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.

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Brexit could cost Scottish economy £16bn a year – report

Nicola Sturgeon says updated analysis strengthens case for UK staying in the EU single market

The Scottish economy faces losing up to £16bn a year as a result of leaving the EU, according to a Scottish government forecast.

The updated analysis warns that a hard Brexit, in which the UK falls back on World Trade Organisation trading rules, would cost Scotland up to £12.7bn and cause real household incomes to fall by 9.6%, or £2,263 a head.

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Are we heading for another developing world debt crisis? | Larry Elliott

Western bank loans for projects in Africa were to be paid off via rising commodity prices. At least that was the theory …

Global interest rates are rising. Poor countries are finding it tough to pay back money borrowed from banks in anticipation of a commodity windfall that never materialised. Stir in some dirty dealing that has seen funds stolen and what do you have? That’s right: the makings of another debt crisis.

Poor country debt was supposed to have been sorted back in 2005, the year the Guardian changed from a broadsheet to its Berliner format. Now, 13 years later, we are changing format again and debt is back albeit in a different form. Last time, the focus was on public debt, money that poor-country governments owed to the International Monetary Fund, the World Bank and individual rich nations – and which was mostly forgiven as a result of the Gleneagles G8 agreement in 2005. These days, the issue is private-sector debt and while as yet only a handful of countries – mostly in sub-Saharan Africa – are in serious trouble, the warning signs are there. The IMF and the World Bank both know it.

Related: Why should Somalia’s children starve to pay for a debt crisis they didn’t create? | Kevin Watkins

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Trump-Trudeau love-in threatened as Canada attacks US over trade

After months of trying to get Trump on side, Canada ‘drops the gloves’ by filing trade complaint – but will the decision merely inflame economic tensions?

The charm offensive was already under way before Donald Trump moved into the White House. By inauguration, Justin Trudeau’s top advisers had fostered close contacts with Trump’s inner circle, setting the stage for a Washington visit peppered with smiles, handshakes and photo ops.

But this week relations between Canada and the US seemingly struck a different note, as news broke that Ottawa had launched an all-out trade war against Washington.

Related: Canada v Mexico: Trump seeks to divide and conquer in Nafta negotiations

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Brexit: UK could lose half a million jobs with no deal, says Sadiq Khan

Analysis commissioned by London mayor predicts ‘lost decade’ of slump and lower employment with hard Brexit

A no-deal Brexit could cause the UK to lose half a million jobs and nearly £50bn in investment by 2030, according to an economic forecast commissioned by the mayor of London, Sadiq Khan.

The report, which models five possible scenarios for leaving the EU ranging from a near-status quo situation to leaving on World Trade Organisation terms without any transition agreement, warns that the worst option could be a “lost decade” of economic slump.

Staying in the single market and customs union

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World Bank issues warnings on interest rates and inflation

After better than expected growth in the global economy, Bank says financial markets are vulnerable to unforeseen negative news

Financial markets are complacent about the risks of sharply higher interest rates that could be triggered by better than expected growth in the global economy this year, the World Bank has warned.

The Washington-based organisation said that much of the rich west was running at full capacity as a result of a broad-based upswing in activity, but were now vulnerable to a period of rising inflation that would prompt action from central banks.

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

Lenders have already bumped up the cost of fixed rate mortgages ahead of the Bank of England’s decision to raise base rate from 0.25% to 0.5%, and mortgage borrowers on tracker and variable rates will see their monthly payments become more expensive in the coming days. ​

Related: A record-breaking year – the global economy in 10 charts

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German industrial output and exports surge as economy strengthens – business live

All the day’s economic and financial news, including new German trade data and Christmas trading figures from UK retailers Morrisons and Majestic Wine

European stock markets have opened higher, with the jump in German industrial production cheering traders.

European markets are trading higher as investors have reacted to positive German industrial data. The number was simply astonishing, and it printed the reading of 3.4% when the market was expecting a number of 1.8%.

The surge in German industry (+3.4%) over November is impressive, but remember it comes after 2 very weak months. Sector now looking at a positive Q4, in line with Q3. Should boost GDP growth for the 6th consecutive quarter.

Germany’s factory sector has staged a “strong comeback”, says analyst Carsten Brzeski of ING.

He points out that these industrial production figures have been volatile – but the trend is positive, suggesting Germany isn’t being held back by pick-up in the euro exchange rate.

Germany: November data confirm strong final quarter performance | Snap | ING Think – Surging industrial data suggest that the German growth party continued in the fourth quarter of 2017.

We also have new German trade figures – and they’re also stronger than expected.

German companies grew their exports by a sparkling 4.1% in November, well ahead of forecast of a 1.2% gain.

On an annual basis, German industrial output growth hit a six-year high.

Here’s another #EUROBOOM chart!
Germany industrial production rose 5.6% YoY in November, the biggest gain since August 2011.

Germany’s economy has smashed forecasts this morning, with a big jump in factory output.

German industrial production rose by 3.4% in November, new figures from statistics body Destatis show. That’s the biggest monthly rise since September 2009, suggesting Europe’s largest economy picked up pace late last year.

Within industry, the production of capital goods increased by 5.7% and the production of consumer goods by 3.6%. The production of intermediate goods showed an increase by 3.0%.

Energy production was down by 3.1% in November 2017 and the production in construction increased by 1.5%.

Germany industry parties on! November industrial production with largest monthly gain since September 2009 at +3.4% mom. Even accounting for weak October industry is currently key cyclical driver.

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

Today, we’ll find out if supermarket chain Morrisons, drinks business Majestic Wine and floorings business Topps Tiles were festive winners and losers, as they report their Christmas trading figures. Housebuilder Persimmon is also updating the City.

Updates this morning from Ferrexpo (Q4 Production), Joules, Majestic Wine, Persimmon, Robert Walters, Safestore, SIG, Stock Spirits, Topps Tiles, WM Morrison

May’s big day:
-more a rebellion
than a reshuffle
Tomorrow’s Guardian

#UK Cabinet reshuffle doesn’t feel very impressive to me. Can’t see it changing to tone much when all the big roles remain unchanged. And there was ample reason, based on performance, to move some people. Too weakened to take them on?

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US job growth slows as economy adds modest 148,000 December jobs

  • Figure comes in below expectations and jobless rate holds steady at 4.1%
  • Lack of hiring has slowed and wages continue to lag behind growth

The recovery in the US jobs market slipped in December, adding 148,000 new positions over the month, below forecasts, as the retail sector shed 20,000 jobs over the holiday season.

The headline numbers suggest that the jobs market remains strong. The labor department announced that the unemployment rate held steady at 4.1% in December, close to a 17-year low.

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