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Microeconomics // Firms, Markets & Industries

8/10/09 Royal Mail loses Amazon contract as postal strikes loom Royal Mail has lost a crucial contract with its second largest customer, the online retailer Amazon, as a wave of strikes threaten parcel deliveries in the busy pre-Christmas sales period. The news comes on the eve of a national strike announcement by the Communication Workers Union that is likely to bring the simmering industrial dispute to the boil and further disrupt deliveries across the country. [G]

11/9/09 MG Rover: Phoenix Four had secret plan to share BMW's £75m The Phoenix Four, the controversial former owners of collapsed car company MG Rover, devised a scheme to pay themselves a windfall totalling £75m from a dowry provided by BMW, according to a government report published this morning. When BMW sold MG Rover in 2000 to the local businessmen for a token £10, the Germans agreed to hand over an extra £75m to relieve it of warranty commitments. [G]

11/9/09 GM Europe sale puts 2,000 UK jobs at risk Offer of £4bn subsidy persuades troubled US car group's board to sell European operations to Germany's favoured bidder. A £4bn carrot dangled by the German government today brought a rich harvest when General Motors finally decided to sell its European car operations to Magna International, a Canadian car parts supplier favoured by Berlin. The move delighted Angela Merkel, the German chancellor, but puts a cloud over GM-owned Vauxhall plants in Luton, Bedfordshire and Ellesmere Port on Merseyside, where 2,000 job losses are feared. [G]

8/9/09 Orange and T-Mobile to merge Deal will catapult merged company into lead position in UK market with 28 million customers. Orange and T-Mobile are to merge their British operations in a deal that will catapult the combined company into lead position in the UK market, with more than 28 million customers and a 37% market share. The two are currently the UK's third and fourth-largest mobile operators, and today's proposed tie-up will see rivals O2 and Vodafone relegated to second and third place in the highly competitive market. [G]

7/9/09 Cadbury rejects £10.2bn takeover offer from US food maker Kraft American food giant behind Oreo, Toblerone and Dairylea claims deal would create a 'global powerhouse' in snacks, confectionery and ready meals. Confectionery group Cadbury, one of Britain's best-known companies, has rejected a £10.2bn takeover from Kraft, the American food giant. In a surprise statement to the London Stock Exchange ..., the US company, whose brands include Oreo cookies, Toblerone chocolate and Dairylea cheese, said the deal would create a "global powerhouse" in snacks, confectionery and ready meals, with total revenues of $50bn (£30.5bn) and leading positions in key developing markets including India, Mexico, Brazil, China and Russia. [G] see also Hovering Kraft [Economist]

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Macroeconomics // National & Global Issues

15/10/09 Unemployment rate slows but pay rises are lowest on record Signs emerged that the surge in unemployment so far this year might finally be starting to ease, but wage growth slowed to its lowest on record, something analysts warned could hamper the recovery. The Office for National Statistics said the broadest measure of unemployment showed joblessness at 2.47 million in the three months to August, up 88,000 from the previous three months but a similar level to that it reported for July and one which left the jobless rate steady at 7.9%. The City had expected the number to jump through 2.5 million. [G]

13/9/09 Inflation falls to lowest in five years Inflation has dropped to its lowest rate in five years as falling energy prices continued to cut the cost of living. The Office for National Statistics (ONS) reported that the consumer prices index (CPI) fell to 1.1% in September on a year-on-year basis, down from 1.6% the previous month. This is its lowest point since September 2004, and below the Bank of England's 2% target. [G]

9/10/09 The Nobel prize for economics may need its own bailout The economics award is usually the last of the Nobel prizes to be announced. Correctly so, for it was also the last to be created – and strictly speaking is not even a real Nobel prize. The five original awards, first given out in 1901 for literature, peace, medicine/physiology, physics and chemistry, were intended by Alfred Nobel to recognise contributions that enhanced the quality of human life, through scientific advance, literary creativity or efforts at bringing about peace. The economics prize is not a prize of the Nobel Foundation; rather, it was created in 1968 by the Central Bank of Sweden as a "prize in economic sciences in memory of Alfred Nobel". However, it now has the same procedure of selection by the Swedish Academy, and the same cash award presented at a similar ceremony as the Nobel prizes. There have been recurrent doubts about whether it conforms to the basic goals of the prizes as envisaged by the founder. [G]

30/9/09 IMF: UK faces credit rationing or higher interest rates unless Bank prints more money International Monetary Fund's comments back the Bank of England's programme of quantitative easing. Britain will face credit rationing or higher interest rates unless the Bank of England continues its emergency money creation programme to support growth, the International Monetary Fund warned today. Highlighting the risk of a £180bn funding gap in 2010, the IMF said there was a "significant tension" between the supply of finance from a weakened banking sector and rising demands for funds, primarily caused by the soaring government deficit. [G]

16/9/09 Unemployment hits highest since 1995 Those claiming benefit increased to 1.6 million, the highest since May 1997. Unemployment has jumped to its highest level since mid-1995, pushing the jobless rate up to nearly 8%, official data showed ... The Office for National Statistics (ONS) said the jobless total on the broad International Labour Office measure rose by 210,000 in the three months to July, taking the total to 2.47 million. That rise was broadly in line with those of recent months and economists said there was little to suggest that the rises in unemployment were slowing. [G]

14/9/09 For all Obama's talk of overhaul, the US has failed to wind in Wall Street With a blank cheque from taxpayers and no real reform the perverse incentives for risk-taking are bigger than ever [Joseph Stiglitz]. What went wrong? Have the right lessons been learned? Could it happen again? The anniversary of the Lehman Brothers' bankruptcy and the freezing of the credit markets that followed is an occasion for reflection. I fear that our collective response has been mistaken and inadequate – that we may just have made matters worse. [G]

12/9/09 After the fall On 15 September 2008 the stock markets of the world collapsed, plunging us into the worst economic crisis since the war. Despite our collective handwringing, what have we really learned, asks Peter Clarke. Below, writers who have been quick to tackle the crash in their work consider where we are a year later. [G]

10/9/09 Interest rates held at historic low Bank of England keeps rates at 0.5% and its quantitative easing (QE) programme steady at £175bn, defying City speculation of further easing in monetary policy. The Bank of England said ... that its programme of creating electronic money would continue for a further two months until it had pumped £175bn into the economy. But the Bank kept interest rates on hold at 0.5% and did not increase its quantitative easing (QE) programme, defying some City speculation that it might ease monetary policy further. Interest rates have now been kept at a record low of 0.5% for six months running. [G]

8/9/09 World job market showing signs of recovery Britain's employers are reporting improved recruitment plans for the first time in three years, offering a "glimmer of hope" to jobseekers in the run-up to Christmas, according to a survey out today. But employers are hiring older, experienced workers rather than young unemployed people, adding to fears for a "lost generation". [G]

4/9/09 How the collapse of Lehman Brothers pushed capitalism to the brink The Wall Street titan's bankruptcy triggered a system-wide crisis of confidence in banks across the globe... Charles Geisst, a Wall Street historian at Manhattan College, describes September 2008 as the most momentous financial turmoil since president Franklin Delano Roosevelt declared a mandatory four-day banking shutdown in March 1933 to halt a panic-driven run on deposits. In the wake of Lehman's failure, institutions accustomed to prosperity suddenly realised they were mortal: "It was a message sent to Wall Street banks that they weren't too big to fail. The reaction was really very severe." [G] Part of a Lehman Brothers Special Report

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News Focus

6/10/08 Faith. Belief. Trust. This economic orthodoxy was built on superstition There is no alternative, went the mantra. Now this corrupt mythology lies in tatters, the crisis of conviction is profound ... how did we get in this mess, and how do we make sure it doesn't happen again? Answering these two questions does not require a crash course in City finance and economics, because this crisis is as much about politics and ideology as anything. If you're pressed for time, the reading list can be very short... Hayek became the founding father of a model of economic management which has brought us to the current crisis; Polanyi, with extraordinary prescience, warned that the crisis would come; he rejected the idea that the market is a "self-regulating" mechanism which can correct itself. There is no "invisible hand" such as the neoliberals maintain, so there is nothing inevitable or "natural" about the way markets work: they are always shaped by political decisions. [G]

2/6/08 The gods of greed They promised economic stability, order and prosperity. But instead the world's bankers have delivered chaos, debt and uncertainty - and then blamed the feeble governments that surrendered control of the global economy to them. In the first of three extracts from their new book [The Gods That Failed: How Blind Faith in Markets Has Cost Us Our Future], Larry Elliott and Dan Atkinson explain how the reckless speculation of a super-rich elite has left us all the poorer. [G]