An incisive analysis of how the controversial ideology has permeated modern lifeIn 1945, Antony Fisher visited the neoliberal economist Friedrich Hayek at the London School of Economics. Fisher, an old Etonian whoworked in the City, shared the Austrian's belief that the nascent postwar welfare state would eventually lead to totalitarianism. Fisher wanted Hayek's advice. Should he go into politics? No, the professor said, something like a thinktank would have far more decisive influence in the great battle of ideas".Fisher went on to found the Institute of Economic Affairs (IEA), the outfit widely credited, among other things, with incubating Liz Truss's disastrous premiership. Fisher later moved to the US, where he set up the Atlas Network, an umbrella organisation that now covers more than 450 thinktanks, including influential groups such as the Cato Institute and the Heritage Foundation. Many are charities. Few name their donors. Continue reading...
Democrats try to connect the dots as some in Saginaw wonder if Trump is just a better fit with the economy'Less than six months before the US presidential election on 5 November, anxiety over the economy looms large. While official figures show a significant recovery since the pandemic, many Americans aren't buying it. As election day approaches, the Guardian is dispatching reporters to key swing counties to gauge how they are feeling - and how they might vote.Joe Biden should be worried about Janel Turner, owner of Kreole Qweenz, a gumbo shop in downtown Saginaw, Michigan. Continue reading...
This live blog is now closed, you can read more on this story hereRachel Reeves, the shadow chancellor, is giving a speech on the economy in Derby.She says her proposition is that Labour is the natural party of British business".Yes, I would describe myself as a Christian socialist in the best traditions of that [term] because that's about putting people first and to do that, you've got to have a set of policies that will deliver for people.I think it's the best tradition of the things that have been delivered in the UK, whether it's the national parks or the NHS, have come from people with a similar background to mine. Continue reading...
CBI data for May suggests slowdown in price growth is encouraging shoppers in Britain to buy moreSales in British shops have bounced back in May, according to retail data that suggests slowing inflation is encouraging customers to buy more.A net balance of +8% of retailers told a Confederation of British Industry (CBI) survey that sales volumes were up this month compared with the same period a year earlier - a sharp improvement on the -44% year-on-year figure for April. The balance is the difference between companies who answered that the number of items was up" or down". Continue reading...
Biggest drop since November 2021 as unseasonable' weather pushes retailers to continue promotionsShop price inflation has eased to the lowest level since November 2021 after retailers cut the price of big purchases such as furniture and TVs as households keep a tight rein on spending amid cost of living pressures and poor weather.Prices rose at an annual rate of 0.6% in May, down from 0.8% in April - the slowest pace since November 2021 - according to the latest monitor from the British Retail Consortium (BRC) trade body and the market research firm NielsenIQ. Continue reading...
The economy is growing again and inflation is only just above government's 2% target, but it is all too little, too lateWinning five elections in a row is something no party has managed in modern times, and there are reasons for that.Voters tire of the ruling party and want something new and fresh. Even more importantly, being in power for a long time increases the chances of bad stuff happening that tarnishes the government's reputation. In the last 50 years, there has been a recession or economic crisis every 10 years or so on average: the mid 1970s, the early 80s, the early 90s, the late 2000s and the early 2020s. Continue reading...
Both major parties will try to conduct their campaigns without mentioning Brexit. But we cannot afford not to discuss itThings can only get better" was a Labour party slogan before the 1997 general election. The reason why Rishi Sunak has surprised the nation, and what my old colleague Alan Watkins used to call the chattering classes", by calling for a snap election is that Sunak and his chancellor, Jeremy Hunt, have apparently decided that things can only get worse.With low inflation figures - at last - and the possibility of a cut in interest rates, the two of them have been talking the economy up as though there were no tomorrow. Continue reading...
Hastings has the highest number of young people in England in bad health. But, amid a national epidemic of forced economic inactivity, there is hopeOn a Wednesday night in Hastings, a handful of under-18s gather in the back of a former newspaper building for a weekly Dungeons and Dragons night. Around the table, a teenager peers from behind a floppy fringe, telling the other players of a monster with jaws wide enough to swallow a man whole. Behind him, two boys are playing pool. For the moment, there's not an iPhone in sight.Sidney Ewing, the youth worker overseeing the programme, says the majority of young people who come to the centre feel uncertain about their future. Their most popular night is for 16-to-18s, she says, a generation who lost two critical years of their education to Covid, with only screens for school and socialising. A lot of them say they aren't ready to go to university or start work because of their mental health," she says. You hear that a lot: I need to sort myself out first.'" Continue reading...
by Josh Halliday North of England editor on (#6N28Y)
The Beatles' home city is pulling out all the stops for the arrival of the US megastar's world tour in the UKThe name of music royalty hangs from Liverpool's historic buildings. Art installations mark the biggest pop hits. An army of loyal fans is about to invade. But this isn't Beatlemania. This is Taylor Town.For one fortnight only, Liverpool will be transformed into a Taylor Swift playground" to give the US megastar a proper scouse welcome" as her history-making world tour lands in the UK. Continue reading...
by Hilary Osborne Money and consumer editor on (#6N1WV)
We analyse a key point of contention in the general election campaign: the government's record on pay, housing, energy and food billsIt is a simple question - and it will be at the heart of the general election campaign. After 14 years of Conservative government, people are asking: am I any better off? Continue reading...
From unemployment to inflation, the key data the Tories and Labour must explain to votersRishi Sunak's slim chance of pulling off a victory against the odds in July's general election depends on voters buying the argument that tough decisions taken since he became prime minister are paying off.That claim will be tested over the next six weeks - with every piece of economic news more closely scrutinised than usual for evidence that the UK's tentative economic recovery is gaining momentum or has started to falter. Continue reading...
Companies in the oil, hotel, meat and other sectors are price-gouging the US public. They're not hiding it, eitherIn 2022, the Biden administration and the oil industry were in a brutal fight over oil prices. The president was demanding that domestic oil producers invest and drill more to address spiking costs, but Texas frackers were recalcitrant. Whether it's $150 oil, $200 oil, or $100 oil, we're not going to change our growth plans," the Pioneer CEO, Scott Sheffield, said, echoing comments from other leaders at different domestic firms. Profits would go to investors, not to more rigs to address pain at the pump.The oil barons won the fight. Profits in the oil industry jumped from virtually nothing in 2020 to the hundreds of billions in 2021, and then doubled again in 2022. And yet, economists did not see any sort of plot at work. Don't blame the oil companies for their high profits," said the economist Olivier Blanchard. It is not price gouging, just how markets work."Matt Stoller is a writer and former policymaker who focuses on the politics of market power and antitrust Continue reading...
While price growth has fallen sharply, with April's 3.4% lower than March's 3.5%, it is still higher than Fed's medium-term goal of 2%Policymakers at the Federal Reserve have expressed concern over stalling progress in their fight to bring down inflation.Although price growth has fallen sharply since peaking at its highest levels in a generation two years ago, it has remained stubbornly above where officials want it to be. Continue reading...
Anglo agrees to enter talks with larger rival, though BHP calls its 38.6n offer final'Financial markets have scaled back their expectations for an interest rate cut in June, and August is also looking slightly less likely. They are forecasting a reduction by September, though.Before today's inflation data, which showed services inflation is more stubborn than expected, markets had fully priced in two rate cuts this year, one by August and another one before the end of the year. Investors are now split on whether there will be a second reduction.The cost-of-living crisis is not over - no matter how much ministers pretend it is. Prices are still going up. Food and energy bills are much higher than a couple of years ago. And many are being hit by soaring mortgage repayments.That's because household budgets have been decimated by the highest price rises in the G7 and wages have flatlined over the last 14 years.Pay packets are still worth less today than in 2008, with working people on course to end this Parliament poorer than at the start. Continue reading...
ONS says budget deficit 1.5bn higher than previous year due to extra spending on benefits and weaker tax revenuesJeremy Hunt's plans for pre-election tax cuts have received a setback after higher spending on benefits and lower tax receipts pushed government borrowing above 20bn last month.The Office for National Statistics (ONS) said the budget deficit - the gap between public spending and tax receipts - was 1.5bn higher than a year earlier and the fourth highest for an April since records began. Continue reading...
A reduction in the consumption of carbon-intensive products and services is not something to complain about, writes Terry CannonYou cannot have it both ways and complain that global warming will harm GDP (Economic damage from climate change six times worse than thought - report, 17 May). A drop in global GDP is one of the best things that can happen to reduce global warming if it reduces consumption of carbon-intensive products and services. GDP is a very poor way to measure the negative impacts of global warming.Much more relevant is to understand people's wellbeing and their livelihoods which, as is well known, are not measured verywell by GDP. What needs to be understood is how the different impacts of climate change affect the many types of livelihood. Continue reading...
With prices forecast to increase at their slowest pace since 2021, we look at the biggest risers in goods and servicesAfter three long years of feeling the pinch, UK consumers finally look likely to get some relief from surging prices on Wednesday, when the Office for National Statistics releases its inflation figures for April. The data is widely expected to show that prices are rising at the lowest rate since summer 2021.Inflation of about 2% is significant for economists, marking a long-awaited snap back towards the Bank of England's target. It still means prices are rising for the consumer, but not as steeply as they have been. The last few years of inflation have been the sharpest within at least 40 years, jumping the equivalent of 11 years of normal 2% inflation within just three years, a total rise of 22%. At the same time, real wages are down by 2.3% since early 2021, making it harder for most people to afford their energy bills and the weekly shop. Continue reading...
Body says 30bn fiscal gap cannot be filled by higher growth or extra borrowing. So how will No 11 ease pressure on public finances?A report that tells the UK government it faces a 30bn funding gap that cannot be filled by higher growth or extra borrowing is a blow to both the current chancellor and the next one.Tuesday's International Monetary Fund assessment of the UK economy and Whitehall spending argues that betting on the economy revving up over the rest of the decade will not be sufficient to pay for all the likely welfare bills associated with an ageing population. Continue reading...
World body's latest health check of UK economy says unpopular revenue-raising measures' may be neededJeremy Hunt is preparing a pre-election cut in national insurance despite a warning from the International Monetary Fund of a looming 30bn hole in the public finances, Downing Street has indicated.Rishi Sunak's spokesperson said the government rejected the IMF's argument that there was no room for a third cut in NI in less than a year and that the Treasury should instead be thinking about tax increases or spending cuts. Continue reading...
Bim Afolami's comments distance British government from protectionist moves by USThe UK cannot afford to give the cold shoulder" to China, the City minister said on Monday, in comments that will distance the British government from the Biden administration's protectionist crackdown.Addressing financial services bosses at the City Week conference in London's Guildhall, Bim Afolami said it was crucial" to engage with strategic competitors such as Beijing, and that the UK risked losing control of its economic future if it failed to find common ground. Continue reading...
US seafood restaurant chain has been struggling with lease and labor costs, and promotions such as its all-you-can-eat shrimp dealRed Lobster has filed for Chapter 11 bankruptcy protection days after shuttering dozens of restaurants.The US seafood restaurant chain has been struggling for some time with lease and labor costs piling up in recent years and also promotions such as its signature all-you-can-eat shrimp deal. Continue reading...
Protectionism in the form of tariffs is justified but the focus will be on whether Beijing retaliatesThe global economy is fragmenting and a new era of protectionism has dawned. Dreams by free marketeers of a frictionless world in which goods and services moved seamlessly from country to country are dead.That was the clear message from Joe Biden's decision last week to target China with a range of new, much higher tariffs on electric vehicles and a range of other products crucial to sectors seen by the White House as vital to the future health of the US economy and to national security. Continue reading...
Companies are deserting the FTSE because of a shortage of investment - but there is a solutionBritain had itin its power to be a genuine hi-tech superpower. Instead, the opportunity slipped through our fingers, as we have been tech-stripped" on a monumental scale. On one estimate, up to half the FTSE 100 could now be populated by vigorous British tech companies but those are all now foreign owned with one exception, Sage. The implications for our industrial, business, services and even defence base are dire - one of the most important condemnations of the last 14 years.The chancellor, Jeremy Hunt, complacently declared last week that this was just how capitalism operated - even as we learned that another 21 companies worth 24.6bn had joined the exodus from the UK's public markets this year alone. It was a variant of Philip Hammond's comment in 2016 on Japanese SoftBank taking over yet another of our tech jewels, the chip designer ARM. What was obviously an exercise in technological vandalism was instead proof positive that Britain was open for business", a view echoed at the time by that other high priest of wealth generation, Nigel Farage. This reflex mantra of Tory ministers and Brexiters alike is a necessity: to say anything else would reveal the paucity of their world view. Continue reading...
The chancellor will have good news to pass on this week. But he knows the cost of living crisis may not be over yetJeremy Hunt knows it. Rachel Reeves knows it too. The Office for National Statistics will come bearing good news on Wednesday when it releases the latest inflation figures. The only real question is just how good the news will be.In the year to March, annual inflation as measured by the consumer prices index stood at 3.2%. The figure for April will be a lot lower and if Hunt gets lucky it might even fall as low as the government's 2% target. Continue reading...
We and the EU must show the Russian leader we mean business and seize $300bn of his country's central bank fundsVladimir Putin is digging deep to win the war with Ukraine. And it could be only months before the tide turns in his favour. If he pummels Ukraine into submission, a military victory will quickly become a wider economic disaster, which is why we underestimate at our peril how much we need to focus on the war.The Russian leader, who was inaugurated for a fifth term as president a fortnight ago, ditched his old friend and defence minister Sergei Shoigu on Monday in favour of an economist to make sure Moscow's war machine runs more efficiently. That economist, Andrei Belousov, has been likened to Albert Speer, the architect who served as the minister of armaments and war production in Nazi Germany. Continue reading...
A 1C increase in global temperature leads to a 12% decline in world gross domestic product, researchers have foundThe economic damage wrought by climate change is six times worse than previously thought, with global heating set to shrink wealth at a rate consistent with the level of financial losses of a continuing permanent war, research has found.A 1C increase in global temperature leads to a 12% decline in world gross domestic product (GDP), the researchers found, a far higher estimate than that of previous analyses. The world has already warmed by more than 1C (1.8F) since pre-industrial times and many climate scientists predict a 3C (5.4F) rise will occur by the end of this century due to the ongoing burning of fossil fuels, a scenario that the new working paper, yet to be peer-reviewed, states will come with an enormous economic cost. Continue reading...
Barclays' analysis may be slightly off the mark, but the megastar is tapping into a new trend in spendingTaylor Swift has long been credited with an outsized influence on music, celebrity culture - even politics. But reviving the UK's flagging economy may be too much to ask, even of the sequinned megastar.Research published this week by analysts from Barclays pointed to the extraordinary spending surge that ensues when Swift touches down, and suggested she could bring a 1bn boost to the UK. Continue reading...
The Treasury has been quietly selling off the government's stake at ever-higher prices on a rising market. Why mess with that?The government's plan to sell shares in NatWest to the general public is so advanced that the odds on the chancellor pulling the plug on a pet project are slim. Investment bankers from Barclays and Goldman Sachs are doing their well-remunerated stuff, and M&C Saatchi is knocking up some adverts. The go-ahead for a rah-rah pre-election retail share offer is expected any week now.In a rational world, though, Jeremy Hunt would call the whole thing off. He already has a tried-and-tested method for disposing of the state's NatWest shares and - this is the point - it is working splendidly. Continue reading...
Peter Dutton has argued for a reduction in migration and a winding back of Labor's overhaul of industrial relations and environmental protections to make mining approvals faster. The opposition leader said his 'vision' was to 'get the country back on track'
Restrictions on collective power led to decades of exploitation and stagnant pay for workers. Why not try another way?Profiteering is nothing new. Stanley Baldwin had a pithy description for the new intake of Conservative MPs at the 1918 general election, noting that they were a lot of hard-faced men who look as if they had done very well out of the war". The future Tory prime minister was right. Many companies had found a war economy greatly to their liking, securing lucrative government contracts and making a mint in the process. Profiteering was rampant.Sharon Graham, the general secretary of the Unite union, says something similar has been happening since the war on Covid began in 2020. A study of the reports and accounts of almost 17,000 firms - big and small - showed that pre-tax profit margins were, on average, 30% higher in 2022 than they were in the years immediately before the pandemic began. Continue reading...
Cold and wet weather also thought to have led to more lambs dying in early season, as Morrison drops 100% British lamb pledgeThe price of British lamb has hit an all-time high as cold weather and disease in the UK and difficulties with imports have combined with a surge in demand.Wholesale prices have soared by more than 40% year-on-year to more than 8.50 a kg , while the amount of lamb expected to be produced in the UK this year is forecast to shrink by 1.4%, according to the Agriculture and Horticulture Development Board (AHDB). Continue reading...
There are alternatives to continued austerity - look at Labour's achievements in 1945, writes Derrick Joad, while Pete Lavender advises against Thatcherite economicsPerhaps the gaslighting is not restricted to the Conservatives (Rachel Reeves accuses Tories of gaslighting' public over economy, 7 May). Yes, the economy is in a mess, but there are alternatives to continued austerity and the continued impoverishment of increasing numbers of people. The Labour government in 1945 faced a much more difficult task than that facing governments today. Instead of listening to the siren voices of the City, it prioritised the wellbeing of people over reducing the national debt. The City may have disliked the radical policies of the government, but it could live with that, as it realised that there was a workable plan for economic recovery.A policy that prioritised people's wellbeing would be one that redistributed income from the wealthiest to the poorest. Labour faced a far worse housing crisis then than it does today. The government rejected the idea of subsidising private rents, realising it would be a cash bonanza for landlords who could keep increasing rents, knowing the government would pay. Instead, it introduced rent controls and security of tenure, and started a large social housing programme - all of which kept housing costs down to an affordable level. Vienna today offers a contemporary example of benign intervention in the housing market, to the benefit of the Viennese people. Continue reading...
Unite union study of 17,000 firms shows sectors from energy to banking, and vets to car dealerships, profited from inflation crisisThousands of UK companies have exploited their corporate power to increase profit margins since the pandemic, redistributing wealth from employees to employers and shareholders, according to the biggest study yet of data since 2019.A trawl through the accounts of 17,000 companies by the trade union Unite found pre-tax profit margins were 30% higher on average in 2022 compared with the average across 2018 and 2019. Post-tax margins were on average 20% higher. Continue reading...