Shares in UK chip designer are making a successful debut on the US stock market today, while UK blue-chip stocks post their best day since last November

Peter Riddle asks if Labour has the necessary vision and courage; plus letters from Nadine Grieve and Adrian CoskerAs crumbling schools and insecure prisons help to hammer the final nails into this government's coffin, the focus inevitably turns to what happens next. A vigorous debate is now being played out between those who argue that anything is better than the corruption and neglect of this Conservative government and those who believe that those who have prospered under 13 years of Tory rule should start to contribute a greater proportion of their wealth for the wider good.Larry Elliott is right (Councils going bust, schools crumbling, the NHS in crisis: the answer is more tax, 7 September). Just a change of personnel in government alone will not bring about the radical changes people are desperate for. The fundamental question remains of whether Labour, under Keir Starmer's leadership, has the vision and courage to introduce a fairer distribution of wealth to fund heavy investment in our public services and start to redress the years of Conservative slash and burn policies, or whether it maintains its current trajectory and achieves power but simply treads water.

Weak consumer spending as, people - especially in Germany, the EU's largest economy - put more into savings

Central bank's president hints this may be the peak for rates in drive to bring down stubborn inflationThe European Central Bank has raised interest rates to the highest level since the launch of the euro to tackle stubbornly high inflation, despite fears over a slowdown across the single currency bloc.It marks the 10th consecutive rate rise for the bank, as the ECB warned inflation remained too high even as the impact of previous increases and a weakening outlook for global trade weigh on the eurozone economy. Continue reading...

Partnership says smaller first-half loss is optimistic sign but recovery plan likely to take two years longer than scheduledThe owner of John Lewis and Waitrose has said its turnaround plan will take two years longer than scheduled, after reporting another loss for the first half of the year.The John Lewis Partnership (JLP) made a pre-tax loss of 59m for the 26 weeks to 29 July, as it continued to face pressures from higher costs and caution from shoppers during the cost of living crisis. Continue reading...

British tech firm valued at $54.5bn before highly anticipated flotation on Nasdaq by private owner SoftBankThe British chip designer Arm has secured a $54.5bn (43.6bn) valuation in its initial public offering (IPO), before its highly anticipated return to the stock market in New York on Thursday.The company, owned privately by the Japanese investor SoftBank since 2016, priced its shares at $51 each and sold 95.5m shares, raising $4.87bn for Softbank. Continue reading...

German-owned discount chain reports 18% sales rise and extra market share but inflation cost it 100m to keep prices lowDiscount supermarket chain Lidl has revealed its British arm swung to an annual loss after battling to keep a lid on prices as its costs rose across the board".The group reported pre-tax losses of 76m for the year to 28 February against profits of 41.1m the previous year as it also invested heavily in the business. Continue reading...

New Lib Dem leadership in Surrey Heath attacks previous Conservative regime for racking up debts of 165mMichael Gove's local council is warning that it faces effective bankruptcy within two years after racking up millions of pounds in debt for failed property investments overseen by its former Conservative administration.Surrey Heath borough council is in the parliamentary constituency of Gove, who as levelling up secretary is the cabinet minister in charge of local government. Continue reading...

Growth in prices still remains far below the decades-high inflation rates that were seen last summer, when rate peaked at 9.1% in JuneUS inflation in August rose for the first time since June 2022, rising to 3.7% as a sharp increase in energy prices pushed prices up toward the end of the summer.Growth in prices still remains far below the decades-high inflation rates that were seen last summer, when the rate peaked at 9.1% in June. Still, an increase in inflation means the US economy is further from the Federal Reserve's target rate of 2% and will probably make officials consider pushing interest rates up later this year. Continue reading...

China's economic crisis. Plus: ChatGPT and Proust

Manufacturing, services and construction sectors contract for first time since summer of 2022

The formula was temporarily stopped after the Covid lockdown but doing so again may upset pensioners at the ballot box

Jump in borrowers unable to make payments with landlords particularly hit and worse to come'

Total pay jumps by 8.5% in the last year - ahead of inflation - while value of mortgages in arrears is now the highest in almost seven years

Soaring pay growth puts pressure on the Bank to act again, but a slowing economy could tip into recession

Figures will add to Bank of England's dilemma over whether to increase interest rates again next week

Campaigners estimate about $3.7bn in trade finance was supplied to oil and gas projects despite bank's green pledgesThe World Bank poured billions of dollars into fossil fuels around the world last year despite repeated promises to refocus on shifting to a low-carbon economy, research has suggested.The money went through a special form of funding known as trade finance, which is used to facilitate global transactions. Continue reading...

Rating agency report amid local government crisis lists 20 most indebted authorities relative to sizeMore English councils are expected to fail owing billions of pounds in debts, a leading credit rating agency has warned, amid an escalating crisis for local government after years of budget cuts and mismanagement.In a report in the wake of the financial meltdown at Birmingham city council, Moody's said several other local authorities across the country were close to issuing pre-insolvency warnings and listed the 20 most indebted in England relative to size. Continue reading...

Warning against pumping money into people's pockets' comes amid hints Bank of England will again raise ratesJeremy Hunt has warned that the high pace of inflation in Britain will prevent pre-election tax cuts this autumn amid signals from the Bank of England that another rate rise to ease cost of living pressures is coming next week.Speaking in India, the chancellor said he would be wary of putting money into the pockets of consumers in his November package because of the danger that it would overstimulate the economy and make it more difficult for Threadneedle Street to bring inflation down. Continue reading...

Chancellor says focus is to fight inflation, while Bank of England policymaker argues for higher interest rates

S&P Global's chief economist Paul Gruenwald believes interest rates will stay elevated for some time

China the largest growth market for agricultural exports for the second year in a row in 2022-2023, led by a 66% increase in wheat exports

The American position depends not only on relations with Russia, China and the Brics countries, but on fixing its own economic and political problemsIs the dollar poised to lose its dominance of global economic and financial transactions? Many commentators apparently think so.Russia obviously hopes they are right, given that it has been shut out of the US banking system and suspended from the Society for Worldwide Interbank Financial Telecommunication (Swift). China evidently wants to help the process along by encouraging countries to undertake transactions in yuan. And the Brazilian president, Luiz Inacio Lula da Silva, has called for the Brics countries (Brazil, Russia, India, China and South Africa) to create a common currency as an alternative to the dollar. Continue reading...

European Commission forecasts 0.4% contraction for country amid high inflationGermany's economy will shrink this year as part of a wider eurozone slowdown triggered by higher inflation and the dampening impact of rising interest rates, the European Commission has said.In its interim quarterly update, the commission said Europe's powerhouse economy would be the worst-affected major country in the 20-nation single currency bloc and would record a 0.4% contraction in 2023. Continue reading...

Survey of businesses gives further indication that Bank of England could limit future interest rate risesBusinesses are pulling back on hiring and slowing their output under the strain of rising borrowing costs, according to a study that gives a further signal that the Bank of England could limit future interest rate rises.A modest pickup in manufacturing in August failed to prevent a slowdown in broader UK private sector economic activity, a survey of businesses by the accountancy firm BDO found. Continue reading...

Sunak faces headache over India trade deal as upheaval continues in handling overseas labourImmigration played a key role in the UK's decision in 2016 to leave the EU. Opinion polls showed strong support among leave voters for an end to free movement and for Westminster to decide who should be allowed to enter the country for work. That's what the slogan take back control" was largely about.Since the Brexit vote, the mood has changed. There is still a feeling ministers need to do more to stop people in small boats crossing the Channel. But legal immigration has ceased to be such a hot political issue. Other issues - such as the cost of living and rising interest rates - rank as more important. Continue reading...

The British PM did eventually meet his counterpart at the Delhi summit - but after a day's wait, and without an impressive photo opRead more: Sunak tells G20: UK will resist hair shirt' policies on net zero pledge When Rishi Sunak finally got to meet his Indian counterpart, Narendra Modi, on Saturday, it was not entirely what the British prime minister had hoped for.India and the UK are respectively the fifth and sixth biggest economies in the world, and the two countries' leaders had been scheduled to meet a day earlier, at Modi's grand residence in New Delhi. But diplomacy can be brutal and Sunak found himself, if not exactly snubbed, certainly shunted down the pecking order. Continue reading...

Work by Threadneedle Street's own analysts suggest that firms are intending to keep prices high, despite falling costsA rebound in corporate profit margins over the next year could prevent inflation falling as quickly as the Bank of England is expecting. That's not the conclusion of a leftist thinktank or trade union. It's a clear message from the central bank itself, or more precisely from a group of its in-house economists, whose published research examines how a wide spectrum of businesses plan to cope over the next few months and into 2024.The data is stark. According to the research, 45% of companies surveyed say they plan to increase their profit margins in the coming 12 months. Almost a third (32%) expect no material change" to margins and only 23% expect to suffer a fall. Continue reading...

Woking declared itself bankrupt in June. Now, residents want answers as care, arts and leisure facilities face funding cutsOn a clear day, the council's ambitious plan was for Woking's tall buildings to be seen from the viewing levels of the Shard in London. Residents, however, view the unfinished towers with much less pride and a symbol of the Surrey town's financial woes.Woking borough council this week announced a sweeping package of cuts to local services, after the local authority in effect declared itself bankrupt in June, revealing a 1.2bn deficit racked up from a risky investment spree overseen by its former Conservative administration. The towers were at the centre of the problem, with cost overruns adding to vast debts. Continue reading...

Slow domestic consumption, high youth unemployment and decline in exports among factors dragging on post-Covid recoveryChina's consumer price index rebounded in August as the world's second-largest economy emerged from deflation, official data released on Saturday suggested, despite sluggish domestic consumption that is complicating its post-Covid economic recovery.Last month's CPI, the main gauge of inflation, rose 0.1% year on year, the national statistics bureau said. Continue reading...

Government criticised as Britain's latest subsidy auction to help support new renewable energy projects awarded no contracts for offshore wind projects

Maintaining guarantee will put insurmountable pressure' on government to increase retirement age, according to instituteMaintaining the triple lock on state pensions could add as much as 45bn a year to the welfare bill by 2050, putting insurmountable pressure" on the government to increase the minimum retirement age, according to the Institute for Fiscal Studies.In a report published ahead of the release next week of official data for earnings growth, which will be used to set the annual increase in pensions, the IFS estimates spending on retirees could rise by a further 2bn from April 2024. Continue reading...

Halifax says prices fell by 4.6% as high interest rates dent homebuyer demand

Pound falls as Andrew Bailey's comments call into question need for further interest rate riseThe Bank of England governor, Andrew Bailey, expects inflation to fall quite markedly" this year, calling into question the need for a further interest rate rise when policymakers meet later this month.Delivering a positive message to MPs that inflation was on a downward path, Bailey said falling energy prices and a weakening labour market meant the cycle of interest rates rises was nearing its end. Continue reading...

Governor Andrew Bailey tells MPs that BoE is much nearer" to ending its run of interest rates increases

We would like to hear your stories of skimpflation and shrinkflation from recent monthsUK consumers are suffering from a bout of skimpflation", as manufacturers downgrade the ingredients in certain food and drink products.Have you noticed a reduction in quality or size of products while shopping? Tell us what you've spotted below. Continue reading...

Resolution Foundation predicts average Britons will be 4% poorer but better-off pensioners will be big winners'UK workers' living standards will flatline next year, leaving them on track to be 4% worse off heading into the next election than they were in 2019, according to a leading thinktank.The Resolution Foundation, which focuses its research on low- to middle-income households, said in a report that never in living memory have families got so much poorer over the course of a parliament". Continue reading...

Fresh signs of weakness in Chinese economy and weak UK and eurozone data spook investorsFears about the health of the global economy have intensified following downbeat news about service sector activity in China, the eurozone and the UK.Share prices fell in Asia and the pound dropped to a 12-week low against the US dollar after fresh signs of weakness in China triggered speculation that its post-lockdown recovery was running out of steam. Continue reading...

Boss says move needed to avoid unacceptable' delays as new controls threaten more disruption

Letter from almost 300 millionaires, economists and politicians says urgent action needed to prevent extreme wealthDeveloped and emerging economies must use a summit this weekend to forge an international agreement to increase wealth taxes on the global rich, campaigners have said.In an open letter to the G20 before its meeting in Delhi, the group of almost 300 millionaires, economists and politicians say urgent action is needed to prevent extreme wealth corroding our collective future". Continue reading...

Rolling coverage of the latest economic and financial news, as stocks rally as Country Garden agrees extension to its onshore debt payments

European stocks hit three-week high as China's government tries to prop up ailing economy

Thinktank Cebr expects Bank rate to rise twice more and predicts 28,000 insolvencies over next yearAbout 7,000 businesses are likely to fail every quarter in 2024 as high interest rates cause financial strain and the UK economy enters recession, according to a thinktank.The Centre for Economics and Business Research said debt taken on during the pandemic, higher borrowing costs and the cost of living crisis would drive an increasing number of businesses under, particularly in the retail and hospitality sectors. Continue reading...

Chancellor blames expected rise on fuel price increases but maintains inflation will halve by end of 2023The chancellor, Jeremy Hunt, has said the UK may experience a blip" increase in inflation this month, as data suggested that average fuel prices have jumped back above 1.50 a litre.Hunt said the government is on track to hit its target of halving inflation by the end of the year but suggested the rate of price rises could spike when the latest figures for August are published in September. Continue reading...

Exclusive: Sources believe deal will not be struck before meeting with Narendra Modi at G20 summitRishi Sunak has ruled out a quick-fix trade deal with India, making it impossible to get an agreement over the line in time for this week's G20 summit in Delhi - and possibly even by next year's elections.Multiple sources close to the negotiations said the prime minister has rejected the idea of an early harvest" deal, which could have lowered tariffs on goods such as whisky but would not have dealt with trickier subjects such as professional services. Continue reading...

The chancellor says the economy is resilient but forward-looking indicators suggest otherwiseManufacturing is struggling and house prices are sliding. There is precious little money in the kitty for pre-election tax cuts. Inflation is proving hard to shift and strikes by hospital doctors and railway workers are set to continue. The Bank of England is slowly throttling the economy with its increases in the cost of borrowing.Having dodged the recession bullet last year, there are signs the UK may not do so again in the coming months. Any good news from lower energy prices is outweighed by the impact of higher interest rates, the full effects of which have yet to be felt. It is a rotten prospect for a government that is 20 points behind in the opinion polls and has to fight an election by January 2025 at the latest. Continue reading...

A long-term lack of investment has left our infrastructure in pieces. Instead we are prey to dire fallout from events that should be within our controlOur national malaise is that nothing works and that the country is falling apart. Two recent episodes have captured the gloomy zeitgeist. On Monday, the national air traffic services (Nats), thrown into crisis by the input of a small amount of mismatching data, went down for several hours, spreading mayhem across Britain's skies, with 1,600 flights cancelled and many others delayed, and the lives of hundreds of thousands of returning holidaymakers disrupted. And on Thursday, days before the start of the new school year, we learned that more than 100 schools are to be closed, all or in part because of fears the light concrete with which they are made could collapse.These disparate events have common roots: they underline the lack of system resilience of so much British infrastructure and the unwillingness to plan for unforseen contingencies, so that reactions to unexpected failures are ad hoc and on the hoof. And when things do go wrong, the processes for redress and compensation are feeble - in these cases, organised around minimising a duty of care to schoolchildren and parents, and to airlines and passengers. There is a complete lack of accountability. Be sure the same is true for so much else. Continue reading...

A trip to Portugal, Britain's oldest ally, was a painful reminder of the benefits of EU membershipThe media has been replete this summer with reports of British holidaymakers returning from EU countries proclaiming - and complaining - that our neighbours enjoy a better way of life than is now the case in Brexit Britain.In years gone by a popular English phrase was mustn't grumble". These days it has been superseded by nothing works" and things are falling apart". Continue reading...

Signs of distress from very different parts of economy will add to Bank of England's dilemma over interest ratesPolicymakers in the UK have been put on recession high alert after surging interest rates triggered a slump in factory output and the biggest annual drop in house prices since the global financial crisis of the late 2000s.Amid growing evidence that the 14 successive increases in the Bank of England base rate have been slowing the economy, the monthly health checks of manufacturing and the property market both pointed to a tough winter ahead. Continue reading...