The US and China have reached a framework deal on short-video app TikTok at talks in Madrid today, US treasury secretary Scott Bessent has saidToday's warnings about higher food prices coming in the UK are likely to cause fresh worries about how long borrowers will have to wait until Bank of England policymakers vote for another cut, reports Susannah Streeter, head of money and markets at Hargreaves Lansdown.Streeter adds:They are set to leave the base rate unchanged on Thursday and aren't expected to make a move until next Spring.The Food and Drink Federation is forecasting food inflation could reach 5.7% by the end of December and still be running at 3.1% by the end of 2026. Higher employer and packaging taxes are being blamed for increasing costs for companies, which they can no longer absorb.I'm delighted that we are on track to deliver yet another period of double-digit revenue growth and a strong profit performance, whilst maintaining our globally leading customer service standards.Our strategy as set out at our full year results is working and we have an exciting pipeline of further value to deliver for customers in H2. Our Five Star membership programme continues to go from strength to strength as our customers realise the exceptional value that it offers. This, combined with our ongoing efforts to broaden our product range, is an increasingly key driver of our performance. Continue reading...

Slowing growth in factory output and retail sales prompts calls for fresh economic stimulus

Discount supermarket's UK boss says potential budget measures may weigh on consumer spending decisions

Agreements include plan to build 12 reactors in Hartlepool with Centrica, creating 2,500 jobs, and fast-tracking UK and US safety checks

Greatest damage from heat, drought and flooding done in Cyprus, Greece, Malta and BulgariaThe violent weather that battered Europe this summer caused short-term economic losses of at least 43bn, according to an EU-wide estimate, with costs expected to rise to 126bn by 2029.The immediate hit to the economy from a single brutal summer of heat, drought and flooding amounted to 0.26% of the EU's economic output in 2024, according to the rapid analysis, which has not been submitted for peer review but is based on relationships between weather and economic data that were published in an academic study this month. Continue reading...

Ex-MPC members say quantitative tightening' should be scaled back or halted entirely, saving the Treasury up to 10bn a yearAndrew Bailey has been urged by former Bank of England policymakers to ease pressure on the government's borrowing costs by cutting back its bond-selling plans.In a crunch week for the economy, four influential ex-members of the Bank's monetary policy committee (MPC) said a change in course was needed. Continue reading...

Recent data shows stagflation, stagnant growth and price inflation, is possible as economy shaken by uncertaintyIt's a strange time for the US economy. Prices are rising, jobs growth has stalled, uncertainty is everywhere and stock markets have soared to record highs. Against this background a scary word last used in the 1970s is being uttered again: stagflation.Stagflation is the term that describes stagnant" growth combined with inflation" of prices. It means that companies are producing and hiring less, but prices are still going up. It's a scenario that some economists say can be worse than a recession. Continue reading...

Economy does feel stuck", says Treasury spokesperson, after UK GDP is unchanged in JulyThe pound has weakened since today's GDP report showed the UK economy failed to grow in July.Sterling is down 0.2% at $1.355 against the US dollar this morning.If the third quarter is not going to be a disaster for the UK economy, then growth in August and September will need to do the heavy lifting.The pound is extending losses on this news and is eroding some of Thursday's gains. For now, GBP/USD is hanging on to $1.3550, however, if bond yields start to rise on the back of this data, then we could see pound weakness later on Friday. The pound is the third worst performer in the G10 FX space so far today. Continue reading...

Official GDP figures confirm widely expected slowdown after strong expansion in first half of the year

Chancellor calls economy stuck, not broken' but there are signs her policies have added to the UK's economic headwinds

Economists say trade war is driving up US prices, as inflation picks up in August

New CPI update shows prices increased 2.9% over the last year, but Wall Street optimistic Fed will cut interest ratesInflation rose slightly in August as companies continued to push the cost of tariffs on to consumers.The newest update to the consumer price index (CPI), which measures a basket of goods and services, showed that prices increased 2.9% over the last year - the highest since January. Core CPI, which excludes energy and food costs, stayed stable at 3.1% after going up in July. Continue reading...

George Weston, CEO at ABF, also said food price inflation had peaked and would now start to easeThe chief executive of the Kingsmill owner Associated British Foods (ABF) has warned Rachel Reeves not to give consumer sentiment another whack" in her upcoming budget, despite signalling that food price rises had peaked and will now start to ease.George Weston, the chief executive of the ABF conglomerate which also owns the fashion chain Primark and produces sugar and cooking ingredients, said recent food price inflation had been driven by employers passing on increases to labour costs announced in Reeves' first budget as chancellor last year. Continue reading...

Key figures from No 10 and No 11 appointed to group include Torsten Bell, new economic adviser Minouche Shafik and comms chief Tim Allan

Fall to 40.9m in first six months of year pushes share price down, with order book lower than year agoHalf-year profits at Vistry Group, one of Britain's biggest housebuilders, have more than halved as buyer demand comes under pressure from concerns over the economy, affordability struggles and slower-than-hoped interest rate cuts.The company, which owns Bovis Homes, Countryside and Linden Homes, said its pre-tax profit in the first six months of the year fell by 55% to 40.9m. Continue reading...

Rain Newton-Smith tells chancellor the time for tinkering is over' and revisit promise not to raise taxes on working people

The budget must reform structures such as business rates, the VAT threshhold and stamp duty that are holding back growth

Revision highlights recent concerns about the health of the labor market, and follows a lackluster August jobs report

Warm weather and interest rate cut lift sales in August, as food, drink and computers perform stronglyRecord warm weather and a Bank of England interest rate cut lifted retail sales in August, according to the latest survey, but retailers fear that speculation about tax rises could weigh on consumers in the crucial pre-Christmas trading period.Retail sales increased 3.1% year on year as consumer spending on food and drink rose, and sales of computers and related equipment performed well as parents readied children for the new school year. Continue reading...

Europe and US consider further actions to weaken Russia after largest-ever air attack on Ukraine over the weekendThe EU's most senior sanctions envoy is holding talks in Washington with US officials after Donald Trump said he was ready to take further action against Russia over the war in Ukraine.David O'Sullivan, the EU sanctions envoy, is meeting US counterparts on Monday, as Europe and the US look for tougher measures to weaken Vladimir Putin's war machine after Russia launched its largest-ever air attack on Ukraine over the weekend. Continue reading...

Former science secretary promoted in reshuffle to continue UK efforts to revitalise trade relationship with BeijingThe UK's new business secretary, Peter Kyle, will fly to Beijing this week as part of Keir Starmer's continuing efforts to revitalise the UK's trade relationship with China and provide growth to the British economy.The former science and technology secretary, who was promoted in Friday's government reshuffle, is expected to land in China on Wednesday, picking up the schedule of his predecessor, Jonathan Reynolds, who is now the chief whip. Continue reading...

President alters demands on a whim, and although investors are averting eyes for now, risks rise with each chaotic weekDonald Trump observed blithely last week that if his cherished tariff regime is struck down by the US supreme court, he may need to unwind" some of the trade deals struck since he declared liberation day" in April.It was a reminder, as if it were needed, that nothing about Trump's economic policy is set in stone. Not only does the ageing president alter his demands on a whim, but it is unclear to what extent he has the power to make them stick. Continue reading...

Issue creates clear dividing line between left and right, as populists target voters with vow to scrap levyIt is the issue that has set the Norwegian general election alight: whether to keep, cut or abolish the national wealth tax. As the country prepares to go to the polls on Monday, Norway is in the grip of a ferocious national argument that is likely to rumble on whichever party wins.In an economy less then a seventh the size of Britain's, the formuesskatt raises about 32bn kroner (2.4bn). Multiply that by the difference in GDP, and the same rules applied in the UK could raise more than 17bn - serious money in tax terms. Defenders say the wealth tax has another benefit. They see it as the cornerstone of a progressive tax system that has helped to create one of Europe's most equal societies. Continue reading...

Older people would save anyway if state support was more limited, and overhaul of council tax would net billions moreRachel Reeves could stop giving money away if she wants to close the UK's looming spending gap. And baby boomers could be her first target.At the moment the chancellor gives away more than 50bn in tax relief for pension saving, most of which goes to wealthier boomers and better-paid gen Xers who do not need the money and would save anyway if state support was more limited. Continue reading...

Latest report also contained more bad news - the US lost 13,000 jobs in June, according to latest surveyThe US jobs market stalled over the summer, adding just 22,000 jobs in August and continuing a slowdown in the labor market as businesses adjusted to disruptions caused by tariffs.The latest jobs report also contained more bad news. The US lost 13,000 jobs in June, according to the latest survey, the first time it went into the negative since December 2020.Federal employment dropped 15,000 jobs in August, totaling 97,000 jobs lost since January.Manufacturing jobs went down by 12,000 in August and have tumbled 78,000 for the year.The racial unemployment gap widened in August. Black Americans are seeing an unemployment rate of 7.5%, compared to 6.1% last August. The unemployment rate for White Americans is 3.7% Continue reading...

August's report gave signs of a cooling labor market with negative job numbers for the first time since 2020 - here's what we learnedA closely watched report on US jobs released on Friday gave signs of a cooling labor market.The economy added just 22,000 new jobs in August, coming in below expectations, while the unemployment rate ticked slightly up to 4.3%, according to the Bureau of Labor Statistics. At the beginning of the year, more than 100,000 jobs were being added each month. Continue reading...

Disappointing US jobs report shows hiring slowed sharply this summer

Nigel Farage reportedly plans to overhaul rules governing City of London that were introduced after 2008 financial crash

Textiles, footwear, jewellery, gems and seafood are sectors most affected in trade with US, India's biggest marketIndia has long been one of the world's great garment houses, turning out everything from cheap T-shirts to intricate embroidery. Last year, textile and garment exports to the US alone fetched 21bn, riding a wave of strong consumer demand.Now the trade is in jeopardy. With the stroke of a pen, the US president, Donald Trump, last week slapped a 50% tariff on more than half of India's 65bn worth of merchandise exports to the country's largest market. A supply chain once prized for being cheap suddenly became among the priciest. Continue reading...

Nigel Farage will be wooing corporate guests at the NEC in Birmingham as his party aims to build on recent successesFags, booze, hunting and cryptocurrency: if the brochures for the Reform UK conference in Birmingham are anything to go by, executives turning up to see Nigel Farage's party will find an eclectic mix.Starting on Friday, the party leading the opinion polls will hold its next step" conference at the National Exhibition Centre, with a plan to show UK plc that it is the next party of government. Continue reading...

Officials to investigate claims of mortgage fraud against Cook, who has refused to accept firing by Donald TrumpThe US justice department has initiated a criminal investigation into mortgage fraud claims against the Federal Reserve governor Lisa Cook as a lawsuit she filed against Donald Trump over her firing makes its way through court.Lawyers with the justice department have issued subpoenas for the investigation, according to the Wall Street Journal, which first reported the investigation, which has since been confirmed by multiple news publications. Continue reading...

Prime minister cautions Canadians as Ottawa moves to curb spending to balance near-record military expendituresMark Carney has told Canadians to prepare for austerity measures and his finance minister warned of tough choices" in the coming months, as the government attempts to balance near-record defence spending, cuts to government programs and a trade war with the United States.Carney, the former central banker and economist turned politician, has been meeting senior ministers before the fall budget, and hinted cuts were coming to the federal bureaucracy. Continue reading...

Companies say increase in employer national insurance contributions has forced them to cut jobs and raise pricesUK businesses cut jobs at the fastest pace in four years over the summer, according to a Bank of England survey highlighting the impact from tax rises on employers.The monthly snapshot from a survey of chief financial officers at British businesses of all sizes showed firms reduced employment by an annual rate of 0.5% in the three months to August, the fastest since 2021. Continue reading...

My friend Hugh Corbet, who has died aged 88, was an expert in trade strategy and an advocate of free trade who advised various governments around the world, including those of Margaret Thatcher and Ronald Reagan in the 1980s.As co-founder and head of the Trade Policy Research Centre (TPRC) thinktank in London from 1968 to 1989, he quickly became a sought-after adviser to politicians, and by 1979 was also working as a consultant on trade policy to the International Chamber of Commerce in Paris and as a special trade adviser to the Conservative party. Continue reading...

Economists warn credibility of Bureau of Labor Statistics at risk after Trump ousts commissioner over job numbersAs it has for more than a hundred years, the Bureau of Labor Statistics (BLS) will release its latest monthly jobs report on Friday.But the routine monthly update on the health of the US jobs market has been overshadowed by Donald Trump's firing of the agency's commissioner, Erika McEntarfer, hours after July's statistics were released last month. Continue reading...

President challenging federal appeals court decision that liberation day' levies on imports overstepped his powers

As the later-than-usual date is set, chancellor insists the economy isn't broken' but isn't working well enough'

Andrew Bailey's remarks to MPs about the rise in the 30-year bond yield will bring some relief to the chancellorThe governor of the Bank of England has cautioned against exaggerating" the impact of a steep rise in the UK's long-term borrowing costs, which he said was part of a global trend.Andrew Bailey told MPs the Treasury had continued to borrow at the same interest rate for most of the year despite a rise in the rate on 30-year bonds to a 27-year high. Continue reading...

UK 30-year yields rose above Tuesday's levels in early trading but have now dropped back

Yield on 30-year gilts hit highest level since 1998, indicating it will cost UK more to borrow from markets

Despite predictions of a 1970s-style budget crisis, analysts point out similar rises are taking place in other marketsThe last time yields on 30-year UK government bonds were this high, Rachel Reeves was a first-year student at Oxford, getting to grips with economics.The chancellor could be excused a moment of nostalgia for such innocent times after waking on Tuesday to a barrage of headlines about Keir Starmer taking back control of economic policy - and a fresh sell-off in the government bond, or gilt, markets. Continue reading...

UK 30-year bond yields rise to highest since 1998 amid worldwide bond market rout'

Chancellor will face more limited fiscal headroom at budget after yield on 30-year bond increases to 5.723%

The PM has brought in Darren Jones, whose superpower is relentless delivery'. If that won't save the world, what will?If I hear one more of our people saying that deckchairs are being shuffled on the Titanic," a government supporter of Keir Starmer confided to the Daily Mail, I will scream." No need for shrieks. The prime minister's No 10 hokey cokey on Monday wasn't so much shuffling the deckchairs as restructuring the deck crew and announcing that some fresh faces will enable the team to work with new focus towards their ultimate goal of reshuffling. Expect the first strategy whiteboard to be broken out 370 miles off the coast of Newfoundland.For now, hold on to your aperitifs and continue to dress for dinner, because the erstwhile chief secretary to the Treasury, Darren Jones, becomes something called chief secretary to the prime minister. To Starmer, Darren is a Mr Fixit; to many of his cabinet colleagues, he is a Mr Fuxit. That's not the official line Downing Steet is going with, preferring instead to claim that yet another reset means Starmer is focused on relentless delivery". Delivery of what? They've barely passed any legislation. Hand on heart, meanwhile, I'm not sure the word relentless" means what Starmer reckons it does. All he ever does is relent, on both staff and policy. The role of his comms chief, for example, is now essentially a gig economy job, while doing a monthly U-turn is the only thing he hasn't U-turned on. We are watching a movie in which it's not clear what the main character wants. Unsurprisingly, it has turned out to be box-office poison.Marina Hyde is a Guardian columnist Continue reading...

Ray Dalio says business leaders scared to criticise Donald Trump as he warns of debt-induced crisis for the economyOne of the world's most prominent hedge fund billionaires has warned that rising inequality is turning the US into an autocratic state and condemned business leaders for failing to speak out against Donald Trump's policies.Ray Dalio, the founder of Bridgewater Associates, said gaps in wealth" and a collapse in trust were driving more extreme" policies in the US. Continue reading...

The government is on the brink of collapse over planned austerity. Instead it must face up to the costs of its unnecessarily rigid labour marketAs someone who has always been against austerity, I find France, with a national debt at 114% of GDP and a budget deficit of 5.8% of GDP, a conundrum. Despite years of denunciation from his left and far-right opponents that Macron has engaged in ultraneoliberalism", there hasn't been any. Not on a macro level, anyway, where both French government spending (57.3% of GDP) and tax receipts (51.4% of GDP) are among the highest in the world, including social spending, which outpaces any of its European neighbours.At the same time, it's impossible to have spent the past decade in France without encountering the widely shared perception and accusation that public services are in decline. Doctors and nurses denounce a labour shortage in public hospitals; people who live in rural areas denounce the closing of rural train lines; students and academics denounce a lack of resources for public universities, many of which are dealing with outdated infrastructure, and for research.Alexander Hurst is a Guardian Europe columnist Continue reading...

Economists say new team could help push back against Treasury but PM needs to spell out what he stands for

Weak market conditions, US tariffs and downbeat client confidence blamed for drop in factory ordersOuch! The UK manufacturing sector shrank again last month, as factories were hit by weaker demand at home and abroad.The latest monthly poll of purchasing managers across Britain's manufacturing sector found that new orders and new export business both fell at quicker rates in August, leading to another drop in production volumes.Production volumes are still showing resilience in the face of global geopolitical uncertainty and US tariff policies, with both July and August having seen only slight contractions that were milder than those suffered earlier in the year. Business confidence has also lifted to a sixmonth high, reflecting hopes that the trading environment is starting to settle down.However, August also saw a steep drop in UK manufacturers' new orders, with total order books and overseas demand both falling at some of the fastest rates seen over the past two years. Weak market conditions, US tariffs and downbeat client confidence all contributed to the dearth of new contract wins. Job cuts were also reported for a tenth successive month, with factory headcounts dropping to one of the greatest extents postpandemic. Continue reading...

The government needs bold policies in the autumn budget that will change the narrative without startling the marketsAssume that Rip Van Winkle had gone to sleep on the eve of the US election on 4 November 2024 and had woken up on 1 September 2025 and was told that, in the US, developments included:a) Donald Trump had been talking of firing Jerome Powell, the chair of the Federal Reserve, and asserting that only those who believed that short-term interest rates needed to be a lot lower were qualified to be the next Fed chair. Moreover, he had attempted to take the unprecedented step of firing a board governor. Continue reading...

Christine Lagarde issues warning about risks of undermining central bank's independenceDonald Trump's attempt to influence the US Federal Reserve could pose a very serious danger" for the world economy, the head of the European Central Bank has warned.Christine Lagarde, the president of the ECB, said Trump undermining the independence of the world's most powerful central bank would have an impact for the US and other countries. Continue reading...