Category Archives: Economics

China to overtake US as world’s biggest economy by 2028, report predicts

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Centre for Economics and Business Research says it expects this to happen half a decade sooner than it forecast a year ago

China will overtake the US as the world’s biggest economy before the end of the decade after outperforming its rival during the global Covid-19 pandemic, according to a report.

The Centre for Economics and Business Research said that it nowexpected the value of China’s economy when measured in dollars to exceed that of the US by 2028, half a decade sooner than it expected a year ago.

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Trickle-down economics doesn’t work but build-up does – is Biden listening? | Robert Reich

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A new study confirms tax cuts for the rich do not benefit the rest. Recovery from the pandemic is a chance to change course

How should the huge financial costs of the pandemic be paid for, as well as the other deferred needs of society after this annus horribilis?

Related: Jeff Bezos became even richer thanks to Covid-19. But he still won't protect Amazon workers | Robert Reich

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UK and US close to deal on cutting tariffs, says White House trade chief

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Talks on reducing charges on items such as Scotch whisky follow UK move to drop levy on Boeing

The UK and the United States are hoping to reach an agreement on reducing trade tariffs, according to Robert Lighthizer, the US trade representative in Donald Trump’s outgoing administration.

In an interview with the BBC, Lighthizer said he was in talks with the UK’s international trade secretary, Liz Truss, which could remove hefty tariffs imposed by the US on goods including Scotch whisky.

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For seasoned EU watchers, Brexit trade talks look uncannily like Grexit

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Analysis: While there are similarities with the 2015 clash between Athens and Brussels, there are also key differences

It was a marathon even by the European Union’s standards. For hours, leaders of countries in the eurozone argued, haggled and shouted at each other. After breaks for refreshment, they argued, haggled and shouted some more. Rumours swirled around the packed media room. Eventually, as Brussels was waking to a new morning, the 17-hour overnight summit staggered to an end.

All participants were in agreement that victory had been snatched from the jaws of defeat. Despite the brinkmanship, a deal was eventually done – as seasoned EU watchers had always said it would be, even when all hope seemed lost.

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Economic cost of Covid crisis prompts call for one-off UK wealth tax

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Tax experts and economists outline ‘fairest, most efficient’ way to repair public finances and quickly raise £260bn

The government has been urged to launch a one-off wealth tax on millionaire households to raise up to £260bn in response to the coronavirus pandemic, as the crisis damages Britain’s public finances and exacerbates inequality.

The Wealth Tax Commission – a group of leading tax experts and economists brought together by the London School of Economics and Warwick University to examine the case for a levy on assets – said targeting the richest in society would be the fairest and most efficient way to raise taxes in response to the pandemic.

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Asian manufacturing boom offers hope for swifter global recovery from Covid

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Markets respond as manufacturing in China and South Korea grows at fastest pace in a decade

Hopes that the world will bounce back from the ravages of coronavirus in the new year have been buoyed by strong growth in output from Asia’s huge manufacturing centres, led by an accelerating post-pandemic boom in China.

China’s factory activity expanded at the fastest pace in a decade in November, a closely watched survey showed on Tuesday, in the latest sign that the world’s second-largest economy is recovering to pre-pandemic levels.

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The US is on ‘inequality autopilot’ – how can Biden’s treasury pick help change course?

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Janet Yellen will likely be the US’s first female treasury secretary – but as Covid shutdowns loom, she will have to win Republican votes for any major initiatives

Teresa Marez has never heard of Janet Yellen, likely to be the next treasury secretary of the United States. But she and millions of other Americans have a lot riding on the decisions Yellen will make if and when she is confirmed next year.

The coronavirus has upended Marez’s life. Her savings are almost exhausted and she is worried about her unemployment benefits, which run out next week. “It’s so hard. It’s just such a mess,” said the mother of two in San Antonio, Texas. “We just need Congress to make a decision,” Marez said. “As long as they are in limbo, we are in limbo.”

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Taiwan politicians throw pig guts at each other in row over US meat imports

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Opposition party’s ‘disgusting’ offal protest prompts scuffle in Taipei legislative yuan

Parliamentarians in Taiwan have thrown pig guts at each other before coming to blows over plans to allow US meat imports.

Members of the opposition Chinese nationalist party (KMT) brought the offal to the legislative yuan on Friday in the latest of daily protests during parliamentary sittings.

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Dominic Raab says legislation is needed to cut UK aid spending

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Foreign secretary says it is not known when 0.7% target, set in law, will be restored

The foreign secretary has decided legislation is required to cut the aid budget since the current fiscal uncertainty means the government may feel obliged to miss the commitment to spend 0.7% on gross national income on overseas aid for longer than a year.

Legislation would be laid, Dominic Raab told MPs in an oral statement, but he did not give a date for doing so. The Foreign Office has indicated it is unlikely to be introduced until the second half of next year.

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Deadly frost and war with the French: Britain’s recession of the 1700s

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Economic distress caused by pandemic is the first in a very long time to have been brought about by the natural world

The chancellor has said the government will borrow a peacetime record of almost £400bn this year in the face of the worst recession the UK has experienced in more than 300 years. But how many of us know what happened at the time of that distant milestone?

Three centuries ago, Britain looked very different. The country was still largely agricultural and as such was completely at the mercy of nature – though 2020 has shown that perhaps, in a way, it still is. Nonetheless, in the early 18th century it was the success or failure of the harvest, which depended on the weather, that had a profound impact on the rate of economic growth.

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Zambia’s default fuels fears of African ‘debt tsunami’ as Covid impact bites

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Aid agencies say debts should be restructured or cancelled due to the pandemic and warn other countries could follow

Zambia has become the first African country to default on its debts since the pandemic, leading to fears that a “debt tsunami” could engulf the continent’s most heavily indebted nations as the financial impact of coronavirus hits.

A hastily-arranged G20 finance minister meeting in Saudi Arabia failed to sort out Zambia’s debt, after the southern African country missed a $42.5m (£32m) coupon payment on its bonds in October. Missing another payment on 14 November meant a technical default.

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Stock market rally pushes Dow Jones to record high of 30,000

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  • Dow rallies by 450 points to close above 30,000 for first time
  • Investors cheer hopes of vaccine and smooth Biden transition

The Dow Jones Industrial Average has topped the 30,000 mark for the first time as financial markets around the world rally amid hopes for a coronavirus vaccine and smooth transition to a Joe Biden presidency.

The landmark for the Wall Street market comes as investors bet rapid medical advances will bring the Covid outbreak to an earlier end than feared, paving the way for a swift economic rebound next year as business activity returns closer to normal and tough government restrictions are relaxed.

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US and Taiwan sign five-year agreement on health, tech and security

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Countries emphasise potential for cooperation and future partnerships, which Beijing opposes

Taiwan and the United States have held their first high-level meetings under a new economic dialogue, inking a five-year agreement and pledging future cooperation on health, tech, and security.

The talks, held amid a contentious US presidential transition period and high regional tensions with China, did not advance Taiwan’s hopes for a trade deal with US, despite the two countries growing closer under Donald Trump and his pushback on Beijing.

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Failure to seal post-Brexit deal would more than halve UK growth, says KPMG

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Accountancy firm warns of stalled economic recovery without EU trade agreement

Failure to strike a post-Brexit trade deal would cut the UK’s economic growth rate by more than half next year, delaying a full recovery from the coronavirus pandemic, according to a report.

The accountancy firm KPMG said the economy would suffer heavily should the UK fail to secure a trade deal with the EU before the end of the Brexit transition period at the end of December, just as the country attempts to escape the deepest recession since records began.

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EU faces crisis as Hungary and Poland veto seven-year budget

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Countries reject package over attempts to link funding to respect for rule of law

The EU is facing a crisis after Hungary and Poland vetoed the bloc’s historic €1.8tn (£1.6tn) budget and coronavirus recovery plan over attempts to link funding to respect for democratic norms.

The move unravels months of negotiations over the scale and terms of the EU’s spending and sets the stage for a stormy videoconference meeting of the bloc’s leaders on Thursday.

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UK coronavirus live: Boris Johnson holds news briefing on first day of England’s new lockdown

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Latest updates: PM gives televised address after Sunak extends furlough until end of March

Q: What is your response to concerns about the data presented by government? (See 4.11pm.)

Johnson says the government is happy to share the data it has.

Q: Won’t we have to live with restrictions for some time?

Stevens says the NHS is prepared for coronavirus.

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Rishi Sunak announces extension of UK’s coronavirus furlough scheme – video

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The chancellor has announced that the government will extend the UK's furlough scheme until March as the second wave of Covid-19 infections and new lockdown threaten to push up unemployment. In a major climbdown, Rishi Sunak said the Treasury would continue to pay 80% of workers’ wages

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Markets rally as investors brace for US election – business live

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Rolling coverage of the latest economic and financial news

Mohit Kumar of Jefferies reckons the battle for the Senate could be worth $2tn in potential stimulus measures:

In terms of market impact, a clear result should be positive for risk sentiment, irrespective of a Biden or Trump win.

From a fiscal stimulus perspective, as we have argued before, the Senate elections are as important, if not more, than a Presidential one. A ‘Blue Wave’ with Biden as the President and Democrats having control of both the House and the Senate would see a fiscal stimulus of over $3trn.

Related: The Senate races to watch on election night

This morning’s rally in Europe follows a strong day’s trading for shares in the Asia-Pacific region.

China’s CSI 300 index gained 1.2%, and Hong Kong’s Hang Seng jumped by nearly 2%, while Australia’s S&P/ASX 200 rose 1.9% after the RBA slashed interest rates to record lows.

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Trump has gone a long way toward hindering democracy in other countries

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The president has questioned American democracy for four years, creating challenges abroad

The last time a Republican won the popular vote for president, the winning candidate declared that the spread of democracy was central to American security.

“It is the policy of the United States to seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world,” said George W Bush in his second inaugural address in 2005.

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Understanding how this catastrophe occurred is of critical importance

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The catastrophe facing the UK is a direct result of our government’s obsession with libertarian issues. Now we must avoid repeating the same mistakes

Six weeks ago, the government was given a stark warning that the nation faced a “very large epidemic with catastrophic consequences”. Only by imposing an immediate two-week “circuit breaker” lockdown could it hope to reduce the spread of coronavirus, the Sage group of scientific advisers told ministers.

“As over 90% of the population remain susceptible, not acting now to reduce cases will result in a very large epidemic with catastrophic consequences in terms of direct Covid-related deaths and the ability of the health service to meet needs,” the group warned.

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