Deputy prime minister warns that spending cuts will have an 'uneven' effect across the country, but says the government is 'laying the building blocks' to rebalance the economyNick Clegg, the deputy prime minister, warned today the economic recovery would be "choppy" and "uneven" because of the way spending cuts will hit different parts of the country.Clegg sought to allay anxieties by insisting the government was laying the "building blocks" to prevent communities suffering from spending cuts.But he warned that it would "take time" for the government to achieve a rebalancing of the economy to make it less dependent on public sector jobs.The deputy prime minister conceded the uneven effects of cuts as research released today suggests that the towns and cities in England's industrial...

MPC likely to deliver 18th consecutive interest rate hold at 0.5% and maintain QE at £200bnSigns of a weakening recovery are expected to see the Bank of England deliver its 18th consecutive decision to hold interest rates today.The Bank's policymakers will give their latest verdict at noon as recent economic indicators led to fears of a double dip recession.Economists widely expect the nine-strong monetary policy committee (MPC) to keep rates at 0.5% and to maintain its quantitative easing (QE) programme at £200bn, with members torn between the pressures of stubbornly high inflation and faltering growth.The MPC has left rates unchanged at their historic low since March 2009.But a split was emerging among members, with above-target inflation leading Andrew Sentance to vote for a...

There's an idea, not a new one by any means, doing the rounds that investment banking and retail banking should not done by the same firm because the risky "Casino" bank could pull under a "safe 'n boring" retail bank, and this is the main objection to Bob Diamond's promotion from running BarCap to running Barclays PLC. Never mind that Bob Diamond's business kept Barclays out of the grubby maw of Government - he's the "Unnacceptable face of the Bonus culture".It may seem obvious that investment banking is risky, but the evidence does not back this analysis up at all. Nowhere did investment banking losses pull a retail bank down, or requrire one to take government bail-out money: let's look at the UK banking sector: Lloyds TSB: Safe, solvent, straighthforward Retail bank, until it was...

The Opinions of Tobias Grubbe is published at this window. His patron is Journalisted where you may Read All About Them. Related Posts:The Opinions of Tobias Grubbe : 24th May 1710The Opinions of Tobias Grubbe 5th July 1710The Opinions of Tobias Grubbe: 7th June 1710The Opinions of Tobias Grubbe – 31st August 1710The Opinions of Tobias Grubbe : 1st June 1710Powered by Contextual Related...

Switched.com clued me into the story of Craig Henderson. In 1984, Henderson developed a sporty looking eco-car which required very little power to push it along and some slippery composite body work. Henderson’s car called Avion reaches back into automotive history where sport cars from the likes of Lotus and Abarth paired small engines with slippery body work to come up with decent performance. Not surprisingly, at the time auto-makers and investors didn’t realise what they had on their hands, it was a decade since the last real oil crisis and whilst Iran and Iraq where knocking seven bells out of each other and taking pot shots at tankers in the Straits of Hormuz now-and-again life was pretty good. Environmental concerns were more about Three Mile Island, nuclear annilation...

You're walking home late at night. You nip down an alley, a short cut home you know.Suddenly you realise that you're surrounded. Hoodies! Both behind and in front. Your way is blocked by these hugging ruffians forming a giggling wall.One steps forwards, takes his monocle out and delicately places it in his pocket. You realise with horror he is holding a baseball bat. He grins."Face or balls?" You gape at him as he swings the bat. "Come on old boy, face or balls?"Months later in court the prosecution are grilling the thug in the dock. Sadly he shakes his head."He told me to whack him in the balls. I didn't want to - that was his choice!"Would it stand up in court? No. He'd be sent down. Sometimes there's no right answer because the it's the question that's the...

As a piece of personal-positioning-cum-political-mischief-making, this article by Boris Johnson is well worth a read. In it, he...casts doubt on the coalition economic strategy, perhaps anticipating it backfiringendorses Ed Balls as the most competent leader for the oppositionapplies a serious dig to both of the favourites for that jobunderlines his position as candid friend to The CityThere's lots to pick from there (read the whole thing) but this bit is worth repeating:"...the People's Party is on the verge of making a historic mistake. They are about to elect one of the two Miliband brothers as their leader, when neither of these perfectly amiable north London intellectuals has ever said anything memorable about...

President on the road to persuade voters economy is safe in his hands, ahead of elections expected to be tough on DemocratsBarack Obama is launching a campaign to persuade American voters that the ailing US economy is safe in his hands, ahead of November's mid-term elections in which the Democrats are expected to receive a drubbing.The president chose Milwaukee, a city in the manufacturing heartlands and home of the motorbike firm Harley-Davidson, to unveil a $50bn (£32bn) infrastructure package designed to boost jobs by investing in roads, railways and airport runways.White House officials presented the scheme as a jump-starting of the economy that would put construction workers, welders and electricians back to work.The speech is an indication that Obama intends to focus almost...

My first one and I see Boris Johnson, the Mayor of London more or less agrees. Related Posts:Drawing: Cat and Wheelie Bin cartoonBoris Johnson is Mayor of London cartoonCartoonists for Johnson!All politicians like to associate themselves with success…Caricaturists and characters – Sarah Palin and Boris JohnsonPowered by Contextual Related...

This lot only cost four quid! Listen to this...

About 54,000 jobs lost, far fewer than the 100,000 expected, easing fears of a second US recession Barack Obama pledged to bring forward a raft of fresh measures to boost American jobs growth after the White House received a fillip from better-than-expected employment figures for August.Seeking to put pressure on Congress to provide an additional stimulus for the struggling US economy, Obama said he was looking at tax breaks to encourage businesses to hire labour, as well as infrastructure programmes, investment in green energy and an extension of middle-class tax cuts."I will be addressing a broader package of ideas next week," he told reporters in the White House Rose Garden after the eagerly-awaited non farm payrolls for August showed a drop of 54,000, half the drop that Wall Street...

Some interesting reading for the weekend here from the New Economics Foundation: The Great Transition (pdf) Of particular interest to readers of this blog may be the chapter -The Great Localisation and Engagement- which argues for the re-localisation of our democracies and economies (pages 56-66)....

The survey, which includes businesses from hairdressers to banks, showed the service sector growing at the slowest pace since April 2009Growth in Britain's service industry has slowed sharply as employers have scaled back hiring in the face of the gloomy economic outlook and looming public spending cuts.A key survey of the sector, which includes businesses from hairdressers to banks and makes up two-thirds of the economy, showed it growing at the slowest pace since April 2009 and revived talk of a double dip recesssion. "Should the surveys continue to weaken in the next few months, the threat of a renewed contraction [in GDP] in the fourth quarter and beyond would become very real indeed," said Jonathan Loynes at Capital Economics.Alan Clarke at BNP Paribas concurred, saying the report...

I attended a friendly 'organising meeting' for the Coalition of Resistance this evening which was put on to help organise both for the conference in November and help bring together a network of anti-cuts activists. Although it started the latter there wasn't much movement on the former, but perhaps that was an impossible task with so many people at the first such meeting.Roughly one hundred and fifty people squeezed into the basement of Birkbeck College all of one common purpose - to oppose the economic policy of the government and make a modest start at organising that resistance.Contributions by the likes of Paul Mackney (former union leader), Lindsey German (Stop the War Coalition), Dot Gibson (National Pensioners Convention), Lee Jasper (all round live wire) and others gave...

David and Ed Miliband distance themselves from former PM's statement of support for coalition's deficit strategyCandidates for the Labour leadership moved tonight to limit the impact of politically explosive remarks in Tony Blair's memoirs in which he backed the economic strategy of the Conservative-led coalition government.Blair shook the party with his backing of David Cameron and George Osborne's economic strategy to cut the financial deficit. Blair also backed the government's decision to raise VAT, which Gordon Brown vehemently warned against throughout the election campaign."If governments don't tackle deficits, the bill is footed by taxpayers, who fear that big deficits mean big taxes, both of which reduce confidence, investment and purchasing power," Blair wrote, in sharp...

Former Prime Minister Tony Blair - Author of The Journey Related Posts:Before and after the SpeakerMPs expenses cartoon – official versionLet’s go global summitsPresident of the Council BlairChannel 4 newsPowered by Contextual Related...

Acceptance of inequality rests on assumptions that 'free markets' make us all richer in the end. Growth figures tell it differentlyAs Nick Clegg fends off accusations of selling out and Labour leadership candidates set out their stall, debates about inequality show no sign of going away. But the moral arguments are rarely extended far enough, and virtually no politician challenges a basic, erroneous premise that inequality is a price worth paying for a more efficient market system that enriches us all.The simplistic, free-market view of the Thatcher-Major era said equality of opportunity is all we need for a fair society. If no one had their market participation blocked, the result, however unfair it may look to some, should be accepted as fair. Today many people, both on the left and the...

Yesterday Danny Alexander told the Observer: "I think the tax burden is necessary as a significant contribution to getting the country's finances in order ... So it will have to stay at that level for quite some time."But is that too optimistic?For some time Michael Portillo has been saying on This Week that he believes if will be difficult politically for the Coalition to make spending cuts on the scale it is planning.If that is right, and cutting the deficit remains the priority, then not only will there be no tax cuts, tax rates will have to...

Markets rally as Federal Reserve chairman tells conference "the committee will use its tools as needed" to support recoveryUS central bank boss Ben Bernanke today vowed to step in to prop up a fragile US economic recovery if needed as he conceded growth had been weaker than the Federal Reserve had expected.Amid growing talk that the world's largest economy is headed for a double-dip recession, the Federal Reserve chairman said that the recovery around the world still had a long way to run and that unemployment remained "too high". But the US central bank was ready to help if needed, Bernanke said in his speech at the Jackson Hole symposium of central bankers in Wyoming.His remarks helped stock markets rally as they looked to the Fed to pump money into the US economy, although they had...

CBI survey reveals retail sales growing at fastest rate since April 2007, boosted by price reductions and warm weatherRetail sales are growing at the fastest pace in three years, boosted by summer sales, warm weather and the school holidays.The Confederation of British Industry's (CBI) monthly survey of retailers showed the sales balance rising unexpectedly this month to 35 from 33 in July, marking the highest reading since April 2007. City economists had expected the balance to fall to 20."Better sales growth continued in the high street in early August, and retailers are upbeat about prospects in the coming three months," said Lai Wah Co, head of economic analysis at the CBI."The summer sales, some warmer weather and the school holidays will no doubt have helped, lifting sales of...

Related Posts:The Opinions of Tobias Grubbe – 9th August 1710The Opinions of Tobias Grubbe – 2nd August 1710The Opinions of Tobias Grubbe – 23rd August 1710The Opinions of Tobias Grubbe – 16th August 1710Drawing: UK General Election 2010Powered by Contextual Related...

A record 27% slump in July home sales has intensified fears of a US double dip recessionFears intensified today that the US was heading for a double dip recession that could reverberate around the world after figures showed American home sales slumped twice as fast as expected last month to a 15-year low.The Dow Jones industrial average fell through the psychologically important 10,000 level and the FTSE 100 was also down sharply as global markets were rattled by news that sales of previously owned US homes dropped by a record 27.2% last month. The gloomy numbers intensified worries in the UK that it could be headed for its own double-dip after a stark warning to that effect from a Bank of England policymaker.In the latest of a slew of downbeat reports on the US economy, the National...

I recently finished reading Union Atlantic, a debut novel by Adam Haslett – another book from Amazon’s Vine programme.  I was a bit underwhelmed by it. To be fair, this might be partly due to my lack of sympathy for extraordinarily wealthy bankers who jeopardise the whole economy to make even more profit, though the book is not especially sympathetic to the main character.  It seems quite neutral towards him really. The story concerns a veteran of the first Gulf War, who is now a senior executive at a Boston-based bank.   He finally decides to spend some of his money by building a huge house he doesn’t really seem to want or need.  His new house comes with a neighbour, a retired history teacher, who doesn;t like either the house or what it represents.  She starts a...

Tax rises in the emergency budget and the upcoming spending review have dented firms' confidence from earlier in the year, according to a surveyThe economic recovery looks set to slow down during the second half of the year following a fall in confidence among businesses, research indicated today.Nearly a fifth of businesses now feel less confident about the coming year than they did during the second quarter, according to accountancy body ICAEW and accountants Grant Thornton.The groups said the coalition government's emergency budget, which set out a range of tax rises, and the looming comprehensive spending review, had taken its toll on firms' confidence.The renewed caution among companies caused the groups' business confidence index to drop back four points during the third quarter to...

I can't recall exactly where in our flat the saying was. I think there was a paperweight – perhaps in a multi-sided geometrical shape – with a number of catch-phrases and sayings. When I first read it, I was too young to work out what it meant. I spent ages puzzling over the words: “Work is the curse of the drinking class.” Apparently it was a joke that I couldn't understand.I suppose the joke played on too many assumptions: that work is a good thing, that the working class are seen (especially by the rich) as idlers, that drunkenness is a working-class problem and that the working class live feckless lives dedicated to the pursuit of pleasure. If someone had explained all that to me then, I'd have been politely incredulous. I could see that my parents worked hard and that...

This is one of my articles on iuhuru.comThe UK is experiencing something new – a real coalition in government. It is producing some interesting ideas and initiatives after so many years of New Labour, the party now in search of a leader. Before the election we knew that the real problem was the budget deficit.Economies are necessary. Government borrowing is out of control. We even subsidised banks for fear of financial collapse. The big battle as ever is where the cuts come and who is to pay more. With an increase in VAT we will all pay more in indirect taxes. My pay slip shows I pay over a quarter of my income in direct taxation. Nearly another quarter is taken by indirect taxation.Two areas for economies I favour have yet to be tackled. First, the growth of the public sector. People...

I was very impressed by the Camden New Journal this week that published a veritable essay by Natalie Bennett on why we need to modernise the economy with a Green New Deal.Natalie is clearly a 'deficit denier' because she argues that "We need a Green New Deal – a major investment package to rapidly modernise the UK economy for a low-carbon future, while seeing off the recession through large-scale job-creation."It's sickening to watch as the government attempts to deal with the deficit by undermining the entire basis of the economy. By turning taxpayers who are doing productive work into unemployed benefit claimants they're not just causing a host of personal tragedies they're also hitting the public services that the poorest need most.The government like to talk about a low carbon...

Quaequam Blog! wakes up and points out the ridiculous position Labour has got itself into on public services: "Labour pledged at the last election to halve the deficit within four years; the coalition plan to half the deficit within three years. Labour planned a 70:30 cuts:tax rises package and conspicuously didn’t rule out raising VAT; the Coalition plan a 77:23 cut:tax rises package which includes raising VAT. While the Coalition’s cuts are undeniable steeper than what Labour intended, Labour has made it clear that they oppose number of cuts to non-frontline services that the Coalition is introducing – specifically by scrapping the National Identity Register, ContactPoint and prison places. These ringfenced spending plans would have to be paid for out of increased cuts to...

The arguments over the usefulness of speed cameras are eternal and reveal politics at its most truthful. It’s all about what happens on your doorstep, or, on your local roads. There are endless metaphorical speed cameras for politicians and the ones I look at tell me these four are speeding. Drawing © Matt Buck Hack cartoons : George Osborne, David Cameron, Nick Clegg and a fourth passenger. Reading: Joseph Stiglitz in The Financial Times (registration may be required). Reading: Reports of former Chancellor Alastair Darling’s speech at the Donald Dewar Lecture this week Reading: Bank of England August report on interest rates and the failure to keep inflation inside the target range. The exchange of letters between Chancellor George Osborne and Governor Mervyn King are, at least...

As if Krugman couldn't be any more of a self-serving arsehole in providing Nobel Laureate cover for people who think that extra state spending somehow stimulates and economy, people who call themselves 'Keynsians' but who would never advocate running a surplus during the good times as Keynes thought necessary for a stimulus to work during recession; now he's giving ammunition to the people who are advocating the policy that caused the Great Depression: Protectionist trade war.China is following a policy that is, in effect, one of imposing high tariffs and providing large export subsidies — because that’s what an undervalued currency does. Of course what this also does is deny Chinese labourers the benefits of their labour. They are kept poor, so that Americans can have cheap...

Monetary policy committee minutes show Bank debated small rate rise to combat inflation, but most members unconvinced The Bank of England's rate-setting committee remained split in August over keeping borrowing costs at a record low with Andrew Sentance again voting for a rise.Minutes from the meeting, when rates were left at 0.5%, showed the monetary policy committee (MPC) weighed arguments for tightening policy and for loosening it. Members considered recent surveys suggesting growth may slow in coming months and signs that there was plenty of spare capacity in the economy to help keep inflation in check as well as some pressure from George Osborne's June budget.But they also discussed "arguments in favour of a small increase in bank rate from its exceptionally low level".The minutes...

• Japan's economy grew just 0.4% a year in second quarter • Figures spark concern over cooling demand in Asia• Japan facing ageing population and a strong yenJapan lost its place as the world's second-largest economy to China in the second quarter as receding global growth sapped momentum and stunted a shaky recovery.Gross domestic product grew at an annualised rate of just 0.4%, the Japanese government said today, far below the annualised 4.4% expansion in the first quarter. The news added to evidence that the global recovery is facing strong headwinds.The figures underscore China's emergence as an economic power that is changing everything from the global balance of military and financial power to how cars are designed. It is already the biggest exporter, auto buyer and steel...

An embarrassment to his UniversitySometimes you come up against the block-headed idiocy of the left. They just believe that if the dastardly "rich" would just pay more, and ever more, then all would be good. Despite all the evidence to the contrary, there is no persuading these people. But when the evidence comes from a Professor of Sociology, Anthropology and applied Social Science at the once respected University of Glasgow in the form of an article which he apparently considered sufficiently good for him to consent to have it published, and not only published but published under his own name where it might even be seen, it not only demonstrates the complete descent of Scotland into an irredeemable socialist hell-hole from which it will never recover, but also the sharp decline of...

• Germany reports 2.2% growth in second quarter • Figure is fastest speed since country reunified• French economy also shows stronger than expected expansionThe German economy grew at its fastest pace in the second quarter since the country was reunified two decades ago, thanks to a recovery in construction and strong foreign demand for German goods.Europe's largest economy powered ahead between April and June, growing by 2.2%, the Federal statistical office, Destatis, reported today. This was well above market expectations of 1.4% growth. Growth in the first quarter was revised higher to 0.5% from 0.2%."Such a quarter-on-quarter growth has never been recorded before in reunified Germany," Destatis said. The surge prompted economy minister Rainer Brüderle to say growth of well...

Bank governor Mervyn King says business and consumer surveys have weakened 'quite markedly'The Bank of England has cut its growth outlook for the UK economy, citing shaky business and consumer confidence, tight bank lending and the government's spending cuts.The central bank's warning that Britain faces a protracted and "choppy recovery" came as official data showed a sharp rise in long-term unemployment and a smaller than expected fall in the number of people claiming jobless benefits.The Bank's latest quarterly inflation report this morning suggested times will remain tough for many months to come and that it is in no hurry to raise interest rates from their record low of 0.5%. But with commentators increasingly debating whether the UK is headed for a double-dip recession, many...

Stumbling and Mumbling picks up and runs with a question I asked recently: Why has political radicalism become synonymous with wanting to see a permanent and massive public...

Expectations of public sector redundancies have undermined property and retail markets, says British Retail ConsortiumComment: Falling house prices? Blame the mediaGovernment austerity measures are already plunging the British economy into reverse according to figures published today which reveal sagging high street sales and renewed falls in house prices.Expectations of widespread job cuts in the public sector have begun to discourage households from moving home or buying "big ticket" items such as furniture and carpets, with spending going on essential items and replacements only, said the British Retail Consortium. One of the worst-hit sectors is big-screen flat televisions, where sales have slowed markedly, but the BRC also noted year-on-year falls in items such as shoes. It said that...

A polemic that blames inequality for most troubles in our society has energised LabourLast week, a group of academics decided that because of the debt he pumped into the economy and the poison he pumped into the Labour party, Gordon Brown was the third-worst British prime minister since 1945. To which the response from all sane onlookers was: "What, only the third?"The charge list against him is long enough for a judge to send Labour to a dark cell for years. It would have been grossly negligent for any government to boast that its "light-touch" regulation had "abolished boom and bust", while failing to notice that it was helping push the banking system towards the edge of a cliff. For a Labour government to set aside social democracy's well-merited suspicion of finance capital was truly...

A couple of years on, 23,000 job losses, 84% stake by taxpayers has provided a modest £1.1bn profit for RBS. Other banks are returning to their modest profits, Barclays: £4bn; Lloyds: £1.6bn; and so on.Meanwhile unemplyement has soared by 3% (to 8%, i.e. risen by 60%) and the country's total debt is around £4 trillion. £1.5 trillion is in personal debt - money that you and I owe to the banks most mortagages (£1.2 trillion).This is from Credit Action: "Average household debt in the UK is ~ £8,650 (excluding mortgages). This figure increases to £18,021 if the average is based on the number of households who actually have some form of unsecured loan."GDP has increased by around 50% in the past 10 years and our ConDemLab parties all want it to continue to rise for ever. For GDP...

Why has political radicalism become synonymous with wanting to see a permanent and massive public debt?As I have argued before, radicals cannot cite John Maynard Keynes in their support.It is hardly a proletarian virtue: the working class always used to be wary of debt. It was the middle class that mortgaged itself up to the ears.And large a public debt means that government, however radical or progressive or socialist, has to have one eye permanently on the institutions it despises the most: the finance markets.Someone (I think he or she was behind the Times paywall) said that Gordon Brown did away with Labour's tradition of "tax and spend" by simply spending. But as that involved such high levels of borrowing, it is hard to see it as a way forward for the...