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by Graeme Wearden and Nick Fletcher on (#P7M0)
Fewer jobs were created than expected in America last month, more people quit the labor force, and wage growth was disappointing
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Feed | http://feeds.theguardian.com/theguardian/business/economics/rss |
Updated | 2025-09-18 18:15 |
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by George Arnett on (#P8S5)
Killing sprees have occurred almost every day in the US since 2013, but public opinion has still turned against gun controlMass shootings occur almost once a day in the US, yet protecting gun rights seems to concern Americans more than increasing controls on guns.On Thursday, a gunman killed nine people in a community college in Oregon. It was the 994th gun incident in which there were four or more victims (including the shooter) since the start of 2013, according to the website Mass Shooting Tracker. Continue reading...
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by Jo Michell on (#P8JE)
Most economists support Labour opposition to the ‘economically illiterate’ fiscal charter. John McDonnell and Jeremy Corbyn should frame a clear alternative to austerity, as promised, not backtrackJeremy Corbyn was elected Labour leader on an unequivocal anti-austerity platform. Shadow chancellor John McDonnell’s announcement that the party will back George Osborne’s fiscal charter has therefore caused alarm among Corbyn’s supporters. So what is Labour’s position on austerity and the deficit?MPs will vote on Osborne’s fiscal charter later this year. The charter commits the government to eliminate the deficit by the end of this parliament and to run a surplus in all subsequent years unless economic growth falls below 1%. Continue reading...
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by Katie Allen on (#P82N)
Companies created jobs for the 28th month running and in September they hired new staff at the fastest pace for three monthsA big pick-up in housebuilding helped the UK’s construction sector enjoy its fastest growth for seven months in September and boosted job creation, according to a survey.All parts of the industry from civil engineering to housebuilders saw output rise in September. That lifted the key measure of business activity for the whole construction sector to 59.9 from 57.3 in August, the latest Markit/CIPS UK construction PMI showed. Continue reading...
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by Mischa Wilmers on (#P7ZB)
Has capitalism had its day? At a Guardian Live/Discuss debate in Manchester, Guardian Members listened to two opposing arguments before voting for or against the motion - the markets will save usThe late Nobel prize-winning economist, Milton Friedman, once described free-market capitalism as “the most effective system we have discovered to enable people who hate one another to deal with one another and help one anotherâ€. Yet since the 2008 financial crash, this understanding has come in for intense criticism from those who believe that unregulated markets are the cause of - rather than the solution to - many of society’s problems.
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by Daniel Hurst on (#P7Y3)
As the new prime minister tries to reinvigorate the Coalition, the government must grapple with an unpopular higher education policy it still believes inListening – presumably a core skill for anyone wishing to stand for high office – sounds like the new buzzword in Australian politics.Related: Malcolm Turnbull promises new style of leadership after overthrowing AbbottRelated: Tony Abbott broods on his bruises as 'dirty water flows under the bridge'Related: Education minister may seek election mandate for revamped university policy Continue reading...
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by Katie Allen on (#P6Q8)
The CBI and EEF sceptical about government plan to create 3m apprenticeships in five years, fearing high cost to business and low quality of trainingThe government’s plan to charge a new levy on businesses to help reach ambitious apprenticeship targets is facing resistance from big employer groups who warn ministers not to sacrifice quality of training.Chancellor George Osborne announced the levy in his summer budget as a key part of his bid to show he was on the side of working people. The government has pitched it to business as a way to end years of under-investment in training and solve skills shortages with 3m new apprenticeships by 2020.Related: Apprenticeships: it's quality, not numbers that matterRelated: Cameron pledges to create 50,000 new apprenticeships using Libor fine Continue reading...
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by Julia Kollewe and Katie Allen on (#P4D3)
Sector growth slows in September, prompting manufacturers to lay off workers, against backdrop of uncertain global outlookTough export markets and weaker consumer spending continued to take their toll on UK factories last month, prompting the first job losses for the sector in more than two years, according to a survey that echoed signs of manufacturing weakness around the world.The performance at UK factories was lacklustre in September, when growth slipped to a three-month low. Against the backdrop of warnings about the uncertain outlook for global growth, eurozone manufacturing also lost momentum and output from Chinese factories continued to fall. Continue reading...
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by Heather Stewart on (#P60F)
Finance institute forecasts net capital outflow from emerging markets for first time since 1988 leaving states vulnerable to ‘capital drought’Global investors will suck capital out of emerging economies this year for the first time since 1988, as they brace themselves for a Chinese crash, according to the Institute of International Finance.Capital flooded into promising emerging economies in the years that followed the global financial crisis of 2008-09, as investors bet that rapid expansion in countries such as Turkey and Brazil could help to offset stodgy growth in the debt-burdened US, Europe and Japan.Related: IMF's emerging markets warning is timely Continue reading...
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by Graeme Wearden on (#P3ZM)
All the latest economic and financial news, as China’s factory output falls at its fastest pace in six years and British firms trim workforces
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by Alison Moodie on (#P5FM)
While the idea of the circular economy has been around for decades, technology has only recently made it possible for companies across industries to participate
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by Nouriel Roubini on (#P4ZW)
Although the oil price has fallen as instability has risen across the Middle East it doesn’t mean the region is less strategically important. The west ignores the region at its perilAmong today’s geopolitical risks, none is greater than the long arc of instability stretching from the Maghreb to the Afghanistan-Pakistan border. With the Arab Spring an increasingly distant memory, the instability along this arc is deepening. Indeed, of the three initial Arab spring countries, Libya has become a failed state, Egypt has returned to authoritarian rule, and Tunisia is being economically and politically destabilised by terrorist attacks.The violence and instability of North Africa is now spreading into sub-Saharan Africa, with the Sahel – one of the world’s poorest and most environmentally damaged regions – now gripped by jihadism, which is also seeping into the Horn of Africa to its east. And, as in Libya, civil wars are raging in Iraq, Syria, Yemen, and Somalia, all of which increasingly look like failed states.Related: The Opec oil price still matters (just not as much as before) Continue reading...
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by Larry Elliott Economics editor on (#P323)
Study predicts that raising statutory pay floor will lead to sharp increase in proportion of people whose wages are set by the stateThe number of employees earning the minimum wage will double to more than 10% of the UK workforce by the end of this parliament, according to new research.A study published on Thursday by the Resolution Foundation, timed to coincide withthe 20p an hour increase in the minimum wage, found that the decision by George Osborne to lift the statutory pay floor through a national living wage would result in a sharp increase in the numbers of people having their wages set by the state.Related: Tory welfare cuts will destroy benefit of new living wage, research shows Continue reading...
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by Nicholas Watt Chief political correspondent on (#P2QY)
For Corbyn, opposition to Trident is a key issue but to his critics it is a reminder of how out of step Labour’s pacifist leader George Lansbury was in the 1930sIt was a tale of two conferences over a week in which the dazzling Brighton sunshine of an Indian summer shone equally on all the delegates.To supporters of Jeremy Corbyn, their Labour conference marked the start of a healing process within the party as MPs from other camps watched the new leader begin to explain his values to the nation.Related: Labour split on defence grows as Eagle criticises Corbyn over TridentRelated: A Labour conference for activists – while Corbyn works out what to do Continue reading...
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by Jill Treanor on (#P2EY)
Paul Fisher, deputy head of the Bank’s regulatory arm, says new rules need to be tested in a crisis before being scaled backA senior official at the Bank of England has warned of the risk of bowing to pressure from lobbyists in the banking industry who want to see a relaxation of rules introduced since the banking crisis.Paul Fisher, one of the most senior regulators at the Bank, said the new regime – which will force banks to ringfence their high street operations from any investment banking operations – needed be tested during another crisis before any watering down took place. Continue reading...
by Graeme Wearden (earlier) and Julia Kollewe (now) on (#P06C)
IMF chief warns emerging markets will be hit by extended period of low commodity prices
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by Larry Elliott Economics editor on (#P234)
Prospect of US interest rates hike and weakness in China contributing to uncertainty and higher market volatility, says Christine LagardeA marked slowdown in big emerging market countries will cut global growth to its lowest level since the deep recession of 2009, the head of the International Monetary Fund has warned.Christine Lagarde, the IMF’s managing director, said forecasts to be published by her organisation next week would show activity expanded by less than the 3.4% recorded in 2014 – the joint weakest since the world economy came to a standstill six years ago.Related: IMF chief warns of slower growth after China shockwavesRelated: IMF: China slowdown could keep global interest rates low Continue reading...
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by Larry Elliott Economics editor on (#P20H)
UK growth was weaker than previously believed in 2010, but stronger in the three years that followed, the ONS has saidCast your mind back to early 2013. The economy’s recovery from the deep recession of 2008-09 had stalled for a second time and there was much speculation that Britain was on the brink of a triple-dip recession.It now turns out that the economy was under no such threat. The latest data revisions from the Office for National Statistics show that growth was weaker than previously thought in 2010, but stronger by an average 0.4 percentage points in each of the next three years. There was no double-dip recession, let alone a third setback. Continue reading...
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by Nick Fletcher on (#P143)
An estimated $11tn wiped off value of world shares amid growing concerns over China’s flagging economyGlobal markets have suffered their worst quarterly performance since the depths of the eurozone crisis in 2011, with an estimated $11tn (£7tn) wiped off the value of world shares, despite an attempted rebound on the last day of September.After a summer of wild swings, sparked by growing fears of a slowdown in China, leading shares have slumped from the record highs of a few months earlier, and recorded their second quarterly decline in a row. Continue reading...
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by Phillip Inman Economics correspondent on (#P0VB)
Negative inflation brought on by cheaper energy prices puts pressure on European Central Bank to boost stimulus programmeA slump in oil prices pushed eurozone inflation below zero this month, according to figures from Eurostat, the statistical office of the EU.Prices fell across the currency bloc by 0.1% year-on-year in September, putting pressure on the European Central Bank (ECB) to beef up the €60bn a month stimulus programme begun earlier this year. Continue reading...
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by Phillip Inman Economics correspondent on (#P0Q9)
ONS data shows real household disposable income rose at annual rate of 3.7% in second quarter of this yearPressure is mounting on the Bank of England to raise interest rates after official figures showed household disposable incomes – a key measure of living standards – rising at their fastest rate in five years.Figures from the Office for National Statistics showed that real household disposable income, which measures spending power after inflation, tax and state benefits have been taken into account, rose at an annual rate of 3.7% in the second quarter of 2015. Continue reading...
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by Staff and agencies on (#P0CY)
Despite a strong bounce back on the stock market after Tuesday’s heavy losses, Australia must adjust to the slowdown in China, rating agency warnsAustralia is the “clear loser†from China’s economic slowdown, according to a leading credit rating agency.Despite a strong recovery by the Australian stock market after Tuesday’s heavy losses, Standard & Poor’s says China’s trading partners must adjust to the Asian giant’s slowing economy with commodity suppliers such as Australia hardest hit.Related: Glencore should have prepared better for China slowdownRelated: Canada and Australia feel the squeeze in wake of Chinese economic slowdown Continue reading...
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by Heather Stewart on (#NZZ2)
World Economic Form says the UK’s weakness include the budget deficit and the quality of its education systemBritain has slipped to 10th in an influential global competitiveness index after being overtaken by Sweden.The World Economic Forum thinktank, which hosts the gathering of business and political leaders in the Swiss ski resort of Davos each January, said that Britain has slipped one place to rank as the 10th most competitive economy in the world, with Switzerland and Singapore topping the table. Continue reading...
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by Larry Elliott on (#NYT6)
Bank of England governor tells Lloyd’s insurers that ‘challenges currently posed by climate change pale in significance compared with what might come’Mark Carney, the governor of the Bank of England, has warned that climate change will lead to financial crises and falling living standards unless the world’s leading countries do more to ensure that their companies come clean about their current and future carbon emissions.In a speech to the insurance market Lloyd’s of London on Tuesday, Carney said insurers were heavily exposed to climate change risks and that time was running out to deal with global warming. Continue reading...
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by Heather Stewart on (#NXDC)
Fund says governments in emerging markets should prepare now for a new credit crunch because of a 10-year corporate borrowing binge
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by Lola Okolosie on (#NY82)
Austerity has pitted the old and young against each other in the competition for housing, education and care. But in reality, we 99% are in it togetherThe concept of divide and rule has been an effective tool of governance since ancient times. This is what came to mind as I sat in a break-out session entitled “Tackling the challenges faced by older women†at this year’s Labour women’s conference. The fact is that the struggles those of us on the left hold dear – tackling inequalities in health, education, income and housing – are a worry for us all, young and old, working- and middle-class, black or white. We will have to bust the myths that pit us against each other when, in truth, we share a common enemy – the 1% and a government that is happy to brazenly transfer public wealth into private hands.Related: The Guardian view on the generation gap: youth clubbed | EditorialThe over-55s are not a homogeneous blob of the financially secure and comfortable Continue reading...
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by Larry Elliott Economics editor on (#NY53)
An interest rate increase from the US Federal Reserve is a likely catalyst for the crisis in emerging markets the International Monetary Fund clearly fearsThe world has turned full circle. In the early 1990s, the slow-burn financial crisis that came to a climax in 2008 had its origins in the developing world. From Mexico in 1994 to Thailand in 1997 the story was the same: hot money from abroad; asset price booms; overvalued currencies; burst bubbles; hot money rushing for the exit.Eventually, the malaise wormed its way from the periphery of the global economy to its core: the developed markets of north America and western Europe. Now the focus of the International Monetary Fund is back on the risks presented by the emerging world.Related: IMF warns of new financial crisis if interest rates rise Continue reading...
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by George Arnett on (#NX8P)
Net financial assets exceed €100tn for first time and remain concentrated in world’s richest regionsThe financial assets of private households have reached a record €135.7tn (£100.3tn), enough to settle the planet’s sovereign debt and still have two-thirds of the total left over, according to Allianz’s Global wealth report for 2015.Debts owed by private households increased by 4.3% on 2013 to total €35.2tn last year, which means that net financial assets (gross assets minus debt) have topped €100tn for the first time. Continue reading...
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by Larry Elliott on (#NX65)
CBI survey reports best business conditions since before 2007 financial crisis, as low inflation and wage growth stimulate consumer demandBritish retailers are reporting the best business conditions since before the financial crisis erupted in 2007 as low inflation and rising wages prompt a surge in consumer spending.The CBI said in its monthly snapshot of the distributive trades that high street and online sales volumes were well above normal for the time of year, with food and clothes outlets notching up particularly strong performances. Continue reading...
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by Aditya Chakrabortty on (#NW97)
Labour’s real battle will be to challenge the same undead orthodoxies it failed to kill off after the financial crash of 2008 – and the elite consensus that keeps them in placeOver and over again during the Labour conference this week we will hear a big lie. It will be lathered on during news bulletins and discussions live from Brighton, daubed across countless newspaper columns. Rather than obviously sounding like an untruth, it will be expressed in a hundred shop-worn homilies and tatters of second-hand advice. That Jeremy Corbyn, we’ll hear, he must get slicker at presentation. This John McDonnell, he needs to convince taxpayers of his trustworthiness.Related: John McDonnell offers different economic tack without sounding scaryThe certainties that had underpinned Britain’s economic model lay shattered and no one knew what would happen nextIn a catastrophe instigated by financiers, the experts brought on to discuss what should be done were financiers Continue reading...
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by Justin McCurry in Tokyo and agencies on (#NW63)
Wall Street losses drag down Tokyo and Shanghai indexes with Asia-Pacific markets at lowest level since June 2012Deepening concern over the health of the Chinese economy has again struck Asian markets, with shares in the region plummeting to their lowest level for three-and-a-half years, after weak Chinese data prompted sharp losses on Wall Street.The Nikkei 225 ended Tuesday down 714.27 points, or 4.05%, from Monday at 16,930.84 – its lowest level for about eight months. Continue reading...
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by Rupert Neate in New York on (#NV8P)
The Dow Jones Industrial Average closed down 313 points (1.9%) to 16,002 points Monday, following losses on other markets across the worldUS stock markets fells significantly on Monday due to renewed concerns about the health of the Chinese economy.The Dow Jones Industrial Average closed down 313 points (1.9%) to 16,002 points, following losses on other markets across the world. Continue reading...
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by Graeme Wearden on (#NRYN)
Commodity trader and miner Glencore slumps as analysts warn its shareholders could be wiped out
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by Patrick Wintour Political editor on (#NSPN)
Shadow chancellor John McDonnell lays out plans to cut deficit by targeting corporate tax avoidance and increasing taxes on rich
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by Associated Press on (#NT9H)
Despite global slowdown that has impacted manufacturers, spending rises 0.4% for second straight month as employment gains solidify upward trendConsumer spending rose at a healthy rate in the US in August, while income growth slowed after a big jump in July.Consumer spending advanced 0.4% compared to July, when spending also increased by 0.4%, the Commerce Department said Monday. In both months, the figures reflected strong gains in purchases of durable goods such as autos. Continue reading...
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by Nicholas Watt Chief political correspondent on (#NT4F)
The shadow chancellor took clear aim at the Tories, big business and austerity in his Labour conference speech, but what were his other messages? Continue reading...
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by Larry Elliott Economics editor on (#NT02)
Shadow chancellor aims to differentiate not just between Labour and the Tories, but between Corbyn Labour and Miliband LabourThere were no jokes. There was no all-out onslaught on capitalism. It was left to others to deliver the strongest attacks on the Conservative government.But John McDonnell’s debut party conference speech as Labour’s shadow chancellor was anything but dull. A bit more mainstream, certainly, than some might have been expecting (or fearing), but not boring.Related: John McDonnell to be interviewed by Guardian editor Katharine Viner Continue reading...
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by Phillip InmanEconomics correspondent on (#NST4)
Report says global trade is still dominated by the export of goods that sold better after a cut in the exchange rateA 10% fall in the value of a nation’s currency can boost exports by an average 1.5% of GDP, according to a study by the International Monetary Fund that reveals the benefits of a cut in the exchange rate for foreign trade.Heightening fears that the global economy is likely to suffer a new round of currency wars, the report said global trade was still dominated by the export of goods such as cars and fridges that sold better after a cut in the exchange rate made them cheaper.
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by James Meadway on (#NSE3)
With world trade contracting, the UK will need to promote renewables to reduce import dependency and boost regional economic growthWorld trade has fallen by its largest amount since the financial crisis of 2008. The crash itself produced a significant shrinking of global trade – the sharpest since the Great Depression. At the time it was possible to believe that this was a temporary wobble. Ongoing technological change, from containerisation of freight transport to today’s ubiquitous digital communications, would lock the economy into a path of deeper and deeper “globalisationâ€, with international flows of goods, services and money overwhelming states and transforming societies.The rapid recovery in global trade in the first years after the crash kindled a hope that the forward march of globalisation would continue. This now looks excessively optimistic.Related: Forget your dreams and follow the money if you want to help the worldRelated: Small scale hydropower can provide stream of new jobs to rural regions Continue reading...
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by Patrick Wintour Political editor on (#NR5X)
Shadow chancellor plans broader remit for Bank of England and will say he understands need to bring deficit under controlJohn McDonnell, the shadow chancellor, will promise to match Jeremy Corbyn’s new politics with a new economics, including a pledge that the next Labour government will live within its means but run a different kind of economy.
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by Nick Fletcher on (#NR5V)
Signs of a global economic slowdown prompt analysts to put back predicted dateThe Bank of England is likely to keep interest rates on hold until the middle of next year rather than raising them sooner, following a gloomier outlook for the global economy, according to the economic forecaster CEBR.The Centre for Economics and Business Research now believes a rise in May or August 2016 is more likely than one in February, its previous prediction. Signs of a global economic slowdown have been growing in recent weeks, especially in the world’s second-largest economy China and emerging markets. This is likely to stay the Bank’s hand despite reasonable growth rates in the UK, with the CEBR warning that the UK’s performance may not be sustainable if economies elsewhere continue to struggle.Related: UK interest rates may have to be cut, warns Bank of England chief economist Continue reading...
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by Heather Stewart on (#NR5Z)
FSA chairman warns of ‘legitimate concern’ that monetary finance proposed by those from socialist tradition would be used to excessLabour’s radical new leader may struggle to win over voters to “Corbynomics†because leftwingers are less trusted with public money, according to former City watchdog Lord Turner.Turner, who chaired the Financial Services Authority at the height of the sub-prime crisis, says the “technical case†for “People’s QEâ€, the policy at the centre of Corbynomics, which involves ordering the Bank of England to create money to pay for infrastructure projects, is “incontrovertibleâ€. Continue reading...
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by Larry Elliott Economics editor on (#NPYM)
Voters will only elect Labour if they trust the party with the economy - but there are some scenarios in which they will give Corbynomics a hearingA reputation for economic competence can be lost in a day and take a generation to win back. Ask the Conservatives. George Soros did for them on 16 September 1992 when his selling of the pound drove Britain out of the Exchange Rate Mechanism. The Conservatives lost three elections on the trot after Black Wednesday.Labour, too, knows how long the rehabilitation process can be. No single event was to blame for Jim Callaghan losing the 1979 election; rather it was the combination of record peacetime inflation, a sterling crisis, a squeeze on living standards and the Winter of Discontent. There followed an 18-year gap before voters were again prepared to trust Labour with their money.Related: I’ve got what it takes to be PM, Jeremy Corbyn tells his criticsRelated: Why we should take Corbynomics seriouslyPeople’s quantitative easing is simply an alternative form of helicopter moneyRelated: UK economic slowdown? Don't panic Continue reading...
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by Simon Goodley on (#NPF8)
The ONS “blue book†has a penchant for rewriting economic history as it revises data. It can all be a bit of a soap operaLike the death of Dallas character Bobby Ewing, economics can deliver alternative realities that leave you feeling cheated for having believed the old plotlines.Millions might have thought they’d witnessed the UK economy heading for a triple-dip recession in 2013 – just as soap fans reckoned they’d watched the demise of their hero in the 1980s – but George Osborne in the Treasury (and Bobby’s wife Pamela in her en-suite) were relieved to discover that both events had just been nasty dreams. Continue reading...
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by Heather Stewart on (#NPES)
The chancellor’s charm offensive has impressed Beijing. But the powerhouse of the east is now exporting economic problems all over the worldChinese hard hats are red, we discovered last week. George Osborne, never slow to slip into industrial workwear, had several opportunities to model one during his five-day-long grand tour, as he gladhanded officials, chatted to workers, and urged Chinese firms to help build Britain’s “northern powerhouseâ€.The chancellor’s Chinese jaunt, on which an extraordinary six other ministers joined him at various points, was part of a concerted strategy to paint himself as a forward-thinking free trader at ease on the world stage – and, of course, to suck up to the Chinese authorities.China’s biggest export these days is not plastic toys or iPhone parts: it’s deflation Continue reading...
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by Will Hutton on (#NNR7)
VW’s existential crisis has revealed the weaknesses inherent in western economies. Change must now happenA well-functioning capitalism has, and will always need, multiple and powerfully embedded checks and balances – not just on its conduct but on how it defines its purpose. Sometimes those checks are strong, uncompromised unions; sometimes tough regulation; sometimes rigorous external shareholders; sometimes independent non-executive directors and sometimes demanding, empowered consumers. Or a combination of all of the above.CEOs, company boards and their cheerleaders in a culture which so uncritically wants to be pro-business do not welcome any of this: checks and balances get in the way of “wealth generationâ€. They are dismissed as the work of liberal interferers and apostles of the nanny state. Continue reading...
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by Heather Stewart Observer economics editor on (#NNKP)
Rise of 50p an hour will not cover loss of benefits for 6.5 million people, says Resolution Foundation thinktankA record 6.5 million people – almost a quarter of UK workers – will remain trapped on poverty pay next year, despite George Osborne’s 50p-an-hour increase in the national minimum wage, according to research by the Resolution Foundation thinktank.Adam Corlett, Resolution’s economic analyst, said: “While the chancellor’s new wage floor will give a welcome boost to millions of Britain’s lowest-paid staff, it cannot guarantee a basic standard of living or compensate for the £12bn of welfare cuts that were announced alongside it.†Continue reading...
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by Bruce Watson on (#NMCC)
New report from green think tank Heinrich Boll shows OECD countries grew their economies 16% in last decade – and cut greenhouse gas emissions 6.4%As the world works out how to avoid catastrophic climate change, one of the biggest questions remaining is whether we can continue to grow economically without also increasing greenhouse gas emissions.New research released this week at Climate Week NYC offers more hope that the answer might be yes. Prepared for green thinktank Heinrich Böll by DIW Econ, a German institute for economic research, the study found that, as a whole, countries that belong to the Organization for Economic Cooperation and Development (OECD) have already decoupled their economic growth from emissions. Continue reading...
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by Nicholas Watt and Patrick Wintour on (#NJTN)
Exclusive: shadow chancellor says party will vote in favour of Tories’ fiscal charter but will take radically different approach on cutting deficitJohn McDonnell, the new shadow chancellor, will tell the Labour conference that Britain must always live within its means as he announces that the party will vote in favour of a new fiscal charter proposed by George Osborne.
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by Editorial on (#NJK6)
The code that runs modern cars is powerful and dangerous. It must be much more tightly controlledWe won’t ever know how many people have died as a result of Volkswagen cheating on the emission controls of its diesel engines. But the pollutants emitted by diesel engines do kill just as surely as other poisons and their victims are predominantly people who are not themselves drivers: pedestrians, or those whose families have to live near the kind of heavy traffic that anyone with money tries to avoid. On a global scale, the filthiest engines are found in the poorest countries, so here, too, it is the non-drivers who pay the price for drivers’ selfishness. That particular injustice will necessarily continue whether or not the authorities can decide on and then enforce honest standards from carmakers in the future, since diesel engines have a life of about 15 years (longer if they are more polluting, less if they run hotter to minimise the damage that they do to the rest of us). Even if every diesel engine made in Europe is honest and unpolluting from this moment on, there is still a huge backlog of VW engines that will go on spewing poison for another 10 years or more.This is a very serious crisis, and the spectacle of the boss on whose watch it erupted stepping lightly down on to the cushion of a gigantic pension is frankly repellent. It is an important part of the explanation for the scandal that the executives involved may have believed that everyone else in the industry was at it. They may well have been right. It is also part of the explanation that the industry regulators connived and still connive at a great deal of small scale cheating for such things as fuel economy tests. But none of these explanations amount to an extenuation. In fact they make matters worse, and argue the case for severity, since it will take exceptional disincentives to change behaviour so widely accepted within the industry, as one lesson of the banking crisis suggests. The VW group has lost almost a third of its value on the stock market in the last week. It is only fair that some similar catastrophe should strike at the men personally responsible for this. Continue reading...
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