by Andrew Jack

From trade embargoes to arms blockades, sanctions have long been an extension of conflict by non-military means. Since the start of the twenty-first century, there has been growing use of “targeted” sanctions that draw on intelligence to pinpoint individuals for travel bans or asset freezes. The United Nations, the European Union and the US have announced a wide series of measures, while other organisations including the African Union and individual countries have also issued them with varying degrees of success.

There is fierce debate about the effectiveness of sanctions, with at least two organisations seeking to assess their mixed impact. Our interactive graphic draws on the global analysis by the Peterson Institute for International Economics and the Targeted Sanctions Consortium, based in Switzerland. Read more

By Paul Hodges

Two remarkable global demographic developments have occurred since 1950. Yet only recently have their impact on companies and the economy begun to be properly understood.

Life expectancy has risen by 50 per cent since 1950 (red column) to average around 70 years today, due to advances in disease prevention and knowledge about healthier lifestyles.

Total fertility rates have halved over the same period (green shading). The average woman now has only 2.5 children, as increased life expectancy means large families are no longer so essential for economic survival. Read more

by Thomas Hale

Fears of an incipient housing bubble in London – and concerns about the UK property sector in general – are soaring as quickly as the prices themselves. But not all bubbles are created equal – especially when it comes to first-time buyers.

How might rising house prices affect first-time buyers? The graph below shows the average UK house price compared to how much of the average take-home pay first-time buyers spend on repayments.

The most striking thing about the graph is the way price correlates so strongly to the stretched nature of first-time buyer households until mid-2009, at which point the two lines start to move in opposite directions. Prices have begun to go up again, but first-time buyers have become consistently less stretched across the UK. Read more

(c) Getty Images

By Henry Foy

Ten things to know about the 48 hour London tube strike that began last night:

1. 3.4m people use the tube every day, according to Transport for London (TFL). Not today they didn’t.

2. The strike is all about jobs. Boris Johnson and TFL, which runs the Tube, wants to close all tube ticket offices by 2015, at a cost of 750 jobs.

3. TFL say the public support the plans. Eighty-two per cent of respondents to their survey backed the move to close ticket offices, it said. But the Rail, Maritime and Transport Union, which is taking part in the strike, said a survey it commissioned found 65 per cent of tube users felt industrial action as a last resort was justified.

4. Forty-three stations, or 16 per cent of the total station network, were completely closed on Wednesday morning, TFL said. Read more

By Henry Mance

BSkyB and BT have both committed billions of pounds to sports rights over the past two years – as they seek to protect their positions as the UK’s biggest pay-TV provider and biggest broadband operator respectively.

So has either taken a lead?

The long view starts in July 2006, when Sky entered the broadband market.
It was slowly closing the gap on BT, adding about 400,000 more customers that its rival.

However, since the launch of BT Sport last summer, BT has added more broadband users than Sky – the first time in a half-year period since 2007. Read more

On Thursday Eric Schmidt gave a fascinating talk on technological innovation, in which he warned that broad range of jobs that once seemed beyond the reach of automation are in danger of being wiped out by technological advances.

I raised two questions to neither of which in my view did I receive a good answer. Read more

The government’s decision to axe the collection of land price statistics threatens ministers’ ability to understand the effects of their radical housing policies, senior economists and policy analysts have warned.

Land prices are a significant component of new-build costs and the rapid housing market recovery in Britain – fired by the government-backed Help to Buy scheme – has already sparked a scramble for land, particularly in the southeast.

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By Roger Blitz, Leisure Industries Correspondent

Should we praise European football clubs for creating an international labour market or criticise them for failing to nurture homegrown talent?

Take your pick. According to the Swiss-based CIES Football Observatory, the proportion of players playing at clubs where they trained is at an all-time low of 21.2 per cent. Five years, ago, it was at 23.1 per cent.

Among the top five countries – England, Spain, Germany, Italy and France – the proportion is even lower, at 16.5 per cent. All charts are from the CIES’ latest report.


No surprise, therefore, that the percentage of expatriate players is at a record high of 36.8 per cent, as the transfer market continues to flourish. Many of them are Brazilians, with 471, though in 2009 there were 538 plying their trade in Europe.

The most likely place to find a club-trained player is Sweden, Slovakia and Finland. The least likely is Italy, Turkey and Russia. English clubs are producing only 13.6 per cent of club-trained players, Germany’s proportion is not much better and they are both well behind Spain and France. Read more

By Claer Barrett and Kiran Stacey

Last autumn, George Osborne came to the Commons to present his Autumn Statement against the backdrop of a stagnating economy and a recent credit downgrade. His speech was full of language about continuing with “Plan A” despite ongoing concern over whether it was working.

This year was very different. With massive increases in the OBR’s growth forecasts, this was in effect the chancellor’s victory speech: in his words “the plan is working”. But there were also plenty of warnings against voting for Labour instead.

Here’s a quick, fun, look at how the language has changed….

The Chancellor was keen to put a positive gloss on continuing austerity while the economy is picking up, promising to “fix the roof when the sun is shining”.

2013 = 2 mentions
2012 = 0 mentions

Armed with a rosy set of forecasts, the Chancellor was able to boast
confidently about his economic strategy: “The plan is working.”

2013 = 3 mentions
2012 = 0 mentions Read more

For the legions of China-watchers within the world’s investment community, there have always been two difficult questions. One, which applies everywhere, is to look at the figures and to ask whether growth can continue, or if a bubble is forming. A second question, much more specific to China, is whether the figures themselves are genuine, and whether words can be taken at face value.

For an example, take the reforms announced at the Communist party’s plenum. They were very well-received, but followed by much analysis asking if the reforms were what they seemed.

It is not a new problem. Nobody is sure whether they believe the numbers coming out of China. Even Li Keqiang, now China’s premier, once commented that the nation’s gross domestic product figures were “man-made” and not to be trusted.

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Releasing market-moving data in full at an appointed hour ought to be a non-negotiable obligation of any government statistics agency. Yet it is a task that often proves too much for the Office for National Statistics. Official data are published by newswires at 9.30am on the day of release but there is often a delay before the same information appears on the agency’s website.

This week the UK Statistics Authority, which oversees the work of the ONS, rightly insisted that everyone should be able to access official data on equal terms. An obvious solution would be to fix the ONS website. Yet the UKSA also floated a more drastic proposal in which the ONS would no longer release reports in full on the morning of publication, instead dribbling out the numbers over the course of a day.

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There is a myth that the London Olympics were delivered within budget. This claim was used recently by David Cameron, the British prime minister, to win support for the proposed high-speed rail line to Birmingham.

The principal relevant facts are these. The first detailed specification of what was needed for London to host the games was drawn up in 2002 by Arup. The report by the engineering and planning consultancy put the cost at £1.8bn, much of it to be privately financed. An extended assessment was then commissioned by the Department of Culture, Media and Sport from PwC. The financial consultancy’s 2003 report estimated the total cost at £3.1bn, requiring a public subsidy of £1.3bn. The balance would be recovered from the private sector and from asset sales after the games. According to PwC’s risk assessment, the probability that the taxpayer would need to provide as much as £2bn was less than 5 per cent.

 Read more

By Andrew Jack

The global sales of prescription medicines is starting to accelerate and will reach $1 trillion next year, according to new estimates from IMS.

The data shows slowed growth since the 2008 financial crisis, when the loss of lucrative patents on drugs pushed down prices for drug companies just as the economic slowdown imposed austerity measures by governments and squeezed incomes by individuals paying out of pocket for healthcare. Read more

The Office for National Statistics has just published October 2013 inflation figures. These show the consumer price inflation rate falling from 2.7 per cent in September to 2.2 per cent last month, a much greater fall than the average of economists’ expectations of a drop to 2.5 per cent. The discredited retail price index, which is still used to uprate index-linked government bonds, rail fares and other utility bills fell from 3.2 per cent in September to 2.6 per cent. The essential news and context comes in the following five charts.

1. Inflation falling faster than Bank of England expected

The BoE produces quarterly inflation forecasts. In the third quarter, its economists’ central forecast was that CPI inflation would stand at 2.8 per cent. It came in at 2.7 per cent, which was well within the normal margins of error. The early indication of the fourth quarter with inflation falling to 2.2 per cent in October, is considerably below the BoE’s 2.9 per cent central forecast. Again, this reading well within the margin of error. The bank estimated a 17 per cent probability inflation would lie between 2 per cent and 2.5 per cent this quarter, showing just what an imprecise science short-term inflation forecasting is.

 Read more

By David Donald of the Center for Public Integrity and James Politi. Interactive graphic by Caroline Nevitt, Tom Pearson and Martin Stabe.

Map: US sequestration impact per capita

US sequestration impact per capita

Automatic US government spending cuts that took effect in March are threatening local economies across the country.

Counties that benefited from high levels of federal spending in recent years and weathered the recession better than the rest of the country could be especially hard-hit, an analysis of so-called “sequestration” by the Financial Times and the Center for Public Integrity has found.

Update, 3 October: The New Mexico county that is home to the Los Alamos National Laboratory, faces the greatest per-capita impact of any county in the United States, at more than $6,000 per person. Areas with military bases, such as Christian county, Kentucky, are also particularly hard hit. Across the 388 counties in the US that have one or more military installation, the sequestration impact per capita is $312. That is nearly twice as high as in the 2,727 counties without a military installation, where the sequestration impact per capita is $171.

Use the interactive graphic below to see how the impact is distributed around the United States and how your county fares.

 Read more

by Alistair Hayes

Another round of Premier League football, another weekend of foreign domination.

Of the 29 goals scored in last week’s Premier League, 21 were scored by non-England-qualified players, providing plenty of ammunition for the many England fans who contend that domestic players are being prevented from reaching world class by a seemingly endless stream of foreigners.

But would a reduction of overseas talent in the Premier League – whose players hold 91 nationalities – allow more English players to rise to international class? Would it be the panacea most onlookers – from the man in the pub to the national manager Roy Hodgson – seem to think it would be? Or is it that they are simply not good enough to compete on the international stage? Read more

by Roger Blitz, FT leisure industries correspondent

Going on a cruise conjures images of luxury travel, affordable only for the rich and those suddenly wondering what to do with their retirement savings.

Yet the price of a cruise for UK passengers has been steadily coming down, as cruise liners fight hard to convince consumers that their trips are affordable and value for money. Read more

Ever feel like you are slipping behind in the rat race? Well, Londoners now face competition from their homes as well. The average house in the capital is now earning as much as its occupants.

As we noted noted last week, London house prices are rising far faster than in the rest of the UK, up 9.7 per cent over the 12 months to July on ONS figures.

With the average London house costing £438,000, the capital gain was worth £38,729. By comparison, the average London household had a post-tax income of £38,688 in 2011, the last year for which the ONS has statistics.

We appreciate that the comparison of an average apple to an average pear is useful only to illustrate the size of the bubble gains from market enthusiasm. We’re ignoring capital gains taxes, hefty transaction costs, and the difficulty of extracting that value while still having somewhere to live.

 Read more

Guest post by Paul Hodges

Whilst the number of working women in the UK continues to rise, since 2009 their total earnings have been falling in real terms. With consumer spending contributing to roughly 60 per cent of the UK economy, this has important implications for the sustainability of the current recovery.

Nearly 14 million women are working today compared to nine million in 1971, whilst their participation rate in the workforce has increased from 59 per cent to 75 per cent today.

There has also been a sustained rise in women’s pay relative to men.

 Read more

Britain’s ranks of managers have risen to more than 3m and are on the brink of overtaking the number of skilled tradesmen such as electricians, plumbers and carpenters.

The number of people classed as managers, directors and senior officials has grown by 7.8 per cent over the past two years to 3.113m, more than a tenth of the workforce, according to data from the Office for National Statistics – the fastest rise of any broad occupational group.

Over the same period, the number of people in skilled trades dropped by 2.2 per cent to 3.137m. Falls were also recorded in sales and customer services staff, process, plant and machinery workers, and “elementary” occupations, which include bar staff and security guards.

 Read more