Nine years after the global economy almost imploded, bankers are finally in the dock. But we are still at great risk of a banking calamity
If you had told people in the City at the height of the financial crash in 2008 that it would take almost nine years for the first top bankers to face prosecution, few would have believed you. If you had then said that this first prosecution would relate to suspected fraud over one bank’s supposed attempt to avoid nationalisation – rather than the crash itself – the bankers involved in the crisis would have laughed in disbelief: surely, they aren’t going to let us get away with that?
European Central Bank’s bid for more powers represents challenge to City’s dominance of £880bn-a-day business
London is facing renewed pressure over its dominance of the €1tn (£880bn)-a-day euro clearing market after the European Central Bank set out proposals aimed at giving it more oversight of the lucrative business.
The move by the Frankfurt-based ECB – the central bank for the 19 countries using the euro – follows a report by the European commission that called for the EU to have more powers over clearing of financial products denominated in euros after Brexit.
Yes, UBI could be an important part of a radical agenda. But beware: its proponents include neoliberals hostile to the very idea of the welfare state
For some time now, the radical left has been dipping its toes in the waters of universal basic income (or unconditional basic income, depending on who you talk to). The idea is exactly as it sounds: the government would give every citizen – working or not – a fixed sum of money every week or month, with no strings attached. As time goes on, universal basic income (UBI) has gradually been transitioning from the radical left into the mainstream: it’s Green party policy, is picking up steam among SNP and Labour MPs and has been advocated by commentators including this newspaper’s very own John Harris.
The era of the dinosaur vanity project is over – money is desperately needed to redress the effects of austerity. Tough decisions are needed
They haven’t gone away. The great spending dinosaurs of the political dark ages, back before June 2017, are still roaming the jungle. Theresa May’s first decision as prime minister, to approve the £18bn Hinkley Point nuclear power station, is still crashing about Whitehall. Now the national audit office (NAO) has added its voice to those calling it a really bad deal. The project now has no independent supporters.
Hinkley was a hangover from when Whitehall’s energy department took leave of its senses and approved anything that looked remotely “green”. It just passed the bill to the Treasury. The Treasury then passed the risk to Chinese investors and French contractors. The risk proved so great that these backers swiftly passed it back to the Treasury and future British taxpayers and energy users, in loan guarantees and sky-high prices.
Germany ‘flash PMI’ is just out, and it shows that private sector growth in the eurozone’s largest economy is slowing a little.
The German composite PMI has dropped to a four-month low of 56.1 this month.
“The latest data signalled a growing performance gap between manufacturing and services, however.
The goods-producing sector continued to outperform, with the headline PMI little-changed from May’s 73-month record. Although growth of manufacturing output, exports and jobs all eased slightly since May, expansions in backlogs and total new orders gathered pace and supply bottlenecks intensified.
Another boost for France! French companies are creating jobs at the fastest rate since the financial crisis.
That’s according to data firm Markit, whose ‘flash’ purchasing managers report for June, just released, shows that private sector employment has jumped at the fastest rate in almost 10 years.
Buoyed by strong client demand, private sector firms in France raised their staffing numbers for an eighth successive month in June. Furthermore, the rate of job creation was the most marked in just under ten years.
The increase was broad-based across both the manufacturing and service sectors.
“A particularly upbeat talking point highlighted in the latest data was the sharpest rise in employment for almost ten years.
This is welcome news for the newly elected government which has made reducing unemployment one of the main aims of its administration. The slowdown in the rate of accumulation in unfinished work poses a slight concern however, and may slow employment growth in the short-term.
French GDP growth in Q1 revised up once again, to 0.5% from 0.4% previously and a preliminary 0.3%. Starting 2017 as strong as 2016 ended.
Newsflash: France’s economy grew faster than previously thought in the first three months of this year.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Today we’ll learn whether European companies are enjoying a blistering June, as data firm Markit releases its latest ‘flash’ purchasing managers indexes.
The National Audit Office said the contract sealed by ministers last September with EDF to construct the country’s first new atomic reactors in two decades would provide “uncertain strategic and economic benefits”.
Further, Brexit and Theresa May’s decision to quit an EU nuclear treaty could make the situation even worse, by triggering taxpayer compensation for EDF or a more generous deal for the French state-controlled company.
On the first anniversary of the EU referendum, financial services company Hargreaves Lansdown said clear winners and losers have emerged, with the pound taking the biggest hit on the markets. Blue chip companies with a large proportion of foreign earnings are among the biggest winners.
The Bank of England’s chief economist is right to say a casualised, de-unionised and atomised labour market has weakened workers’ ability to bid up wages. He’s wrong to say it may be time to raise interest rates
Life is getting interesting at the Bank of England. Next month will mark the 10th anniversary of the last time the technocrats of Threadneedle Street raised the official cost of borrowing, but the chances of an interest rate rise are higher than they have been for some while. Mark Carney, the Bank’s governor, thinks the time is not yet ripe for a tightening of policy. He used his delayed Mansion House speech in the City of London this week to voice concerns about the negative impact of higher inflation on consumer spending and the uncertain effects of Brexit negotiations on the economy. But three of the eight members of the Bank’s monetary policy committee took a different view, and they were almost joined by a fourth, the Old Lady’s chief economist, Andy Haldane, who said the time was fast approaching when he would vote for an increase. Mr Haldane’s intervention was significant, not just because he has hitherto been seen as one of the MPC’s most prominent “doves”, nor because his intervention came little more than 24 hours after that of his boss. Rather, it was because the bombshell was dropped at the end of a speech that seemed to argue the opposite.
For years, the Bank of England has been trying to find the answer to a puzzle: why is wage growth so weak even though unemployment keeps coming down? Britain currently has its lowest jobless rate since the mid-1970s, but there has been no sign of an acceleration in earnings growth. Quite the contrary, in fact. At least part of the answer, according to Haldane’s analysis, stems from structural changes in the labour market: a decline in union membership; more self-employment; more zero-hours contracts and more part-time and temporary work. The clock has been turned back not one century but three, so that the world of work in 2017 bears more than a passing resemblance to Britain as it was before the Industrial Revolution. There were no trade unions. Most people were self-employed or worked in a small business. The Uber drivers of that era were the agricultural workers hired only when there were cows to be milked or crops to be harvested. In those pre-industrial days, the relationship between wages and unemployment was strikingly similar to the one seen since the recession of 2008.