Retail data shows 0.4% month-on-month increase in August, with 0.6% rise in non-foodUK shop prices rose last month, according to the latest data from the British Retail Consortium, in a sign that driver shortages and the costs of Brexit-induced red tape are beginning to hit household budgets.The latest figures from the BRC and research group NielsenIQ reveal a 0.4% month-on-month rise in August. This was driven by a 0.6% rise in non-food prices, including a sharp increase in the cost of electrical goods caused by shortages of micro-chips and shipping problems. Continue reading...
Retail data shows 0.4% month-on-month increase in August, with 0.6% rise in non-foodUK shop prices rose last month, according to the latest data from the British Retail Consortium, in a sign that driver shortages and the costs of Brexit-induced red tape are beginning to hit household budgets.The latest figures from the BRC and research group NielsenIQ reveal a 0.4% month-on-month rise in August. This was driven by a 0.6% rise in non-food prices, including a sharp increase in the cost of electrical goods caused by shortages of micro-chips and shipping problems. Continue reading...
• Letter seeks greater action on climate crisis and racial justice• Trump appointee’s term at Federal Reserve expires in FebruaryThe New York representative Alexandria Ocasio-Cortez and other members of the Democratic party’s progressive caucus have urged Joe Biden to replace Jerome Powell as chairman of the Federal Reserve as part of a top-to-bottom makeover of the US central bank.“As news of the possible reappointment of Federal Reserve Chair Jerome Powell circulates, we urge President Biden to re-imagine a Federal Reserve focused on eliminating climate risk and advancing racial and economic justice,” they said in a statement issued on Tuesday. Continue reading...
by Richard Partington Economics correspondent on (#5NZN5)
Tapering of stamp duty holiday in England and Northern Ireland fuels drop in housing market activityUK homeowners made a rare net repayment of mortgage debt in July as the tapering of the stamp duty holiday in England and Northern Ireland fuelled a drop in housing market activity after a record June.The Bank of England said individuals collectively paid back £1.4bn more of mortgage debt than they borrowed, in the first net repayment since the housing market ground to a halt during the first wave of Covid-19 in April 2020. Continue reading...
We’re interested to hear whether workers have seen their wages rise due to labour shortages in the UKAs demand for staff continues to outstrip labour supply in various sectors in the UK, we’re keen to hear whether workers have experienced wage growth in recent months.We’re also interested to hear from workers who, while more than 1.1m jobs in the UK remain unfilled, believe they will be able to demand better conditions in future. Continue reading...
Today’s challenges demand radical action. The old orthodoxy of free markets and hands-off government won’t cut itAs western economies emerge from the pandemic, their governments face a choice: do they seek to address the profound problems that Covid exposed, or try to return to “business as usual” as quickly as possible? Their problem is that many of the issues exacerbated by the pandemic, such as wage stagnation, precarious work and rising inequality are not bugs in an otherwise well-functioning system, but inevitable outcomes of the way that western economies are now organised. So a business-as-usual approach simply won’t work. Much more fundamental change is needed.The US government seems to recognise this. Joe Biden’s economic plans are a radical departure from the era that stretches from Reagan to Obama, when governments sought to keep taxes and public spending low and focused principally on globalised trade and the education and training of the workforce. Unlike his predecessors, Biden is pursuing large-scale public spending and taking advantage of ultra-low interest rates to borrow for infrastructure investment. His stimulus plans target the climate crisis while creating green jobs and expanding health, education and childcare – the “social infrastructure” that is essential to the economy but has often been ignored by mainstream economists.Michael Jacobs is professor of political economy at the University of Sheffield, and managing editor of NewEconomyBrief.net
Decline in exports from Taiwan combines with port closures in China and Japan to hinder growthA recovery in global trade during the summer is beginning to wane, according to some early warning signs pointing to the negative effects of widespread Covid-19 outbreaks in the manufacturing centres of east Asia.A dramatic decline in exports from Taiwan, which makes many of the computer chips used in cars and mobile phones, has combined with temporary port closures and lockdowns in Australia, China and Japan to cut the level of global trade. Continue reading...
For those who are part of Britain’s casualised workforce Brexit isn’t flawed – quite the oppositeThe number of job vacancies has topped the 1m level for the first time. Firms are screaming out for staff. Labour shortages abound. Wage growth is accelerating. There are calls from industry lobby groups for the government to ease the pressure by granting more visas for EU workers.At which point it may be worth taking a second or two to ask a simple question: if labour shortages are driving up the wages of low-paid workers then what is wrong with that? Continue reading...
Poor pay and conditions for HGV drivers and the loss of many thousands of EU workers are plunging the UKs supply chain into crisisGaps on supermarket shelves. Fast food outlets pulling milkshakes and bottled drinks from their menus. Restaurants running out of chicken and closing. Empty vending machines. Online grocery orders full of substitutions. Fruit and vegetables rotting in the fields.These are just some of the most visible signs of Britain’s deepening supply chain crisis, which has seen stocks in shops and warehouses slump to their lowest levels since the Confederation of British Industry began surveying in 1983. Continue reading...
Firms ignored the issue of migrant labour for years, but it is possible to manage without it – at a costWe’re not used to modern capitalism being a mess. For something so incredibly complex, it runs smoothly in normal times. Even those of us who don’t like many of its outcomes – its impact on inequality or the environment, for example – can marvel at how quickly a huge variety of goods and services are made available to us almost instantaneously.Which in part explains the collective trauma as real supply challenges have emerged, with shortages of certain goods (chickens or anything involving a semi-conductor) and workers (HGV drivers) dominating the headlines.Related: Whitehall must act on skills shortages – or see businesses driven into the groundThere is a reason why UK graduates aren’t clamouring for a career in meat packing on the minimum wage Continue reading...
The prime minister’s expansive vision for Britain faces many hurdles, the most awkward of which is his chancellorBoris Johnson must wish he owned a time machine to transport him beyond what is shaping up to be one of the most difficult autumns faced by any prime minister. Events in October and November are about to set the tone for the rest of the parliament and the premiership of our once brazen, and now rather bedraggled, PM.The list of promises that will transform the UK into a 21st-century economic powerhouse are long and costly, and most of them are tied closely to Johnson’s personal ambitions. He has told us that his government will transform the education system, the skills base and the social care system, and “level up” the regions. Backlogs of NHS operations will be cleared and the path to net zero carbon emissions charted.There is an increasing likelihood Johnson will find himself forced to defend high profile cuts, such as the important high speed rail link from Birmingham to Leeds Continue reading...
As pinged people stay home, the unpinged may be getting more cautious, suggesting a longer-than-expected recoveryNewspapers call August the silly season because not a lot happens. That’s not always the case, as events in Afghanistan have shown, but it is certainly true of the UK economy this year. And that’s bad news.Each week the Office for National Statistics puts together a digest of the very latest data, everything from restaurant bookings to the number of cars on the road. To be clear, these are not official figures, but they do provide a reasonably good guide to what’s going on. Continue reading...
Jerome Powell seen as less likely to announce cut to stimulus due to Delta variant affecting growthThe resort of Jackson Hole in the Grand Tetons will be the focus of intense financial market interest on Friday as the head of the US central bank, Jerome Powell, gives his update on the health of the world’s biggest economy.Expectations that Powell will provide a timetable for the scaling back of the Federal Reserve’s colossal support programme have faded in recent days due to signs that rising case numbers of the Delta variant of coronavirus are leading to slower growth.Related: ‘Taper tantrum’ by stock markets points to gaps in the easy recovery story | Nils PratleyRelated: Banking chiefs head for the hills in bid to leave cheap money behind Continue reading...
A prolonged malaise caused by deep-seated structural problems has prevented a full economic recovery post-2007Every year since 1978 the world’s central bankers have gathered to chew the fat at Jackson Hole in the Grand Tetons. This year’s star attraction is the most influential central banker of them all – Jerome Powell – and financial markets will hang on every word from the chairman of the US Federal Reserve.Powell won’t reveal much and for good reason: he doesn’t have all that much to say. He is worried about inflation but there are also signs the US economy is slowing as coronavirus infection rates rise. The pace of recovery is moderating in the UK, Germany, China and pretty much everywhere else as well. There are shortages of materials and labour. In a world of lockdowns, quarantines and travel restrictions, it is proving harder to sustain a model built around frictionless movement of people, parts and finance. Global supply chains are under pressure.Related: As the UK economy bounces back, do we sceptics need to say we got it wrong? | Willl HuttonLarry Elliott is the Guardian’s economics editor Continue reading...
by Written by Stephen Metcalf, read by Andrew McGrego on (#5NRCQ)
We are raiding the Audio Long Read archives to bring you some classic pieces from years past, with new introductions from the authors.This week, from 2017: The word has become a rhetorical weapon, but it properly names the reigning ideology of our era – one that venerates the logic of the market and strips away the things that make us human. By Stephen Metcalf Continue reading...
by Richard Partington and Joanna Partridge on (#5NPYQ)
Shortage of workers and disruption caused by Covid and Brexit push retail stock to 38-year lowBritain’s economy has been plunged into a supply chain crisis, with major retailers’ stock levels at their the lowest since 1983 as a result of worker shortages and transport disruption caused by Covid and Brexit.In a development that suggests recovery from the pandemic could be at risk, the Confederation of British Industry (CBI) said stock levels in relation to expected sales fell to their lowest level in August since it began tracking retail industry trends almost four decades ago. Continue reading...
There was no need to put a rocket under the housing market. The consequences are now all too clearRishi Sunak’s approval ratings tell their own story. The chancellor’s stock is high, because the Treasury’s furlough scheme has limited the job losses from the pandemic. But while Sunak has had a much better crisis than some of his colleagues, his record is far from flawless.Two errors of judgment stick out: the “eat out to help out” discounts for diners, blamed for a wave of infections last autumn, and the decision to raise the threshold on stamp duty for home purchases in England and Northern Ireland from £125,000 to £500,000. Continue reading...
Britain’s bout of mini-stagflation continues as businesses face supply and demand constraintsGrowth is slowing and price pressures are mounting. Consumers are anxious and an important commodity is in short supply. That was the state of the UK in the mid-1970s, when a single word was used to describe a combination of recession and a rising cost of living: stagflation.And, in a much milder form, it is the malaise that is afflicting the economy today. The shortage is of computer chips rather than crude oil but the latest snapshot from IHS Markit/Cips suggests businesses again face supply and demand constraints.Related: UK’s Covid recovery slows amid staff and materials shortages Continue reading...
by Andrew Sparrow Political correspondent on (#5NNCH)
Former England cricketer and crossbench peer will ‘bat for business down under’, says Liz TrussIan Botham, the former England cricketer and crossbench peer, has been appointed a UK trade ambassador to Australia, the government has announced.He is one of 10 parliamentarians given a new role as a trade envoy, taking the total number of MPs and peers performing unpaid trade ambassador roles to 36. Continue reading...
‘Freedom day’ was supposed to bring business as usual but Nando’s is out of chicken and carmakers are low on chipsFirst there were empty supermarket shelves and “pingdemic” staff shortages; now Nando’s is out of chicken and the car industry short of chips. It’s an unusual state of affairs for a country where normality was supposed to resume a month ago.After the lifting of most pandemic restrictions on the government’s 19 July “freedom day”, the long hard slog of Covid-19 was meant to be all over bar the shouting. Britain’s economic potential would be unleashed, allowing for the fastest growth since the second world war. Continue reading...
Regions worst hit by the religious persecution are substantially economically worse off than areas that escapedHistory isn’t just of historical interest – it matters for understanding economies today. That’s the lesson of a growing body of research demonstrating the very long shadow cast by events.A new paper on the Spanish Inquisition proves the point. The Inquisition lasted from the late 15th century to the early 19th century. Its aim was to root out heresy and its methods were the denunciation of suspects followed by torture and executions. The researchers examined how active the Inquisition was in local areas by considering the number of trials and reveal its lasting effect: areas with little or no Inquisition activity have around 8% (€1,450) higher average incomes than those that had lots of persecution. Continue reading...
Many of us have been confounded by recent figures, but the British model remains flawedBritish capitalism seems to be on a roll. A million job vacancies were advertised in July, a new monthly record. Early signs are that unwinding the furlough scheme, now under way, is not going to cause a sharp rise in unemployment.House prices are rising at the fastest rate since 2004. Public borrowing in July halved compared with last July. Many new companies are being created. Business confidence is rising. The recovery is moving so fast as threats of lockdown recede that the UK on average will get back to pre-pandemic levels of output before the year is out. The chancellor, Rishi Sunak, can indulge his boss’s tantrums; his political position could hardly be stronger.The US private equity group Clayton, Dubilier & Rice’s unsolicited – and swiftly rejected – takeover approach for the supermarket chain Morrisons is the latest in a flurry of bids for UK firms from private equity firms since the start of the pandemic.Kwarteng and the chancellor collude in the fiction that Brexit presents opportunities that trump its obvious costs Continue reading...
The UK’s feebleness abroad and supply-chain problems at home show how absurd the Brexiters’ dream of a transformed nation wasSo much for Global Britain. The fiasco and tragedy of the retreat from Afghanistan have laid bare the folly of the Brexiters’ Faustian pact: choose the irresponsible but vote-winning Boris Johnson as your leader; say “goodbye European Union, hello world”; and, oh dear, it turns out not to be the triumph they promised.The combination of the insanity of Brexit and the Johnson government’s manifest incompetence is now seen to be adding geopolitical impotence to economic self-harm. What an achievement! Global Britain? Whatever you say, President Biden. Three bags full, sir.It may never – in Browning’s words – be 'glad confident morning again' for Johnson as prime minister Continue reading...
Trade between Northern Ireland and the Republic has soared this year, while life for British exporters looks set to get grimmerIt was supposed to be a deal no UK prime minister could ever agree to, an Irish sea border between Great Britain and Northern Ireland. Half a year on from Boris Johnson doing exactly that, while denying the fact, the economic consequences are becoming clearer.Figures published by the Irish government last week indicate that a heavy toll for British trade can be added to the political turmoil unleashed by Johnson’s signing up to the Northern Ireland protocol. The data shows evidence beginning to emerge of deeper economic unity on the island of Ireland, at a time when shipments between Britain and Northern Ireland have been disrupted by the Brexit border checks the prime minister promised would never happen. Continue reading...
At the Jackson Hole bankers’ summit this week, the talk will be of ending quantitative easing – and this time it will be seriousIt is credited with preventing the worst global recession since at least the second world war from turning into something far worse. But after the injection of trillions of dollars into financial markets to cushion the blow from Covid-19, the era of quantitative easing could be coming to an end.This week, attention will turn to the gathering of central bank chiefs in Jackson Hole for clues about how the US Federal Reserve plans to bring its vast QE bond-buying programme to an eventual halt after more than a year of emergency stimulus.Leading central banks now own more than £18tn in government bonds and other assets, an increase of more than 50% on pre-pandemic levels Continue reading...
by David Spiegelhalter and Anthony Masters on (#5NMC7)
Caution is needed when extrapolating from statistics in times that are far from normalSome economic effects of the coronavirus are obvious. Pre-pandemic, the share of retail sales conducted online had taken around eight years to go from 10% to 20%, but then in nine months shot up to 36% in January 2021.But perhaps more surprising was a recent dramatic headline from Bloomberg: “UK Wage Growth Hits a Record as Vacancies Pass 1 Million”. This was based on estimates from the Office for National Statistics’ monthly wages and salaries survey that average regular pay had increased by 7.4% over the past year. So why should we be cautious in interpreting this huge rise? Continue reading...
by Written by Nicholas Mulder, read by Tanya Cubric a on (#5NKJJ)
For the hardline conservatives ruling Poland and Hungary, the transition from communism to liberal democracy was a mirage. They fervently believe a more decisive break with the past is needed to achieve national liberation. By Nicholas Mulder Continue reading...
Cheap money, the Delta variant and China’s sluggish performance add up to tough times aheadFinancial markets these days react to any whiff of tighter monetary policy in the US, so a little drama on Thursday was par for the course after the US Federal Reserve’s minutes suggested the winding-down of the huge pandemic stimulus programme could start soon. The Fed will still be buying assets in the autumn, but maybe not at the rate of $120bn (£89bn) a month. Commodities fell and shares globally took a hit. The FTSE 100 index dropped 1.5%.Context is needed, of course. The Footsie had risen by 25% in a straight line, more or less, since the arrival of vaccines last November. If one goes back further to the start of the pandemic, the S&P 500, the main US index, has roughly doubled from its low point. So the odd percentage decline hardly shows up on a medium-term view.Related: European stock markets tumble on Covid support concerns Continue reading...