The issue of ‘consumer expectations’ of inflation is hotly debated by economists, and might be a key factor in the Reserve Bank’s decision
If the Reserve Bank lifts interest rates on Tuesday, governor Michele Bullock may well cite the need to keep consumers’ expectations of inflation “anchored”.
But it’s not a simple task to determine what those expectations are and whether they are anchored to reality.
Continue reading...Labour leader says he thinks most practical way to get aid into Gaza is to have a humanitarian pause
Keir Starmer is delivering his speech to the North East Chamber of Commerce now.
He starts by saying they are near the A1, where there is a stretch of road that Rishi Sunak recently promised to upgrade.
It’s a story you see right across Britain. Infrastructure projects, some with billions already committed, businesses planning around the structures developed in rooms like this.
But the projects and investment get blocked by objections, consultations, legal challenges, ballooning costs delays, delays, delays – until it’s easier just to give up and move on.
Continue reading...With company chiefs in attendance and an endorsement from Mark Carney, shadow chancellor sought to demonstrate economic competence
At every turn in Labour’s annual conference in Liverpool, there are signs of big business on manoeuvres. Exhibition stands for Google, Ineos and Specsavers; slick videos for Amazon and Uber, fringe events sponsored by Deliveroo and Goldman Sachs, while even the parliamentary lounge – a retreat for MPs from the throng of 16,000 delegates – was sponsored by Lloyds Banking Group.
Labour was keen to demonstrate economic credibility by basking in the presence of company bosses. For business leaders, it was a chance to check out a potential government in waiting, with many commenting on the marked contrast with the Conservative conference in Manchester.
Continue reading...Labour leader says party has ‘plan to get Britain building again’ after security breach where protester threw glitter on him at start of speech
Labour has published fresh details of how the community policy guarantee (see 9.43am) will work.
On community policing
On Starmer, told that after Reeves’ reassurance over economy, his speech designed to paint a ‘picture of hope’ & it ‘emotive rather than a big policy drop’> the word cloud on what Starmer’s about peppered with don’t know and even ‘nothing’. This his chance to hammer home values
Continue reading...Shadow chancellor will tell party conference that Labour wants to be the party of building and infrastructure
In normal circumstances, Labour conference would be front-page news, but this week’s event has being overshadowed by the war between Israel and Hamas. Rachel Reeves has been taking questions on this in her morning interviews and she stressed Labour’s support for Israel. In an interview with BBC Radio 4’s Today programme, asked about claims that the “occupation of Palestine” had provoked the attacks by Hamas, Reeves replied:
Gaza is not occupied by Israel.
The real cause of what is happening now is a terrorist attack. If Britain or any other country was attacked by terrorists, we would believe, and rightly so, that we have every right to defend ourselves, to get back hostages and to protect our citizens.
Speeding up the planning for critically important infrastructure by updating all national policy statements – which set out what types of projects the country needs – within the first six months of a Labour government.
Fast-tracking the planning process for priority growth areas of the economy, such as battery factories, laboratories, and 5G infrastructure.
If we want to spur investment, restore economic security, and revive growth. Then we must get Britain building again.
The Tories would have you believe we can’t build anything anymore. In fact, the single biggest obstacle to building infrastructure, to investment and to growth in this country is the Conservative party itself.
Continue reading...Shadow chief secretary to the Treasury says multinationals are ‘crying out for stability and competence’
Businesses are “crying out for stability and competence” and are turning in droves to Labour after losing hope with the government the shadow chief secretary to the Treasury has said.
Speaking to the Guardian before a speech by his boss, Rachel Reeves, at the Labour conference, Darren Jones said the scale of renewed corporate interest in Labour meant he was spending almost the entire event meeting business leaders.
Continue reading...Shadow health secretary questioned by Guardian editor-in-chief, Katharine Viner
Q: You oppose the Rwanda policy because you don’t think it will work. If the supreme court rules it is legal, and deportations start and it is seen to be working, would you still reverse it.
Yes, says Starmer. He says it is the wrong policy. It is very expensive, and it only affect only a small number of people. And the policy does not deal with the problem at source.
Continue reading...Survey shows nearly 90% of 2019 Conservative voters say green industry is vital to UK’s economic growth
Almost nine in 10 voters who intend to switch their support from Conservative to Labour candidates in the next general election believe that “green growth” is important for the future of Britain’s economy, according to a poll.
Carried out by pollsters Opinium, the survey found that 82% of all respondents backed the growth of Britain’s green industry to boost the economy, in the same week that the prime minister announced a series of U-turns on the government’s green commitments in an attempt to create a dividing line with Labour before the election.
Continue reading...Prime minister says investors are excited about Britain and that he instinctively understands what the public wants
Rishi Sunak has rejected criticism that recent U-turns mean the UK cannot be taken seriously, as he fought to maintain order before a Conservative conference set to be dominated by questions about tax cuts and rivals jostling to succeed him.
In the traditional pre-conference TV interview, the prime minister again refused to say whether HS2 would extend as far as Manchester, the host city for the conference, which begins on Sunday afternoon.
Continue reading...Country needs successful firms to grow and struggling ones to shrink, says Resolution Foundation
The UK needs more businesses to fail, or at least shrink, to solve the economy’s long-running productivity crisis, a study has argued.
The country’s lack of “economic dynamism”, whereby weaker firms or lower productivity sectors shrink, and more productive ones grow, has caused GDP to be 4% lower between 2008 and 2019 than it would otherwise have been, according to a paper published on Monday by the Resolution Foundation.
Continue reading...PM says people to be given more time to switch gas boilers to heat pumps, and ban on sale of new petrol and diesel cars delayed
Climate scientists have expressed dismay at reports that Rishi Sunak is to row back on net zero commitments, arguing that this would be harmful not just environmentally, but economically too.
Prof Myles Allen, professor of geosystem sciences at Oxford University, said:
We haven’t heard the actual speech yet, but we all have to hope the PM is true to his word that he is looking for better ways to deliver net zero, not just slower ways. As we have found time and again in Britain, dithering costs money. The USA is seeing other countries’ faltering as an opportunity to get ahead. It will be sad indeed if we just see it as an opportunity to join the laggards.
It’s not pragmatic, it’s pathetic. This rolling back on emissions cuts for short-term political gain will undermine the transition to net zero and with it the future opportunities, prosperity and safety of the entire country.
Burning fossil fuels produces carbon dioxide which causes global warming which amplifies the consequences of extreme weather events, as we have so clearly seen this summer. Climate change will continue until we reach net zero globally, and we will then have to suffer the consequences of that warmer world for decades or more. It also matters how we reach net zero, not just when – delaying action means more emissions which means more severe consequences.
Continue reading...Former PM set to give speech defending her time in charge and explaining spending decisions
Liz Truss will claim that Rishi Sunak’s government has spent £35bn more than she would have as prime minister, in a speech on Monday.
The short-lived prime minister will use a speech at the Institute for Government to defend and explain her time in charge, nearly a year on from the ill-fated mini-budget that helped end her premiership.
Continue reading...Prime minister can find comfort in ranking above Liz Truss, however
Rishi Sunak is seen as less competent on economic affairs than most recent Conservative prime ministers, according to the latest Opinium poll for the Observer.
The prime minister has made reducing inflation one of his key priorities, as well as reducing debt and avoiding a recession. Much of his pitch has been on his economic management skills as a former chancellor.
Continue reading...Huw Pill says he prefers longer, more steady use of interest rates of Table Mountain model over sharp rise and fall of Matterhorn approach
Tourist attraction, backdrop to millions of selfies and one of the world’s most easily identifiable landmarks. Cape Town’s Table Mountain is all of these things, but now it has found a new role: as a guide to what will happen to UK interest rates.
For Huw Pill the opportunity was too good to pass up. Invited by South Africa’s central bank to speak at a high-level conference, the Bank of England’s chief economist said there were two ways for Threadneedle Street to bring UK inflation back to the government’s 2% target.
Continue reading...Labor to lay out new economic growth plans in response including focus on digital technologies and aiming to become a ‘renewable energy super power’
The last decade saw Australia experience its lowest productivity growth in 60 years, and the Albanese government is concerned it will continue if the country does not adjust to large structural changes in the economy, including the transition to net zero.
The latest intergenerational report – to be released in full by the treasurer on Thursday – shows productivity growth remaining a problem, with Australia no more immune to sluggish growth than other major economies around the world.
Continue reading...Both sides of constitutional debate use Gers data to argue case for and against independence
Scotland’s public spending deficit has fallen from a record peak last year, as oil and gas revenues reached their highest-ever level after a global rise in oil prices.
The government expenditure and revenue Scotland (Gers) report calculated a per-person deficit – the gap between the amount raised through all tax and spending on all public services – as £1,521 in the 2022-23 financial year, down from £2,184 the previous year.
Continue reading...Economic experts say it will take until third quarter of 2024 for output to return to pre-pandemic peak
Rishi Sunak will fight the next election against a backdrop of an economy suffering from five years of lost growth and a widening of the gap between the prosperous and less well off parts of Britain, a leading thinktank said on Wednesday.
The National Institute of Economic and Social Research (NIESR) said it would take until the third quarter of 2024 for UK output to return to its pre-pandemic peak and that there was a 60% risk of the government going to the polls during a recession.
Continue reading...If both parties win election in 2024, their ideological closeness would make them strong allies, says Nick Thomas-Symonds
Labour’s ideological closeness to the Democrats puts the party in an ideal position to sign trade deals with the US should both parties win their elections next year, the shadow trade secretary has said.
Nick Thomas-Symonds told the Guardian he thought Labour’s shared economic values with the Biden administration meant his party would have more success than the Conservative government has had in making trade agreements across a range of sectors.
Continue reading...Policymakers vote for quarter-point rise to 5.25% – the 14th hike in a row – but BoE rules out prospect of recession
The Bank of England has warned businesses and households that the cost of borrowing will remain high for at least the next two years as it raised interest rates for the 14th consecutive time to 5.25%.
Ruling out the likelihood of a recession over the next two years, policymakers blamed strong wages growth in recent months for the need to increase interest rates by 0.25 percentage points to the highest level for 15 years.
Continue reading...Exclusive: Maurizio Bragagni, who has given over £700k to Tories and £30k to chancellor, attended event
Jeremy Hunt oversaw the signing of a low-tax treaty with San Marino championed by a leading Tory donor, who with his companies has given more than £700,000 to the party and £30,000 to the chancellor.
Maurizio Bragagni, a prominent businessman and diplomat for San Marino, was present in No 11 when a “double taxation” treaty between the UK and San Marino was signed in May.
Continue reading...