Major tube upgrades shelved as TfL struggles to balance books

Capital’s transport authority faces shortfall due to Crossrail delays and government cuts

Plans to upgrade major parts of the London Underground will be put on hold after a decline in passenger numbers, government cuts and delays to the opening of Crossrail have left the capital’s transport authorities struggling to balance the books.

Related: Delayed Crossrail could cost almost £3bn more than planned

Related: TfL facing near £1bn deficit next year after journey numbers fall

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Retail data suggests UK political turmoil taking its toll this Christmas

Figures from John Lewis, Tesco and Sainsbury’s point to subdued consumer activity

Poor figures from John Lewis, and a slowdown at Tesco and Sainsbury’s has raised fresh concerns that the uncertain political climate is taking its toll on consumer confidence this Christmas.

December is the most lucrative time of the year for the retail sector but John Lewis said sales in its department stores fell by more than 5% last week. The picture from its fashion and homewares divisions was even weaker, with sales in both down by about 7%.

Maplin, Toys R Us and Jacques Vert have all collapsed in recent months, but several retailers and restaurant groups are facing financial problems and are trying to close stores or negotiate rent cuts.

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The labour market is thriving – but rates won’t be rising just yet | Larry Elliott

Despite high employment levels and good pay growth, Brexit uncertainty will weigh heavily on the economy for some time

Employment is at record levels. Firms are struggling to hire workers. Pay growth is back to levels last seen before the financial crisis of a decade ago. So what does the Bank of England do?

In normal circumstances, it would be a no-brainer. Some members of Threadneedle Street’s monetary policy committee would already be voting for an increase in borrowing costs and the City would be assuming action from the Bank in February. After all, at 0.75%, official rates are extremely low by historic standards.

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UK workers get biggest pay rise in a decade

Average weekly earnings rose by 3.3% in October despite jump in unemployment

British workers secured their biggest pay rise in a decade in the three months to October, despite a rise in unemployment that revealed cracks in Britain’s previously robust labour market ahead of Brexit.

Average weekly earnings, including bonuses, rose by 3.3% on the year, the biggest rise since July 2008 and comfortably beating a median forecast of 3% in a Reuters poll of economists.

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Brexit: MPs condemn ‘unrealistic’ government analysis

Treasury select committee also criticises failure to look at economic impact of backstop

The government kept MPs in the dark when it presented an overly optimistic assessment of its Brexit deal, rather than a realistic prediction of the final relationship, an influential committee of MPs has found.

The Treasury select committee, chaired by the former cabinet minister Nicky Morgan, found that the UK government had also failed to give adequate information on how the backstop mechanism would affect the economy.

A backstop is required to ensure there is no hard border in Ireland if a comprehensive free trade deal cannot be signed before the end of 2020. Theresa May has proposed to the EU that the whole of the UK would remain in the customs union after Brexit, but Brussels has said it needs more time to evaluate the proposal.

Related: Brexit chaos: what happens next?

This soft Brexit compromise has been championed by the former Conservative minister Nick Boles as a plan B for leaving the European Union if Theresa May’s withdrawal agreement is defeated in the Commons.

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George HW Bush was fiscally responsible – unlike Donald Trump | Jeffrey Frankel

The late president tried to tackle the budget deficit by doing a deal with Democrats to raise taxes

When George HW Bush was laid to rest last week, the encomiums appropriately remarked on his general decency and competence, which tended to be followed by a “but”. For journalists and historians, it is “but he was only a one-term president”. He lost the 1992 election, in part because of the recession of 1990-91. For his fellow Republicans, however, it is “but he broke with the legacy of Ronald Reagan by repudiating his ‘no new taxes’ pledge”. Bush’s electoral defeat was blamed on that supposed betrayal.

But Bush’s mistake was that he made that anti-tax pledge in the first place and stuck to it in the first part of his presidency. His courageous 1990 reversal on fiscal policy set the stage for a decade of economic growth that eventually achieved budget surpluses.

Related: Cryptocurrencies are like lottery tickets that might pay off in future | Kenneth Rogoff

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IMF warns storm clouds are gathering for next financial crisis

David Lipton says world is unprepared for downturn and Fund needs more resources

The storm clouds of the next global financial crisis are gathering despite the world financial system being unprepared for the next downturn, the deputy head of the International Monetary Fund has warned.

David Lipton, the first deputy managing director of the IMF, warned that “crisis prevention is incomplete” more than a decade on from the last meltdown in the global banking system.

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North-south economic divide set to narrow as Brexit hits London growth

Capital no longer growing at a much faster pace than the rest of the UK, report says

Slowing growth in London since the Brexit vote has put the British economy on track to narrow the north-south economic divide over the coming three years, according to a report.

The accountancy firm EY, despite warning of a weaker outlook for almost every region through to 2021 amid continuing Brexit uncertainty, said London would no longer continue to grow at a much faster pace than the rest of the country.

Related: Brexit vote has cost each UK household £900, says Mark Carney

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