Lifelines handed to Swiss bank and US regional bank First Republic fail to ease investor concerns

Was it the result of Trump-era regulation rollbacks, risk mismanagement at the bank, sharp interest rate rises – or a combination of all three?The collapse of Silicon Valley Bank continues to reverberate, hitting bank stocks, revealing hidden stresses, knocking on to Credit Suisse, and setting off a political blame-game.Why the $212bn tech-lender abruptly collapsed, triggering the most significant financial crisis since 2008, has no single answer. Was it, as some argue, the result of Trump-era regulation rollbacks, risk mismanagement at the bank, sharp interest rate rises after a decade of ultra-low borrowing costs, or perhaps a combination of all three? Continue reading...

Banking system is reeling from a series of shocks but is in better shape than at time of 2008 crashThe global banking system is reeling from a series of shocks over the past week, prompted by the collapse of California’s Silicon Valley Bank. That has stoked fears that this is the start of another banking crisis, posing big questions for central banks as they try to fight inflation while ensuring financial stability. Continue reading...

Organisation also says UK will be only G20 economy apart from Russia to shrink this yearCentral banks should maintain the fight against inflation with high interest rates despite fears of a global banking crash, according to the OECD, which said the UK will be the only economy in the G20 apart from Russia to shrink this year.The Organisation for Economic Cooperation and Development said it was concerned that inflation remained stubbornly high in many of its 39 members countries and urged central banks to persist with interest rate increases when necessary. Continue reading...

The US food assistance program offered expanded benefits during the Covid emergency, but they ended last monthGina Melton is facing a dilemma. Like millions of other Americans, Melton and her family relied on food assistance benefits boosted by Congress to help them through the pandemic. Now that extra cash is gone.The reduction has hit them hard. Three of her family members are disabled and one of her daughters works to take care of them through an agency. They had already relied on credit cards to pay for medical equipment that wasn’t covered by the federal health insurance schemes Medicare or Medicaid but have had to stop paying a couple of them in order to afford food. Continue reading...

Janet Yellen, the US treasury secretary, told Congress that the recent collapses of two US banks, Silicon Valley Bank and Signature Bank, does not reflect on the overall strength of the US banking system. She told Congress the US banking system 'remains sound', claiming that the government's swift response to the failures helped to restore public confidence in the banking system. 'I can reassure the members of the committee that our banking system remains sound, and that Americans can feel confident that their deposits will be there when they need them,' she said

Rachel Reeves, the shadow chancellor, accused Jeremy Hunt's budget of causing the 'biggest hit to living standards since records began'. She criticised Hunt for giving 'a huge handout to the richest 1% of pensions savers' while neglecting the needs of working people and businesses.Reeves stated that the pension reforms, which remove the higher tax rate on pension savings for people who have saved over £1m, were 'the wrong priority, at the wrong time, for the wrong people'. She vowed that Labour would reverse the measure if they won the next election

ECB presses on with 0.5 point increase in eurozone interest rates, and says it stands ready to respond to market turmoil

Unions recommend members accept pay offerSinn Féin’s US fundraising arm has caused a row by calling for a referendum on Irish unity in adverts in the New York Times, Washington Post and other US publications.The half-page ads were paid for by Friends of Sinn Féin and ran on Wednesday urging support for unity referendums in Northern Ireland and the Republic of Ireland. “It is time to agree on a date,” it said. “Let the people have their say.”They’re ads from Irish American organisations whose view on reunification is well known and held for a very long time and they take out ads every year. So, the focus now needs to be on getting back to work [at Stormont]. Continue reading...

Treasury secretary attempts to reassure nervous investors that emergency measure succeeded and bank deposits ‘will be there’The treasury secretary, Janet Yellen, told Congress on Thursday that despite two US bank failures over the past week the US banking system “remains sound”.The government’s response to the collapse of Silicon Valley Bank and Signature Bank last weekend were “decisive and forceful actions to strengthen public confidence in our banking system”, Yellen told the Senate finance committee. Continue reading...

Thinktank says taxes as share of GDP are on course to reach 70-year high but public services are being cut

Shadow chancellor says decision to axe lifetime allowance is ‘wrong priority at the wrong time for the wrong people’

IFS says budget pensions giveaway could open up loophole for avoidance of inheritance taxJeremy Hunt’s huge pensions giveaway for the wealthiest 1% may have no impact on increasing the number of people in work, while opening a loophole for avoidance of inheritance tax, a leading economic thinktank has warned.The Institute for Fiscal Studies said the surprise measure in the chancellor’s budget probably would not “play a big part, if any” in increasing the number of people in work. Continue reading...

European Central Bank could opt for smaller increase as concerns spread over health of banking systemThe European Central Bank is facing a dilemma over whether to push ahead with its plans for a large interest rise on Thursday amid fears over the strength of the banking system after Wednesday’s heavy sell-off of the Swiss banking firm Credit Suisse.After raising interest rates since last summer at a record pace to tackle high inflation across the eurozone, the ECB had in effect committed to another 0.5 percentage point increase in borrowing costs this week. Continue reading...

The struggling Welsh town wishes the UK government had done more to tackle deprivation

Jeremy Hunt has set out his first budget as chancellor. With plans to boost childcare and help people get back to work, can it provide the much-needed growth the economy needs? The Guardian’s John Harris is joined by former Conservative minister David Gauke and Miatta Fahnbulleh from the New Economics Foundation to discuss Continue reading...

The chancellor has put getting Britons back into work at the heart of his plan to grow the UK economy. But the danger signs are still flashing, reports Heather StewartJeremy Hunt delivered his first budget as chancellor and said he was “proving the doubters wrong”, having inherited a dire economic outlook from his predecessor last autumn.But, despite an improvement, Britain’s economy is still projected to contract this year and citizens are facing the deepest hit to their disposable incomes in their lifetimes. Continue reading...

Chancellor’s upbeat note in budget delivery was echoed by safe-seat Tory MPs but ‘red wall’ members are less happyAt a drinks party in Downing Street a few weeks after he took over as chancellor last year, Jeremy Hunt told his guests: “Sometimes doing the popular thing isn’t the right thing.”Ever since he was handed the keys to the Treasury, first by Liz Truss and then Rishi Sunak, Hunt’s overwhelming priority has been to restore the Conservatives’ reputation for economic competence. Continue reading...

Swiss authorities pledge to pump liquidity into Credit Suisse if needed, after its shares hit record low today

No money for nurses, doctors or teachers note critics as Starmer says UK is on ‘path of managed decline’

Labour leader says government has presided over decade of stagnation, and Tory mavericks attack chancellor

Education, Employment, Enterprise and … Everywhere? Chancellor’s solutions to heal economy fall flat as he fails to read the room

Measure over next three years will allow firms to write off costs of IT equipment and machinery against tax on profits

Campaigners unite with suppliers to call on ministers to give long-term help to struggling households

Jeremy Hunt criticised for scrapping lifetime allowance and increasing annual contribution cap

Charities and disability campaigners say chancellor’s proposals set out in his budget more ‘stick than carrot’

Chancellor abolishes lifetime cap on amount workers can save in pensions without paying tax

The statement will be remembered for the childcare pledge, but there was nothing to meet the scale of Britain’s economic malaiseI have spent more than 25 years covering budgets, because someone had to, and have learned one golden rule: for all the huff and puff, the ready reckoners and those blessed fan charts, most of what’s said evaporates from the public consciousness by the weekend. Out of all Jeremy Hunt’s promises today, only one will linger in the electorate’s memory: providing working parents with 30 hours of free childcare during term time for their babies and toddlers.Not that you’d know. The chancellor gave it only brief airtime and got far more excited at the idea of building “12 potential Canary Wharfs”. But that’s the only policy guaranteed to light up WhatsApp groups this evening and perhaps to be remembered by many voters at the ballot box. It is also, according to the Office for Budget Responsibility, the measure that will do most to boost the economy – more than the much costlier giveaways to business. The pledge is shot through with more holes than Clint Eastwood’s cowboy hat, as we shall see, but it also contains important clues for how politics will play out between now and the next election.Aditya Chakrabortty is a Guardian columnist and senior economics commentator. He was last week named columnist of the year (broadsheet) at the Press Awards Continue reading...

Jeremy Hunt’s efforts to boost growth unlikely to prevent largest fall in living standards on record

How the measures will affect Britons’ finances – and who will be the winners

Chancellor delivers ‘budget for growth’ but UK is battling rising interest rates, rising taxes and a cost of living crisis

Nursery providers question the funding while parents wonder why they have to wait years to access help

Campaigners call for fully funded system saying free 30 hours of support would take years to filter through

Jeremy Hunt has announced reforms to childcare, pensions and disability benefits. What do they mean for the economy?“Are you and your family better off than you were 13 years ago?” Ask yourself this, Labour says, echoing Ronald Reagan. Of course not. Living standards will fall and every public service will continue to decay. The government can expect few thanks for preventing another monster rise in energy bills, when people are still paying twice as much as a year ago. Headlines on falling inflation will impress few when voters find prices don’t fall, but keep climbing. “You could have been even worse off” is not much of a slogan.Polly Toynbee is a Guardian columnist Continue reading...

How Hunt’s measures on tax and benefits will affect single people, couples and those receiving pensions Continue reading...

Jeremy Hunt has delivered his financial update – here are the main points, with political analysis

From how much households could be paying to what prompted the rethink

In today’s newsletter: Jeremy Hunt’s autumn statement was all about repairing the damage of the Truss government. What will his first budget entail?

Biggest change to welfare system in a decade and extension of energy price guarantee among expected measuresJeremy Hunt is due to set out the government’s plans for tax and spending in his first budget on Wednesday. Meanwhile, the Office for Budget Responsibility (OBR) will publish updated economic forecasts and an assessment of the government’s finances for the next five years – running up to and beyond the next election. Here is what to expect. Continue reading...

From cooling inflation to easing staff shortages, we look at the factors behind the chancellor’s spending choices

Average monthly cost of owning 3-bed home is £500 a year less than renting, but the gap is narrowingHomeowners in the UK are almost £500 better off a year than renters, according to new research from Halifax.The average monthly cost of owning a three-bed home for first-time buyers is now £971, which is £42 lower than the average cost of renting an equivalent property, the mortgage lender said. Renters pay on average £1,013 each month – 4% more. Continue reading...

Probes announced in the UK and US over failure of California lender as financial markets recovered from Monday’s turmoilInquiries into the collapse of Silicon Valley Bank (SVB) and its UK arm have been announced in Britain and America, as financial markets settled and banking shares recovered from Monday’s turmoil.In the US, prosecutors at the Department of Justice (DoJ) as well as the stock market regulator, the Securities and Exchange Commission (SEC), are conducting separate investigations into the collapse of California lender SVB, which was taken over by the government after a run on its deposits. Continue reading...

Failure of America’s 16th biggest bank amid high inflation poses an awkward decision on interest rates for the Federal ReserveThe collapse of Silicon Valley Bank (SVB) has inevitably conjured up memories of September 2008 when the bankruptcy of Lehman Brothers prompted a market meltdown, a global recession and a dramatic easing of policy from the world’s central banks.Fears that SVB is not the only poorly regulated bank to be feeling the effects of steadily rising US interest rates have led to a rethink of what will now happen to official borrowing costs. Ultimately, that depends on whether this really is a “Lehman’s moment”, or a re-run of the stock market crash of 1987 or the failure of the hedge fund Long Term Capital Management in 1998, when the market turmoil was temporary. Continue reading...

Shares in First Republic, Western Allliance, PacWest and Zions are all rallying after Monday’s selloff; US inflation drops to 6%

The Fed’s target of bringing inflation to 2% could see dramatic change in tumultuous aftermath of Silicon Valley Bank collapsePrice rises slowed again in February as the annual rate of inflation eased but the report has been overshadowed by a banking crisis ahead of next week’s meeting of the Federal Reserve.Prices in February were 6% higher than a year ago, down from an annual rate of 6.4% in January and significantly lower than the 9.1% peak of inflation seen in June. Between January and February, prices rose 0.4% as prices increased in sectors including housing and food. Continue reading...

Parents describe plight as pressure builds on Jeremy Hunt to provide help in the budgetJoanna Jayarajan, 41, a self-employed mother of two from London, is one of many thousands of working parents in Britain for whom the current childcare offer simply does not work.She used to work five days a week providing extracurricular activities in schools and nurseries, until she lost her last au pair a year ago, and subsequently a chunk of her income (her wages more than offset the cost of the childcare). Continue reading...

We’re keen to hear from people in the UK whether a bigger allowance for tax-free pension contributions might entice them to put off retirement or work more hoursChancellor Jeremy Hunt is likely to announce a significant increase of the annual tax-free allowance for pension contributions from £40,000 to £60,000, as well as the so-called lifetime allowance (LTA) – the maximum amount workers can pay into their pension pot tax-free – by more than half a million pounds.We’re interested to hear from people in the UK how these new allowances might affect their career and retirement plans. Would you consider working longer hours or retiring later than you had envisaged to make use of the new pension thresholds? Or could you be persuaded to return to work from early retirement? Continue reading...

Employment increased in January as younger employees returned to workplace, says ONS

Chancellor is trying to to increase employment, but redundancies are up and wage growth has slowed

E-bikes, home security cameras and frozen berries added to ONS list in sign of changing shopping habitsTwo ubiquitous consumer items of the 1990s – alcopops and CDs – will no longer count towards the monthly update of Britain’s cost of living after the latest shake-up of the shopping basket used to measure price changes.In a sign it is no longer fashionable to order a fruit drink laced with booze in a pub and that the age of the compact disc is over, the Office for National Statistics said both products had fallen foul of its annual audit of the UK’s spending habits. Continue reading...