Category Archives: Economics

France launches €100bn stimulus plan to drive Covid-19 recovery – business live

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US stock market is suffering its worst day since June, as Apple and Tesla lead stock markets into the red

Earlier:

US traders can now catch their collectives breath after the choppiest trading session in several weeks.

It wasn’t as dramatic as the massive selloffs back in February and March (which still give me the shivers), but certainly a volatile day.

Related: Coronavirus live news: Robert Pattinson 'tests positive for Covid-19, halting Batman production'

Today’s losses mean the Dow is slightly negative for 2020, while the tech-heavy Nasdaq Composite index is still up 27% since January.

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Tories warn Rishi Sunak amid Covid tax hike rumours

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Several Conservative backbenchers argue that focus must be on supporting a continued economic recovery

The chancellor, Rishi Sunak, has been urged not to introduce tax hikes in his November budget by Conservative backbenchers who argue they would damage economic recovery.

The intervention followed speculation the Treasury could raise £20bn through extra levies to deal with the fallout from Covid-19.

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FTSE 100 falls ahead of crucial Jerome Powell speech – business live

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Rolling live coverage of business, economics and financial markets as investors anticipate new approach to inflation

Something to sink your teeth into before lunch: more discounts on dining out.

Related: Eat out to help out scheme to be extended by some restaurants

Mark Haefele, chief investment officer, UBS Global Wealth Management, said:

While we expect the Fed to shy away from more radical easing measures, such as explicit controls on government bond yields, we believe Powell will likely outline other dovish measures. These could include a move toward average inflation targeting, giving the central bank more leeway to allow inflation to overshoot the 2% target while keeping rates pegged close to zero.

Maybe the age of the independent, activist central bank head is also coming to an end. Fiscal policy is more powerful and monetary policy needs to work in harmony with it. Monetary policy is being asked to do things (like tackle economic inequality) that it really isn’t suited to. But, here we are, waiting for Jay Powell to turn up at Grafton’s Saloon. He’s already done everything he can, he’s almost out of bullets and he may even have already won the fight, but we have placed our faith in him and desperately want fresh encouragement.

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‘Coming here is a necessity’: demand for food aid soars in US amid job losses

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Nationwide the need for aid at food banks and pantries has surged amid worst unemployment rate in modern times

Neisha Davis cradles brown paper lunch bags in the crook of one arm, while holding on to Demitri, her wriggling baby son, in the other and keeping a careful eye on Naya, her four-year-old daughter, as she runs around the church car park with another little girl.

It’s hectic but the free packed lunches have become a crucial part of their daily nutrition. So everyday at noon the family make the two-mile journey from Homewood, a low income predominantly African American Pittsburgh neighbourhood with no grocery stores, to the East End Community Ministry’s pop-up lunch stall in East Liberty.

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Is this the end of the road for dollar dominance?

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In the short term, probably not, but with China weaponising the yuan stern challenges lie ahead

The recent sharp depreciation of the US dollar has led to concerns that it may lose its role as the main global reserve currency. After all, in addition to the Federal Reserve’s aggressive monetary easing – which threatens to debase the world’s key fiat currency even further – gold prices and inflation expectations have also been rising.

But, to paraphrase Mark Twain, reports of the dollar’s early demise are greatly exaggerated. The greenback’s recent weakness is driven by shorter-term cyclical factors. In the long run, the situation is more complicated: the dollar has both strengths and weaknesses that may or may not undermine its global position over time.

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UK to drop ‘Facebook tax’ in favour of post-Brexit trade deal

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Recently introduced tax would have raised £500m, helping to reduce Britain’s huge Covid bill

The UK government is preparing to drop a recently introduced tax on global technology companies such as Facebook, Google and Amazon, due to fears that the so-called “Facebook tax” could jeopardise a post-Brexit trade deal.

Rishi Sunak is reportedly planning to ditch the digital services tax which was expected to generate about £500m to help pay towards the huge cost of the government’s response to the coronavirus pandemic.

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Debt in developing countries has doubled in less than a decade

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Jubilee Debt Campaign reveals sharp rise in number of countries in distress since 2018

Developing nation debt has more than doubled in the past decade and left more than 50 countries facing a repayment crisis, according to a campaign group.

Data from the Jubilee Debt Campaign shows that even without taking full account of the impact of the coronavirus pandemic, there has been a sharp jump in the number of poor countries in debt distress since 2018.

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Tale of two Cities: FTSE 100 rises despite economic collapse

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Surge in shares contrasts with Covid-related downturn and growing unemployment

The economic collapse in Britain during the second quarter of 2020 was the most brutal on record. Unemployment is forecast by the Bank of England to soar to 2.5m by Christmas. The Brexit cliff edge approaches. Yet in the City, the FTSE 100 has been on the up.

Never has the disconnect between financial trading and economic fundamentals appeared so extreme. What explains surging asset prices (the FTSE jumped 2% on the same day it was revealed the economy had slumped by 20%) when the outlook for many workers is so grim?

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China retail sales fall fuels concern for global recovery from Covid-19

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Retail sales dropped 1.1% in July while industrial production remains subdued

Fears over the strength of China’s economic recovery from the coronavirus pandemic have been raised after retail sales slumped in July and industrial production remained subdued.

Fuelling concerns for the world economy, retail sales in China dropped in July by 1.1% compared with the same month a year ago, missing predictions for a small increase in consumer spending.

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Forget doom-laden headlines, the dollar has not gone into terminal decline | Barry Eichengreen

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Too much is being read into the greenback’s recent weakening against the euro

The dollar is in freefall! The global greenback is doomed! screamed recent headlines. Actually, such sensational headlines are “too sensational”, to echo that noted authority on currencies, Miss Prism, in Oscar Wilde’s The Importance of Being Earnest.

The dollar’s fall in July to a two-year low against the euro was the immediate impetus for these stories. In fact, the dollar’s recent slide is one in a series of readily explicable fluctuations. When the Covid-19 pandemic went global in March, the dollar strengthened on the back of safe-haven flows into US Treasuries, as it does at the start of every crisis. By May, the Federal Reserve, acting as global lender of last resort, had accommodated this mad scramble for dollars by pouring buckets of liquidity into financial markets and the greenback gave back its early gains.

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Covid-19: UK economy plunges into deepest recession since records began

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GDP falls 20.4% – the worst of any G7 nation in the three months to June

Britain has entered the deepest recession since records began as official figures on Wednesday showed the economy shrank by more than any other major nation during the coronavirus outbreak in the three months to June.

The Office for National Statistics (ONS) said gross domestic product (GDP), the broadest measure of economic prosperity, fell in the second quarter by 20.4% compared with the previous three months – the biggest quarterly decline since comparable records began in 1955.

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Stock markets boom as hopes rise for US economic stimulus and Covid-19 vaccine

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S&P edges towards all-time record with oil prices and hospitality stocks rising as investor optimism rebounds

US stock markets moved closer to record highs on Tuesday after investors bet on a fresh round of government spending to lift the economy and counter the effects of the Covid-19 pandemic.

The S&P 500, seen as the broadest measure of US investor sentiment, raced to a 10-point gain by mid afternoon to leave it just 16 points short of the all-time high reached in February.

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UK to plunge into deepest slump on record with worst GDP drop of G7

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Official measure to be declared this week as coronavirus lockdown shrinks GDP by 21% in second quarter

Britain’s economy will be officially declared in recession this week for the first time since the 2008 financial crisis, as the coronavirus outbreak plunges the country into the deepest slump on record.

Figures from the Office for National Statistics on Wednesday are expected to show that gross domestic product (GDP), the broadest measure of economic prosperity, fell in the three months to June by 21%.

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‘Coronavirus has stolen our future’: young people’s despair as jobs evaporate

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New graduates and school leavers across the UK have paid the price of lockdown, says survey

Young people across Britain believe their future has been “stolen” as a result of the coronavirus outbreak, with more than half fearing it has damaged their prospects.

Amid growing evidence that the pandemic is fuelling a generational divide, two thirds of 16- to 24-year-olds also said that their age group, loosely defined as ‘Generation Z’ will pay the economic price for a disease that has mostly affected older people, according to a survey by the Hope not Hate charitable trust, an anti-racism group.

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US economy suffers worst quarter since the second world war as GDP shrinks by 32.9%

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Drop in quarterly gross domestic product comes as 1.43m people file for unemployment benefits, a second week of increases, amid Covid-19 pandemic

The US economy shrank by an annual rate of 32.9% between April and June, its sharpest contraction since the second world war, government figures revealed on Thursday, as more signs emerged of the coronavirus pandemic’s heavy toll on the country’s economy.

The record-setting quarterly fall in economic growth compared to the same time last year came as another 1.43 million Americans filed for unemployment benefits last week, a second week of rises after a four-month decline.

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Shell reports $18bn loss as global oil and gas prices collapse

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Energy giant hit by massive change in fortunes as Covid-19 crisis forces writedown in asset values

Royal Dutch Shell has reported a deep financial loss after a record writedown on the value of its oil and gas assets due to the collapse in global market prices triggered by coronavirus.

The Anglo-Dutch oil giant revealed a net loss of $18.3bn (£14.1bn) for the second quarter 2020, down sharply from a net profit of $3bn over the same period last year and $2.7bn in the first three months of 2020.

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Economic fallout from pandemic will hit women hardest

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IMF says 30 years of gains for women could be erased as recession deepens

Even before the coronavirus pandemic, there were vast inequalities between men and women in the world of work. Despite chipping away at the glass ceiling over recent decades, in 2020 the gender pay gap still remains stubbornly high, while more men called Steve and Dave run FTSE 100 companies than women.

Four months from the launch of lockdown, and as Britain slips into the deepest recession for three centuries, it is increasingly clear the economic fallout from the pandemic is having a disproportionate impact on women.

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The EU coronavirus fund will take Europe another step towards disintegration | Yanis Varoufakis

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The recovery package promises deeper integration between European countries. Here’s why I think it won’t work

During the early years of the eurozone crisis, I remember gauging its depths by the rapidly diminishing half-life of the celebrations that followed every European Union summit. Premature proclamations that the crisis was over inspired hope, which caused the money markets to rebound. But then, at some point, gloom would unfailingly return. As the years of austerity for the many and socialism for the few ground on, that point arrived sooner after each EU summit.

Could it be that, at long last, this sad pattern has been broken by last week’s summit, which resulted in a brand new, €750bn post-pandemic EU recovery fund?

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EU leaders go into extra time as tempers fray at coronavirus summit

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Proposals on the size and terms of a recovery fund have led to splits between member states

Angela Merkel and Emmanuel Macron said they are willing to walk away from a summit of EU leaders, as they arrived at the third day of a long and acrimonious debate on the terms of a €750bn (£682bn) pandemic recovery fund.

With the EU split between northern and southern member states as well as eastern and western, France’s president and the German chancellor both indicated their patience was waning despite the need to respond to the economic recession facing the bloc.

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EU leaders in bitter clash over Covid-19 recovery package

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Orbán accuses Netherlands’ Rutte of ‘communist’ tactics on tense third day of talks

Hungary’s prime minister, Viktor Orbán, accused his Dutch counterpart of using the same methods as his country’s former communist leaders on Sunday, as EU leaders publicly clashed during tense and acrimonious negotiations over the terms of a proposed €1.8tn budget and recovery package for the bloc.

A third difficult day of a summit of the EU’s 27 heads of state and government – the first in person for five months – saw movement towards agreement as talks stretched deep into the night, but laid bare the deep splits between north and south, and east and west.

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