Category Archives: Economics

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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US blocking selection of Ngozi Okonjo-Iweala to be next head of WTO

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Sources say it is unclear if move is attempt to sabotage trade body much criticised by Trump

The US is blocking the appointment of Ngozi Okonjo-Iweala as the next head of the World Trade Organisation despite the former Nigerian finance minister winning the overwhelming backing of the WTO’s 164 members, it has emerged.

Ngozi had moved a step closer to becoming the first woman and the first African to be director of the global trade watchdog after securing the support of a key group of trade ambassadors in Geneva. Soundings taken by a selection panel of three WTO trade ministers found Okonjo-Iweala had far more support than her South Korean rival, Yoo Myung-hee.

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US and European markets dip as Covid containment efforts founder

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Investors’ summer optimism gives way to insecurity as curfews and lockdowns return

Stock markets in the US and Europe fell sharply oas investors focused on signs that rich countries’ efforts to contain the coronavirus pandemic were foundering.

In Europe, the Stoxx 600 index lost 1.8% after heavy falls in German blue-chip stocks. In the US the Dow Jones industrial average closed 2.3% down at 27685.38, while the benchmark S&P 500 fell 1.9% to 3400.97.

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Covid leaves 6m UK small businesses and 16m jobs in ‘precarious position’

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Survey finds nearly two-thirds of entrepreneurs believe their business may not survive pandemic

An estimated 6m small businesses in the UK supporting 16.6m jobs are in a financially precarious position as a result of the pandemic, a London business school has warned.

Nearly two-thirds of entrepreneurs felt their business might not survive the pressures of Covid-19, while more than half predicted they would run out of money within the next 12 months, according to the new study from King’s Business School.

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Sunak’s £12bn scheme for self-employed was ‘terribly targeted’, says analysis

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Review finds testing flaws meant support went to many workers who lost no income but not to others who had

Rishi Sunak’s flagship scheme to help the self-employed through the pandemic has handed £1.3bn to workers who saw no loss of income while giving nothing to 500,000 people left without work, new analysis has revealed.

In a sign of major flaws in the £12.7bn self-employment income support scheme (SEISS), more than 400,000 workers were able to claim support despite losing no income in the crisis.

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With 10 days to go, time and history are not on Donald Trump’s side

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Covid has tanked the gains he made in the economy and any new stimulus could be too late

It all looked so simple for Donald Trump as he took the stage at the World Economic Forum in Davos in January this year. At the start of an election year, the annual gathering of the global business elite was an opportunity to launch his campaign.

It was one Trump eagerly seized. The next 30 minutes was one long boast, detailing how a US economy that had allegedly been on its knees under Barack Obama had been transformed under his stewardship.

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EU seeks Amazon protections pledge from Bolsonaro in push to ratify trade deal

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Brazilian president’s stance on deforestation remains stumbling block for South America agreement

Brussels is in talks with Brazil’s far-right nationalist president, Jair Bolsonaro, over commitments on the future of the Amazon as it seeks to persuade Emmanuel Macron and other EU leaders and parliaments to ratify the trade deal the bloc has negotiated with South America.

The ratification of the draft trade agreement between the EU and the “Mercosur” or Southern Common Market free-trade zone – which spans Brazil, Uruguay, Paraguay and Argentina – has been in doubt almost since it was announced last June.

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