Can consumers keep the British economy going?

GDP watchers will be out in force this week as third-quarter figures are revealed

This week’s big economic number is GDP for the third quarter, due on Wednesday morning. Economists reckon output rose by 0.3% or 0.4% in the three months to the end of September.

Assuming the figure isn’t lower than expectations, economy watchers will turn quickly to the underlying trends, such as business investment. The economy has confounded predictions of a sharp post-Brexit vote slowdown or recession, mainly because of resilient consumer spending.

That is becoming harder to replicate as prices rise faster than wages, consumers become wary about adding to debts and banks restrict lending. Business investment failed to take off, as the economy recovered from the recession, and unwillingness to loosen corporate purse strings has contributed to Britain’s dire record on productivity, which has become the big bugbear.

In July, when second-quarter GDP growth came in at 0.3%, Philip Hammond, the chancellor, blamed the pound’s fall after the Brexit vote for what he called a “painful” squeeze on living standards and the slowing economy. Since then, Hammond has been a target for pro-Brexit Conservatives who have accused him of talking down the economy. Hammond has stuck to his guns so far but he risks a new onslaught if he continues to make the case against Brexit.

Financial glass ceiling: yep, still there

The Treasury committee has launched an inquiry into why so few women make it into senior jobs in finance. The first witness, on Tuesday, is Jayne-Anne Gadhia, chief executive of Virgin Money. Gadhia will no doubt have some personal insights but she could face stiff questions in her other role as the government’s women in finance champion. It’s almost a year since she took up the post and nearly 100 financial firms signed up to a charter pledging to put women in senior jobs.

The committee, chaired by the Conservative MP Nicky Morgan, is seeking a progress report. Starting at the top, Morgan wrote to the chancellor on Thursday asking for evidence that the Treasury is doing enough to hire women and people from ethnic minorities at the Bank of England. MPs want information about the makeup of applicants for top jobs at the Bank before they confirm candidates at appointment hearings.

Morgan’s letter follows the chancellor’s recent appearance before the Treasury committee, at which he lamented a lack of female candidates for the vacancy on the Bank’s monetary policy committee. Morgan doesn’t appear convinced.

Bumps in road for big banks

Britain’s biggest high-street banks report on trading this week but each faces problems outside day-to-day business. First up, on Wednesday, is Lloyds.

The bank is under attack from customers whose businesses were ruined by fraudster bankers at HBOS before Lloyds bought the failing bank during the financial crisis. The bankers in question were jailed in January but TV presenter Noel Edmonds, one of the claimants, has alleged Lloyds and its boss António Horta-Osório must have known about the fraud.

Lloyds is also defending itself in court against shareholders seeking compensation for losses caused by the takeover of HBOS. If the two sides haven’t settled, Tim Tookey, Lloyds’s ex-finance director, will start up to seven days of evidence on Wednesday.

At Royal Bank of Scotland, which reports on Friday, the Treasury committee wants the Financial Conduct Authority to publish a suppressed report into RBS’s treatment of business customers. Will Ross McEwan, RBS’s chief executive, repeat his comments about former customers unfairly “badmouthing” the bank? On Thursday, Jes Staley, Barclays’s chief executive, will unveil his numbers while the Financial Conduct Authority investigates him for trying to root out a whistleblower. Things will calm down one day – won’t they?


Sean Farrell

The GuardianTramp

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