A call for growth from three veterans of the financial crisis rings hollowIt has now been 15 years since the outbreak of the global financial crisis, long enough for memoirs and professional accounts to start to appear. The process was kickstarted with the publication of Crashed by Adam Tooze in 2018, a much lauded first draft of history. A friend recounts being interrupted by a series of men in expensive suits while reading it in a coffee shop in Princeton shortly after its publication. They wanted to know whether they were in it - and, if so, how they came off. The people involved have an eye to their legacies.That may include the three authors of this book, which attempts to apply the lessons of the crisis to current problems. Each has a different perspective. One, Mohamed El-Erian is president of Queens' College, Cambridge and chief economic adviser at the financial giant Allianz. The book recounts how his former employer, the investment management firm Pimco, gamed out the unlikely scenario of Lehman Brothers collapsing in a disorderly fashion, leaving them well positioned to reap rewards for their clients when that actually happened. Another, Michael Spence, is an academic who went from a Nobel prize in economics in 2001 to a position with the private equity firm Oak Hill Capital and a senior fellowship at the free market Hoover Institution. The third, Gordon Brown, is the most familiar. As prime minister, he hosted a G20 summit in London at the height of the crisis in March 2009, convincing the gathered powers to flood financial markets with cash" to the tune of $1.1tn. Continue reading...

With company chiefs in attendance and an endorsement from Mark Carney, shadow chancellor sought to demonstrate economic competenceAt every turn in Labour's annual conference in Liverpool, there are signs of big business on manoeuvres. Exhibition stands for Google, Ineos and Specsavers; slick videos for Amazon and Uber, fringe events sponsored by Deliveroo and Goldman Sachs, while even the parliamentary lounge - a retreat for MPs from the throng of 16,000 delegates - was sponsored by Lloyds Banking Group.Labour was keen to demonstrate economic credibility by basking in the presence of company bosses. For business leaders, it was a chance to check out a potential government in waiting, with many commenting on the marked contrast with the Conservative conference in Manchester. Continue reading...

Labour leader says party has plan to get Britain building again' after security breach where protester threw glitter on him at start of speechLabour has published fresh details of how the community policy guarantee (see 9.43am) will work.On community policingOn Starmer, told that after Reeves' reassurance over economy, his speech designed to paint a picture of hope' & it emotive rather than a big policy drop'> the word cloud on what Starmer's about peppered with don't know and even nothing'. This his chance to hammer home values Continue reading...

Markets surge on relief that bond yields are falling, while gas prices jump following reports that damage to Finland-Estonia pipeline could be deliberate

Britain faces fairly subdued' growth and persistent' inflation, global economic health check finds

Once, Dorling was viewed as a radical. Now his writing on inequality simply seems prescient. He discusses poverty, politics, and how we reached such a parlous stateWhenever I do a potted biography of Danny Dorling, geographer, author, crusader, I miss the late Dawn Foster, thinking of her going through his bibliography in the office ahead of meeting him, saying: Fuck, I can never read all this." His first book, published nearly 30 years ago, had the arrestingly dry title Area Cartograms: Their Use and Creation. Then, in 2010, something changed: well, the government changed, austerity was born and Dorling became, in public, the radical geographer that academic colleagues - first at Bristol, then Leeds, then Sheffield, then for the past 10 years at St Peter's College, Oxford - must have always known him to be. Starting with Injustice: Why Social Inequality Still Persists in 2010, he would write at least one book a year and sometimes as many as three, on justice and equality, until 2018, when he published Peak Inequality. Spoiler: we were not at the peak, but that's not what he meant.I meet him in Greenwich, south-east London, where he is between meetings at a conference on inequality. He has a new book, Shattered Nation: Inequality and the Geography of a Failing State. The picture he draws is delineated carefully through appalling statistics: over the first five years of austerity, the poorest fifth of people in England lost, on average, 11% of their income, while the richest fifth lost nothing. There are now twice as many food banks in the UK as there are branches of McDonald's. The country [is] moving towards a minarchy, or night-watchman state, with minimal power over the rich and minimal support for the poorer of its citizens," he writes. Continue reading...

Cost of repaying loans is 15% of income and likely to be higher after this year's rate hikes, as fund predicts GDP growth of 1.2% next year

Business will welcome Labour's message of stability, but it may be too little, too late for our ailing health and education systemsThere was a distinct lack of rabbits out of the hat in Rachel Reeves's speech at the Labour party conference. Setting up a commission to investigate dodgy deals during the Covid-19 pandemic and tightening up government use of consultancies and private jets played well to conference, but will raise just a few billion pounds - a negligible figure.Instead, Reeves concentrated on ramming home the key messages of the leadership: stability, security and, more than anything else, growth. It is certainly a message voters are in need of hearing after one of the most tumultuous periods in British economic history since the global financial crisis. It is also a message that business probably wants and needs to hear after yet another U-turn on transport infrastructure in the shape of the abandoning of the Birmingham-to-Manchester leg of HS2.Josh Ryan-Collins is associate professor of economics and finance at the UCL Institute for Innovation and Public Purpose Continue reading...

Shoppers search out deals in September and sunnier weather lifts sales of ice-cream and burgers

Credit card spending figures show shift towards saving as retailers report dip in visitsCash-strapped Britons are cutting back on eating out and reining in on buying takeaways to save up for the expensive Christmas season splurge.The amount spent on going out to restaurants plunged 10.8% month on month in September, a significant slowdown compared with the decline of 5.8% registered in August, according to the latest UK consumer card spending figures from Barclays. Continue reading...

Rachel Reeves' plans for stable growth contrast favourably with the Tories' record of wasteful, corrupt and inept administrationIt's the economy, stupid. That was the message from Rachel Reeves, the shadow chancellor, to her Conservative opponents in her speech to Labour's party conference. Ms Reeves is not a showy politician. Her style is to be all substance, and her message was that she is capable and decent. This is smart politics. The Conservative party has proved to be incompetent in its stewardship of the economy just when the issue topped the political agenda.Ms Reeves set out her party's stall by promising to boost business investment, build homes and ease planning rules - especially around green industries - to spur growth. Often seen as a hard-headed pragmatist, the shadow chancellor played on her party's heartstrings with a call for a Labour government to rebuild public services and create jobs. She also hit home by creating dividing lines with the Tories by contrasting her plans for stable growth with the Conservatives' record of wasteful, corrupt and inept administration. The biggest cheer was for her proposed anti-corruption commissioner to recover money lost to fraud during the pandemic. Continue reading...

Carney says it is beyond time we put her energy and ideas into action' in video shown to Labour conference after shadow chancellor's speechThis morning Sharon Graham, the Unite general secretary, told the Today programme that she wanted Labour to be more ambitious. Restating an argument that she made in an Observer interview at the weekend, she said:Whilst I think Rachel is doing a good job, I don't think we're going get this sort of growth that they're talking about quickly. We haven't had high growth since the 1970s.And so what I'm saying is that we need to look at the economy differently. We need to do some big ticket ideas. And the renationalisation of energy is one of those ideas. It is absolutely affordable and Labour needs to act more like a 1945 transformative government rather than being so timid.I'm under no illusions about the scale of the task that I will face if I become chancellor of the exchequer next year.The public finances are in a dire state, growth is on the floor, public services are on their knees.My feeling about them is that they don't expect Labour to support independence in Scotland, but they do want us to show an empathy towards those who do support independence.I think that we need to gain a hearing from ex-SNP voters, I think that's going to be very important indeed if we're going to build our support and win the seats that we need at the next election.It looks increasingly as if Scottish Labour will deliver seats to build a UK Labour majority in the next parliament after the election. I think importantly, in return, a Labour government, should it be formed, must then deliver to Scotland and the Scottish people ahead of the Holyrood elections in 2026. And that's got to be the basis, in my view, of our appeal and of our project.I'm very clear that for Labour as a whole to strengthen its appeal in Scotland we need to present a convincing economic growth plan to benefit the whole of the UK including Scotland, and that's something the SNP can't do. Continue reading...

Ex-Bank of England governor's backing for shadow chancellor shows how far Labour's economic message has travelled

Shadow chancellor says in Labour conference speech that next election will be fought on economic issues

Harvard professor becomes only the third woman to win the prestigious prize

Joe Biden's Inflation Reduction Act spurred similar efforts worldwide, but care must be taken when targeting subsidiesIndustrial policy is back. It is back with a vengeance in the US, where for decades the dominant ideology and policy minimised government efforts to influence the structure of the economy. Now, in contrast, we have the Infrastructure Investment and Jobs Act, the Chips and Science Act, and the Inflation Reduction Act, all with significant industrial policy components.And what happens in the US doesn't stay in the US. Other countries, similarly seeking to preserve and enhance their industrial bases, have responded with comparable measures. The question is whether the return of such government-led efforts should be welcomed. Continue reading...

Shadow health secretary interviewed by Guardian editor-in-chief Katharine Viner at Labour party conference in LiverpoolQ: You oppose the Rwanda policy because you don't think it will work. If the supreme court rules it is legal, and deportations start and it is seen to be working, would you still reverse it.Yes, says Starmer. He says it is the wrong policy. It is very expensive, and it only affect only a small number of people. And the policy does not deal with the problem at source. Continue reading...

Cautious Labour approach at conference has risks yet something more transformative may raise concerns about trust

At the fund's annual meeting this week in Morocco, ambitions for climate and debt relief may be overwhelmed by events - againLast week's turmoil in the global bond markets will be playing on the minds of finance ministers and central bank governors when they gather in Marrakech this week for the annual meetings of the International Monetary Fund and the World Bank.After the triple shocks of the Covid pandemic, the war in Ukraine and the surge in inflation, the mood may be less febrile than it was a year ago, but few if any of those travelling to Morocco - which suffered a devastating earthquake last month - would dare say that the crisis era is over. Most will be wondering what might go wrong next. Continue reading...

The PM's messianic zeal to dismiss consensus - over HS2, health, education - echoes the errors of the Thatcher yearsIt's all about him. That much was clear from Rishi Sunak's conference speech last week and the interview he gave the BBC soon afterwards. I want to change our country," he told his interviewer, before adding: I want to change the way we do politics."There was the occasional reference to the government, other members of the cabinet and the Conservative party, but mostly we found out what his plans were going to be after almost a year in No 10. Continue reading...

The Nobel prize winner and author of new book Economics in America argues economists must get back to serving societyWhen Angus Deaton arrived in the US four decades ago, he imagined he had something to say about economic inequality and how to tackle it that Americans might want to hear. Instead, the great economic minds of the time told him to shut up.The Scottish-born winner of the 2015 Nobel prize for economics struggled at first to understand why there was so little interest in a subject most European economists regarded as a central concern of post-war policies to reduce poverty and build more equitable societies. Continue reading...

Rolling coverage of the latest economic and financial news, as US non-farm payroll shows surge in hiring last month

Data comes as central bank seeks to guide the US economy to soft landing' to avoid a recessionThe US workforce added 336,000 jobs last month, much more than expected, as the world's largest economy remained resilient in the face of higher interest rates.The sharp acceleration in hiring saw non-farm payrolls rise during September by almost double the rate anticipated by economists. Readings for July and August were also revised higher, with 236,000 and 227,000 jobs added, respectively. Continue reading...

Persistently high interest rates have had chilling effect on consumer spending, says trade bodyThe World Trade Organization has halved its forecast for global trade growth this year in response to rising interest rates that have dented consumer spending power in the US, Europe and Asia.The 164-member trade body slashed its estimate from April that predicted the global trade in goods would grow by 1.7% in 2023, saying it needed to be scaled back to 0.8%. Continue reading...

Rolling coverage of the latest economic and financial news, as WTO warns that global economic fragmentation is hurting trade growth

Kristalina Georgieva discusses protracted high interest rates and first term dominated by two unthinkable' eventsThe head of the International Monetary Fund has warned that victory in the fight against inflation could spell trouble for financial markets by forcing central banks to keep interest rates high until 2025.In a Guardian interview before next week's IMF annual meeting in Marrakech, Kristalina Georgieva said there was a risk of borrowing costs staying high for a protracted period, with knock-on effects for asset prices. Continue reading...

Former Bank of England governor says businesses prioritise countries with clean power and consistent strategies

Average rental property receives three times more enquiries from prospective tenants than in 2019

Rolling coverage of the latest economic and financial news, as fears of high interest rates hit the bond market

Inflation expectations have pushed up government's long-term cost of borrowing, which is expected to slow economyBorrowing costs for governments around the world have risen to the highest level in decades as investors bet that stubbornly high inflation will force global central banks to leave interest rates higher for longer.UK 30-year bond yields - which dictate the country's long-term cost of borrowing - rose to the highest level since 1998 on Wednesday, surpassing the levels seen a year ago in the panic after Liz Truss's mini-budget. US Treasury yields have climbed to a 16-year high, while EU nations and Japanese government borrowing costs have also risen sharply. Continue reading...

Rate tops level last seen after Liz Truss mini-budget as fears of global inflation and US political instability spook markets

MPs express bafflement PM has resolved to do so little since steadying ship' after Truss's disastrous tenure

Economic arm of UN says pro-growth stance needed, with interest rate rises increasing inequalityCentral banks risk tipping a stalling global economy into a full-blown recession unless they relax their 2% inflation targets and adopt a more pro-growth stance, the economic arm of the UN has warned.Pointing to evidence of a looming debt crisis in poor countries, the UN said the sharp rises in interest rates from the major central banks since 2021 had increased inequality and reduced investment but proved a blunt anti-inflation weapon. Continue reading...

RMT says planned strike action by over 3,000 members at London tube stations on Wednesday 4th and Friday 6th October will not go ahead.

Britain's biggest bakery chain says cost inflation is easing, although staff costs are rising

Average food basket down by 0.1% amid fierce supermarket competition, says the British Retail ConsortiumFood prices dropped in the UK in September for the first month in almost two years, according to retail industry figures, offering consumers some respite amid the cost of living crisis.The British Retail Consortium (BRC) said price reductions for dairy, margarine, fish and vegetables and fierce supermarket competition helped to bring down the cost of an average food basket by 0.1% compared with the previous month. Continue reading...

Andy Burnham, Labour mayor of Greater Manchester, says news would be profoundly depressing'In a report last week the Institute for Fiscal Studies said the current parliament was likely to mark a decisive and permanent shift to a higher-tax economy".In its report, it also said that although this was partly because of the pandemic, government decisions taken before Covid were a more important factor. It said:Only during and in the immediate aftermath of the two world wars have government revenues grown by as much as they have in the period since 2019. To some extent, this ought not to be a surprise: the Covid-19 pandemic represented the most significant economic dislocation since the second world war. But while the response to the pandemic and its after-effects does explain some of the tax rises announced in recent years, it is far from the only - or even the most significant - explanation. Instead, tax rises have largely been the consequence of a desire for higher government spending on things that pre-date the pandemic (such as manifesto promises to expand the NHS workforce and hire more police officers, and a September 2019 declaration to be turning the page on austerity').I disagree with that analysis. One of the biggest reasons that we've had to see taxes go up is because our debt interest payments have gone up as a result of the energy shock. That has an enormous pressure on the public purse.The other thing I disagree with the IFS on - normally I don't disagree with them, I do this time - is their suggestion this is a permanent rise in the level of taxation. I don't believe it has to be. If we are prepared to take difficult decisions about the way we spent taxpayers' money, to reform the deliver of public services, to reform the welfare state, there's a chance to bring taxes down. But there aren't any short cuts. Continue reading...

John Lewis chair Sharon White will not seek second term at retailer, as Nationwide reports UK house prices fell 5.3% in year to September

Growth Group now same size as government's majority, as it urges PM to cut taxes and resume fracking

High interest rates blamed for year-on-year fall with price of average home 14,500 lower than September 2022.UK house prices fell by 5.3% in the year to September, with drops in price in every region of the country as rising interest rates squeeze the market.The house price index by Nationwide, the biggest British building society, showed that seasonally adjusted prices stalled over the month in September, after a 0.8% drop in August. Continue reading...

Local government has been steadily squeezed by austerity, inflation and centralisation. Greater devolution is neededIn most of Britain's towns there are buildings hinting at a more prosperous past. Vast stone public libraries, swimming baths and theatres; all encircling the grand town halls that once controlled them. Many are long shut, converted or owned by someone else. But the symbolism remains - local government used to do stuff.Today, England's councils are in the worst crisis since the foundation stones of these municipal palaces were laid. Continue reading...

Public spending hikes and pro-poor tax cuts might fix the economy and be popular enough to stop the far rightWith poverty rising, a recession approaching and annual inflation topping 120% in Argentina, it is unsurprising that voters are fed up. They would be forgiven for wanting change in the upcoming presidential election. However, voting for a far-right candidate, Javier Milei, would be a serious mistake. Mr Milei admires Donald Trump, trades in misogyny and says the outrageous to get noticed. Despite what Mr Milei claims, the Pope is not an emissary of the evil one" nor is the climate crisis a socialist lie".After winning Argentina's primary election this summer, Mr Milei is, depressingly, in pole position to clinch the presidency. His pitch is that Argentina's interventionist, welfarist economic model has failed. Mr Milei is a fan of the free market missionary Milton Friedman. He thinks inflation results from too much of the Argentinian currency, the peso, being in circulation. Mr Milei's solution is to shrink the state and replace the peso with the dollar. Friedman's ideas have been debunked. But they are held with religious fervour by adherents such as Mr Milei.Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...

Labour's Stella Creasy elicits confirmation of higher charges to firms, which some say risk further fuelling food inflationThe government has admitted it will cost businesses 330m each year in additional charges when new post-Brexit border controls on animal and plant products imported from the European Union are implemented next year.Lucy Neville-Rolfe, a minister of state in the Cabinet Office, confirmed the estimated annual cost adding that the UK needs tighter border controls to protect our international reputation" in a letter to Labour MP Stella Creasy, the chair of the Labour Movement for Europe. Continue reading...

Survey shows nearly 90% of 2019 Conservative voters say green industry is vital to UK's economic growth

The Conservatives could be out of office for two terms. Labour has the chance to govern with seriousness and restore trustIn his classic work The Decline and Fall of Practically Everybody (1951), the New York Herald Tribune humorist Will Cuppy's verdict on Attila the Hun was: Attila's career teaches that you may get by for a while, but it can't last."Without wishing to push the comparison too far, I think Cuppy's observation epitomises the situation our present prime minister - they come and go, these Conservative prime ministers - now finds himself in. Continue reading...

Updated GDP figures show UK recovering faster from pandemic than Germany or France, but mortgage approvals have fallen

Revisions to figures show stronger performance than Germany and France but momentum starts to stall

Thinktank says Tories have overseen the biggest increase in taxes during a parliament since records began in 1951UK households are facing an average tax rise of 3,500 a year by the next election, the country's leading economics thinktank has said - the biggest increase over a parliament on records dating back more than 70 years.The Institute for Fiscal Studies (IFS) said that on current forecasts the Conservatives were on track to raise 100bn more annually by 2024 than if taxes as a share of national income had stayed the same as in 2019. Continue reading...

Tanzania government blamed for violence against villagers in national park, while thousands more people face losing their homesThe World Bank is investigating allegations of killings, rape and forced evictions made by villagers living near the site of a proposed tourism project it is funding in Tanzania.The bank has been accused of enabling" alleged violence by the Tanzanian government to make way for a $150m (123m) project ministers say will protect the environment and attract more tourists to Ruaha national park. Continue reading...

Survey finds parents under pressure, as second study finds some are leaving workforce because of costsParents of nursery and primary school-age children are facing more than 600 of extra childcare costs a month, a study has found, as employers demand staff spend more days in the office.More than half of parents said they had come under increasing pressure to increase time spent at their desks, in response to a survey by the flexible childcare provider Pebble. Continue reading...