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Coronavirus: UK worst hit among major economies – BBC News

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The UK was the hardest hit by Covid-19 among major economies from April to June, the Organisation for Economic Co-operation and Development has said.

Its economy suffered its biggest slump on record over the three-month period as coronavirus lockdown measures pushed the country officially into recession.

Its 20.4% contraction was well above the 9.8% drop for the 37 OECD nations as a whole, the think tank said.

Spain was the next worst hit, with a decline of 18.5%.

The decline for the OECD area was its largest on record, far outstripping the 2.3% drop recorded in the first three months of 2009, at the height of the financial crisis.

At the same time, the G7 group of industrialised nations suffered a contraction of 10.9%, while the eurozone saw a 12.1% fall.

Among other G7 nations, second-quarter GDP declined by 13.8% in France, while Italy, Canada and Germany suffered falls of 12.4%, 12% and 9.7% respectively.

When the UK published its second-quarter GDP figures earlier this month, Chancellor Rishi Sunak told the BBC that the government was “grappling with something that is unprecedented” and that it was “a very difficult and uncertain time”.

He said the UK economy had performed worse than its EU counterparts because it was focused on services, hospitality and consumer spending.

But shadow chancellor Anneliese Dodds blamed Prime Minister Boris Johnson for the scale of the economic decline, saying: “A downturn was inevitable after lockdown – but Johnson’s jobs crisis wasn’t.”

From Madrid to Manchester, the empty streets at the height of spring laid bare the economic impact of measures to halt the spread of the virus.

And now the OECD has put numbers to the bigger picture; it thinks the wealthiest nations, those accounting for the bulk of global trade, shrank four times faster between April and June than during the darkest period of the financial crisis.

And with its reliance on the worst hit sectors – shopping, services and hospitality – the UK suffered one the biggest drops.

But that was then. As restrictions have been eased, shutters lifted, attention has turned to the strength of the recovery.

In the UK, the evidence is mixed: retail spending is back to pre-crisis levels (albeit with some winners and losers) but other sectors continue to struggle. Economists expect it may take a couple of years for the economy to get fully back on track, some fear unemployment could spike to 10% , or even higher, in the meantime.

And we may not be alone: the OECD reckons the convalescence of many other nations could be just as drawn out.

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Swedish government promises $12 billion to kick-start economy in 2021 budget – The Journal Pioneer

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By Simon Johnson

STOCKHOLM (Reuters) – Sweden’s government will pump 105 billion crowns ($12 billion) into the economy in 2021 through tax cuts and spending in a record giveaway aimed at getting the economy back on its feet after the coronavirus pandemic-induced slump.

Sweden’s economy will shrink around 4.6% this year, the minority coalition said its budget on Monday, a milder hit than many other European countries, some of which are being forced to re-impose COVID restrictions after a surge in new cases.

“Economic policy is going into a new phase,” Finance Minister Magdalena Andersson told reporters. “It is about a record-large budget to restart the Swedish economy: 100 billion so that we can work our way out of the crisis.”

The Social Democrat and Green coalition said the budget would focus would be on boosting jobs, welfare and supporting the switch to a carbon-free future.

Most measures, agreed with two small, centre-right parties which help keep the coalition in power, were already known.

Individuals and companies will get a tax cut and local authorities and welfare services more cash while around 10 billion crowns will go toward fighting climate change.

The budget is expected to create around 75,000 jobs.

LONG TERM WINNERS

While Sweden looks to have got off relatively lightly economically in the short term, analysts caution that it is too early to pick the longer term winners and losers from the pandemic.

Much will depend on how government largesse, including Europe’s 750 billion euro recovery find, is spent.

Sweden also faces a number of structural challenges, not least in the labour market where unemployment among young people and immigrants is uncomfortably high.

A dysfunctional housing market also threatens long-term economic stability while funding the country’s comprehensive welfare model as society as a whole ages will require a huge increase in productivity.

The government has promised to keep the taps open, at least for the next few years – tax cuts and spending will boost the economy by 85 billion in 2022.

But with a general election due that year, longer term policies remain unclear. The last national vote resulted an a virtual stalemate between the centre-left and centre-right blocs and there is little evidence that voters are any clearer about what they want now.

(Reporting by Simon Johnson, additional reporting by Johan Ahlander; Editing by Niklas Pollard and Toby Chopra)

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US household wealth hits record even as economy struggles – CKPGToday.ca

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By Canadian Press

Sep 21, 2020 9:07 AM

WASHINGTON — Americans’ household wealth rebounded last quarter to a record high as the stock market quickly recovered from a pandemic-induced plunge in March. Yet the gains flowed mainly to the most affluent households even as tens of millions of people endured job losses and shrunken incomes.

The Federal Reserve said Monday that American households’ net worth jumped nearly 7% in the April-June quarter to $119 trillion. That figure had sunk to $111.3 trillion in the first quarter, when the coronavirus battered the economy and sent stock prices tumbling.

Since then, the S&P 500 stock index has regained its record high before losing some ground this month. It was up 2.8% for this year as of Friday. The tech-heavy Nasdaq has soared more than 20% this year.

The full recovery of wealth even while the economy has recovered only about half the jobs lost to the pandemic recession underscores what many economists see as America’s widening economic inequality. Data compiled by Opportunity Insights, a research group, show that the highest-paying one-third of jobs have almost fully recovered from the recession, while the lowest-paying one-third of jobs remain 16% below pre-pandemic levels.

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US household wealth hits record even as economy struggles – meadowlakeNOW

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By Canadian Press

Sep 21, 2020 10:06 AM

WASHINGTON — Americans’ household wealth rebounded last quarter to a record high as the stock market quickly recovered from a pandemic-induced plunge in March. Yet the gains flowed mainly to the most affluent households even as tens of millions of people endured job losses and shrunken incomes.

The Federal Reserve said Monday that American households’ net worth jumped nearly 7% in the April-June quarter to $119 trillion. That figure had sunk to $111.3 trillion in the first quarter, when the coronavirus battered the economy and sent stock prices tumbling.

Since then, the S&P 500 stock index has regained its record high before losing some ground this month. It was up 2.8% for this year as of Friday. The tech-heavy Nasdaq has soared more than 20% this year.

The full recovery of wealth even while the economy has recovered only about half the jobs lost to the pandemic recession underscores what many economists see as America’s widening economic inequality. Data compiled by Opportunity Insights, a research group, show that the highest-paying one-third of jobs have almost fully recovered from the recession, while the lowest-paying one-third of jobs remain 16% below pre-pandemic levels.

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