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Updated 2024-12-25 15:30
Trussonomics will be a reckless exercise in slashing the state when there’s nothing left to cut | William Davies
Thatcherism was disastrous 40 years ago, but the new prime minister seems intent on reviving it to meet the crises of 2022Liz Truss and her likely chancellor of the exchequer, Kwasi Kwarteng, belong to a particular generation, many of whom once asked their parents: “Can a man be prime minister?” Not even four years old when Margaret Thatcher took power, 15 when she lost it and well into adulthood before the Tories were finally defeated, their earliest political awakenings would have taken place against the long backdrop of Thatcherism.This biographical context is acknowledged in the notorious political tract that Truss and Kwarteng co-authored with Priti Patel, Dominic Raab and Chris Skidmore, Britannia Unchained, published in 2012. “All five authors grew up in a period where Britain was improving its performance relative to the rest of the world,” it says. “The 1980s, contrary to the beliefs of many on the left, were a successful decade for Britain.” Their objective is to resurrect political dreams from their own childhood.William Davies is a sociologist and political economist. His most recent book is Unprecedented? How Covid-19 Revealed the Politics of Our EconomyGuardian Newsroom: What does Liz Truss’s leadership mean for the UK? Join our panel including Hugh Muir, Jessica Elgot, Owen Jones and Salma Shah as they react to the announcement of the new PM in this livestreamed event. On Tuesday 6 September 8pm BST | 9pm CEST | 12pm PDT | 3pm EDT. Book tickets hereDo you have an opinion on the issues raised in this article? If you would like to submit a letter of up to 300 words to be considered for publication, email it to us at guardian.letters@theguardian.com Continue reading...
UK economy on brink of recession as Truss takes over, figures show
Activity in manufacturing and services fell last month as businesses struggle with soaring costsLiz Truss will become the UK’s next prime minister with the economy on the brink of recession, according to figures that show private sector activity fell last month as businesses struggle with soaring costs.The latest snapshot from S&P Global and the Chartered Institute of Procurement and Supply (Cips) revealed a “severe and accelerated” decline in manufacturing output in August, alongside weaker activity in the UK’s dominant service sector. Continue reading...
The daunting economic challenges facing the UK’s next chancellor
Nadhim Zahawi’s successor will have to provide support as the country grapples with falling into recessionThe chancellor picked by Britain’s new prime minister will face a daunting array of issues from the moment he or she takes office.Whoever takes the hot seat in the Treasury will find themselves in a similar position to Rishi Sunak in March 2020 when the pandemic hit and the economy faced being shutdown for several months. Continue reading...
Liz Truss considering energy bills freeze if she becomes PM, say reports
Expected Tory winner again refuses to reveal details amid growing concerns about her plans to cut taxes
John Lewis adopts ‘moments’ slogan as spending habits shift after Covid
Retailer’s research shows people want to spend money on enjoying life day to day as cost of living continues to riseFor close to a century, John Lewis has been “never knowingly undersold”, but the retailer is now positioning itself as being there “for all life’s moments” as it adapts to a profound shift in spending habits driven by Covid-19 and rising living costs.The pledge is designed to tap into what the department store chain is billing as the “moments economy”, as Britons spend smaller amounts on enjoying day-to-day life – from hosting a dinner party to celebrating a dog’s birthday – rather than splurging on set-piece events such as foreign holidays. Continue reading...
A crisis is coming for UK energy prices and this is what has to be done
We need to target our response by replacing price caps with a new system of ‘free basic energy’
UK must be put on an economic war footing for the coming recession | Larry Elliott
Incoming prime minister’s only priority over next few weeks should be to avoid meltdownThe waiting is almost over. Conservative party members have made their choice. This week a new prime minister will be installed in Downing Street at the most testing time imaginable. Even February 1974, when Harold Wilson came to power and ended Britain’s three-day week, doesn’t really match up to the omni-crisis with which Boris Johnson’s successor has to grapple. Arguably, it is the grimmest inheritance since Winston Churchill’s in May 1940.All the smart money is on Liz Truss winning the race, although in retrospect it may come to be seen as a Pyrrhic victory because the new prime minister will arrive in office with the economy about to hit the wall, energy bills soaring, the pound crashing and the global financial markets selling off. Continue reading...
Britain needs an economic strategy – instead we’ve got Liz Truss | William Keegan
As we wrestle with the disaster of Brexit and loss of the single market, our next PM is ruining Anglo-French relationsDuring a blissful holiday in the Vaucluse I managed to avoid any news about this dangerously absurd Conservative leadership election – that is, apart from one classic Truss gaffe.Yes, the news that Liz Truss had declared that “the jury is out” on the UK’s future relations with France most certainly struck a dissonant chord with Kate McKinley, who runs the Mourchon winery in Séguret. She informed me of it with a despairing air, adding also that President Emmanuel Macron had reacted with the tolerance that has become his lot in matters of Anglo-French relations as long as the Brexiters reign over here. Continue reading...
Now Britain is in the 100% debt-to-GDP club, what’s the spending plan?
Covid has pushed many states’ debts above annual income, but the UK has lower credibility than some with lendersBritain is about to become a member of a club it has avoided joining for six decades – that of nations with a 100% debt-to-GDP ratio.Such is the size and scale of the rescue packages needed to prevent the energy crisis overwhelming millions of families and avoid thousands of businesses going bust, a debt ratio that shot up from 83% to 94% in the first months of the pandemic and touched almost 104% in 2021, is now on course to stay in three figures for the rest of the decade. Continue reading...
Markets rally after US jobs report; G7 ministers back Russian oil price cap; pound under pressure – as it happened
US non-farm payroll rose by 315,000 in August, as hiring slowed after a strong July
Will the dollar’s recent rises end in whiplash? | Kenneth Rogoff
Some previous surges were followed by sharp declines, but world instability means the euro and yen could fall
US added 315,000 jobs in August as strong market defies signs of worsening economy
Numbers come as Jerome Powell says Federal Reserve intends to continue interest rate hikes to try to tamp down inflationThe US added another 315,000 jobs in August as the jobs market remained strong amid signs of a worsening economy.The US jobs market lost 22m jobs in early 2020 at the start of the pandemic but roared back after the Covid lockdowns ended. It has remained strong despite four-decade-high rates of inflation and slowing economic growth. In July, the US unexpectedly added 526,000 new jobs, restoring employment to pre-pandemic levels. Continue reading...
‘Storm coming’: Britain in a mess as ruinous energy bills meet austerity
Talk on picket line in Felixstowe and high street in Ipswich says new PM has just weeks to tackle crisisOn the picket lines outside the port of Felixstowe there is a feeling breaking point has been reached. Against a soundtrack of Bob Marley’s Get up, Stand Up pumping out over speakers, all the talk among the throng of dockers outside Britain’s biggest container terminal is of wages failing to keep pace with soaring living costs.“People have had enough,” says Donna Crichton, one of the many represented by the Unite union in the eight-day strike, which ended without resolution last week. The 41-year-old, who lives at home with her parents, says buying or renting a home is a pipe dream when living costs are going through the roof. Continue reading...
The UK is at a perilous tipping point. But what is Truss planning to do about it? | Polly Toynbee
Each day brings more news about a spiralling catastrophe – the economy is crying out for major government interventionThe gigantic scale of the oncoming economic shock becomes clearer by the hour. Click – and there’s Goldman Sachs predicting a 22% inflation rise next year. Click again and Bloomberg reports UK energy companies will make £170bn in excess profits over the next two years. If interest rates do hit 4%, banks too will roll in unearned mortgage money, plus shedloads from money loaned to the government. Fine profits will be made from national misery.Each day dawning reveals how everything, everywhere, is at a perilous tipping point. Martin Lewis warns that lives will be lost from cold and hunger, amplified by Sir Michael Marmot’s warning yesterday of children in grave peril. Lewis is not “catastrophising”, he says: “This is a catastrophe, plain and simple unaffordable.” If only he were to be the new chancellor … carry on with your own Jack Monroe-and-Marcus Rashford dream team.Polly Toynbee is a Guardian columnist Continue reading...
UK gas prices fall; growth fears hit markets; pound sinks below $1.16 amid living standards squeeze – business live
Energy prices fall in UK and Europe; Resolution Foundation warns three million more people could be pulled into absolute poverty
UK factory output slumps at fastest rate since May 2020
Analysts say manufacturing recession has begun as new orders fall amid soaring inflation and economic uncertaintyUK factory production slumped in August at the fastest rate since the early Covid-19 pandemic lockdown month of May 2020 after manufacturers suffered a sharp reversal in new orders from domestic and overseas customers.Analysts said a manufacturing recession had begun after firms reported that clients had “postponed, rescheduled or cancelled agreements” in response to economic uncertainties, soaring inflation and component shortages. Continue reading...
IMF offers Sri Lanka provisional $2.9bn loan to tackle debt crisis
Funding still needs to be approved but could offer breathing space amid country’s economic turmoilThe International Monetary Fund has tentatively offered Sri Lanka a $2.9bn (£2.5bn) loan to help the country recover from the worst economic crisis since it gained independence from Britain in 1948.The funding is meant to provide some breathing space for Sri Lanka, which is scrambling to restructure nearly $30bn in debt to creditors including China, India and a string of international banks. Continue reading...
UK households’ spending power to drop by £3,000, warns thinktank
Resolution Foundation says rising energy bills will push extra 3 million people into poverty
The Guardian view on Rishi Sunak: the politician who cried wolf | Editorial
Of course financial markets are jittery: the government has gone awol and the economy is tankingThe man most likely to lose the fight to become Conservative leader is threatening dire consequences if he is disappointed. Pointing to volatile financial markets, Rishi Sunak warned this week that investors will dump British assets if Liz Truss becomes prime minister and then borrows tens of billions to give away. Pressing ahead with tax cuts and public spending while ignoring the risk of an investors’ revolt is, says the former chancellor, “complacent and irresponsible”.A degree of rhetorical licence is granted to electoral combatants, and Mr Sunak has enjoyed his full quota this summer. The once mild-mannered MP has spotted a dangerous “lefty woke culture” from which only he can protect “our history, our values, our women”. Indeed, the further behind he has fallen, the more extreme the vows for what he will do if he wins. But even the boy who cried wolf called it right once, and this latest claim will undoubtedly be taken more seriously. After all, its author once worked in the City for those money managers he sees as so jittery. Continue reading...
A challenge to neoliberal economics and the myth of market supremacy | Letter
Even in normal times, the private sector relies heavily on public money, infrastructure and services, writes Prof Mary MellorTaking back control of malfunctioning markets must mean challenging neoliberal economics and the myth of market supremacy (Editorial, 29 August). The market is not the sole source of money and wealth. The public economy is equally important – and vital when markets fail or in times of crisis. Even in normal times, the private sector relies heavily on public money, infrastructure and services. The biggest myth of all is that public expenditure is funded from the (private) taxpayer’s pocket. There is a growing alternative economics which shows that it is the state’s capacity to create money that underpins the market, through the authorised banking system and government spending.The illusion that the latter is based solely on borrowing from the private sector or taxation is sustained by the ambivalent role of central banks. When national debt is held by the (national) central bank, the reality is that the government effectively owes the debt to itself. Public spending is not inflationary if it is balanced by taxation. Continue reading...
Borrowing costs on UK’s debts hit by biggest monthly rise since 1986
Heaping pressure on incoming prime minister, 10-year government bond yields shoot up to 2.78%Fears of a long recession and the likelihood of higher public spending to cope with the cost of living crisis have sent the interest rate on Britain’s debts soaring towards its biggest monthly rise in almost 40 years.Ten-year UK government bond yields, which are a proxy for the effective interest rate on public borrowing, hit 2.78% to register the biggest monthly rise since September 1986. Continue reading...
Inflation pushes average cost of filling Panini 2022 World Cup sticker album to £870
Five-sticker packs for football tournament in Qatar are 12.5% more than for Russia 2018Inflation has come for the football sticker album. Collecting and completing the official Panini Fifa World Cup Qatar 2022 album will cost fans an average of about £870.Panini, which first produced a World Cup sticker album for the 1970 tournament in Mexico, has priced five-sticker packs for the Qatar 2022 album at 90p each. That is a 12.5% increase on the 80p cost of a five-sticker pack for the Russia 2018 album. For Euro 2016 a pack cost 50p. Continue reading...
Burn out: Inside the 2 September Guardian Weekly
On the frontline of Britain’s energy bills crisis. Plus: Visions of outer space
This age of abundance must come to an end to save the planet | Letter
We are overconsuming the Earth’s resources and are increasing our ecological debt every year, writes Barbara WilliamsThank you for sharing Emmanuel Macron’s warning about the “end of abundance” (Report, 24 August). It is heartening to see a glimmer of realism creep into a speech by a politician. Humanity has now been exceeding the biocapacity of Earth for well over 50 years, and it beggars belief that both politicians and voters still believe that pursuing GDP might solve the ecological collapse that has been caused by this measure of “wellbeing”.We are increasing our ecological debt every year, leaving less and less scope for our children to survive. What we really need is a global aspiration to unite us in all our diversity, to peacefully and equitably aspire to shrink back within the biocapacity of our planet. Continue reading...
A fairer measure of Britain’s wealth | Letter
Peter Danielian disputes a claim that the UK is the sixth-richest country in the worldAlthough I agree with the main points of Aditya Chakrabortty’s article (These are energy bills many Britons simply can’t afford. Some will pay with their lives, 26 August), it is not correct to say that the UK is the “sixth-richest country in the world”. We have the sixth-largest economy (GDP), but GDP should not be used to compare nations’ wealth, which depends on the size of the population. India has the fifth-largest GDP, but I doubt many would describe it as rich; Denmark has a small GDP but is much richer than the UK.How rich a citizen is depends on per-capita GDP and how equitably it is distributed. It is better to use purchasing power parity (PPP) to compare individual wealth – this takes account of the per-capita GDP and the cost of living in each country. By this measure, the UK is ranked 30th in the world. The list of countries above us does include the expected tax havens and oil-rich countries with small populations, but notably includes Ireland (fifth) and most of the western and northern EU countries.
Energy prices could push UK inflation to 22%, a near post-war record
Goldman Sachs warns inflation could inflation peak above 22%, adding more pressure to households and businessesInflation in the UK could top 22% next year, close to the post-war record set in 1975, if wholesale energy prices remain at current high levels, Goldman Sachs has warned.Highlighting the pressure on households and businesses, the US investment bank said inflation could peak at 22.4% next year if wholesale gas and electricity prices continue to spiral over the winter. Continue reading...
Goldman Sachs warns UK inflation could hit 22% in January; German inflation at near 50-year high – as it happened
Investment bank warns inflation could exceed 20% if UK energy price cap rises 80% in January, while baseline forecast has inflation rising to almost 15%Russian energy giant Gazprom has intensified the squeeze on Europe’s energy market, by cutting supplies to France’s Engie.Engie says it has been told that Gazprom will reduce gas deliveries starting today, due to a disagreement over some contracts.“As previously announced, Engie had already secured the volumes necessary to meet its commitments towards its customers and its own requirements, and put in place several measures to significantly reduce any direct financial and physical impacts that could result from an interruption to gas supplies by Gazprom.”“Very clearly Russia is using gas as a weapon of war and we must prepare for the worst case scenario of a complete interruption of supplies. Continue reading...
How a century-old bakery is weathering inflation in the US’s worst-hit city
As costs rose nationwide, La Segunda in Tampa, Florida, had to figure out how to keep 140 employees across three bakeries afloatFor 106 years, La Segunda has baked bread in Ybor City, a neighborhood in Tampa, Florida. It’s a Cuban bakery where the loaves are scored with palmetto fronds and reach 36in in custom ovens. Between the longstanding traditions and myths that shape the place, the owners that span four generations have never seen prices rise as they have in the past year.Across America, inflation affected the food industry acutely, and in the case of La Segunda, the cost of wheat doubling in just 12 months left a bruise. “That’s 30% to 40% of our manufacturing,” said Copeland More, a partner alongside his father in the business. Continue reading...
The Fed keeps raising interest rates. Working people are getting hammered | Robert Reich
Corporations are pushing up prices at the expense of AmericansFriday at Jackson Hole, Wyoming, Federal Reserve chairperson Jerome Powell said the Fed must continue to raise interest rates, even though it will “bring some pain to households and businesses”.This – with all due respect – is nuts.Robert Reich, a former US secretary of labor, is professor of public policy at the University of California, Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com Continue reading...
Unions threaten ‘waves of industrial action’ over UK cost of living crisis
Move could see synchronised strikes in autumn as new prime minister takes officeBritain is facing a wave of coordinated industrial action by striking unions this autumn in protest at the escalating cost of living crisis, the Observer can reveal.A series of motions tabled by the country’s biggest unions ahead of the TUC congress next month demand that they work closely together to maximise their impact and “win” the fight for inflation-related pay rises. Continue reading...
Britain’s property owners hold all the cards – so hard luck everyone else
In the face of energy crises and recession fears, house prices and rents remain robust – because the market is rigged that wayAs rising gas and electricity prices take centre stage after Ofgem set the October energy price cap at £3,549, it is interesting to see how little other parts of the economy have reacted.A plentiful supply of cheap energy has underpinned every period of growth in national income over the past 70 years and the prospect of what was once ubiquitous and low cost becoming a major financial burden is one of the main reasons many economists predict that a recession will begin this autumn and run throughout next year. Continue reading...
Dow plunges 1,000 points after Fed chief Powell warns of inflation ‘pain’
US stock markets nosedive as Jerome Powell says at top bank summit the ‘overarching focus is to bring inflation back down’US stock markets nosedived on Friday after the Federal Reserve chair, Jerome Powell, warned of “pain” ahead as the central bank struggles to bring down inflation from a 40-year high.Powell’s highly anticipated speech was more hawkish than had been expected, with the Fed chair pledging to do all he could to end rising prices. The Dow Jones Industrial Average lost just over 1,000 points, 3%, the S&P fell 3.3% and the Nasdaq dropped almost 4%. Continue reading...
Economic watchdog confirms it could scrutinise Truss’s cost of living plans
MPs say it is vital tax and spending measures proposed by potential new prime minister are examined by OBRLiz Truss has been challenged to open up her prospective emergency tax cuts and spending plans to scrutiny if she becomes prime minister and makes immediate moves to tackle the cost of living crisis.The Office for Budget Responsibility (OBR), which produces independent forecasts based on major fiscal announcements by the government, revealed preparatory work had been under way for about a month to publish fresh economic forecasts in September. Continue reading...
Energy cap leap looks to be moment when UK recession fears turn into reality
Rocketing gas and electricity prices may usher in some benefits – but none will have much impact this winter
British households £160 worse off in July than a year ago, says Asda
Retail chain pledges to do more to help consumers hit by cost of living crisisBritish households were on average £160 worse off in July than a year earlier, according to research by the supermarket Asda, as it said it would do more to help shoppers being squeezed by soaring food and energy costs.Asda bosses said they would keep “grocery bills in check” and do all they could to support customers “during these tough times”, as they monitor how much money consumers have to spend through their income tracker. Continue reading...
Long Covid keeping 2-4 million Americans out of workforce, report says
About 16 million working-age Americans have long-term Covid, according to a Brookings Institution reportAbout 16 million working-age Americans have long-term Covid and 2-4 million are out of work because of its ill effects, according to a new report from the Brookings Institution.Employers have complained of labor shortages throughout the pandemic, and the analysis of data from the US Census Bureau’s Household Pulse Survey, which collects data from Americans through a survey on education, employment, health and housing, suggests one possible reason for the lack of workers. Continue reading...
UK firms fear CO₂ shortages; agricultural inflation soars; US jobless claims drop – as it happened
Pubs and farms concerned about supplies as CF Fertilisers UK prepares to pause ammonia and carbon dioxide production due to high natural gas pricesBritain’s next prime minister must adopt radical ideas - such as discounted power tariffs, energy bill freezes or a “solidarity” tax hike for higher earners - to protect households from the energy price shock, the Resolution Foundation thinktank warns.In a new report this morning, Resolution lays out how tens of billions of pounds in new government support must be targeted at households least able to cope with surging energy costs. Continue reading...
Sony raises global prices of PlayStation 5 outside US market
Gaming console maker says inflation rates and supply shortages have led to ‘challenging economic conditions’Sony is increasing the price of the PlayStation 5 by as much as 20%, the company says, in every major market save the US.The UK price of the games console, which has been plagued by supply shortages since its release in November 2020, will increase by 6% (£30), from £449.99 to £479.99. A cheaper, disc-less version of the console will get the same price rise, from £359.99 to £389.99. Continue reading...
Huawei founder sparks alarm in China with warning of ‘painful’ next decade
Ren Zhengfei writes in leaked memo that ‘chill will be felt by everyone’ and company must focus on survivalThe founder of Huawei has delivered a stark warning for the tech company’s future, sparking alarm with the frankness of his assessment and what it signals for smaller businesses amid China’s economic troubles and a global downturn.In a leaked internal memo, Ren Zhengfei told Huawei staff “the chill will be felt by everyone” and the company must focus on profit over cashflow and expansion if it is to survive the next three years, indicating further job cuts and divestments. Continue reading...
Economists demand urgent action on energy bills to avert ‘catastrophe’
Millions of vulnerable people will be harmed without radical policies to ease cost of living crisis, say expertsPhysical and financial harm will be caused to millions of vulnerable families unless the government takes action to avert a winter catastrophe by cutting energy bills, leading economists have warned.In the run-up to the announcement of the new energy price cap tomorrow the Resolution Foundation thinktank said radical policies such as price freezes, solidarity taxes or lower social tariffs were needed to prevent the cost of living crisis worsening. Continue reading...
Student loan forgiveness: what does it mean for the US debt crisis?
The $1.7tn debt has become a hot political issues as midterm elections approachAmerica’s students have a debt problem. A big one. More than 45 million Americans – more than the population of California – now owe a collective $1.7tn in student debt.The vast majority of the money is owed to the federal government, which has been backing or directly offering student loans for higher education since 1958. While student loans are not new in the United States, the amount of student debt has more than tripled over the last 16 years. Continue reading...
How the US student loan debt crisis started — and how it could end
The $1.7tn debt has become a hot political issues as midterm elections approachAmerica’s students have a debt problem. A big one. More than 45 million Americans – more than the population of California – now owe a collective $1.7tn in student debt.The vast majority of the money is owed to the federal government, which has been backing or directly offering student loans for higher education since 1958. While student loans are not new in the United States, the amount of student debt has more than tripled over the last 16 years. Continue reading...
Levelling up bill includes no funding to make levelling up happen, say MPs – as it happened
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Felixstowe port disruption ‘could continue until Christmas’ says union – as it happened
Disruption at the UK’s largest container port could escalate until Christmas unless workers are given an improved pay offer, Unite boss says
Zahawi faces shortest chancellorship since 1970 – and may be glad of it
The ex-vaccines minister appears to be the equivalent of a caretaker football manager, with Kwarteng waiting in the wingsGordon Brown used to joke that there were two sorts of chancellors: the ones who failed and the ones who got out in time. Nadhim Zahawi looks like being in the second category.Appointed by Boris Johnson on 5 July as he struggled in vain to remain prime minister, Zahawi is likely to be the shortest-serving chancellor since Iain Macleod died in office in 1970. Macleod was in charge of the Treasury for a month; Zahawi’s tenure will probably last only twice as long. Continue reading...
Britain imports no energy from Russia for first time on record
UK aimed to phase oil Russian oil imports by end of 2022; in June it achieved that target, ONS data shows
Tory leadership hustings – Birmingham: Liz Truss confirms she will allow new grammar schools – as it happened
This live blog is now closed. You can read our latest story on the leadership contest here:
Factory slump drags UK near stagnation; US private sector shrinks; eurozone ‘heads into recession’ – as it happened
UK private sector growth hits 18-month low, while the US, Germany and France all suffer falls in activity this month, adding to recession fearsThe downturn in Germany’s private sector economy has deepened too.The Flash Germany PMI Composite Output Index has fallen to just 47.6 this month, from July’s 48.1.Continued weakness in manufacturing is being compounded by a slowdown in the service sector, with surveyed businesses reporting a growing strain on demand from high inflation and increased interest rates.“The slowdown in the economy is increasingly taking a toll on firms’ hiring activity, with employment growth easing to its weakest for almost a year-and-a-half in August. A first fall in backlogs of work for more than two years points to capacity pressures across Germany’s private sector economy starting to ease and represents a downside risk to job creation going forward.Flash Germany PMI Composite Output Index at 47.6 (July: 48.1). 26-month low.Flash Germany Services PMI Activity Index at 48.2 (July: 49.7). 18-month low.Flash Germany Manufacturing Output Index at 46.4 (July: 45.0). 2-month high.Flash Germany Manufacturing PMI at 49.8 (July: 49.3). 2-month high. Continue reading...
Bank of England may be forced to raise interest rates to 4% in 2023
City traders bet central bank will more than double cost of borrowing to combat soaring inflationThe Bank of England could be forced to raise interest rates to 4% from as early as next year to combat soaring inflation, despite the growing risk of recession amid the cost of living crisis.City traders are betting the central bank will more than double the cost of borrowing from 1.75% in response to inflation at the highest levels for more than 40 years. Continue reading...
New PM’s spending plans must face scrutiny, says Treasury committee chair
Mel Stride says OBR must provide fiscal forecasts as Liz Truss urged to ‘come clean’ on promised tax cutsThe chair of the Commons Treasury committee has urged the government’s economic watchdog to produce fiscal forecasts alongside any emergency budget this autumn, after Liz Truss signalled she would try to avoid early scrutiny of her fiscal plans.Mel Stride, the chair of the committee, said the chancellor must ensure that the Office for Budget Responsibility (OBR) provides its assessment at the same time as the new prime minister makes any big fiscal decisions. Continue reading...
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