Category Archives: Economics

China begins anti-subsidy investigation into European dairy imports

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Inquiry into eight EU countries is latest chapter in hostility between Beijing and EU over trade

Chinese authorities have launched an anti-subsidy investigation into European dairy imports, in the latest sign of escalating trade tensions between Brussels and Beijing.

The announcement from China’s commerce ministry on Wednesday came a day after the European Commission revealed revised duties on Chinese electric vehicles as part of its examination into what it viewed as artificially cheap cars that posed a threat to jobs in Europe’s motor industry.

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Rachel Reeves planning to raise taxes and cut spending in October budget

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Chancellor insists she still has large black hole to fill despite stronger-than-expected growth in first half of 2024

Rachel Reeves is planning to raise taxes, cut spending and get tough on benefits in October’s budget amid Treasury alarm that the pickup in the economy has failed to improve the poor state of the public finances.

With the latest official set of borrowing figures out on Wednesday, the chancellor is insisting she will still have a substantial black hole to fill despite stronger than expected growth in the first half of 2024.

Raising more money from inheritance tax and capital gains tax.

Sticking to plans for a 1% increase in public spending even though it would involve cuts for some Whitehall departments.

Rejecting pressure to scrap the two-child benefit cap.

Changing the way debt is measured to exclude the Bank of England.

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Gold prices hit record high amid prospect of US interest rate cuts

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Spot price increases to $2,522.99, with record run meaning standard gold bar is worth more than $1m

Gold prices have hit a fresh high as increasing hopes of US interest rate cuts from the Federal Reserve prompted investors to buy more of the precious metal.

The spot price of gold rose to a record $2,522.99 (£1,941.69) on Tuesday morning, up 0.7% on the day. Gold bars generally weigh 400 troy ounces (12.4kg), so a standard gold bar is now worth more than $1m.

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Federal Reserve ‘poised to begin cutting rates as early as September’

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Bank officials signal readiness to start interest rate-cutting cycle to ease pressure on households and businesses

Kamala Harris’s hopes of victory in the looming US presidential election have been given a boost by mounting expectations that the US Federal Reserve will cut interest rates from as early as September.

As Democrats gather for the party’s national convention in Chicago starting on Monday, economists on Wall Street said the world’s most powerful central bank was poised to begin a cycle of interest rate cuts before the end of the year.

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Interest rate cut fuels immediate upturn in UK property market

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Figures from Rightmove show inquiries to estate agents since 1 August up 19% compared with a year ago

The first Bank of England rate cut in four years has triggered an immediate upturn in the UK property market, as cheaper mortgages prompt interest among buyers and drive up house prices.

Figures from the property website Rightmove show the number of potential buyers contacting estate agents about homes for sale since 1 August jumped by 19% compared with the same time a year ago. Contacts in July were up 11% on the previous year.

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‘Share government data to boost economy’, says UK statistics watchdog chief

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The UK Statistics Authority’s chair says linking data sets from departments could aid growth and improve services

• We need to make data sharing across government the rule

Ministers could find ways to boost the economy and improve public services by combining data from separate government departments, according to the head of the UK’s statistics watchdog.

Sir Robert Chote, the chair of the UK Statistics Authority, said that too often government data was “siloed” because departments and other bodies were worried that people may uncover weaknesses in the data or even reach inconvenient conclusions.

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Rachel Reeves’ pension plan could damage the north, says ex-minister

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Lord Jim O’Neill says small businesses could lose out from merger of local government schemes to create large fund

Government plans to create one of the largest pension schemes in the world from a merger of 87 local authority retirement funds could undermine investment in groundbreaking businesses across the north of England, according to former Treasury adviser Lord Jim O’Neill.

Innovative startup businesses, many of them spun out of universities in Manchester, Leeds and Sheffield, could lose out if the Treasury creates a big fund interested only in backing large companies, he said.

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Former Sunak adviser urges Labour to introduce wealth tax on housing

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The economist behind the Covid furlough scheme has called for ‘unfair’ council tax and stamp duty to be axed

Council tax and stamp duty are “unfair and unpopular” taxes that should be abolished, says the economist who devised the Covid furlough scheme.

Tim Leunig, who has advised a series of cabinet ministers, including Rishi Sunak during his prime ministership, said it was time for a new and radical approach that would axe the two taxes and replace them with proportional levies.

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UK economy continues recovery from recession with GDP growth of 0.6%

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ONS data shows strong performance in second quarter with service sector helping drive growth

Britain’s economy has extended its recovery from recession after recording growth of 0.6% in the three months to June, handing a boost to the chancellor, Rachel Reeves, in the run-up to the autumn budget.

Figures from the Office for National Statistics (ONS) show gross domestic product continued to grow in the second quarter, after a rise of 0.7% in the first three months of 2024. The reading matched the forecasts of City economists.

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Battle against UK inflation is far from over, says Bank of England policymaker

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Catherine Mann says Britain should not be ‘seduced’ by price rises easing to the BoE’s target

The UK should not be “seduced” into thinking the battle to calm inflation is over despite price rises easing to the Bank of England’s target, according to an interest rate setter at the central bank.

Catherine Mann, a member of the Bank’s monetary policy committee, said the underlying price pressures in the economy remain strong and showed that the central bank needed to take a tough stance when it sets interest rates.

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Jobs market and pay growth are cooling off, large UK employers and recruiters warn

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Survey reveals net fall in permanent jobs last month amid lengthening slowdown in employment market

The UK’s largest employers have warned the jobs market is cooling amid a slowdown in wage growth in July and a fall in vacancies, extending an almost two-year downturn in hiring demand for permanent staff.

Figures from the Recruitment and Employment Confederation (REC) and the accountancy firm KPMG showed a fall in permanent staff placements in July as large employers made more redundancies and hired fewer new starters.

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UK recovery ‘will accelerate and force Bank to keep interest rates higher for longer’

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Niesr forecasts raise doubts over chance of further cuts by Bank of England before end of year

The UK’s economic recovery will accelerate over the next year, forcing the Bank of England to keep interest rates higher for longer, according to the National Institute of Economic and Social Research (Niesr).

Signalling that bets on further interest rate cuts before the end of the year could be misplaced, the thinktank said a modest economic recovery and the threat from persistent inflationary trends should make the central bank more cautious about reducing the cost of borrowing.

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Unions welcome scrapping of Tories’ ‘spiteful’ minimum service law

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Senior figures praise repeal of law but privately some want full workers’ rights overhaul implemented without delay

Unions have welcomed the government’s move to formally scrap a “draconian” anti-strike law that would have ensured a minimum level of service during industrial action as the legislation had restricted workers’ rights.

The deputy prime minister, Angela Rayner, and the business secretary, Jonathan Reynolds, have written to government departments with sectors that were most affected by the strikes to give a “clear message” the measures will be repealed and have urged all metro mayors to start engaging with local employers on the change.

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Wood Group suitor pulls out of takeover, blaming market turmoil

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Shares in FTSE 250 company slump 37% in early trading after Dubai-based Sidara cites geopolitical risk

The share price of the British oil services company John Wood Group has plunged by more than a third after a Dubai-based suitor pulled out of a purchase amid global market turmoil.

In a statement to the stock market on Monday the engineering company Sidara said it had pulled out of a bid for Wood “in light of rising geopolitical risks and financial market uncertainty”.

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Shares in New York and London tumble on fears of US recession

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FTSE 100 on track for its lowest close since April and Japan’s Nikkei suffers biggest fall since crash of 1987

Shares on Wall Street and in London have fallen heavily amid a global stock market rout triggered by fears of a recession in the US.

The tech-focused Nasdaq index dropped by 6% as trading in New York opened on Monday, while the broader S&P 500 index fell by 4.2% in a sell-off triggered by weak US jobs data. The Dow Jones industrial average lost more than 1,100 points, a 2.8% decline.

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Large English vineyards mark boom year as output and investment soars

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Though tiny compared with rivals, English wine trade is thriving as climate crisis fuels flood of new capital from investors

The largest English vineyards increased their revenues by 15% last year, as wine investors respond to the climate crisis by planting more vines.

While the UK still languishes well down the list of the largest wine-producing nations, below countries such as Uzbekistan and Tunisia, the industry’s output has soared in recent years, rising by 77% last year to 161,960 hectolitres, equivalent to 21.6m bottles.

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UK food industry says lack of testing capacity forcing imports back to EU for checks

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Trade bodies blame lack of lab facilities at Brexit border posts for longer delays and shorter shelf life of food

Imported food coming into the UK through Brexit border posts is being sent back to Europe to be tested due to a lack of laboratory capacity in Britain, food bodies have said.

The SPS Certification Working Group, which represents 30 trade bodies covering £100bn worth of the UK’s food supply, has written to the government warning that members are being advised that some samples of imported foods are being sent to countries such as Germany to be tested before they can be released at the border.

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Weak US jobs growth for July sparks Wall Street sell-off

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US economy added 114,000 jobs in July in significant dip from June while unemployment increased to highest level since October 2021

The US labor market cooled significantly last month as unemployment unexpectedly rose, sparking fears of a slowdown across the world’s largest economy.

American employers added 114,000 jobs in July – short of the 180,000 additions expected by economists, and a marked decrease from the 179,000 added in June.

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Don’t be fooled by the interest rate cut – higher rates are here to stay

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Mortgage payers and business owners vainly hope cut to 5% signals return to pre-pandemic era of cheap borrowing

Mortgage payers and business owners will be hopeful that a cut in interest rates to 5% by the Bank of England this week signals a return to the pre-pandemic era of low borrowing costs.

Unless much lower interest bills arrive soon, thousands of homeowners and businesses could be forced to sell up.

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Fear of US recession rattles global markets as tech shares fall

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Europe’s main indices all decline and Japanese equities suffer worst day since 2020 while gold hits fresh record

Stock markets in Europe, Asia and New York tumbled on Friday as fears of a US economic slump grew and technology shares were hit by underwhelming earnings.

Concerns that the US could be sliding towards a recession spurred a global sell-off, which accelerated after a poor employment report on Friday showed that the US jobs market was cooling fast, pushing up the unemployment rate.

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