Second estimate of GDP by the Office for National Statistics was expected to see an upwards revision to growthOfficial figures have confirmed that Britain’s growth rate slowed to 0.3% in the first three months of the year after an improvement in construction output was offset by a slowdown in the services sector.The second estimate of GDP by the Office for National Statistics was expected to show that the halving of the UK’s quarterly growth rate had been exaggerated and would be revised upwards. Continue reading...

Analysis suggests that Poland is the best country at turning economic growth into the wellbeing of its citizensPoland is outperforming the UK when it comes to education as well as being the world leader in converting economic growth into the well-being of its citizens, according to a new report.The Sustainable economic development assessment (Seda) by The Boston Consulting Group (BCG) measures wellbeing across 149 countries. Continue reading...

Greece claims bailout deal is close, as US urges swift action Continue reading...

George Osborne said in 2010 that he would eliminate the structural deficit by 2015; it now stands at £92bn. His latest yarn (Let the cuts begin, 21 May) is that he will eliminate it by 2017-18. Fat chance. According to the Treasury red book accompanying his April 2015 budget (p22), the deficit reduced from £97.3bn in 2013-14 by just £7bn to an expected £90.2bn in 2014-15. According to the same table, Osborne now expects/hopes/wishes the deficit to reduce by £15bn this year, £36bn the next year, £27bn the year after that, and a further £17bn in the year after that. Is that remotely credible or just another yarn to keep people quiescent while the deficit threshing machine cranks up into top gear?Osborne has kicked off with an immediate £30bn cuts target. Maybe he can get away with £13bn cuts to policing, the courts, the military and prisons, but there is a serious and rising risk of explosive consequences all round. His proposed £12bn welfare cuts to carers’ allowances, disability benefits, child benefit, industrial injury benefits and tax credits will hit some of the most sensitive sections of British society, including millions in in-work poverty, and like Thatcher’s poll tax will eventually trigger a grassroots rebellion. His £5bn savings on tax avoidance is fantasy: he’s never achieved that in five years of telling us he’s been cracking down on this.Before the second world war there was an orthodoxy of balanced budgets, sound money, the gold standard and free tradeProductivity growth is the big issue, but quality of the workforce is a symptom not a cause Continue reading...

American Treasury secretary, Jack Lew, vows to use upcoming event to press Greece and European ministers to forge a rescue dealThe US Treasury secretary has said he will use the G7 finance ministers’ meeting on Thursday and Friday to press Greece and its European creditors to end their brinkmanship and forge a rescue deal.With the Syriza-led coalition scrambling to secure an agreement, which will release the final €7.2bn (£5.1bn) tranche of bailout cash and prevent it defaulting on a looming payment to the International Monetary Fund (IMF), Jack Lew urged both sides in the ongoing Greek debt crisis to “treat every deadline as the last”. Continue reading...

All the latest economic and financial news, as Greek PM Alexis Tsipras claims that an agreement with creditors is close

Critics of the controversial Trans-Pacific Partnership are unlikely to be silenced by an analysis of the flood of money it took to push the pact over its latest hurdleA decade in the making, the controversial Trans-Pacific Partnership (TPP) is reaching its climax and as Congress hotly debates the biggest trade deal in a generation, its backers have turned on the cash spigot in the hopes of getting it passed.“We’re very much in the endgame,” US trade representative Michael Froman told reporters over the weekend at a meeting of the 21-member Asia-Pacific Economic Cooperation forum on the resort island of Boracay. His comments came days after TPP passed another crucial vote in the Senate. Continue reading...

Many investors are putting plans in the UK on ice until the referendum on EU membership is out the wayThe government’s plan to hold an EU referendum will dent foreign investment in the UK and threatens its position as Europe’s top destination for overseas investors, according to a new report. Continue reading...

Upbeat tone of the Nielsen survey underpinned by improving job prospects and low inflationUK consumers are at their most upbeat for nine years on the back of improving job prospects and low inflation, according to the latest report to suggest spending power is recovering.Consumer confidence rose for the fifth successive quarter in the opening months of this year to hit its highest level since the pre-crisis days of 2006, according to market research company Nielsen. The proportion of people feeling now was a good time to spend was also up; at 45%, it was the highest since comparable records began in late 2006.Retailers will be encouraged to see growth in sales and orders on the high street bounding ahead. Low inflation, which we expect to remain below 1% for the rest of the year, has given household incomes a much-needed boost and greater spending power. Continue reading...

Most people will accept inequality if it comes about through creativity, innate ability or pure chance. Then there’s the other type of inequality ...Inequality has reached the point where even billionaires are worried about it. In an open letter to “my fellow zillionaires”, American dot-com entrepreneur Nick Hanauer warns that rising inequality is making his country “less a capitalist society and more a feudal society”. Hong Kong billionaire Li Ka-shing, the 15th richest person in the world, says that his concerns about widening polarisation are keeping him awake at night: “… why am I sleepless in Hong Kong? I fear that widening inequality in wealth and opportunities, if left unaddressed could fast become ‘the new normal’.”Related: Don’t blame rising inequality on technological change | Owen JonesRelated: Why is Thomas Piketty's 700-page book a bestseller?Related: Joseph Stiglitz: ‘GDP per capita in the UK is lower than it was before the crisis. That is not a success’Related: Inequality harms all of us | Lesley Riddoch Continue reading...

All the latest economic and financial news, as speculation swirls that Greece could fail to meet its IMF repayments in June

Demands for more austerity in Greece are as inhumane as economically crass but Greeks would likely prefer more such ‘medicine’ if it meant keeping the euroPaddy Power is quoting 11/10 on Greece leaving the euro – and after recent events it’s hardly a surprise that the bookmaker is offering the shortest odds ever on a Grexit. After months of wrangling, Greece still can’t reach an agreement with its creditors to secure fresh financial assistance and doesn’t have the ready cash to make a payment due to the International Monetary Fund at the end of next week.The economic argument for Greece staying in the euro is weak. National output is down by a quarter in five years. The debt-to-GDP ratio is heading rapidly towards 200%. One in four people are unemployed and there is widespread poverty.Greece’s PM has to decide whether to accept more austerity as the price of remaining in the single currency Continue reading...

Scotland’s first minister says cuts will hit economic growth and deficit reduction and says the Scottish government will campaign to stay in the EUNicola Sturgeon has attacked the “scale and speed” of government spending cuts, while pledging that the Scottish government will campaign for the UK to stay in the EU.In her first major speech on the economy since the general election, Scotland’s first minister argued that the proposed cuts would hamper the economic recovery and make reducing the deficit harder.During the runup to the referendum the Scottish ​government will make a strong and positive case for staying in the EU Continue reading...

Tsipras says technical talks with Greece’s creditors would resume amid fears Athens is close to running out of money as €1.6bn IMF debt repayment loomsThe high-stakes game of brinkmanship between Greece and its creditors intensified on Monday after prime minister Alexis Tsipras convened an emergency meeting of his political negotiation team following a stark warning from Athens that default was looming.Amid mounting fears of financial collapse, Tsipras instructed officials to act speedily as his government sought to defuse tensions saying it would do its best to honour its debts – even if it failed to reveal how, exactly, it would find the money to pay €1.6bn in loans to the International Monetary Fund next month. Technical teams are set to resume talks in Brussels on Tuesday.Related: Greece warns it is set to default on debt repayment loans Continue reading...

Sir Michael Graydon says David Cameron must repair damage to UK security and commit to Nato minimum of 2% of GDPDavid Cameron must repair the damage to UK security by guaranteeing a minimum level of defence spending, the former head of the RAF has said.

Conservative prime minister actually increased state regulation of financial sector, according to Institute for Economic AffairsThe free-market thinktank that inspired many of Margaret Thatcher’s reforms has now turned critic of the Iron Lady’s shakeup of the City in the 1980s, suggesting it increased state regulation of the financial sector, making it too burdensome.While the left has blamed the liberalisation of finance under Thatcher for the crisis that paralysed the banking system and led to the deepest UK recession of the post-war era, the Institute for Economic Affairs says the 1980s involved private regulation being replaced by less effective statutory regulation. Continue reading...

Interior minister says Athens simply cannot satisfy IMF deadline next month unless it works out a deal with eurozone creditorsGreece has threatened to default on €1.6bn (£1.14bn) of debt repayment due on international bailout loans next month, claiming it does not have the funds to satisfy creditors at the same time as paying wages and pensions.

When anti-capitalist protesters set up camp on the steps of St Paul’s in London, its canon chancellor found himself at the heart of a crisis that shook the church even more than the City. As a new play, Temple, explores the affair, he questions the very existence of the cathedral itselfOn the afternoon of 26 October 2011, the cathedral chapter of St Paul’s came together for a hastily convened meeting. Some were absent, but there were enough of us to make a decision. And there was only one item on the agenda: the eviction of Occupy. Everyone was tired. Everyone was emotional. The previous weeks had taken their toll. And we all dealt with it differently. During the meeting, I felt almost unable to speak, perhaps overwhelmed by the gravity of the moment. The dean reached across the baize table to hold my hand and break my silence. It was a simple act of kindness in an impossible situation. He, too, was tired and angry. I don’t remember what I said, but it wasn’t enough. The vote was close but it didn’t go my way. A few hours later, I rang the dean’s doorbell and handed him the letter. I couldn’t just pop it through his letterbox. He knew what it was.I'm played by Paul Higgins, the other ferocious spin doctor in The Thick of It. Some might call this typecastingOccupy reflects a deep-seated sense that there is something wrong … Of course they were right. AbsolutelyThe Romans stole Jesus's religion … Christians swapped the rags of the oppressed for the ermine of high officeThe poor, vulnerable God of Bethlehem was more clearly articulated in the camp [than in the cathedral] Continue reading...

‘It would make economic sense if people like us got laid more’Ten years ago, as we were about to publish a book called Freakonomics, we decided to start a companion website. At the time, we thought it was a bit of a waste of time, a marketing tool through which readers could submit their own dumb-ass ideas and where we could dump some of our dreariest and most futile observations that had no chance of making it into any of our subsequent books. But guess what? It turns out there is nothing you cannot monetise, if the brand is big enough.PS: As economists, perhaps we should have foreseen that possibility. PPS: Some of our readers reached that conclusion a while ago, with the publication of our third book. Continue reading...

Jonathan Hoffman is seeking $83m in unpaid bonuses from his days at Lehman BrothersBarclays paid a “lone wolf” star trader £170m in the five years following the financial crisis, a payout which dwarfed those of Bob Diamond, the bank’s former boss.Jonathan Hoffman’s earnings included an $83m (£52m) payment to the trader who previously worked for Lehman Brothers, the US bank that collapsed in 2008 kicking off the global financial crisis. Continue reading...

Interior minister Nikos Voutsis makes most explicit remarks yet that if talks with creditors fail, Greece will default next monthGreece cannot make debt repayments to the International Monetary Fund next month unless it achieves a deal with creditors, its interior minister said on Sunday, the most explicit remarks yet from Athens about the likelihood of default if talks fail.Shut out of the bond markets and with bailout aid locked, cash-strapped Athens has been scraping state coffers to meet debt obligations and to pay wages and pensions. Continue reading...

When chancellor says he wants economy to find another gear, it’s not so much speed at which UK is expanding that concerns him, it is quality of that growthIt’s Monday morning and you arrive at the station to find that your train has been cancelled due to a points failure. You miss an important meeting.On Tuesday your desktop computer crashes yet again. IT says the problem is simple: the computer is old and needs to be replaced.Related: Joseph Stiglitz: ‘GDP per capita in the UK is lower than it was before the crisis. That is not a success’ Continue reading...

With an increasing number of fancy fast food restaurants opening across the UK, we look at the businesses that are spoiling diners for choiceBritain’s taste for burgers – especially its love of gourmet versions – continues to grow.Once the choice was limited to McDonalds and Burger King. But now, British burger lovers are presented with a multitude of “premium” burgers from the likes of Byron, Honest Burger, Five Guys and Shake Shack.The growth in ‘better burger’ concepts in particular is largely reflective of higher consumer expectations, with ongoing demands for fresh, ‘real’ food. The success of this can be seen in the rise of established ‘better burger’ players such as Gourmet Burger Kitchen and Byron Burgers over recent years. The emergence of new US players such as Smashburger and Five Guys is arguably leveraging this proven demand for ‘better burgers’ in the UK whilst further tapping into consumers’ ongoing demand for fast service concepts. Continue reading...

Argentina defaulted in 2001, and is still not free of its creditors. There needs to be a clear resolution to the blight of vulture funds and neverending austerityAlexis Tsipras, Greece’s combative prime minister, is facing yet another week of fraught negotiations as he and his team struggle to agree a shopping list of economic reforms stringent enough to appease the country’s creditors, but different enough from the grinding austerity of the past five years to satisfy the Greek electorate.And all the while, bank deposits will leach out of the country, investment plans will remain on hold and consumers hammered by years of austerity will continue living hand to mouth.The aim would be to impose a debt write-off significant enough to make future repayments manageable Continue reading...

Nobel prize-winner Joseph Stiglitz is the world’s foremost critic of economic and political inequality. He thinks the lessons of the global crash are being ignored, and he’s not much taken with the UK’s recovery either…Think back to 2008. There was an inquest into Princess Diana’s death, Portsmouth won the FA Cup and Jonathan Ross and Russell Brand got in trouble for making a prank call to Andrew Sachs. Oh yeah, and the global economy almost collapsed.To prevent the disintegration of international banking, and capitalism as we know it, governments were forced to pour trillions of dollars into rescue packages. In Britain alone, government loans to and investment in the banks amounted to hundreds of billions of pounds, which in turn presaged a debt crisis and years of austerity measures. Continue reading...

In the days before the Great Recession, the liberalisation of world trade seemed a certainty: now fears over ‘hot money’ and migration have changed the moodGlobalisation is under attack. It was meant to be the unstoppable economic force bringing prosperity to rich and poor alike, but that was before the financial crisis ripped up the rulebook.For the past four years, international trade flows have increased more slowly than global GDP – “an outcome unprecedented in postwar history”, as analyst Michael Pearce of Capital Economics put it in a recent note.I have always thought that the greatest threat to globalisation is the USObama's been a little bit subdued, but he’s not going to want a protectionist legacy Continue reading...

Federal Reserve chair issues caution to US markets that the increase is ‘likely to be gradual’ over lingering concerns about ‘slack’ in the jobs marketFederal Reserve chairwoman Janet Yellen has said she expects interest rates to rise this year, in what would be the first rate hike from near zero since the 2008 economic crisis.Yellen said that if the US economy continues to strengthen, “it will be appropriate at some point this year to take the initial step to raise the federal funds rate”.Related: Federal Reserve says June too early to begin raising interest rates Continue reading...

All the latest economic and financial news, as EU leaders hold a summit in Riga overshadowed by the Greek debt crisis

Instead of focusing on just creating jobs, the impact fund invests in companies that offer good jobs – with health care benefits and growth opportunities – in underserved communitiesAt the heart of the American Dream – the idea that anyone in the US, by dint of hard work and determination, can climb the economic ladder – is the American dream job. This is, the kind of job that can become a career, the sort of work that provides employees with decent wages, benefits, training and opportunities to better themselves. It’s the type of job that underlays a thriving economy.

From the banlieues of Paris to the northern quarters of Marseille, a black-market auto repair industry is boomingUnder the trees, just down the road from the Dourdin housing estate, the signs are unmistakable, with a couple of cars jacked up and a litter of oily rags and toolboxes spilling all over the pavement. By Thursday evening the open-air mechanics have set up shop in this district of St Denis, north-east of Paris.Sporting a singlet and a (fake) diamond stud in his ear, Eddie (name changed) has plenty on his hands. Customers are waiting in their cars. At the end of the day he pulls out a flask of bourbon and some plastic cups, and turns up the sound system. The scene turns into a boozy picnic. Continue reading...

Rise in VAT, corporation tax and stamp duty takings helps improve finances but analysts warn a balanced budget by 2020 remains trickyA sharp fall in Whitehall spending and lower interest bills on government debt helped narrow Britain’s public sector budget deficit in April.A steady rise in tax receipts in the first month of the financial year also played a part following a record-breaking VAT haul, a bumper rise in corporation tax receipts and the rebound in stamp duty on property sales.Related: UK public borrowing fall: four reasons not to gloat Continue reading...

There are many good reasons why the government offered a guarded welcome to the better than expected deficit for AprilNo short cuts. Plenty of hard work left to do. That was the Treasury response to news that public borrowing in April was 27% down on the same month a year earlier. A guarded welcome rather than jubilation was the order of the day.Why the cautious response? There are four main reasons. The first is that the deficit is a lot higher than the government would like it to be – at £87bn in 2014-15 it was £50bn more than George Osborne forecast when he first became chancellor in 2010.Related: UK budget deficit narrows after boost from taxes and duties Continue reading...

David Cameron puts a negative spin on the figures, but the fact that skilled migrants are attracted to the UK’s relatively strong economy is good news

Office for National Statistics says government borrowing was £6.8bn in April, down nearly 27% from a year earlierBritain’s public sector budget deficit narrowed more than expected in April, giving the chancellor, George Osborne, a boost as he renews his push to fix the country’s public finances.

All the latest economic and financial news, as the leaders of Germany, France and Greece meet in Riga tonight

Former welder Manolis Rallakis is leading the fight against pension cuts. He has to, he says – the elderly population is literally feeding the Greek familyManolis Rallakis likes to take to the streets to fight for his rights. Battles have come and gone – but always been won. “The lost battle is the battle never fought,” says the retired metal worker, his eyes fixed in a steely glare – “and now we are fighting the battle of our lives.”Seated in his lounge adorned with prints on orange walls, the 75-year-old embodies the Greek trade unionist par excellence: Rallakis is general secretary of the federation of the country’s pensioners.Related: Greece hopes for bailout extension breakthrough at EU summit - live updates Continue reading...

April’s big rise in retail sales is down to the falling cost of oil and shops cutting prices. But getting consumers to spend is the easy part of George Osborne’s long-term economic planBritons love a windfall. When the building societies became banks, consumers sold their shares and went on a spree. When they received compensation for wrongly sold payment protection insurance, they blew the lot on new cars and cruises.So when oil prices crashed in the second half of 2014, it was a no-brainer that shops and stores could look forward to a promising start to 2015. Faced with the choice between banking the savings they were making on filling up the car and a bit of retail therapy there was never any real doubt about what consumers would do.Related: Sun shines on UK clothing industry with biggest April rise for five years Continue reading...

George Osborne and David Cameron have been waiting for this moment – to take us back to a prewar, pre-welfare governmentEvery new chancellor wants to set their own budget after an election. But George Osborne isn’t a new chancellor. He inherits his own 2015-16 plan, and yet last night he told the Confederation of British Industry he will reopen it to cut more, tearing up every departmental and agency budget after contracts are signed halfway through the year.A question: what is there in his spending plans that he dared not announce to voters before the election? It was already a piece of remarkable democratic arrogance that David Cameron and Osborne refused to say where the £12bn of benefit cuts would fall – and dereliction on the part of all the broadcasting interviewers not to hammer hard enough on this one point with every minister in their studios so as to force them to reply. But we shall see now, too late, exactly where the axe is falling on all the unprotected departments. Continue reading...

Sales of clothing and footwear, such as flip-flops and shorts, up 8.7% year on year, with analysts crediting spell of good weather last monthBritain’s shoppers have taken advantage of the spring sunshine and stocked up on shorts and sandals early, which has contributed to the strongest growth in April clothing sales for more than five years.Retail sales data from the Office for National Statistics, published on Thursday, showed the volume of clothing and footwear sales was 8.7% higher than the same month a year earlier.Related: UK retail sales: while politicians campaigned, the voters shoppedRelated: Clothing sales surge: what the economists say Continue reading...

In the UK, non-standard work including zero-hours contracts accounted for all net jobs growth since 1995A surge in self-employment and temporary or part-time jobs over the past two decades has been a key factor behind the rise in inequality in the world’s industrialised countries, according to a major new study by the Organisation for Economic Co-operation and Development.The Paris-based club, which has been a driving force in arguing that increasing inequality jeopardises economic growth, says more than half of all job creation in its 34 member countries since the mid-1990s has been in “non-standard work”, which accounts for about a third of total employment.Related: Most of the world's workers have insecure jobs, ILO report reveals Continue reading...

Aircraft firm’s Paul Kahn says company would reconsider its position in the country if Britain left the EU – putting at risk thousands of jobsThe head of Airbus in the UK has warned that the defence and aircraft company would reconsider its investment in the country in the event of Britain leaving the EU, saying such a move would be destructive with “enormous ramifications” for the UK’s long-term future.It’s a hell of a lot more difficult, more bureaucratic and more costly to do [business] from outside the EU Continue reading...

Chancellor tells government departments to make immediate start on finding £13bn of further cuts – with goal of announcing savings by JulyGeorge Osborne has told Whitehall departments that the fresh squeeze on government spending has begun, ordering them to make an immediate start on finding the £13bn of cuts needed for the next phase of his deficit reduction plan.The chancellor told the CBI he wanted to be able to announce savings from all spending apart from the ringfenced areas of health, schools and overseas aid in his summer budget on 8 July.When it comes to saving money, we all know that the more you can do early, the smoother the rideRelated: Labour needs to define social democracy and the language to build it Continue reading...