Elected leader would take office in 2024 alongside return of powers from Westminster as part of levelling-up agenda
York and North Yorkshire are to elect a mayor and receive £540m of government investment over 30 years in a landmark devolution deal to be signed on Monday.
The agreement will create a new combined authority across the region led by a directly elected mayor, who will have the power to spend the money on local priorities such as transport, education and housing.
Continue reading...Former chancellor says UK ‘needs to control borders’ and again references Margaret Thatcher
In an interview with GB News, Liz Truss was asked if she would keep the expensive wallpaper in the Downing Street flat, installed as part of Boris Johnson’s controversial refurbishment, if she became PM. In what is being seen by some as a dig at Johnson, she replied:
I’m not going to have the time to be thinking about the wallpaper in No 10, because we’ve only got two years until the general election – we need to hit the ground running.
Continue reading...Analysis: If Johnsonomics stands for anything, it is a lack of plan or vision to address Britain’s economic woes
Boris Johnson entered Downing Street in July 2019 with a promise. The doubters, doomsters and gloomsters were going to get it wrong again: his leadership would make Brexit a success, re-igniting an economy stalled by the divisions over Europe.
Three years later, almost to the day, he prepares to leave with the country reeling from a political implosion of his own making, and an economy teetering on the brink of recession.
Continue reading...Unemployment rise and prospect of new Scottish independence referendum fuel recession fears
The pound has fallen to its lowest level against the dollar since the onset of the Covid pandemic amid growing concern over the strength of the British economy.
Sterling dropped by more than a cent against the dollar to trade below $1.20 on foreign exchange markets for the first time since March 2020, as City traders reacted to mixed figures from the jobs market and the prospect of a fresh referendum on Scottish independence.
Continue reading...OECD singles out cost of living crisis as a cause of Britain’s slide down growth league table
Boris Johnson’s attempt to reset his troubled premiership has received a double blow after petrol prices had their biggest daily rise in 17 years and a leading international thinktank said the UK economy would slow to a standstill next year.
Fears that Britain is heading for a prolonged period of 1970s-style stagflation intensified amid fresh evidence of the damaging impact of the war in Ukraine on the cost of living and growth.
Continue reading...Leading economists publish letter to Rishi Sunak in response to proposed financial services and markets bill
A group of 58 leading economists and politicians, including the former business minister Vince Cable, has written to the chancellor to say that scaling back City regulation will put the UK at risk of another financial crash.
The open letter, which has also been signed by the former Greek finance minister Yanis Varoufakis and Columbia University professor Adam Tooze, was sent in reaction to the Queen’s speech, which outlined Rishi Sunak’s plans to “cut red tape” through a financial services and markets bill.
Continue reading...Ex-official says policymakers must shrink the UK economy to limit upward pressure on prices made worse by Brexit
Britain’s central bank policymakers are “duty bound” when they meet this week to push the UK into recession to cap rising inflation, a former Bank of England (BoE) official has said.
Adam Posen, who runs Washington-based thinktank the Peterson Institute, said that while the Bank of England would not want workers to lose their jobs, it should hike interest rates now to squeeze out inflationary pressures made worse by Brexit trade and immigration restrictions.
Continue reading...Slowdown in retail sector feared as public gripped by pessimism about the economy as well as personal finances
Fears that Britain is heading for a marked slowdown in consumer spending have intensified as it emerged that the public is gloomier about the economy than when banks were on the brink of collapse during the financial crisis of 2008.
A combination of rocketing energy prices, higher taxes and a surge in the annual inflation rate to its highest level in three decades meant confidence was in freefall, according to the latest monthly snapshot of sentiment.
Continue reading...Tory MPs and business groups urge chancellor to scrap increase intended to fund NHS and social care amid fears of stagflation
Chancellor Rishi Sunak is under renewed pressure from MPs and business groups to rethink plans to increase national insurance next month, as fears grow that Russia’s invasion of Ukraine will dramatically worsen the cost of living crisis and plunge the economy into “stagflation”.
Both Tory and Labour MPs believe Sunak can still be persuaded to ditch the 1.25 percentage point rise – announced last September to fund the NHS and social care – and want him to use the potentially devastating effects of events in Ukraine on prices as justification for what they say is an urgently needed U-turn.
Continue reading...GDP expanded by 0.9% before impact of Omicron as Christmas shopping began early
The UK economy surpassed its pre-pandemic level for the first time in November after growing by 0.9% over the month, partly driven by an unexpected surge in early Christmas shopping.
The Office for National Statistics (ONS) said a jump in restaurant bookings and a rapid turnaround in construction output were also behind the growth that took the size of the economy 0.7% above its level before March 2020.
Continue reading...Those promised rewards for Britain of leaving the EU should surely be with us by now. What have been the costs and gains of ‘taking our country back’?
• UK and the EU set to remain best of enemies as 2022 dawns
On New Year’s Day the UK will have been fully out of the European Union for a year: out of its political and legal structures, out of its single market, out of its customs union.
This was what Boris Johnson and Michael Gove – who led the Leave campaign – had wanted. No awkward halfway house like Theresa May had negotiated. No Brexit light. Out completely. Gone. Brexit well and truly done.
Continue reading...Rishi Sunak will be looking at key indicators such as GDP growth, public debt levels and inflation as he draws up his autumn budget
Britain’s economic recovery from Covid is at growing risk from severe shortages of workers and materials, as well as mounting living costs for households, as Rishi Sunak prepares his budget and spending review.
Here are five key charts that will underpin the chancellor’s statement on Wednesday afternoon.
Continue reading...Chancellor concedes only 20% of transport funding boost is new and other commitments in £26bn spending plans are recycled
Labour has accused Rishi Sunak of presiding over a “smoke and mirrors” budget after he conceded that just 20% of his biggest single spending commitment unveiled before the speech is made up of new money.
The Treasury has committed to almost £26bn of spending in a rush of announcements before Wednesday’s budget and spending review. It is expected to contain no tax cuts and the chancellor has sought to reassure anxious Tory MPs that he is a fiscal Thatcherite at heart.
Continue reading...Data collected from 38 member countries says UK among the major economies now in the slow lane
The world’s major economies have seen their rapid recovery after easing Covid restrictions begin to run out of steam in the past month as a resurgence in the virus depressed consumer spending, according to the Organisation for Economic Cooperation and Development.
There are signs that the recovery in the US and Japan is losing momentum, the OECD said, while parts of Europe and China have slowed as consumers remain reluctant to eat out, visit attractions and shop as they did before the pandemic.
Continue reading...G7 countries will lose $5tn a year by 2050 if temperatures rise by 2.6C
The economies of rich countries will shrink by twice as much as they did in the Covid-19 crisis if they fail to tackle rising greenhouse gas emissions, according to research.
The G7 countries – the world’s biggest industrialised economies – will lose 8.5% of GDP a year, or nearly $5tn wiped off their economies, within 30 years if temperatures rise by 2.6C, as they are likely to on the basis of government pledges and policies around the world, according to research from Oxfam and the Swiss Re Institute.
Continue reading...Experts say recovery at risk amid sharp fall in EU workers and dwindling interest in UK jobs from abroad
Britain’s employers are struggling to hire staff as lockdown lifts amid an exodus of overseas workers caused by the Covid pandemic and Brexit, industry figures reveal.
According to the Chartered Institute of Personnel and Development (CIPD) and the recruitment firm Adecco, employers plan to hire at the fastest rate in eight years, led by the reopening of the hospitality and retail sectors as pandemic restrictions are relaxed in England and Wales on Monday.
Continue reading...Twelve months after the pandemic struck the Guardian’s economic tracker reveals real risk of lasting damage
When Boris Johnson announced the first stay-at-home order, effectively shutting down whole sections of the economy, it was hoped the tide could be turned within 12 weeks. As many months later, lockdown measures are being relaxed for a third time and Britain still faces a lengthy road to recovery from the worst recession for 300 years.
As restrictions ease, the chief economist at the Bank of England, Andy Haldane, warned that despite the reopening of the economy, the risk of a “jobs equivalent of long Covid” remains for workers across the country.
Continue reading...FTSE 100 posts biggest daily gain for over a month as investors buoyed up by vaccine and US economy hopes
The pound has hit its highest level against the dollar for almost three years as global markets were buoyed up by hopes for a faster economic recovery from the coronavirus pandemic.
Sterling rose by 0.5% to hit a 33-month high against the dollar on Monday, trading above $1.39 on the global currency markets for the first time since 2018, while also rising to a nine-month high against the euro of almost €1.15.
Continue reading...Departure to cost EU 0.5% of GDP but UK 2.25% by end 2022, according to first official estimate since deal was agreed
The economic blow dealt by Brexit will be four times greater in the UK than the EU, according to the latest forecasts by Brussels.
A month into the new relationship, the European commission said the UK’s exit on the terms agreed by Boris Johnson’s government would generate a loss in gross domestic product (GDP) by the end of 2022 of about 2.25% in the UK compared with continued membership. In contrast, the hit for the EU is estimated to be about 0.5% over the same period.
Continue reading...Tax experts and economists outline ‘fairest, most efficient’ way to repair public finances and quickly raise £260bn
The government has been urged to launch a one-off wealth tax on millionaire households to raise up to £260bn in response to the coronavirus pandemic, as the crisis damages Britain’s public finances and exacerbates inequality.
The Wealth Tax Commission – a group of leading tax experts and economists brought together by the London School of Economics and Warwick University to examine the case for a levy on assets – said targeting the richest in society would be the fairest and most efficient way to raise taxes in response to the pandemic.
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