by Richard Partington Economics correspondent on (#6KAR6)
Chancellor's unfunded proposal would be work of many parliaments' and depended on growth of economyJeremy Hunt has admitted his unfunded proposal to scrap employee national insurance could take more than a decade, after conceding it would require a sharp increase in economic growth to avoid making cuts to public services.With the government under growing pressure to explain how the plan could be afforded, the chancellor told MPs on the Commons Treasury committee: It won't happen in one parliament, but it's a long-term ambition." Continue reading...
Human development report finds the pandemic, conflict, globalisation and populism have combined to disproportionately affect lower-income countriesThe gulf between rich and poor countries continues to grow, according to the UN, furthering the reversal of a 20-year trend where the gap steadily shrank until 2020.The latest human development report found that although each of the 38 OECD (Organisation for Economic Co-operation and Development) countries has recovered from the Covid pandemic, only half of the least-developed countries have done so. Continue reading...
CMA says government may need to step in to protect consumers from rising ground rents; watchdog intervenes to free over 500 households from problematic' ground rent clausesAlso today: UK ministers will publish legislation to quash the convictions of hundreds of post office operators who were prosecuted during the Horizon scandal, marking a significant victory for victims after decades of campaigning.The legislation on Wednesday will automatically overturn convictions of theft, fraud and false accounting that were handed down in connection with Post Office business during that period. It will cover prosecutions brought by the Post Office and the Crown Prosecution Service in England and Wales between 1996 and 2018.Although by far not good enough, 2023 ended better than what I had expected at the beginning of the year. Despite losing a lot of Yeezy revenue and a very conservative sell-in strategy, we managed to have flat revenues.We expected to have a substantial negative operating result, but achieved an operating profit of 268m. With a very disciplined go-to-market and buying process, we reduced our inventories by almost 1.5bn. With the exception of the US, we now have healthy inventories everywhere.Our ambition is to return to strong growth and continue our margin expansion, as reflected in our new mid-term guidance Continue reading...
We're keen to hear from employers in Britain which job openings they have been having trouble to recruit for, and whyEmployers in the UK have cut back on hiring new staff, pushing the number of advertised vacancies down on the quarter by 43,000 to 908,000, while the unemployment rate rose unexpectedly to 3.9% in January from 3.8% in December, according to the Office for National Statistics.We're interested to hear from UK employers whether there have been vacancies in their companies they have been struggling to hire qualified staff for, and why they think that has been the case. Continue reading...
Consumer price index rose at annual pace of 3.2% in February, up slightly from 3.1% the previous monthInflation ticked higher across the US last month as Joe Biden puts the economy at the heart of his re-election bid.The consumer price index rose at an annual pace of 3.2% in February, up slightly from 3.1% the previous month. Continue reading...
Exclusive: most renters surveyed by Harris Poll say the areas they live in have become so unaffordable they are barely livable'The American dream of owning your own home is dead, according to the majority of renters surveyed in a new poll shared exclusively with the Guardian, and the areas they live in have become so unaffordable they are barely livable".The poll, conducted by the Harris Poll Thought Leadership and Future Practice, asked survey takers to identify themselves as renters or homeowners, along with other demographic information. Those polled were asked their opinion on home ownership in the United States. For many, especially renters, the outlook is bleak. Continue reading...
Countries are placing a higher priority on resilience and security in the wake of the pandemic and as tensions growIn 2012, shortly before becoming China's top leader, Xi Jinping visited the Port of Los Angeles to discuss boosting trade. What then looked like a locus of cooperation has now become another site for suspicion as Sino-American relations remain tense. Last month, the Biden administration announced $20bn of funding for port infrastructure, much of it to replace cargo cranes that have almost all been made by a state-owned Chinese firm. The US is concerned because the sophisticated pieces of equipment manage information about containers and their contents, their origins and their destinations - and can be remotely programmed and controlled. It wants to restart domestic production of the cranes, which have not been made in the US for decades.The move comes amid a much broader economic rethinking: what the EU foreign affairs chief, Josep Borrell, last year described as a paradigm shift from the primacy of open markets to the primacy of security; from just in time' to just in case'". The pandemic was a wake-up call, forcing nations to scrutinise their supply chains, and ask whether they had sacrificed resilience for efficiency. The climate crisis is already affecting logistics: low rainfall in Panama has forced the authorities to limit vessels using the canal. Cyber-attacks by criminal actors are another concern.The Japanese port of Nagoya was put out of action by a ransomware attack last summer. But current conflicts and geopolitical dividesaredrivingthe changes. Continue reading...
Fears grow party is poised for another U-turn akin to ditching of 28bn green pledge as business groups call for pragmatismIn his pre-election budget last Wednesday, Jeremy Hunt rehearsed a new attack line against Labour, alongside familiar arguments on tax and spend: Keir Starmer's party would, the chancellor said, destroy jobs".Remarks fed to newspapers in advance of Hunt's moment in the spotlight talked of the 70 new burdens on employers" that Labour would impose. Continue reading...
Live, rolling coverage of business, economics and financial markets as exchange-traded funds help bitcoin rally above $71,800The biggest European stock markets are all in negative territory (with the smaller exception of Switzerland).The FTSE 100 in London is down by 0.4%, with mining companies the biggest losers.The FCA continues to remind people that cryptoassets are high risk and largely unregulated. Those who invest should be prepared to lose all their money. Continue reading...
Former prime minister will tell thinktank the Treasury is in danger of retreating into comfort zone'Britain needs to be put on an economic war footing" if it is to break out of a vicious cycle of low growth, the former prime minister Gordon Brown will say on Monday.In a speech to the Institute for Government thinktank, he will call for the creation of a National Economic Council, jointly chaired by the prime minister and chancellor with a mission to deliver annual growth of 3%. Continue reading...
Unfunded pledges and election gimmicks - from Tories or Labour - are last thing Britain needsBefore his budget last week, Jeremy Hunt said he knew voters could see through gimmicks. And we are not going to do gimmicks on Wednesday". Fast forward and what did the chancellor offer? A tax-cutting budget where taxes were still actually rising, and the promise of more funding for public services grounded in a 20bn austerity drive.Having made very few new pledges that hadn't been leaked to the media, the most attention-grabbing promise Hunt made was to declare an ambition to abolish employee national insurance - an unfunded commitment worth more than 40bn; equivalent to the annual transport budget. Continue reading...
The PM's admiration for Washington's economic model may backfire amid looming US banking and stock market disastersOne of the consistent themes of the Conservative economic narrative is an admiration for the US and its ability to grow quickly. The way it has bounced back from the pandemic and how it has ridden out the impact of Russia's invasion of Ukraine should serve as a blueprint.A neoliberal Conservative analysis puts the emphasis on tech, innovation and a myth-like entrepreneurial spirit that the UK would do well to emulate. What it ignores is the way the US economy zips ahead on fantastical stock market valuations and off-balance-sheet accounting reminiscent of the years before the 2008 financial crisis. And how both these habits could bite back in a big way, much as they did in 2008, and pretty soon. Continue reading...
Bulgaria's eternal optimist' in favour with European finance ministers after first five-year stint encompassing Covid and UkraineThe head of the International Monetary Fund, Kristalina Georgieva, will run for a second five-year term after being nominated by a string of European countries to lead the global lender.The Bulgarian economist and champion of policies to tackle the climate crisis will be given the support of her home country, which said she had accepted the nomination for another term starting in September. Continue reading...
Layoffs climb sharply with last month's rate the highest of any February since 2009 but expert says job gains remain solid'Employers added 275,000 jobs across the US last month, as the labor market continues to grow at a clip in the face of the high interest rates.Job growth exceeded expectations of 200,000 on Wall Street in February and rose from the previous month's revised rate of 229,000. Continue reading...
by Richard Partington, Kiran Stacey and Larry Elliott on (#6K601)
Economists say making the policy an election pledge could cost 40bn, which is badly needed for health, education and elsewhereRishi Sunak has been warned against fighting an election on an unfunded plan to abolish employee national insurance amid projections the move could blow a 40bn hole in the public finances.As the pre-election battle on the economy between the Conservatives and Labour intensified, the prime minister was on Thursday under mounting pressure to explain how the measure could be afforded while public services were crumbling. Continue reading...
Critics say extra funding to key battleground constituencies proves government happy to ignore regional inequality'The phrase levelling up" may once have conjured a vision of northern towns and cities scarred by deindustrialisation - but Jeremy Hunt's budget suggested the government's definition now stretches to Buckinghamshire, Canary Wharf and Cambridge.In the section of his speech on historic underinvestment in our nations and regions", Hunt hailed new devolution deals for Surrey and Buckinghamshire. Continue reading...
Office for Budget Responsibility says national insurance and tax cuts will be paid for by average 8bn-a-year borrowing to 2028-29The chancellor will raise government borrowing to help fund a 2p cut in national insurance contributions from April, according to an assessment of the spring budget by the Treasury's independent forecaster.The Office for Budget Responsibility said the chief measures to pay for Jeremy Hunt's budget measures, including the cut in national insurance and a reduction in capital gains tax, would come from an average extra 8bn of borrowing in each of the years to 2028-29. Continue reading...
by Presented by John Harris with Miatta Fahnbulleh an on (#6K4ZC)
The Guardian's John Harris is joined by the former Conservative chief secretary to the Treasury David Gauke and the economist and Labour candidate Miatta Fahnbulleh to go through today's budget announcements Continue reading...
Headline cut to national insurance rate echoes measure taken in autumn statement, which made little impact on votersJeremy Hunt has spent weeks managing expectations over potential tax cuts in his spring budget, with Tory MPs desperately searching for ways to avoid election defeat as household finances buckle under a record tax bill and the cost of living crisis.As the chancellor's fiscal headroom shrank in the run-up to the budget, so did his plans for spending in areas such as housing and defence, as he promised he would not take any risks" with the British economy despite all the political pressure. Continue reading...
How Hunt's measures on tax, NI and benefits affect single people, couples and those receiving pensions in England, Wales and Northern Ireland Continue reading...
These latest tax cuts were not the gamechanger the Tories need before the electionJeremy Hunt is in favour of delaying the election until the autumn, and it showed. His second budget had all the hallmarks of a holding operation from a government hoping the summer will bring better economic news and leave open the possibility of another package of measures in six or seven months' time.Sure, there was the much-heralded cut in national insurance contributions, which formed the biggest chunk of a front-loaded 14bn stimulus package. Certainly, he took every opportunity to have a pop at Labour in a deeply political speech. This will be the last budget before the election, but it did not feel like the last roll of the dice for the government. Continue reading...
In today's newsletter: As the chancellor presents a plan aimed at satisfying the Tory faithful, we look at what he will do and what it will mean for you Sign up here for our daily newsletter, First EditionGood morning, and strap on your Homer Simpson secret nap spectacles: it's budget day. Coming into this one, the big question about Jeremy Hunt is this: is he, as friends of his recently told the FT, realistic enough to know he is unlikely to be chancellor this time next year" - or does he think that his decisions today can give the Conservatives a serious chance of winning the election? Does he want to bolster his economic legacy - or give his many vulnerable backbenchers something to tell voters about?The truth is likely to be somewhere in the middle: tax cuts to satisfy the Tory faithful, with just enough cover on affordability to keep fiscal watchdog the Office for Budget Responsibility (OBR) happy. Today's newsletter is a simple guide to what that means: what the chancellor will do, the dubious sums that will help him afford it, and what it'll mean for you. Here are the headlines.US politics | Joe Biden and Donald Trump cruised to easy victories on Super Tuesday, as both men piled up delegates on their way to their parties' nominations for the presidency. While Nikki Haley did win the Republican primary in Vermont, that was her only success against Trump, and she came under renewed pressure to drop out of the race.Birmingham | Councillors in Birmingham have approved what are thought to be the biggest budget cuts in local authority history. 600 council jobs are under threat, with libraries closed, bin collections reduced, street lights dimmed, and arts grants scrapped. The council also approved a 10% council tax increase for the upcoming financial year.Israel-Gaza war | Negotiations aimed at brokering a ceasefire in the Israel-Gaza war appear to have stalled, days before an unofficial deadline of the beginning of Ramadan. Israel did not send a delegation to the second day of talks in Cairo as hoped, demanding that Hamas present a list of hostages who would be the first to be released.UK politics | Michelle Donelan, the science minister, has apologised and paid damages after accusing two academics of sharing extremist views" and one of them of supporting Hamas. Donelan - whose department covered the damages and legal expenses - had faced a libel action after her allegations led to the two academics' suspension from roles at Research England.Monarchy | The army has removed a claim on its website that the Princess of Wales will attend an event in June, after apparently publishing the information without approval from Kensington Palace. Catherine has been recovering from abdominal surgery for the past seven weeks, with no date yet given for her return to public duties. Continue reading...
Vast majority of parents in survey say they cannot make the new system workStruggling single parents are being punished" and set up to fail by an unrealistic" government policy that forces them into near-full-time work when their children turn three, according to parents and new research.A year after the chancellor, Jeremy Hunt, forced parents on benefits to work for 30 hours a week or risk seeing their benefits docked, the vast majority of parents say they cannot make the new system work. Continue reading...
Whatever Jeremy Hunt says, traders know the rich will get richer and the poor will get poorer. And they're paid millions to bet on itIn May 2010, I lost $8m in a week. I was 23 years old. Back then, I was an interest rates trader for Citibank in Canary Wharf. I had won that job only three years earlier in a card game while I was a maths student at LSE. At that time, the job was the culmination of a lifetime ambition. It was also an escape route from poverty.What do you do when you are 23, and you have just lost $8m? And you know that if you let slip a few dollars more, you will also lose your job? I did what anyone else would do. I worked. I started bringing my old economics textbooks on to the trading floor, and studied them into the evenings. I wanted to understand where I'd gone wrong. Continue reading...
Global gender gap is far bigger than previously thought, as annual World Bank report takes childcare and safety issues into account for first timeNo country in the world affords women the same opportunities as men in the workforce, according to a new report from the World Bank, which found the global gender gap was far wider than previously thought.Closing the gap could raise global gross domestic product by more than 20%, said the report. Continue reading...
The Treasury watchdog is seen by some Tories as a block to tax cuts - and could be ignored by Jeremy HuntIt has been described as a millstone around the chancellor's neck and the reason Conservative MPs could be disappointed by Jeremy Hunt's budget on Wednesday if he spurns their demands for large pre-election tax cuts.After coming under intense criticism during Liz Truss's premiership, the Office for Budget Responsibility (OBR), the Treasury's tax and spending watchdog, is once again under fire. Continue reading...
Democratic senator Sherrod Brown endorsed the Sesame Street star's complaint on products getting smaller as prices remain sameThe Ohio Democratic senator Sherrod Brown endorsed a key voice in the American public square - Cookie Monster - in a complaint about shrinkflation.Me hate shrinkflation!" the Sesame Street character posted on social media on Monday, referring to an economic phenomenon Merriam-Webster defines as the practice of reducing a product's amount or volume per unit while continuing to offer it at the same price". Continue reading...
High street shops, pubs and restaurants lose out as Britons relax on the sofa in FebruarySoggy February weather and continued cost of living pressures put a dampener on retail sales last month, with growth slowing to just over 1% as many households saved cash by snuggling up on the sofa.Sales of non-food items slumped by 2.5% in the three months to February - led by declining demand for footwear, household appliances, furniture and clothing - amid weak consumer confidence, according to the latest retail sales monitor from the British Retail Consortium (BRC) and the advisory firm KPMG. Continue reading...