Bank’s markets chief Chris Salmon warns of increasingly likelihood that a ‘flash crash’ in one market risks contagion in othersThe Bank of England has warned the financial community against complacency in the wake of a series of “short sharp shocks” in markets over recent months that it said could happen more frequently.Chris Salmon, the Bank’s executive director for markets, said uncertainty surrounding the global economy following the collapse in the oil price had heightened anxiety in the major currency and bond markets. Continue reading...

From employment and migration to Britain’s role on the world stage, a look at how the country has fared under the coalition governmentHow has Britain fared under the coalition? On the surface the economic data shows the coalition has been a success, but digging deeper reveals an uneven recovery that has left many behind, a series of unmet promises and a divided country with a smaller standing on the world stage.These 12 graphs summarise how Britain has fared since May 2010. The overall picture? A country with the chassis of a Jaguar with the engine of a Morris Minor hiding under the bonnet. Continue reading...

Thomas Piketty might argue that we need growth to resolve inequality, but this is just a comforting half-truth our politicians can use to justify business as usualWouldn’t it be wonderful if our politicians focused on things that matter, like the kind of society we want to live in, instead of squabbling over TV debates and “empty chairs”? Why couldn’t they be a bit more like actor Michael Sheen, for instance, whose barnstorming defence of public values went viral after he turned out for a rain-soaked St David’s Day rally in support of the NHS?The closest we’ve come to that kind of passion is Ed Miliband’s measured attack on the perils of inequality. “Tackling inequality is the new centre ground of politics,” claimed the Labour leader in his Hugo Young lecture last month, citing Obama’s State of the Union Address, the election of New York mayor Bill de Blasio and the Pope.Related: A wave of disruption is sweeping in to challenge neoliberalismRelated: The dilemma of growth: prosperity v economic expansion Continue reading...

Dramatic fall in oil prices contributes to improved trade balance but higher pound and fall in exports to eurozone limit gainsBritain’s trade balance improved in January after a dramatic fall in oil prices cut the cost of imports.But the higher pound and a fall in exports to the eurozone limited the gains from cheaper energy supplies brought into the UK. Continue reading...

Ranking hardship is not a simple, or happy, task – but as the world urbanises, city poverty becomes ever more important. Here are the places that struggle mostFor most of history, and despite the stereotype of urban squalour, it has been the countryside where poverty has particularly thrived. But as the world urbanises, poverty is moving with it. Over the past decade, the share of poverty in the developing world blighting cities rather than rural areas has jumped from 17% to 28%. In sub-Saharan Africa, almost a quarter of all poverty is urban. In east Asia, half.You know it when you see it, of course, but modelling poverty is a complicated business, and ranking hardship not a simple, or happy, task. One thing is certain, though: given that China has so effectively hauled much of its population out of pauperism, and with North Korea statistically dark, sub-Saharan Africa has the most extreme examples of urban impoverishment.Related: What is the oldest city in the world?Related: What's the world's coldest city? Continue reading...

Goldman Sachs, Morgan Stanley, JPMorgan Chase and Bank Of America fail to win central bank’s unconditional approvalFour of the largest US banks just scraped through the annual Federal Reserve financial checkup, underscoring the central bank’s ongoing doubts about Wall Street’s resilience more than six years after the financial crisis.Goldman Sachs Group Inc, Morgan Stanley and JPMorgan Chase & Co, all with large and risky trading operations, lowered their ambitions for dividends and share buybacks, the Fed said on Wednesday, to keep them robust enough to withstand a hypothetical financial crisis. The revised plans allowed them to pass the Fed’s simulation of a severe recession. Continue reading...

Whether you win or lose as average wages fluctuate depends on your income and how the government enacts further deficit cutsIs it really over? The longest squeeze on living standards since Victorian times is finally at an end – on paper at least. Across the economy as a whole, average wage growth has overtaken inflation, meaning pay is rising in real terms.But averages can mask wide differences in individuals’ experience; and many in Britain will be asking themselves why they still feel no better off. Continue reading...

ECB’s quantitative easing programme and deepening of Greek crisis among the factors sending the euro down and boosting prospects for eurozone exportersA fresh plunge in the value of the euro against the dollar was shrugged off by the European Central Bank (ECB) on Wednesday as it said its new growth-boosting policy would work without triggering a global currency war.With the euro on course to dive below parity against the dollar within the next few weeks, one of the ECB’s senior policymakers denied that Frankfurt was deliberately driving the single currency lower in an attempt to secure a competitive advantage. Continue reading...

Four-year bailout programme is expected to unlock further credit from donors and includes immediate $5bn payment to help stabilise conflict-hit economyThe International Monetary Fund has signed off on a $17.5bn (£11.8bn) four-year aid programme for Ukraine, the second attempt in less than a year to help the country avoid bankruptcy.

Your editorial on the role of the Office for Budget Responsibility (9 March) completely misses the point of what parliament has asked us to do.We have been asked to assess the outlook for the public finances on the basis of the government’s tax and spending policies as it currently expresses them, not on the basis of how we think they will or should evolve. Continue reading...

Coalition Britain: Retirement-age households saw income rise 10%, while that of working-age homes fell 4%, according to study by the Resolution FoundationBritain’s pensioners are emerging from the austerity years with their standard of living unscathed, while their children and grandchildren are struggling to make up the ground they lost in the recession, according to analysis by a thinktank.

MPC member says fall in oil prices provided breathing space, but little more, and that he could see himself voting for higher borrowing costs in coming monthsThe prospect of another split at the Bank of England over interest rates has emerged as one of its leading “hawks” says he could see himself voting for higher borrowing costs over the coming months.Martin Weale, one of the four independent members of the Bank’s nine-strong monetary policy committee, said that despite global worries about low inflation the decision about whether to raise interest rates was finely balanced. Continue reading...

While reporting for the BBC on the 2008 meltdown, Robert Peston was also facing personal tragedy. He talks about the pain of losing his wife to cancer, adrenaline addiction – and the haircut that spawned its own Twitter accountA year or so ago, Robert Peston got a new job, and immediately felt rather unwell. After 30 years as an influential business and political reporter in Fleet Street, and eight as the BBC’s business editor, reporting on the biggest financial story in half a century and breaking scoops so significant that he was at times accused of singlehandedly shifting the markets, he moved to become the broadcaster’s economics editor, and to a suddenly, shockingly, quieter life.Though still busy, the release from the rat-a-tat round of results, bonuses and resignations meant he was rarely called upon to be on hand all day, from the Today programme in the morning to the Ten O’Clock News at night, as had been commonplace before. The abrupt change of rhythm, he says, left him feeling “almost physically ill for a few weeks, and I was trying to work out what the hell was going on”. Continue reading...

Steep drop in hi-tech goods sector blamed for decline in monthly figureBritain’s manufacturers cut production going into the new year, according to official figures that showed a dip of 0.5% in output in January compared with the previous month.The fall in output contributed to an unexpected reverse in the broader measure of industrial production, which fell month on month by 0.1%, against a 0.2% increase predicted by economists taking part in a Reuters poll. Continue reading...

Eurozone currency slides after ECB launches €60bn-a-month quantitative easing programmeCity analysts are betting that the euro could soon sink to the same value as the US dollar on foreign exchanges, after the European Central Bank’s quantitative easing programme kicked off.The euro has fallen sharply since last summer when Mario Draghi, the ECB president, laid the groundwork for QE; but the currency has fallen further since the monthly €60bn (£42bn) bond-buying programme began on Monday. Continue reading...

British Chambers of Commerce upgrades growth forecast despite slowdown in investment but warns of dependence on consumer spending and rising imports

All major US stock markets fell on Tuesday as investors worry about signs that the Federal Reserve could raise interest rates for first time since 2008 crisisUS stock markets fell on Tuesday as investors worried about rising interest rates and a strengthening dollar.

Alan Rusbridger failed to mention (Why we put the climate on the cover, 7 March) that Naomi Klein’s This Changes Everything is subtitled Capitalism v the Climate. Her thesis is that global capitalism, as it demands ever-increasing consumption of goods and services by the world’s population, is the main driver of catastrophic climate change. The agents of capitalism like to believe that consumption will go on for ever, and ignore, and persuade us to ignore, the unpleasant fact that the earth’s resources are not infinite.The sad reality is that so entrenched is capitalism in governments, corporations, banking systems and other global elites, and so dependent on it are “we”, the ordinary working people of this planet, for our lifestyles, comfortable, impoverished or luxurious as they may be, that the chances of getting rid of, or even modifying, capitalism are effectively nil. It’s all about power, and the ability to enforce the status quo. The likelihood is, as Tom Lehrer put it: “We will all go together when we go.”

Budget carrier comes to rescue of Castellón airport, which opened in 2011 but lay unused for years and became an emblem of reckless spending before recessionRyanair is set to become the first airline to operate scheduled flights from the Spanish “ghost airport” of Castellón.The Irish carrier will announce plans on Wednesday to fly from the airport, which cost €150m (£107m) to build but stood empty for almost four years and is widely regarded as a symbol of regional governments’ profligacy during Spain’s long-gone property boom. Continue reading...

Currency traders brace for single currency to fall below parity against dollar as slowing Chinese economy and prospect of higher US rates buoy greenback

Tesco’s resurgence and a bitter price war fuelled by competition from Aldi and Lidl lead to three-month sales fall of 2.1% at AsdaAsda has sunk to its worst sales performance in more than 20 years in the face of a resurgence by its larger rival Tesco and a bitter supermarket price war.Tesco increased sales by 1.1% in the 12 weeks to 1 March, its best performance in 18 months, while sales dropped at all three of its major rivals, according to the latest data from Kantar Worldpanel. Continue reading...

British Retail Consortium figures suggest UK shops affected by supermarket price war in February as economic recovery continues to ‘bypass the sector’​Britain’s retailers suffered another slow month for sales in February, according to industry figures that suggest a supermarket price war continues to affect​ takings.Related: UK shop price deflation deepens as food costs fall Continue reading...

Rolling business and financial news, as eurozone finance ministers gather in Brussels

Sir Martin Sorrell says the election could bring problems for UK business, but No 1 on his list is the eurozone – uncertainty over Greece looks a bigger worrySir Martin Sorrell is probably right that May’s general election brings uncertainty for UK business whatever the outcome. The corporate world has worked itself into a fine flap about a referendum on EU membership that a Tory, or Tory-led, government would bring. Equally, the bosses don’t want business to be “bashed” by Labour, as they see it, especially if the SNP has its hand on the instrument of supposed violence.The UK election was the fifth “grey swan” on Sorrell’s pond of known risks. But No 1 on his list – the eurozone – still looks a far bigger worry, as a glance at the grey men in Brussels going about their business on Monday would confirm.The Tories will not allow [Green] to be called. They are trying to palm this off until after the election Continue reading...

Just a few footnotes to the very pessimistic comment from Timothy Garton Ash (Europe is being torn apart, 9 March): 1) German wages are rising. 2) German consumption is rising strongly. 3) German overall employment is rising, giving jobs to Spaniards, Greeks and others. 4) Tourism to eurozone countries and especially to Greece, is expected to rise again this year. 5) The German government has announced additional investment in the coming years. 6) German imports and exports to the eurozone countries are in balance at +€400bn in 2013 and 2014. 7) The EU, especially through the structural funds, is already redistributing wealth across the EU. 8) The Greeks have made painful cuts in spending. But they have not yet tried to reform their procedures sufficiently. Take export funding for example: I have recently read that there are massive absurdities in the procedures, leading to reduced exports of Greek products.Garton Ash is certainly right about the political bit. But only in the long run.

Rolling coverage of all the day’s political developments as they happen, including Ed Balls’ speech on Tory spending cuts and David Cameron’s speech on education and family

Meeting of finance ministers in Brussels lasts just one hour as EU nations vent frustration at speed of Athens response to potential bankruptcyGreece’s eurozone creditors have stepped up the pressure on Athens over reforms that might unleash billions more in bailout loans and save the country from bankruptcy over the next three months.

President to outline plan that will train and hire high-tech workers to make progress on higher-income employmentBarack Obama is set to announce a new programme, TechHire, during a speech on Monday to the National League of Cities.The president, focusing on high-tech jobs in a bid to make progress on stagnant wages, has obtained commitments from more than 300 employers as well as local governments in 20 regions of the US to train and hire high-tech workers in an effort to drive up higher-income employment. Continue reading...

Latest shares sell-off cuts government stake in bank to 23% with nearly half of £20bn bailout now recoupedThe government has sold a further tranche of shares in the bailed-out Lloyds Banking Group, reducing the taxpayer’s stake to less than 23% and returning £500m to the public purse.UK Financial Investments, the body that controls the taxpayer stake in the nation’s bailed-out banks, has promised to drip-feed Lloyds shares on to the market in the runup to the general election, with the aim of cutting its stake to 20%. Continue reading...

With an election looming, UK politicians are once again courting the all-important over-55s with income-, pension- and estate-friendly policiesKevin Spacey, looking greyer and paunchier as President Underwood in the third series of House of Cards, shocked Democratic party leaders when he told them a plan to create 10m jobs must be paid for with dramatic reductions in benefits, especially for the old.As usual, it was hard to tell if the move was a genuine tilt at a social democratic legacy or yet another tactic in Underwood’s never-ending scramble for survival. Taking him at his word, Underwood’s jobs plan is a return of fire in the long battle of the generations, with the fictional president attacking better-off baby boomers on behalf of blue collar families and the young. Continue reading...

Notionally independent fiscal forecasts build in Treasury assumptions about public spending, which are worthy of the Enron school of accountingAfter 58 months of blood, toil, tears and cuts, two months before the election, there are whispers that the austerity chancellor has spotted the funds for a little largesse.The Treasury was yesterday backpedalling from unhelpfully detailed reports about George Osborne weighing specific tax cuts for next week’s budget, fearful no doubt, of spoiling any surprise on the day. The chancellor is also conscious that such a late-in-the-day giveaway could confuse his campaign pose as the man for tough decisions. The question, however, is whether he will be able to resist. For with cheap petrol putting some fuel into the economy’s tank, and falling inflation reducing debt-servicing costs, there is apparent scope for a fiscal loosening of, perhaps, £5bn a year. Continue reading...

Athens’ finance minister, Yanis Varoufakis, says referendum or new election on fiscal policy is possible if deadlock remainsGreece’s anti-austerity government has raised the spectre of further political strife in the crisis-plagued country by saying it will consider calling a referendum, or fresh elections, if its eurozone partners reject proposed reforms from Athens.Racheting up the pressure ahead of a crucial meeting of his eurozone counterparts on Monday, the Greek finance minister, Yanis Varoufakis, said the leftist-led government would hold a plebiscite on fiscal policy if faced with deadlock.

This monetary union without a political one will continue to cause suffering and divide the north from the south“If the euro fails, Europe fails”: thus spake Angela Merkel. Unfortunately, the euro is failing, but it is failing slowly. Even if Greece grexits, the eurozone seems unlikely to fall apart in the near future, although there is still a chance that it will. There is a much higher chance that it will grind along like a badly designed Kazakh tractor, producing slower growth, fewer jobs and more human suffering than the same countries would have experienced without monetary union. However, the misery will be unevenly distributed between debtor and creditor countries, struggling south and still prospering north.These different national experiences will be reflected through elections, creating more tensions of the kind we have already seen between Germany and Greece. Eventually something will give, but that process may take a long time. “There is a great deal of ruin in a nation,” said Adam Smith. Given the extraordinary achievements of the 70 years since 1945, and the memories and hopes still invested in the European project, there is a lot of ruin still left in our continent.The structural problem here is that the monetary area is European but the democratic politics are still nationalRelated: European disunion: Tsipras, Merkel and the conflict at the heart of the EU Continue reading...

Mark Carney promised to make the Bank a more open place. But its behaviour over the Serious Fraud Office investigation is reminiscent of the bad old daysMaybe the Bank of England is still feeling its way. When the news broke last week that it faced its first investigation by the Serious Fraud Office, the Old Lady of Threadneedle Street was reticent. A brief statement from the governor Mark Carney. No details. Not even an outline of the case.Almost immediately speculation started, and with it the sense that once again the public was being presented with piecemeal disclosure about allegations of wrongdoing during the financial crisis. Not only was the Bank giving the appearance of an institution with something to hide, but there was a forceful reminder that parliament has never commissioned an all-embracing investigation of what went wrong before and after the Lehman Brothers collapse, or how various institutions dealt with the fallout. Continue reading...

Lloyd George’s war loan is due to be paid off on Monday. If only those currently in charge of the national finances could think so far aheadPolicymakers in Britain and the eurozone should take note of an interesting event due to take place on Monday. The British government will finally redeem the war loan taken out in 1917 under the premiership of Lloyd George. That is to say, the last traces of that first world war debt will be repaid almost 100 years later.With debt, and deficits, one has to take the long-term view. This applied to the situation facing the coalition in 2010, and to the policymakers of the eurozone, who were also faced with the financial consequences of the 2007-09 banking crisis. The impact of the crisis was the peacetime equivalent of the devastation wreaked on public sector finances by war itself. Unfortunately, both in this country and the eurozone, an absurdly short-term view was taken of the situation, not least with regard to Greece and other peripheral eurozone economies.Unfortunately, both in this country and the eurozone, an absurdly short-term view was taken of the situation Continue reading...

Finance minister Yanis Varoufakis comes up with novel methods to reform Greek economy before meeting with eurozone ministers

Euro drops against pound and dollar as ECB plans to unleash €1.1tn of quantitative easing and strong US jobs report boosts the dollarThe pound has hit a seven-year high against the euro, bringing cheer for British holidaymakers but underscoring fears about the fragile European single currency as markets prepare for a flood of emergency electronic cash.Related: Why the FTSE 100 has hit a record high Continue reading...

On Friday, the jobless rate dropped to 5.5%, the lowest in seven years. But youth unemployment is rising – and some young people need all the help they can getSnow blanketed New York City on Thursday, and its streets quickly emptied. An occasional brave soul could be seen walking, head down, shoulders hunched against the wind. Offices cleared out early as the weather threatened the journey home, but behind the blue doors of a nondescript Manhattan building a group of young people were wishing they had jobs to leave.The Door, in Manhattan’s Soho neighborhood, is a nonprofit that helps people between the ages of 12 and 25 find jobs and get healthcare, legal help and qualifications. It helps about 10,000 young Americans a year.Related: US economy shrugs off winter weather to add 295,000 jobs in February Continue reading...

Strong jobs numbers beat economists’ expectations and is the 12th consecutive month of over 200,000 jobs, as unemployment rate falls to 5.5%The US economy shook off the brutal winter weather in February to add 295,000 new jobs, the 12th straight month it has added over 200,000 jobs, the Bureau of Labour Statistics said Friday.

As global warming argument moves on to politics and business, Alan Rusbridger explains the thinking behind our major series on the climate crisisJournalism tends to be a rear-view mirror. We prefer to deal with what has happened, not what lies ahead. We favour what is exceptional and in full view over what is ordinary and hidden.Famously, as a tribe, we are more interested in the man who bites a dog than the other way round. But even when a dog does plant its teeth in a man, there is at least something new to report, even if it is not very remarkable or important.Related: Don't look away now, the climate crisis needs youRelated: Gormley climate change artwork shown for first time in the GuardianRelated: Polly Toynbee: 'If you read the Guardian, join the Guardian' Continue reading...