Eurozone central bank gives press conference after pausing its cycle of rate hikes, as inflation slows and Europe's economy weakens

High wages and a tight labor market powered consumer spending, leading to GDP growth of 4.9%The US economy grew at its fastest pace in nearly two years in the third quarter as higher wages from a tight labor market helped to power consumer spending, again defying dire warnings of a recession that have lingered since 2022.Gross domestic product increased at a 4.9% annualized rate last quarter, the fastest since the fourth quarter of 2021, the commerce department's Bureau of Economic Analysis said in its advance estimate of third-quarter GDP growth. Economists polled by Reuters had forecast GDP rising at a 4.3% rate. Continue reading...

Widely expected decision by European Central Bank follows 10 consecutive rises in borrowing costs

Governments face surge in cost of borrowing fuelled by high interest rates and conflict in Middle EastThey punish governments that dare to deviate from financial orthodoxy. They strike fear into the hearts of finance ministers. They were seemingly a dying breed in the years between the crash of the late 2000s and the 2020 Covid-19 pandemic, but now the bond market vigilantes are heading back into town.There was a time, not so long ago, when governments were able to borrow as much as they wanted at rock-bottom rates. For almost three years, investors paid for the privilege of lending the German government money because bond yields were below zero. Continue reading...

Bosses warn European Commission president that rules of origin', which come into force in January, will harm EU productionThe bosses of Europe's largest carmakers have urged the president of the European Commission to postpone the cliff-edge" introduction of post-Brexit tariffs they say will harm EU electric vehicle production.Renault, Mercedes-Benz, Volvo and Ferrari were among the 13 large manufacturers who wrote on Tuesday to Ursula von der Leyen asking for a delay to rules of origin" that are scheduled to come into force on 1 January. Continue reading...

Unctad outlines conditions last year, with unemployment rate of 45% one of highest in worldIsrael's blockade hollowed out Gaza's economy and left 80% of its inhabitants dependent on international aid even before the current crisis erupted, the UN has said.In a report outlining conditions in the Palestinian territory last year, the UN Conference on Trade and Development (Unctad) said two-thirds of Gaza's population was living in poverty, while its unemployment rate of 45% was one of the highest in the world. Continue reading...

Strong quarterly inflation figures sends market scrambling as odds on for interest rate hike at Reserve Bank's Melbourne Cup Day meeting

Quarterly CPI was higher than economists' expectations and will increase speculation that the Reserve Bank may again raise interest rates

Exclusive: Poll shows young people willing to make big lifestyle changes but baulk at smaller gesturesThey are willing to have smaller families, stop using cars and - albeit in smaller numbers - go vegan for the planet, but abandoning single-use plastics and growing a few more plants could be a step too far.Across Europe, according to a seven-country survey, it seems young people are more willing than older generations to make big lifestyle changes that would help combat the climate crisis - but are less convinced by smaller gestures. Continue reading...

Rishi Sunak's decision to dilute net zero policies has become even more shortsightedEarlier this year, the world economy had a lucky escape. After a mild winter in Europe, energy prices were in retreat as the continent shifted away from Russian gas supplies. Inflation was cooling, while economic growth remained resilient.Hello lower gas prices, bye-bye recession," analysts at the US investment bank JP Morgan wrote in January. Less than a year later, the Israel-Hamas war serves as a stark warning that the global energy crisis has far from vanished. Continue reading...

With the market expected to improve this year, the Conservatives will doubtless seek to exploit the reliable vote-winning toolProperty prices will go back up next year. Not by much. And not by enough for those who chart their wellbeing by the value of their home. In the pantheon of property price recoveries, it will rank among the weaker ones, though the Conservative party will be hoping it provides a lifeline.That's the view of some economic forecasters - minus the political implications - who say house prices could exceed general inflation, ending a brief 18-month period when stagnant property values made flats and houses marginally more affordable. Continue reading...

The staples of your weekly shop are changing fast ... and it's not only in sizeYou take the spreadable butter out of the fridge and put it on your bagel; you are sure it is more watery than it used to be. You pick up the bagel and some filling falls out - is the hole bigger? The coffee seems to have run out again, so you seriously consider a stiff drink but your gin seems to have less kick than it used to.After you've eaten, you wash your hands - the bar doesn't seem as big and there's less lather - and then you squeeze out the last toothpaste from a tube you're sure used to last longer. You wonder: is everything a bit worse than it used to be? Continue reading...

The postwar generation has benefited from good pensions and now interest rate rises, but while its spending has boosted the economy, it has many downsides - not least pricesRishi Sunak has pledged to halve inflation this year, but faces a challenge from the verygroup of core voters he hopes will keep him in office: baby boomers.Born in the postwar years between 1946 and 1964, and now aged 59 to 77 years old, boomers are contributing to stubbornly high inflation with their spending splurges. Armed with final-salary pensions or good jobs, and boosted by a rapid rise in interest rates on their nest eggs, millions of boomers are defying the wider economic gloom to keep spending. Continue reading...

Pound hits five-month low vs euro, shares slide in London, and UK 30-year gilt yields hit highest since 1998

Despite figures for six months to end of September, analysts play down chance of pre-election tax cuts

On Thursday protesters chanted: Off fossil finance!' and held a banner reading: Fed Is Burning: Money, Futures, Planet'The Federal Reserve chair, Jerome Powell, was escorted out of an event Thursday afternoon after a group of climate protesters briefly took the stage before he was due to give a speech. He took the stage after a 15-minute delay.At the Economic Club of New York, protesters stormed the stage holding a banner that read Fed Is Burning: Money, Futures, Planet" and chanting Off fossil finance!" Powell, who was on stage, briefly left the event before returning to deliver his speech as planned. Security officials cleared protesters from the room. Continue reading...

Three crypto groups are being sued by New York for allegedly defrauding investors of $1.1bn, while financial markets remain on edge

OBR says it underestimated strength and persistence of inflation as well as impact of high energy pricesThe Treasury's independent economic forecaster has admitted it underestimated the scale of the inflation shock sparked by the Covid pandemic and Russia's invasion of Ukraine.Blaming the rapid succession of shocks hitting the economy, the Office for Budget Responsibility said it significantly underestimated the strength and persistence of inflation". Continue reading...

Resolution Foundation also calls for Bank to have power to set negative interest rates in response to future downturns

Credit rating agency says further deterioration in Israel-Hamas war could raise oil prices with knock-on effect for inflationThe global economy risks suffering a renewed inflation shock from the war between Israel and Hamas, a leading credit rating agency has warned, amid growing concern over a sharp rise in oil prices.Standard & Poor's, which rates the creditworthiness of governments and companies, said the conflict threatened to compound an already fragile global outlook, as the world's leading central banks battle inflationary pressures sparked by the Covid pandemic and war in Ukraine. Continue reading...

UK consumer prices inflation remained at 6.7% in September, dashing hopes of a fall, as petrol and diesel prices increase

Economists are examining how the conflict could escalate as they plan for the next big global shockWarning bells went off in financial markets the instant the extent of the deadly Hamas attack on Israel became apparent - and it is easy to see why.One of the rules of thumb of geopolitics is that recessions are sparked by a sharp jump in oil prices, and the cost of crude is sensitive to events in the Middle East. Continue reading...

From sugar to butter and transport to holidays, how the cost of everyday items varies

Ministers face anxious wait and consumers more pain on prices as September rate stays steady

Rate is unchanged in September, raising questions over next Bank of England decision on interest rates

Basic pay outpaces inflation for the first time in almost two years, but fall in vacancies suggests jobs market is cooling

Wages outpace inflation for first time in almost two years, driven by growth in City of London

Ministers likely to be discussing 7.9% increase rather than 8.5% by choosing triple-lock figures selectively

UK stuck between weak economic growth and risk of persistently high inflation, says thinktankThe government has no room for unfunded pre-election tax cuts despite having pushed through a colossal" 52bn a year stealth raid on household incomes on Rishi Sunak's watch, the Institute for Fiscal Studies has warned.Britain's foremost economics thinktank said the dire state of the public finances meant that attention-grabbing tax cuts risked stoking inflation, leading to higher Bank of England interest rates and a lengthy recession. Continue reading...

Rolling coverage of the latest economic and financial news, as Huw Pill warns against declaring premature inflation victory

Huw Pill raises possibility of interest rate rise, saying war between Israel and Hamas may affect oil priceThe Bank of England has more work to do" to ensure inflation is brought back under control, Threadneedle Street's chief economist Huw Pill has said.Raising the possibility of an increase in borrowing costs from the Bank, Pill said the fact that the headline measure of the cost of living was now falling was not enough to claim victory. Continue reading...

Fall from 6.7% in August signals prices are still rising as higher cost of oil feeds throughHeadline inflation eased again in September, official figures are expected to show this week, while pay growth is slowing.Economists polled by Refinitiv expect the Office for National Statistics (ONS) to say annual inflation fell slightly to 6.5% in September from 6.7% in August. However, that is still well above the Bank of England's 2% target. Continue reading...

Rightmove says 0.5% rise is smallest for time of year since financial crisis 15 years ago as higher interest rates hit homeUK house prices are rising at the slowest rate for this time of year since the 2008 financial crash, according to new data that highlights the impact on the housing market of higher interest rates.The average new asking price rose by 0.5% in the month to 7 October to 368,231, but it was the smallest post-summer bump since the 2008 crisis, according to property website Rightmove. Continue reading...

The failure of the Conservative party's flagship project of levelling up is a huge opportunity for LabourDiminished by outsourcing, impoverished by Westminster-imposed austerity, and constrained by one of the most centralised polities in the world, local government in England has endured a miserable first quarter of the 21st century.Levelling up, the Conservative party's response to the regional discontent exposed by the Brexit referendum, contrived to add insult to injuries already inflicted. Too often amounting to a top-down, pork barrel exercise, it required local councils to participate in Hunger Games-style competitions for Whitehall largesse. Many wasted millions of pounds on bids, only to be told that London says no". The various pots of money released in any case failed to compensate for the cuts to council funding from 2010 onwards. Continue reading...

Development minister's comments at World Bank summit in Marrakech acknowledge effect of aid budget cutsBritain has to rebuild its reputation as a global leader in providing assistance to developing countries after the damage caused by the decision to slash the aid budget as part of post-pandemic spending cuts, the development minister, Andrew Mitchell, has admitted.Speaking at the annual meeting of the World Bank in Marrakech, Mitchell - who led a backbench revolt against the decision to abandon the government's commitment to spending 0.7% of national output on aid - said it was vital that the UK played its part". Continue reading...

Just like the Yom Kippur war 50 years before, the current conflict represents a grave threat to an already fragile global economyHalf a century ago a surprise attack on Israel by neighbouring countries marked the start of the Yom Kippur war - an event that signalled the end of the long postwar boom and ushered in a period marked by higher inflation and rising unemployment.So it was with a degree of trepidation that finance ministers, development ministers and central bank governors from around the world gathered in Marrakech last week for the annual meetings of the International Monetary Fund (IMF) and the World Bank. Nobody needed reminding of what happened half a century ago. Continue reading...

The loss of a national asset that would have aided levelling up' shows how little Rishi Sunak is really committed to long-termismOne of the many whoppers to emerge from the recent Conservative party conference was Rishi Sunak's claim that our Brexit freedoms make us ever more competitive".When I was at school, freedom" was used in the singular; but these days, as Cole Porter wrote, anything goes. There are promises of freedoms" all over the place. Continue reading...

Economics is a religion where rhetoric persuades voters to believe bad policies can have good resultsPaul Krugman, the Nobel prize-winning economist, warned a decade ago against thinking about budget deficits in terms of bond vigilantes" and confidence fairies". He said politicians - mostly, though not exclusively, on the right - argued that unless governments cut their deficits, bond vigilantes would pressurise them by forcing up interest rates. But if they did cut them, the story went, then the confidence fairy" would magically stimulate so much private spending that this would compensate for the loss caused by budget cuts. This fiction was heard across the EU, Britain and the US.Prof Krugman was right. Austerity didn't produce economic growth. The confidence fairy is as unreal as the one looking for children's teeth. But the political rhetoric has not gone away. Every major UK political party wants more economic growth, and the message is that to grow the economy means bearing down on the deficit. The Office for Budget Responsibility forecast in March that the UK economy would grow by about 2%. This looks wildly optimistic. The International Monetary Fund sees two years of about 0.5% growth. It is a dangerous delusion to think that economies can cut their way to growth. Continue reading...

Jamie Dimon says war in Ukraine compounded by last week's attacks on Israel may have far-reaching impacts on energy and food markets, global trade, and geopolitical relationships

In an exclusive interview, Akinwumi Adesina, head of the African Development Bank, says the outlook is good for a continent with the workers of the future and the best investment opportunitiesAfrica holds the future workforce for the ageing economies of the west, according to one of the continent's leading financial figures, who also said it was time to ditch the myths around corruption and risk.In an exclusive interview before this weekend's World Bank meetings in Morocco, Akinwumi Adesina said there was a resurgence of belief in Africa's economic prospects and attacked negative stereotyping, adding that there was every reason to be optimistic". Continue reading...

The pursuit of stable government' could become a trap: there will be great pressure from the establishment to keep its privileges intactIn scary enough circumstances, stability" can be one of the most appealing words in politics. When a country has had years of political and economic chaos, as Britain has, who doesn't want life to be more stable? More consistency in the provision of public services, in people's incomes, in the behaviour of governments - things taken for granted in calmer times - becomes something which voters yearn for and which ambitious politicians promise.So far, Keir Starmer's Labour leadership has really been one long, sometimes ruthless exercise in creating and offering stability: for the party after the turmoil under Jeremy Corbyn, for the country after the collapsing policies of the Tories, and for 10 Downing Street, which most observers expect to soon be occupied by Starmer's solid, methodical, largely unchanging personality.Andy Beckett is a Guardian columnist Continue reading...

Chancellor rules out tax rises and vows to cut spending in autumn statement as borrowing rises up to 30bn more than forecast

Developing nations need equivalent of US Inflation Reduction Act, says Nobel prize-winning economistPoor countries should be provided with $300bn (246bn) a year from the International Monetary Fund to finance their fight against the climate crisis, the Nobel prize-winning economist Joseph Stiglitz has said.Speaking to the Guardian at the IMF's annual meeting in Marrakech, Stiglitz said developing nations needed their equivalent of the US Inflation Reduction Act - a package of grants and subsidies designed to promote green growth and jobs. Continue reading...

UK services sector lifts economy back to growth in August, but BoE policymaker Swati Dhingra warns that economy is flatlining

Swati Dhingra says economy has flatlined and millions of mostly young and poorer people could be affected if rates stay high

Kristalina Georgieva says fund had been conducting thinking the unthinkable' scenario-planning before Israel-Hamas war began

Rise in GDP fuelled by business services amid worries that impact of recent interest rate hikes yet to be feltThe UK economy returned to growth in August, as activity picked up after a worse-than-expected slump in July.A modest 0.2% rise in gross domestic product in August was driven by a jump in business services output that offset a downturn in manufacturing and the negative impact of the US film and TV writers' strike, which has closed down large parts of the British film industry. Continue reading...

Birkenstock to float in New York with market value of $8.6bn (7bn), as IMF/World Bank hold annual meetings in Marrakech

The recognition of Goldin's pay gap analysis is empowering for all of us, but depressingly, her gender is still more newsworthyA few years ago I took a class on the most influential modern economists. It was at an Ivy League institution in the US and dozens of old, white men and their theories made the syllabus. Claudia Goldin was the only woman. On the slide accompanying the lecture in which she was featured, her name was misspelled.On Monday, Goldin won the Nobel economics prize. After Elinor Ostrom in 2009 and Esther Duflo in 2019, Goldin is only the third woman to win, and the first to be honoured solo.Josie Cox is a journalist and broadcaster specialising in business, finance and gender equality Continue reading...

Bank's new president Ajay Banga urges faster action on providing debt relief but says there is no magic wand'