The world should be wary: Japan’s economic woes are contagious

Fear is that Tokyo will export its deflation to the rest of the world, setting off a chain reaction of competitive depreciations

Japan’s surprise descent into recession is going to have big repercussions. It means the abandonment of a planned increase in sales tax. It will lead to the country’s prime minister, Shinzo Abe, calling a snap election. It will herald the end of Abenomics if he loses, and it will lead to a further weakening of the yen on the foreign exchanges.

Let’s take those in order. Abe’s plan for the Japanese economy involved a loosening both of monetary policy through quantitative easing – creating electronic money – and fiscal policy -higher spending on infrastructure. The hit to Japan’s public finances from the extra spending was supposed to be clawed back by tax increases further down the road. Sales tax was increased in the spring and a second hike was due next year.

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David Cameron: Red lights are flashing on the global economy

The G20 meeting in Brisbane made it clearer than ever to me that we in Britain must stick to our long-term economic plan

Six years on from the financial crash that brought the world to its knees, red warning lights are once again flashing on the dashboard of the global economy.

As I met world leaders at the G20 in Brisbane, the problems were plain to see. The eurozone is teetering on the brink of a possible third recession, with

We can’t blame David Cameron if the eurozone stumbles into recession again

As PM warns of economic red lights, it’s fair to say UK’s tax and spending policies are his fault, but not long-term global problems

It’s a rare treat to hear the phrase “Writing in the Guardian, David Cameron says” on the morning’s news bulletins before being told that the prime minister is warning us sandal-wearing polenta eaters of flashing red lights ahead for the global economy.

That’s not so good, but it is mostly true, as Larry Elliott explains in his analysis of Cameron’s statement.

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