Asia Pacific is now world’s second wealthiest region and will overtake North America this year, according to survey by Boston Consulting GroupNew millionaires in China and India have helped propel the combined wealth of Asia Pacific’s richest individuals past their peers in Europe, with the region’s wealthiest predicted to become more affluent than millionaires in North America over the next 12 months. New “millionaire households” were also created more quickly in Asia Pacific than anywhere else, according to the Boston Consulting Group’s (BCG) annual global wealth report, as the world’s 17m households worth more than $1m (£640,000) grew richer once again during 2014.For the first time in the survey’s 15-year history, the Asia Pacific region – which for the purposes of this report excludes Japan – overtook Europe to become the world’s second wealthiest region, with $47tn in private wealth, up 29% on 2013. North America, where private wealth totals $50.8tn, remains the wealthiest region, but it will be surpassed next year when the wealth of Asia Pacific’s so-called “high net worths” reaches $57tn, the survey predicts. Continue reading...

ECB chief, Mario Draghi, sounds warning as Athens and its creditors remain deadlocked, with markets getting jittery over fears of defaultMario Draghi, the president of the European Central Bank, has warned that time is rapidly running out to resolve the Greek debt crisis, as financial markets took fright at the prospect of a looming default. Shares fell across Europe after the latest breakdown in talks between Athens and its creditors diminished hopes of a deal being agreed at a meeting of eurozone finance ministers in Luxembourg on Thursday.Giving evidence to the European parliament in Brussels, Draghi said: “We need a strong and comprehensive agreement with Greece. And we need it very soon.” His remarks came amid evidence of the fragile state of Greece’s banks, where the pace of deposit withdrawals increased to €400m (£289m) on Monday.Related: Greek debt default looks more likely by the dayRelated: Why this week is vital for Greece and the eurozoneRelated: Unsustainable futures? The Greek pensions dilemma explained Continue reading...

Greece and its eurozone partners have 72 hours to resolve their differences, but rather than edging closer together the two sides have never seemed further apartIt’s the morning of Friday 19 June. In Luxembourg, the finance ministers from the eurozone’s 19 countries are heading for home. Talks aimed at finding a solution to the Greek crisis have ended in failure. For once, there has been no 11th hour fudge. After years of kicking the can down the road, the end has been reached.In Athens, tourists out for an early look at the Parthenon find they can no longer get euros out of the cash machines. Contingency plans have been triggered to prevent a run on the banks. Strict capital controls are in force. Continue reading...

The sudden slump in the US oil industry has left many men without college educations unemployed and struggling to find alternative workOther men bought big houses or new pickups with their oil money. Mike Gillham bought his favourite bar in Enid, Oklahoma. He heads there most nights, to lug in more beer, to throw darts with his regulars, to smoke Camels and sit with his wife and wonder how to keep getting by, now that his oil job is gone.Four years ago, Gillham stumbled upon what is more or less an economic lottery ticket for an American man whose education stopped after high school. It paid more than any other gig he’d had – more than all three of the jobs, combined, that he’d been working simultaneously before a buddy called and invited him into the well-paid world of the oil and gas industry.There’s going to be very few opportunities paying anywhere near what they’re making. That’s beginning to dawn on themImproved hydraulic fracturing technology made it possible to extract oil and gas from fields thought to be tapped out Continue reading...

Minding your Ps and Qs to save schools from austerity Continue reading...

Study indicates stagnating incomes of the poor and middle classes could have been instrumental in the financial crisisThe idea that increased income inequality makes economies more dynamic has been rejected by an International Monetary Fund study, which shows the widening income gap between rich and poor is bad for growth.A report by five IMF economists dismissed “trickle-down” economics, and said that if governments wanted to increase the pace of growth they should concentrate on helping the poorest 20% of citizens.Raising the income share of the poor and ensuring that there is no hollowing-out of the middle class is good for growth Continue reading...

Athens and EU finance ministers remain at loggerheads but if an agreement is not reached by this weekend there are many long-term consequencesThe Athens government has been in debt talks with its international creditors for months in a bid to get them to release a last chunk of held-up bailout funds and avert bankruptcy. It needs the money to meet debt repayments and without it there is a fear that Greece will end up defaulting, which could precipitate its exit from the eurozone.Related: Greek default fears hit markets, as commissoner predicts "state of emergency" - live updatesRelated: Markets slide as fears grow that Greece is close to defaulting on debtRelated: Unsustainable futures? The Greek pensions dilemma explainedThe fact is, unless some significant concessions are made on either side, a default is now more or less inevitable, and even if a plan were agreed that was agreeable to the creditors, it is unlikely that the Greek government would be able to get it through their parliament.Given that Germany won’t countenance anything like debt relief at this point, we are likely set to see a continuation of this game of political cat and mouse through this week’s Eurogroup finance ministers’ meeting on Thursday, and beyond to the end of the month.Our economists’ base-case scenario [60% probability] remains that a last-minute deal will be struck, leading to a semi-stable scenario, but most likely not before the EU summit on 25-26 June.Mr Tsipras had better get ready to blink if he wants to get a single additional euro from Germany or, indeed, any of the other member countries. Of course, he too may have given up on reaching an agreement and is keeping up appearances simply to impress Greek voters. Either way, he is no longer in last-chance saloon but no-chance saloon.Even in the event of default, Grexit should be avoided. It is not in anyone’s interests for Greece to leave the eurozone. For Greece, it would mean widespread bankruptcies. For the remaining eurozone members, the fact that a precedent of exit had been established would probably lead to a permanent upwards re-pricing of their sovereign debt. For both sides, it would be a very risky leap into the unknown.A short-lived default should not therefore lead to Grexit. It would not be the end of the road for Greece, but potentially the precursor to a breakthrough on a longer-term deal.Much would depend upon the response of the eurozone and the ECB in the short term, economic growth (or the lack of) in the medium term and of course the economic performance of Greece relative to the other eurozone countries in the longer term...So we could soon find out if the eurozone/ECB really do have a plan B. One would hope so, after all, as a certain Mr Wilde might have said: to lose one country may be regarded as a misfortune; to lose two looks like carelessness. Continue reading...

The standoff between Greece and its creditors over pensions is part of a much wider problem: the conflicts between economics, politics, a dependent society, and inefficient accountingPensions are a significant sticking point in the standoff between Greece and the IMF, the European commission and the ECB.Greece’s creditors demand that Athens should cut pensions further. But the Greek government says it has gone as far as it can go. Continue reading...

Collapse in talks with creditors heightens default fears as Greek PM Alexis Tsipras attacks ‘five years of looting’ under bailoutsFears that Greece is close to defaulting on its debt swept European trading floors on Monday morning after talks between Athens and its creditors collapsed on Sunday.The Greek stock market slumped by almost 7% in early trading, as traders showed alarm that a deal will not be reached before the country’s bailout programme expires on 30 June.#Greece's 2yr yields jump to 28.3% as default risks rise after debt talks collapsed. pic.twitter.com/EXCdYd8WM1 Continue reading...

Even if you don’t care about the Greek people, be warned – the faultlines of Grexit would shake the entire continentEurope must save Greece. The consequences of keeping Greece within the eurozone will be bad, but those of its leaving would be worse. They would be not just economic, but human, geopolitical and historic. Europe would never be the same again.I was in Greece two weeks ago, and grasped this at every turn, from standing on the ancient Pnyx, the birthplace of democracy, through talking to business leaders, journalists and academics, many of who were witheringly critical of the current Syriza government. But since then I have been back in northern Europe, in England, Belgium and now Poland, and in the north I find not just relative indifference (Greece is more often the subject of jokes than of deep concern) but also two dangerous illusions.Related: The case for radical change in Europe can’t be left to the nationalist right | Seumas Milne Continue reading...

Analysis: Chancellor’s policies favour old over young and sow the seeds for another crash that will hurt those he professes to be fighting forLight-sabre wielding George Osborne says he is fighting for Britain’s future generations. Central to his Mansion House speech was a warning that unless the state runs a budget surplus in normal times, a toxic legacy of debt awaits our children and grandchildren.The chancellor, who let it be known last week that he is a Star Wars fan who keeps several replicas of the Jedi weapons in his office, said that for the sake of future generations “governments of the left as well as the right should run a budget surplus to bear down on debt”.Related: Growth at all costs: climate change, fossil fuel subsidies and the TreasuryRelated: Academics attack George Osborne budget surplus proposal Continue reading...

Resolution Foundation predicts that weekly earnings growth will have hit an annual rate of between 2.5% and 2.6% between February and AprilEmployment figures for April due later this week are expected to show the biggest rise in real wages growth for nearly eight years, according to new analysis.The data will give George Osborne a post-election lift after a weak first few months of the year that have shown manufacturing output slide backwards and the biggest boost to growth come from the City and the hotel and restaurant sectors. Continue reading...

Exit from eurozone a step closer as EU officials dismiss Alexis Tsipras’s reforms as incomplete, with talks halted after less than an hourLast-ditch talks aimed at breaking the impasse between Athens and its international creditors have collapsed in acrimony with European Union officials dismissing Greece’s latest reform package as incomplete in a step that pushes the country closer to leaving the eurozone.What had been billed as a last attempt to close the gap between Alexis Tsipras’s anti-austerity government and the bodies keeping debt-stricken Greece afloat was halted late on Sunday after less than an hour of negotiations in Brussels.

After weekend of intense talks, Greek prime minister is thought to be hopeful of ‘viable’ but tough agreement before bailout accord is due to expire

Joining the euro club was once a badge of political and economic advancement. Now, if Athens is pushed out, others may choose to followFinally, the endgame. After weeks of posturing, Greece is running out of time to escape bankruptcy and a forced exit from the European single currency. By Friday, as both sides scrambled to fix up a fresh round of talks for this weekend after the International Monetary Fund’s negotiators flew home in frustration, it appeared that European officials had been discussing how they might manage a Greek default.It’s hard not to be mesmerised by the day-to-day drama of walkouts, public posturing and political intrigue, which may finally reach its conclusion in the coming days.Greece has contracted by an extraordinary 20% at the behest, and under the supervision, of its eurozone partners Continue reading...

An austerity-led attack on public spending and an obsession with ‘rules’ will not deliver a balanced economyThe inquest on Labour’s electoral defeat will run and run, and the recriminations will no doubt persist throughout the party’s inordinately long timetable for selecting a new leader. But there is a limit to which candidates should surrender to the Big Lie that George Osborne, more than anyone else, has managed to get away with.Take a report in the Times’s recent “investigation” into Labour’s “disastrous campaign”. We are told that “as early as 2010, Labour’s pollsters sent a memo saying the party should argue ‘the deficit is the number one challenge facing the country’ and back ‘tough spending cuts’.”The truth is that the deficit was not the problem: it was the solution Continue reading...

Greek finance minister says he does not believe Europe would let his country leave the eurozone, but decision on its fate is expected by ThursdayFears that Greece could leave the eurozone continued to mount on Saturday, despite its finance minister saying that Europe would not allow that to happen.Yanis Varoufakis told BBC Radio 4’s Today programme: “I don’t believe that any sensible European bureaucrat or politician will go down that road.” Continue reading...

New exchange rate is $1 for 35,000,000,000,000,000 old dollarsZimbabweans will start exchanging “quadrillions” of local dollars for a few US dollars next week as President Robert Mugabe’s government discards its virtually worthless national currency.

Thomas Piketty, David Blanchflower and other experts say chancellor’s law would risk crash by shifting debt from government on to householdsGeorge Osborne’s plan to enshrine permanent budget surpluses in law is a political gimmick that ignores “basic economics”, a group of academic economists has warned.Related: Osborne plan has no basis in economics | Letter from Ha-Joon Chang, Thomas Piketty, David Blanchflower and othersRelated: The Guardian view on the RBS sell-off: a bad deal all round | Editorial Continue reading...

Credit rating agency joins other forecasters in warning about the potential damage to the UK economy from holding a referendumDavid Cameron’s decision to hold a referendum on EU membership has put Britain at greater risk of losing its triple-A credit score, according to Standard & Poor’s, the only big ratings agency to still give Britain the top ranking.Cutting its outlook for UK government debt to “negative” from “stable”, the agency highlighted serious risks to the pound and Britain’s ability to attract foreign investment were it to break away from the EU. There was also a danger that in the runup to the vote domestic party politics and negotiations with Brussels would divert attention away from the UK’s pressing economic problems.

The chancellor’s plans, announced in his Mansion House speech, for “permanent budget surpluses” are nothing more than an attempt to outmanoeuvre his opponents (Report, 10 June). They have no basis in economics. Osborne’s proposals are not fit for the complexity of a modern 21st-century economy and, as such, they risk a liquidity crisis that could also trigger banking problems, a fall in GDP, a crash, or all three.Economies rely on the principle of sectoral balancing, which states that sectors of the economy borrow and lend from and to each other, and their surpluses and debts must arithmetically balance out in monetary terms, because every credit has a corresponding debit. In other words, if one sector of the economy lends to another, it must be in debt by the same amount as the borrower is in credit. The economy is always in balance as a result, if just not at the right place. The government’s budget position is not independent of the rest of the economy, and if it chooses to try to inflexibly run surpluses, and therefore no longer borrow, the knock-on effect to the rest of the economy will be significant. Households, consumers and businesses may have to borrow more overall, and the risk of a personal debt crisis to rival 2008 could be very real indeed. Continue reading...

Trade authority approval would be a huge win for Barack Obama, but both supporters and opponents say anticipated Friday vote is too close to callWith fast-track trade authority expected to face a close House vote on Friday, Ben Wikler, the Washington director of MoveOn.org, has little patience for trade advocates who suggest that its only opponents are labor unions.Related: European politicians protest to Congress as TPP trade bill excludes climate deals Continue reading...

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New titles for James and Lachlan Murdoch leave doubts as to who will really lead 21st Century Fox – but brothers’ double act may hasten change in voting powerTypical. You wait years to discover the winner of the great Murdoch succession race, and then you get a fudge. Rupert Murdoch will be succeeded as chief executive of 21st Century Fox by James Murdoch, according to reports, but older brother Lachlan will get the title of executive co-chairman. It will be hard to tell who’s boss.Chief executives run companies, so, on that score, James has won. On the other hand, chairmen usually have the power to fire the chief executive, so, viewed that way, Lachlan is supreme. But, just to complicate things, the 84-year-old Rupert is staying on as executive co-chairman, so perhaps nothing can be read into the job titles. Continue reading...

Neither taxpayers nor the economy will benefit from George Osborne’s fire saleCredit to George Osborne: he can make even a fire sale look like a headline land grab. The chancellor has been all over the front pages this week, first with his proposal to make budget surpluses a legal requirement, and then with his plans to sell Royal Bank of Scotland back to the market. Trust Mr Austerity to wring two splashes out of one Mansion House speech.Yet however confidently it is presented, however many background briefings it comes cushioned in, reprivatising RBS is a stinker of an idea. For it is the squandering of two opportunities: a financial waste as taxpayers are set to lose cash on the deal, and a political waste as the government flunks its best chance to make banks work for the economy, rather than crash it over and over again. Continue reading...

Your story “Osborne turns to ‘Micawber’ economics” (10 June) is very disturbing. As someone born in the mid-1930s who grew up in the postwar period and spent his working life studying, teaching and writing about democratic capitalism, I wonder if policymakers know anything about modern history. After the first world war the search for budget surpluses of the kind Mr Osborne now seeks destroyed national economies and world trade, brought ruin to millions and led to fascism, militarism and the second world war. After 1945, years of government borrowing and spending of the kind he deplores rebuilt democratic capitalism in western Europe, restored its democratic institutions and doubled standards of living by creating more wealth more equitably distributed. All this rested on new notions of economic management. Their abandonment in the 1980s and 1990s to the siren call of Reaganomics ushered in the era of unregulated world finance capitalism that crashed and burned in 2007-08 and led to our current woes. Yet like the Bourbons our leaders seem to have learned nothing and forgotten nothing.

By pulling its negotiators out of talks in Brussels, the IMF is asking Greece to decide whether it can afford to carry on haggling“You’ve got to ask yourself one question. Do I feel lucky? Well, do ya, punk?” The lines spoken by Clint Eastwood in Dirty Harry sprang to mind when the International Monetary Fund (IMF) announced that it had called its Greek negotiating team home from talks in Brussels.The IMF’s message was short and brutal. There were still major differences between Greece and its creditors. There was no progress in narrowing those differences. The two sides were well away from an agreement.Related: IMF walks out of Greece bailout talks Continue reading...

Lender says its negotiating team are going home to Washington due to a lack of progress in narrowing key differences with AthensThe International Monetary Fund dramatically pulled out of talks with debt-stricken Greece on Thursday after it accused Athens of failing to compromise over labour market and pension reforms.The Washington-based lender of last resort said its team of negotiators had quit talks in Brussels after reaching a stalemate and would be returning to Washington.The Greek government has to be, I think, a little bit more realistic. It is very obvious that we need decisions, not negotiations.” Continue reading...

Scottish Labour seizes on OBR figure for expected tax, cut from £37bn to £2bn, as Nicola Sturgeon repeats aim for maximum fiscal independenceThe Office for Budget Responsibility has warned that North Sea oil and gas could generate just £100m a year in tax in future after it dramatically slashed its forecasts for North Sea tax receipts.In a significant blow to the Scottish National party’s quest for full fiscal autonomy, the OBR said it now believed the sector could only generate a total of about £2bn in tax revenues over the 20 years from 2020 to 2041, compared with its forecast last year of £37bn for the same period.Related: Scottish government may consider income tax rise after £107m budget cutRelated: North Sea oil price slump puts industry confidence at an all-time low Continue reading...

Office for Budget Responsibility says that national debt would come down from its current 80% of GDP to 54% by the early 2030s and then start rising againThe financial cost of Britain’s ageing population will require a fresh £20bn wave of spending cuts or tax increases from 2020 to bring the national debt back to pre-recession levels in 50 years time, the government’s public finances watchdog has said.Long-term projections by the Office for Budget Responsibility show that the second round of austerity due to be detailed by George Osborne in next month’s budget will not be sufficient to reduce debt to 40% of national income – its level before the economy entered its deepest postwar slump.Related: Mansion House speech: Mr Micawber meets Mr Osborne Continue reading...

Will any of the leadership contenders have the political nerve to tell the chancellor the truth: that this is economic nonsense?Here comes the great test for Labour’s candidates. At Mansion House, George Osborne threw down the gauntlet to them all. Will they vote to pass a law commanding all governments to run a surplus (in “normal times”)? Will they vote for an equally bad law not to raise income tax, national insurance or VAT for ever more, the three main revenue-raisers? Ha! Thinks Osborne, ever the shoddy, short-term tactician, Got ’em there!But he may be doing Labour a favour. We shall see who thinks they have the political nerve and the intellectual clout to call him out and explain in robust terms to the public what most serious economists and the IFS say: this is economic nonsense. Yes, the deficit needs to keep coming down each year: at 5% of GDP it’s too high. But of course the government can borrow, as all governments do, if it borrows a bit less than the growth rate. Growth is everything.Ed Miliband never found the language to escape the blame the Tories heaped on Labour for the crash Continue reading...

European leaders have met in Brussels for a summit overshadowed by Greece’s debt crisis

Economy doubles growth rate to 0.6% as NIESR predicts annual growth of 2.5% but drop in manufacturing deals blow to George OsborneA rebound in North Sea oil production in the three months to May helped the UK double its growth rate to 0.6% from the first quarter of the year, handing the Treasury a much-needed boost.According to the National Institute for Economic & Social Research (NIESR), output improved on the 0.5% in the three months to April and soared above the meagre 0.3% seen in the first three months of the year.Related: Growth, what growth? Thatcherism fails to produce the goods Continue reading...

Leadership candidate admits there are merits in George Osborne’s plans, while two rivals struggle to get nominations to stand in race to succeed Ed Miliband

George Osborne announces plans for permanent budget surpluses designed to cut the national debt. Speaking during his annual Mansion House speech on Wednesday, the chancellor says he will introduce a 'new settlement' that will allow the government to borrow only in exceptional circumstances and ensures successive governments run a budget surplus. Treasury figures show that in only seven of the past 50 years have governments run a budget surplus Continue reading...

Lower oil prices and looming US interest rate rise lead to downgrades for countries including Nigeria, Angola and Brazil, while India bucks trendThe World Bank has cut its forecasts for growth across emerging economies this year, warning that they face a double whammy from rising US interest rates and lower commodity prices. “Developing countries were an engine of global growth following the financial crisis, but now they face a more difficult economic environment,” said the bank’s president, Jim Yong Kim, as the anti-poverty body published its twice-yearly Global Economic Prospects document.Growth in emerging economies is expected to be 4.4% in 2015, down from the 4.8% the World Bank was expecting in December. Continue reading...

Sale of bailed-out bank’s shares at present prices means a £13bn shortfall for taxpayer from 2008 part-nationalisationGeorge Osborne on Wednesday night signalled his readiness to start selling off the Royal Bank of Scotland, seven years after it was rescued from collapse by the taxpayer.The chancellor said the time was right for British business and taxpayers to start selling off part of the 79% stake in the Edinburgh-based bank, even though the shares are worth £13bn less than the state paid for them during the financial crisis. The shares will be sold to major City institutions in the coming months. An offer for members of the public, as has been promised for Lloyds Banking Group, could follow. Continue reading...

Greece’s punishment and Cameron’s referendum games underline who really calls the shots in the EUFor the true face of the European Union, look no further than the war now being waged on Greece by its troika of euro creditors. No people have suffered more from the eurozone crisis than the Greeks. The victim of rapacious European banks, a corrupt elite, and a half-baked, lopsided currency union, Greece has paid a pulverising price for the financial crash and eurozone meltdown.Related: Tsipras meets Merkel amid talk of compromise - live updatesEU treaties enforcing privatisation and corporate privilege would be a serious obstacle to progressive change in Britain Continue reading...

Britain still tolerates economy-threatening monoliths like HSBC. In America they know that small worksShock horror. A chancellor of the exchequer thinks we should not spend beyond our means. The habit must end. The Micawberish cliche, respun by George Osborne’s aides before his Mansion House speech tonight, is hardly new. Jim Callaghan shouted it at a rally in 1976, as did Margaret Thatcher at her party ad nauseam. Gordon Brown had his 1997 “golden rule” and America its Gramm-Rudman act. Such homespun mantras are recited by treasuries round the world, but they are dust blown away by the hurricane of politics. Like all voodoo economics, they are both right and rubbish.Related: George Osborne moves to peg public finances to Victorian valuesLondon's financial community is in denial. It believes the past is best forgottenRelated: Labour overspending did not trigger financial crash, says senior civil servant Continue reading...

Europe is facing a social emergency. Tackling it requires a common budget and a joint insurance scheme for jobseekersDespite some signs of recovery, the euro area’s economic performance remains disappointing. The lasting impact of the financial crisis exposes a lack of demand, structural impediments to growth and job creation, and flaws in the architecture of economic and monetary union.Persistently high unemployment rates have led to widespread popular disaffection with the currency in particular, and the European project more broadly. No wonder so many Europeans are now convinced that the way to solve these problems is to unwind integration and retrench behind national borders.We can either muddle through or we can face up to the challenges in bold and concrete waysWe need to anchor expectations to the irreversibility of the euro, rebuild confidence and restore trust among members Continue reading...

Apparent softening of Berlin’s stance towards Athens cheers investors keen to see sustainable rescue after months of wranglingStock markets surged on Wednesday after reports of a German proposal to allow Greece to receive a drip-feed of loans in return for a staggered reform programme.The softening of the German stance towards Athens cheered investors keen to see a sustainable rescue of the debt-stricken country after more than four months of wrangling.

Supermarket shares rise as chief points out that customers’ average spend has not fallenSainsbury’s has revealed its sixth quarter of falling sales, but chief executive Mike Coupe insisted there were signs of improvement on the horizon as shoppers start to increase the number of purchased items.Sales at the supermarket’s established stores fell 2.1% in the last three months amid a continuing price war which has dragged down grocery prices by 2.5% year-on-year. Continue reading...

Chancellor will use Mansion House speech to outline new fiscal framework with aim of permanent budget surpluses and only ‘exceptional’ borrowingGeorge Osborne is to announce a return to the public finances of the Victorian age, with plans for permanent budget surpluses designed to cut the national debt and to make life uncomfortable for the Labour party.The chancellor will use his annual Mansion House speech on Wednesday to exploit the political advantage of the Conservative victory in the general election with a “new settlement” that would allow the government to borrow only in exceptional circumstances.Related: The Guardian view on George Osborne: free and frightening | Editorial Continue reading...