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...

Rising inflation, slowing growth, a weakening currency, surging debt and a deepening corruption scandal - Brazil is suddenly looking vulnerableThe more you look at Brazil’s fundamentals, the more shaky the country looks. And we are not talking about the defensive prowess of David Luiz here. It is the country’s economic backline that risks tumbling down like a set of dominoes.When a Latin American economy is in trouble a good place to start is its inflation rate. Brazil’s is today running at 7.5%. While this is nowhere near the 2,000-3,000% of the early 1990s, when the price of everything went up several times a week, it is far higher than the central bank’s mid-point target of 4.5%. Continue reading...

Bank of England finds inflation expectations at lowest level for 13 years as public mindset adapts to cheaper oil and potential deflationThe British public’s expectations for inflation are at the lowest level in more than 13 years as the nation adjusts to the impact of lower oil prices and the prospect of the first bout of deflation in more than half a century.Inflation expectations for the year ahead fell to 1.9% when the public were surveyed by the Bank of England in February, compared with 2.5% when they were asked in November. Continue reading...

Despite much to celebrate, women continue to be hit hardest by financial crises

Li Keqiang warns ‘the difficulties we are to encounter in the year ahead may be even more formidable than those of last year’China’s premier Li Keqiang cut the nation’s growth target to “around” 7% on Thursday, reiterating the need to pursue reform as development slows and the likelihood of tougher times ahead for the world’s second largest economy.

Mario Draghi said buying assets was the final set of measures and that governments needed to pick up the batonThe European Central Bank will press the button on Monday on a €1.1tn stimulus programme that will play a major role in putting the eurozone back on track for sustained growth, its president Mario Draghi said on Thursday.The ECB will pump the €60bn a month into the euro economy as the first phase in its quantitative easing programme that Draghi said would combine with low oil prices and recovering consumer confidence to spur growth and propel inflation back up close to its 2% target. Continue reading...

Business secretary opens up division with Tories by calling for investment in skills training and rail schemesVince Cable has warned that the next government must relax Whitehall spending budgets to support training and infrastructure projects in a move seen as taking the Liberal Democrats closer to Labour before the general election.In a speech in the City, the business secretary attacked the “archaic” way that public spending was controlled, calling for changes to boost areas such as skills training and new rail schemes. Continue reading...

It seems the judgment that the chancellor had no cash to spare for pre-election lollipops may well have been prematureAt the time of last December’s autumn statement, received wisdom in Westminster was that it marked the last major economic policy milestone before May’s general election.There is no financial room for pre-election giveaways, the logic went; and, anyway, by the time the chancellor stands up at the dispatch box on 18 March, it would be far too late for any to make themselves felt in voters’ pockets. Continue reading...

Figures reveal how American corporations continued to invest in the Irish Republic even during the recessionIreland has benefited from $277bn (£182bn) of US direct foreign investment in the past two decades – gaining more from American firms than Brazil, Russia, India and China combined.The figures from the American Chamber of Commerce in Ireland go back to 1990 and show corporations continued to cross the Atlantic even during the dark years of the recent recession. Continue reading...

The Bank of England cut interest rates to all-time low of 0.5% in 2009 in an emergency response to the global financial crisisUK interest rates have been on hold at an all-time low of 0.5% for six years after Bank of England policymakers voted for no change at their March meeting.It was at their March 2009 meeting that the Bank’s monetary policy committee decided emergency measures were required to address extreme circumstances. Continue reading...

A UK ruling on sovereign debt liabilities reminds us that US judges are not the world’s judgesLast July, when United States federal judge Thomas Griesa ruled that Argentina had to repay in full the so-called vulture funds that had bought its sovereign debt at rockbottom prices, the country was forced into default, or “Griesafault”. The decision reverberated far and wide, affecting bonds issued in a variety of jurisdictions, suggesting that US courts held sway over contracts executed in other countries.Ever since, lawyers and economists have tried to untangle the befuddling implications of Griesa’s decision. Does the authority of US courts really extend beyond America’s borders? Continue reading...

Farmers and managers are being encouraged to ‘do business creatively’ in the totalitarian state’s biggest domestic policy experiment since Kim Jong-un took powerNorth Korea is trying to invigorate its hidebound economy by offering more control and possibly more personal rewards to key sectors of its workforce in the country’s biggest domestic policy experiment since leader Kim Jong-un assumed power.The measures give managers the power to set salaries and hire and fire employees, and give farmers more of a stake in out-producing quotas. Some outside observers say they’re a far cry from the kind of change the North really needs, but they agree with North Korean economists who say it is starting to pay off in higher wages and increased yields.Related: Pyongyang is booming, but in North Korea all is not what it seemsWhat is happening in the enterprise area is a development of major economic significanceRelated: The North Korean women driving economic change Continue reading...

Online craft marketplace’s listing is expected to be largest tech IPO since 1999, bringing in hundreds of millions of dollars in investmentEtsy, the online craft and vintage goods marketplace, has formally filed its intention to float on New York’s Nasdaq stock exchange.The Brooklyn-based company, founded in 2005 by painter, carpenter and photographer Rob Kalin after he struggled to find anywhere to sell his handmade wooden computers, registered its intention of an initial public offering (IPO) on Wednesday night. Continue reading...

It is unclear whether the Bank’s employees are suspected of involvement in any attempt to rig the auctions, used as emergency lending during the credit crisis

Innovation and the proximity of knowledge-intensive jobs are more important than the decline of manufacturing in causing the divide between England and Wales’ largest cities and towns, according to a Centre for Cities analysisThe decline of traditional industries – often cited as an explanation for Britain’s north-south divide – does not alone determine a city’s economic success in the 21st century, according to analysis by Centre for Cities thinktank.In a study of 100 years of economic data from 57 of the largest cities and towns in England and Wales, researchers concluded that proximity to knowledge-intensive jobs and a city’s capacity for innovation were more important.The scale of the deindustrialisation challenge was such that the city still has some way to go; in 2013 Manchester still had 90,000 fewer jobs than it did in 1951. However, its recent successes suggest that it is on a new pathway of knowledge-based economic growth. Continue reading...

So household incomes are back to 2007 levels. This isn’t evidence of success but confirmation of how dismal economic performance has beenHousehold incomes are back to 2007 levels, before the crisis – though still below their 2009-10 peak. Does this in some way vindicate the government’s economic strategy? For most economists, even asking that question is bizarre. As the UK has got richer, average incomes have grown pretty consistently since the second world war. And after recessions, they have grown particularly fast – for example, between 1982 and 1985 they grew by about 3% a year.But this “recovery” has been different. As Paul Johnson, director of the Institute for Fiscal Studies, puts it: “It’s astonishing actually that seven years later incomes are still no higher than they were pre-recession, and indeed for working-age households they’re still a bit below where they were pre-recession.” For the chancellor, George Osborne, to claim this as evidence of economic success – “a major milestone in our recovery”, he told BBC Radio 4 today – is not really credible.Related: UK household incomes near pre-banking crisis levels, thinktank claims Continue reading...

Details of rises in retail sales and services sector output come on eve of ECB’s announcement of its bond-buying programmeShoppers across the eurozone went on a new year spending spree in January, raising hopes that the 19-member single currency area is bouncing back from the brink of a deflationary downturn.

European court rules that they should not be forced to move from London to the eurozone in a victory for the chancellorGeorge Osborne declared a victory over Europe on Wednesday after a landmark ruling that protected the City’s position as a major financial centre and prevented leading clearing houses being forced to move out of London.The European Central Bank had argued that clearing houses – such as LCH Clearnet, which step in between major banks and financial firms on big deals to guarantee the transactions – should be based in the eurozone as they handle euro-denominated deals.

Average income of people aged between 22 and 30 estimated to be 7.6% lower than before the financial crisis, according to Institute for Fiscal StudiesAverage household incomes in Britain have finally returned to their pre-financial crisis levels, but recovery has been very slow and working-age households are still worse off, according to a leading thinktank.The Institute for Fiscal Studies (IFS) said average incomes in 2014-15 are about the same as they were in 2007–08, before the banking crisis triggered a deep recession. Continue reading...

Business group asks George Osborne for measures to boost growth of UK’s Mittelstand in last budget before the general electionChancellor George Osborne should use his final budget before the general election to help Britain’s medium-sized firms while sticking to his deficit-cutting plans, the business lobby group CBI has said.CBI director-general John Cridland says the UK’s equivalent of Germany’s widely praised group of companies known as the Mittelstand, are the “backbone of the UK economy” and should be allowed to grow further with investment support, export help and a simpler tax system.This is a good opportunity for the chancellor before the election to support growth and investment well beyond the election, providing stability, certainty and simplicity for the UK’s Mittelstand to get themselves on the front foot.“So the chancellor must reward growing, ambitious firms with the tools to get on with the job of rebalancing the economy and lift productivity. There has been good progress on this front from the government, and the chancellor can now take further action to boost investment and innovation.”Innovation is fundamental to long-term growth and creating more high-skilled jobs in the economy. If we want to really get the full benefit of the great work going on in labs and workshops up and down the country, we need to encourage more firms to build their prototypes here in the UK.There is a growing pattern of re-shoring production back home and a super-charged tax credit could help keep that ball rolling. Continue reading...

British Retail Consortium said overall prices in February were down 1.7% on last year amid supermarket wars and drop in commodity costs

Institute for Fiscal Studies report finds that falls in inflation and unemployment, together with modest wage rises, have raised household spending powerAfter the longest decline in living standards this century, the fortunes of Britain’s workers have turned – with the average household ending the financial year in April better off than they were in 2008, according to a leading thinktank.In a huge pre-election boost for the government, the Institute for Fiscal Studies (IFS) said average incomes in 2014–15 are around the same level as they were in 2007–08 – before the banking crisis precipitated a deep recession. Continue reading...

Mark Carney says 42 cases have been sent to FCA following forex-rigging scandal and new Bank policies for staff to raise suspicionsBank of England governor Mark Carney has said 50 cases of potential market abuse have been uncovered following the foreign exchange-rigging scandal that led to the Bank’s own chief currency dealer being fired last year.The cases have come to light since March 2014 when the Bank launched an investigation into its own role in the scandal involving the manipulation of the £3.5tn-a-day foreign exchange markets.Related: Bank of England foreign exchange investigation too narrow, says MP Continue reading...

Rolling economic and financial news, as a new survey finds that investors are more concerned about Greece leaving the eurozone