Greece prepares for third election in nine months, with fatigue, resentment, the EU and refugee crisis dominating agenda for a weary electorateLike all politicians, Greek politicians love a stage. And this week, in the run-up to Sunday’s election, the scene was set with scaffolding, billboards and loudspeakers being erected at seemingly record speed in the squares of central Athens.On Thursday night, it was Vangelis Meimarakis, the veteran conservative recently catapulted to the helm of the New Democracy party, addressing the crowds in Omonia Square. “Let’s take Greece forward,” he exhorted supporters, many sullen, glum-faced and wide-eyed as they went through the motions of roaring approval, waving flags and honking horns. “The lies are over. The Syriza experiment is over.”Related: Eurozone's enforcer ready to keep Greece's new leader in lineRelated: Alexis Tsipras and rivals trade barbs in televised election debateRelated: Greek elections: Alexis Tsipras makes a calculated gambleRelated: Greek election 2015: Golden Dawn exploits atmosphere of austerity-driven despair Continue reading...

Dutch economist Maarten Verwey has unprecedented powers as his taskforce oversees the implementation of Greece’s cash-for-reforms rescue packageWhoever ends up moving into Maximos Mansion, the official Athens residence of Greece’s prime ministers, after Sunday’s election, they will not, in any meaningful sense, be running the country.

Bank of England’s chief economist thinks the 2008 crash, then the ongoing eurozone crisis and now the turmoil in emerging markets are all linkedThe Barbican cultural centre in London is currently hosting The Colour of Money: a season of films about finance, “from the gold rush to the credit crunch”. If Andy Haldane, one of the Bank of England’s most thoughtful policymakers, is right, they should clear some space in the schedule for Financial Crisis III.Haldane warned in a speech on Friday, that we may be locked into what he calls a “three-part crisis trilogy”, with part I, the Anglo-Saxon crisis of 2008-09, and part II, the euro crisis, about to be followed by part III, the emerging market crisis of 2015 onwards. Continue reading...

Only Japan in the G7 performed worse than the UK last year in terms of output per hour workedBritain’s productivity gap with other G7 nations has widened to its largest since estimates began in 1991, according to official figures.Data from the Office for National Statistics (ONS) showed that the output per hour from UK workers in 2014 fell to 20 percentage points below the average of other leading industrialised nations.UK 33% less productive than Germany but 15% more productive than Japan in 2014 http://t.co/695NJYz538 Continue reading...

Andy Haldane suggests a rate cut may improve economic growth, given signs third phase of global financial crisis is loomingInterest rates in the UK may have to be cut further from their record low level, the Bank of England’s chief economist has warned, as he highlighted signs that the global financial crisis is entering a third phase of turmoil.Andy Haldane cited evidence of a slowdown on the domestic front and risks to the global economy from China, where an economic downturn has coincided with a stock market rout that has sent shockwaves through the world’s markets.Related: Shareholders receive too much money from business – Bank's chief economist Continue reading...

Delaying the inevitable hike in interest rates could create more risk in an uncertain global market environment – the time is now to send the message that the Fed believes in the US economic recoveryTo raise, or not to raise? (Interest rates, that is.)

More and more, the stuff is grist to the mill of the shadow economy – just one reason why we should have less of it in circulationThe chief cashier of the Bank of England says that only about a quarter of the cash they put into circulation is used to buy and sell things. The rest of it is either shipped overseas – which we will put to one side for the moment – kept outside of the banking system ie (hoarded), or used to support the shadow economy (iestashed). In other words, not in circulation at all but stuffed under mattresses.If you look at the trend growth of that cash “in circulation” over the last few years, it has accelerated past GDP growth as well as past the amount of money being taken out of ATM machines. And we also know that the use of cash in retailing has continued to fall steadily. That means the “cash gap”, between the small amount of cash that is used to support the needs of commerce and the large amounts of cash that are used for other purposes, has been growing. The interesting question is: why?If hoarding cash is on the up, that would suggest people have lost confidence in formal financial servicesRelated: Half of UK banknotes used to fund shadow economy Continue reading...

Despite hints of a winter increase in borrowing costs, recent figures suggest the economy is going through a soft patch rather than something more seriousFor the past couple of months, the Bank of England has been preparing the ground for an increase in interest rates. The governor, Mark Carney, began the campaign at a lecture in Lincoln Cathedral in July, in which he said Threadneedle Street would start looking at raising borrowing costs around the turn of the year.Since then, other members of the Bank’s monetary policy committee have hinted that they too could soon be voting for the first increase in interest rates in more than eight years.Related: Inflation collapse – should central banks raise interest rates or not? Continue reading...

Grassroots projects are springing up across the UK to empower local people and build communities

High street stores maintain record of monthly gains, paving way for possible interest rate rise next springBritain’s high street stores kept up their record of monthly sales increases in August as shoppers were lured by heavy price discounting, according to official figures.The sales rise stretches back to June 2014 and is likely to be leapt on by hawks on the Bank of England’s monetary policy committee as a sign of strength in the economy and another reason to raise interest rates as early as next spring.

Prime minister says it would be in New Zealand’s competitive interests if Australia didn’t seal its controversial agreementRelated: Malcolm Turnbull down to work as Tony Abbott declares he will stay - politics liveNew Zealand’s prime minister will be “quite happy” if Australia fails to seal its controversial free trade deal with China.Related: Confused about the China free trade deal? Here's what you need to know Continue reading...

Economist who became a noted authority on the business of scientific innovation and the revival of ailing regionsMany practitioners of the “gloomy science” are the object of scathing criticism these days, either for having taken their eyes off the financial ball in the run-up to the banking crisis or for retreating into mathematical byways. But Barry Moore, who has died aged 74 of a heart attack, belonged to the old school of “applied” economists – a breed always concerned with practical issues, and much in demand around the world.His early speciality lay in regional policy – a subject that almost fell into desuetude from the later years of Margaret Thatcher’s government, once Michael Heseltine had used development corporations to revive the fortunes of Merseyside and London Docklands, but which now seems to have been rediscovered by their Conservative successors. Continue reading...

Banks and economists brace for a decision called ‘the most eagerly awaited in years’ – one that will affect every American and many others around the worldUnder intense security and privacy, 12 people are gathering in Washington DC to make decisions that could change the lives of everyone in the US – and much of the rest of the world.The Federal Open Market Committee (FOMC) will on Wednesday and Thursday thrash out a decision on whether to raise US interest rates, which have been held at near-zero since the 2008 financial crisis. Continue reading...

Latest data shows pay is rising at fastest rate since 2009, with average salaries up by just under 3%Britain’s workers are finally receiving a long-awaited pay rise, with average wages increasing at the fastest pace for more than six years, even before the minimum wage hike planned by the chancellor.Official figures showed that average pay across the economy increased by 2.9%, when comparing May to July with the same period a year earlier. Continue reading...

Paris-based Organisation for Economic Cooperation & Development says China slowdown and uneven data for other large markets will cause uncertaintyThe world economy appears to be suffering a slowdown in growth that will stretch through the rest of the year and 2016, according to a report by the Organisation for Economic Cooperation & Development.Heightening concerns that a period of “secular stagnation” is about to dampen the prospects for global growth, the Paris-based thinktank said China’s economy was flagging and recent stock market turmoil had exposed the fragility of many emerging market economies. Continue reading...

As the Fed embarks on its two-day policy meeting, we analyse why policymakers might vote for the first rate hike in almost decade, why they might not, and what it all means for the global economyInterest rates in the US have been close to zero since the depths of the financial crisis but global investors are braced for change, as the country’s central bank prepares to raise borrowing costs. The first in an expected string of small increases could come this week, with the Federal Reserve rate-setting committee starting a two-day meeting on Wednesday where it will consider a rise. The ramifications of the decision, announced on Thursday, will extend beyond the world’s largest economy.Related: Markets brace for US Federal Reserve interest rate decision - live updatesRelated: Federal Reserve slashes interest rates to nearly zeroSpeech by Vice Chairman Fischer on U.S. inflation developments: http://t.co/2IKVc1zrOBNo time for an interest rate hike. Read my column: http://t.co/XmY9PS2OO2 Continue reading...

Tumbling cost of crude oil, supermarket price war and cheaper clothing offers timely boost to consumer spendingSharp falls in petrol and diesel pulled UK inflation back down to zero last month as tumbling crude oil prices trickled down to households.Official figures showed inflation on the consumer prices index edged back down to 0.0% in August from 0.1% in July, continuing the trend since the start of this year of virtually no year-on-year rise in living costs. Inflation has been below the Bank of England’s 2% target for the past 20 months.

With the Marx-reading campaigner as shadow chancellor, renationalisation is back on the agenda along with wealth tax and a higher living wageChris Leslie, Labour’s short-lived post-election shadow chancellor, said the party should pitch its appeal to “the Which? magazine strata of society” made up of cost-conscious middle-class consumers and buy-to-let landlords. His successor, the veteran leftwing campaigner John McDonnell, is more likely to be found reading Karl Marx.Marx’s Capital, with its prognosis – as yet unrealised almost 150 years on – that capitalism’s inherent contradictions and periodic crises would eventually bring about its collapse, is the first book O’Donnell recommends reading to understand the thinking behind Labour’s new economic policy.Related: John McDonnell: unreconstructed on the left, but with allies on the right Continue reading...

Rolling coverage of economics and the markets, including the latest UK inflation report and another bad day for Chinese stocks

The new PM needs a grown-up approach to industrial policy, tax, housing and aged care in order to tackle the problems facing the Australian economyMalcolm Turnbull has but a year to inject confidence and strength into the economy or else he will be swept from office and condemned to history as a wrecker of a first term Liberal government.Related: Malcolm Turnbull takes first question time as prime minister – politics liveRelated: The rich are getting richer – and their wealth is safe as housesRelated: Economic management is now Tony Abbott's weakest claim to re-election | Stephen Koukoulas Continue reading...

Some analysts even see CPI turning negative again after a sharp fall in crude oil prices and a supermarket price war cut the cost of petrolSharp falls in petrol prices are expected to have pulled UK inflation back down to zero in August, economists predict ahead of the latest official figures today.Financial markets will be looking to inflation data at 9.30am for clues as to when the Bank of England will start raising interest rates after more than six years at their record low of 0.5%. The US Federal Reserve is expected, by a slim majority of economists, to hike its main interest rate this week, but experts believe the UK’s central bank will wait until at least the end of the year to follow suit. Continue reading...

Thinktank predicts one-in-four workers will benefit from new wage floor, with total wage bill rising by £1.5bn next yearUK employers will see their total wage bill rise by only 0.6% under the new “national living wage” – but the impact will be much bigger for a handful of industries, including retail and hospitality, according to a report.The Resolution Foundation thinktank also found that small businesses with fewer than 10 employees face the biggest increase in their wage bill under the new minimum pay rates announced in George Osborne’s summer budget. Continue reading...

Stock market ends day slightly down after election of Labour’s new leader and the appointment of his senior teamBusiness leaders were treading carefully in their approach to the new Labour leadership on Monday, saying only that they want to meet the new shadow cabinet to get more details on the policies Jeremy Corbyn outlined during his leadership campaign. These included taking public control of the energy industry, hiking taxes and his “people’s QE” - electronic money-printing to spend on infrastructure.City traders appeared largely unworried about the new Corbyn-Tom Watson-John McDonnell Labour team. The FTSE 100 index was little changed, ending 33 points lower at 6084. Shares in the UK’s big banks, threatened with nationalisation by new shadow chancellor McDonnell, were slightly lower, but there was no sign of a big sell-off. Energy company shares were also little moved in stark contrast to the panic that set in two years ago when Ed Miliband threatened the sector with price capping. Continue reading...

¿Por qué todos hablan del Pablo Iglesias británico?

The Labour leader and my own party Podemos have one thing in common: a rejection of the neoliberalism that has impoverished our people

In an extract from his new book, Andy Beckett gets an extraordinary insight into the 1981 Toxteth riots – from the Liverpool-based economist advising Margaret Thatcher’s government, and a rioter enraged by their controversial policiesFor much of the postwar period, Britain imported more than it exported. The resulting trade deficits were widely seen as a sign of approaching economic doom; that a once-great trading and manufacturing nation could no longer make its way in the world.

Resolution Foundation study reveals overlooked link between firms limiting wage rises to plug pension liabilities of retired staffWorkers expecting Britain’s economic recovery to fill out their pay packets are in for a nasty surprise.While the UK’s collective national income is expected to grow by more than 2% a year until at least 2020, the share distributed in wages is going to be less than many hope. As much as one percentage point could continue to be knocked off annual pay rises because firms need to plug holes in the pension pots of retired staff, according to a report.Related: John Lewis group ditches final salary pension for staff contribution schemeRelated: Baby boomers v the rest: is age the great new divide? Continue reading...

Business confidence stalls as new evidence shows UK growth becoming more reliant on consumer spendingNew doubts have emerged over the UK’s economic outlook after new evidence that growth is reliant on household spending while manufacturers struggle with a strong pound and the fallout from a downturn in China.UK economic growth is expected to hold up during the second half of this year but a sharp drop in business confidence in recent weeks suggests the momentum is under threat, according to a round-up of indicators from accountants BDO.Related: UK manufacturing hit by turmoil in ChinaRelated: Interest rates must rise 'relatively soon', says Bank of England's Martin Weale Continue reading...

Continuing wage growth and inflation mean rate hike likely follow despite recent economic slowdown, according to Bank’s monetary policy committee memberA Bank of England policymaker has said interest rates need to rise “relatively soon”, adding to signs that support is gradually building for the first increase in British borrowing costs since before the financial crisis.Martin Weale, one of the Bank’s rate-setters, also said a rise would give the central bank scope to make cuts if the British economy runs into trouble in the future.Related: Bank of England official raises prospects for early interest rate hike Continue reading...

Reforms of underperforming state-owned enterprises include introducing ‘mixed ownership’ by bringing in private investmentChina has unveiled details of how it will restructure its state-owned enterprises, including partial privatisations, as data pointed to a cooling in the world’s second largest economy.

The chancellor’s higher minimum wage will benefit the low-paid. But the Tories’ trade union bill simultaneously strips them of their bargaining power at workThe backlash has begun. CBI director general John Cridland last week joined the bosses of Next, Whitbread and Wetherspoons in expressing concern about the impact of George Osborne’s “national living wage”, which Cridland described as “a gamble”.It is a gamble. Churlish Corbynites might complain that the £9 or so which over-25s will have to be paid by 2020 is still well below any realistic estimate of the income required to cover basic needs – rent, food, bills and so on.Without the right to strike, few of the past century’s seminal advances in pay and conditions would have been won Continue reading...

Once seen as the ‘decoupled’ vanguards of global financial change, emerging economies suddenly seem as vulnerable as ever to developments in the USBrazil, which saw its credit rating downgraded to junk last week, is only the latest Brics economy to crumble in the face of a strong dollar, a global trade slowdown and the prospect of higher US interest rates.Russia is already in recession; many economists believe China is heading towards a “hard landing”; and South Africa, which managed to append itself to the emerging-markets club in 2010, is on the brink of recession. Continue reading...

Glasenberg faces tricky talks with bankers, plus Britain’s long-awaited pay rise, and Andy Haldane prepares to tweetAs any child knows, an apology doesn’t count if you cross your fingers behind your back while making it. Last week we saw the City version of this approach, when commodities giant Glencore finally gave in to shareholders and admitted it had got it wrong about its balance sheet. Well, sort of.The company announced a programme to cut its debts by about $10bn, including raising $2.5bn of extra funds – essentially giving in to demands from investors. Still, chief executive Ivan Glasenberg’s statement on this enforced U-turn began with the word “notwithstanding”, before going to explain why he was right and shareholders were wrong. Continue reading...

Jeremy Corbyn must deliver a credible economic alternative grounded in a new, modernised KeynesianismJeremy Corbyn’s extraordinary surge to the Labour leadership is part of the same revolt against austerity and the political establishment represented by the SNP in Scotland, Syriza in Greece and Podemos in Spain.By supporting austerity in moderation, Europe’s socialist parliamentary parties, Labour included, have haemorrhaged support to populist parties – in Labour’s case to Ukip; the French Socialists to the Front National. Continue reading...

Retailers are angry, exporters are worried and productivity is still poor – then comes worse news from overseasAs he gazes across the Commons to a new shadow cabinet, George Osborne will doubtless be prouder than ever of the long-term economic plan that helped his party stampede to victory in May. For a chancellor who never tires of saying that his stewardship of the UK economy has made it among the best performing of the developed world, now more than ever he will want to paint himself as a safe pair of hands. But Osborne can’t expect an easy ride: he has a bumper in-tray and economic threats from home and abroad. Here are his six big challenges: Continue reading...

A Jeremy Corbyn win could take Richard Murphy from the rural town of Downham Market to No 11 Downing StreetRichard Murphy is a chartered accountant and tax expert from a rural market town in Norfolk. He is also the brains behind Corbynomics, the radical policy platform that has electrified Labour’s leadership campaign – and he is happy for you to know it.

Well done to George Monbiot for his blistering attack on the excesses of the financial world (Opinion, 9 September). But he sets out the problems without offering solutions. Here is one suggestion. The dysfunction of speculative investment could be tackled by slowing down the frenzied activity of stock markets. Suppose it became illegal to part with shares within a year of purchase. This would encourage the view of shares as long-term investments in enterprises with the expectation of regular, but not exorbitant, dividends. Shareholders might then take more interest in the management of the enterprise, including the welfare of its workforce.China is partly doing this, as reported on 11 July by Jennifer Duggan, with shareholders with large stakes in listed firms currently banned from selling for six months. Monbiot’s article should be widely discussed by the many people who have suddenly realised that politics deserves their attention. Perhaps they will begin to clamour for social justice for all and an end to the scandalous practices that he cites. Certainly it should underpin the thinking and decisions of the next Labour shadow cabinet.

United Nations general assembly agrees set of principles on debt restructuring, although US, UK and Germany vote againstThe United Nations general assembly has approved a set of principles to resolve disputes between bankrupt countries and their creditors that the former Greek finance minister Yanis Varoufakis said would have “avoided the pitfalls of the Greek crisis”.The vote, with 136 supporting the scheme to six against, and 41 abstentions, comes after years of lobbying by Argentina and latterly Greece for a debt restructuring process to shield them from draconian cutbacks and reforms that threaten their political and economic stability. Continue reading...

US investment bank expects oversupply to continue into next yearThe price of oil could more than halve again, to just $20 (£13) a barrel, experts at Goldman Sachs are predicting, a shift which would spell big savings for motorists but cast doubt on the viability of North Sea oilfields.

Rate-setting member Kristin Forbes outlines how failure of strong pound to hold down inflation could prompt early riseA senior Bank of England official has raised the prospect of interest rates rising sooner than expected if economists are proved wrong about the power of a strong pound to hold down inflation.

Construction of public housing fell by 15.6%, while the 0.8% growth in private building work was slowest since March 2013, offical data showsBritish construction output dipped unexpectedly in July, reversing a bounce in June, after the biggest annual fall in housebuilding in more than two years.A major driver of the decline was a year-on-year fall in the amount of new housing being built, which dropped by 2.5%, the first decline since March 2013. Continue reading...