Alexis Tsipras and Angela Merkel are to meet in Berlin for high-stakes talks that could prove to be decisive in the battle over austerity measuresWhen the red carpet is rolled out for Alexis Tsipras in Berlin on Monday, the euro debt drama will come to a potentially decisive turning point.His host will be none other than Angela Merkel, Europe’s mother, its powerbroker par excellence and the queen of austerity, defender of the very policies the leftwing firebrand has vowed to dismantle. For many, it will be the long anticipated moment of truth. Continue reading...

Amid demands for wartime compensation from Athens, and for deep economic reforms from Berlin, a majority of Germans now want Greece out of the eurozone

Analysts expect inflation is likely to have fallen to 0.1% with some predicting that figures could show a negative readingThe British economy is heading for a spell of deflation as official figures are expected to show that inflation dropped to 0.1% last month.Analysts expect the UK’s consumer price inflation (CPI) figure for February, which is released on Tuesday, to fall from 0.3% in January, driven by lower energy and food prices. Some economists think the monthly update from the Office for National Statistics could already show deflation. Continue reading...

For Britain’s industrial areas, recovery is patchier, with weaker jobs growth and less infrastructure spending. The evidence says we never have been in it togetherHartlepool has seen better days. Its port was used to transport coal from the Durham coalfields and manufacturing thrived on the Tees estuary.Heavy industry is still important, although there is less than there was. The council has ambitious plans for regeneration. On the waterfront, there is evidence of previous attempts to turn the town’s fortunes around. The empty office blocks and the shuttered outlet centre show these have not been entirely successful. Continue reading...

IMF and Asian Development Bank tell Beijing conference they are happy to cooperate with Asian Infrastructure Investment Bank, but US urges caution

The chancellor’s boastfulness and trickery have not saved him from the criticism of the independent economic watchdogs that he himself set upI keep wondering who George Osborne reminds me of, and it finally came to me, during what I hope – in common, I imagine, with tens of millions of British citizens – will prove to have been his last budget speech.During the austerity years of 1945-51, there was no shortage of demand, but a severe shortage of supply. Also, the country was broke, and there was, to coin a phrase, no alternative to austerity, of which the most obvious manifestation was rationing.Osborne cannot get away from the fact that he has presided over the slowest and feeblest recovery in living memory Continue reading...

Rolling economic and financial news, as European leaders urge Athens to present details reform plans quickly

UK index of top 100 companies surpasses 7,000, recording its all-time high since the index was introduced in January 1984The FTSE 100 has soared through the 7,000 barrier for the first time in its history, with investors buoyed by the prospect of continuing low interest rates and growing hopes that a solution may finally be found to Greece’s financial crisis.Seventeen years after the leading index hit 6,000, it finally added the next 1,000 points after a number of attempts, notably in 1999 at the height of the dotcom boom. Last year there were predictions that the index would reach new peaks, but after coming close a number of times, it always fell at the final hurdle as new risks – ebola, the Ukraine crisis, the eurozone – emerged. But on Friday, it closed 60.19 points higher at a record 7,022.51, a near-1% rise on the day. Continue reading...

Newcastle’s collaborative, ‘future thinking’ regeneration scheme has revived a city that was on its knees after the devastation of 1980s deindustrialisation. But what about near-neighbour Sunderland? Compare its fortunes hereIt comes as no surprise to the Geordies that Newcastle is rated one the UK’s best performing cities. I left in 1990 when the city (and most of the north-east) was on its knees, but the city I see on my visits home is revived, emerging as a poster child for the new north. A recent Centre for Cities report ranked Newcastle eighth among the UK’s largest cities in terms of jobs growth – attracting nearly 30,000 new jobs between 2004 and 2013 (an 8% increase), and belying the report’s overall message of a widening north-south divide.The revived Quayside is testament to the city’s determination to rebuild itself after the devastation of 1980s deindustrialisation. Building on the work of neighbouring Gateshead in promoting its Garden Festival, Sage culture centre and Millennium Bridge, Newcastle published Going for Growth, an ambitious, city-wide regeneration strategy, back in 2000. Seeking to position itself as a competitive, cohesive and cosmopolitan city of international significance, it built partnerships with citizens, communities, companies and government – and even bid to become European City of Culture, achieving a level of exposure overseas despite losing out to Liverpool.To many north-easterners, this part of the world has been ignored for so long that self-reliance is bred into the psycheRelated: City rivalries: Sunderland's reinvention is profound – but its recovery is fragile Continue reading...

Thinktank says chancellor must specify how he will reach targets announced in the budget, given that the poor had been hardest hit by benefit changesGeorge Osborne is under pressure from the Institute for Fiscal Studies to specify how he planned to cut welfare spending by £12bn in the next parliament, and warned the poor had lost most from the coalition’s benefit changes of the past five years.Britain’s leading experts on tax and spending also said the pickup in living standards hailed by the chancellor in his budget was the slowest in modern history and “no cause for celebration” – although the IFS did suggest living standards on current projections would be higher in 2015 than 2010, a finding that was hailed by Osborne.Related: Budget 2015: beneath George Osborne’s performance was a party on the defensive | Jonathan FreedlandRelated: Osborne will need unprecedented cuts in welfare to meet targets, says IFS Continue reading...

Greece has agreed to present a new list of reforms plan quickly, after top-level overnight talks in Brussels

In the medium-term, Next has nothing to worry about – even if the bottom of Wolfson’s profits range for the current year is £785m, or almost no growthNext shareholders should not despair: their chief executive, Lord Wolfson, may be “very cautious” about the year ahead but that represents only a modest downgrade on his normal mood in March.This time last year, he thought Next’s pre-tax profits would be £730m-£770m. In the event, Wolfson unveiled £782m on Thursday – and that was achieved even with a mild weather-related warning last autumn. Continue reading...

In his budget speech (Report, 19 March) the chancellor, George Osborne, forgot to mention the following eight factors: missed target to eliminate the deficit by end of this parliament; larger debt in the government’s five years than Labour accrued over 13 years in office; tax breaks for millionaires and hedge funds; a million people using food banks; 59% rise in working people forced to claim housing benefit; 1.4 million people on zero-hours contracts; record numbers of people living in poverty; and another £60bn in cuts still to be found before 2020. All seemed to have slipped George’s memory.

Housing benefit and pensions are likely to keep rising, as will tax credits. As the Institute for Fiscal Studies says, it’s time we knew where the cuts will fallAny challenge from the Institute for Fiscal Studies is a hard one for George Osborne to dodge.The tax-and-spending watchdog wants him to explain how he plans to cut welfare spending in the next parliament. Continue reading...

Rolling coverage of all the day’s political developments as they happen, including George Osborne and Ed Balls’ post-budget interviews, and the IFS post-budget briefing

Political parties lobbying for curbs on immigration may be missing the bigger picture – Britain needs foreign workers to avoid deeper cuts and higher taxesGeorge Osborne’s sunny economic forecast and much of his claim that Britain is a “comeback country” have more to do with higher than expected levels of net inward migration than his stewardship as chancellor or the falling oil price.That is not a verdict that you are likely to hear from the Conservatives or from Labour for that matter, both of which like to appear as parties opposed to mass migration, but the Office for Budget Responsibility makes clear that it is one key factor fuelling Britain’s economic recovery. Continue reading...

The UK’s macroeconomic policy is uncoordinated and still unduly influenced by political factors, as the new budget proposals showThe lack of coordination of the different parts of UK macroeconomic policy – ­fiscal, monetary and financial­ – has caused problems for some time now. Political, not economic, factors have continued to have undue influence. They are much in evidence currently in the chancellor’s proposal to run budget surpluses in the future, in spite of his earlier quite elaborate extensions to both financial and prudential regulation. If these new arrangements work, there is no need to build up surpluses to offset the effects of a future crisis and this calls into question his motives for doing it.There are important lessons to learn from the years before the financial crisis, when financial liberalisation in the UK and elsewhere led to huge increases in private sector debt based on highly speculative collateral requirements. This fuelled a rapid increase in the consumption-to-income ratio, the major engine of growth in the economy then. After two years of fiscal consolidation, Labour also slackened the fiscal stance in the early 2000s. If the Bank of England had been operating independently as planned, it would have tightened monetary policy, which would also have curbed the asset bubble and limited the excessive risk­taking in the financial sector, as well as acting simultaneously to offset the fiscal relaxation. This, however, did not happen, either due to a complete failure of the Bank to understand these developments or because it was not actually operating independently. Continue reading...

Ed Balls, the shadow chancellor, says the plans laid out in George Osborne's budget cannot be paid for without cuts to the NHS or a rise in VAT. Balls says the chancellor did not explain how he will pay for promises made in the budget on Wednesday. He says Labour would provide a 'better, fairer, more balanced plan' for the economy Continue reading...

The Fed has signalled it’s changing its approach to interest rates – and that means consumers are in for a volatile six monthsThe Federal Reserve isn’t going to be “patient” any more. Dropping that one word from the language surrounding policymakers’ approach to future interest rate hikes may seem minor, but it’s a significant change for savers, investors and borrowers.Last December the Fed signalled that the era of ultra-low interest rates was coming to an end. But it added it would patient about deciding when. Wednesday’s decision to drop the P-word throws open the doors to the first increases in lending rates since 2008, and means that Janet Yellen and her fellow Fed officials will respond to economic data on a meeting-by-meeting basis. Continue reading...

George Osborne, the chancellor, says his budget offered help for workers, savers and first-time buyers because his government has made difficult decisions. Speaking on Thursday in Tilbury, Essex, Osborne says his decisions have allowed him to protect the NHS and to invest in mental health services. The chancellor says that in the upcoming election voters need to understand that a strong economy is necessary for vital services to be maintained Continue reading...

Thinktank warns that extra £20bn will need to be saved – while protecting pensions – even if austerity targets are relaxed as plannedThe Treasury will need to find “unprecedented” welfare savings over the next three years for the government to achieve its public spending plans, according to an influential thinktank.The Institute for Fiscal Studies said the chancellor’s plans require welfare cuts that have eluded ministers over the past five years.

Prospect of tough post-election squeeze overshadows £3bn in pre-election budget’s gains for first-time buyers and savers

Robert Chote says consumers will provide momentum in coming term as chancellor’s amended austerity cuts put pressure on state-funded enterprisesPublic services face a “rollercoaster” ride over the next five years, the government’s fiscal watchdog has predicted, after George Osborne trimmed his austerity plans in the budget.The Office for Budget Responsibility has made radical changes to its public finances outlook after Osborne used his pre-election budget to scrap plans that would have meant the biggest squeeze on public spending since the 1930s by the end of this decade. Continue reading...

In response to budget, Labour leader claims chancellor has hushed up the fact that NHS faces even deeper cuts under the next parliament

George Monbiot is right that corruption poses a vast challenge to all economies (Let’s not fool ourselves. We may not bribe, but corruption is rife in Britain, 18 March), but he is wrong to suggest that institutions such as the World Economic Forum are standing idly by waiting for the problem to solve itself. He correctly points out that one of the major problems with tackling corruption is actually measuring it. Here, our annual survey of global executives has been successful in starting debates in countries where it is commonplace. Far better, though, to fix the international system so that loopholes and opportunities for exploitation are not there in the first place.Our eyes are on this bigger prize, which is why we convene leaders from business, civil society and government countless times throughout the year to explore and design ways to build institutions, policies and regulatory regimes that not only promote transparency and ethics but guarantee them. It is why we encourage debate in Davos on income inequality and trust in leadership. This is not lip service: it is action in the interests of every stakeholder. Continue reading...

He poses as a steadfast steward, but the record as well as the budget suggests that he is a man who reliably puts expediency above principleHe is reliably economical with words and in three sparse budget sentences the austerity chancellor reviewed his tenure and set out the Conservative election campaign: “We set out a plan. That plan is working. Britain is walking tall again.” With the UK edging out from the shadows of the great recession, this chancellor’s steadfast stewardship is a powerful election asset – if it is believed.On any objective appraisal, however, steadfast is not a word to apply to George Osborne: review the statistics in the light of all his original promises and he emerges instead as the chancer chancellor. Continue reading...

A little good economic news goes a long way in the chancellor’s budget speechRabbit, rabbit, rabbit, rabbit. The Tory backbenchers were starting to get a bit restless. They wanted their pre-election feelgood rabbit but the chancellor just wanted to rabbit. And cluck. Sudden weight loss, sweaty forehead, pallid features and half-dead eyes; George Osborne had been re-reading Trainspotting.“We choose the future, we choose families, we choose the future,” he began. The second future was a different future to the first future: in the second future you also got a fucking big TV thrown in. The chancellor had first tried his line in junky-chic at the Conservative party conference last September and it hadn’t gone down particularly well then, either. A typical Osborne speech works best as aversion therapy and the Tories generally try to limit his public appearances. For the budget, they have to grin and bear it. Continue reading...

Central bank decision to raise interest rates after six years comes after months of impressive jobs growth, but IMF director warns of market ‘temper tantrum’The US Federal Reserve called time on an era of historically low interest rates on Wednesday.In its latest statement on the health of the US economy the central bank moved away from a pledge to be “patient” before deciding to raise interest rates. Economists expect that interest rates could now rise by the end of the summer, the first rise in more than six years. Continue reading...

Part of Chancellor’s speech claims living standards have completely recovered over course of parliament but metric he is using is not so clean cutIn a sharp rebuttal to Labour accusations that living standards have been squeezed over the course of this parliament, George Osborne said the following during his budget speech:“You can use the most up-to-date and comprehensive measure of living standards which is real household disposable income (RHDI) per capita. In other words, how much money families have to spend after inflation and tax. Continue reading...

Chancellor says stability would be greatly threatened if Athens exited eurozone and defends UK joining Asian Infrastructure Investment BankGreece’s financial crisis and the recent plunge in oil prices pose real risks to Britain’s economy, the chancellor warned in his budget speech, even as he unveiled better than expected growth forecasts for the UK.

Chancellor also signals end of austerity before the end of next parliament in statement packed with pre-election policiesGeorge Osborne delivered a pre-election budget designed to herald a “comeback Britain” on Tuesday, announcing tax cuts for savers and first-time buyers but prompting accusations that the Tories would be forced to slash public spending to levels not seen since 1938.In an effort to woo voters in middle Britain just 50 days before the general election, the chancellor said 95% of taxpayers would not face any savings tax under his plans for a personal savings allowance. Drinkers were also given 1p off a pint of beer and drivers benefited from another freeze in fuel duty as the chancellor repeatedly stressed that his “economic plan” was working.Related: The Guardian view on George Osborne: the chancer chancellor | EditorialRelated: How was George Osborne’s budget performance? Our columnists' verdict Continue reading...

Guardian writers give their reactions to the chancellor’s pre-election budget statement Continue reading...

George Osborne has unveiled his 2015 budget today: here are the key pointsIn 2015 revised up to 2.5% from 2.4% in the autumn statement.Rowena Mason, political correspondent: This is good news for the chancellor but he is treading carefully when it comes to boasting about growth to make sure voters do not think his work is done when it comes to the economy. He therefore argues the sun has only just begun to shine.RM: This is helping Osborne as it means he will have lower interest on the public debt but he is still way below the 2% inflation target.RM: He says the money raised from the bank sale will be used to pay off national debt and not fund pre-election giveaways in a move that may disappoint Tories fighting marginal seats.RM: Osborne is now able to say his original target has been met of getting the national debt share falling by the end of the parliament – although it is still a year later than predicted in emergency budget in June 2010.RM: The massive fall in the surplus Osborne was predicting for 2018-19 means less opportunity for promised future hand-outs. It is an easing of his plans for austerity that may be designed to kill Labour’s argument that he was shrinking the state to size of 1930s.RM: This decision is a political trap for Ed Balls. Osborne poached the plan from Labour, which said it would be used to pay partly for the tuition fees cut.RM: Labour has made tackling tax avoidance a major campaign issue. This appears to be an attempt to put the Conservatives on the same page when it comes to stopping multinationals shifting profits offshore. However, yet more claims of raising money through cracking down on tax avoidance may be met with scepticism as they rarely seem to raise as much as expected.RM: This appears to undo a big tax rise on the industry in 2011 when the oil price was higher. He makes a political argument that this is only possible because the UK is still together - and could not have been afforded in an independent Scotland.Related: Osborne offers tax cuts and help-to-buy Isas in highly political 2015 budgetRM: There are big cheers from the Tory backbench for this one. It is a tangible cut to red tape that will make a difference to some of their core voters. The abolition of employer NICs for under 21s and self-employed is a bid to boost employment further.RM: A beer duty cut had been widely expected but it is also cheer for wine, whisky and cider lovers - for voters across the drinking spectrum.RM: Osborne has frozen or cut petrol duty for so many budgets in a row it would have been impossible for him to put it up this time.RM: This had been widely trailed - originally a Liberal Democrat policythat the Conservatives have tried to adopt and take credit for since going into coalition. Repeatedly raising the threshold from £6,475 to £11,000 in successive budgets has also been criticised for failing to do anything for the very lowest earners who are already exempt from income tax.RM: This is the rabbit out of the hat. It is a small-c conservative policy to reward saving will please the Tory faithful and give activists something new to talk about the doorstep but it’s not a eye-catching as some may have been hoping for. Continue reading...

A demonstration organised by the Blockupy movement to protest against the policies of the European Central Bank began after it officially inaugurated its new headquarters on Wednesday morning in Frankfurt, Germany. Thousands of protesters took part while riot police equipped with water cannon established a wide security perimeter around the ECB site Continue reading...

Minutes of the March MPC meeting showed members are now concerned that a persistently strong pound could keep inflation well below the Bank’s 2% target for a prolonged periodA strong pound has increased the chance of a prolonged period of very low inflation, leaving the Bank of England in no hurry to raise interest rates, its senior policymakers suggested.

Thinktank says easy money is building up fresh financial stability risks and urges governments to do more to shore up recoveryAbnormally low inflation and interest rates are building up new risks for the global economy, a leading thinktank warned on Wednesday, as it called on governments to play a greater role in shoring up the recovery.

Office for National Statistics said average earnings, excluding bonuses, grew at an annual rate of 1.6% in the three months to JanuaryEarnings growth for Britain’s workers has slowed, undermining George Osborne’s hopes of stoking up the feelgood factor in the runup to May’s elections.On the day the chancellor delivers his pre-election budget, official figures showed that while unemployment has continued to fall rapidly over the past three months, wage growth has faltered. Continue reading...

George Osborne will try to single out workers as the main winners from the budget. But the reliance on low-paid jobs means many will not benefit from a rise in personal allowancesTories and Liberal Democrats will describe today’s budget as a triumph for working people. The chancellor George Osborne will say there have been many triumphs over the last five years, from boosting the living standards of pensioners to cutting corporate taxes, but he and his Lib Dem opposite number Danny Alexander will single out workers as the main winners.The claim hangs by two threads. First is a boom in jobs that has defied most predictions. The second is the £10,000 income tax threshold, which is due to rise to £10,600 after April and may even top that should the coalition agree on an even bigger tax giveaway.Related: Budget 2015: what we know already and what we can expect Continue reading...

The chancellor, George Osborne, delivers his final budget of the coalition government on Wednesday and his performance in the House of Commons is expected to follow a tried and trusted structure. The Guardian's economics editor, Larry Elliott, talks us through what to expect in the 2015 budget. Just watch out for the rabbit Continue reading...