As Labour leader journeys north again the task of building a new narrative has only just begunIt is a cold night on a Stoke-on-Trent industrial estate and Keir Starmer is in town again. It’s at least his seventh trip here in search of redemption after Labour’s historic defeat in 2019, in a sign of how important he sees the Potteries to the party’s future.“I feel I’m getting to know Stoke quite well,” he tells me. “And we’ll keep on coming. I think it’s very, very important. The sort of discussion we want to have tonight is not a discussion we could have in London. You’ve got to have it where people live, in their place, in their town, about the issues that matter to them.” Continue reading...
Northern cities need a flourishing capital, so there will be no winners from the downgrading of transport schemesThose MPs in the north and west of England who believed Boris Johnson when he promised to level up the regions will be drowning their sorrows this weekend. The prime minister’s flagship integrated rail plan was revealed to be not much more than reheated and piecemeal improvements to existing rail lines.Leeds will be allowed to move ahead with a tram system connecting the city and its nearest neighbours. A couple of electrification projects mothballed in 2017 have secured another lease of life. But otherwise the word “integrated” in the document’s title falls foul of the Trade Descriptions Act. Continue reading...
After the pandemic more women are choosing to work from home but that choice could damage career prospectsEmployees want it, employers know they have to offer it; flexible working has transformed almost every office during the pandemic and it’s here to stay.It is a change that has been demanded for decades by groups including women, those with caring responsibilities and disabled people. But economists and employment experts are warning it could lead to more inequality at the office, particularly for working mothers. Continue reading...
Bank of England’s Huw Pill says ‘burden of proof’ now in favour of December interest rate riseThe Bank of England’s chief economist has warned that the UK’s buoyant labour market and rapidly rising inflation is pushing the central bank closer to raising rates at its next meeting in December.Huw Pill said the “burden of proof” was now in favour of increasing the cost of borrowing, though he said a rate rise would not be a quick fix that could bring down inflation in the short term. Continue reading...
by Written by Adam Tooze, read by Ben Norris and prod on (#5S3JS)
The year 2020 exposed the risks and weaknesses of the market-driven global system like never before. It’s hard to avoid the sense that a turning point has been reached. By Adam Tooze Continue reading...
by Richard Partington Economics correspondent on (#5S3H0)
October clothes and toys spending drives first increase in six months, with people fearing goods shortageRetail sales in Great Britain rose for the first time in six months in October as consumers started their Christmas shopping earlier than usual to avoid missing out if there was a shortage of goods.The total volume of goods bought rose by 0.8% last month, according to the Office for National Statistics, compared with flat sales in September, driven by a rise in spending on toys and clothes. Economists had forecast a smaller rise in sales of 0.5%. Continue reading...
Colin Hines and Richard Murphy call for ‘climate quantitative easing’ to keep up hopes of hitting climate targetsRebecca Solnit’s inspiring long read (Ten ways to confront the climate crisis without losing hope, 18 November) correctly emphasised the need to maintain hope when tackling the climate crisis by acting collectively, being tenacious through constant campaigning, despite setbacks, and listening to those whom the climate crisis most directly affects.However, she left out the one factor crucial to achieving the systemic change required to protect the planet: to campaign to make clear how to pay for the enormous upfront costs required for such a fundamental transition. Continue reading...
by Fiona Harvey Environment correspondent on (#5S246)
Those most at risk warn countries such as Australia they will lose out economically if they do not raise targetsSome of the countries most vulnerable to climate breakdown have called on the UN and the UK and other countries who want to lead the climate fight to help them ensure high emitters upgrade their carbon targets, as called for at the Cop26 summit.They added that countries such as Australia, which has refused to embrace strong carbon-cutting targets, would lose out economically. Continue reading...
Johnson’s boosterism has worked for him so far. But the answers to the big questions are coming from the leftInflation has hit its highest level in a decade. For most people, prices are rising faster than wages. Energy bills are soaring. The Bank of England is poised to raise interest rates next month. Personal taxes are going up in the spring. A tough winter looms.It’s not hard to see why Boris Johnson has hit the panic button with his plan to ban MPs from holding consultancy jobs. On its own, the government could perhaps ride out a sleaze scandal on the grounds that voters think (wrongly) that politicians are all as bad as each other. But sleaze plus a struggling economy is a potentially toxic mixture, especially since a long period of one-party rule makes voters susceptible to that most powerful of political messages: time for a change.Larry Elliott is the Guardian’s economics editor Continue reading...
Median basic pay rose 2% in three months to end of October, unchanged for seventh month in a rowThe average pay deal across the UK is worth just 2%, despite a rise in prices that pushed the retail prices index (RPI) – a widely used measure of inflation in pay bargaining – to 6% this month.According to the latest figures from the consultancy XpertHR, pay bargaining across some of Britain’s biggest private and public sector employers showed median basic pay increased 2% in the three months to the end of October, unchanged for the seventh consecutive month. Continue reading...
by Jasper Jolly, Joanna Partridge, Sarah Butler and G on (#5S0VJ)
As inflation hits 10-year high, Covid-hit sectors are sounding the alarm on spiralling pricesInflation has barely stirred for most of the 14 years since the start of the global financial crisis. Yet the coronavirus pandemic has disrupted almost every aspect of the global economy, and businesses are having to face up to what to many feels like an unusual phenomenon: rapidly rising prices.It has taken those who watch the economy by surprise. A year ago independent economists polled by the UK Treasury expected consumer price index inflation to reach only 1.9% by the fourth quarter of this year. On Wednesday, the Office for National Statistics reported CPI had risen 4.2% over the year to October – almost double the Bank of England’s 2% target and the highest in a decade. Continue reading...
Analysis: End of furlough has not driven up unemployment, but issues such as low productivity still existAfter a bruising couple of weeks, the government was in need of some good news and that was provided by the latest jobless figures. Fears that the end of the furlough scheme would lead to rising unemployment have proved groundless.It is, of course, early days. There are still only flash estimates of what happened in October once the Treasury’s wage subsidies had come to an end but the signs are promising. Continue reading...
Prospect of pre-Christmas interest rates rise looms larger after Andrew Bailey commentsThe prospect of a pre-Christmas increase in interest rates has loomed larger after the Bank of England governor told MPs he was troubled by the UK’s rising inflation rate.Giving evidence to the Commons Treasury select committee, Andrew Bailey said he was “very uneasy” about the rising cost of living and had come close to voting for an increase in borrowing costs when Threadneedle Street last met to decide on interest rates earlier this month. Continue reading...
Living Wage Foundation’s minimum rate rises by 40p to £9.90 an hour, largely due to higher fuel costs and rentsMore than 300,000 workers in the UK will get a pay rise from Monday as the charity behind the voluntary real living wage raises the minimum hourly rate amid growing fears over a squeeze on household incomes this winter.Set by the Living Wage Foundation, the nationwide “real living wage” will be raised by 40p to £9.90, while workers in London will see their pay boosted by 20p to £11.05. The changes will apply to workers at about 9,000 living wage employers who adopt the voluntary pay measure. Continue reading...
WTO talks show how hard it is to get everyone on the same page – and what goes for trade, goes for climate tooIt was a messy compromise. It wasn’t nearly enough. In many respects it was a classic example of kicking the can down the road. But Cop26 wasn’t the car crash it could have been and, realistically, was always going to end in the way it did, with last-minute haggling over the text.Why? Because achieving a climate change deal at a meeting of representatives from 197 countries was always going to be tough. While there was general agreement about the need to tackle global heating, there were big differences about how and when to do so. Continue reading...
The Cop26 outcome may disappoint campaigners but the talks are part of a wider shift in which everyone has agencyCapitalism has divided opinion violently in Glasgow over the past fortnight. Prince Charles rewarded those global businesses delivering on their commitments to net-zero carbon emissions with his Terra Carta award, declaiming that only the private sector could and would deliver, while Mark Carney, co-chair of the Glasgow Financial Alliance for Net Zero, boasted of the $130tn (£97tn) of private investment funds – doubled in six months – committing to invest in companies signed up to net zero. But capitalism, growth, greenwashing and self-seeking lobbying were denounced by activists and NGOs as the root of the problem. Prince Charles and Carney were dismissed as little better than collaborators in our collective downfall.In truth, a complex but ultimately hopeful dance is being performed before our eyes. The growing conviction of voters and consumers, further intensified by environmental campaigners at Cop26, that the climate crisis is real is forcing change. Last week, rivalling in importance to what was unfolding at Cop26, came the news from New York that electric pick-up truck manufacture Rivian, hardly in production, had floated for more than $100bn, valuing it at more than Ford and General Motors. It’s the kind of mind-boggling welcome Wall Street gave to young companies making petrol-propelled cars a century ago. Continue reading...
The key figures in the Owen Paterson debacle were all Leavers. To many Remainers, that will come as no surpriseThere is a close link between the parliamentary sleaze scandal and – you’ve guessed it – Brexit.The plotters who tried scandalously to exonerate Owen Paterson and undermine the course of parliamentary justice were all Brexiters – some of them extremely so. From Paterson himself to the prime minister, who attended the dinner where the plot was hatched, taking in the leader of the house, Jacob Rees-Mogg, who enthusiastically supported it, they all share responsibility for what is now being increasingly recognised as the catastrophe of Brexit. For, make no mistake about it, Brexit was, and remains, a sleazy operation. Continue reading...
A tight labour market and high inflation may see real wages growth for some, but ongoing uncertainty for manyFor several months now, policymakers at the Bank of England have been agonising about wages. They ask themselves how workers will react when they see rising prices in the shops and, worse, the rocketing cost of petrol, which last week jumped to its highest level on record.Will they march into their boss’s office and demand a pay rise of 10%? Or, more likely, will they march down the road to a rival employer prepared to increase wages by double digits to attract new staff? Continue reading...
The Tories set great store by the special economic zone, but will it create thousands of jobs, or just be the economic damp squib experts predict?There is demolition work at every turn on Teesside, from the increasingly regular explosions heard across Redcar, as the old steelworks is blasted to pieces, to the cranes taking down nearby Wilton International’s coal-fired power plant.“The site has seen better days,” said Andy Koss of Sembcorp Industries, which manages the Wilton International complex. “For the region as a whole it has been a tough time, with the gradual erosion of industry at Wilton. And then the closure of the steelworks was a massive blow.” Continue reading...
Wealthier households likely to wait for better economic outlook before increasing spending, suggests IFSA much-anticipated Christmas spending spree is unlikely to materialise despite consumers having around £150bn of savings on deposit to splash on toys, food and festive parties, economists have warned.According to a study by the Institute for Fiscal Studies, much of the savings built up during the pandemic will remain in household bank accounts until the economic outlook is more upbeat. Continue reading...
Surging infection rates, the ‘pingdemic’, rising prices and supply constraints put the brakes on growthBritain’s recovery from its third Covid-19 lockdown slowed sharply over the summer as the economy’s growth was hit by rising infection rates, the pingdemic and global supply shortages.Figures from the Office for National Statistics show that national output expanded by 1.3% in the three months to September, leaving it still more 2.1% below its pre-crisis level in the fourth quarter of 2019. Continue reading...
World Bank says 40% of low-income countries failed to publish any figures in past two yearsEfforts to combat a looming debt crisis in the world’s poorest countries are being hindered by a lack of up-to-date, reliable figures showing how much individual nations owe, the World Bank has said.The Washington-based institution highlighted “massive gaps” in the data, with 40% of low-income countries failing to publish any figures on their sovereign debt in the past two years. Continue reading...
Joe Biden needs someone at the top who shares his values – so step forward then please … Lael BrainardThe US president, Joe Biden, faces a critical decision: whom to appoint as chair of the Federal Reserve – arguably the most powerful position in the global economy.The wrong choice can have grave consequences. Under Alan Greenspan and Ben Bernanke, the Fed failed to regulate the banking system adequately, setting the stage for the worst global economic downturn in 75 years. That crisis and policymakers’ response to it have had far-reaching political consequences, exacerbating inequality and nurturing a lingering sense of grievance in those who lost their houses and jobs. Continue reading...
Number of vacancies now 25% higher than pre-Covid figure as companies struggle to recruit workers for festive seasonBritain’s employers are offering bonuses of up to £2,000 to recruit Christmas workers amid fears over staff shortages disrupting the festive season.Research from the jobs website Adzuna showed there are currently 26,307 seasonal job vacancies ahead of the pivotal Christmas shopping period, almost double the 13,668 at the same point a year ago. Continue reading...
NIESR blames deepening malaise on economic mismanagement since 2008 amid criticism for BoE and BrexitBritain’s economy risks emerging from the pandemic into a long period of stagnation that damages household incomes and undermines plans to level up the regions, according to a hard-hitting report by the National Institute of Economic and Social Research.As it downgraded growth forecasts for next year and predicted a rise in prices that could push inflation above 5%, the thinktank accused the government and the Bank of England of mismanaging the economy since the 2008 financial crash. Continue reading...
Analysts predict rising costs of groceries will push hard-pressed consumers to shop around even moreFood price inflation reached a 14-month high in October with the prices of favourite snacks such as crisps and soft drinks rising the most, according to new figures.Annual grocery price inflation reached 2.1% last month which is the highest since August 2020, according to grocery market analysts Kantar. Continue reading...
Bank of England stimulus since late 2008 has done more to boost house prices than productive investmentNext year marks the 30th anniversary of Black Wednesday, a momentous day in history. 16 September 1992 will be forever remembered as the day Britain was blown out of Europe’s exchange rate mechanism by foreign currency speculators led by George Soros.John Major’s government sought to fend off the attacks by using Britain’s reserves to buy pounds and by raising interest rates. The day started with official borrowing costs at 10% but during the morning of Black Wednesday they were raised to 12% and later it was announced that they would be further increased, to 15%, the next day. Continue reading...
The UK’s long-running productivity problems are not being solved – but they must be if the economy is to get greenerRishi Sunak says his tax and spending plans, outlined in the budget, will boost the outlook for private sector jobs, wages and growth. The Bank of England’s most recent review of the economy begs to differ.It might appear that the recovery is strong and that companies can barely keep pace with customer demand. Sadly, appearances can be deceptive. If anything, the archetypal mainstream UK business – the one that stays out of the limelight, doesn’t attend award ceremonies or even bother to join the local chamber of commerce – will continue to look and behave like a zombie, staggering along with the same old equipment and outmoded technology. Continue reading...
Digital art is a billion-dollar business, with everyone from Paris Hilton to Damien Hirst trading in ‘non-fungible tokens’. But are NFTs just a get-rich-quick scheme masquerading as culture?“It’s actually a lot simpler than you think.” It’s a Tuesday afternoon, and somewhat to my surprise, I’m on the phone to Paris Hilton, who is graciously explaining the world of NFTs.Hilton is many things – a reality star, an heiress, an unlikely lockdown fitness guru who uses designer handbags instead of weights. But until now, she has never been considered a significant player in the art world. When artists have acknowledged her, often they’ve done so to fetishise her image. In 2008, Damien Hirst bought a portrait of her by the artist Jonathan Yeo, in which her body is constructed from collaged images cut from porn magazines. Continue reading...
As labor shortages and supply chain problems bite, consumers have a growing sense they’re getting less for their money“Flight cancelled”; “service temporarily suspended”; “not currently available”; “longer than normal wait times”: these are the messages that confront US consumers daily as the economy struggles to find a post pandemic footing. Now the phenomenon has a name: “skimpflation”.It’s a simple in concept – struggling with shortages of workers and goods, companies are skimping on what they offer consumers while, in many cases, charging the same price or more for that service. Continue reading...
Andrew Bailey says interest rates will rise when clearer picture about the labour market emergesThe governor of the Bank of England has signalled that interest rates will need to rise towards 1% in the coming months and rejected suggestions that his team of policymakers “bottled it” by failing to impose a widely expected increase.Speaking to BBC Radio 4’s Today programme on Friday, Andrew Bailey said interest rates would rise when a clearer picture emerged about the end of the furlough scheme and unemployment. Continue reading...
With shipping industry still recovering from Ever Given crisis, transit tolls are increasing by 6%The Suez Canal Authority is increasing the fees it charges ships passing through the critical waterway, in a move expected to pile further inflationary pressure on global supply chains.It will seek to capitalise on the recovery in cargo trade by raising its transit tolls by 6% from February, 11 months after the canal was blocked for nearly a week by the Ever Given container ship. About 12% of international trade passes through the canal, which is the shortest maritime route between Asia and Europe. Continue reading...
President says ‘our economy is on the move’ as jobs growth outpaces 450,000 new positions analysts had predictedUS employers added a solid 531,000 jobs in October as the American economy appeared to withstand the impact of coronavirus and continued its recovery.The strong number provides a boost to Joe Biden, whose presidency has been battered by political setbacks in recent months as it struggles to enact his domestic agenda and suffered a major defeat in the race for governor of Virginia. Continue reading...