UK economy suffering ‘long-term’ economic cost of Brexit, Goldman Sachs group says

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“The evidence points to a significant long-run output cost of Brexit,” the economists at Goldman’s wrote.

Yet more evidence has emerged of just how disastrous the decision to leave the EU has been for the UK economy, with economists at Goldman Sachs group saying that real GDP has underperformed by about 5%.

In a research note published earlier this month, Sven Jari Stehn and colleagues said that Brexit had resulted in reduced growth and higher inflation, with ‘reduced international trade, weak business investment and a drop in migrants coming from Britain’s largest trade partner all contributing’, Bloomberg has reported.

It comes as a number of studies have warned of the harmful consequences of Brexit, with the Bank of England saying last year that the decision to leave the EU has cost the average UK household £1,000, due to a lack of investment following the referendum.

Continue ReadingUK economy suffering ‘long-term’ economic cost of Brexit, Goldman Sachs group says

Mark Carney demolishes Brexit and Liz Truss’ economic policies

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Image of Liz Truss and Kwasi Kwarteng
Liz Truss and Kwasi Kwarteng. “Some people said we were in too much of a rush – and it is certainly true that I didn’t just try to fatten the pig on market day, I tried to rear the pig and slaughter it as well. I confess to that.”

The former governor of the Bank of England, Mark Carney, has taken apart the arguments of Brexiteers as well as the economic policies of Liz Truss during a speech at the Global Progress Action Summit in Montreal, where he praised “progressive” policies while attacking “far-right populists”.

Carney, who was governor between 2013 to 2020, accused those who backed quitting the European Union of wanting to “tear down the future” and also launched a scathing attack on the disastrous economic policies of Liz Truss.

Turning his attention to Truss, Carney said that when Brexiteers tried to create Singapore on the Thames, the Truss government instead delivered Argentina on the Channel – and that was a year ago.

“Those with little experience in the private sector – lifelong politicians masquerading as free marketeers – grossly under-value the importance of mission, of institutions, and of discipline to a strong economy.

“And the bad news is that while these tactics never work economically, they can work politically. Brexit happened, Donald Trump was elected. So we can’t dismiss the impact of anger, but we must resist its power.”

Continue ReadingMark Carney demolishes Brexit and Liz Truss’ economic policies

Soaring corporate profits were the largest contributor to Europe’s inflation, IMF admits

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It’s not pay rises for ordinary workers that are fuelling the rise in inflation, it is corporate profiteering.

Image of cash and pre-payment meter key
Image of cash and pre-payment meter key

We’ve so often heard calls for hard-pressed public sector workers to show ‘pay restraint’, so that we can combat inflation. Indeed, the Governor of the Bank of England, Andrew Bailey, previously provoked outrage when he said workers should not ask for big pay rises.

Even in recent days, Prime Minister Rishi Sunak has hinted that he is unlikely to accept the recommendations made by public sector pay bodies for pay rises for public sector workers, including teachers and health service staff, in an attempt to tackle soaring inflation.

Millions of public sector workers who are struggling to make ends meet are expected to just put up with dwindling pay packets. And yet very little is said about the eye-watering corporate profits among those at the top that are driving inflation, with the Tories and right-wing press determined to keep the focus on those at the bottom and hard-pressed families.

Let’s be clear. It’s not pay rises for ordinary workers that are fuelling the rise in inflation, it is corporate profiteering.

Continue ReadingSoaring corporate profits were the largest contributor to Europe’s inflation, IMF admits

Climate activists disrupt financers of climate destruction Barclays Bank AGM

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Fossil Free London protest at Barclays AGM 2023.

Major disruption to Barclays AGM by Money Rebellion and other activist groups with searching questions, songs and Shakespeare

A major bank funding our extinction by pouring billions of pounds into new fossil fuel projects was left in disarray today as activists linked to a huge new climate crisis coalition disrupted their Annual General Meeting headquarters in the City of London.  

The board of directors faced constant interruption and challenge making it almost impossible for the AGM to continue. When Barclays chairman Nigel Higgins tried to outline the bank’s own climate commitments, a protester shouted “bullshit.”

At 11am teams of activists infiltrated the AGM of Europe’s biggest funder of fossil fuels, Barclays. A 70-strong Climate Choir sang a climate crisis version of the Spice Girls “Stop Right Now” to bank board members. Further disruption followed as other shareholders from Fossil Free London, with a Shakespearean condemnation of Barclays as being on the wrong side of history. 

Pulling out hidden ruffs and quills, they performed Shakespeare-based lines generated by ChatGPT about the bank’s funding of fossil fuels. Lines included: “The people thee harm, and our air thou pollute! And yet, there is more, I tell you this day, For Barclays is guilty in a vile way. Thou art on the wrong side of history, I say!”

At the action, Claude Fourcroy, of Money Rebellion, an off-shoot of Extinction Rebellion, said: “We need UK banks to stop funding fossil fuels today, but instead they are profiting from a rigged system where bankers sacrifice people and planet to make vast fortunes. This is why we have chosen to target these vastly wealthy and powerful establishments, in the interests of the public – because time for humanity and every other species on the planet is running out. 

“These banks boast about being part of the solution to the climate and ecological emergency while taking baby steps toward pulling funding for the worst fossil fuel criminals, making empty promises full of loopholes, and greenwashing on an industrial scale

“The government and Bank of England are failing to challenge or regulate the power of the banks. But people power can and will stop them. No more carbon bombs, no more genocide and no more displacement. Until the banks stop funding new fossil fuels, we will use every tool in the box to stop them, including building the biggest bank boycott in history to hit them where it hurts – in their pockets.”

Extinction Rebellion co-founder Clare Farrell said: “These Money Rebellion actions disrupting financial power holders are just the start of an unprecedented movement of movements stepping up to challenge the corrupt elite in order to drive the urgent changes we need for survival of life on this planet.”

“In this new phase of Extinction Rebellion, we are connecting across groups to build a stronger climate alliance aimed at community resilience, inclusivity and fairness for all living beings. By linking up everyone who stands for a just and rapid response to the climate crisis we will create a formidable opposition. People are determined to challenge the misuse of power which threatens to bring an end to all life if we do not stop it.”

Barclays’ AGM was targeted by activists because the bank is the largest financier of fossil fuel expansion, heavily funding new fossil fuel exploration and drilling, while issuing net zero pledges. 

According to Rainforest Action Network and Greenpeace since 2016 Barclays has been the worst bank in Europe for fossil fuel financing. In 2022 alone, the bank provided over $16 billion to coal, oil, and gas companies, and $190 billion since the Paris Agreement, making it the seventh largest fossil fuel funder in the world.

Barclays has said it is committed to aligning its financed emissions with the goals of the Paris Agreement, but in reality the bank has no policy dictating how it should reduce its financing of the oil and gas sector. Barclays is one of the only major UK banks which has not started the process of restricting financing for new oil and gas, putting it at odds with competitors HSBC, Lloyds, and NatWest.

Andrew Taylor from Money Rebellion, an offshoot of Extinction Rebellion, added: “As the UN Secretary General António Guterres has said, we have reached a tipping point on the need for climate action. The disruption to our climate and our planet is already worse than we thought, and it is moving faster than predicted. And what is the reaction of these banks to this frightening scenario?  

“According to the London School of Economics and the Grantham Research Institute on Climate Change and the Environment Barclays scores 0% on its commitment to achieve net-zero emissions from its financing activities by 2050 or sooner, consistent with a 1.5°C scenario. It also scores 0% on climate policy engagement.

“A more accurate title for these AGMs would be Annual Greenwash Meetings.”

Continue ReadingClimate activists disrupt financers of climate destruction Barclays Bank AGM

Bank of England expects UK to fall into longest ever recession

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image of banknotes and a prepayment key by Lydia.

The Bank of England has warned the UK is facing its longest recession since records began, as it raised interest rates by the most in 33 years.

It warned the UK would face a “very challenging” two-year slump with unemployment nearly doubling by 2025.

Bank boss Andrew Bailey warned of a “tough road ahead” for UK households, but said it had to act forcefully now or things “will be worse later on”.

It lifted interest rates to 3% from 2.25%, the biggest jump since 1989.

By raising rates, the Bank is trying to bring down soaring prices as the cost of living rises at its fastest rate in 40 years.

BBC: Bank of England: Five things we now know about the UK economy

Here are five things we learned from the central bank about the future of the economy.

BBC: Bank of England: Five things we now know about the UK economy

Continue ReadingBank of England expects UK to fall into longest ever recession

OBR forecasts likely to show £60bn-£70bn hole after Kwarteng’s mini-budget

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Kwasi Kwarteng has been handed independent forecasts on the state of the UK finances that are expected to show a hole of more than £60bn left by his sweeping tax cuts and a sharply slowing growth outlook.

Sir Charlie Bean, a ex-member of the independent watchdog and a former Bank of England deputy governor, said the document would probably show a large shortfall for the exchequer.

“It will be in the order of £60bn to £70bn relative to its previous forecasts,” he said, adding that Kwarteng would face three options: further U-turns on his tax-cutting plans, deep cuts to public spending, or risking the ire of already rattled financial markets by substantially adding to the national debt.

“What he’ll be confronted with, and I don’t think to be honest most observers and MPs have really woken up to this yet, is the extent to which the public finances has deteriorated since the spring,” Bean said.

Continue ReadingOBR forecasts likely to show £60bn-£70bn hole after Kwarteng’s mini-budget