As the US president warns of a a little short-term interruption', businesses are struggling to make decisions amid heightened uncertaintyDonald Trump declared there to be no room left" for a deal with Canada and Mexico this week, launching a trade war against his nation's closest allies that he presented as an effort to protect America's soul.Then he pulled back. It wasn't his first feint and retreat. It probably won't be the last. Continue reading...
Officials said to be looking at whether producers have conspired to increase prices or have held back supplyThe justice department has reportedly opened an investigation into what is driving the sharp rise in egg prices, including whether top producers have conspired to increase them.Officials are also said to be looking at whether companies have held back supply. Their investigation is in its early stages, and may not lead to any formal action, according to the Wall Street Journal, which cited sources familiar with the matter. Continue reading...
Selling off assets to foreign owners, deregulating markets, and liberalising financial services only leads to inequality and instabilityIn 1994, I joined a march protesting against how the World Bank and the International Monetary Fund - backed by the US - were forcing governments in the global south to follow what was called the Washington consensus".We argued that privatising state assets, deregulating markets, and liberalising financial services to attract external investment was leaving countries more unstable, more unequal and more dependent on foreign actors. Decades on, I am horrified that an approach that wreaked havoc in the global south is still being pursued in the UK.Dhananjayan Sriskandarajah is the chief executive of the New Economics Foundation and author of Power to the People. He is a former chief executive of Oxfam GB and secretary general of Civicus, a global alliance of civil society organisations Continue reading...
by Rashida Tlaib and Michael A McCarthy on (#6VQK2)
The GOP budget seeks vast cuts to Medicaid, food assistance and more. Instead, let's build an economy for everyoneFamilies in the US are exhausted. They deserve a government that chooses them over billionaire donors. The Republican budget plan that passed the House last week calls for $4.5tn in tax giveaways for the ultra-rich and corporations. It will be paid for with enormous cuts to Medicaid, food assistance and other federal programs that serve our families and the working class. These are the folks Elon Musk refers to as the parasite class".The agenda of the billionaire president and the richest man in the world is crystal clear: making the rich richer while working families struggle. Continue reading...
After a call with top executives at GM, Ford and Stellantis, president approves one-month exemption from tariffsDonald Trump has temporarily spared carmakers from sweeping US tariffs on goods from Canada and Mexico, one day after an economic strike on the US's two biggest trading partners sparked warnings of widespread price increases and disruption.The US president extended his aggressive trade strategy at midnight on Tuesday by targeting the country's two closest neighbors with duties of 25%. Continue reading...
The chancellor-elect's proposals for gamechanging spending on defence and infrastructure are the right response to a new eraThree days after Russia's invasion of Ukraine in February 2022, the German chancellor, Olaf Scholz, created a 100bn special fund to modernise Germany's armed forces. Vladimir Putin's aggression, he told a stunned Bundestag in explanation, meant that Europe was living through a Zeitenwende, or turning point.Mr Scholz was right. But it has taken the return of Donald Trump to the White House to lay bare the full scale of the emerging threat to European values, security and economic interests. For leaders across the continent, the dawning realisation of what Trump 2.0 means for the transatlantic alliance constitutes a second historic moment of jeopardy and decision.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...
Although UK may avoid tariffs, overall productivity could be impacted by tit-for-tat tariffs between economiesA full-blown trade war would pose a substantial" threat to the British economy, Bank of England governor Andrew Bailey has warned.Donald Trump struck Canadian and Mexican imports with new duties of 25% at midnight on Tuesday, and also levied extra 20% tariffs against Chinese goods, triggering retaliatory moves. He also threatened to place sweeping 25% tariffs on EU imports last week. Continue reading...
Many plan to boycott US goods and say they will not cross the border while Trump is in officeSince Donald Trump began his tariff threats against Canada and his jokes' about making Canada the 51st US state, I have not bought a single product originating in the US," said Lynne Allardice, 78, a retired business owner from New Brunswick, Canada.Not a single lettuce leaf or piece of fruit. I have become an avid reader of labels and have adopted an anywhere but the US' policy when shopping. I will not visit the States while Trump remains in office, and most of the people I know have adopted the same policy." Continue reading...
by Callum Jones in New York and Leyland Cecco in Toro on (#6VNZQ)
Prices highly likely' to rise almost immediately, retailers say, after 25% duty hits exports from Mexico and CanadaAmericans have been warned to brace for higher prices within days of Donald Trump pulling the trigger on Monday, imposing US tariffs on goods from Canada and Mexico and hiking tariffs on China.Global stock markets came under pressure again on Tuesday, with leading indices falling sharply - and the benchmark S&P 500 losing all its post-election gains - as Canada, Mexico and China vowed to retaliate, and investors balked at the prospect of an acrimonious trade war. Continue reading...
by Richard Partington Economics correspondent on (#6VP8J)
Chancellor says increased military spending should support British jobs and British industries'Rachel Reeves has said UK companies and jobs will be prioritised under the government's plans for a significant increase in defence spending, with an aim to support left behind" industrial towns and the economy at large.Announced by Keir Starmer last week amid growing fears over Donald Trump's commitment to European security, the government will increase defence spending to 2.5% of GDP by 2027 - worth an additional 6bn a year. Continue reading...
Government to expand coverage of employment rights bill, according to reportAgency workers will reportedly be included in a ban on exploitative" zero-hours contracts as part of changes to the UK government's employment bill.Under the new rules, employers will have to offer agency workers a contract that guarantees a minimum number of hours every week, the BBC reported. Continue reading...
Donald Trump has said there is no room' left for negotiation with Mexico and Canada on planned tariffs. He also said the US would institute tariffs at 20% on China. All Mexican exports to the US face a levy of 25% under the plans. Most Canadian exports will face a 25% tariff, with 10% for energy products
Companies will never solve the climate emergency alone. The impetus for change needs to come from governmentIt would be very easy to be sharply critical of BP, given its sudden volte-face on its environmental commitments. Under pressure from a shareholder, Elliott Management, it has abandoned the green ambitions it announced in 2020 and pivoted squarely back to an overwhelming focus on oil and gas.While easy, it would arguably be unhelpful, and perhaps even misguided. Because viewed in the round, this isn't really about BP: it's about capitalism at large, and its inability to respond to the climate crisis in the manner we need.Brett Christophers is a professor in the Institute for Housing and Urban Research at Sweden's Uppsala University and author of The Price is Wrong: Why Capitalism Won't Save the PlanetDo 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...
The government and the City want to push regular savers into risky investments, but we're right to be wary, says David RedshawThere are good reasons why cash Isa holders like me don't want to convert to share-based investments (Cash Isas: pressure grows against rumoured move to 4,000 allowance, 1 March). We don't trust the City or governments. After Margaret Thatcher and Nigel Lawson's deregulation of the City in 1986, people were encouraged to become part of the shareholder democracy". This worked until it didn't. In 1990, the splurge of loose cash and cheap shares dulywentpop.In the end people will decide for themselves. It's all very well investment firms telling us that a share instrument will perform better than cash over a period - but what period? Suppose great volatility arrives out of nowhere - where economic cycles are so short that they are measured in the lifetime of a lettuce. The bankers were back taking their bonuses long ago, and are now asking the chancellor to allow them to hold less capital. Continue reading...
Global Times signals Beijing's likely countermeasure after US president threatened a further 10% duty to come into force on TuesdayChina is preparing countermeasures against fresh US import tariffs that are set to take effect on Tuesday, China's state-backed Global Times reported, with American agricultural exports likely to be targeted.Donald Trump last week threatened China with an extra 10% duty, resulting in a cumulative 20% tariff, while accusing Beijing of not having done enough to halt the flow of fentanyl into America, something China said was tantamount to blackmail". Continue reading...
With Trump's true intentions clear, new thinking is needed to fund UK defence, be it fully seizing Russian assets or reversing Hunt's NI cutsPrincipled political resignations are rare at Westminster, so Anneliese Dodds's departure on Friday, over Labour's cuts in aid to fund defence spending, was a significant moment.In her powerful resignation letter, Dodds rightly highlighted the heavy costs of the cuts for some of the world's poorest people, compounding the damage caused by the Trump administration shutting US aid projects. Continue reading...
Last week's much-trumpeted Anglo-US meeting has not reduced concerns about Ukraine, Nato or tariffs - or boosted confidence in the UK governmentMost people I know were concerned about the prospect of a second Trump presidency; but we did not have a vote. However, those Republicans who elected him should have been mindful of the old Chinese proverb: be careful what you wish for.A classic example has been provided recently in the columns of the New York Times. On 17 December, the rightwing columnist Bret Stephens wrote: Here's a thought for Trump's perennial critics, including us on the right. Let's enter the new year ... by dropping the lurid comparisons to past dictators, by not sounding paranoid about ... the ever-looming end of democracy." Continue reading...
UK's balanced trade with the US, Trump's fondness for Britain, and new invitation for a state visit at Buckingham Palace, make the UK popular with investors today
by Richard Partington Economics correspondent on (#6VM25)
A weak economy, higher borrowing costs and increased defence spending will mean tough decisionsRachel Reeves is rapidly running out of wriggle room amid higher borrowing costs, stubborn inflation, a sluggish economy and a promise to find billions of pounds for additional defence spending.On Tuesday, the chancellor will get the final verdict from the Office for Budget Responsibility (OBR) before her 26 March spring statement on whether her fiscal rules have been smashed apart by increasing financial pressures since last autumn's budget. Continue reading...
Harris poll finds 51% of Americans think US economy is worsening with views on Trump tariffs split on party linesThe majority of Americans believe the economy is getting worse rather than better, even as Republican views on the nation's finances have performed a dramatic backflip since Donald Trump's re-election, according to an exclusive poll conducted for the Guardian.One month into Trump's second presidency, a Harris poll found that 51% of Americans now believe that the US economy is worsening, while just 20% said it was improving and 29% said it was the same.39% of Republicans now believe the US economy is improving compared with just 8% last May. Over a quarter, 26%, believe it is worsening compared to 70% last May.69% of Democrats now believe the US economy is getting worse compared with 36% last May; 11% think it is getting better compared with 32% last May.Independent voters' views have shifted the least with 12% believing the economy is improving (11% last May) and 56% thinking it is getting worse (59% last May).49% of all polled said tariffs will have a negative impact on the US economy.43% of Republicans, 17% of Democrats and 19% of independents said the impact would be positive.28% of Republicans, 63% of Democrats and 54% of independents said it will have a negative impact. Continue reading...
European reconstruction bank will help rebuild country if peace is agreed but a lasting end to conflict is neededThe war-torn Ukrainian economy could expand by 5% next year if a ceasefire is agreed, the European Bank for Reconstruction and Development (EBRD) has predicted - but prospects for reconstruction depend on a lasting peace.The London-based lender has invested $6.2bn (4.9bn) in projects in Ukraine over the course of the three-year conflict. Continue reading...
by Richard Partington Economics correspondent on (#6VJ83)
Capital's mayor wants return to productivity growth, which has struggled to recover from 2008 financial crisisSadiq Khan, the mayor of London, has announced an ambitious plan to add more than 100bn to the capital's economy within a decade.Unveiling what he is calling the London growth plan, Khan said he was allocating hundreds of millions of pounds in devolved funding in an attempt to return the annual productivity growth of the London economy to the levels seen before the 2008 financial crisis. Continue reading...
by Presented by Helen Pidd with Ashifa Kassam; produc on (#6VJJW)
How much is immigration responsible for Spain's economic growth? Ashifa Kassam reportsWhen the Guardian's European community affairs correspondent, Ashifa Kassam, first moved to Spain 14 years ago, the country was still reeling from the 2008 financial crisis. All they talked about was la crisis, la crisis. They couldn't see a way out. There was just no light at the end of the tunnel."Today, things are very different - businesses are opening up, restaurants are packed, and in Madrid there's just a buzz to the city that wasn't there before". Continue reading...
President opens new front in assault on global trade norms as advisers claim China moving to dominate copper marketDonald Trump on Tuesday opened yet another front in his assault on global trade norms, ordering a new investigation into possible tariffs on copper imports to rebuild US production of a metal critical to electric vehicles, military hardware, semiconductors and a wide range of consumer goods.Trump, looking to thwart what his advisers see as a move by China to dominate the global copper market, signed an order directing the commerce secretary, Howard Lutnick, to start a new national security investigation under Section 232 of the Trade Expansion Act of 1962, the same law that Trump used in his first term to impose 25% global tariffs on steel and aluminum. Continue reading...
Friedrich Merz, expected to be next chancellor, has spoken of urgent need for ramped-up defence, but blocking minority' could form in future BundestagGermany's outgoing parliament could be asked to sign off on a new defence fund in its final weeks as the conservative winners of Sunday's election seek to balance geopolitical demands with the looming pressures of a new Bundestag hostile to military spending.Since the victory of his CDU/CSU alliance, Friedrich Merz has spoken of the urgent need for Europe to ramp up its own defence capabilities, saying it needs independence from the USA" amid an unpredictable Trump administration and a looming threat from Russia. Continue reading...
Index reflects consumer optimism, which is shaky as inflation seems to be stuck and a trade war over tariffs loomsUS consumer confidence plummeted in February, the biggest monthly decline in nearly four years, a business research group said on Tuesday, with inflation seemingly stuck and a trade war under Donald Trump seen by a growing number of Americans as inevitable.The Conference Board reported that its consumer confidence index sank this month to 98.3 from 105.3 in January. That's far below the expectations of economists, who projected a reading of 103, according to a survey by FactSet. Continue reading...
Scores in the US say they're grappling with raised mortgage and loan interest rates and exploding insurance premiumsI bought my home in a hurry in 2020," said Meg, 60, an office manager from Maryland. It was less expensive to take on a mortgage than to keep paying ever-increasing rents for my college-student daughter and me."Now housing costs consume 50% of her income. Continue reading...
by Damian Carrington Environment editor on (#6VFQ3)
Green sector growing at triple the rate of the UK economy, providing high-wage jobs and increasing energy securityThe net zero sector is growing three times faster than the overall UK economy, analysis has found, providing high-wage jobs across the country while cutting climate-heating emissions and increasing energy security.The net zero economy grew by 10% in 2024 and generated 83bn in gross value added (GVA), a measure of how much value companies add through the goods and services they produce. Continue reading...
US consumer debt is high and rising but 16 cents on every dollar spent by the government is now going to interestA recent report from the Federal Reserve warned that consumer debt is now more than $18tn and the people are worried. Americans' credit card and household debt reach all-time high", reports Fox News. Consumers are finding it harder and harder to pay off their debt", claims CNN. A third of Americans have more credit card debt than emergency savings", says Marketplace.Yes, consumer debt has ticked up this year. It's true that some consumer debt - particularly student loans - has soared in the past few years. But - although worrisome - this debt is still being used to fund education and skills. Other consumer debts are being used to buy homes and cars and fund the purchases that make life livable, not to mention the many industries that rely on this spending. Continue reading...
Bucket-loads of political capital and cash will be used to reconfigure English councils' two-tier set-up, but the benefits could be hugeAcross England a quiet rebellion is brewing. In Rutland, locals have started a campaign to save the tiny county from abolition. Villagers in High Peak, rural Derbyshire, worry they could be bundled in with Andy Burnham's Greater Manchester. Nottingham is expanding, Medway wants to become a city, and Surrey will have a mayor.Flick through your local newspaper (if one still exists), or fight past the online pop-ups and chances are there will be a story about Labour's plans for the biggest shake-up of local government since the 1970s. Continue reading...
There is political agreement that Britain and Europe need to increase military spending. But in straitened times, how can it be done?Can Britain increase defence spending without cuts elsewhere?
As China's cheap prices continue to dominate western markets, attempts to revive or invent UK brands has never been tougherBritons might never again get the chance to buy an electric kettle made in the UK. Even a 150 kettle from Dualit, the company most famous for making its celebrated toaster in Crawley, West Sussex, is produced by Chinese workers 5,000 miles away.Most consumers think the whereabouts of the factory or assembly plant riveting their latest purchase together is irrelevant, but those who do want it to be produced locally do not have a choice. Continue reading...
All three major stock indexes moved decisively lower, extending sell-off in wake of dour economic reportsUS stocks tumbled on Friday, extending a sell-off in the wake of dour economic reports and closing the book on a holiday-shortened week fraught with new tariff threats and worries of softening consumer demand.All three major US stock indexes moved decisively lower on the heels of the data, and continued their slide into afternoon trading. Continue reading...
Sharon Graham, the Unite general secretary, says direct action is being considered to save UK jobsBritain's income from inheritance tax is on track to hit a record this financial year, having risen around 10%.Inheritance Tax receipts for April 2024 to January 2025 are now 7.0bn, new data from HMRC shows, which is 700m higher than the same period last year.The inheritance tax creep crawls ever higher, hitting 7bn so far this tax year. This puts it well on track to surpass the 7.5bn record that it hit a year earlier.With government plans to include pensions in the net for inheritance tax from 2027 and thresholds remaining frozen, the tax take is only going to get higher. Continue reading...
by Richard Partington and Phillip Inman on (#6VFDE)
Rule dating from 2009 that limits borrowing looks vulnerable as main political parties promise to revive stalled economyGermany is used to running its economy with the brake on. Ever since the 2008 financial crisis Berlin has sought to burnish a reputation as the world capital of fiscal discipline, with a near-pious aversion to debt and pride in strong government finances.Under a rule known as the debt brake" - introduced in 2009 by Angela Merkel to show Germany was committed to balancing the books after the banking crash - the federal government is required to limit annual borrowing to 0.35% of GDP. Continue reading...