Prime minister also urges City to curtail bonuses and says he is keen to reduce reliance on food banks

Companies hit by increasing energy prices, higher inflation, labour shortages and interest rate risesThe number of companies collapsing into insolvency in England and Wales has jumped by nearly 40% in a year, as soaring energy prices, high inflation and rising interest rates take their toll.There were 1,948 company insolvencies in England and Wales last month, the Insolvency Service reported, up 16% from September’s total of 1,684. Continue reading...

Workforce has shrunk amid rising long-term sickness and it appears unemployment is growing again

Wage growth continues to lag behind rising inflation as unemployment rate rises slightly

The chancellor insists Britain has to ‘live within its means’ – but many economists say painful cuts are neither inevitable nor proven to workJeremy Hunt is preparing to wield the axe over public spending this week and raise taxes for everybody in an autumn statement that will be long on pain and short on good news. After Liz Truss’s short and catastrophic premiership, the “abacus economics” she despised is back in the ascendancy under Rishi Sunak.The message from the government is that Britain has to live within its means, which Hunt and Sunak say requires action to reduce government borrowing and ensure that the national debt starts to fall as a share of national income. Continue reading...

As Rishi Sunak and Joe Biden meet world leaders at the G20, they should be pushing for greater cooperation to deal with growing threats

A steady stream of bad economic news has filtered into Britain’s property market, prompting fears that prices could tumble. But how worried should people be? Rupert Jones reportsEver since Margaret Thatcher’s ‘right to buy’ revolution in the 1980s, the UK housing market has been an obsession for millions of people. For many, buying a home has been like a lottery win, with properties rising in value year after year, often by far more than the average wage. It has spawned an industry of lifestyle programmes pushing people to get on to the property ladder and revamp their homes.Recently, however, things have started to go sour. Prices in October fell by 0.9% month on month, according to the mortgage lender Nationwide, in the market’s first decline in 15 months. One of the reasons was a slowdown in demand for properties as a result of spiralling borrowing costs, with a spate of interest rate rises leading to soaring monthly payments. Continue reading...

Tax Justice Network says countries lose $89bn a year by allowing anonymity over use of tax havensGovernments around the world could reap almost $90bn a year extra in tax if they made public their data on the extent to which multinational companies use tax havens, an advocacy group reports.The Tax Justice Network said states were depriving themselves of $89bn (£75bn) a year by allowing some of the world’s biggest companies anonymity over the way they conduct their tax affairs. Continue reading...

Jeremy Hunt has chance to make a big difference for small businesses in his autumn statementThe buildup to Jeremy Hunt’s autumn statement on Thursday has inevitably been dominated by the big stuff: tax rises for individuals and companies; departmental spending cuts; and what, if anything, will constitute a plan for growth now that Liz Truss’s brief flirtation with deregulation and investment zones has been abandoned. But there is a smaller measure that should be getting more attention: business rates.The CBI, the business lobby group, called action on that front its “main and modest fiscal ask” and was right to do so, because next spring’s “cliff edge”, in the usual lingo, will look daunting from the point of view of many small businesses on high streets. Continue reading...

Former US vice-president says bank should refocus its spending and end its role in ‘fossil fuel colonialism’Fundamental reform of the World Bank could be completed within a year, to refocus its spending on the climate crisis and end its contribution to “fossil fuel colonialism”, according to the former US vice-president Al Gore.“I don’t know why it need take longer than a year,” said Gore, a longtime campaigner on the climate crisis since leaving politics, in an interview with the Guardian at the Cop27 UN climate summit. “We have an emergency on our hands.” Continue reading...

Bank of England interest rate rises mean higher costs for borrowers but better returns for saversThe average easy-access savings rate has improved to its best level in more than a decade, according to Moneyfacts.Savers can now typically receive 1.16% in annual interest on an easy-access account on the market, the website said. Continue reading...

Former Bank of England policymaker says Brexit has caused permanent damage to the UK economyElsewhere in UK retail, Frasers Group is reportedly in late-stage talks to seal a deal for Savile Row tailor Gieves & Hawkes. Sky News has reported that Mike Ashley’s empire is close to sealing the purchase of the 251-year-old Savile Row business after its Hong Kong-based owner fell into administrationBased at 1 Savile Row, the brand has been part of Trinity Group - which is in turn owned by the collapsed Shandong Ruyi Technology Group - since 2012.“While the potential job losses are regrettable, it seems that Joules has taken the precautionary steps needed to limit further fallout in terms of further job losses and an erosion in their brand equity.“Given the surprising acquisitions and strategic partnerships that have been made in the retail space recently, there should be at least some optimism that another industry player will come to the rescue of a brand that still holds resonance with consumers. Continue reading...

Former Bank of England policymaker Michael Saunders says leaving EU has ‘permanently damaged’ economyBrexit is the ultimate reason why the UK now faces a fresh round of austerity, a former interest rate-setter at the Bank of England has said.“The UK economy as a whole has been permanently damaged by Brexit,” Michael Saunders, who was an external member of the central bank’s monetary policy committee, said in an interview with Bloomberg TV. Continue reading...

Many investors believe taking money from the rich and giving it to the poor would be ‘fine’ with the bond marketAs the charts climbed higher on their data terminals, bond market investors watching the shift felt increasingly sick.The impact of that fateful day in September when Trussonomics was launched on an unsuspecting public with the mini-budget was huge, and it got worse second-by-second, as the panic spread. It is a day that will remain etched in the memories of many for years to come. Continue reading...

Lobby group says failure to tackle workforce shortages would be highly damaging for the economyBritain’s foremost business lobby group has urged Jeremy Hunt to use this week’s autumn statement to shake up immigration rules to support companies struggling with chronic staff shortages and a looming recession.The head of the Confederation of British Industry (CBI) said urgent action was required from the chancellor on Thursday to bolster the economy, including “tough political choices” to allow more overseas workers in Britain as employers struggle with a desperate lack of staff. Continue reading...

Hike in mortgage costs after mini-budget cuts 20% off buyer demand in OctoberFirst-time buyers pulled back most from purchasing a home after the increase in mortgage costs following the mini-budget, according to a report showing a widespread slowdown in the property market.Figures from the property platform Rightmove show buyer demand fell 20% in October compared with a year ago, as house-hunters put their property searches on hold in response to soaring borrowing costs and rising economic uncertainty. Continue reading...

Spending cuts and tax rises will deepen the recession so the pain will be deferred until 2025 and a likely Starmer government

Successful bids for levelling up money will be revealed alongside the autumn statement on Thursday, but scepticism about the policy is high in the northern townBehind its imposing town hall lies a 19th-century stone building that many in Barnsley believe points the way to a brighter future.Soon, it could be home for a youth choir that has beaten all the odds to become one of the best in the world. More broadly, the hope is that by delivering a permanent base for its 560 young performers it will serve as a catalyst for greater ambitions and inject confidence in a town struggling to transcend its post-industrial malaise. A third of Barnsley’s children live in poverty. Continue reading...

The succession of PMs have all spoken out on who or what has caused the state of UK finances. They’re all partly right, but conveniently miss out one or two other key reasonsCovid-19 ripped a £400bn hole in the government’s finances. The money was used largely to support the economy and it succeeded in allowing industries and workers to bounce back once restrictions were lifted. Continue reading...

A collapse in credibility under the former Tory PM is being followed by a return to ‘sado-monetarism’ under the new oneOne of the unfortunate consequences of the 44-day Truss/Kwarteng economic experiment is that there is now almost certainly going to be an overreaction. It was fit and just that the free-marketeers were brought down by the markets they believed in. The irony of it! But the danger now, with all this talk about the black hole in the nation’s finances, is that in its efforts to restore “credibility” the Sunak/Hunt economic experiment could well be taking risks with the country’s social fabric, while not necessarily retaining credibility in the markets.To put it bluntly: when the central banks of the Group of Seven are on the warpath, deliberately fomenting recessionary forces to fight inflation, there is a danger of a recurrence of what, in the early 1980s, I termed “sado-monetarism” – as if the sado-Brexiters were not enough. Continue reading...

Tackling inflation and restoring credibility are top of the chancellor’s to-do list in the autumn statement. Business pleas may go unheededLooming recession, soaring inflation, worker shortages and evaporating business confidence provide a fairly sobering backdrop for Jeremy Hunt’s autumn statement this week.As the government goes back to the drawing board after Liz Truss’s botched mini-budget, most of the problems that Britain’s economy faced under her leadership are either still a big worry for company bosses or have been amplified. Continue reading...

Labour says preventing companies stashing profits overseas would raise as much as £7bn a yearRishi Sunak is being urged to act “immediately” to crack down on UK-based firms stashing their profits in overseas tax havens, in a move Labour claims would raise as much as £7bn a year.Sir Keir Starmer’s party wants the prime minister to implement a “multinational top-up tax” in line with reforms agreed by the G20 in 2021. Continue reading...

The republic’s welcoming corporate tax policy has been a success, but it depends heavily on just a few big namesIn 1958, a young Irish civil servant named Kenneth Whitaker surprised his political masters in Dublin with a 250-page document on which he and some of his colleagues in the department of finance had been covertly working for months. Its title, Economic Development, may have been deceptively bland, but its message was blindingly clear. The country was an economic mess and unless radical action was taken its very existence as a viable state was in doubt.As the writer Fintan O’Toole put it in his memoir, 1950s Ireland was basically “a vast cattle ranch with a few cities and a lot of small provincial towns attached”. This ranch had two main exports: live cattle and beef products, most of them destined for the British market, and young people, emigrating in their thousands every year because there were no livelihoods, or any prospect of fulfilling lives, at home. Continue reading...

Next week’s autumn statement will show if Jeremy Hunt has learned anything from George Osborne’s and Kwasi Kwarteng’s failuresA fool repeats his folly, the Old Testament suggests, in the same way that a dog returns to its own vomit. Kwasi Kwarteng seems determined to prove that this is true. On Friday he made two false claims about his short tenure at the Treasury. The first is that his 23 September mini-budget was not a cause of the government’s current financial woes. The second is that Liz Truss forced the pace on economic policy too hard during her brief period as prime minister, while Mr Kwarteng, even more briefly her chancellor, argued for a slower approach.Neither claim stands up. No one pretends that the mini-budget is uniquely responsible for the high levels of UK public debt that are now being invoked as the justification for next week’s looming autumn statement. There are many other large causes, some of them global, like Covid and energy costs, and others closer to home, including Brexit. The mini-budget, though, made things even worse. It triggered a run on the pound, a lurch in gilts, a Bank of England buy-up emergency and a tightening of the mortgage market. It says a lot about Mr Kwarteng and Ms Truss’s doctrinaire wing of the Conservative party that, even now, they remain in denial about something the voters understand more clearly from their own experience than these discredited ministers ever did. Continue reading...

Pioneering ecological economist who foresaw the catastrophic effects of unlimited economic growthIn the 1960s, when economic growth became the single most important objective of government economic policy, the economist Herman Daly, who has died aged 84, saw a different future. He called for a change in thinking to make our economies more consistent with the finite energy and resource limits of the Earth.Sixty years ago it was considered heresy to question economic growth, and Herman faced much opposition, but his ideas have become a foundation for many new approaches, such as doughnut economics and wellbeing economics, by placing the economy within the Earth’s systems and in society. Continue reading...

One backer of ex-PM says ‘that wasn’t what was going on’, as Jeremy Hunt also appears to dispute version of eventsKwasi Kwarteng’s claims that he tried to get Liz Truss to slow down her financial plans have been challenged by her allies.In his first interview since he was sacked as chancellor by Truss, Kwarteng said he had told the then prime minister to be more cautious with their £45bn programme of tax cuts. Continue reading...

Cryptocurrency exchange FTX starts bankruptcy proceedings in US and Sam Bankman-Fried is resigning as chief executive officer

This live blog has now closed, you can find our latest political coverage hereMichael Gove, the levelling up secretary, is holding a press conference in Blackpool with Micheál Martin, the taoiseach (Irish PM), following the conclusion of the British-Irish Council summit.Asked whether the UK government would pause the progression of the Northern Ireland protocol bill, which is currently in the House of Lords (see 12.39pm), Gove said that was not a decision for him. This is from UTV’s Tracey Magee.It is really disgraceful that Kwasi Kwarteng has the cheek to do this interview. He crashed the economy with his mini-budget just a few weeks ago. It’s caused untold damage to people. Anyone coming off a mortgage deal will be blaming the Conservatives, including Kwasi Kwarteng, for those huge increases, up to £500 a month more in interest payments because of the decisions by Conservative chancellors over the last few months, including Kwasi Kwarteng. Continue reading...

Founder Sam Bankman-Fried resigns as CEO and tells of shock ‘to see things unravel the way they did’

GDP fall of 0.2% for three months to September gives bleak picture in run-up to autumn statement

Amid higher costs and worker shortages, British Chambers of Commerce says Brexit is another factor

The decay has set in across social classes, and more deeply than when the country last turned itself around in the 90sDecline is a spectre that has haunted this country for at least a hundred years. Through the retreat from empire, postwar recessions and growth panics, and our inward turn since Brexit, the worry that Britain is falling behind other countries – or deteriorating in absolute terms – has repeatedly gripped journalists, politicians and the public.We are in one of those periods now. Seven out of 10 people in a recent Ipsos Mori poll agreed that the country was in decline. Commentators in other countries look on with a mixture of pity and schadenfreude.Andy Beckett is a Guardian columnist Continue reading...

Pound surges and stock markets rebound as US consumer price index drops from 8.2% to 7.7% in OctoberStock markets rebounded and the pound surged on Thursday after the US reported a lower than expected inflation rate for October, fuelling hopes that the cost of living crisis may have peaked.Shares on the London exchange jumped after US inflation dropped from 8.2% in September to 7.7% in October, with the FTSE 100 rising 1% and the FTSE 250 gaining 3.9%. Continue reading...

Readers respond to an article by Larry Elliott in which he said that Brexit remains an opportunity to transform an underperforming British economyI am glad that Larry Elliott has given us his latest take on Brexit, but his contention that there is an absence of evidence that Brexit has done much harm has holes in it (Brexit isn’t to blame for our current problems; it is still an opportunity, 6 November). Most fundamentally, the pound was trading at $1.49 on the day of the referendum. Two days later, it was $1.36. Now it is $1.15. Prior to the referendum result, £1 equalled €1.31. Now it is €1.15. Imports are more expensive and exports are not helped because manufacturing is such a small proportion of our economy, and uses a lot of imported materials anyway.He claims that Britain attracts more foreign direct investment than any other European country. Perhaps a chunk of this is buying up British assets at bargain basement prices? He does not mention the businesses relocating to mainland Europe to survive, undoubtedly reducing the British economy.

RSA chief executive says century of progress now going into reverse after years of underinvestmentThe worsening health of the British people is holding back economic growth for the first time since the Industrial Revolution after years of underinvestment in services, Andy Haldane has warned.The chief executive of the Royal Society of Arts (RSA) said more than a century of progress on health and wellbeing was going into reverse, with a direct impact on the economy and the cost of living emergency. Continue reading...

Brexit didn’t change the party: austerity was as heartless under Cameron and Osborne as it is under SunakWhat kind of government is this? You can almost see the puzzlement on pundits’ faces as they try to work it out. Is it the technocratic dictatorship of Jeremy Hunt, or the banal nastiness of pound-shop mafioso Gavin Williamson? Is it Rishi Sunak bro-hugging Emmanuel Macron, or Suella Braverman banging up “invaders”? Is this the administration of smooth-cheeked, spreadsheet-speaking sensibles they long for at the Times, or the gleeful barbarians the Daily Mail ordered?It depends on how you look at the shape British politics has taken since 2010. Of the party that has run the country since then, a simple story is usually told. It goes thus: from 2010 to 2016, the Conservatives were a well-spoken and professionally run centrists’ club. True, there was some unpleasantness over spending cuts – but don’t forget gay marriage, the huskies and hoodies and London’s Olympics!Aditya Chakrabortty is a Guardian columnist Continue reading...

Move to lower threshold from £150,000 would be in line with Hunt’s vow that tax rises should hit ‘broadest shoulders’Jeremy Hunt is expected to increase the number of people paying the highest rate of tax by lowering the threshold from £150,000, according to Treasury sources.The move to increase the number of taxpayers paying the 45p rate of tax is a handbrake turn from Liz Truss’s government, which proposed to abolish the rate altogether. Continue reading...

Young people no longer able to rely on hard work to improve their living standards as they age, says IFSWorking for a living has become a harder way to grow rich in modern Britain amid rising wealth inequality over the past decade, according to research published today that warns of a breakdown in social mobility as inheritances grow in importance.The Institute for Fiscal Studies said wealth had grown rapidly compared with earnings from work since the 2008 financial crisis, driven by a surge in house prices and financial assets – such as stocks and shares – at a time of flatlining progress for average wages. Continue reading...

As Cop27 discusses climate finance, report says continent’s GDP growth could fall by two-thirds this century

If climate catastrophe is to be avoided, the governments and institutions of the rich west will have to alter their prioritiesMaking a transition away from fossil fuels and towards low-carbon energy is the only way to keep our planet safe and habitable for future generations. That transition has thankfully begun, but it has a vast distance to go. And the kinds of changes that are needed cost money. Development of new technology has always required investment. This applies to the generation of renewable energy, and to the myriad lifestyle changes that follow from the shift away from coal, oil and gas. Electric cars and other transport are one example. Packaging to replace plastic (which is derived from oil) is another. Resources are also required to protect societies from the harms caused by the global heating that has already happened, and to help them adjust to altered conditions.A new report presented at the Cop27 UN climate summit says that about $2tn (£1.75tn) a year will be needed by 2030 if developing countries are to make the necessary changes. One of the authors, Nicholas Stern, pointed to a crucial role for the World Bank as well as western governments in redirecting finance and reducing the cost of capital for investors (banks typically charge higher interest on investments in poor countries, due to perceived risks). Continue reading...

UK households face £682 rise in annual grocery bill as prices soar, and there’s ‘no peak in sight’

Huw Pill says there is ‘still more to do’ on tackling inflation despite risks of prolonged recessionThe Bank of England is preparing to further raise interest rates over concerns that inflation could become embedded in the British economy, despite the growing risks of a prolonged recession, its chief economist has warned.Huw Pill said there was “still more to do” to tackle soaring inflation after the central bank raised interest rates to 3% last week with the biggest single rise in borrowing costs since 1989. Continue reading...

Such a move may force Bank of England to rethink interest rates approach, says its chief economistBritain risks a deeper than expected economic slowdown if Jeremy Hunt sets out large tax rises and spending cuts at next week’s autumn statement, the Bank of England’s chief economist has warned.Huw Pill said a tough fiscal settlement from the chancellor could weigh on the British economy by more than the central bank currently anticipates, in a development that would force it to rethink its approach to setting interest rates. Continue reading...

The strictures of neoliberalism must be thrust aside and public money used for the public good, says Mary Mellor. Plus letters from Colin Hines, Kevin Donovan and Patricia BorlenghiLarry Elliott rightly sees the current panic about a “black hole” in public funding as demonstrating a fundamental misunderstanding of public economics (The UK economy is about to be thrown into a black hole – by its own government, 2 November).As he points out, the widespread use of state money creation (quantitative easing) after the financial crisis of 2007-08 and the Covid pandemic fundamentally challenges the fairytale that the public sector is totally dependent on private funding. QE also challenges the assumption that public “money printing” automatically leads to inflation. The current inflationary spike comes from non-monetary factors: the war in Ukraine and the Covid slowdown. Continue reading...

House prices dropped at fastest monthly rate since February 2021, as newer buyers risk falling into negative equity

Kristalina Georgieva cautions that supply chain disruption could cause persistent pressure in living costsGlobal inflation could be peaking, the head of the International Monetary Fund has said, but she warned that consumers were at risk of facing persistent pressure from rising living costs due to a breakdown in world supply chains.Kristalina Georgieva, the IMF’s managing director, said there were signs the global surge in consumer prices since the Covid pandemic and exacerbated by Russia’s war in Ukraine was close to its apex. Continue reading...

Care workers and cleaners turn out in North Carolina, Nevada and Georgia to urge voters to elect officials who’ll listen to their needsAs America heads to the polls, representatives of the more than 2 million workers in domestic jobs – from caring for the sick, elderly and disabled to cleaning homes – are making a last-minute midterms push to make sure their voices are heard.Diondre Clarke, a certified nursing assistant in Charlotte, North Carolina, has been canvassing in nearby Winston-Salem to boost voter turnout in the critical swing state. Continue reading...

Whether that opportunity is seized or squandered is yet to be seen but the dire predictions didn’t happenThe UK economy is clearly struggling. Growth has stalled, interest rates are going up and the Treasury is softening up the public for a new dose of austerity measures.For some, the explanation for these horrors is simple: Britain is paying the price for its decision to leave the European Union. Forget the impact of the most severe pandemic in a century. Forget what Vladimir Putin’s invasion of Ukraine has done to energy prices. Brexit is the “gorilla in the room”. Continue reading...

The “invasion” of immigrants does not mask our real woes: climate change and a tanking economy• You can order your own copy of this cartoon Continue reading...

The real reason for last week’s rate rise was to boost unemployment and keep a lid on wage demands. But the government could instead increase the supply of labourA recession is already with us and could last all next year and beyond, says the Bank of England. It’s a gloomy outlook, tempered only by the Bank’s monetary policy committee signalling that the downturn is unlikely to be as bad as expected, despite its jolt to mortgage payers last week with a 0.75 percentage-point increase in the base rate.Interest rates will peak at a lower level than the 5.25% financial markets previously expected – somewhere between 3% and 4% – which means the recession, rather than being the longest in 100 years, will be short and shallow. Continue reading...