Jeremy Hunt says the government can open borders for care homes and construction workers that are facing worker shortagesOn Brexit, Jeremy Hunt is pressed by the moderator about the challenge that Brexit has posed for many businesses in the room for the BCC conference this morning.He’s sidestepped the question a bit, saying that “any change in your trading relations with your biggest trading partner presents challenges” but notes that the surge in energy prices linked to the war in Ukraine have also hampered businesses. Continue reading...

Rishi Sunak’s Farm to Fork meeting, the first of its kind, failed to address solutions to inflation, soaring costs and food security, say attendersRishi Sunak’s Downing Street food summit has been described as “empty" by food and farming industry representatives, who rounded on the prime minister for failing to discuss soaring inflation or set out measures to safeguard British food production.The Farm to Fork summit, the first meeting of its kind, brought together farmers, food producers and some of Britain’s largest supermarkets. Continue reading...

The White House and Republicans in Congress are currently in a standoff over how much the government can borrowThe US faces an “unprecedented economic and financial storm”, the treasury secretary, Janet Yellen, warned on Tuesday as Joe Biden met with his Republican counterparts for the latest in a series of tense talks over the US debt ceiling.Time is quickly running out to find a solution, said Yellen. Without raising the debt limit, the US government will default on its bills, a historic first, with likely catastrophic consequences. Federal workers would be furloughed, global stock markets would crash and the US economy would probably drop into a recession. Continue reading...

Turning a blind eye to anti-competitive deals wouldn’t improve UK’s reputation as good place to do business, suggests Competition and Markets Authority

We’re keen to hear what Britons in their 50s and 60s have been doing with their time since they’ve begun working fewer hours, or stopped working completelyWe’d like to hear from people in the UK in their 50s and 60s who have recently decided to work less or leave the workforce altogether why they have made this decision, and what they are doing instead.The economic inactivity rate for people aged 50 to 64 years has increased slightly, from 27.1% between October and December last year to 27.2% between January and March 2023, according to the Office for National Statistics (ONS). Continue reading...

Number of vacancies falls and more people rejoin workforce – but work is needed on skills and ill health

Evidence of cooling in demand for labour amid 136,000 drop in employees between March and April

Jeremy Hunt’s freeze on allowances and thresholds will put a quarter of teachers and one-eighth of nurses in 40% income tax bracketOne in four teachers and one in eight nurses will be higher-rate taxpayers by 2027 as a result of the government’s record freeze on income tax allowances and thresholds, according to a leading thinktank.The Institute for Fiscal Studies said better-paid public sector workers will be among the almost 8 million people – one in five of all taxpayers – who will pay income tax at 40% or above as result of the Treasury’s attempt to reduce the UK’s budget deficit. Continue reading...

Fuel margins have increased across the retail market, but in particular for supermarkets, over the past four years, says competition watchdog

Revised outlook for 2023 and 2024 puts average growth for 27-member bloc at 1%

Customers seek energy-saving tech, repair services and consumer finance deals to stretch budgets, says CEO

Prices in the UK are continuing to rise on everything from groceries to energy bills and mortgage costs. Meanwhile, some companies are reporting record profits. Richard Partington reportsMillions of households in the UK are feeling a prolonged pinch as inflation eats away at their standard of living. Rising bills for weekly shopping, energy use and housing costs have meant many people are cutting back on luxuries and essentials.As the Guardian’s economics correspondent, Richard Partington, tells Michael Safi, the story spun by the government has been a simple one: the blame lies with Vladimir Putin and a global pandemic. But not everyone is suffering from these higher costs. Look at the country’s top 350 companies and, according to a team of researchers at Unite, the UK’s largest private-sector trade union, average profit margins increased from 5.7% in the first half of 2019 to 10.7% in the first half of 2022. It’s a concept that is being called ‘greedflation’ – where companies are using the alibi of a global crisis to bolster their profit margin by putting up prices more than they could otherwise get away with. So is that what’s happening? And if so, what can we do about it? Continue reading...

Without one, the country risks missing out on the opportunities offered by the green transition and new technologiesIn 2011, George Osborne used his second budget speech to promise a “Britain carried aloft by the march of the makers”. The UK manufacturing sector, cut off at the knees during the accelerated deindustrialisation of the 1980s, was to rise up and make a triumphant comeback. Britain was going to make stuff again.It didn’t happen of course. By 2016, Mr Osborne’s ideological commitment to a smaller state and austerity had contributed to a steel crisis, falling orders in construction, and a crisis of confidence in the private sector. In the absence of a proactive government setting strategic goals, and using its spending power to direct investment towards them, the march of the makers shuddered to a halt amid a needlessly prolonged recession. Brexit, by decoupling Britain from the mass market on its doorstep, then introduced a whole new world of pain for manufacturers. Continue reading...

Britain says it has no need for Biden-style green subsidies as it has a thriving renewables sector. The complacency is staggeringCountries that are serious about manufacturing have industrial strategies. The US and China have one. So do Germany and France.Britain does not have an industrial strategy. Rishi Sunak talks about turning the UK into a “science and technology superpower” but that’s all it is: talk. It is a PR strategy masquerading as an industrial strategy.It is no surprise that AstraZeneca recently announced it was building its new factory in Ireland. Continue reading...

Fewer voters believe the rapidly fragmenting right can offer solutions to our pressing crisesIt’s in its infancy, but it’s hard to imagine how the emergent mood of seriousness about the interlinked threats to our economy, society and democracy cannot but grow stronger.Yes, there was relief at last week’s news that the economy was still growing in the first three months of this year, even if at a minuscule rate. But that was dispelled by the realisation that it is still smaller than before the pandemic three years ago, the worst performance in the G7. Another interest rate increase seems sure to follow after last week’s hike – yet more stress for those having to remortgage their homes, and a further economic dampener. Business and consumer optimism are in short supply. Continue reading...

The Conservatives have much to be ashamed of after 13 years. But the surge in Lib Dem support shows Europe still matters‘When one with honeyed words but evil mind persuades the mob, great woes befall the state.” Euripides was not of course referring to Brexit in his play Orestes, but to the chaos caused by Clytemnestra’s murder of Agamemnon and Orestes’s dispatch, in turn, of Clytemnestra.The disastrous outcome for the Conservatives in the local elections may not lead to any physical violence, but all the signs are, as the recriminations begin, that the Tories are in for a metaphorical bloodbath. Continue reading...

Costs are falling yet shopping bills rise. Something doesn’t add up and experts point to ‘greedflation’ on the part of big retailers‘It’s diabolical because if I put my prices up people are going to stop coming to my shop,” says Bally Singh, owner of Hooked Fish and Chips about the hard decisions as high energy and food costs threaten his business.Singh’s fish and chip shop in West Drayton, in the outer suburbs of London, is one of 10,500 in the UK battling to keep customers happy as the cost of a meal, once as cheap as chips, soars, in grim lockstep with wider UK food prices which are climbing at the fastest rate since 1977. Continue reading...

Impact of Bank of England’s decision to hike rates to 4.5% will be felt mostly by young families, thinktank saysSoaring interest rates will cost UK mortgage holders £12bn in extra payments, according to a leading thinktank which said the impact will be felt mostly by young families.In a report that emphasised the dramatic impact of higher borrowing costs, the Resolution Foundation said the Bank of England’s 12 consecutive rates rises since December 2021 had already cost homeowners £4.2bn, with about £8bn more in extra payments likely over the next couple of years. Continue reading...

UK’s recovery since pandemic has lagged other G7 nations, despite expanding by 0.1% in first quarter of 2023

But there was 0.1% growth in first quarter overall thanks to a stronger January, ONS says

There are some signs that headwinds are easing but economy still looks fragile

The Bank of England has raised interest rates by a quarter of a point to 4.5% as it forecast inflation would stay higher for longer than previously expected and the economy would perform more strongly. The Bank’s monetary policy committee voted by a majority for a 12th successive increase in borrowing costs, continuing its most aggressive rate-hiking cycle since the 1980s in an attempt to dampen UK inflation, which remains in double digits. UK rates are at the highest level since October 2008, when the global economy was in the grips of the financial crisis

Families who have remortgaged or are about to do so tell of a precarious position after rate raised to 4.5%

Latest 0.25 point hike marks 12th rise in a row as Bank battles stubbornly high inflation

Bank of England aware that impact of most rates rises has yet to be felt, meaning a pause is now probable

The quarter-point rise to 4.5% hits mortgage holders, credit card users and people seeking loans, but savers could benefit

Poll of City analysts shows unanimous expectation of Bank of England raising interest rates to 4.5%Almost 1.5 million homeowners with variable rate mortgages face higher borrowing costs with the Bank of England expected to push up interest rates on Thursday to 4.5%.City analysts polled by Refinitiv were unanimous in forecasting the central bank would increase its base rate by 0.25 percentage points when policymakers meet to tackle Britain’s stubbornly high inflation rate. Continue reading...

Headlines stoked fears of ‘stimulatory’ measures but you only need to look at the big banks and markets to see the reception was calm

Leading thinktank sounds alarm over cost of living crisis with poorest £4,000 worse off in 2023 than before Covid pandemicRishi Sunak is at risk of missing his flagship target to halve inflation this year, one of Britain’s leading economic forecasters has warned, as households are left thousands of pounds worse off amid the cost of living crisis.Sounding the alarm over the hit to living standards, the National Institute of Economic and Social Research said the soaring price of food and other basic essentials meant inflation was on track to remain persistently high for the rest of this year. Continue reading...

The obscene wealth of many CEOs is less a result of intelligence and more down to luck, background and personalityMoney may be able to buy you happiness, but it can’t buy you brains. A study published in January found that billionaires aren’t any smarter than the rest of us – indeed, those in the top 1% of earners scored lower on cognitive ability tests than those who earned slightly less.This is according to researchers who analysed data from 59,000 Swedish men, then tracked their lives for more than a decade. They found a strong connection between how smart someone was and how much they earned – until they reached a salary of 600,000 kronor (£46,700) a year. After that, factors such as luck, background and personality became more important. Continue reading...

Report details how local people and firms helped Alisher Usmanov’s conceal immense wealthCyprus has received an 800-page dossier from the US government detailing sanctions breaches by local individuals and entities that are alleged to have enabled the Russian billionaire, Alisher Usmanov, to conceal his immense wealth.As the island’s leader Nikos Christodoulides vowed to push ahead with the prosecution of law and audit firms that had aided the oligarch, Washington released documents that amounted to a toolkit to facilitate the process. At least two other dossiers are expected to follow. Continue reading...

Influential economist Andy Haldane says dearth of coherent strategy means Britain isn’t in the new ‘arms race’ to reindustrialiseBritain risks falling behind in a multibillion-pound global “arms race” of re-industrialisation without an urgent launch of a coherent plan for manufacturing, Andy Haldane has warned.The influential economist, who is on Jeremy Hunt’s council of economic advisers, said the UK was “not really in the race at any kind of scale” as other countries steal a march in developing the green, hi-tech industries of the future. Continue reading...

Move by UK’s second-largest supermarket raises hopes that food inflation will start to come downSainsbury’s has cut the price of its own brand bread and butter, in what some are seeing as a sign that soaring food price inflation will start to come down in the coming months.The UK’s second-largest supermarket chain said it had lowered the price of its soft white medium, wholemeal medium, wholemeal thick, and toastie white loaves of bread to 75p, which is a reduction of 11%. Continue reading...

Sluggish retail sales and credit card spending figures add to fears for British economyConsumers are cutting back on purchases amid growing pressure on the Bank of England to tame inflation.Retail sales increased 5.2% on a like-for-like basis in April compared with the same period a year earlier, according to data from the British Retail Consortium and the consultancy KPMG. Continue reading...

Its weaponization threatens US economic standing, so some are considering doing away with the ‘anachronistic’ ruleIn just a few weeks, the US may be unable to pay its bills.A divided Congress has still not reached an agreement on raising the debt ceiling, and time is running out to avoid a default. The treasury secretary, Janet Yellen, has warned that the government may be unable to cover its financial obligations as early as 1 June. And economists predict that a federal default would cause unemployment and interest rates to rise as the country’s GDP shrinks, wreaking havoc on Americans’ finances. Continue reading...

Two-thirds of the population are struggling with falling living standards as even the once-thriving middle classes hunt for second jobs and eat lessIncreasing numbers of Egyptians are desperately hunting for second jobs, cutting back on eating meat and scrambling to find new ways to cope with soaring prices, amid a worsening cost-of-living crisis.Ahmed Fawzi is searching for a second job even though his current role as a graphic designer in Cairo leaves him with few spare hours in the day. He said: “It feels like the economic crisis is literally squeezing me. Prices are going up every day and there’s no solution to it.” Continue reading...

US investment bank believes inflationary pressures could force monetary policy committee’s handThe Bank of England could be forced to raise interest rates to 5% this summer, Goldman Sachs has warned, as Britain struggles to bring down the highest rates of inflation among the G7 group of advanced economies.Threadneedle Street is widely expected to increase the cost of borrowing for households and businesses on Thursday for a 12th time in succession, with financial markets anticipating a quarter-point rise to 4.5%. Continue reading...

If president is not worried about re-election prospects after one of biggest economic bubbles of past 100 years, he should be

Being alone can be bliss or hell, and different kinds of solitude matterSolitude is up. More people live alone and 6% of us (equivalent to 3 million people in England) report feeling lonely often or always. The pandemic left millions of us alone for months on end.But what kinds of solitude matter and how? After all, psychologists tell us being alone doesn’t necessarily mean being lonely. Solitude ranges from bliss to hell. Continue reading...

Conservative narratives have lost their power. Britain should follow the lead of the world’s winnersThe art of success in politics, economics and even war is to tell compelling stories. Data, formal speeches, slide decks, clever debating points and tools of close analysis all have their place – but the trump card in persuasion and winning hearts and minds is a good story. To win is to have owned the best narrative. Get the message wrong and it turns into an unbelievable, losing fairytale.Thus, one of the reasons the Russians will ultimately fail in Ukraine is as much their weak story as any military frailties, while the Ukrainian account in response is so strong. Few, even inside Russia, believe Vladimir Putin’s story that Ukraine was always and immutably Russian, justifying such death and destruction to reassimilate it into its “natural” motherland.Do you have an opinion on the issues raised in this article? If you would like to submit a letter of up to 250 words to be considered for publication, email it to us at observer.letters@observer.co.uk Continue reading...

King Charles and the Prince’s Trust arguably did a better job of improving the skills of the under-30s in the last decade than the governmentKing Charles is well known for his support of Britain’s youth. Arguably, he has done more to train the under-30s in practical skills over the last decade than the government – and financed it without lumbering them with huge debts.The Prince’s Trust passed its one millionth trainee milestone in 2020 and has carried on without much fanfare while the government’s skills programme has floundered – undermined by Theresa May’s complicated and misused apprenticeship levy. Continue reading...

Experts say up to 20,000 parties will be thrown, 62m pints quaffed and untold special quiches scoffedThe big day has finally arrived, which means millions of flags will be waved, pints drunk and quiches eaten. Here is the coronation weekend in numbers. Continue reading...

Latest US jobs report beats forecasts, although February and March’s data has been revised down

April broke downward trend in growth of labor market, which has been slowing over the last few monthsUS employers added 253,000 jobs in April, a sign that the resilient jobs market remains robust even after a year of Federal Reserve interest rate rises.Labor market growth has been slowing over the last few months, from 472,000 jobs in January to a revised 165,000 in March. April broke that downward trend in growth, the Bureau of Labor Statistics (BLS) reported on Friday. Continue reading...

IAG expects to fly almost the same passenger numbers this year as before Covid pandemicThe owner of British Airways has upgraded its full-year profit expectations thanks to strong demand for holiday travel, as the airline group said it expected to fly almost the same number of passengers this year as it did before the coronavirus pandemic.International Airlines Group (IAG) reported a first-quarter profit for the first time since 2019, before the travel industry was plunged into chaos by Covid lockdowns. It made an operating profit of €9m (£7.9m) in the first three months of the year. Continue reading...

Regulators step in after PacWest and Western Alliance shares plunge as investors fear repeat of First Republic, SVB and Signature failures

Comments by Christine Lagarde come after central bank raises interest rates for seventh time in successionThe president of the European Central Bank has suggested companies are taking advantage of high inflation when increasing prices, after the bank raised interest rates by a quarter of a percentage point to tackle the cost of living surge.Christine Lagarde said wage pressures in the eurozone had strengthened, as workers try to recoup some of the purchasing power they have lost due to inflation, but she hinted some firms were engaging in so-called greedflation. Continue reading...

From rationing to taxes, house prices to health – the differences and similarities between the Britains of 1953 and 2023Double-digit inflation prompted by a regional war. Essential goods in short supply in the shops. Shortages of workers. In some respects the economy when Charles III is crowned king this week has distinct echoes of his mother’s coronation 70 years ago.In other respects, Britain is an entirely different place. In 1953, the retreat from empire was under way, the welfare state was in its infancy and membership of the European Economic Community was two decades away. Continue reading...

Chain’s CEO Simon Wolfson warns of ‘very challenging’ 2023 after signalling price rises of 7%The UK clothing and homeware retailer Next has reported a smaller than expected drop in sales in recent weeks but expects a bigger decline in the spring quarter because of the cost of living crisis and colder weather than last year.Next, which has about 500 stores and is seen as a good barometer of consumer spending, said sales were down by 0.7% from a year earlier in the 13 weeks to 29 April, better than the firm’s guidance of a 2% fall. Continue reading...

Despite Washington’s efforts to de-escalate tensions with Beijing attempts to restore bilateral trust seem futileI recently attended the China Development Forum (CDF) in Beijing, an annual gathering of senior foreign business leaders, academics, former policymakers, and top Chinese officials. This year’s conference was the first to be held in person since 2019, and it offered western observers the opportunity to meet China’s new senior leadership, including new premier Li Qiang.The event also offered Li his first opportunity to engage with foreign representatives since taking office. While much has been said about the Chinese president, Xi Jinping, appointing close loyalists to crucial positions within the Communist party of China (CPC) and the government, our discussions with Li and other high-ranking Chinese officials offered a more nuanced view of their policies and leadership style. Continue reading...