Sustainability-focused inclusive income formula accounts for non-monetary factors overlooked in GDP, says ONSFor generations, the economy's progress has been measured by a single figure: gross domestic product (GDP). But the UK's official number cruncher, the Office for National Statistics (ONS), is developing an alternative way of judging what constitutes economic growth, with a view to declaring whether the way we are doing business is more or less sustainable than the previous year.The rival metric to GDP supplements all the money transactions in the economy with everything from housework to renewable energy's knock-on environmental benefits, according to the ONS. Continue reading...
by Jessica Elgot in Rio de Janeiro and Heather Stewar on (#6SAHE)
PM says budget stabilised the economy, while mortgage rates are individual decisions for the banks'Keir Starmer has conceded he was disappointed in the UK growth figures last week, but denied that his government's budget was responsible for a recent rise in mortgage rates.The prime minister told journalists travelling to the G20 summit in Rio: What we have done with the budget is to stabilise the economy and that, in my view, was the essential first step. Continue reading...
Further plans include blows to food stamps that could threaten millions of Americans to fund tax cut extensionsDonald Trump's economic advisers and congressional Republicans are discussing possible cuts to Medicaid, food stamps and other government welfare programmes to cover the costs of extending the president-elect's multitrillion-dollar 2017 tax cut.The cuts could mean new work requirements and spending caps, according to the Washington Post, citing sources involved in the talks, including aides in Trump's transition team. Continue reading...
Survey shows households' economic fears, while Goldman Sachs predicts impact of increase in employer NICsTax rises in the budget have sapped consumer confidence and will lead to sharp reductions in private sector pay growth next year, two separate reports have said.In a blow to Rachel Reeves's efforts to boost growth, a survey by S&P Global Market Intelligence showed that consumer confidence dropped this month after households said the outlook for the economy had deteriorated and the prospects for their own finances had worsened. Continue reading...
Rolling coverage of the latest economic and financial newsUK consumer confidence has fallen this month, as households grow gloomier about their financial prospects.The latest poll of consumer sentiment, just released by data firm S&P Global, shows that households reported that their current finances continued to deteriorate in November, while pessimism about the financial outlooks for the year ahead has risen.November is seeing households grow somewhat gloomier again, failing to build on the underlying improvement seen in the months leading up to the General Election.Consumer confidence has fallen back since spiking higher in July amid the election buzz, as ongoing pressure on household finances has resulted in squeezed spending, higher debt and lower savings. Continue reading...
Carlos Cuerpo calls on G20 leaders to act and says election results show citizens want redistribution of wealthSpain's economy minister has urged the world's richest countries to be brave" and redouble efforts to reach an agreement on a global minimum tax on the world's 3,000 billionaires, saying recent elections have shown citizens are demanding redistribution of wealth".Speaking during a visit to London before the gathering of G20 leaders in Rio de Janeiro on Monday, Carlos Cuerpo said the plan had gained political momentum since the summer, when finance ministers agreed to work together to ensure that ultra-high-net-worth individuals are effectively taxed". Continue reading...
Prime minister wants bilateral at G20 to lead to closer ties with China, which he sees as key to faster growthKeir Starmer will become the first UK prime minister in six years to meet the Chinese president, Xi Jinping, promising to turn the page on UK-China relations by building a pragmatic and serious relationship".Starmer and the chancellor, Rachel Reeves, have been pursuing a thawing of relations with the world's second-largest economy on pragmatic grounds, suggesting that the UK cannot achieve its growth ambitions without better terms with China. Continue reading...
Productivity and quality in a sector that is its workforce will require even more money after national insurance risesKemi Badenoch's second go at prime minister's questions last Wednesday was judged a flop at Westminster but she did draw attention to one genuine issue: the impact of the national insurance rise for social care.It is 14 years since the Tories sank Andy Burnham's plan for a death tax" to fund social care. Over that time, as demand has continued to rise, there have been patches and sticking plasters, including the social care precept, and the decision to fill gaping holes in the workforce with a surge in overseas workers. Continue reading...
The government's budget has caused a rupture with the farming community, who have vowed to fight their corner'It could scarcely be a more idyllic morning on Marcross farm. Autumn sun beams down across the Vale of Glamorgan. While it can blow a gale on the south Wales coast, today is perfectly still and the sky bright blue. After a hiccup with the electricity, milking is well under way. Yet despite the apparent serenity and beauty of the surroundings, the mood among the Evans family, who own and run the farm, is gloomy.They have battled for years to make the farm viable and invested heavily in technology to make that a reality. They have diversified to help cover costs - they have a caravan park nearby. Like farmers across the country, however, they are now seriously worried that the government's inheritance changes to farming land could scupper their best-laid plans. Continue reading...
Amid sluggish UK productivity and global insecurity, pulling closer to Europe is diplomatically and economically vitalAchieving the fastest sustainable growth in the G7 was the Labour party's highest-profile pledge going into the general election last July. Chancellor Rachel Reeves has said that boosting growth is at the heart of everything she does". But there was concerning news last week with new figures showing the economy grew by just 0.1% in the three months to the end of September, falling significantly short of expectations.Some business leaders have linked this anaemic growth to uncertainty in the run-up to last month's budget. But it will largely still be a product of factors outside the new chancellor's control, including the decisions of the last Conservative government. Continue reading...
Fears over the health secretary's plan are understandable. But patients and doctors alike are now fleeing the service for other providersThere is going to be lots of angst in Labour ranks about the government's proposed health reforms. At first glance they appear to be a reheated collection of Blairite targets and financial strictures that smack of privatisation by the backdoor.When the former health secretary and arch-Blairite Alan Milburn was installed by his successor Wes Streeting to oversee the shake-up, it was easy to see how fears of a rightward shift might be being confirmed. Continue reading...
The president-elect's unpredictability on trade has experts guessing about his impact on the UK economy - but some find glimmers of hope in the gloomFour years ago, when Donald Trump last occupied the White House, Liz Truss was sent on a mission. Carrying a bottle of British gin on her flight to Washington, the trade secretary had a gift for her US counterpart to show what Americans were missing out on.Back then, while still formally a member of the EU, Britain was hit with 25% US import tariffs on distilled spirits as Trump's administration waged trade battles on multiple fronts, slapping border taxes across a range of goods sold by America's allies and enemies alike. Continue reading...
by Kalyeena Makortoff and Heather Stewart on (#6S99X)
New remit given to FCA by chancellor raises fears of a weakening of rules meant to avert another financial crisisThe financial regulator has been ordered to encourage more risk-taking across the City, raising concerns that the Labour government is in danger of watering down rules meant to avoid another financial crisis.In an official remit" letter addressed to Financial Conduct Authority (FCA) boss, Nikhil Rathi, the chancellor, Rachel Reeves, said regulations meant to protect consumers should not stand in the way of sensible risk-taking" by investors and the wider financial sector, which includes banks, asset managers and insurers. Continue reading...
Progressive senators urge party to learn the right lessons' from election defeat and take fight to US billionaire classElizabeth Warren delivered a rallying cry to Democrats in the wake of Donald Trump's election victory, calling on the party to show it stands ready to unrig this economy" as the president-elect works with billionaires to overhaul it.Calling on allies to learn the right lessons" from Kamala Harris's defeat last week, the Democratic senator set the stage for a big battle" over economic policy as Trump returns to the White House. Continue reading...
Family farmers are sick with worry after the end of inheritance tax relief on agricultural property - and the breakup of farms will hit food security, writes Cheryl Cottle-HunkinWe're a father-and-daughter duo working on our sheep and beef farm in north Devon. Despite our farm being relatively small, we too have been feeling the immediate stress and worry of Labour's budget announcements, and thousands of others are similarly feeling the strain (Tax changes in budget last straw for UK farmers after years of being squeezed', 8 November).Mental health has always been a massive issue in the farming industry. There are so many uncontrollable variables to contend with: disease, climate, supermarket prices, not to mention all of the uncertainties following Brexit. We're literally counting trees and measuring hedgerows in a bid to claw back money lost since leaving the EU, as if we somehow need to prove we're custodians of the countryside. A complete mockery. Continue reading...
The consumer price index rose at annual pace of 2.6% after September saw lowest rate in more than three yearsA key measure of US inflation has risen for the first time since March, underlining its bumpy ride down to lower levels.The consumer price index (CPI), which measures price growth across a basket of goods, ticked up to an annual pace of 2.6% in October - from 2.4% in September, which had been the slowest rate in more than three years. Continue reading...
During the US time out, Australia and its allies must remain steady and seek to deepen cooperation among themselvesThe idea of open international exchange that framed the Australian reforms of the late 20th century and its subsequent economic success are being challenged in the 21st century. The challenge is intensified by the restoration of Donald Trump as president of the United States. He is committed to higher protection, tax cuts that will set record highs for budget deficits, a trade war with Australia's largest trading partner with a risk of worse, and separation of the United States from the rules-based international trading system. He is also committed to withdrawal from international cooperation and domestic action to reduce climate-changing emissions of greenhouse gases. Global financial crisis is not out of the question.These developments will damage Australian interests. Global long-term interest rates set a base against which Australian rates settle, and will be higher than they would otherwise have been. International inflation will be higher, increasing Australia's own inflation challenge. Australia is the developed country that has most to lose from a failure to stop global heating. Australia has more to gain economically than any other country from success in the world achieving net zero carbon emissions, as an exporter of zero-carbon goods to countries which lack rich renewable energy and biomass resources of their own. Continue reading...
Beijing's model is hitting roadblocks. It needs to move toward more home-grown spending - even if one-party politics makes that hardChina faces what the economist Albert Hirschman noted decades ago: explosive growth is unbalanced, and success embeds that unevenness into political, business and cultural institutions, making change tough. China now stands at this crossroads.The Asian giant's economic growth, which previously relied on exports and a debt-driven construction boom, is facing headwinds: the disastrous crash from a real estate investment spree, big losses hitting the banks, and local governments facing a crippling debt crisis. With households highly indebted, China cannot just build more apartments to sell. Sustaining an export-led boom will become harder as anti-dumping measures and Donald Trump's tariffs hit. All this when Chinese firms report plunging profits. Continue reading...
28 years of lessons | Sarah Winman's Still Life | Crocodile infestations | Running bores | Brexit and Donald TrumpI am so sorry to find that I have read Larry Elliott's last column as economics editor (From Thatcher to Trump and Brexit: my seven lessons learned after 28 years as Guardian economics editor, 10 November). I have always relied on him for explanations of the murky world of economics that are clear, concise and explain the context. My understanding of economics has always been shaky, but Larry'sarticles have given me quitea few lightbulb moments. Ishall treasure the final column.
by Richard Partington Economics correspondent on (#6S581)
Keir Starmer can show UK is open for business', says former Bank of England chief economist Andy HaldaneThe UK can strike a US trade deal with Donald Trump while also rebuilding EU relations after Brexit to cement its status as a beacon of stability" in an increasingly volatile world, a leading economist has said.Andy Haldane, the former Bank of England chief economist, said Keir Starmer's government could show the UK was open for business at a time when so much else of the world is looking inward - whether to the EU, or the US, it could really pay dividends". Continue reading...
Price has more than doubled in a year as traders hope Trump will favour crypto when he returns to White HouseThe price of bitcoin has risen above $87,000 for the first time as it benefited from traders' hopes that Donald Trump will favour cryptocurrencies when he returns to the White House.Bitcoin reached a record high of $87,198, before slipping back slightly on Monday. The price has more than doubled from about $37,000 12 months ago. Continue reading...
US protectionism raises alarms, underscoring the need for balanced policies as wealthy nations' tariffs can hurt developing economiesTo me, the most beautiful word in the dictionary is tariff," Donald Trump told business leaders in October. It's my favourite word. It needs a public relations firm." Now, with his election victory, Mr Trump's wordssend a shiver through global capitals. Many fear he may pull a curtain across the US economy, locking them out of the world's largest market and cutting off access to US technology. These fears are amplified by last year's contraction in merchandise trade - which was the first such shrinkage at a time when the global economy was growing.However, it's wise to take Mr Trump seriously, not literally. During his last term, he imposed tariffs on more than $400bn in US-China trade and renegotiated the North American free trade agreement (Nafta) in a push to reshore blue-collar jobs. In many ways, JoeBiden continued - and even accelerated - these trends. Mr Trump averaged 144,000 reshored jobs a year; in 2022, Mr Biden reached 364,000. Continue reading...
The economy matters, but the likes of Trump succeed by offering voters revenge for problems both real and imaginedDonald Trump, for the first time, won a majority of the popular vote. He took the US presidency with huge swings in his favour, increasing his share of first-time voters, young voters, black voters and Latino voters. And he gained among voters earning under $100,000, while wealthier voters preferred Harris - a reversal of the class alignments in 2020. Current voting tallies suggest the swing to the Republicans was largely caused by mass abstention among Democrat voters. This result echoes global trends. Trump and his new coalition will now head a loose alliance of far-right governments from India to Hungary, Italy, the Philippines, Argentina, the Netherlands and Israel.The rhythm of far-right successes began with Viktor Orban's landslide in Hungary's 2010 parliamentary election. Since Narendra Modi's victory in the 2014 Indian general election, it has scarcely paused: Trump's first ascent to the White House, the Brexit vote and Rodrigo Duterte's success in the Philippines all took place in 2016. Two years later, Jair Bolsonaro scored an upset in Brazil. Since the pandemic, the Brothers of Italy won the Italian general election in 2022 and Javier Milei took the Argentinian presidency in 2023. For most of this period, Benjamin Netanyahu's Likud has ruled Israel in coalition with far-right parties. Even where it is not in power, the far right is gaining, as in France and Germany. In the long view, the defeat of Trump in 2020 and Bolsonaro in 2022 were predictable oscillations in a general pattern of ascent.Richard Seymour is an author and founding editor of Salvage. His latest book is Disaster Nationalism: The Downfall of Liberal CivilizationDo you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...
US suffered greatest economic losses, report commissioned by International Chamber of Commerce finds, followed by China and IndiaViolent weather cost the world $2tn over the past decade, a report has found, as diplomats descend on the Cop29 climate summit for a tense fight over finance.The analysis of 4,000 climate-related extreme weather events, from flash floods that wash away homes in an instant to slow-burning droughts that ruin farms over years, found economic damages hit $451bn across the past two years alone. Continue reading...
The free market experiment has failed, free trade is out, and populism is rife but it can be defeated if the left can galvanise ideas into a credible planMargaret Thatcher was prime minister and Nigel Lawson her chancellor of the exchequer. Neil Kinnock was leader of the Labour party. The iron curtain separated Europe.Across the Atlantic, Ronald Reagan's second term in the White House was drawing to a close. Donald Trump floated the idea that George Bush might want him as his running mate in the looming US presidential election, an overture Bush described as strange and unbelievable".Trump won because he promised to give voters what they wanted rather than what America's liberal elite thought they ought to want. Continue reading...
Voters across the world have backed any alternative to the people in chargeWhat do the British Conservatives, the New Zealand Labour party, the LDP of Japan and the ANC of South Africa have in common? Defeat. All four led governments that have been pummelled at the polls recently as part of the greatest wave of anti-incumbent voting ever seen. Governments of left and right, radicals and moderates, liberals and nationalists: all are falling.This week the US Democratic party joined the electoral casualty list, bested by the man they ousted four years ago, the past and now future president, Donald Trump. Critics and cheerleaders alike see Trump as an extraordinary figure with a unique appeal. But his triumph is the rule, not the exception. Defeated vice-president Kamala Harris ran ahead of the global trend, even more so in the crucial swing states. But she was swept away nonetheless. Continue reading...
The chancellor's budget may have a small effect on UK interest rates. But US tax cuts and tariffs could have international repercussionsHaving been fairly critical of my (almost) friend Rachel Reeves's approach to her first budget, I wish to put in a word of praise for certain aspects of it before, er, continuing to be critical.The emphasis on devoting more resources to the NHS is long overdue. The new health secretary, Wes Streeting, does no good for the morale of doctors, nurses and patients when he goes on about the NHS being broken". In common with friends and family, I have recently had recourse to medical help, and we have been much impressed by what we have witnessed - not least by the good work of staff from overseas. Continue reading...
The chancellor will make the case for free trade as Labour is warned that it must choose between the United States and the European UnionThe chancellor Rachel Reeves will use a keynote speech this week to promote free and open trade between nations as a cornerstone of UK economic policy, putting the Labour government on direct collision course with president-elect Donald Trump.Reeves will use her first speech at the Mansion House - an annual showpiece for the chancellor - to outline a post-budget plan to go for growth". But as the UK government scrambles to respond to Trump's emphatic victory, and the challenges it poses for Britain on vital issues of economic and foreign policy, the chancellor is expected to be clear that she will take the fight to Washington in defence of free trade. Continue reading...
by Richard Partington Economics correspondent on (#6S3GV)
Donald Trump's US election campaign threat to impose 10% levies on US trading partners could hurt the UK economyOutside the US embassy in London, a steady line of visitors arrive for visa appointments. On the windswept south bank of the Thames, the fortress-like building is not the most welcoming proposition: it stands isolated, a cold glass cube hemmed in by a medieval-style moat.Inside, after Donald Trump's election victory last week, the atmosphere was not much warmer. Having flown in to promote US trade links with Britain, the governor of New Jersey, Phil Murphy, knew his job had just got a lot harder. Continue reading...
The German dream of centrist, stable government has been dashed by geopolitical forces and the cult of balanced budgetsWednesday 6 November was a seismic day in the politics of the west. On one side of the Atlantic, it was confirmed in the early hours of the morning that the hard-right nationalist Donald Trump had been elected president of the US; on the other side, the government running Europe's largest economy - Germany's traffic-light coalition of social democrats, market liberals and greens - collapsed. It could hardly have come at a worse time.The breakdown of the feuding Berlin alliance will leave a political vacuum in Germany for months, just when the EU needs decisive leadership. Instead, the country faces months of introspective electioneering, followed by protracted coalition negotiations, with investment and public spending on hold.Paul Taylor is a senior visiting fellow at the European Policy CentreDo you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...
Cash stops short of hoped-for bazooka option', with critics calling it an accounting exercise' that will not bolster growthChina has announced 10tn yuan in debt support for local governments and other economic measures, but stopped short of the bazooka" stimulus package that many analysts had expected.The fiscal package included raising debt ceilings for local governments by 6tn yuan (646bn) over three years, so they could replace hidden debt, which authorities said stood at 14.3tn yuan by the end of 2023. Continue reading...
New modelling finds risk to global economies much worse than previously thought, but group of central banks says even this may be an underestimateThe physical shocks caused by climate breakdown will hit global economic growth by a third, according to a risk assessment by a network of central banks.The rise in the estimated hit to the world's economies as a result of the shocks from flooding, droughts, temperature rises, and mitigating and adapting to extreme weather was the result of new climate modelling published this year. Continue reading...
The president-elect benefited from working-class hostility to a remote elite. Liberals need to reargue their caseYes, we all know it looks terrible. We have heard what Donald Trump has promised. But could there be silver linings to these ominous clouds? The election was two days ago. Tomorrow is another day, and this strange, faulty, thin-skinned but tough-as-nails character is notable for one thing: unpredictability.The essence of Trump is that he is not a politician but an egotistical wheeler-dealer. He is not a strategist, let alone an ideologue. Dealers are judged by their deeds, not their words. They react to circumstance by talking, negotiating, not policymaking. Trump is said by his friends to be aware of the mistakes he made last time round. That he is desperate not to do so again is good news.Simon Jenkins is a Guardian columnist Continue reading...
Rise in unemployment in low hundreds of thousands as technology creates roles, Tony Blair Institute suggestsArtificial intelligence could displace between 1m and 3m private sector jobs in the UK, though the ultimate rise in unemployment will be in the low hundreds of thousands as growth in the technology also creates new roles, according to Tony Blair's thinktank.Between 60,000 and 275,000 jobs will be displaced every year over a couple of decades at the peak of the disruption, estimates from the Tony Blair Institute (TBI) suggest. Continue reading...
Narratives matter in economics, and we must acknowledge the circumstances the government faces and give credit where dueGiven the tone and content of much of the coverage in the British press, you would be forgiven for thinking that the Labour government's first budget in 14 years was a bust, and that is putting it nicely. Yet this is more than unfair. It obfuscates four important aspects of the budget, sidelines three lessons for the future and undermines today's good news from the Bank of England.In the run-up to the budget on 30 October, I was among those warning that the announcements from the chancellor, Rachel Reeves, would please almost no one" and that they should not be assessed according to their ability to meet all the demands that have been placed on them". Continue reading...
Economics | The Guardian