My former colleague JR (Dick) Sargent, who has died aged 96, was the founding professor and chair of the economics department at Warwick University when it launched in 1965. Following a period of unrest, he was instrumental in reshaping the university to make it more democratic. The changes that were made reverberated through other universities.Within a few years of Warwick’s launch many staff and students felt the university’s structure was insufficiently democratic and excessively oriented towards the business community. These views were influenced by les événements, the wave of student and worker unrest that swept across Europe in 1968. They were articulated by a staff member, the labour historian EP Thompson, in his book Warwick University Ltd (1970). Continue reading...
Theme parks, toy brands and even coastal hotspots are looking to the latest dinosaur blockbuster for a bump in salesDinosaur attractions across the UK are braced for a fresh wave of visitors following the release of Jurassic World Dominion this weekend.The sixth film in the franchise is expected to offer a boost not only to UK cinemas – the series’ box-office takings so far top £200m – but to the country’s many dinosaur-themed attractions. Continue reading...
Inflation rate sends stock markets into tailspin as S&P 500 falls over 2% and Nasdaq down over 3.5%Inflation in the US rose unexpectedly last month to a fresh four-decade high of 8.6%, the labor department said on Friday.The latest consumer price index (CPI) figures showed that the cost of living increased by one percentage point from April and was broad-based, with the indexes for shelter, gasoline and food being the largest contributors. Continue reading...
by Robert Booth Social affairs correspondent on (#6074A)
As campaigners seize on how Covid shook up work, 70 UK firms embark on largest trial yet of shorter weekFive days on, two days off has been the defining pulse of British labour for more than 80 years. But as 70 UK companies embark on the largest trial yet of a four-day week, the working calendar may finally be changing.Campaigners are seizing on the way Covid shook up working lives to push back the boundaries of the weekend for the first time since the postwar years when the whole of Saturday became a day off for most. One advocate predicts a four-day week could be available to the majority in Britain within five years and Stephen Fry this week gave his voice to an increasingly confident four-day week campaign, which argues shorter hours boosts productivity, cuts carbon emissions and improves family life – all without cutting pay. Continue reading...
PM must act quickly as economy and household finances worsen, but Treasury is not sympatheticPetrol heading for £2 a litre. A £100 bill to fill the average family car with fuel. A warning from the west’s leading thinktank that only Russia of the world’s 20 leading economies will have weaker growth than the UK next year.Boris Johnson might have hoped for easier weeks to begin his political fightback. A pickup in the economy is vital if the prime minister is to cling on to his job after 148 of his MPs said they lacked confidence in him. Things are not going to get any easier for some time to come. Continue reading...
by Kalyeena Makortoff Banking correspondent on (#606YP)
Assessment finds customers could access accounts despite any collapse but three banks have shortcomingsThe UK’s largest banks are no longer “too big to fail” and could foot the bill for their own failures, the Bank of England has said, but it found shortcomings at three banks including HSBC and Lloyds.Fourteen years on from the financial crisis that threatened a collapse of the banking system and led to huge taxpayer bailouts, the Bank of England’s first public assessment of lenders’ “living wills” found that even if a major UK lender were to collapse, customers would be able to access their accounts, and banks could broadly provide services as normal. Continue reading...
Shortage of candidates since January means thousands of vacancies unfilledUK employers increased the number of new staff in May at the slowest pace since early 2021 after a steep fall in the number of workers responding to job adverts.After an increase in job switching by workers last year, often to secure higher pay, employers said the shortage of candidates since January meant they were unable to fill thousands of vacancies. Continue reading...
Base rate to rise by 0.25% and quantitative easing to stop in July after ECB warns about inflationThe European Central Bank (ECB) plans to raise interest rates next month for the first time since 2011 after warning inflation would increase by more than previously estimated.Resisting calls for a 0.5% increase next month, the ECB’s governing council said the base rate for the 19-member currency bloc would be raised by 0.25% with a further, and possibly larger increase scheduled for September. Continue reading...
Pepco says ‘acute spike in inflation’ and lack of wage rises forcing consumers to spend lessThe cost of living crisis is prompting UK shoppers to cut back even on essential items as wages fail to keep pace with inflation, the owner of Poundland says.Pepco Group, which owns Poundland in the UK, Dealz in Ireland and the Pepco chain across Europe, says that while the absolute levels of inflationary pressure are greater in central and eastern European markets, higher wage growth of about 10% in those regions compared with others is substantially offsetting this. Continue reading...
RAC calls it a ‘truly dark day’ as latest increase puts cost of filling typical 55-litre family car at £100.27The average cost of filling a typical family car with petrol has exceeded £100 for the first time on what was labelled a “truly dark day” for drivers.Figures from data firm Experian Catalist show the average price of a litre of petrol at UK forecourts reached a record 182.3p on Wednesday. Continue reading...
Analysis: US to examine with fresh urgency easing reliance on China as pandemic disruptions expose global economic vulnerabilitiesEveryone has a story to tell about the supply chain problems that have affected the global economy, from the beginning of the pandemic through to the disruption caused by the war in Ukraine. From shortages of Ikea furniture and Christmas turkeys, to the dearth of computer chips that sent the cost of secondhand cars soaring, the dislocation of a once smooth-running system has caused havoc in the global economy.But while predictions about the easing of bottlenecks have come and gone without any improvement, it has become clear the disruptions of the past two years or more are spurring fundamental changes to the world economy that could have yet more profound impacts on our lives. Continue reading...
Business group downgrades its outlook for growth next year to 0.6% as inflation soarsBritain’s economy will “grind to a halt” before shrinking in the second half of this year as soaring inflation and tax rises take their toll, according to forecasts from one of the UK’s leading business groups.Consumers and business will pay a high price for Russia’s invasion of Ukraine and persistent delays to supplies from China, said the British Chambers of Commerce (BCC) as it downgraded its outlook for growth next year to 0.6%. Continue reading...
Zero-growth warning for UK as petrol prices surge and OECD says Britain will be weakest economy in G7 next yearBoris Johnson’s attempt to reset his troubled premiership has received a double blow after petrol prices had their biggest daily rise in 17 years and a leading international thinktank said the UK economy would slow to a standstill next year.Fears that Britain is heading for a prolonged period of 1970s-style stagflation intensified amid fresh evidence of the damaging impact of the war in Ukraine on the cost of living and growth. Continue reading...
Treasury secretary admits she regrets describing inflation as ‘transitory’ and says it is ‘top economic problem at this point’Janet Yellen told Congress that the US is facing “unacceptable levels of inflation” on Tuesday as the treasury secretary defended herself from criticism of her previous comments that rising prices were “transitory”.Although the hearing with the Senate finance committee was centered on Joe Biden’s budget for 2023, Yellen was forced to answer questions on inflation, including some on how she once said that inflation would be “transitory”, or temporary. Continue reading...
Stagflation feared as global economy suffers fallout from Covid pandemic, Chinese lockdowns and war in UkraineThe global economy faces a protracted period of weak growth and high inflation reminiscent of the 1970s as the impact of a two-year pandemic is compounded by Russia’s invasion of Ukraine, the World Bank has warned.In its half-yearly economic health check, the Washington-based Bank said echoes of the stagflation of four decades ago had forced it to cut its growth forecast for this year from 4.1% to 2.9%. Continue reading...
Food Standards Agency says number of people who skip meals or use food bank has leapt in past yearThe cost of food is a big worry for the vast majority of Britons while the number of people who skip meals or use a food bank has jumped in the past year, according to the Food Standards Agency (FSA).Its research shows food prices are a significant future concern over the next three years for more than three-quarters of UK consumers (76%), and the number using a food bank has risen from around one in 10 in March 2021, to nearly one in six this March. Continue reading...
Number of people visiting shops during June bank holiday week was up 17% on May averageFour days of jubilee celebrations provided some much-needed respite for Britain’s retailers after a tough May in which cost of living pressures weighed heavily on spending.There was a sharp increase in consumer footfall on the high streets during the long bank holiday weekend to mark the Queen’s 70 years on the throne, according to the British Retail Consortium (BRC). Continue reading...
by Kalyeena Makortoff Banking correspondent on (#6028B)
Total donated to parties by financial firms and individuals tied to the sector over two years, report saysConcerns have been raised over the City’s influence on Westminster, after a report found financial firms and individuals tied to the sector donated £15m to political parties and gave £2m to MPs during the pandemic.The campaign group Positive Money tallied the gifts, expenses and donations handed to MPs, peers and their parties, as well as the value of income from politicians’ second jobs, saying it contributed to finance’s “oversized influence” on policymaking. Continue reading...
Cryptocurrencies’ use in avoiding taxes, laws and capital controls makes restrictions seem inevitableWith cryptocurrency prices plummeting as central banks start to raise interest rates, many are wondering if this is the beginning of the end of the bubble. Perhaps not yet. But a higher opportunity cost of money disproportionately drives down the prices of assets whose main uses lie in the future. Ultra-low interest rates flattered crypto, and young investors are now getting a taste of what happens when interest rates go up.A more interesting question is what will happen when governments finally get serious about regulating bitcoin and its brethren. Of the big economies, only China has so far begun to do so. Most policymakers have instead tried to change the topic by talking about central bank-issued digital currencies (CBDCs). Continue reading...
With work changed for ever by the pandemic, businesses are testing whether pilot represents a recognition that ‘the new frontier for competition is quality of life’More than 3,300 workers at 70 UK companies, ranging from a local chippy to large financial firms, start working a four-day week from Monday with no loss of pay in the world’s biggest trial of the new working pattern.The pilot is running for six months and is being organised by 4 Day Week Global in partnership with the thinktank Autonomy, the 4 Day Week Campaign, and researchers at Cambridge University, Oxford University and Boston College. Continue reading...
During Queen’s reign, country has tended to move quickly from national gloom to premature belief that it has finally ‘cracked it’In her 70 years on the throne the Queen has been served by 14 prime ministers and 22 chancellors of the exchequer. She has seen the country become wealthier and healthier despite five significant recessions. In 1952, the economy was dominated by manufacturing and powered by coal. Seven decades later, the pits have all closed and Britain is primarily a service-sector economy.The past 15 years have been the toughest of the Queen’s reign. Two deep recessions have provided the bookends to a period of extremely weak growth and flatlining living standards. Inflation is the highest it has been in four decades and the immediate prospects for the economy are poor. Continue reading...
Workers in Las Vegas are still feeling the effects of employers’ pandemic cuts – all made worse by rising inflation and low wagesIn the rotating restaurant at the top of the Strat hotel and casino, guests can once again enjoy $20 cocktails or a $90 shellfish display for two while taking in the expansive views of downtown Las Vegas from its landmark tower. After the Covid shutdown, Vegas is back in business. But not everyone seems happy, or sure how long it will last.On a recent afternoon, just out of view of the hotel’s 1,000-plus feet (350-metre) spike, a couple of hundred hospitality service workers were gathered in a nearby car park. In baking 90F (32C) heat, speakers told the workers that they must fight to get improved contracts and controls for soaring rents. “Sí, se puede” – yes, we can – they shouted outside the headquarters of Nevada’s powerful Culinary Workers Union. Continue reading...
Firing up the property market with a tax break is usually the Conservatives’ go-to tactic in times of trouble. But the chancellor must have his reasons…Boris Johnson’s government, out of ideas and beyond its sell-by date, is stuck in a rut. With the economy heading south as inflation ravages household incomes, there is a sense among Tory MPs that the chancellor should have something more up his sleeve.Yet all the Treasury can offer them is a looped tape of Rishi Sunak’s 2021 budget speech, when he laid out spending plans that were immediately submerged by the cutbacks and tax rises his fiscal conservatism demanded. Continue reading...
Plummeting prices and lost life savings confirmed for many that the blockchain dream was too good to be true – and it may now struggle to hit past highsEven if you don’t live and breathe cryptocurrency, you’ve probably noticed some turmoil in the sector. Eye-catching headlines about missing apes and collapsing stablecoins are indicative of the chaos, but what’s really going on? Continue reading...
Price hikes driven by combination of factors, including inflation and the war in UkraineThe price of a pint in London has long been bemoaned as the sign of how expensive it is to live in the capital.However, as crowds flocked to central London to toast the Queen on the jubilee bank holiday weekend, some would have been staggered if they ordered a round of drinks in one pub, after it emerged the the average price of a pint has topped £8 for the first time. Continue reading...
Unemployment rate holds at 3.6% for third month but rate for Black Americans is nearly twice that of white peopleThe US extended a year-long streak of strong jobs growth in May, adding another 390,000 new jobs, the Department of Labor said on Friday.The unemployment rate remained at 3.6% for the third month in a row, near a half-century low. The number of unemployed people was also essentially unchanged at 6 million. Continue reading...
Central bank moves to stem double-digit inflation and protect currency, taking borrowing to highest level since 2015Ukraine more than doubled interest rates to 25% on Thursday in a move to try to stem double-digit inflation and protect its currency, which has collapsed since Russia’s invasion.In the first interest rates intervention since Vladimir Putin’s troops attacked on 24 February, the Ukrainian central bank’s governor, Kyrylo Shevchenko, increased the benchmark interest rate from 10% to 25%. Continue reading...
Business and political elite embraced new ethos at WEF without reflecting on past mistakesThe World Economic Forum’s first meeting in more than two years was markedly different from the many previous Davos conferences that I have attended since 1995. It was not just that the bright snow and clear skies of January were replaced by bare ski slopes and a gloomy May drizzle. Rather, it was that a forum traditionally committed to championing globalisation was primarily concerned with globalisation’s failures: broken supply chains, food and energy price inflation, and an intellectual property (IP) regime that left billions without Covid-19 vaccines just so that a few drug companies could earn billions in extra profits.Among the proposed responses to these problems are to “reshore” or “friend-shore” production and to enact “industrial policies to increase country capacities to produce”. Gone are the days when everyone seemed to be working for a world without borders; suddenly, everyone recognises that at least some national borders are key to economic development and security. Continue reading...
On 5 June 1947, secretary of state George Marshall put forward the idea of a European economic recovery plan to be financed by the US. See how the Guardian and Observer reported events6 June 1947It would be neither fitting nor efficacious for this government to undertake to draw up unilaterally a programme designed to place Europe on its feet economically. This is the business of the Europeans. The initiative, I think, must come from Europe. The role of this country should consist of friendly aid in drafting a European programme and of later support of such a programme so far as it may be practical to do so.It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world without which there can be no political stability and no assured peace. Our policy is directed not against any country or doctrine but against hunger, poverty, desperation and chaos.United States assistance should not be doled out as crises develop. Any assistance the government may render in future should provide a cure rather than a mere palliative. Any government that is willing to assist it in the task of recovery will find full cooperation on the part of the United States government. Any government which manoeuvres to block the recovery of other countries cannot expect help from us. Furthermore, governments, political parties or groups which seek to perpetuate human misery in order to profit therefrom politically or otherwise will encounter the opposition of the United States. Continue reading...
In normal times consumers spend for gratification – in this cost of living crisis they are spending out of desperationWhen credit card balances begin to rocket, analysts are usually convinced the trend indicates consumers are growing in confidence and the economy is bowling along in rude health. In more normal times, consumers feel less concerned about the possibility of paying a super-expensive rate of interest if it means they can buy what they want straight away.These are not normal times. Britain’s economic recovery has ground to a standstill and a cost of living crisis means most things we buy are becoming less affordable by the day. So it was not surprising that City economists agreed that April’s £1.4bn rise in credit card balances was most probably an act of desperation by middle- and low-income households. Continue reading...
Discount chain predicts decline in discretionary spending as UK inflation soars to 40-year highThe discount retailer B&M has warned that its profits could drop as customers struggling with the cost of living crisis opt for cheaper products.It highlighted an “uncertain macroeconomic outlook” that could prompt customers to switch to cheaper products, making it difficult to predict the impact of inflation on sales volumes. Continue reading...
Critics say proposals ‘an own goal’ for government in combating money laundering, tax evasion and fraudThe government has been accused of watering down efforts to combat economic crime after putting forward proposals that could reduce transparency around small company accounts.It said it was reviewing the kind of reporting burdens faced by the UK’s smallest businesses in the hope of reducing the cost and time required to produce public accounts to a level of detail that it claimed was “only needed for larger companies”. Continue reading...
by Richard Partington and Sarah Butler on (#5ZSQC)
New way of gathering figures by ONS highlights cost of living pressures on struggling householdsUK consumers are facing significantly bigger increases in the price of some budget food items including pasta, crisps and bread, new experimental data shows, as poorer families bear the brunt of the cost of living crisis.Highlighting the challenge for low-income households, figures from the Office for National Statistics (ONS) showed prices for some low-cost groceries increased at a much faster rate than general inflation in the year to April. Continue reading...
Ever since Thatcher’s monetarist medicine, profits have become all-but guaranteed for wealthy elites – and society has sufferedInflation in the UK has hit its highest level in 40 years, particularly thanks to the dramatic rise in energy and food prices. This fact has provoked panic among some commentators and policymakers that Britain is about to relive the inflationary turbulence of the 1970s, and has prompted Rishi Sunak to announce a last-minute £15bn “cost of living package” partly funded by a one-off tax on energy companies. Andrew Bailey, the governor of the Bank of England, has already been the subject of outrage for suggesting that workers should show “restraint” in their pay demands, to prevent an upward spiral in wages and prices as seen in the 1970s. Right now, with inflation at 9% and employers expecting to increase pay this year by just 3%, Bailey should be able to relax on that front.Inflation aside, the differences between Britain’s economy of 2022 and that of 40 years ago are stark. In 1982, unemployment hit a postwar record, at more than 3 million, as manufacturing employment plummeted. Today, Boris Johnson boasts of record low unemployment. Trade union coverage was still over 50% in 1982; today, it’s less than half that, and almost half of that again in the private sector. The inability of most workers to negotiate collectively for wage increases is one of the principal reasons why Bailey sounded so out of touch, and why comparisons with the 1970s miss the mark.William Davies is a sociologist and political economist. His latest book is This is Not Normal: The Collapse of Liberal Britain Continue reading...
by Richard Partington Economics correspondent on (#5ZSF2)
Exporters fear Northern Ireland protocol row will spur trade war with Brussels, making an already difficult job even harderMark Brearley is still frustrated by Brexit. More than a year from Britain’s formal withdrawal from the EU, on terms agreed by Boris Johnson’s government, exporting the goods his company produces hasn’t got any easier for the London-based manufacturer.Describing it as “the same nightmare week after week”, he says: “A lot more time is spent with things going wrong. The EU really feels like the hardest place in the world to ship things to sometimes.” Continue reading...
Half worry rocketing prices will cut spending, while three in four fear long-term damage to businessesThree-quarters of small and medium-sized companies are worried about the long-term impact the cost of living crisis, soaring energy bills and rising inflation will have on their business, a survey has found.Just over half (51%) of SMEs said they were concerned that rocketing prices would dent consumer spending, in response to Barclays’ SME Barometer, a quarterly survey of business sentiment conducted for the bank. Continue reading...
The Tory reputation for economic competence was shredded in 1992 but the present PM’s woes go deeper, politically and economicallyMemories came flooding back as George Soros lambasted Vladimir Putin and Xi Jinping in Davos last week, although 30 years ago it was sterling rather than authoritarian leaders that the arch speculator had in his sights.As 1992 wore on, pressure on the pound intensified until on 16 September it was blown out of Europe’s exchange rate mechanism (ERM). John Major’s government never recovered from what was quickly dubbed Black Wednesday, so complete was the humiliation and loss of public trust. Continue reading...
by Vincent Ni, China Affairs Correspondent on (#5ZRTG)
Schools and airports help the leaders of countries that receive cash from Beijing tighten their grip on power, a new book claimsChina’s financing of overseas projects has disproportionately benefited the core political supporters of incumbent presidents or prime ministers of those countries that receive the funds, according to a new book.During the 20th century, China was mostly known as a recipient of international development finance. Its overseas development programme was modest – roughly on a par with that of Denmark. But over the course of one generation, as Beijing emerged as the world’s second-largest economy, its footprint began to extend far beyond its borders – often in the form of infrastructure initiatives such as Belt and Road. Continue reading...