Thinktank says 2010-2019 spending would have been £540bn higher had previous plans been stuck toA decade of austerity by the Conservative-led governments after 2010 resulted in more than half a trillion pounds of lost public spending and a weaker economy, a left-of-centre thinktank has calculated.The Progressive Economy Forum said that had state spending continued at the pace before David Cameron became prime minister, it would have been £91bn higher by 2019 – enough to cover the entire education budget in that year. Continue reading...
Concerns that a big driver of price rises may be firms using inflation as excuse to increase profit marginsFears that Europe’s companies are exploiting high inflation to increase their profit margins have prompted a warning from the European Central Bank that it is closely monitoring potential price gouging of consumers.Policymakers have repeatedly called for wage restraint but concerns are mounting that a bigger driver of the wave of price rises may be companies using inflation as an excuse to increase profit margins, a trend unions have described as “greedflation”. Continue reading...
Books-to-stationery retailer says a cyber security incident has resulted in illegal access to current and former employee data, though website and customer accounts are unaffected
The UK chain’s thrifty founding family would never have run it this way. Now, with high debts and falling profits, signs look grim‘We all say he would be turning in his grave. It is not what it was,” says one former member of staff outside the Girlington branch of Morrisons in Bradford.On the streets of the West Yorkshire city that Sir Ken Morrison helped put on the map, the mood surrounding Britain’s fifth-biggest supermarket chain is decidedly glum. Continue reading...
by Richard Partington Economics correspondent on (#698EA)
Thinktank warns austerity drive at next month’s budget will further damage economyRishi Sunak’s government is hiding £28bn of “stealth cuts” to public services over the next five years, according to a report warning that a renewed austerity drive at next month’s budget would further damage the economy.Calling on the chancellor, Jeremy Hunt, to change course at next month’s tax and spending set-piece speech to the House of Commons, the Trades Union Congress said a boost for public spending could help keep Britain out of a recession this year. Continue reading...
Cancelling loans put the Wunder into Wirtschaftswunder. Treat poor nations the same todaySeventy years ago this Monday, the London Debt Agreement saw half of Germany’s (then West Germany’s) borrowings, accumulated after two world wars, written off. The debt cancellation, worth more than a fifth of national GDP, was driven by the United States, the UK and France. Eventually, South American, Asian and African nations signed up – including, in a bitter twist of history, colonial precursors of today’s bankrupts.Germany’s economic miracle was built on debt relief. Unlike today, Germany was allowed to repay a large part of its debts in its national currency. Meanwhile, the cost of servicing the country’s external debt was capped at 5% of export revenues. In 2021, the comparable figure was 16% for poor, indebted nations – money that should be used for schools and hospitals. Creditors in the 1950s were expected to take a haircut if the German economy faltered. The country was allowed to industrialise by replacing imports with home-manufactured goods, while creditor nations agreed to reduce their own exports. Unlike the current International Monetary Fund bailouts, West Germany’s state was allowed to get bigger. Social welfare spending zoomed upwards. Continue reading...
Under layers of misinformation, UK inequality is rising after decade of flatlining progress for most peopleThe sea of yellow placards, held aloft in the protest against Oxford’s low -traffic neighbourhoods (LTNs) scheme earlier this month, told a story. In the crowd of about 2,000 people who took part, it was clear the demonstration was about much more than traffic reduction.“The 15-minute WEF ghettoes are not about climate, it’s tyrannical control,” read a placard. “Say NO to the new world order. Say no to 15 mins prison cities. Wake up, people, wake up.” Continue reading...
by Richard Partington and Damian Carrington on (#697QJ)
A year of conflict has brought soaring prices and faltering trade, but also a step change in the switch to renewablesRussia’s invasion of Ukraine sent shockwaves through the global economy and now, a year on from the start of the attack, the world is fundamentally changed.Trends that were already in motion have accelerated, as the need to move away from fossil fuels to greener, renewable energy supplies became more urgent. Food prices have soared, increasing hunger in the developing world, and forcing governments, businesses and people to adapt to lasting shifts. Here we take a look at five ways the global economy has changed: Continue reading...
Productivity is much lower than in comparable countries, yet bosses just award themselves millions – and hire consultantsBanker bonuses are on the rise again. NatWest, HSBC, Lloyds and Barclays have in the past fortnight reported shelling out millions of pounds to bosses and assorted directors as a reward for their exceptional efforts. Almost £20m was doled out between the four chief executives.A glance at the FTSE 100 shows that all chief executives seem to believe they are exceptional: the data shows their pay and bonus packages averaging a whopping £3.4m each, or 103 times the £33,000 average salary for full-time UK workers. Continue reading...
by Jon Henley in Cherbourg and Rory Carroll in Rossla on (#697BS)
The cheapest way from Ireland to Europe used to be via Dover. But now Cherbourg and Rosslare are thrivingRain or shine, Colm Lambert likes to sit on a bench overlooking Rosslare port on the south-eastern tip of Ireland and watch the new freight ships and passenger ferries sailing in from the Irish Sea.“They’re coming in from France, Spain, Belgium, Holland – it’s great to see,” he said. “Brexit has made an awful difference to here. Boris Johnson did Rosslare a favour.” Continue reading...
Consumer prices rose 0.6% from December to January, up sharply from a 0.2% increase from November to DecemberThe Federal Reserve’s preferred inflation gauge ticked higher in January, a sign that price pressures remain entrenched in the US economy and could lead the Fed to keep raising interest rates well into this year.Friday’s report from the commerce department showed that consumer prices rose 0.6% from December to January, up sharply from a 0.2% increase from November to December. On a year-over-year basis, prices rose 5.4%, up from a 5.3% annual increase in December. Continue reading...
Catherine Mann, a hawkish member of the MPC, says high rates necessary to stop inflation becoming embedded in wages and pricesInterest rates will need to rise again to prevent inflation becoming a persistent problem in the UK, a Bank of England policymaker has warned.A shortage of workers and high wage demands were likely to continue pushing up inflation, acting as a counterweight to falling energy prices, said Catherine Mann, a member of the Bank’s monetary policy committee (MPC), which sets the base rate. Continue reading...
by Amy Hawkins Senior China correspondent on (#694VQ)
Loan is on top of £25bn that cash-strapped Islamabad already owes Beijing and Chinese commercial banksChina has agreed to loan Pakistan $700m (£580m) to help it weather its worst economic crisis in a generation, in a development that will intensify concern among western countries about cash-strapped Islamabad’s debt burden to Beijing.The loan comes on top of $30bn (£25bn) that Pakistan already owes China and Chinese commercial banks. Securing the financing will help to unlock bailout cash from the International Monetary Fund (IMF). Continue reading...
by Kalyeena Makortoff Banking correspondent on (#693GK)
Chief executive Charlie Nunn could receive £9.1m payout, while top performing bankers to share £446m bonus pot for work in 2022Lloyds Banking Group has been accused of “stuffing the pockets of already overpaid bankers” after proposing increases for top bosses that could result in a £9.1m payout for its chief executive, Charlie Nunn.The bank revealed on Wednesday that staff would share a £446m bonus pot – the highest in four years – for their work in 2022, despite reporting flat annual profits, after an increase in the money put aside for a potential jump in defaults. Continue reading...
Falling gas prices and CPI decline could boost public finances before 2024 general electionBritain’s inflation rate could fall to below 2% by the end of the year, according to new financial industry forecasts, handing the chancellor a boost to the public finances before a general election in 2024.Predictions that falling gas prices will accelerate the decline this year in the consumer prices index (CPI) from last month’s level of 10.1% could also support a recovery in household living standards and persuade the Bank of England to cut interest rates earlier than expected. Continue reading...
Now Modi’s government has modernised it must make growth sustainable, inclusive and fairIndia is poised to become the world’s most important country in the medium term. It has the largest population (which is still growing), and with a per-capita GDP that is just one-quarter that of China’s, its economy has enormous scope for productivity gains. Moreover, India’s military and geopolitical importance will only grow, and it is a vibrant democracy whose cultural diversity will generate soft power to rival the US and the UK.One must credit the Indian prime minister, Narendra Modi, for implementing policies that have modernised India and supported its growth. Specifically, Modi has made massive investments in the single market (including through de-monetisation and tax reform) and infrastructure (not just roads, electricity, education and sanitation, but also digital capacity). These investments – with industrial policies to accelerate manufacturing, a comparative advantage in tech and IT, and a customised digital-based welfare system – have led to robust economic performance after the Covid-19 slump. Continue reading...
The RBA tells us the pain is only temporary, but it could be here for a while. Here’s whyAustralia’s politicians and Reserve Bank officials have obfuscated the extent of the economic challenges ahead.The spin is that interest rate rises are temporary and for the best. The truth is that the cost of living and interest rates may stay high for some time to come. Continue reading...
by Richard Partington, Alex Lawson and Julia Kollewe on (#692AP)
Jeremy Hunt says he will not improve pay offer despite surprise budget surplusJeremy Hunt has insisted the government is unable to afford a bigger pay increase for nurses and other public sector workers at next month’s budget, despite official figures showing an unexpected boost for the exchequer in January.Batting away calls for an improved pay offer to break months of strike deadlock, the chancellor said the government finances still remained under pressure after recording a surprise £5.4bn surplus last month. Continue reading...
by Richard Partington Economics correspondent on (#692VA)
Woking says it is at risk of issuing section 114 notice, which would force central government to interveneA local council in Surrey has signalled it is close to effective bankruptcy after amassing debts worth almost £2bn to fund a property investment spree, raising fresh questions over the fragile health of local authorities after years of austerity.Woking borough council said it was “in the territory” of being unable to meet its financial obligations, amid a surge in debt interest costs on its investments, which include a shopping centre, residential skyscrapers and 23-storey Hilton hotel. Continue reading...
Pound edges up as stronger economic growth increases chances of further interest rate risesA rebound across the UK’s services sector in February has raised hopes that the country might avoid recession in the first half of this year.Analysts said the bigger than expected surge in business activity appeared to show that the UK would narrowly avoid a recession, though the squeeze on consumer spending from the energy crisis and a struggling manufacturing sector would continue to put the brakes on the economic recovery. Continue reading...
I was in a six-month trial for the four-day week – it transformed people’s spare time and their working lifeI’m interested in any idea that makes staff happier and more productive, because I work in HR. But until last year I hadn’t given a lot of thought to asking people to work less. When I first heard about the idea of a four-day week, I have to admit I thought it sounded a bit too good to be true. When we gave it a try, though, my teams and I thought it was a huge success.Last year, from July to December, Citizens Advice Gateshead – where I work – was one of 61 companies, comprising about 2,900 workers, who took part in a six-month trial run by the 4 Day Week campaign. So far we’ve been continuing with the trial as our staff have found it so rewarding. We want conversations to continue so that staff are thinking about how they can improve their work-life balance and what we can do to support them.Claire Hall is head of HR and agile working at Citizens Advice Gateshead Continue reading...
Surprise surplus lands the chancellor with a dilemma – but he is unlikely to listen to calls to change courseInflation is the chancellor’s friend if he only considers his income.The official figures for the public finances show total tax revenues rose by 13.2% in January from the same month a year ago. Continue reading...
Nearly all companies taking part opt to continue with new pattern as staff report better work-life balanceThe vast majority of companies taking part in the world’s largest trial of a four-day week have opted to continue with the new working pattern, in a result hailed as evidence that it could work across the UK economy.Of the 61 companies that entered the six-month trial, 56 have extended the four-day week, including 18 who have made it permanent. Continue reading...
by Joanna Partridge and Richard Partington on (#6919E)
Wholesale milk price hit all-time record in December, after months of farmers absorbing higher costsOn a misty February morning, a few dozen of Michael Oakes’ herd of dairy cows are busy tucking into their food, inside one of the large sheds on his farm near Bromsgrove in Worcestershire.“They’re worse than teenagers,” laughs Oakes, of his 160-strong herd of mostly black and white Holstein Friesians, as well as 30 brown Jersey cows. “All they do is sleep, eat and go to the toilet.” Continue reading...
Many believe there is little future in trying to tackle problems of the 2020s with institutions created in the 1940sWanted: a new president for the World Bank, a venerable global institution with a mission to eradicate poverty. The successful candidate will have a plan for tackling the crisis in human development caused by the global pandemic. Climate-change deniers and non-Americans need not apply.By all accounts, the US has already made up its mind who it wants to run one of the two bodies established at the Bretton Woods conference in 1944. Rajiv Shah, who runs the Rockefeller Foundation and was formerly the head of the US agency for international development (USAID) is the hot favourite to take over from the departing David Malpass. Continue reading...
The Conservatives’ long assault on the public sector has been multifaceted. But the meanness over public sector pay is its ugliest aspectBefore we get on to Brexit – don’t worry: we shall – I want to draw attention to what I regard as the epitome of the meanness and duplicity of what is indubitably the worst government of most of our lifetimes.Sorry, did I say “government”? A neighbour asked me the other day if I was aware of a new oxymoron. Tell me, I replied. “The very phrase ‘Conservative government’,” he said. Continue reading...
Calls for White House to lose stranglehold on choosing bank’s leadershipThe head of the Rockefeller Foundation, Rajiv Shah, has emerged as the favourite to succeed David Malpass as head of the World Bank amid calls for the White House to lose its stranglehold on choosing who should run the global development body.Shah, a doctor, health expert and former head of the US Agency for International Development, is one of the names hotly tipped to be the Joe Biden’s administration choice as a replacement for Malpass following his announcement that he would be leaving his post by June. Continue reading...
David Malpass was criticised when he dodged question about fossil fuels’ link to climate crisisThe World Bank president, David Malpass, has announced his resignation months after sparking controversy by failing to say whether he accepted that fossil fuels were driving the climate crisis.Malpass, who was appointed to the post by Donald Trump in 2019, said he would step down from the multilateral development bank, which provides billions of dollars a year in funding for developing economies, by the end of June. Continue reading...
The index of largest companies listed on the London Stock Exchange reaches its highest levelBritain’s FTSE 100 share index has passed 8,000 points for the first time, as fears of a global recession ease.In an afternoon surge, the index of the largest 100 companies listed on the London Stock Exchange hit 8,003.65 points, a new record. Continue reading...
by Jasper Jolly (now) and Joanna Partridge (earlier) on (#68WG5)
Live, rolling coverage of business, economics and financial markets as transport and motor fuel prices contribute to decline in inflationUK inflation fell for a third consecutive month in January, although in double digits it remained at among the highest levels in 40 years amid the cost of living crisis.The latest prices data comes as the Bank of England considers a further rise in interest rates to tackle inflation at the highest levels since the early 1980s, in a move adding to pressure on borrowers after 10 successive rate rises in the past 18 months.While any fall in inflation is welcome, the fight is far from over. High inflation strangles growth and causes pain for families and businesses – that’s why we must stick to the plan to halve inflation this year, reduce debt and grow the economy.Household electricity and gas costs remain by far the biggest drivers, while transport costs saw a further easing. Producer price inflation, however, remains much higher at 14.1%.The stubbornly high rate means that we are now seeing a compounding effect on what was already a spiking inflation rate this time last year. The peak may have started to pass but prices have settled at a much higher level than two years ago. Continue reading...
This online tool will help you discover what is contributing to your household’s cost of living increasesInflation is soaring in the UK as people are hit by higher prices for everyday essentials.Now in double digits, the latest inflation rate for the 12 months to January 2023 means that goods and services cost over 10.1% more than they did a year ago – in most cases, surpassing any pay rises workers can expect to receive. Continue reading...
Not only is demand even greater than it was year ago, but rampant inflation means the pound is buying lessThe shelves should be chock-a-block with baked beans, soup and tuna but it looks as if someone has played Supermarket Sweep and Angela Gardiner admits she has never seen supplies at the food bank so depleted.“I have never seen it like this,” Gardiner says, pointing to yawning gaps on the blue racks filling the unit at the Canterbury food bank, where she is operations director. “This is normally full of beans, but we are short of tinned stuff.” Continue reading...
Economics | The Guardian