Category Archives: Economics

ECB cuts interest rates to support flagging eurozone economy

Posted on by

Fall in inflation enables central bank to bring in quarter point cut to 3.25% after business and consumer slowdown

The European Central Bank has intervened to prevent a sharp slowdown in the eurozone economy with its first back-to-back interest rate cut since the euro crisis in 2011.

With Germany on the brink of a recession and inflation tumbling across the 20 member single currency bloc, the ECB followed a reduction in the cost of borrowing at its previous meeting in September with a further 0.25 percentage point cut in its key deposit rate to 3.25%.

Continue reading...

Negative stereotypes in international media cost Africa £3.2bn a year – report

Posted on by

Focus on conflict, corruption and poverty heightens perception of risk, raising interest on sovereign debt, authors say

Africa loses up to £3.2bn yearly in inflated interest payments on sovereign debt due to persistent negative stereotypes that dominate international media coverage of the continent, according to a new report.

Research by consultants Africa Practice and the advocacy non-profit Africa No Filter suggests that media portrayals, especially during elections when global coverage is heightened, focus disproportionately on conflict, corruption, poverty, disease and poor leadership, widening disparities between perceived and actual risks of investing in the continent, and creating a monolithic view of Africa.

Continue reading...

PMQs live: Keir Starmer faces Rishi Sunak in the Commons

Posted on by

Latest PMQs comes as sources say chancellor is briefing ministers that £40bn will need to be found in the budget

Robert Jenrick has finished his speech, and he is now taking questions.

Q: Kemi Badenoch says she is Labour’s worst nightmare. Is she right?

I think that our party faces an existential challenge right now. Our party has no divine right to exist. That’s why we need to get the choice right in this leadership election, and that’s why I stand for ending the drama, ending the excuses, and actually delivering for the British people.

Continue reading...

Surprise fall in UK inflation badly timed for benefit recipients

Posted on by

Payments such as universal credit linked to previous September’s figure, meaning a rise of just 1.7% in April

Last month’s surprise fall in UK inflation lands with bad timing for millions of people who receive state benefits linked to the figure, who can now expect their payments to rise by just 1.7% next April.

A number of benefits, including universal credit, are increased each tax year in line with the cost of living figure for the previous September.

Continue reading...

UK inflation falls below 2% for first time since 2021 in boost to Rachel Reeves

Posted on by

Surprise annual drop to 1.7% in September raises chance of interest rate cuts, increasing budget leeway

Inflation in the UK has fallen to its lowest level in three and a half years, giving a pre-budget boost to Rachel Reeves as expectations grow for the Bank of England to cut interest rates.

Figures from the Office for National Statistics show the consumer prices index dropped sharply to 1.7%, down from 2.2% in August, in a bigger fall than anticipated in financial markets, driven by lower air fares and petrol prices.

Continue reading...

Shares in UK gambling firms fall £3bn amid talk of higher taxes in budget

Posted on by

Thinktank reports saying sector should be hit with extra £900m to £3bn in levies prompts market selloff

Shares in British gambling companies have dropped sharply, reducing the stock market value of large operators by more than £3bn, after the Guardian reported that Treasury officials could tap the sector for between £900m and £3bn in extra taxes.

The chancellor, Rachel Reeves, has come under pressure from two influential thinktanks to raise taxes on the industry, as she pulls every available lever to plug a £22bn “black hole” in the nation’s finances.

Continue reading...

Labour considers up to £3bn tax raid on gambling firms

Posted on by

Treasury weighing proposals as chancellor attempts to plug £22bn hole in public finances

Ministers are considering a tax raid of up to £3bn on the gambling sector as Rachel Reeves casts around for funds to shore up the public finances.

Treasury officials are understood to be weighing up proposals, put forward by two influential thinktanks and backed by one of the party’s top five individual donors, to double some of the taxes levied on online casinos and bookmakers.

Continue reading...

Will Rachel Reeves’s rules on debt and spending survive the budget?

Posted on by

The chancellor desperately needs more money to finance growth and public spending so expect a bit of tweaking to supposedly strict constraints

Change*. If Labour’s one-word campaign slogan had an asterisk, it would have directed voters to Rachel Reeves’s budget.

Later this month the chancellor will attempt to walk the line between repairing Britain’s battered public realm, while sticking to a manifesto promise to balance the books without raising taxes on working people.

Continue reading...

Labour needs £25bn a year in tax rises to rebuild public services, warns IFS

Posted on by

Thinktank says tax increases in budget will be necessary even if Rachel Reeves changes fiscal rules

Keir Starmer’s promise to end austerity and rebuild public services will require tax increases of £25bn a year in the coming budget even if debt rules are changed to provide scope for extra investment spending, a leading thinktank has said.

In its preview of the first Labour budget in 14 years, the Institute for Fiscal Studies said Rachel Reeves would need to raise taxes to fresh record levels to meet the government’s policy goals. The chancellor was also warned of the risk of a Liz Truss-style meltdown if the City responded badly to substantially higher borrowing.

Continue reading...

Chinese stocks suffer worst fall in 27 years over growth concerns

Posted on by

Investors disappointed after hoped-for policy plans by Beijing to stimulate economy failed to materialise

Chinese stocks have suffered their worst fall in 27 years after efforts by Beijing to stimulate the world’s second-largest economy disappointed investors.

Stock markets in Asia fell sharply after China’s top economic planning authority failed to announce further measures to improve flagging growth.

Continue reading...

Wednesday briefing: Inside Labour’s plan to move the fiscal goalposts – and tackle debt

Posted on by

In today’s newsletter: Rachel Reeves calculates that changing debt rules could help boost the UK economy, but what does it really mean?

• Sign up here for our daily newsletter, First Edition

Good morning.

There are just three weeks to go until the biggest fiscal and political event for any government: the budget.

Middle East | Israel has said it is expanding its ground operation in Lebanon with the deployment of a fourth division after another night of intense airstrikes. The reservist 146th division was sent to southern Lebanon overnight, meaning the number of troops on the ground is now likely to number 15,000. The Lebanese health ministry said late on Tuesday 36 people have been killed and 150 have been injured in Israeli attacks over the past 24 hours.

Environment | Florida’s western coast was making emergency preparations on Tuesday for the impact of Hurricane Milton, with thousands of evacuees clogging highways, contending with fuel shortages, and the mayor of Tampa warning residents bluntly “you are going to die” if they stayed behind.

Conservatives | James Cleverly has topped the latest MPs’ vote in the Conservative leadership contest, making him the new favourite, as Tom Tugendhat became the latest candidate to be eliminated.

Poverty | More than 9 million people in the UK experience levels of poverty and hunger so extreme they are vulnerable to reliance on charity food handouts, according to research by the charity Trussell.

Society | Deaths have outstripped births in the UK for the first time in almost half a century, excluding the start of the pandemic, official figures showed.

Continue reading...

Financial markets could still avoid panic amid oil price risk in Middle East crisis

Posted on by

Oil prices rose by more than 4% as Israeli troops moved into Lebanon and Iran launched missiles on Israel

As Israeli troops moved into Lebanon and Iran launched a missile attack on Israel, the risk of a jump in oil prices that could trigger another global inflation shock appeared to be materialising.

Oil prices rose by more than 4% to about $75 a barrel on Tuesday.

Continue reading...

In Las Vegas, housing could make or break the battle for the White House

Posted on by

Nevada, once known for its low living costs, has seen house prices soar and rents climb – can Trump take advantage?

It’s 105F (41C) in the Las Vegas suburb of Henderson, about 20 miles away from the bustle of tourists on the Vegas strip. Front yards have small pebbles instead of grass, and signs that welcome the start of autumn seem premature in the sweltering heat.

Andrew Clarke knocks on the door of a ranch-style house. A dog barks aggressively from inside. “Hi, my name’s Andrew. I’m an organizer with For Our Future Nevada. Is Jennifer available?” Clarke asks in an upbeat voice. The voice says Jennifer doesn’t live there any more.

Continue reading...

Kamala Harris’s economic policy slate more popular than Trump’s – poll

Posted on by

Exclusive: Harris Poll for Guardian finds Democrat put forward four of top five most popular economic proposals

Kamala Harris’s economic policies proved far more popular than Donald Trump’s plans in a blind test of their proposals.

Four of the top five most popular proposals were from the Democratic candidate’s campaign, according to a new Harris Poll conducted exclusively for the Guardian.

Continue reading...

Reeves’ economy inheritance claim one of Labour’s ‘biggest lies’, Hunt tells Tory conference – UK politics live

Posted on by

The shadow chancellor said he ‘would have died’ to have had the legacy Rachel Reeves had when he took over

Robert Jenrick has used a campaign rally just outside the Conservative conference to paint the issue of migration in highly stark terms, saying his party will “die” if it does not commit to quitting the European convention on human rights. (See 8.23am.)

Speaking to supporters in a studio theatre at Birmingham Rep, Jenrick repeated his styling of the issue in Brexit terms, saying the choice was between the “leave” of leaving the ECHR or “remain” of staying in it, and that this was a chance to “get migration done”.

This is more than just, ‘leave or amend’ – frankly, our party doesn’t have a future unless we take a stand and fix this problem. It’s leave or die for our party – I’m for leave.

Foreign national offenders in our country,who we have struggled to deport because of our membership of the European Convention on Human Rights – that’s the issue I was raising.

What is the biggest challenge we face as a party?

Our biggest strategic challenge is the fact that the average age above which you are more likely to vote Conservative than Labour is now over 60.

Continue reading...

Stock markets hit record highs after news of a fall in US inflation

Posted on by

S&P 500 index of major US companies registers near 100% gain on year ago amid expectation of interest rate cuts

A fall in US inflation expected to pave the way for further cuts in interest rates pushed stock markets to record highs on Friday.

Ending a week of gains that began when the Chinese authorities approved a huge economic stimulus package, the S&P 500 index of major US companies soared above 5,750 to register a near 100% gain on a year ago.

Continue reading...

Harris says cost of living ‘still too high’ as she lays out economic agenda

Posted on by

Democratic presidential nominee fleshed out economic vision for middle class and small businesses

Millions of Americans are struggling to make ends meet, Kamala Harris has said, as the Democratic presidential candidate fleshed out the economic agenda she hopes to adopt in the White House.

Conceding that the cost of living in America “is still just too high”, the vice-president argued this was true “long before” the Covid-19 pandemic ravaged the global economy, and she took office with the president, Joe Biden.

Continue reading...

Labour crackdown on non-doms may raise no money, officials fear

Posted on by

Exclusive: Watchdog may conclude that emigration of wealthy individuals could actually cost Treasury revenue

Keir Starmer’s promised tax crackdown on non-doms could yield no extra funds for the Treasury, leaving a £1bn hole in the government’s planned spending for schools and hospitals.

Labour planned to use the money raised from wealthy individuals who are registered overseas for tax purposes to invest in ailing public services.

But the Guardian understands that Treasury officials fear estimates due to be released by the government’s spending watchdog may suggest the policy will fail to raise any money because of the impact of the super-rich non-domiciles leaving the UK.

Continue reading...

UK economy to grow faster than Japan, Italy and Germany this year, says OECD

Posted on by

Forecast upgrades UK to joint second after US but it is still expected to have highest inflation among G7 countries

The global economy is “turning a corner”, according to the Organisation for Economic Cooperation and Development, which has upgraded the UK’s growth forecast for this year to faster than that of Japan, Italy and Germany.

The OECD’s latest outlook ranked Britain joint second among the G7 developed countries in its latest outlook for the world economy. However, the UK is still expected to have the highest inflation in the group.

Continue reading...

‘Davos on the Mersey’: key conference takeaways as Labour tries to woo business

Posted on by

As the budget looms, where the party stands on investment in the UK economy, workers’ rights and more

For a second year running, corporate Britain descended on Liverpool for Labour’s annual conference, in an event so packed with executives that some insiders joke the socialist gathering has developed into a full-blown “Davos on the Mersey”.

Like last year, the exhibition and conference fringe had sponsored events, lounge areas and advertising from exhibitors including Gatwick, National Grid, Ikea and Specsavers. This year, however, business leaders were looking for clues about how Labour will govern after July’s election landslide.

Continue reading...