Economics | The Guardian

EU-UK trade deal continues to hurt trade with 27% drop in exports since 2021 reports Aston University

ITV's political editor has helped explain our national crises, from the 2008 financial crash onwards. Could he also help solve them?

Alan Ereira suggests using the increase in value of Britain's gold reserves to boost welfare payments to its poorest peopleWe are told that the country is so poor that we have to keep the two-child benefit cap and take the winter fuel allowance away from pensioners who are not on certain benefits (Winter fuel: 780,000 UK pensioners entitled to payment will lose it, 14September).Those just over the cutoff point will lose out although they are desperately hard up. This imposes the burden of our debt on the frailest, keeps child and pensioner poverty high, and has a knock-on effect in reducing our capacity to grow the economy. Continue reading...

Steps are now being taken to reduce headcount at Harland & Wolff, as board concludes the company is insolvent

Experts say baffling' lack of equivalent to fuel duty means motorists are more strongly taxed than private jet ownersCampaigners have urged the chancellor to start taxing jet fuel - with a report showing that charging duty at the same rate paid by motorists would raise up to 6bn a year for the public finances.An analysis by the thinktank Transport & Environment (T&E) UK said introducing a fair" equivalent to the fuel duty paid in other sectors could raise between 400m and 5.9bn a year, based on the 11m tonnes of kerosene consumed by planes taking off from the UK in 2023. Continue reading...

Thinktank says with up to 40% of staff on track for inadequate funds even 16-year-olds should be signed upEmployees as young as 16 should be automatically enroled into workplace pensions and there is a strong case for making their employers pay in even when they do not contribute themselves, according to a leading thinktank.The Institute for Fiscal Studies (IFS) has warned that many current workers are on track for inadequate retirement incomes", with between 30% and 40% of private sector workers, 5 to 7 million people, likely to fall short of what is needed for a minimum standard of living. Continue reading...

Keir Starmer made exacting promises on borrowing. Now he either breaks them - or makes more cuts and bleeds popularityMost Labour MPs would not have wanted 1.6m pensioners with disabilities to lose their winter fuel payments because of government cuts. But they didn'tknow, because a partial assessment of the measure's impact was only released on Friday evening, three days after they voted on it in the House of Commons. Last month the chancellor claimed spending cuts were not the choices I wanted to make or expected to make". The result has been to suck buoyancy out of a government still less than 100 days old, and to boost the morale of its critics, including theReform party.As winter sets in and fuel bills go up, many people will go cold or hungry or both. Opponents of this government, in parliament and the press, will maintain a laser-like focus on pensioners suffering because they've lost their fuel allowance. Ministers can expect their expense claims to be scrutinised to see how much they've received for heating their homes. It's a good thing SirKeir Starmer is reconciled to being unpopular, because his approval ratings are unlikely to pick up much this side of Christmas.Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...

Action is needed to restore the damage done by the Tories to Britain's international reputationDomestic issues have dominated in the two months or so since the general election. Much of the talk has been of holes in the public finances, the dire state of the NHS, and the early release of prisoners to prevent jails overflowing.That's not to say there has been no attention paid to foreign affairs. Labour has pledged continuing support for Ukraine and suspended 30 arms export licences to Israel. Keir Starmer has sought to burnish links with the US and to reset relations between Britain and the EU. Continue reading...

The move is widely expected - but will still be studied closely as dark clouds loom on the US horizonEconomic moments are often forecast with great certainty, but few will have been as widely expected as an interest rate cut by the US Federal Reserve this week.Analysts have included a reduction in the cost of borrowing by the US central bank in their forecasts for more than a month and investors have placed their bets accordingly. Continue reading...

The anniversary of Norman Lamont's failure is a timely reminder to Labour not to have its fiscal agenda set by the oppositionMonday will be the 32nd anniversary of Black Wednesday. For younger readers, and older ones with ailing memories, Black Wednesday, on 16 September 1992, was the day the Tories lost their reputation for economic competence.True, they had lost it once before, when the Heath government of 1970-74 fell victim to the inflationary impact of the 1973-74 oil crisis, their economic boom that got out of control, and what became known as the disaster of the three-day week. Continue reading...

PM told his downbeat tone risks putting off investors and that his conference speech must temper realism with hopeThe government's gloomy diagnosis of the state of Britain is imperilling the private investment needed to secure economic growth, City figures are warning, amid widespread calls for Keir Starmer to inject more optimism in his Labour conference speech later this month.The prime minister has spent his first months in power setting out the dire inheritance his party has been left by the outgoing Conservative government, most notably a 22bn black hole left in the public finances this year. The forthcoming spending review is set to uncover an even bigger shortfall over the next two years. Continue reading...

We are ready to get back to the table to reach a new agreement," Boeing pledges, as walkout over pay deal beginsBeijing's finance ministry has imposed a six-month business suspension on PwC's auditing unit in mainland China over the auditing of Evergrande.PwC has also been hit with financial penalties totalling around 47m.The ministry also imposed a fine of 116 million yuan (12m) on PwC Zhong Tian LLP, the registered accounting entity and the main onshore arm of PwC in China, according to a statement on the MOF website.China's securities regulator said in a separate statement that it confiscated the unit's revenue involved in the Evergrande case totalling 27.7 million yuan (3m) and fined the unit 297 million yuan (32m). Continue reading...

Pimlico Plumbers founder Charlie Mullins has had it up to here with the UK's taxes, and he is determined to make sure every one of us knows itAlways intriguing to watch the emergence of a new publicity circuit, so the warmest of welcomes to the loose collective of multimillionaires currently using their well-earned platforms to announce their imminent departure from the UK. If their number has an indisputable star at the moment, it is the Pimlico Plumbers founder Charlie Mullins, who resembles the world's oldest boyband member, and sports so much dermal filler that I can only assume that even he lacks the drain rods to address it. Goes without saying I have always had a HUGE amount of time for him. Charlie claims to often" be mistaken for Rod Stewart, presumably by moles or pavement satirists.But you may recognise him from various legal challenges to Brexit, and - last year - the suggestion that someone should kill" London's Muslim mayor", Sadiq Khan. Back during the Brexit years, Mullins declared: Nobody can tell me to shut the window on 500 million customers in the EU, and 225bn worth of trade." Then, this year, he opted to throw his lot in with Nigel Farage's Reform party. Please, please don't try to rationalise it! Just let it flood your home like an uninsured act of God.Marina Hyde is a Guardian columnist Continue reading...

Protest letter sent to fund's head over move to send staff to Moscow for first review since invasion of UkraineThe International Monetary Fund (IMF) will send staff to Moscow next week to review the Russian economy for the first time since the invasion of Ukraine, in a move that has prompted anger and dismay across European capitals.Officials of the Washington-based organisation will travel to the Russian capital and meet stakeholders" before publishing an assessment of the economy and providing recommendations about how the Kremlin might improve its economic handling and tackle issues such as the climate crisis. Continue reading...

European Central Bank makes 0.25-point cut as expected after eurozone inflation fell to 2.2% in AugustThe European Central Bank has lowered interest rates for the second time this year, as it warned that economic growth in the eurozone will be weaker than it had hoped.The ECB's governing council decided to lower its deposit rate - paid to banks that make overnight deposits with the Eurosystem - by a quarter of a percentage point, from 3.75% to 3.5%, on Thursday. Continue reading...

A 17-year-old male was detained last week on suspicion of Computer Misuse Act offences in relation to the attack launched on TfL on 1 September.

OBR report is not all doom and gloom, but preventing debt rising to 274% of GDP would require tough action

Public finances under pressure from ageing population, climate crisis and security risks, OBR report says

Chancellor says revision of how much lenders must set aside to cope with future crises will bolster growth

Using inflation as cover, companies have raised prices of everyday household items to rake in record profits at the expense of American familiesOver the past few years, Erin Wiggle has approached every trip to the grocery store with a sense of dread. During each visit, the retired army veteran, small business owner and mother from Worcester Township, Pennsylvania, has seen her budget stretched thinner and thinner as prices keep ratcheting up for the goods her family relies on. Erin's burden has grown heavier despite pandemic-related supply chain issues subsiding, and she has a growing sense that the companies making the products she needs are padding their profits at the expense of her family.Erin is right. Under the cover of inflation, companies have raised the prices of everyday household items to rake in record profits at the expense of American families. As my investigation into what I've called greedflation" shows, from mid-2020 to mid-2022, corporate profits rose by 75% - five times as fast as inflation. In fact, corporate profits jumped so much that they played a major role in causing inflation - according to the Federal Reserve, corporate profits accounted for all the inflation from July 2020 through July 2021 and 41% of all inflation from July 2020 through July 2022. Continue reading...

UK government's 500m taxpayer-backed deal for steelworks secures long-term future of Port Talbot but unable to secure guarantees to save 2,500 jobs

Pre-election slowdown continues in July despite economists predicting growth of 0.2%

The notorious syndrome causes chancellors to demand savings that look ingenious but really aren't. No 10 must be vigilantAn unwritten law of Westminster mechanics states that power, in the absence of a countervailing force, gravitates to the Treasury.The governing agenda can be set in No 10, but a prime minister has few instruments of control as immediate and far-reaching as the purse strings in a chancellor's hand.Rafael Behr is a Guardian columnist Continue reading...

Statistics show 16- to 24-year-olds out of work at highest level since pandemic, a rise of almost 50% in two yearsYouth unemployment has risen to a post-pandemic high as unions warned that young people's futures are on the line" amid a widespread struggle to find a job.Official figures showed youth employment has reached its highest level in more than three years. There were 597,000 young people aged 16 to 24 who were unemployed in May to July 2024, an increase of 51,000 from the previous year, according to figures released by the Office for National Statistics (ONS). Continue reading...

Brent crude has hit its lowest level since December 2021

Level looks poised to rise to 230 a week from April 2025 as a result of government formula

Likely 4% pension rise next year could help defuse row facing chancellor over winter fuel payment

Average earnings including bonuses in three months to July - used to calculate the triple lock - grew by 4%

Peers said they were raising a big red flag' and tough choices will be neededThe pressing risk of the national debt becoming unsustainable will force Britain into the unenviable choice of paying higher taxes or the state doing less, a House of Lords committee has warned.A report by peers said tough decisions and a new set of rules for the public finances were needed in order to put debt - currently just under 100% of annual national income - on a decisive downward path. Continue reading...

As the TUC annual conference begins, new figures from the UN show why productivity growth doesn't naturally benefit everyoneWithin a hundred years," wrote John Maynard Keynes in 1930, humanity's economic problem" - the requirement to work to produce the goods and services that sustain us - would be resolved. In his essay Economic Possibilities for our Grandchildren he said the standard of life in progressive countries ... will be between four and eight times as high as it is today". The productivity gains, Keynes thought, would mean people's material needs would be satisfied. Their dilemma would be how to spend their free time. Some people were stubborn, he accepted, and would still work three hours a day", but both the poor and the rich would enjoy such wealth that this would become unnecessary.History suggests Keynes got it wrong. While workers in the industrialised nations have seen the length of their average working week drop by more than a fifth in the past century, they are still working about 40hours. Globally, says the UN's International Labour Organization (ILO), men are working 46 hours a week. This hardly fulfils Keynes's vision of a future global economy distinguished by leisure and abundance. Perhaps he underestimated the human preference to consume rather than relax and unwind. Continue reading...

For the first time since the cold war we must genuinely fear for our self-preservation,' warns former ECB chief as he presents new report on European competitiveness

Report by Mario Draghi calls for additional investment to regain growth and prevent social unrest

With a campaign this close, anything can shift the dial - but the average person also probably has no idea' about the monthly jobs reportAs another presidential election rears into view, spare a thought for campaign operatives on the eve of the first Friday of each month. Aides used to functioning on little sleep struggle by on even less. Press releases and attack lines are meticulously prepared.As the clock clicks to 8.30am, the website of the Bureau of Labor Statistics is refreshed repeatedly on hundreds of laptops and phones, until it finally lands: a 40-page statistical release entitled The Employment Situation. Continue reading...

The price mechanism is an effective if brutal route to cheap flights abroad and, Labour hopes, affordable housingFans of Oasis received a lesson in how capitalism works when the first tickets for the band's reunion concerts went on sale. People queued for hours only to find that the price had rocketed from what they imagined would be 148.50 to 355.20 by the time it came to pay.This was due to dynamic pricing, under which businesses adjust their prices flexibly based on current market conditions. Airlines, hotels and taxi companies all use this model. Continue reading...

Employees have lost out on holiday pay worth 2bn, according to new trade union researchWorkers across Britain have lost out on holiday pay worth 2bn, with more than a million people going without a single day of paid time off, according to new research.With unions gathering in Brighton this weekend for the first TUC conference under a Labour administration for 15 years, the body revealed new research showing the extent to which workers are being denied holiday pay. Workers are entitled to 28 days paid leave for a typical five-day week. Continue reading...

Analyses by Lord Darzi, the NHS Confederation and hospital chiefs detail a spectrum of ills in the service. But will their recommendations fuel appropriate remedies?

Black Americans whose ancestors were enslaved were still suffering a century later because they lived in states where Jim Crow laws were enforcedPersistence studies are all the rage in economics - using clever maths to show that events in the distant past drive political or economic outcomes today. One well-known example argued that Britain's superior growth to France as late as 1800 was shaped by... the collapse of the western Roman empire a millennium before. Here, the collapse saw the population de-urbanise, while in France they remained in Roman-era towns that lasted. So when Britain's cities re-emerged they were in places better suited to growth in the run-up to the Industrial Revolution.Interesting stuff. But persistence studies also breed something dangerous: determinism. If ancient history is so influential, what hope do we have to shape our destiny? Which is why I love a new paper by Lukas Althoff and Hugo Reichardt, examining the lasting economic impact of slavery. Their findings look like the normal persistence story: black Americans whose ancestors were enslaved before the civil war have had significantly worse economic outcomes ever since, compared with black Americans whose forefathers were free - even in 2023, descendants of enslaved people had incomes $11,620 lower than other black Americans.Do you have an opinion on the issues raised in this article? If you would like to submit a letter of up to 250 words to be considered for publication, email it to us at observer.letters@observer.co.uk Continue reading...

The UK urgently needs investment. But no one seems to know whether the institutions that deliver it are working as they shouldEvery time an upmarket home is bought in the UK, the new residents seem obliged to rip out the kitchen and install two bathrooms where there was only one.It is almost a cast-iron rule that walking across the threshold means paying builders to rearrange what was there before, almost for the sake of it. Continue reading...

The chancellor claims she needs to shave pennies from all departments, but there are better options for dealing with the 22bn funding holePressure is building on Rachel Reeves to prevent some of the UK's poorest pensioners being hit by restrictions on the winter fuel allowance. A plan to scrap the subsidy for all but those who claim pension credit, saving the exchequer 1.4bn, is under attack from opposition parties, trade unions and many inside Labour's ranks.So far, the chancellor has resisted calls to reinstate the allowance of up to 300 a year - or even to make more of an effort to ensure only the richest pensioners lose the payment, implying that she needs all the savings to help close a 22bn gap. Continue reading...

Reading for month was shy of the average forecast as headline unemployment rate decreased from 4.3% to 4.2%US employers added 142,000 jobs last month, the labor department announced on Friday, in one of the year's most closely watched economic news releases.The release comes as the US Federal Reserve prepares to cut interest rates for the first time since March 2020, and November's election puts a spotlight on the state of the US economy. Continue reading...

Telegram boss Pavel Durov announces a new approach towards moderating content and will remove some features that had been abused for illegal activity.

To achieve 3% annual growth, 100bn a year must be found for key sectors like housing and energy, City taskforce findsThe UK needs 1tn of fresh investment over the next decade if the government is to hit its economic growth targets, a City taskforce has said.The Capital Markets of Tomorrow report, led by the City veteran and former boss of Legal & General Sir Nigel Wilson, said that in order to achieve at least 3% annual growth, the UK would have to attract around 100bn of investment per year, divided between key sectors. Continue reading...

UK construction sector has turned a corner" after a difficult start to the year, as housing activity rises at quickest pace since September 2022We also have results from online clothing retailer ASOS this morning, but they don't report problems from the bad weather.ASOS told the City that its adjusted profits for the current financial year are expected to hit the top of analyst estimates.... but its sales will be slightly below guidance". Continue reading...

Former president offers blank cheque to coal and oil, and cosies up to billionaires such as Elon Musk and Peter ThielThe US presidential election in November is critical for many reasons. At stake is not only the survival of American democracy, but also sound stewardship of the economy, with far-reaching implications for the rest of the world.American voters face a choice not only between different policies, but between different policy objectives. While the vice-president, Kamala Harris, the Democratic nominee, has yet to detail her economic agenda fully, she probably would preserve the central tenets of Joe Biden's programme, which include strong policies to maintain competition, preserve the environment (including reducing greenhouse gas emissions), reduce the cost of living, maintain growth, enhance national economic sovereignty and resilience and mitigate inequality. Continue reading...

The 2017 Grenfell Tower fire in London was the result of decades of failure' by central government, the public inquiry into the catastrophe has found. The Guardian's John Harris looks at the findings of the report with the social affairs leader writer Susanna Rustin. And, as Labour continues to warn things will get worse before they get better', we are joined by the economists James Meadway and Ann Pettifor to discuss whether a painful period of austerity-lite is the only way through the storm Continue reading...

It's a sign of the times

New governments usually come into power offering hope and a break with the past. This one is squandering the opportunity for a fresh startAll is not well in Britain. Last week the Children's Society reported the results of a study of 15-year-olds' life satisfaction, which has steadily declined over the past decade. The findings showed that British 15-year-olds had the lowest life satisfaction levels of 27 European countries.In a 2023 report on global mental health, the UK ranked the second worst of 71 countries, with only Uzbekistan scoring lower. My own research also makes for grim reading: my co-author and I found a collapse in the mental health of the young, and especially young women, in the UK. Scotland looks especially bad. Meanwhile, there are millions of people of all ages on waiting lists for surgeries, GP services are in decline, dentists are scarce and social care is in disarray.David Blanchflower is a professor of economics at Dartmouth College. He was a member of the Bank of England monetary policy committee from 2006 to 2009 Continue reading...

The new government is under constant attack. It deserves more cheerleaders for policies such as green energy and for backing workersThe honeymoon for Labour is over, say the massed ranks of the rightwing media. What honeymoon was that? It seems to have been over since 5 July. Despite their own readers voting for that Labour victory in large numbers, the majority of media outlets paused not a moment to reconsider whether their rantings were out of kilter with the country, and their own subscribers.Polling before the election, Redfield and Wilton found, no surprise, huge Labour leads among Guardian, Observer and Mirror readers, but also large proportions backing Labour among readers of the Daily Express (41% to the Tories' 27%), the Daily Mail (37% to 24%), the Telegraph (34% to 21%) and the Times (42% to 23%), with the Sun, FT and Economist much the same. Yet their commentators seem quite unabashed. Telegraph columnists have been apocalyptic: It's over for Britain, crushed by Labour's cruel war on the middle classes". Continue reading...

Exclusive: Growth in sector in 2023 driven by concerts featuring big names such as Elton John and BeyonceSpending on the UK live music sector and associated businesses has hit a record 6.1bn as a wave of huge acts from Elton John to Beyonce cashed in on the pent-up demand to attend shows in person.Live, the federation representing Britain's live music industry, revealed that the sector's contribution to the UK economy topped 6bn for the first time last year, as fans denied live experiences in the Covid pandemic rushed to snap up tickets. Continue reading...

UK bonds 10 times oversubscribed in auction considered first big test of Labour's reputation with foreign investorsThe UK remains among the world's most attractive destinations for investors seeking a haven after an auction of government bonds was more than 10 times oversubscribed.Matching a previous record set in June and illustrating the stability of the government's finances, Britain attracted 110bn of bids on bonds worth 8bn. Continue reading...