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...

Deficit balloons to widest since 1948, raising fears for UK recovery and its future after possible BrexitBritain’s trading position with the rest of the world has deteriorated sharply with the current account deficit swelling to its widest on record, fanning fears about the sustainability of the economic recovery.News of the ballooning current account shortfall overshadowed figures showing economic growth was stronger than first thought in the fourth quarter. GDP rose 0.6% compared with an earlier estimate of 0.5% and 0.4% growth the previous quarter, according to the Office for National Statistics (ONS).

Confidence has dipped to lowest level since December 2014 with the EU referendum weighing on people’s minds, says GfKGrowing fears of a British exit from the European Union has knocked confidence among UK consumers, which remains stuck at its lowest level in more than a year, according to a report.Market research firm GfK said its consumer sentiment indicator stayed at zero in March, unchanged from February its joint lowest level since December 2014.Related: Would Brexit help Britain’s steel industry? Continue reading...

While renationalisation of British steel is outlawed by the EU, the government urgently needs to take measures to rescue this strategically important industryThe announcement by Tata Steel that it intends to sell off its remaining UK steel operation is a body blow to the industry. The hope was that, with the promise of firm government commitment to the site, Tata would keep open the Port Talbot plant that employs 4,000 people, and supports 10,000 more jobs. The worst-case scenario of immediate closure has not been realised, and the focus now is on persuading Tata to provide the time needed for a buyer to be found.Related: Now is the perfect time for Cameron and Osborne to show their steel | Anne PerkinsRelated: We bailed out the bankers. Welsh steelworkers deserve no less | Michael Sheen Continue reading...

A US judge has ruled that the IFC cannot be sued over a $450m loan for a power plant that the plaintiffs maintained had destroyed their livelihoodsA Washington DC judge has ruled that the World Bank cannot be sued in a case brought by Indian fishermen and farmers who said that an investment by the Bank’s private sector arm in a giant coal-fired power plant had “destroyed their livelihoods”.In 2008 the International Financial Corporation (IFC) branch of the Bank announced a $450m loan for a subsidiary of the Tata Group conglomerate to build the power plant in Gujarat, billed as an essential project to help fuel India’s ongoing economic development.Related: Fishermen and farmers sue World Bank lending arm over power plant in India Continue reading...

All the day’s economic and financial news, as the head of the Federal Reserve speaks in New York

Financial policy committee also warns of possible run on sterling and higher interest rates for mortgages in boost for remain sideThe Bank of England has given David Cameron a significant boost ahead of the EU referendum by warning that a vote to leave risks causing a run on sterling, a credit crunch and higher interest rates for mortgage payers and businesses.Threadneedle Street said the closely fought campaign posed the “most significant near term” domestic risk to financial stability, after one of its key policy committees weighed up the consequences of Britain ending its 43-year relationship with the EU.Related: Whether it likes it or not, Bank of England is in the thick of Brexit debateRelated: Bank of England must burst the buy-to-let bubble now Continue reading...

Federal Reserve chair says economic uncertainty contributed to decision to delay rate hike twice this year, and expects only ‘gradual increases’ in the futureGlobal economic uncertainty including the slowdown in China and collapsing oil prices led to the delaying of an interest rate hike in both January and March, the Federal Reserve chair, Janet Yellen, said on Tuesday. Urging caution, Yellen said she expects “only gradual increases” to be warranted in the future.“Importantly, this forecast is not a plan set in stone that will be carried out regardless of economic developments,” Yellen said. “Instead, monetary policy will, as always, respond to the economy’s twists and turns so as to promote, as best as we can in an uncertain economic environment, the employment and inflation goals assigned to us by the Congress.”Related: Weak US consumer spending expected to delay interest rate riseRelated: Weak US consumer spending expected to delay interest rate rise Continue reading...

Are you a buy-to-let landlord or tenant? We want to hear your thoughts on the Bank of England’s new lending conditionsBuy-to-let is one of the biggest domestic risks to the financial system the Bank of England has warned. The Bank’s financial policy committee (FPC) is concerned that the sector has potential to cause a new property crash, with borrowers possibly over-stretched by potential interest rate rises and changes to mortgage tax relief.We’d like to hear from buy-to-let landlords - and their tenants.Related: Bank of England clamps down on buy-to-let lending Continue reading...

The Bank would love to issue technocratic, uncontroversial reports, but whatever it says will be seized upon by either sideThe Bank of England cherishes its independence. There is nothing that Threadneedle Street would like more than to retain an Olympian detachment when it comes to the Brexit debate, issuing technocratic reports that are treated as uncontroversial by both sides.That, of course, is impossible. The Bank has a mandate to safeguard the financial security of the UK and would be failing in its legal duty if it did not point out that there are short-term implications of a vote to leave on 23 June. Continue reading...

Highly complex issue of EU membership means referendum remains uncertain and could prove hostage to sudden eventsDuring a recent visit to the UK, I was struck by the extent to which the question of whether the country should remain in the European Union is dominating the media, boardroom discussions, and dinner conversations. While slogans and soundbites capture most of the attention, deeper issues in play leave the outcome of the 23 June referendum subject to a high degree of uncertainty – so much so that a single event could end up hijacking the decision.Of course, the most cited arguments on both sides tend to be the most reductive. On one side are those who caution that departure from the EU would cause trade to collapse, discourage investment, push the UK into recession, and trigger the demise of the City of London as a global financial centre. They point to the pound’s recent depreciation as a leading indicator of the financial instability that would accompany a British exit (or “Brexit”).Related: Brexit? Voters can be yours for £25 each Continue reading...

ECB policies are setting the stage for severe instability with a property bubble inflating fast in Austria, Germany and LuxembourgThe European Central Bank’s latest policy moves have shocked many observers; while their goal – to prevent deflation and spur growth – is clear, the policies themselves are setting the stage for severe instability.The policies in question include setting the interest rate on the ECB’s main refinancing operations to zero; raising monthly asset purchases by €20bn (£15.7bn) to €80bn; and pushing the interest rate on money that banks deposit with the ECB further into negative territory, to -0.4%. Moreover, the ECB has launched a series of four targeted longer-term refinancing operations, which also carry negative interest rates. Banks receive up to 0.4% interest on ECB credit that they take themselves, provided they lend it out to private businesses.Related: Young people are right to be angry about their financial insecurity Continue reading...

Fractured parliaments, unstable coalitions and divided governments are the new normal, at a time when Europe least needs themJust when Europe needed it least, a string of confusing and inconclusive elections this year – from Spain and Ireland to Slovakia and Portugal – has produced fractured parliaments, improbable and unstable coalitions, and weaker, more divided governments.As countries struggle to shake off the eurozone’s financial crisis, migration and Islamist terror are overtaking the economy as most voters’ main concerns, magnifying deeper social changes that have seen support for mainstream parties plunge and anti-austerity, anti-EU or anti-immigrant populism surge across the continent.

Greece aiming to close €915m agreement to lease the 444-acre plot to property consortium by the end of April as part of bailout programmeGreece is aiming to conclude a deal to lease a prime seaside property at the site of the former Athens International airport, as the country pushes on with state sell-offs as part of its bailout programme.In 2014, Greece signed a €915m (£717m) deal to lease the property to a consortium that includes Chinese and Abu Dhabi-based firms. Continue reading...

Optimism among companies has fallen at fastest rate since 2011, reflecting fears of global slowdown and EU referendum uncertaintyFears over the UK’s faltering economic outlook have been underlined by a survey showing a sharp drop in confidence among financial services firms, against the backdrop of the Chinese slowdown and the EU referendum.Optimism among companies in the UK’s financial sector has fallen at the fastest rate since 2011, reflecting a backdrop of tumultuous markets and worries about a global economic slowdown. The downbeat outlook from one of the UK’s key sectors - which accounts for around 10% of GDP - will add to fears that the economy will slow this year amid global pressures and domestic challenges. The survey also indicated that banks in the UK are preparing to cut more jobs. Continue reading...

Business group EEF says skills shortage is putting productivity growth at risk and warns government over lack of supportBritain’s manufacturers are struggling to recruit skilled workers and keep pace with global technology, according to an industry report that criticises the government for lack of support.Three-quarters of companies say they have faced difficulties finding the right workers in the last three years, according to business group EEF. It warns a skills shortage is putting productivity growth at risk and adding to pressure on manufacturers as they battle a host of pressures in domestic and overseas markets.

First two months of 2016 return to growth partly due to a recovery in China’s property market – but wider economy strugglesChina’s industrial profits returned to growth in the first two months of 2016, partly due to a recovery in the property market in the context of an otherwise struggling economy.Related: Welcome to Shenzhen, home to the planet's fastest rising house prices Continue reading...

Visits to UK shopping centres and high streets slump 6% and 10.5% on Saturday and Monday compared with last EasterRetailers have been left counting the cost of Storm Katie after the wet and windy weather put a dampener on the traditional Easter spending spree.The long weekend usually heralds the first big trading days since Christmas for the country’s store chains. But retail specialist Springboard, which tracks shopper numbers, said that after a boost from the sunny conditions on Good Friday the number of visits to shopping centres and high streets around the country slumped 6% and 10.5% on Saturday and Monday compared with last Easter. Continue reading...

Figures show consumer spending, which makes up more than two-thirds of US economic activity, edged up just 0.1% in FebruaryFresh evidence of subdued consumer spending and soft inflation in the US has bolstered expectations that the Federal Reserve will hold back from raising interest rates over the coming months.

With his CCTV-style pictures of London’s financial elite, Daniel Mayrit joins a growing number of activist photographers lifting the veil on the CityWhen the London riots kicked off in 2011, Daniel Mayrit was living in Tottenham, and he witnessed violent events on his doorstep. A few months later, he received a police leaflet in the post featuring faces of the alleged participants, taken from CCTV cameras, which asked neighbours to help identify them. At the same time, banks were being bailed out and financial scandals were rolling out in the press.“On the one hand we had the petty thieves that maybe had stolen a TV in the supermarket, and on the other those responsible for the financial crisis,” says Mayrit. “The difference was that in one case we got their images delivered to our homes, in the other we had no idea who they were or what they looked like. There was a representation vacuum, and I wanted to put faces on them the way that power puts faces on criminals.”Related: Strange and Familiar indeed – these photographs of the life I lived are eye-opening | Ian JackRelated: What really goes on inside the City of London? Continue reading...

There is too much gobbledegook and bland generality in Ed Vaizey’s new statement of government policy for arts and culture. It lacks the focus of Jennie Lee’s white paper of 1965Half a century after the last white paper on the arts, Ed Vaizey, the government’s culture minister, has just published a successor. The white paper of 1965, by the Labour arts minister Jennie Lee, was Britain’s first expression of a national cultural policy. It makes interesting reading now: both for what has been built on her vision, and for what remains undone.Lee aimed to make the arts available to the many, not just the few, and in all parts of the country. She thought the state had a moral duty to help artists nurture, not squander, their talents. She wrote: “In any civilised community the arts and associated amenities, serious or comic, light or demanding, must occupy a central place. Their enjoyment should not be regarded as remote from everyday life.” She wanted Britain to be a “gayer and more cultivated country”. And she raised government funding by 30%. Continue reading...

Rise of outsiders such as Bernie Sanders, Donald Trump and Jeremy Corbyn reflects sense of being left behind by globalisationDonald Trump and Bernie Sanders have something in common. Both are hostile to the free trade deals that Barack Obama has been negotiating, and both have been campaigning on a platform of putting American workers first.

Brazil, Russia, India, China and South Africa seem to be failing to justify predictions of 21st century dominationThe political crisis in Brazil over economic mismanagement and high-level corruption, likely to come to a head next week, has reinforced the fashionable view, popular among western governments and businesses, that the Brics bubble has burst.Members of the exclusive Brics club of leading developing countries – Brazil, Russia, India, China and South Africa – are failing to justify predictions that, separately and together, they will dominate the 21st century world, or so the argument goes. Continue reading...

On business rates, corporation tax, insurance premium tax and much more, the chancellor is far from being British firms’ champion. So where’s the criticism?George Osborne’s newly acquired devotion to taxing sugar was a calculated distraction from the pain of transforming the annual deficit into a surplus over the next five years. His meddling in education policy and £100m support for the homeless were likewise smoke bombs thrown to divert attention from his adding another £4.6bn of disability benefit cuts to the huge welfare reductions needed to create a budget surplus in 2020.The business community supports his mission and backs almost without question the £12bn of welfare cuts, pay restraint in the public sector and generous tax breaks for the better-off that allow Osborne to make up the numbers. It cares little that the £4.6bn of personal independent payment cuts were abandoned. It knows there is plenty of time to find an alternative.These measures would be regarded as anti-business if any Labour chancellor thought of following the same path Continue reading...

Tim Martin, pub chain chairman, says relationship with Brussels undemocratic and unproductive, as 250 industry leaders join pro-Brexit campaignContinued membership of the European Union would leave Britain with huge economic turmoil, akin to those affecting Greece and Spain, the chairman of JD Wetherspoon said, as he joined 249 other business leaders in openly backing Brexit.Tim Martin, who founded the pub chain in 1979, said the EU was transferring power away from its member states and handing it to unelected officials in Brussels. As a result, he pointed out, countries like Spain and Greece that are struggling to drag themselves out of an economic downturn had no power over their own budgets and interest rates. Continue reading...

Markets in Europe and the Far East have recovered slightly from February’s low, but the factors that pushed them into bear territory have by no means gone awayThe advice of economists from Royal Bank of Scotland to their clients at the start of the year was: sell (mostly) everything. And by the middle of February it seemed well-founded, as markets slumped to levels not seen since July 2012 amid panic selling and warnings of a new financial crisis.The FTSE 100 officially entered bear-market territory – a 20% decline from the peak it reached in April last year – as did France’s CAC, the German Dax, the Shanghai Composite and Japan’s Nikkei. US markets avoided this fate only because the American economy seemed to be the best placed to weather any financial squalls. Continue reading...

Rise in consumer spending helps boost fourth-quarter GDP growth to 1.4% and eases lingering fears of imminent recessionUS economic growth slowed in the fourth quarter, but not as sharply as previously estimated, with fairly strong consumer spending offsetting the drag from businesses trying to cut stock levels.

Shares and commodity prices are suffering from fresh US interest rate rise fears, and a big dollop of pessimism from UK retailer Next