Pets and package holidays – how over-65s drive UK consumer spending

Household expenditure on cars, holidays and pets drives recovery but signs emerge of a slowdown

Spending by British households has returned to its pre-financial crisis levels in real terms, driven by purchases of cars and spending by older consumers on package holidays and pets.

Figures from the Office for National Statistics showed average weekly spending in the UK rose to £544 in the financial year ending March 2017, an increase from £533 the previous year. Transport and recreation were the two categories where expenditure increased the most, rising by about £5 on average per week.

Inflation is when prices rise. Deflation is the opposite – price decreases over time – but inflation is far more common.

Related: The economics of retirement: the power of pensioner spending

Continue reading…

Brexit is hampering UK productivity, says Bank policymaker

Silvana Tenreyro, a member of the bank’s monetary policy committee, said firms will delay investment due to uncertainty

The uncertainty caused by Brexit is deterring companies from investing and hampering Britain’s ability to close its productivity gap with other leading developed countries, a Bank of England policymaker has warned.

Silvana Tenreyro, one of the nine members of Threadneedle Street’s monetary policy committee (MPC), which sets UK interest rates, said 75% of the decrease in growth of output per worker since the financial crisis a decade ago was due to manufacturing and financial services, but that a period of catch-up was feasible.

Productivity is an economic measure of the efficiency of a workforce. It typically measures the level of output per hour of work, or per worker.

Continue reading…

UK productivity jumps at fastest rate for six years

Fewer people working fewer hours but creating same output explains surprise gain but productivity remains well below pre-financial crisis trend

The productivity of British workers has increased at the fastest rate in more than six years, handing the government a rare boost in correcting one of the biggest problems facing the UK economy.

Labour productivity, or the rate of growth in economic output per hour worked, grew by 0.9% in the three months to September 2017, the Office for National Statistics said. Economists said the jump came thanks to stronger growth in factory output, weaker jobs growth and the UK economy generating broadly the same amount of output for fewer hours worked.

Productivity is an economic measure of the efficiency of a workforce. It typically measures the level of output per hour of work, or per worker.

Related: UK’s poorest to fare worst in age of automation, thinktank warns

Continue reading…

Bankers work around the clock to iron out EU finance reforms

New MiFID II rules seek to apply lessons from financial crisis and aim to force banks to report details of trillions of euros in transactions

Bankers will work through the night to iron out last-minute hitches before Wednesday’s launch of a major change to European Union financial markets that aims to apply lessons from the financial crisis nearly a decade ago.

The new rules are already a year late due to their complexity, with regulators having to issue 11th-hour guidance to banks and financial firms to avoid freezing up trades as well as calming nerves of those not yet fully compliant.

Related: Complacent regulators have two years to prevent a financial crash

Related: Financial markets could be over-heating, warns central bank body

Continue reading…

Complacent regulators have two years to prevent a financial crash

Outside Brexit Britain, the view looks rosy and borrowing is being pushed to new highs. What could go wrong? Almost everything

There is a complacency in the air as we stumble into 2018. Global economic forecasts are coated with sugar. Stock markets keep heading skywards and borrowing is at an all-time high. Brexit may be a brick through the window of the UK’s economic outlook, but for the rest of the developed world, the view is decidedly rosy.

Such is the exuberance among those with plenty of spare cash that there is a return of borrowing with the sole purpose of betting on stock market gains. To this end, investors are using any asset to hand – their house, their pension or their deposit savings – to get a boost from the alpha funds that promise stellar returns. Bitcoin is another feature of this relaxed attitude to risk. Who needs safety nets when there is no prospect of a fall? It’s not hard to see why the picture looks so rosy and why it is likely to conclude with an ugly denouement.

Continue reading…

Heretics welcome! Economics needs a new Reformation | Larry Elliott

Neo-classical economics has become an unquestioned belief system and treats those challenging the creed as dangerous

In October 1517, an unknown Augustinian monk by the name of Martin Luther changed the world when he grabbed a hammer and nailed his 95 theses to the door of the Castle Church in Wittenberg. The Reformation started there.

The tale of how the 95 theses were posted is almost certainly false. Luther never mentioned the incident and the first account of it didn’t surface until after his death. But it makes a better story than Luther writing a letter (which is what probably happened), and that’s why the economist Steve Keen, dressed in a monk’s habit and wielding a blow up hammer, could be found outside the London School of Economics last week.

Related: Philip Hammond must ditch deficit reduction and invest. But he won’t | Larry Elliott

Continue reading…

UK banks join multinationals in pledge to come clean on climate change risks

Mark Carney says big six British banks have joined global initiative for firms to disclose climate change exposure and pave way for low-carbon economy

Bank of England governor Mark Carney has announced growing global support for a new initiative designed to help pave the way to a low-carbon economy by persuading firms to come clean about their exposure to climate-change risks.

Speaking at the One Planet Summit in Paris, Carney said he was delighted that 237 companies with a combined market capitalisation of $6.3tn were now backing the scheme.

Related: Insurance giant Axa dumps investments in tar sands pipelines

Related: Banks should disclose lending to companies with carbon-related risks, says report

Continue reading…

China’s debt levels pose stability risk, says IMF

Health check of financial system says reforms have not gone far enough and notes similarities to US before 2008 crisis

Fears that China risks being the cause of a fresh global financial crisis have been highlighted by the International Monetary Fund in a hard-hitting warning about the growing debt-dependency of the world’s second biggest economy.

The IMF’s health check of China’s financial system found that credit was high by international levels, that personal debt had increased in the past five years, and that the pressure to maintain the country’s rapid growth had bred an unwillingness to let struggling firms fail.

Related: IMF warns China over ‘dangerous’ growth in debt

Related: Adani coalmine project: China Construction Bank won’t grant loan, PR firm says

Continue reading…