Higher costs, weaker demand and bottlenecks sink manufacturing output to lowest level since start of pandemicBritain’s factories are bearing the brunt of the slowdown in the economy as higher costs, weaker demand and supply bottlenecks combine to send output plunging.Two separate snapshots of industrial activity showed a decline in manufacturing activity – part of a Europe-wide trend exacerbated by the economic fallout from the war in Ukraine. Continue reading...
The sector is dangerously overheated – but unlike the 2008 financial crisis, the global ripple effect is likely to be limitedThe property sector in the Chinese economy has always been something of a puzzle. At its peak, it accounted for a quarter of the nation’s economic output, broadly measured. And it sees people in Beijing and Shanghai paying house prices similar to those in San Francisco and New York, despite having just a quarter the income of American buyers.Now many believe that we are about to see a violent contraction of the property market in China. The government wants to intervene to curb speculation, and rein in what it calls the “three high” problem: high prices, high debt and high financialisation. The approach has been nothing short of dramatic. Financing for property developers has tanked. Earlier this year, property sales declined by as much as 20-30%, in-progress developments are not being completed and people have taken to the streets, banding together to stop mortgage payments on such projects in protest.Keyu Jin is a professor of economics at LSE Continue reading...
Forecasts updated after 25% and 7% rally in gas and electricity prices respectively last weekInflation in the UK will hit 18% early next year as consumers count the cost of the deepening energy crisis, one of the world’s biggest banks has predicted.The US financial services group Citi said it expected the consumer prices index to breach 18% in the first quarter of 2023, while the retail prices index inflation rate would soar to 21%. Continue reading...
Rising cost of living is “entering the stratosphere” says Citi, which forecasts energy price cap could rise to £5,816 per year in April.Barristers have voted to begin striking indefinitely from next month, in the latest industrial action to hit the UK.The Criminal Bar Association, which represents advocates in England and Wales, has announced that 80% of voting members had backed escalating their industrial action in their ongoing dispute over government funding. Continue reading...
Truss cannot deliver £50bn tax cuts and support packages without pushing debt to dangerous levels, says Tory leadership rivalLiz Truss will plunge the economy into an “inflation spiral” if she does not choose between her unfunded £50bn tax cuts and providing cost of living support, her Conservative party leadership opponent, Rishi Sunak, has claimed.Sunak’s leadership campaign said Truss would increase borrowing to “historic and dangerous levels” and place public finances into “serious jeopardy” if she attempted to do both. Continue reading...
by Rowena Mason Deputy political editor on (#62R4W)
Brexit opportunities minister says Tory leadership hopeful’s comments reflect Britain’s ‘poor productivity’Jacob Rees-Mogg, a key ally of Liz Truss, has defended the Tory leadership frontrunner’s suggestion that British workers need “more graft” as “sensible”.Rees-Mogg, the Brexit opportunities minister, told the Mail on Sunday that her comments reflected “poor productivity in the British economy”. Continue reading...
by Jessica Elgot and Richard Partington on (#62R1N)
Our writers assess and cost the key ideas floated so far, from targeted help to the most vulnerable to a new windfall taxBoris Johnson has said he will not introduce any new measures to deal with the cost of living crisis. Big spending decisions are being delayed until his successor as prime minister is in post. However, the result of the Conservative leadership election will not be announced until 5 September.In the meantime, a major increase in the regulated energy price cap, which puts a ceiling on gas and electricity bills, is due to be announced this Friday. It is forecast to rise from just under £2,000, to £3,600 a year for the average household. Continue reading...
Consumers are in either denial about the economy or think they are managing … for nowThe UK economy is a puzzle. Inflation has burst above 10% for the first time since Argentina was gearing up to invade the Falklands in early 1982. Prices are rising far more quickly than wages. Consumer confidence has plumbed depths not seen during any of the many misfortunes of the past half century.And yet, the official data shows the British public is carrying on shopping regardless. Retail sales were higher in July than they were in June despite the progressively tighter squeeze on living standards. Airports are busy with holidaymakers, house prices keep on rising. Odd sort of crisis, you might think. Continue reading...
Analysis: the party’s coalition is built on the ‘red wall’ and younger southern professionals, whose patience for posturing is limitedThe Conservative leadership campaign has seen the party jettison large parts of the platform it was elected on in 2019 – not least Boris Johnson’s pledge to level up the country – tacking rightwards on the economy and issues such as the environment and education. Should Conservatives be concerned that the rightward lurch of their party threatens its appeal at the next election to both new and traditional supporters?Younger, more educated voters have been moving out of London in their droves to the capital’s commuter belt for some time, tilting the demographic makeup of numerous seats. Many marginal constituencies in the south-east – places such as Esher and Walton and Winchester – are home to large numbers of graduates and professionals, groups that once upon a time were reliable Conservative voters. The party can no longer take these voters for granted, especially those of working age. Not only are they more likely to be Remainers but they also tend to hold more socially liberal attitudes on issues such as immigration and the environment, and are less likely to be sympathetic to anti-woke, anti-green posturing. Continue reading...
Sunak and Truss have no grasp of how low personal taxation is now – or how much a battered Britain needs public spendingWhenever I told him things were going from bad to worse, my father used to nod sagely and say: “It was ever thus.” However, I wonder what he would have said now about the state of the country and the “governing” Conservative party.In a leadership race whose inanity almost beggars belief, the two very rightwing contenders seem obsessed with establishing their Thatcherite credentials without, as far as I can see, having a clue what Thatcherism was really about. Continue reading...
by Richard Partington and Larry Elliott on (#62QD4)
War, drought and Covid have blighted prospects not just in Britain but continent-wide. Which countries are most at risk?Almost six months after Vladimir Putin ordered Russian troops into Ukraine, the extent of the damage to the European economy is becoming clear. The red lights of recession are flashing.The eurozone’s big four economies – Germany, France, Italy and Spain – have all had their growth forecasts for 2023 downgraded by the International Monetary Fund, as a combination of the war and higher interest rates put a brake on activity. Continue reading...
Beijing is in a bind over harsh Covid lockdowns, a property crisis and tensions with western trading partnersOn his tour of the southern Chinese city of Shenzhen last week, Li Keqiang, the premier, tried to send some positive energy at a time many citizens have been complaining of economic hardship.“China’s opening will continue. The Yellow river and the Yangtze river will not flow backward,” Li said, striking an upbeat tone while visiting Yantian Port, a gateway to Europe and North America, two of China’s biggest markets. Continue reading...
Those in Europe’s inflation hotspot remain calm about rising prices, but a lack of government intervention could fuel further increases – and discontentLike his cappuccinos, Taniel Vaaderpass, 33, isn’t bitter. His usually profitable company, OA Coffee, one of Estonia’s biggest coffee bean roasting companies, may have posted a loss for the first time last year and is set to do so again this year, but Vaaderpass remains strikingly sanguine as he sits on the terrace of the cafe he also owns on a cobbled street in the old town of Tallinn.The central causes of Vaaderpass’s misfortune is a 240% increase in the price of unroasted green coffee and a 20% surge in the cost of the gas he uses to roast his imported beans. He also felt the need to give his staff a 10% pay rise in January despite the lack of company profits. Continue reading...
Jobs disappear and high streets decimated as growing number of traders are forced to shut due to higher costsThe energy crisis is tearing through Britain’s high streets, with warnings on Friday of a “lost generation” of small businesses, as the impact of soaring gas and electricity prices begins to hit cafes, restaurants, shops and salons.Across the UK, growing numbers of traders are closing their doors for good in the face of unaffordable costs driven by record inflation, with some reporting tenfold increases in utility bills. Continue reading...
Tory leadership frontrunner says new laws will make it harder to strike as London mayor accuses government of picking a fightLondon mayor Sadiq Khan has accused the UK government of “deliberately provoking” tube, overground and bus strikes that he said could harm the capital’s recovery from the worst of the coronavirus pandemic.“I’m concerned that the government is almost deliberately provoking industrial action in London”, Khan said in an interview with Sky News on Friday morning.I am frustrated by the strikes today. It’s ordinary Londoners, commuters and businesses who will be affected today at a time we’re trying to get a recovery.If we were speaking in January, the amount of people using the tube was about 45% versus pre-pandemic [levels].So we’re making that stand on behalf of our members, but many other workers in Britain are suffering some very similar things and you’re going to see a wave of this type of action. We can’t stand by and watch our conditions be chopped up. Otherwise, it’ll just be a race to the bottom for all British workers.We haven’t got a pay issue on London Underground at the minute because we’re still in the long-term deal that’s hanging over from the last pay agreement, but we’ll have a pay agreement going into the new year, where we’ll be looking for negotiations.That’s going to be a really difficult period. So the issues that are involved in London Underground may get more serious and right across TfL, because they haven’t got any funding from the government, it’s going to be difficult. Continue reading...
IMF says it expects region’s oil and gas exporters to benefit from high prices over next four yearsMiddle Eastern states are to land a $1.3tn (£1.09tn) windfall from extra oil revenues over the next four years, according to the International Monetary Fund.The IMF said on Friday it expected oil and gas exporters in the region, notably the Gulf states, to benefit from high prices and opportunities to ramp up their market share. Continue reading...
by Richard Partington Economics correspondent on (#62NXT)
July rise of 0.3% driven by online promotions but clothing sales continue to fallRetail sales in Great Britain unexpectedly rose in July as consumers continued spending, despite concerns over the cost of living crisis.The Office for National Statistics said sales volumes rose by 0.3% on the month, after a revised fall of 0.2% in June, with a range of online sales promotions helping to overcome a broader trend for a decline in spending. Continue reading...
Many middle- and lower-income Americans are left with a dwindling number of options or forced into renting while supply increases for the wealthiest buyersSamantha Hawkins had a clear vision for her first home: the 29-year-old from Austin, Texas, wanted a detached house surrounded by a yard for her dog, a garden and a stable space where she could put down roots.By January, when she bid $230,000 on a tiny, yardless condo converted from a rental studio, she had “bent on a lot of the things I valued”. She found herself beaten by investors willing to pay cash far above the listing price, and buy sight unseen in gameshow-like bidding wars. Continue reading...
Monthly look finds deepening pessimism about personal finances and prospects for the economyConsumer confidence in the UK is weaker than during the four major recessions of the past half century as rapidly rising inflation saps morale.Although the UK is technically yet to enter recession, the latest barometer of sentiment from the data company GfK found the public gloomier than at any time since the survey began in January 1974. Continue reading...
With inflation raging and real wages falling, more and more of us are taking an old-school approach to staying on top of spending. Suddenly coins and notes are back in favourA year ago, buying a Starbucks coffee didn’t feel “real” to Samantha Thomas. “It was just tapping,” the 41-year-old private tutor from Wigan says. “It didn’t feel like real money, it was just my card.” Nowadays, Thomas pulls out a £5 note every time she wants a hot drink. “When you’re physically handing over solid money,” she says, “it just makes you think twice.”For the last 12 months, Thomas has been a cash-only consumer. She leaves her debit card at home when she does her weekly food shop, bringing only the budget she has allocated in notes. As a result, Thomas could “sit here and tell you to the penny” what most items in the supermarket cost. “I know that if I go to Aldi something would cost me 6p less than if I went to Asda and about 5p less than if I went to Tesco,” she says. Thomas’s “solid money” habit hasn’t just changed her attitude to Starbucks; it’s changed the way she spends and saves entirely. Continue reading...
Soaring cost of living is forcing up government spending on benefits, pensions and debt leaving no spare cash to lower taxesBritain’s first double-digit inflation in more than four decades has cast doubts on the plausibility of the tax cuts being promised by Liz Truss and Rishi Sunak during their leadership battle, one of the UK’s leading thinktanks has said.Following news that the government’s preferred measure of the cost of living rose by 10.1% in the year to July, the Institute for Fiscal Studies said higher inflation would mean extra spending on welfare benefits, state pensions and on debt interest. Continue reading...
The UK is not the only country in this economic mess, but its position is the most precarious of any in the rich worldThe news this week that inflation has hit a 40-year high even as wages fall at their fastest rate in two decades is sobering, yet sadly unsurprising. You need not be an economist to know how much prices have been going up this year, from the petrol pump to the supermarket checkout to direct debits. And while inflation at 10% is a remarkable figure, it is set to go even higher. Unless the government acts on energy bills, when the cap rises by a predicted 80% on 1 October, inflation will soar again. Analysts expect prices for gas and electricity to keep on increasing well into the new year. And where energy prices go, so go the costs for everything else, from food to clothes to transport.The UK is not the only country in this mess, but its position is the most precarious of any in the rich world. Privatisation means that the British government has little control over the prices set by its utilities (unlike, say, Emmanuel Macron with EDF), while workers in the UK have far less bargaining power than their counterparts in France and Germany. Then there is Brexit, plus the long-held assumption by politicians and economists that the UK need neither own nor manufacture much of what it consumes – it can just buy it all in. The result is that inflation in the UK far outstrips that in the US, Japan, Germany or France – and financial markets expect that to remain so next year. Continue reading...
Austerity, Brexit and the cost of living crisis have been built on nonsensical misinformation and meaningless division“If there is a class war – and there is – it is important that it should be handled with subtlety and skill,” wrote Maurice Cowling, the influential rightwing historian, in the late 1970s. “It is not freedom that Conservatives want; what they want is the sort of freedom that will maintain existing inequalities or restore lost ones.” The nature of Conservatism has altered very little since, but the class on whose behalf the Tory party fights has changed dramatically: where once it was doctors and lawyers, businessmen, “respectable people”, it is now hedge fund managers and property developers, the filthy, the super, the Croesus rich. If you’re less wealthy than Jacob Rees-Mogg, the party has fought a 12-year war against you, and – newsflash – it won.Some statistics need animating, and some animate themselves. We do not need a human-interest case study to understand what a 40-year high of 10.1% inflation feels like. We don’t need a pessimistic temperament to be terrified of what October will look like, when it’s slated to reach 13% and the choice between heating and eating kicks in for so many people. We don’t need an infographic to get to grips with the official figures that show a 4.1% drop in regular pay. But news that the Dogs Trust, for the first time in its history, has a waiting list for taking in people’s pets still takes your breath away. I’m emphatically not saying that dogs are more important than people – I’m merely pointing out that this government has brought us to a point where we can’t afford to feed our best friends. This isn’t a belt-tightening moment; this is a wake-up moment.Zoe Williams is a Guardian columnist Continue reading...
UK productivity does lag the G7, but the idea that shirking is to blame does not stand up to serious scrutinyIt will doubtless come as a surprise to British workers toiling in distribution warehouses, call centres or the NHS that Liz Truss thinks they could do with showing “more graft”.Judging by comments made when she was chief secretary to the Treasury, the frontrunner to be prime minister thinks the UK’s economic problems are down to a working culture quite different from that in communist China. Continue reading...
From low-fat milk to ice-cream and clothing to recreation, how costs have soaredInflation last month bust the double-digit barrier to hit 10.1%, the latest figures show. The Office for National Statistics uses the consumer prices index to measure the rising cost of living and also compiles the increasing prices of individual goods and services.Here is a breakdown showing how everyday items have shot up over the past year. In each case, the figure is the percentage change in the average price over the 12 months to July 2022, and on many occasions the rate has risen to an even higher level than in June. Continue reading...
Rates have gone up six consecutive times, yet very few savers are benefiting, researchers findMillions of people are being short-changed on savings rates, with banks and building societies failing to pass on this month’s 0.5 percentage point interest rate rise, research has claimed. Continue reading...
by Richard Partington Economics correspondent on (#62J1V)
Real pay continues to be outstripped by soaring inflation amid a continuing cost of living crisisThe real value of UK workers’ pay continued to fall at the fastest rate for 20 years in June as wage increases were outstripped by soaring inflation amid the cost of living crisis.The Office for National Statistics said annual growth in average pay, excluding bonuses, strengthened to 4.7% in the three months to June against a backdrop of low unemployment and high job vacancies. Continue reading...
Labour’s idea may represent smart politics but it makes no economic sense to freeze prices for everyoneThere was an amusing interlude during BP’s announcement of bumper profits earlier this month when the chief executive, Bernard Looney, was asked what he planned to do with the £400 rebate on his energy bill that would arrive courtesy of the cost of living support package that Rishi Sunak, then chancellor, announced in May. Looney appeared unaware that he, like everybody else in the UK, would get the discount automatically from October. It was only later that BP offered the PR-friendly answer that its £4.4m-a-year boss would make a donation to charity.Looney’s bafflement was understandable. High earners like him (and, indeed, high earners collecting considerably less) obviously don’t need assistance from the state in paying their energy bills this winter. There was no sound economic reason for Sunak to add a universally applied £400 element to a package that was otherwise rightly concentrated on vulnerable households, meaning those most affected by higher bills. Continue reading...
by Richard Partington Economics correspondent on (#62HF8)
Chinese recovery from lockdowns shows signs of fizzling out as central bank cuts interest ratesGlobal oil prices have dropped amid concerns over weaker growth in the Chinese economy caused by repeated Covid lockdowns and a downturn in the property sector.A barrel of Brent crude fell by about 5% to below $94 (£78) on Monday, hitting the joint lowest levels since the Russian invasion of Ukraine as traders reacted to weaker figures from the world’s second-largest economy. Continue reading...
Live coverage of business, economics and markets as Chinese economy shows signs of slowdown and Institute for Fiscal Studies warns on maintaining similar level of energy bills supportEvery time you look at oil prices this morning it seems like they have lost more ground.The new low for Brent crude today is $93.54, down $4.60 today or 4.7%. Continue reading...
by Jamie Grierson, Ben Quinn and Peter Walker on (#61N9M)
What promises are leadership rivals making in terms of economy, climate, education and levelling up?Either Liz Truss or Rishi Sunak will become the next prime minister after Tory MPs put them into the final round of the Conservative leadership election. Here we look at how they differ on key areas of policy. Continue reading...
by Fiona Harvey Environment correspondent on (#62GYW)
Ex-chief scientist David King says outgoing PM must deliver fiscal policies to support poorer peopleBoris Johnson should intervene urgently to start insulating British homes and introduce fiscal policies to reduce bills, as further delay will mean more people face “extreme suffering” this winter as energy bills soar, a former government chief scientific adviser has warned.David King said: “This could be the worst possible time for the leadership of this country to be simply sitting back. We’re waiting until what? We have an energy crisis right now and we need good leadership. We need alert leadership, leadership that is thinking about this – and that is missing.” Continue reading...
The psychologist Steven Pinker has long believed we should be more optimistic – and even current crises do not dissuade himReading and watching the media over the past year, you might be forgiven for thinking that we are facing the collapse of civilisation. We have a shrinking economy, a fuel crisis that may bring on energy rationing and forced blackouts, extreme weather events, the increased chance of nuclear war, and risk of the growth of a new pandemic riding on the back of the last. The Doomsday Clock – a symbol created by scientists to represent the likelihood of a human-made catastrophe – places us at just 100 seconds before midnight, the closest we’ve been to Armageddon in the project’s 75-year history.In the face of these threats, it may be hard to maintain a rose-tinted view of the future – unless, that is, you are the Harvard psychologist Steven Pinker. In 2018, his book Enlightenment Now argued that our interpretations of news events make us far too gloomy. There has never been a better time to be alive, he said, thanks to the social, economic, political, technological, and medical advances of the past 300 years. Continue reading...
Whether she or Rishi Sunak becomes prime minister, challenge looks as daunting as it did for James Callaghan in 1976In Britain, the year 1976 was marked by three big events – a summer heatwave, a change of prime minister and a sterling crisis. In 2022, we have had the first and will soon get the second. Few would be entirely surprised if the third arrived by the end of the year.As has been the case this year, in the summer of 1976 people enjoyed the sunshine and seemed not to care much about high inflation. According to a 2004 report from the New Economics Foundation thinktank, the UK has never been happier than it was in the year when Denis Howell was made the drought minister, Concorde made its first commercial flight and the Sex Pistols released Anarchy in the UK. Continue reading...
We’re still struggling with rising costs and the situation isn’t going to change any time in the near futureInflation is the top challenge facing small businesses this year, according to a report issued by the National Federation of Independent Businesses this past month, with a whopping 91% admitting that rising prices are having either a “substantial” or “moderate” impact on their companies.The US Chamber of Commerce says that nearly seven in 10 small businesses have raised prices to cope with inflation, which is also considered their “dominating challenge”. Sixty-five percent of small business respondents in a Goldman Sachs study said rising input costs have forced them to raise the price of their goods and services this year, with almost 80% saying the economy has gotten worse over the past three months. Continue reading...
Nothing in her pledges will foster the growth that this country so urgently needsLiz Truss has observed the dynamics of today’s Tory party – and the media and thinktank ecosystem that supports it – as a minister under three prime ministers. It is the Brexit right’s Taliban-like belief in the righteousness of its cause that drives the party. To win, she has resolved to be its uncompromising representative, but her decision has not stopped there. The only way for a Tory leader to sustain the leadership of what is ever more obviously a deranged and factionalised political movement is to govern from the hard right. It will end in failure.The epicentre will be the economy. Her uncontroversial stated aim is growth of 2.5%. Consensus stops there. All the mechanisms to achieve growth are drawn from the evidence-free but prejudice-rich rightwing playbook – persistently anti-Europe, obsessed with tax cuts, buying into the faith that nameless regulations are shackling business and, above all, that a weak political class, deep state and obeisance to technocrats have combined to make Britain quasi-socialist – despite 12 years of Tory rule. Truss is the insurgent carrying the Thatcherite flame who will put the world to rights. Continue reading...
Data on jobs, prices and sales this week will add to the gloom, but might an inflation-led return to work take the edge off?Rewind to this time last year and the UK economy was accelerating out of the biggest slump in 300 years. The year-on-year growth rate was 8.7% and there was a sense that the worst of the pandemic was over.China had reopened its doors to the world and inflation was falling as commodity prices – from copper and oil to wheat and timber – began to tumble. Continue reading...
Anger as thousands of Bank staff enjoy ‘performance awards’ after governor urged other British workers not to demand big risesThe Bank of England, which has been criticised for underestimating the threat of rising inflation, last year paid out bonuses to its staff amounting to more than £23m, the Observer can reveal.This bonus pot was at its highest level for at least two years, with more than 4,260 employees receiving performance awards. Andrew Bailey, the bank’s governor, was widely criticised earlier this year after telling Britain’s workers that they should not be asking for big pay rises because inflation had to be kept under control. Continue reading...
Higher mortgage costs will hit homeowners and tenants, investment and consumer spending. In a recession. I hope they’re proud of their acquisitive selvesCity bankers are ruining your life again. They just can’t help it. Rescued from collapse in 2008 and force fed a healthy financial diet ever since, the industry is now in fine fettle. And with a deluded display of arrogance only they can muster, bankers have come to see themselves as a force for good, especially in these troubled times.Their sizable reserves are largely intact and the hazardous operations that caused so much trouble more than a decade ago are overseen by tough regulators. Continue reading...
With their bills already soaring, fuel-intensive firms are now on notice that they may have to cease operationsAt Dreadnought Tiles’ factory just outside Birmingham, specialist staff monitor its nine kilns 24 hours a day. The furnaces reach temperatures of 1,130C and are capable of churning out 40,000 roof tiles a day. Now Alex Patrick-Smith, the 217-year-old company’s managing director, faces the prospect of being forced to switch this nonstop operation off.Dreadnought belongs to a select group of the UK’s heaviest power users, manufacturers that employ about 210,000 people and contribute £29bn to the economy. Continue reading...
Members of Aslef union on 24-hour strike, affecting services in England, Scotland and WalesRail passengers are facing disruption as train drivers at nine operating companies stage a 24-hour strike, halting services in many parts of England, Scotland and Wales.The strikes on Saturday affect nine train companies and come after the union said operators had failed to make a pay offer in line with the increase in the cost of living. Continue reading...
Dismissing instances of direct trade as ‘outliers’ that don’t fit statistical theory is a major failing, writes Prof Scott MossSimon Jenkins (theguardian.com, 8 August) points to economists’ failure to forecast the 2008 financial crisis. He could have pointed to many more such forecasting failures, since there has never been a correct econometric forecast of a macroeconomic turning point. The question is, of course, why? Here is one answer.The relevant macroeconomic theories all assume that no one ever trades or communicates directly with anyone else. What happens if people do trade directly, and generally communicate with one another? We know from a different kind of modelling that evidence-based assumptions of social interactions lead to episodes of volatility that cannot be forecast. Continue reading...
Increasing figure from 2% to 4% may result in more stable monetary policy regimeThe performance and mandate of the Bank of England have become central issues in the contest to succeed Boris Johnson as leader of the Conservative party, and therefore as the UK’s prime minister. But with recent reviews of other leading central banks offering little guidance amid today’s soaring inflation, it might make sense to revive an old idea for reforming the prevailing anchor for monetary policy.It is not surprising that the Bank’s performance is in question, given the central bank’s 2% annual inflation target. With UK inflation currently running at 9.4% and expected to exceed 13% later this year, something has clearly gone wrong. But some of the Conservative leadership candidates, and notably the frontrunner, Liz Truss, have gone beyond merely criticising the Bank’s governor, Andrew Bailey, for taking his eye off the ball. They talk about changing the Bank’s objectives, or even its very status. Truss has pledged to alter its mandate to toughen its focus on inflation, and one of her lieutenants has asked whether the Bank is “fit for purpose in terms of its entire exclusionary independence over interest rates”. Continue reading...
Economics | The Guardian