Category Archives: Economic policy

UK lockdown could end ‘with sector-by-sector plan’ for firms

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Industries like manufacturing could return to normal before entertainment companies, according to Whitehall sources

Ministers are looking at ending the coronavirus lockdown with a “gradual sector-by-sector approach” that could see vital industries such as manufacturing get back to work before less critical ones like entertainment, according to Whitehall sources.

Two officials said one of the main options being explored for ending the lockdown was the idea of a phased return by industry, with civil servants in the Department for Business, Energy and Industrial Strategy among those looking at how it could work.

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Blindsided: how coronavirus felled the global economy in 100 days

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A singular event has economists asking the same questions as everyone else: how far is there to fall – and can we ever get back?

It is New Year’s Eve 2019 and around the world stock markets are closing for business on a high note. Shares in the US are up by almost 30% on the year, those in Japan by 18%. Even in Britain, where the mood has been dampened by months of Brexit uncertainty, the FTSE 100 has risen by 12%.

Overall, it had been the best year for stocks since 2009 and traders saw no real reason why the party should not continue into 2020. The US and China looked close to an armistice in their trade war, the US central bank was stimulating the world’s biggest economy, and Boris Johnson’s decisive victory in the general election had removed any lingering doubts about whether Britain would leave the European Union.

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Coronavirus could double number of people going hungry

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Exclusive: multinationals write to G7 and G20 urging leaders to keep borders open to trade and avert global food crisis

Food supplies across the world will be “massively disrupted” by the coronavirus, and unless governments act the number of people suffering chronic hunger could double, some of the world’s biggest food companies have warned.

Unilever, Nestlé and PepsiCo, along with farmers’ organisations, the UN Foundation, academics, and civil society groups, have written to world leaders, calling on them to keep borders open to trade in order to help society’s most vulnerable, and to invest in environmentally sustainable food production.

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‘We can’t go back to normal’: how will coronavirus change the world?

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Times of upheaval are always times of radical change. Some believe the pandemic is a once-in-a-generation chance to remake society and build a better future. Others fear it may only make existing injustices worse. By Peter C Baker

Everything feels new, unbelievable, overwhelming. At the same time, it feels as if we’ve walked into an old recurring dream. In a way, we have. We’ve seen it before, on TV and in blockbusters. We knew roughly what it would be like, and somehow this makes the encounter not less strange, but more so.

Every day brings news of developments that, as recently as February, would have felt impossible – the work of years, not mere days. We refresh the news not because of a civic sense that following the news is important, but because so much may have happened since the last refresh. These developments are coming so fast that it’s hard to remember just how radical they are.

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Delay is deadly: what Covid-19 tells us about tackling the climate crisis | Jonathan Watts

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Rightwing governments have denied the problem and been slow to act. With coronavirus and the climate, this costs lives

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The coronavirus pandemic has brought urgency to the defining political question of our age: how to distribute risk. As with the climate crisis, neoliberal capitalism is proving particularly ill-suited to this.

Like global warming, but in close-up and fast-forward, the Covid-19 outbreak shows how lives are lost or saved depending on a government’s propensity to acknowledge risk, act rapidly to contain it, and share the consequences.

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‘Time is running out’: airline industry warns government

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EasyJet and Ryanair to stop flying on Monday and less than 5% of passengers expected at airports amid coronavirus

Airlines and airports have warned that time is running out for the government to enact promised measures to help the aviation industry, with EasyJet and Ryanair set to stop flying after Monday and less than 5% of normal passenger numbers expected at major airports.

Further talks are expected between ministers and the industry on Monday as the government wrestles with how to keep critical infrastructure functioning.

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Peacetime constraints ditched in the war for economic survival | Larry Elliott

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The Covid-19 outbreak is forcing politicians and central bankers to set aside ideology and orthodoxy to prevent a global collapse

It is as if the lights have been switched off. The global economy has been plunged into darkness as countries hunker down in response to the Covid-19 pandemic.

Most recessions develop gradually over time. When the last one started in 2008 it took the Bank of England six months to spot it. This time it is different. Then it was a financial virus, this time it is the real thing. Commentators often say the economy is hitting the wall or is falling off a cliff on the weakest of evidence. Today the cliches are horrifyingly true.

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A budget for social infrastructure | Letters

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Eighteen signatories call for spending rules to be shaken up to benefit care services and marginalised groups. Plus Jeremy Beecham says local government is in dire need of a funding injection

We welcome the government’s commitment to level up disadvantaged areas of the UK in this week’s budget. We also welcome suggestions that the chancellor is considering including spending on social infrastructure such as health, education or care as a form of infrastructure investment.

Most of the time when we think of infrastructure we think of physical infrastructure like roads, railways and hospital buildings, but a broader definition of it would include social infrastructure like NHS salaries, training, personal assistants for those with disabilities and childcare workers. The government has promised to spend in these areas, but is restricted by its own rules about what it can and can’t borrow money for. It can borrow to invest but not to “just spend”.

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Sunak to unveil budget aimed at helping firms deal with coronavirus

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Chancellor mulling measures including tax holidays and support when staff self-isolate

Rishi Sunak is poised to announce a package of emergency measures to support businesses hit by the knock-on effects of the coronavirus crisis in his first budget on Wednesday.

The chancellor is considering short-term tax holidays for affected businesses, and taxpayer support for small businesses whose employees self-isolate as the outbreak escalates, the Guardian understands.

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Greece’s economic ‘recovery’ is for the few, not the many | Yanis Varoufakis

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Buoyed by fire sales of public assets, a tiny minority of Greeks are thriving. Everyone else is mired in hopelessness

Spring is already in the air across Greece. Even in the bleakest of times, nature’s renaissance renders hope irrepressible. But this one is proving a cruel spring for a people caught up in a decade-old crisis yielding one ritual humiliation after another.

Costas runs a small bookshop in my central Athens neighbourhood. Although jovial by constitution, he finds it difficult to hide the worry lines multiplying on his face. Fifteen years ago he put his flat up as collateral for a business loan to spruce up the bookshop. When the Greek debt crisis wreaked its havoc, it was impossible to service that loan.

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Sajid Javid resigns as chancellor in Boris Johnson reshuffle

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Rishi Sunak replaces Javid, who refused the PM’s request to sack all his advisers

Sajid Javid has resigned as chancellor after Boris Johnson asked him to sack all of his advisers in a move by No 10 to seize control of the Treasury.

Javid has been replaced by his deputy, Rishi Sunak, the chief secretary to the Treasury, who is a favourite within No 10.

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IMF boss says global economy risks return of Great Depression

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Kristalina Georgieva compares today with “roaring 1920s” and criticises UK wealth gap

The head of the International Monetary Fund has warned that the global economy risks a return of the Great Depression, driven by inequality and financial sector instability.

Speaking at the Peterson Institute of International Economics in Washington, Kristalina Georgieva said new IMF research, which compares the current economy to the “roaring 1920s” that culminated in the great market crash of 1929, revealed that a similar trend was already under way.

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UK channels aid budget as it seeks closer ties with Africa post-Brexit

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£395m trade boost is aimed at countering China’s spending on the continent

Britain has unveiled plans to channel part of the £14bn aid budget through the City as it seeks to exploit the global reach of the finance sector to boost investment in Africa.

Details of the £395m package were announced by the international development secretary, Alok Sharma, ahead of a high-level UK-Africa investment summit next Monday.

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UK growth will dip to 1% even if no-deal Brexit avoided, warns OECD

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Prospect of crashing out of EU leaves UK more exposed to global financial risks, thinktank says

The UK’s GDP growth rate will slip to 1% next year even if a no-deal Brexit is avoided, according to the Organisation for Economic Development and Cooperation.

The OECD said the economy would slow down from growth of 1.2% this year if parliament passes Boris Johnson’s Brexit deal before the 31 January deadline, before returning to 1.2% in 2021.

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World economy is sleepwalking into a new financial crisis, warns Mervyn King

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Past crashes spawned new thinking and reform but nothing has changed since 2008 banking meltdown, says former Bank of England boss

The world is sleepwalking towards a fresh economic and financial crisis that will have devastating consequences for the democratic market system, according to the former Bank of England governor Mervyn King.

Lord King, who was in charge at Threadneedle Street during the near-death of the global banking system and deep economic slump a decade ago, said the resistance to new thinking meant a repeat of the chaos of the 2008-09 period was looming.

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Northern Powerhouse seeks more control of HS2 rail scheme

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Business and city leaders warn of economic damage of cancellation and call for 2012 Olympics-style authority

A review of HS2 by northern business and city leaders has called for control of construction of the high-speed railway to be devolved to the north and Midlands – and warned that its possible cancellation would leave no viable alternatives for transforming their economies.

The Northern Powerhouse Independent Review (NPIR), established to inform or pre-empt the government’s own review of HS2, recommended a new body, HS2 North, be established to integrate HS2 with proposed Northern Powerhouse Rail links.

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African lives are measured in fighting UK visa rejections | Nesrine Malik

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The Home Office’s hostile handling of visiting African professionals doesn’t bode well for Global Britain

An African passport is the most egalitarian of documents, in that if you have one then class, employment status and professional invitations from the country you are visiting all count for nothing. From university professors to unskilled labourers, anyone holding a passport issued by a country in Africa will be treated the same by UK border officers. They will also show no compassion for or recognition of the need for people to be reunited with family or to see friends.

In fact it’s not too far-fetched to say an African passport is a no-travel document. Even countries within Africa are miserly with each other. I am a veteran visa applicant, and I can tell you there is no respite. A European visa is as prohibitively hard to secure as one to a neighbouring African country. My Sudanese passport meant that I had to become an Olympian visa-applier in order to visit, study and settle in the UK. You can’t slouch with a passport from a country on a terror watchlist.

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George Osborne’s ambitions over IMF top job prompt criticism

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Former UK chancellor’s austerity agenda will count against him, say opponents

George Osborne’s interest in running the International Monetary Fund has met immediate criticism because of the former chancellor’s austerity policies and Brexit-related question marks over the UK’s international standing.

Osborne, the editor of the Evening Standard, has signalled to friends that he views himself as a potential candidate to replace Christine Lagarde, the current head of the Washington-based fund, who was nominated to lead the European Central Bank this week.

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Angela Smith launches bid to commission report on no-deal Brexit risks

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Labour’s leader in House of Lords at head of cross-party effort to establish joint committee of MPs and peers

Labour’s leader in the House of Lords, Angela Smith, is spearheading a cross-party bid to force the government to set up a powerful new committee to report by September on the risks of a no-deal Brexit.

Both candidates in the race to be Britain’s next prime minister are saying they are prepared to take Britain out of the EU without a deal if they cannot secure concessions from Brussels.

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Mexican president leads ‘celebration’ rally after US tariffs dropped

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Andrés Manuel López Obrador tells crowd in Tijuana he is raising an ‘open hand’, not a closed fist, to Donald Trump

The Mexican president, Andrés Manuel López Obrador, travelled to the border city of Tijuana to rally the country in “defence of national dignity”, but to also reaffirm friendship with the US people – barely a day after the US cancelled the threat of tariffs.

López Obrador called the rally, which was convened prior to the tariffs being cancelled, a “celebration” of both countries brokering a deal.

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