Tuesday, Alejandro García Padilla calls island’s emergency financial measures ‘unsustainable’Puerto Rico’s governor, Alejandro García Padilla, told the US Senate on Tuesday that the troubled Caribbean island has “no cash left” and can no longer repay its $72bn debts.The territory announced it would honor a $354m debt payment due on 1 December as Padilla was testifying, but Padilla said austerity measures had not only eaten into essential services but caused tax revenues to crater. With more than $900m due in January, the governor said his options were restructuring or disaster.Related: Puerto Rico poised to miss another debt deadline as financial crisis rages on Continue reading...

UK pension will be worth 40% of average pay, with a retirement age only matched by those in Ireland and Czech Republic, says OECDWorkers in the UK will have the worst pensions of any major economy and the oldest official retirement age of any country, according to the Organisation for Economic Cooperation and Development.The typical British worker can look forward to a pension worth only 38% of their salary, once state and private pensions are combined. The Paris-based thinktank said on Tuesday that this compares with above 90% in the Netherlands and Austria and 80% in Spain and Italy. Continue reading...

Prices have risen 18.9% over the past 12 months, according to Knight Frank, but 2016 should see reduced pressures on markets across the worldIt’s a country with a war raging on its borders, embroiled in a conflict with Russia, and fighting terrorism on its own soil. Yet Turkey also has the fastest rising house prices in the world, according to figures from global estate agents Knight Frank.Prices in Turkey are up 18.9% over the past year, compared to the 2.7% global average. Ukraine, whose economy has been devastated amid the ongoing dispute with Russia, saw the biggest price falls, down 14.8%. Continue reading...

Chancellor George Osborne expected to maintain fiscal course set in July’s budget and last week’s autumn statementGeorge Osborne will stage his first full budget of the parliament on 16 March next year as he seeks to steer the public finances into the black by 2020.The chancellor, who already has an emergency budget and autumn statement under his belt since the Conservatives won the election in May, is expected to maintain a course that will generate a £10bn surplus by the end of the parliament. Continue reading...

The island some have called ‘America’s Greece’ looks poised to default on its $72bn debt for a second time amid anger over territory’s ‘Wall Street captors’Debt-racked Puerto Rico looks all but certain to miss a second repayment deadline on Tuesday – a move that is likely to worsen the financial crisis in the US territory and turn up the political heat on a Caribbean island that has been dubbed “America’s Greece”.Puerto Rico’s government development bank is due to make a $354m payment to bondholders on 1 December but is unlikely to be able to pay. Puerto Rico governor Alejandro Garcia Padilla was still negotiating with creditors late Monday.

Manufacturing PMI falls to 52.7, from 55.2 in OctoberGrowth in Britain’s manufacturing sector has weakened and costs are falling sharply, suggesting inflationary pressure remains subdued, and Bank of England policymakers are unlikely to be in a rush to raise interest rates.The purchasing managers’ index (PMI) for manufacturing, based on a survey of the sector, declined to 52.7 in November, from a revised 55.2 in October. Continue reading...

Guardian analysis shows that without recent upward revisions of net migration numbers, chancellor would not achieve budget surplus by 2019-20George Osborne is relying on rising immigration numbers to reach his fiscal target of a budget surplus by the end of the decade, according to a Guardian analysis of official data.Without the UK’s current levels of net migration, the chancellor would be faced with the choice of missing his fiscal goal or achieving a surplus by adding more spending cuts and tax rises to his existing plans.

Risks around extreme weather are high for Australian companies, but there are also plenty of opportunities to benefit from the ‘business boom’

A vote to include the yuan in the International Monetary Fund’s basket of elite currencies looks set to to pay offShareholders in the Washington-based International Monetary Fund have voted to admit the yuan, also known as the renminbi, as the fifth member of its special drawing rights (SDR) currency basket alongside the US dollar, the Japanese yen, sterling and the euro.Related: Chinese yuan to join elite global currency club Continue reading...

IMF chief says inclusion recognises Beijing’s progress at bolstering its monetary and financial systemsChina’s yuan will be added to an elite basket of global currencies used by the International Monetary Fund, in a boost to Beijing’s global economic ambitions.Shareholders in the Washington-based IMF voted to include the yuan, also known as the renminbi, as the fifth member of its special drawing rights (SDR) currency basket alongside the dollar, the Japanese yen, sterling and the euro.

Banks could be forced to strengthen capital positions after surge in loans to near-decade high triggers warning from debt charitiesLending to consumers has reached its highest level since before the banking crisis according to figures from the Bank of England, which will reveal on Tuesday if it is imposing restrictions on banks to cool down overheating parts of the economy.According to the Bank, consumer lending increased at an annualised rate of 8.2% in October, the highest level since February 2006. A further category of loans and advances, which includes lending to buy new cars, jumped by 9.6%, the highest for 10 years. Continue reading...

A sharp rise in personal borrowing has led to fears that families are storing up financial troubleBlack Friday, the day of discounted deals and shopper madness imported from the US, passed last week without the scuffles, fights and mini-riots that came to mark last year’s event. But the relatively quiet aisles and slowly revolving doors of Britain’s high-street stores masked an unseen online spending frenzy that analysts believe happened on Friday and will continue this weekend into Cyber Monday today, another discount day, and will add to a predicted bumper Christmas for retailers.Shoppers are expected to blow a total of £16.5bn between now and the big day, on everything from Star Wars droids to sprouts – up 2.5% on 2014. Continue reading...