Category Archives: Economic recovery

UK importers brace for ‘disaster’ as new Brexit customs checks loom

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Exporters badly hit already but KPMG says ‘biggest headaches’ have yet to come’ for importers

British firms are warning of further Brexit red tape as the government prepares to introduce a long list of new controls on imports from the European Union in April and July.

In the coming months further checks are due to be phased in at the UK border, controlling everything from the import of sausages and live mussels to horses and trees, as well as the locations these checks can take place.

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New Covid infections pose challenge to China’s growth and Xi’s leadership

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The leader has declared victory over the virus, but a fresh outbreak is complicating the narrative

When Britain was in its second lockdown last November and the economy was contracting, China’s quarterly growth rate was hitting 6.5%. Figures last week showed that for the full year, the world’s second-largest economy could boast a growth rate of 2.3% while all its rivals in Europe and the Americas were going backwards.

The trend could be traced back to Beijing’s efforts to tackle the virus – albeit after a period of denial – and keep infection rates among the lowest in the world.

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Economic cost of Covid crisis prompts call for one-off UK wealth tax

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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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Asian manufacturing boom offers hope for swifter global recovery from Covid

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Markets respond as manufacturing in China and South Korea grows at fastest pace in a decade

Hopes that the world will bounce back from the ravages of coronavirus in the new year have been buoyed by strong growth in output from Asia’s huge manufacturing centres, led by an accelerating post-pandemic boom in China.

China’s factory activity expanded at the fastest pace in a decade in November, a closely watched survey showed on Tuesday, in the latest sign that the world’s second-largest economy is recovering to pre-pandemic levels.

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Things are looking up for oil, but Opec can’t uncross its fingers just yet

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Despite good vaccine news and price rises, the cartel could still meet a few bumps in the road – some of them of its own making

When oil ministers from the world’s largest fossil-fuel nations meet via webcam this week to make decisions about the global oil market in 2021, they could be forgiven for indulging in a little early festive cheer.

Oil prices have more than doubled since tumbling below $20 a barrel and hitting 21-year lows during “black April” – when Covid restrictions brought major economies to their knees, and caused what is thought to have been the worst month in the history of the oil industry.

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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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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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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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IMF estimates global Covid cost at $28tn in lost output

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World economic outlook says 2020 impact is less than thought but there will be deep scars

The International Monetary Fund has scaled back its estimate of the hit to the global economy from Covid-19 this year but warned that the final bill for the pandemic would total $28tn (£21.5tn) in lost output.

Gita Gopinath, the IMF’s economic counsellor, described coronavirus as the worst crisis since the Great Depression, and said the pandemic would leave deep and enduring scars caused by job losses, weaker investment and children being deprived of education.

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Chinese city giving away 10m yuan in lottery trial of digital currency

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Shenzhen residents can win one of 50,000 ‘red packets’ to spend in local shops

Authorities in the Chinese city of Shenzhen have begun giving away more than 10m yuan ($1.49m) in a citizens’ lottery, as part of trials of a new digital currency.

Almost 2 million people applied to be one of 50,000 randomly selected citizens receiving a “red packet” valued at 200 yuan (about US$30) on Sunday, to spend at 3,800 designated outlets in the district of Luohu. Participants must download the official digital Renminbi app, which is not yet publicly available, to receive the currency for purchases within the next week.

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Summer spending boosted Britain but winter job cuts have yet to bite

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Reductions in government support as the original furlough scheme ends point towards a brutal round of redundancies

The UK economy continued its rapid rebound from the depths of the coronavirus lockdown in August, the latest official data on growth is expected to show on Friday, but many economists are braced for a grim winter as job losses mount.

The Bank of England’s chief economist, Andy Haldane, predicted last week that GDP would be “only around 3-4% below its pre-Covid level” by the end of the third quarter, covering July to September.

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Covid-19: UK economy plunges into deepest recession since records began

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GDP falls 20.4% – the worst of any G7 nation in the three months to June

Britain has entered the deepest recession since records began as official figures on Wednesday showed the economy shrank by more than any other major nation during the coronavirus outbreak in the three months to June.

The Office for National Statistics (ONS) said gross domestic product (GDP), the broadest measure of economic prosperity, fell in the second quarter by 20.4% compared with the previous three months – the biggest quarterly decline since comparable records began in 1955.

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UK to plunge into deepest slump on record with worst GDP drop of G7

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Official measure to be declared this week as coronavirus lockdown shrinks GDP by 21% in second quarter

Britain’s economy will be officially declared in recession this week for the first time since the 2008 financial crisis, as the coronavirus outbreak plunges the country into the deepest slump on record.

Figures from the Office for National Statistics on Wednesday are expected to show that gross domestic product (GDP), the broadest measure of economic prosperity, fell in the three months to June by 21%.

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London risks losing its aura as a ‘fun’ place to work, economist fears

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Capital could lose £178m in 2021 as companies decline to send all workers back to offices

Major cities such as London face more economic pain as some companies resist the government’s efforts to encourage workers back to their desks this week, economists have warned.

Pablo Shah, a senior economist at the Centre for Economics and Business Research (CEBR), fears that the capital could have lost its aura as a “fun” place to work, particularly in the digital and creative industries.

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‘Coronavirus has stolen our future’: young people’s despair as jobs evaporate

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New graduates and school leavers across the UK have paid the price of lockdown, says survey

Young people across Britain believe their future has been “stolen” as a result of the coronavirus outbreak, with more than half fearing it has damaged their prospects.

Amid growing evidence that the pandemic is fuelling a generational divide, two thirds of 16- to 24-year-olds also said that their age group, loosely defined as ‘Generation Z’ will pay the economic price for a disease that has mostly affected older people, according to a survey by the Hope not Hate charitable trust, an anti-racism group.

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EU leaders go into extra time as tempers fray at coronavirus summit

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Proposals on the size and terms of a recovery fund have led to splits between member states

Angela Merkel and Emmanuel Macron said they are willing to walk away from a summit of EU leaders, as they arrived at the third day of a long and acrimonious debate on the terms of a €750bn (£682bn) pandemic recovery fund.

With the EU split between northern and southern member states as well as eastern and western, France’s president and the German chancellor both indicated their patience was waning despite the need to respond to the economic recession facing the bloc.

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EU leaders in bitter clash over Covid-19 recovery package

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Orbán accuses Netherlands’ Rutte of ‘communist’ tactics on tense third day of talks

Hungary’s prime minister, Viktor Orbán, accused his Dutch counterpart of using the same methods as his country’s former communist leaders on Sunday, as EU leaders publicly clashed during tense and acrimonious negotiations over the terms of a proposed €1.8tn budget and recovery package for the bloc.

A third difficult day of a summit of the EU’s 27 heads of state and government – the first in person for five months – saw movement towards agreement as talks stretched deep into the night, but laid bare the deep splits between north and south, and east and west.

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Britain beyond lockdown: what we learned from two weeks on the road

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People do not want to go back to the way things were, but the good intentions could fade without the right leadership

Britain is crying out for a better normal. Communities across the country are emerging from lockdown with a new sense of what is possible and what is necessary – and the answers to both go a lot further than Westminster’s efforts to drive the country back to business as usual.

That was the overriding impression from a two-week reporting trip around Britain, asking people in different regions how they view recovery and whether there is an appetite for more fundamental change.

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‘New deal’ risks fuelling emissions and eroding building standards

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Green campaigners and housing experts warn Boris Johnson’s recovery plan could swiftly become a liability

Boris Johnson’s plan to build tens of thousands of new homes risks locking in high carbon emissions for decades to come, if they are built to today’s poor efficiency standards instead of being designed for net zero carbon.

The prime minister’s plans to “build, build, build” form the centrepiece of his “new deal” to lift Britain’s economy out of the coronavirus recession. About £12bn will go to building 180,000 new homes to relieve the housing crisis, while new hospitals and schools will be constructed to improve degraded public services.

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Angela Merkel has become the spend, spend, spend chancellor | Larry Elliot

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With its €130bn stimulus package, Germany is showing others how to do the recovery

And in one bound she was transformed. For Angela Merkel, the days of being lampooned as the archetypal Swabian housewife keeping tight control over the purse strings are over. Now, courtesy of a €130bn (£116bn) stimulus package, she is the spend, spend, spend chancellor.

Make no mistake, much of the past criticism of Germany’s frugal approach to government spending and budget deficits was justified. Saving some money for a rainy day is one thing but running surpluses worth 8% of national output was unnecessary and harmful to the global economy.

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