Construction industry figures for the first quarter of 2015 revealed an 18% increase in registrations compared to the same period last yearHousebuilding is having its best year since 2007 with most of the UK seeing strong growth, an industry body has reported.The National House Building Council (NHBC) said 40,281 new homes were registered between January and the end of March, the highest total for the first three months of a year since 53,420 new registrations were recorded in early 2007.Related: Housebuilding could be hindered by worker shortage Continue reading...

How domestic politics deals with the pressures of the global economy will decide the success of the next governmentThis is the moment to be bold. Governments do not need full coffers to embark on the kind of reforms Britain needs, but they do need ambition and courage. Britain is not broke in 2015, yet there has been little or no discussion about the broader economy during the campaign. Instead, the focus has been on which party will best fill the hole in the public finances. If ever there was a campaign to rebut the cliche “It’s the economy, stupid,” this was it.But now that the election is over, the new government must face up to some of the economic challenges that have been sidelined over the past six weeks. There are big decisions to be made in at least five separate areas. Continue reading...

Deputy PM Yannis Dragasakis says upcoming eurozone meeting could herald agreement with creditors and end months of stalemateGreece’s deputy prime minister has endorsed growing expressions of optimism over talks with the country’s creditors, saying enough common ground has been found to enable the two sides to reach an agreement.Yannis Dragasakis said he hoped the meeting of eurozone finance ministers on 11 May would finally break ground by signalling that progress had been made. “I hope on Monday a sign of progress will be given and [they say] an agreement is visible,” the 68-year-old politician told the Guardian in an interview.We have a mandate for a sustainable solution within the eurozoneRelated: Greek finance minister claims bailout deal is close Continue reading...

Britain’s motor industry smashed records last month with the 38th consecutive increase in new car sales and the most April registrations since 2005UK demand for new cars was unwavering in the face of political uncertainty last month as registrations hit a decade high.Sales rose 5.1% to 185,778 vehicles in what was the strongest April since 2005, according to the Society of Motor Manufacturers and Traders (SMMT) .Related: Sales of small, fuel-efficient cars jump ahead as consumers seek to cut costs Continue reading...

Markets hate uncertainty but they are falling because share prices may be too high and the cost of oil is rising plus there is the small matter of GreeceHas “fallout Friday” come early? As the queues form outside polling stations up and down the country, share prices have already fallen sharply, with the FTSE 100 down more than 100 points, and sterling lower against the dollar and the euro. Are traders already getting cold feet about the idea of a prolonged period of post-election uncertainty?Related: Stock markets slide as bond sell-off deepens - live updates Continue reading...

Trial of Nikolaos Michaloliakos and other members of neo-Nazi party had resumed briefly in high-security prison in Greece and will continue on 12 MayThe trial of dozens of members of Europe’s most violent neo-Nazi political party, the far-right Golden Dawn in Greece, has been adjourned until next week after resuming briefly in the country’s largest prison.Three years to the day after entering the Greek parliament, the entire leadership of Golden Dawn will be among the 69 defendants accused of masquerading as a political force to pursue a criminal agenda of murder and assault. Continue reading...

From market expectations to to mortgage rates, here are the five key indicators that will show what investors and lenders make of the election outcomeWith the polls so tight, traders are unsure how to position themselves. A whole host of scenarios have been considered for the election aftermath. So once some kind of result is in, how best to gauge what investors make of it?Ian Stewart, chief UK economist at Deloitte, has come up with some key indicators to watch on Friday and the days that follow. We pick out five here.There are three concerns for markets and businesses after the election. One fear is a breakdown of what was thought to be a consensus about deficit reduction. The second is accretion of regulation and tax, so a re-setting of micro-economic policy to the left, and the third thing is Brexit.”If the general election ushers in sustained political uncertainty that seems likely to weigh on growth, market expectations for interest rates are likely to drop further. Conversely, if the new government were decisively to break with austerity and seek to boost the economy through more public spending, interest rate expectations are likely to rise.”a) Improved confidence in the UK’s growth outlook, therefore an expectation of rising interest ratesb) Concerns that a lack of fiscal tightening will usher in higher base rates or cause growing worries about the UK’s credit-worthiness Continue reading...

Negotiations between Greece and its creditors have been badly mismanaged. It is time to stop grandstanding and reach a compromiseThe European project has a history of pulling out of a crisis precisely at the moment when it seems things are doomed. This moment could soon be reached over Greece. A sign of solace may have come on Wednesday, when Greece made a €200m repayment to the International Monetary Fund, ahead of a meeting of the eurozone finance ministers on Monday – although this doesn’t mean a breakthrough is imminent. For three months, a battle of brinkmanship has been going on between the government of Alexis Tsipras and its European creditors over a cash-for-reforms plan that would give Greece the €7.2bn worth of rescue funds that it needs to meet its debt payments. Tensions have run so high that a Greek stumble out of the eurozone has recently started to be described as a lesser evil compared with the current uncertainty. Both sides are certainly calculating that the other will eventually blink first. Greece’s public finances are in a dire state and its growth forecasts have been slashed. Turning to Moscow for a bailout was never going to be a serious option. So Mr Tsipras continues to be faced with the herculean task of having to balance democratic expectations (his campaign promises) with European realities.It hasn’t helped that his government’s negotiating tactics have become overwhelmingly perceived as having more to do with posturing and lecturing than with readiness to find a compromise. Syriza believed its electoral victory back in January would take Europe into a whole new anti-austerity direction. That has not happened. On the contrary, all of the other eurozone countries have dramatically formed a bulwark against Greek demands, in a take-it-or-leave it attitude. Whereas the Tsipras government thought it could find allies by painting Germany as the problem, it has found itself up against an EU-wide front of exasperation. The crisis has been mismanaged from both sides. Continue reading...

Fears that Greece would run out of funds this week and miss a €2bn public sector pay and pensions bill alongside the IMF payment prove unfoundedGreece gained some breathing space in its battle to stay solvent on Wednesday after it met the deadline for a €200m (£149m) debt payment and the European Central Bank extended its lifeline to the country’s banking system.The International Monetary Fund confirmed it had received the repayment, allowing the debt-stricken country’s rescue package to remain in place until next week when another €750m is due to the Washington-based organisation. Continue reading...

Athens has avoided defaulting on an interest repayment to the International Monetary Fund, but hopes of a deal by Monday’s eurogroup meeting are fading

Janet Yellen discussed potential dangers with IMF’s Christine Lagarde amid fears that near-zero borrowing costs may distort markets and create bubblesJanet Yellen, chair of the US Federal Reserve, has highlighted the risks of ultra-low interest rates for financial stability, warning investors that share valuations are “quite high”.At a seminar in Washington, Yellen was asked by International Monetary Fund (IMF) managing director Christine Lagarde about fears that near-zero borrowing costs distort markets and create bubbles.Related: Fed chair Janet Yellen says income inequality is un-American Continue reading...

Outgoing CEO Tidjane Thiam warned of a downward spiral of low income and lower growth, due to reduced long-term ratesPrudential’s outgoing chief executive, Tidjane Thiam, warned about the impact of low, long-term interest rates, as the insurer’s investment returns were hit in the UK and US, despite strong growth in Asia.Britain’s biggest insurer reported a 6% drop in new business profits in the first quarter as double-digit growth in Asia was offset by declines in the UK and the US. This reflected the impact of UK pension reform and reduced interest rates. Interest rates in the UK and the US have been near zero for years. Continue reading...

Ahead of the election, services PMI follows much weaker-than-expected equivalent surveys from the manufacturing and construction industriesThe government was handed a last-minute election boost after the last major piece of economic news before the polls signalled a booming UK services sector, easing fears of a sharp slowdown in the wider economy.Growth in the sector, which accounts for roughly three-quarters of the UK economy and includes areas such as bars, restaurants and transport, was stronger than economists predicted, hitting an eight-month high in April.

The markets usually fear change but no big majority at Westminster means no big changes - gridlock is good, it seems, but not for too longBritain’s financial markets are preparing for gridlock on Friday 8 May, the day after the tightest general election race in decades.

Guardian Australia's political editor, Lenore Taylor, is joined in the studio and on the line by three experts in Australia's budgetary options. Together they pretend to be the budget cabinet, answering the big question: in Australia's current social and economic circumstances, what would a good budget look like? Continue reading...

But NIESR thinktank says recovery is stable despite weak productivity and troubled eurozone

Greece’s bailout crisis deepens as the European Commission rips up its previous growth forecasts

Senior official lays blame on disagreements between EU and IMF as economic growth rate forecasts are slashedGreece’s government has blasted its creditors for holding back progress on bailout talks, laying the blame squarely on differences between the European Union and the International Monetary Fund.Racheting up the pressure on the two bodies, the anti-austerity Syriza government said conflicting strategies and opposing views were not only impeding negotiations but injecting “a high level of danger” into the talks at a time when the country’s finances had hit rock bottom.Related: 100 days of solitude: Syriza struggles as Greeks once again stare into the abyss Continue reading...

Economy thought to have contracted in first quarter of 2015 as gap between imports and exports jumps from $35.9bn in February to $51.4bn in MarchThe US trade deficit jumped to its highest level in almost six and a half years in March, suggesting the economy overall shrank in the first quarter of 2015.The goods and services deficit leaped to $51.4bn (£33.8bn) from $35.9bn in February as imports rose more than exports. It was the largest trade gap since October 2008, a month after the collapse of US investment bank Lehman Brothers, and more than $10bn higher than the $41.2bn forecast by economists.Related: Why the strong dollar is worrying US policymakers Continue reading...

Federal Reserve officials have started to speak explicitly about the dollar as a factor that affects net exports, inflation, and growthIn a world of weak domestic demand in many advanced economies and emerging markets, policymakers have been tempted to boost economic growth and employment by going for export led-growth. This requires a weak currency and conventional and unconventional monetary policies to bring about the required depreciation.Since the beginning of the year, more than 20 central banks around the world have eased monetary policy, following the lead of the European Central Bank and the Bank of Japan. In the eurozone, countries on the periphery needed currency weakness to reduce their external deficits and jump-start growth. But the euro weakness triggered by quantitative easing has further boosted Germany’s current-account surplus, which was already‎ a whopping 8% of GDP last year. With external surpluses also rising in other countries of the eurozone core, the monetary union’s overall imbalance is large and growing. Continue reading...

Commercial activity at its weakest since August 2013 with election weighing heavily on buildign firms who are infamously sensitive to political changeLast month’s construction industry figures add to the welter of evidence showing that boom-boom Britain is no more.Building firms, according to the Markit/CIPS survey, are expanding output at the slowest rate for almost two years.Related: Election uncertainty puts brakes on building sector Continue reading...

Strength of slowdown shown in construction PMI survey reveals how tight election race is putting ‘grit in the wheels of decision-making in the building sector’Uncertainty over the general election affected British building sites last month, with construction output rising at the slowest rate in almost two years.In the latest sign that the UK’s economic recovery is faltering, the closely watched Markit/CIPS construction PMI survey showed all parts of the building sector weakened in April, including housebuilding.

Royal Bank of Scotland’s recent losses (Report, 1 May) should tell us that if privatisation is the answer, we have been asking the wrong question. Taxpayers have taken all the pain of cleaning up the mess, so instead of rushing into a cut-price sale of our stake in RBS, why don’t we treat our investment as a once-in-a-generation opportunity to transform UK banking? Devolving RBS’s retail arm into a network of 130 independently run local banks, held in trust for the public benefit, could provide a huge boost to SME lending, improve access to banking services and reduce the fragility of our financial system. Such local banking networks are common among our industrial competitors. For any government to sell shares in RBS without properly considering the other options would be an act of negligence.

‘I remember who got hurt in the crash – it wasn’t the bankers’, says Tory leader as he tries to pin blame for banking crisis on LabourDavid Cameron has intensified the Tory assault on Ed Miliband by saying Labour has no right to portray itself as the champion of the low-paid after it wrecked people’s lives in the crash.In an impassioned and at times angry speech to a Tory rally in Bath, the prime minister told the Labour leader never to “dare lecture” the Conservatives about helping the poor after the Labour government had lavished knighthoods on disgraced bankers.Related: The Tory economic plan is NOT working, at all - sadly, their PR war isRelated: Labour overspending did not trigger financial crash, says senior civil servant Continue reading...

UN lawyer says tactics used by multinationals in courts outside of public jurisdiction would undermine democracy and lawA senior UN official has called for controversial trade talks between the European Union and the US to be suspended over fears that a mooted system of secret courts used by major corporations would undermine human rights.Alfred de Zayas, a UN human rights campaigner, said there should be a moratorium on negotiations over the Transatlantic Trade and Investment Partnership (TTIP), which are on course to turn the EU and US blocs into the largest free-trade area in the world. Continue reading...

Talks with Brussels Group continue as minister of labour brands IMF demands ‘extreme’

An index complied by HSBC shows the manufacturing sector contracted in April, with layoffs and a cutback in procurement indicating further challenges aheadChina’s manufacturing activity recorded its worst contraction in a year in April, a survey showed on Monday, as subdued domestic demand weighed on growth in the world’s second-largest economy.

The Guardian’s writers and editors failed to get their heads around a complex exposé on which our partners in the International Consortium of Investigative Journalists had been working for monthsNewspapers have not traditionally been the greatest fans of sharing stories with other news organisations. Even nominating a pool of photographers to record an event and share the images can be difficult to arrange.However, in recent years the Guardian has developed links with other newspapers and organisations that have proved crucial in bringing stories to readers such as the WikiLeaks cables and the NSA revelations of Edward Snowden. More recently the Guardian joined with the International Consortium of Investigative Journalists (ICIJ) in a series of articles investigating HSBC’s private banking subsidiary in Geneva. The series was published in the Guardian, as well as other media organisations. Continue reading...

The Tory election narrative of an economy safe in their hands may be undermined by some disturbing trends already evident in the GDP dataUntil the moment when David Cameron whipped up a froth of confected passion at a campaign event last week, the Conservatives’ appeal to the electorate was based on a carefully constructed case about the economy.Vote Labour, the narrative went, and you’ll put Britain’s hard-won recovery at risk. Yet last week’s GDP figures, showing the growth rate halving to 0.3% in the first three months of 2015, suggest the upturn of which the Tories are so proud may already be starting to fade. Continue reading...

A Whitehall official once observed that it was his job to help government do foolish things properly. How apposite those words seem once againIn a review of my book Mr Osborne’s Economic Experiment in last weekend’s Financial Times, the former editor of the Economist, Bill Emmott, re-quoted the following remark once made to me by a Whitehall official: “Governments do foolish things. My job is to make sure they do foolish things properly.”Emmott speculated that this quote was “possibly apocryphal”, but I can assure him it was not. What it was, however, was a typical example of the sense of humour never far from the surface in the civil service, and immortalised in Yes, Minister, the celebrated BBC comedy series, which was based on serious research. Some of my best Whitehall friends helped the writers, although I could not possibly comment on who they were.People are going to look back on this period and conclude that this country has been afflicted by a kind of madness Continue reading...

UK stock markets could suffer if coalition negotiations become protracted, say City analystsCity investors are bracing themselves for a tumultuous week in the financial markets as they ponder the risk of a “dead heat” election, followed by weeks of political horse trading.Related: The Tory economic plan is NOT working, at all - sadly, their PR war is Continue reading...

Health, welfare and the economy, plus education, transport and housing: we look at what the parties are promising in each areaNHS Continue reading...

If there is another hung parliament, weary party leaders will have little chance to rest as questions over alliances and coalitions multiplyIt is breakfast time on 8 May. The people have spoken – and for the second successive election they have denied a Commons majority to any single party. As the polls suggested and most of the pundits predicted, we have another hung parliament.Ministers remain ministers until a new government is formed and do so even if they are no longer MPs Continue reading...

Only Ed Miliband offers a vision for a fairer Britain. His party deserves to form the next governmentThe gap between the richest and the rest was never wider, spectacular mergers produced giant companies that paid minimal taxes, and a democratic stalemate exposed the shortcomings of a political system creaking at the seams. No, not a retrospective look at 2015, but an account of late 19th-century America, a context that gave rise to the emergence of the radical new politics ushered in by Republican President Theodore “Teddy” Roosevelt.In a country increasingly divided and impoverished, he brokered a different kind of relationship between government and the people. The state intervened in a rampant market – driven by rapacious oligarchs – that advantaged big business at the expense of ordinary working men and women. Roosevelt pledged to curb the power of business, support organised labour and spoke out in support of the “common welfare”, and “a square deal” for all. Heaven knows what the early 21st-century press in Britain would have made of Red Ted. Continue reading...

The billionaire admits surprise that low rates have not caused inflation and tells shareholders the dollar will still be the world’s reserve currency in half a centuryWarren Buffett has warned that stock prices will appear expensive if interest rates increase from their current ultra-low levels.

Outside the eurozone, governments have no problem funding their deficitsHeather Stewart is correct that in Simon Wren-Lewis’s article for the New Statesman he argues that the purpose of government policy should be “to increase the welfare of the public” (“Let us applaud Sturgeon and Bennett – but not vote for them”, Business).However, she failed to point out that Wren-Lewis also gave lie to the argument that the government can run out of money to do what is necessary and thereby perpetuates the myth started by Liam Byrne, the former Treasury chief secretary who left a note for his successor, David Laws, saying: “I’m afraid to tell you there’s no money left.” Continue reading...

Appeal to Greece’s millions of tourists comes as government plans higher VAT rate on islands most popular with visitorsGreece’s tourism chief has appealed to the millions of Britons planning to visit the crisis-hit country this year to use credit cards as much as possible.The move comes as the government in Athens has signalled that it plans to raise VAT rates on some holiday islands. Continue reading...

New British CEO Steve Easterbrook set to unveil turnaround plan to bring back lost customers and profits as rivals muscle in on burger marketLast weekend Steve Easterbrook, the new British chief executive of McDonald’s and lifelong fan of the less-than-glamorous Watford Football Club, celebrated as his team secured promotion back to the Premier League after an eight-year absence. “Incredible achievement. Great run-in under pressure. Faultless,” he tweeted before turning back to his own personal challenge: How to resurrect the world’s biggest burger chain.Related: How McDonald's took over the world: in picturesRelated: McDonald's: a brief history in 15 facts Continue reading...

Downbeat Markit/Cips report adds evidence to claims that economy is losing momentum with factory orders far weaker than forecastThe Conservatives have suffered another blow to their track record on the economy from a surprise slowdown in manufacturing and fresh evidence that consumers are being relied on to drive the flagging recovery.With less than a week to go till the general election, a closely watched survey of Britain’s manufacturers compounded fears the economy has run out of steam in recent months. The pound tumbled as the first snapshot of factory activity in April showed companies were forced to cut their prices to eke out new orders.Related: UK manufacturing growth slows sharply in setback for economy - live updates Continue reading...

Countries such as Latvia and member states in eastern Europe have been some of Greece’s most trenchant critics, after having to take part in the world’s biggest ever bailoutYanis Varoufakis could not resist bragging. Shortly after Greece’s new leftist government struck a deal with creditors to extend the country’s bailout to the end of next month, the finance minister and glamour boy for the Syriza radicals waxed triumphalist about how he had outfoxed the eurozone.“We no longer have this unified group against Greece,” he declared in a lengthy radio interview. “We now have a side that has broken down into many different sides, some of which are very open to our proposals. This by itself is a great success.”Related: Eurozone recovery defies the odds but long-term problems remainFDR, 1936: "They are unanimous in their hate for me; and I welcome their hatred." A quotation close to my heart (& reality) these days Continue reading...