Bank of England moves closer to August interest rate rise

For first time since joining MPC, Andy Haldane breaks ranks and pushes for rise

The Bank of England raised the likelihood of an August rate rise after its chief economist joined two other members of its rate-setting monetary policy committee in voting for an immediate hike in borrowing costs.

For the first time since joining the MPC four years ago, Andy Haldane broke ranks with the majority on the nine member rate-setting panel to join Ian McCafferty and Michael Saunders in calling for an increase in interest rates. The move is likely to heighten speculation that Threadneedle Street could be gearing up for an increase in two months’ time.

Related: Bank of England leaves interest rates on hold, but chief economist pushes for a rise – business live

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The right sees opportunity in a crisis. Why can’t the left? | Larry Elliott

Labour missed its chance for real change after the financial crash. Now it is in danger of flunking it on Brexit

In normal circumstances, John McDonnell’s plan to shake up the Bank of England would be creating quite a buzz in Labour circles. The proposal that Threadneedle Street should have a productivity growth target as well as one for inflation would be the biggest change to the way the Bank operates since it was granted the power to set interest rates by Gordon Brown in 1997. These, though, are not normal circumstances. The political focus is on whether the government can get Brexit legislation through parliament, not on whether it is possible to give the Bank the task of raising Britain’s long-term growth rate. As the second anniversary of the EU referendum approaches, McDonnell might think it is time to move on, but the left as a whole is having trouble doing so. That’s unfortunate but indicative of a deep, and politically dangerous, conservatism.

Related: Labour to propose Bank of England remit to boost productivity

Related: Enough Brexit fairytales. In the real world spending must increase | Phil McDuff

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Chancellor to promise a series of post-Brexit financial partnerships

Philip Hammond will use speech to outline a plan for striking deals outside the EU

The government plans to safeguard London’s position as the world’s leading financial centre after Brexit by signing a series of financial partnerships with non-EU countries.

Philip Hammond will use his keynote Mansion House to the City’s elite on Thursday to say that the government intends to strike deals outside of the single market that will make the UK a gateway to financial markets.

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Port of Dover warns of ‘regular gridlock’ in event of hard Brexit

Port’s head of policy says there will be serious congestion without a suitable trade deal

The port of Dover has warned there will be serious traffic congestion once a week in the town and on surrounding routes unless the government achieves a Brexit deal involving frictionless trade.

Richard Christian, the port’s head of policy, said there would be “regular gridlock” in Kent in the event of a hard Brexit, and disruption to freight traffic on ferries and Eurotunnel services would have a profound impact on Britain’s economy.

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Middle income households faring best since the crash, report finds

Swelling ranks of the UK’s pensioners joining middle earners have pushed median up, says IFS study

Middle-class households in the UK have seen their incomes grow more strongly than those at the top and bottom ends of the earnings scale during the years since the financial crash, according to the Institute for Fiscal Studies.

Between 2012 and 2017, the average income increased by 8% after taking into account inflation. For those in the bottom 10% of earners and those in the top 10%, incomes increased by just 4%, as those at the bottom were hit by benefit cuts and those at the top by tax rises and sluggish salary growth.

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Markets recover as China calls for calm over trade war – business live

All the day’s economic and financial news, as investors worry that Donald Trump could trigger a full-blown trade war with China

Sterling has hit a new seven-month low this morning, as the UK government faces another crunch vote over Brexit.

Parliament will vote on the EU withdrawal bill, the government’s flagship piece of Brexit legislation, later today. And one group of MPs are refusing to drop their demand for a ‘meaningful’ vote in the scenario in which Britain can’t agree a Brexit deal.

Related: Brexit: No 10 and rebels stand firm in row over ‘meaningful vote’

Those calming words from the People’s Bank of China are helping markets recover from yesterday’s rout.

In London the FTSE 100 has jumped by 80 points, or 1%, to 7683 (partly helped by a weaker pound).

On the trade front, we’re likely to see a two month ‘hibernation’ as the US works through the legal process for the next $200bn of tariffs and China awaits the US’ formal response.

The boss of Wall Street giant Goldman Sachs has predicted that China and the US still step back from a devastating trade wars.

That’s what you would do if it was a negotiating position, and you wanted to remind your counterparty just how much fire power you had to bring to the negotiation.”

“I don’t think we’re in a suicide pact on this…“I suspect we’re not going to cause the economies to collapse with Smoot-Hawley on steroids.

China’s stock market isn’t the only one flirting with a bear market.

After days of losses, the Philippines PSI index has fallen almost 20% from its recent peak.

Philippine stocks may fall into a bear market as early as today amid record streak of outflows of 23 straight days. $40 billion in value wiped out this year from the country’s biggest stocks

Donald Trump’s threat to impose more tariffs on China is dominating the newspapers across Asia today.

The China Daily newspaper – often a good window into Beijing’s thinking – has accuse the US of trying to hurt the Chinese economy.

“Faced with this heightened intimidation from the U.S., China has no choice but to fight back with targeted and direct measures aimed at persuading the U.S. to back off, since it appears that any concessions it makes will not appease the Trump administration, which wants to suck the lifeblood from the Chinese economy.”

“Beijing will have to ensure that Washington is aware that there will be heavy price to pay every action it strikes against China if it is to avoid being a victim of the Trump administration’s growing blood lust.”

A raging fever of nationalism rising in the world’s sole super power sends an alarming signal. Nationalism is a challenge to globalization. Rising nationalism and protectionism could hinder the process of globalization and jeopardize the world order.

The US often points an accusing finger at alleged economic nationalism of other countries including China, but now, the reality is that Trump’s truculent nationalism is posing the biggest threat.

Epic trade-war front page from Apple Daily

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

Related: Stock markets roiled as US-China trade dispute escalates

“China still has good economic fundamentals and resilient growth. The yuan is one of a few currencies that have appreciated against the US dollar this year.

“I’m fully confident about the health of China’s capital market based on the fundamentals.”

Shanghai Composite bouncing after a brutal Tuesday; trading close to the bubble burst lows… not a lot going right for #China at the moment.
Obviously this presents downside risks, but one question is where is the pain point for them to launch a new stimulus package?

Shanghai Composite bouncing after a brutal Tuesday; trading close to the bubble burst lows… not a lot going right for #China at the moment.
Obviously this presents downside risks, but one question is where is the pain point for them to launch a new stimulus package?

#China | PBOC Governor Yi Gang says China share price drop on Tuesday were mainly emotions …nailed it.

Global GDP could stand to be hit by 2% – 3% should the trade war continue and spread, to put this into context the Great Recession wiped out 6% of the global GDP, so this trade spat is by no means insignificant.

For weeks the market has been relatively complacent that Trump’s tough protectionist rhetoric were merely a negotiating tool; however, the realisation that the US President is willing to go ahead with his threats has sent a shiver through the markets.

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What happens when ordinary people learn economics? | Aditya Chakrabortty

In Manchester, groundbreaking economics courses are giving locals the means to challenge some of society’s received wisdom – for free.
• Listen to Aditya Chakrabortty talking about game-changing economic models on The Alternatives podcast

In a makeshift classroom, nine lay people are battling some of the greatest economists of all time – and they appear to be winning. Just watch what happens to David Ricardo, the 18th-century father of our free-trade system. In best BBC voice, one of the group reads out Ricardo’s words: “Economics studies how the produce of the Earth is distributed.”

Not good enough, says another, Brigitte Lechner. Shouldn’t economists study how to meet basic needs? “We all need a roof over our heads, we all need to survive.” Nor does the Earth belong solely to humans. Her judgment is brisk. “Ricardo was talking tosh.”

Related: The town that refused to let austerity kill its buses | Aditya Chakrabortty

Related: The shopping centre where the currency is hope | Aditya Chakrabortty

Has you or your community come up with answers to doing things differently? If so we’d like to hear from you.  Share your stories via this form and we’ll be in touch. 

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Labour to propose Bank of England remit to boost productivity

John McDonnell will call for major changes to UK’s financial system based on broad review

The Bank of England could be given a mandate to boost productivity growth under a Labour government as part of opposition plans to overhaul the country’s “economic architecture”.

Revealing the findings from a review of the UK financial system, the shadow chancellor, John McDonnell, will on Wednesday make the case for a fundamental transformation that could include a revamp of the Bank’s remit in order to help drive economic growth.

Related: Government urged to use RBS majority stake to veto branch closures

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