The Guardian view on the Bank of England: keep the menopause out of economic theory | Editorial

Let’s talk about the economy without repeating misogynist myths

The economy, according to a newspaper headline, is “at a menopausal moment”. The deputy governor of the Bank of England, former Goldman Sachs banker Ben Broadbent, has been quoted as comparing the current slump in productivity to a similar, and much debated, spell of stagnation in the late years of Queen Victoria’s reign. This period was identified in 1952 by the economist Henry Phelps Brown as “the climacteric of the 1890s”. Broadbent, asked to explain what was meant by a “climacteric”, said that it was a biological word meaning “menopausal, but can apply to both genders … it means you’re past your peak, you’re no longer potent”.

And with that Mr Broadbent, to use another bodily metaphor, fell flat on his face. Anyone equipped with basic common sense, leave alone in possession of a prominent position in public life, ought to be ashamed of the claim that the menopause means that a woman is over the hill and lacks “potency”. Such ideas are, plain and simple, misogynist myths.

Continue reading…

Jeremy Corbyn mocks Theresa May over Brexit divisions in cabinet

Labour leader presses PM at question time for details of plan for customs deal with EU

Jeremy Corbyn has accused the government of being “in complete disarray” over its Brexit negotiations, using prime minister’s questions to warn that delays and uncertainty caused by cabinet divisions were risking jobs and investment.

Focusing on Brexit for a second consecutive week, the Labour leader lambasted Theresa May for being unable even to unite her ministers around a common plan, leaving her hopelessly exposed when it comes to talks with the EU.

Continue reading…

Carillion roasted over ‘rotten corporate culture’; Japan’s economy shrinks – business live

All the day’s economic and financial news, as MPs blast the ‘recklessness, hubris and greed’ that led to the collapse of UK outsourcer Carillion

Ben Broadbent, the deputy governor of the Bank of England, is facing heavy criticism this morning after declaring that the UK economy is entering a “menopausal” era.

Broadbent said the term applied by economic historians to describe such a slump was “climacteric”, which he said essentially means “menopausal, but can apply to both genders. You’ve passed your productive peak.”

His comments drew criticism on Twitter. Robert Peston, political editor of ITV, tweeted that Broadbent’s language was “sloppy and potentially offensive”.

Sloppy, empirically unsound and potentially offensive use of language by Bank of England deputy governor. There is no reason to think menopausal people are less productive or past their peak in any sense other than the bleedin’ obvious one

Splutter. Bank of England Ben Broadbent’s “menopausal economy” comment definitely brings out my inner Kate Reddy. Unintentional casual sexist ageism with yer cornflakes, anyone? Of course it might just be my age 😉

Ben Broadbent of The Bank of England used the “menopausal” metaphor for economies that were “past their peak and no longer so potent” – tell that to all the successful women over 50 #menopausalmoment

For all the talk of change at the Bank of England these comments by deputy governor Ben Broadbent about a “menopausal economy” reveal how little culture change Mark Carney has actually delivered …

“Mr Broadbent said financial experts used the ‘menopausal’ metaphor for economies that were past their peak.”

Mr Broadbent et al. clearly need to grow up and conjur up some less sexist economic jargon.

Deputy Bank of England governor talks about the economy being “menopausal”. Besides the offensively gendered language, this suggests economy’s woes are natural and unavoidable.

The body which governs Britain’s auditors has announced that it is making ‘good progress’ in its probe into Carillion.

Britain’s Financial Reporting Council is examining Carillion’s financial statements and audits over several years, to decide whether any disciplinary action is needed.

Given the clear public interest in this matter, the Financial Reporting Council (FRC) is providing an update on its investigation into Carillion. The main areas of focus for the investigations of KPMG’s audit of Carillion (2014 – 2017) and of two finance directors Richard Adam and Zafar Khan are: contract accounting; reverse factoring; pensions; goodwill and going concern.

Good progress with the investigation is being made by the FRC’s team of lawyers and forensic accountants.

Chronically passive, they do not seek to influence corporate decision-making with the realistic threat of intervention. Action is part of their brief. They require cultural change as well.

Labour MP Rachel Reeves, who chairs the BEIS committee, is calling for Britain’s Big Four accountancy firms to be broken up in the light of the Carillion crisis.

Today’s report concludes that the auditors failed to spot Carillion’s crippling financial problems because they were too focused on their own fees.

KMPG was paid £29 million to act as Carillion’s auditor for 19 years. It did not once qualify its audit opinion, complacently signing off the directors’ increasingly fantastical figures.

In failing to exercise professional scepticism towards Carillion’s accounting judgements over the course of its tenure as Carilion’s auditor, KPMG was complicit in them.

“The auditors should also be in the dock for this catastrophic crash.

“The sorry saga of Carillion is further evidence that the Big Four accountancy firms are prioritising their own profits ahead of good governance at the companies they are supposed to be putting under the microscope.

Carillion’s board lined their own pockets, boosting bonuses and dividends even when the company was on the brink of disaster. The thousands who lost their jobs and the small businesses facing ruin won’t thank them for rewarding their own failure.

We’ve gathered some of the best quotes from the report:

Related: What MPs said about the collapse of Carillion and its board

Former Carillion finance director Richard Adam isn’t best pleased with the MPs’ report.

Adam, who was FD between 2007 and 2016, says:

Despite retiring over a year before Carillion went into insolvency, I am deeply saddened by the events that have since overtaken the company.

The reasons for the collapse are clearly complex, however, I reject the unwarranted conclusions the Committees have reached concerning my role at the company.

You can read the full report here.

We have been examining what lessons can be learnt from the collapse of Carillion. Find out more here:

The MPs are especially critical of three top directors who steered Carillion towards its demise.

As the report puts it:

“The problems that caused the collapse of Carillion were long in the making, as too was the rotten corporate culture that allowed them to occur”.

Three Carillion directors singled out in an official report into the debacle of the company’s collapse – from @gillplimmer1‘s @FT rpt

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Four months after UK outsourcing group Carillion spectacularly collapsed, the people behind its demise are being held to account.

Carillion used aggressive accounting policies to present a rosy picture to the markets. Maintaining stated contract margins in the face of evidence that showed they were optimistic, and accounting for revenue for work that not even been agreed, enabled it to maintain apparently healthy revenue flows.

It used its early payment facility for suppliers as a credit card, but did not account for it as borrowing. The only cash supporting its profits was that banked by denying money to suppliers. Whether or not all this was within the letter of accountancy law, it was intended to deceive lenders and investors. It was also entirely unsustainable: eventually, Carillion would need to get the cash in.

A damning 100-page report compiled by two select committees, published today, found that directors prioritised senior executive bonus payouts and dividends for shareholders even as the firm neared collapse, while treating pension payments as a “waste of money”.

Frank Field, who chairs the work and pension committee, said: “Same old story. Same old greed. A board of directors too busy stuffing their mouths with gold to show any concern for the welfare of their workforce or their pensioners.”

Related: ‘Recklessness, hubris and greed’ – Carillion slammed by MPs

Emma Mercer is the only Carillion director to emerge from the collapse with any credit. She demonstrated a willingness to speak the truth and challenge the status quo, fundamental qualities in a director that were not evident in any of her colleagues.

Her individual actions should be taken into account by official investigations of the collapse of the company. We hope that her association with Carillion does not unfairly colour her future career.

Related: Whistleblower warned Carillion bosses about irregularities, MPs told

Carillion was the most spectacular corporate collapse for some time. The price will be high, in jobs, businesses, trust and reputation. Most companies are not run with Carillion’s reckless short-termism, and most company directors are far more concerned by the wider consequences of their actions than the Carillion board.

But that should not obscure the fact that Carillion became a giant and unsustainable corporate time bomb in a regulatory and legal environment still in existence today.

Continue reading…

Greenland ice cores track Roman lead pollution in year-by-year detail

Buried beneath the snow on Greenland’s surface, ancient layers of ice hold deposits of lead that originated at mines and foundries in ancient Rome. Fluctuations in the amount of ancient lead pollution that reached Greenland turn out to be a remarkably accurate way to trace the economic impact of wars, plagues, and imperial expansion in Classical Europe.

Lead might seem unexciting, but the classical world’s economy ran on it. “The Romans made extensive use of lead for water pipes and other elements of plumbing, weights, soldering clamps between ashlar blocks or columns in architectural construction, sheathing the hulls of some ships, etc.,” classical archaeologist Andrew Wilson of the University of Oxford told Ars.

The lead economy

In a much more direct way, the economy ran on silver: Roman currency was minted in silver coins called denarii. When smelting silver, adding lead to the crushed ore helps concentrate the silver. High-temperature smelting at around 1,200ºC, along with the process of separating lead from silver after the fact, released a lot of lead into the air over Southern Europe during Roman times.

Read 22 remaining paragraphs | Comments

UK employment hits record high despite slow economic growth

Regular pay is up by 2.9% on a year ago, which could make an interest rate rise more likely

The slowest economic growth in more than five years has failed to dent Britain’s jobs market, with the latest official figures showing a record employment rate in the first three months of 2018.

The Office for National Statistics said there were 32.34 million people in work in the first quarter of the year, an increase of 197,000 on the previous quarter and up by 396,000 on the first three months of 2017.

Related: Shoppers desert UK high streets, putting more jobs at risk

Continue reading…

UK bookies beware: US will look after its own in betting revolution

Legalisation of sports betting in US should be greeted with caution by UK operators

The estimate that $150bn-worth (£110bn) of sports bets are placed illegally in the US every year may be exaggerated but nobody doubts the true figure is enormous. That it is why it is mystifying that the US, or most of it, has held out so long against legalisation. Money – in the form of easy tax revenues – usually beats puritan scruples in the US.

Now, finally, the door has opened. The US supreme court has struck down the federal ban on sports betting, paving the way for a mini revolution. Each state will have to pass its own legislation and many may still confine betting to casinos and racecourses. Others, though, may allow betting via mobile phones, in which case large parts of the US could eventually look very European, and specifically British, in their approach.

Related: UK bookmaker values surpass £1.5bn as sports betting is set to be legal in US

Continue reading…

Why a rising dollar risks unbalancing the world outside the US | Mohamed El-Erian

The sharp shift in exchange rates destabilises emerging economies and threatens trade talks

Argentinian president Mauricio Macri’s government has asked the International Monetary Fund for a loan that it hopes can stem a peso rout that has driven up interest rates, will slow the economy, and threatens the reform programme. This reversal of fortune for the economy partly, though far from fully, reflects broader pressure created by the US dollar’s recent appreciation – a process that is set to accelerate, because both monetary policy and growth differentials are now favouring the US.

For a while now, the US Federal Reserve has been well ahead of other systemically important central banks in normalising monetary policy – that is, raising interest rates, eliminating large-scale asset purchases, and starting the multi-year process of shrinking its balance sheet. This was amplified this year by another catalyst of the dollar’s recent appreciation; a growing, and less favourable, divergence between economic data and expectations in the rest of the world.

Related: The UK economy’s slowdown is clear to all. Except the Bank of England

Continue reading…

When society’s safety net is shredded, the predators move in | Phil McDuff

In place of the ‘big society’ we were so fatuously promised, we have growing numbers of loan sharks and slumlords

It may be hard to believe, in the midst of a benefit sanctions regime that sees one in five universal credit applications turned down, and a “hostile environment” that directly led to the Windrush scandal, but most of the current Conservative government also stood at the 2010 general election with a campaign that centred on something called the “big society”. The idea was that the state, massive and overblown as it apparently was after years of Labour profligacy, was taking up too much space in people’s lives. Move the government out of the way and communities would step in to fill the gaps, giving it some of that old British blitz spirit, reinvigorating civil society along the way.

As with many Tory policies, this was based on the fantasies of people whose only interaction with the realities of the private rental market was checking the yields on their property portfolios. It’s a philosophy that contains a toxic mix of soft-focus nostalgia for a time that never was, and quasi-religious moralising that sees poverty not as a scourge to be eradicated but a tool for disciplining society’s undeserving into better behaviour.

Related: Loan sharks are circling, says one of UK’s biggest doorstep lenders

Related: We supported women with complex needs. What will they do now?

Continue reading…