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The Guardian view on the IMF’s warning: Britain’s economy runs hot for profits, cold for pay | Editorial

The Guardian view on the IMF’s warning: Britain’s economy runs hot for profits, cold for pay | Editorial

Labour is misreading the economics – leaving it unable to deal with the G7’s worst inflation and flat living standard Bloomberg’s headline said it all: “UK Faces Worst G-7 Inflation and Flat Living Standards, IMF Says”. The International Monetary Fund warns that inflation will be higher in the UK than in any other major advanced economy – including in the US, where Donald Trump’s tariffs are driving up costs for American consumers. This while GDP growth per head crawls at 0.4%, the weakest of any major economy. Real wages have stagnated for 11 months. Meanwhile, official figures show that unemployment has climbed to 4.8%, the highest since spring 2021. Forget talk of Britain’s “upgraded growth”; the economy, under Labour, is running hot only for those collecting profits. The Joseph Rowntree Foundation (JRF) projects that by 2029 average disposable incomes will be £570 lower than today, a fall of 1.3% – the sharpest drop in living standards since records began in 1961. This isn’t a simple case of prices getting ahead of demand. What Britain faces is profit inflation : prices are rising while wages stand still. As Lord Keynes noted, this is a transfer from labour to capital – an increase in mark-ups, not in productivity. Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here . Continue reading...

The Guardian view on the rising risk from flooding: uninsurable buildings should focus minds on climate adaptation | Editorial

The Guardian view on the rising risk from flooding: uninsurable buildings should focus minds on climate adaptation | Editorial

The bleak future faced by one small town offers a cautionary tale about the threat from global heating The bleak prospect facing the market town of Tenbury Wells in Worcestershire, due to rising flood risks, is first and foremost a problem for locals. After seven floods in four years , and with plans for new flood defences around the town abandoned after costs rose to £30m, the town council announced this month that three buildings it owns, including a theatre and historic pump rooms, no longer have insurance. Independent retailers are in a similar situation, and some are packing up as a result. The number of empty properties is growing. Tenbury is at higher risk than most places from floods, due to its low-lying position between the River Teme and Kyre Brook. But the threat it faces is not unique, and will become more common in future. Last year UK insurers paid out a record £585m for weather-related damage to homes and possessions, after unusually severe storms led to floods in several counties , with buildings left under water in towns including Henley, Wellingborough and Tewkesbury. Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here . Continue reading...