Irish government also hits back at accusations by US that country is operating a tax scam'

The chancellor lacks room to manoeuvre before her spring statement thanks to the cost of debt interest payments

Airline and hotel shares tumbled as substation fire shuts airport, while UK borrowing jumped more than expected

IFS says chancellor boxed in' by promises before spring statement as February figure is much worse than expected

Report co-authored by Irish government also finds tariffs could cause job losses and relocation of US multinationals

ONS, already working on fixing a survey, uncovers problems with two indices used to measure prices in economy

Chancellor may see data as vindication for spending cuts but some analysts say more radical action will be needed

Chancellor has very little headroom within her fiscal rules but is keen to keep Office for Budget Responsibility on sideWhen Rachel Reeves made her speech as shadow chancellor to Labour's annual party conference two years ago it was one of the more niche announcements that drew a cheer from the audience.Strengthening the role of the Office for Budget Responsibility might have sounded like a dry measure to unveil to the party faithful. But, after the Liz Truss debacle, handing the Treasury watchdog more powers went down a storm in Liverpool. Continue reading...

Despite the decision to hold at 4.5%, businesses and households can take a confident view of the UK's prospects

Payments by OECD countries outstrip amount spent on defence, police services and housing, report finds

Rate-setting committee also points to mounting global uncertainty as it pauses its cycle of reductions

Unemployment was level in January, but has risen over the past six months

Officials raise inflation forecast to 2.7% this year, as Fed chair Jerome Powell says uncertainty is remarkably high'Officials at the US Federal Reserve cut their US economic growth forecasts and raised projections for price growth as they kept interest rates on hold.Uncertainty around the economic outlook has increased," the central bank said in a statement, as Donald Trump's attempt to overhaul the global economy with sweeping tariffs sparks concern over inflation and growth. Continue reading...

A groundbreaking vote by outgoing MPs has given the chancellor-elect, Friedrich Merz, the chance to renew mainstream politicsThe first grand coalition" government in Germany's postwar history was formed in 1966 to address an unexpected economic downturn, amid concerns over a nascent neo-Nazi far right. Nearly six decades later, as the Christian Democratic Union (CDU) and the Social Democratic party (SPD) prepare to join forces across the right-left divide for the fifth time, following February's snap election, the circumstances are superficially similar. The scale of the challenges, however - and the sense of jeopardy - are of a different order.As geopolitical events have undermined its tradeled business model, the German economy has been undergoing the most prolonged period of stagnation since the second world war. Not unrelatedly, the extreme-right Alternative fur Deutschland (AfD) party - elements of which are judged a threat to the democratic constitutional order by security services - has risen in the polls to become the second-biggest party in the EU's most powerful member state. At the same time, a Putin-sympathetic Donald Trump is dismantling the transatlantic security guarantees on which Germany has relied in the postwar era.Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...

Rolling coverage of the latest economic and financial news

Rolling coverage of the latest economic and financial news, as gold hits $3,027 per ounceGold is continuing to hit new heights this morning - it's now trading at $3,027 per ounce.In the current environment, every day seems to offer a new catalyst for the gold price," comments Kathleen Brooks, research director at XTB.In uncertain times, central banks and individuals demand gold, while inflation concerns emanating from President Trump's tariffs and trade war are also boosting the price of gold.Life above $3,000 per ounce could be the norm for the gold price in 2025, it is already higher by 15% YTD, easily outpacing gains for global equities. Continue reading...

Warning lights are flashing on a dashboard of economic indicators as analysts grow alarmed about a Trumpcession'Prospects for the US economy have cooled significantly in a matter of months. After outperforming its international peers last year, warning lights are flashing on a dashboard of economic indicators as analysts warn that Donald Trump's erratic approach is hitting the world's largest economy.Fears of a US recession this year are growing, in what is being called a Trumpcession", amid a sharp decline in business and consumer confidence as the president threatens punitive import tariffs on US allies and enemies alike. Continue reading...

Pulled pork replaces oven-ready gammon joints, and local newspaper adverts are out on ONS list

Despite the government pledging extra funds and one hole being filled every 18 seconds, motoring groups say situation looks bleak' for driversThe cost of fully fixing the pothole-plagued local roads of England and Wales has reached a new high of almost 17bn, according to the latest industry report.The record sums required come despite increased government funds to target road repairs - and one pothole being filled every 18 seconds. Continue reading...

Crude prices lifted by US-Houthi attacks, as City watchdog decides to fine Crispin Odey 1.8m and ban him from the UK financial services industry for a lack of integrity'

Charlie Bean says OBR forecasts are flaky' and cautions against trying to hit targets five years awayThe former Bank of England deputy governor Charlie Bean has warned the chancellor against making kneejerk cuts in next week's spring statement to try to hit fiscal targets that are five years away.Rachel Reeves is preparing to slash spending, including on disability benefits, in response to weaker forecasts from the independent Office for Budget Responsibility (OBR) - prompting a backlash from within her own party. Continue reading...

Economic organisation downgrades forecasts for growth in UK as well as US, Canada and Mexico due to tariffs

Vacancies increase in building sector after low levels of activity in recent months amid economic uncertaintyVacancies have increased in the construction industry as well as for gardeners, teachers and maintenance workers, according to a new report.Research by the Recruitment and Employment Confederation (REC) and data firm Lightcast showed a recent fall in demand for veterinary nurses, delivery drivers and train and tram drivers. Continue reading...

Painting a veneer of morality over welfare cuts risks people fighting a tougher battle for support they needThe assessment process itself is awful." Carol Vickers receives the personal independence payment (Pip), the disability support benefit whose spiralling cost the government is determined to cut back.She has a debilitating condition called Ehlers-Danlos syndrome that affects her connective tissues, and means she needs an assistance dog. I spoke to her this week, to get a sense of how those at the sharp end of the looming changes may be feeling. Continue reading...

A trade war could push up inflation when both the UK and US economies really need cheaper borrowing. So what's a central bank to do?Monetary policymakers on both sides of the Atlantic will be considering how seriously to take Donald Trump's threats of an all-out trade war as they give their verdict on the path of interest rates this week.The Federal Reserve, the US central bank, will examine the prospect of a Trumpcession" brought on by tariffs that send import costs rocketing and convince consumers, already shellshocked from the cost of living crisis, to stop spending. Continue reading...

Russia has pushed Europe into a quasi-Keynesian approach to the defence budget. Only Britain insists on cutting help to the sick to pay for securityAs the president of the US provokes trade and economic chaos at home and abroad, an American tells a British friend of mine: At least your political system removed Truss; we are landed with Trump for fouryears."Unfortunately, when it comes to the worldwide damage being wreaked by Trump and his cronies, the we" applies to all of us. Continue reading...

Treating disabled and sick people callously flies in the face of all the party stands for - the government must rethink its plans

The president's chaotic policy on import duties makes planning impossible, says the CEO of a Kentucky distillery - and state Republicans are unhappy, tooBrough Brothers Distillery is in the midst of a big expansion. A fifteen minutes' drive from its small distillery in the West End neighborhood of Louisville, Kentucky, workers are toiling away on its new site, seven times the size of the old one, in the heart of Bourbon City.This has been a long time coming for Brough Brothers, which opened its first location in 2020 and had drawn up ambitious plans for international growth in 2025. Then Donald Trump returned to power. Continue reading...

Calls for chancellor to exclude defence from rules or raise taxes in response to spending pressure at spring statementLeading economists are urging Rachel Reeves to bend her fiscal rules or raise taxes instead of cutting welfare when she responds to growing spending pressures in her spring statement later this month.The independent Office for Budget Responsibility (OBR) is expected to downgrade its forecasts for the UK when they are published on 26 March, wiping out the headroom to meet the chancellor's rules. Continue reading...

UK economy unexpectedly contracts by 0.1% in January in blow to the chancellor ahead of spring statement; Friedrich Merz declares: Germany is back'Let's look at the GDP figures in more detail.The 0.9% drop in production output in January, which came after 0.5% growth in December, was mainly caused by a 1.1% slump in manufacturing while mining and quarrying also declined. Basic metals and metal products were down along with pharmaceutical products. Continue reading...

ONS data showing 0.1% fall in GDP in January comes less than two weeks before chancellor's spring statement

GDP goes in wrong direction as chancellor puts final touches to fiscal plans

Lib Dem leader says PM should make public show of support for ally against shocking attacks' on its sovereigntyThe leader of the UK's Liberal Democrats has called on the prime minister to publicly support Canada and oppose the shocking attacks" on Canadian sovereignty, as the Trump administration further escalates its global trade war against longstanding allies.Ed Davey, who leads the third largest political party in the UK, has called on Keir Starmer to travel to Canada in a show of support to the nation's new prime minister, Mark Carney, as the commonwealth nation faces a generational crisis under Trump's tariff war and suggestions that the country might become the 51st US state. Continue reading...

Labour targeting sickness and disability benefits that have ballooned amid increasingly ageing and unwell populationKeir Starmer's government is aiming to cut billions of pounds from welfare spending before the spring statement.The prime minister has warned that Britain's benefits system is the worst of all worlds", before the government publishes a green paper on sickness and disability benefit changes next week. Starmer is facing the biggest rebellion of his premiership over the plans. Continue reading...

Districts in Birmingham now ranked below poorest areas of France, Malta and Slovenia as institute urges rethink on planned welfare cutsThe UK has tumbled down the league of affluent nations after almost a decade of welfare cuts and stagnant incomes, according to a report that found the poorest districts in Britain now rank below the lowest-income areas of Malta and Slovenia.In a warning for ministers to protect welfare spending before Rachel Reeves's spring statement later this month, the National Institute of Economic and Social Research (NIESR) said the UK's reputation for high living standards was under threat. Continue reading...

Inditex shares plunge as some analysts say data suggests falling demand across Americas amid tariff uncertainty

Once again, the American economy is under the gun and under a microscopeIn 2016, voters in the UK opted to leave the European Union hoping that the day after would deliver something better. Nearly nine years later, Britain's growth remains anemic, its economy continues to underperform. A parade of prime ministers came and went. Along the way, a head of lettuce outlasted a hapless and clueless Liz Truss.Blood and soil economics exacts high a price. Fittingly, Nigel Farage, the godfather of Brexit, was on hand for Donald Trump's inauguration in January. On account of the cold, he was not seated. Still, Farage left his mark. America now endures a Brexit moment of its own. Continue reading...

FCA move follows longstanding pressure against new public interest test for announcing investigations

While inflation has declined sharply from its peak in 2022, price increases have remained above Fed's target rate of 2%Consumer prices remained relatively stable in February even as some economists have warned that prices could rise again amid Donald Trump's trade war and stock markets have fallen on fears of a recession.According to the Bureau of Labor Statistics latest Consumer Price Index (CPI), which tracks the prices of a range of goods and services, the annualized inflation in February was 2.8%, a 0.2% decrease from January's year-over-year rate of 3%. The month-by-month price increase for all goods minus the volatile food and energy industries was 0.2%, compared with January's 0.4%. Continue reading...

Large tax cuts for the rich, import tariffs, and the competing interests of Republican nationalists and the techno-right is a dangerous combinationWhat connects Donald Trump's approach to trade, tax and government spending? Is there a Trumpian theory of economics - Maganomics? Trump, like most politicians, would doubtless reject any claim that he was following a particular ideological blueprint, but then, as John Maynard Keynes said: Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist."It's certainly difficult to attribute Trump's policies to the intellectual influence of any one strand in economic thinking. The most obvious frame is the dual one identified by Harvard economist Dani Rodrik, who describes it as a combination of economic nationalism and the techno-right. The former, represented by long-term Trump confidantes Peter Navarro and Steve Bannon, wants to rebuild America's traditional industrial strength behind tariff walls while deporting as many immigrants as possible; the latter, represented of course by Elon Musk, to engineer a great leap forward into an AI-enabled libertarian future.Jonathan Portes is professor of economics and public policy at King's College London and a former senior civil servant Continue reading...

The release of economic data was moved to 7am in 2020, and research has suggested that if the time was reverted, the ONS website could crashThe UK's embattled statistics agency cannot reverse a pandemic-era decision to release official data on the state of the economy before financial markets open because its creaking website could crash, it has emerged.The Office for National Statistics (ONS) had sought views on whether to revert to releasing statistics - such as GDP and inflation data - at 9.30am. The releases were moved forward to 7am in March 2020 to allow investors time to digest consequential data - such as the subsequent record contraction in the economy - before the start of London stock market trading at 8am. Continue reading...

US president announces new 50% tariff on Canadian metal imports from tomorrow

Philip Wood, Daniel Scharf and Sheila Triggs respond to an article by Rowan Williams calling for a refocusing of Labour's goals on wellbeing, not wealthBravo! I never thought I would find myself in full agreement with that woolly liberal Rowan Williams, but I do now (When politicians tell us to focus on growth we need to ask: Why, and for whom?', 8 March). As a green social democrat, I am appalled by the intellectual vacuity of our neoliberal growth orthodoxy, so enthusiastically pursued by Labour. We seem to be oblivious to how the neoliberal revolution since the 1970s has immiserated most of our population. It has led to inequality and soaring rates of poverty and illness; a largely non-unionised, exploited workforce; impoverished public services; knackered infrastructure and an environmentin crisis.Instead of the trickle down of wealth created by rentier capitalism, to be taxed and invested in better infrastructure, public services and general wellbeing, we have had this wealth from growth sucked up into the top 1%. Dhananjayan Sriskandarajah (Opinion, 7 March) outlines how 38% of all turnover of non-financial businesses in Britain went through foreign companies, especially US businesses. He quotes Angus Hanton as rightly saying that we have become a vassal" state, with our assets being destructively exploited by US economic predators. We need Labour to begin a counter-revolution, not further servility to this economic madness, by taking back into full public ownership our precious infrastructure, public services and strategic industries such as steel-making and green power generation and distribution. Continue reading...

British PM has discussed issue with president, as US trade war with Canada escalatesKeir Starmer has said he will not hit back with immediate counter-tariffs if Donald Trump imposes 25% levies on all steel and aluminium imports to the US on Wednesday.The prime minister discussed the issue with Trump in a phone call on Monday and is prepared for the tariffs to be imposed at 4am UK time on 12 March. Continue reading...

US currency has lost all the gains it enjoyed since Trump won election and hits lowest level since mid-OctoberThe euro and the pound have risen against the dollar to their highest level since the week of the US election, as the greenback sank against other leading currencies amid mounting Trumpcession" fears.The European single currency rose by a cent to $1.093, breaching the $1.09 barrier for the first time since Donald Trump won the presidential race. Sterling hit $1.2956, its highest since 8 November, with both currencies strengthening after the US president escalated his trade war with Canada by lifting planned tariffs on metal imports. Continue reading...

Industries across the country are bracing for the impact of the Trump administration's worldwide tariff regime

Jewellery purchases linked to 14 February give lift to otherwise lacklustre month, British Retail Consortium saysAn increase in Valentine's Day gift-buying brought relief for retailers last month amid February's grey days", as consumers held back from spending on big-ticket items, according to industry figures.Jewellery purchases linked to Valentine's Day were one of the highlights of an otherwise lacklustre month when sales inched ahead, the British Retail Consortium (BRC) said. Continue reading...

New York stock market posts heavy losses, as investors have a wake-up call' about risks of recession under Donald Trump

Premier Doug Ford says province won't back down' until US president retracts duties on CanadaThe Canadian province of Ontario is imposing a 25% surcharge on electricity exports to the states of New York, Michigan and Minnesota in protest against Donald Trump's tariffs, the premier, Doug Ford, said on Monday.President Trump's tariffs are a disaster for the US economy. They're making life more expensive for American families and businesses," Ford said in a statement. Continue reading...

Donald Trump's brinkmanship and stop-start approach to tariffs rattle investors