Boost for Hammond as budget deficit hits lowest level since 2007

Chancellor may ease austerity as public sector net borrowing falls to £42.6bn for the last financial year

Britain’s budget deficit dropped to the lowest level since before the financial crisis in the last financial year, laying the ground for Philip Hammond to raise government spending on public services later this year.

The Office for National Statistics said public sector net borrowing, excluding the state-owned banks, dropped by £3.5bn to £42.6bn in the last financial year, cutting the budget deficit to the lowest level since the year ending March 2007.

Related: UK economy grew slower in first quarter of 2018 than last quarter of 2017

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UK economy grew slower in first quarter of 2018 than last quarter of 2017

EY Item Club says uninspiring economy is ‘chugging along’ as inflation continues to drop

The UK economy is set for another year of uninspiring growth in 2018, according to the latest forecasts from the EY Item Club.

This week’s first-quarter GDP figures are expected to show growth of just 0.2%-0.3%, according to EY Item Club economists, mainly due to the severe weather the hit the country at the end of February and beginning of March. This compares to quarter-on-quarter growth of 0.4% in the final three months of 2017.

Related: Slow UK economic growth is not just a cold weather trend | Larry Elliott

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Bank of England ‘dangerously ill-equipped’ for next recession, says IPPR

Thinktank warns of a ‘car crash’ as low interest rates mean further cuts to stimulate demand would not be an option

The Bank of England is “dangerously ill-equipped” to avert the next recession and remains mired fighting the last downturn, according to a report calling for the introduction of radical new policy tools.

According to the Institute for Public Policy Research (IPPR), the odds of a recession once every 10 to 15 years mean Threadneedle Street needs additional firepower for when the economy next begins to falter.

Related: Bank of England gives mixed signals on rate rise, Trump slams Opec on oil prices – as it happened

We are heading for a car crash if nothing is changed

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Head of EBRD hopes to expand into sub-Saharan Africa

The European Bank for Reconstruction and Development keen to work with countries committed to market economics

A bank originally set up to help countries of the former Soviet bloc is poised to extend its operations into sub-Saharan Africa in order to speed up progress in meeting ambitious development goals set by the United Nations.

Sir Suma Chakrabarti, the president of the London-based European Bank for Reconstruction and Development, said his organisation had the money and the expertise to stimulate the growth of strong private sectors in some of the world’s poorest countries.

Related: Global debt now worse than before financial crisis, says IMF

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City faces corruption crackdown as IMF investigates wealthy countries

G7 nations plus Austria and the Czech Republic face tests of their mechanisms to prevent bribery and money laundering

The City of London will come under the spotlight of the International Monetary Fund as part of a new crackdown on corruption that will investigate whether Britain and other rich countries are taking tough enough action against bribery and money laundering.

In a hardening of its approach, the IMF said it needed to look at those giving bribes and financial centres that laundered dirty money as well as improving the existing clamp down on wrongdoing in poor countries.

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Could Donald Trump’s lone ranger approach provide the silver bullet? | Larry Elliott

The president’s rejection of multilateralism is risky but our 70-year-old rule-based system is far from perfect

Donald Trump is playing with fire. That thought permeated last week’s spring meetings of the International Monetary Fund and World Bank in Washington.

The US president’s go-it-alone approach – especially in the field of trade – has certainly shaken things up. It is not just the threat of tariffs, nor that the US has brought the dispute settlement system at the World Trade Organisation to a standstill.

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Japan ambassador’s Brexit warning: there won’t be a deal better than the single market

Koji Tsuruoka expected a quiet posting in a stable country. Then Brexit happened. He tells the Observer of his fears and hopes for manufacturing, trade and investment

Koji Tsuruoka is sipping green tea in Japan’s splendid embassy in Mayfair, recalling how his first two years as Japan’s ambassador to the UK have not gone quite according to plan. At least, they haven’t turned out how his predecessors assured him they would. One after another, ex-ambassadors advised him, before he took up the position on 6 June 2016, that he would find the UK very “stable”, and its politics “very predictable”.

The attractions of London’s ballet scene, opera and art galleries quickly lured him into thinking it would be “an excellent place to conclude my 40-plus years of diplomatic service in a very comfortable and quiet environment”. British politicians and civil servants he met early on were almost all sure the EU referendum would pass peacefully by. “Almost 99% said that you don’t have to worry because the British people don’t make adventurous decisions. They said it was irrational to leave because of the economic conditions… And you know what happened.”

Related: Brexit could cut manufacturing exports by a third, experts warn

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Shakespeare’s sceptr’d isle has always been a part of Europe | William Keegan

The inspiration the bard drew from the continent emphasises, whatever Brexiters might say, the inseparability of our history

We know that the Brexiters want to recapture a lost Britain; and few Britons can rival William Shakespeare in the patriotism stakes.

It intrigued me, therefore, to hear the following from a Shakespearean scholar who recently delivered a Bardic talk in – where else? – Stratford-upon-Avon. Stratford-upon-Avon is as near to Middle England as any Brexiter could wish.

There is much talk of ‘globalisation’, but the key economic development of the British economy has been Europeanisation

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