by Jessica Elgot, Richard Partington and Eleni Courea on (#6Z63F)
Exclusive: The Guardian has been told that discussions about increases include a near-certain gambling levyThe chancellor and prime minister will begin to pitch-roll tax rises and reforms from September as part of a strategy to prepare the country for a difficult budget that could be held in November, the Guardian has been told.Although Treasury sources have insisted Rachel Reeves will stick to her pledge not to raise income tax, national insurance or VAT, senior Whitehall sources said that she and Keir Starmer had begun a series of meetings to thrash out the shape of the budget. Continue reading...
Monetary Policy Committee has cut UK interest rates today, in a deeply split decision, but City pricing suggests another cut in 2025 is no longer fully priced in
Base rate reduction to 4% will hit some savers, but people with tracker home loans will see immediate benefit Bank cuts interest rate for fifth time in a year
by Richard Partington Senior economics correspondent on (#6Z5JJ)
Quarter-point reduction expected, with City investors predicting a three-way split among rate setters Business live - latest updatesThe Bank of England is poised to cut interest rates on Thursday despite a growing divide between its policymakers over the dangers to the economy from high inflation and rising unemployment.In a development that will ease pressure on households and businesses, City forecasters expect the central bank to announce a quarter-point cut, its fifth rate reduction in a year. Continue reading...
The chancellor and the CBI have plans for reviving the institution. Neither will tackle Britain's pitifully low levels of business investmentWe are, it is admitted, the financial centre of the world," said the chairman of the Union Bank of London in 1903. Back then, the City of London was the world's banker, and its stock exchange was worth as much as the New York and Paris exchanges combined. Today, the stock market is shrinking at its fastest rate since 2010. While the mining company Glencore's recent decision to retain its London listing provided a temporary boost, it won't stem the tide. Companies are increasingly ditching London and moving to Europe and the US.Rachel Reeves hopes to revive the exchange by pushing stock ownership, encouraging people to become their own portfolio managers. The Confederation of British Industry (CBI) has its own proposals, including tax breaks and looser bonus rules. Both of these plans are based on deregulation, and neither addresses the underlying problem: Britain's ailing stock market is both a cause and consequence of stubbornly low business investment and a broken growth model.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...
Prime minister defends government's handling of economy but will not give assurances over not raising income tax, employee NI or VATEd Davey, the Liberal Democrat leader, has urged Keir Starmer to call Donald Trump to encourage him to use his influence to block Israel's plans for a full occupation" of Gaza.In a statement, Davey said:[Israeli PM Benjamin] Netanyahu's latest proposals for the occupation of all of Gaza are utterly horrifying.If realised, they will only wreak yet more destruction on Gazans - while gravely endangering the lives of the hostages still held in Hamas' captivity.I see NIESR is talking today about a 41.2bn hole in the UK public financesTwo things are newsworthy: Continue reading...
Overcapacity - from electric vehicles to high-speed rail to housing - is destroying profits as well as GDPChina's astounding technological success in mass-producing quality electric vehicles (EVs) sits alongside a serious flaw in its industrial model: overcapacity.It has the capacity to produce about three times as many units as it can sell at home. The consequences so far have included widespread price cutting, large losses, misallocation of capital, and surging low-cost EV exports leading to trade conflict. Continue reading...
Rolling coverage of the latest economic and financial newsBritain's service sector companies were hit by a drop in orders last month, as demand at home and abroad remained sluggish.Service sector growth slowed last month amid a decline in new work, according to the latest survey of purchasing managers from data firm S&P Global.UK service providers recorded a third consecutive monthly rise in business activity, but they were unable to maintain the growth rate achieved in June.Moreover, new business intakes swung back into contraction during July, with the downturn in order books the fastest for just over two-and-a-half years. Risk aversion and low confidence among clients were the main reasons provided for sluggish sales pipelines, alongside an unfavourable global economic backdrop. Continue reading...
The president has an awful lot to say about tariffs - but what about what he doesn't say?Donald Trump's words and actions rarely align perfectly. If you watch carefully, what he doesn't say can be just as telling as what he does.Starting on day one, we will end inflation and make America affordable again, to bring down the prices of all goods," he told the nation ahead of his re-election. The US president declared that 2 April would forever be remembered as the day American industry was reborn", only to pause tariffs a week later. Continue reading...
by Richard Partington Senior economics correspondent on (#6Z37Z)
Agreement is said to dampen the mood', with the US viewed as the winner at the expense of the eurozoneInvestor confidence in the EU has fallen sharply after Donald Trump's trade agreement with Brussels, amid mounting concern about the economic hit from the US president's tariff war.The latest snapshot from the Sentix index showed that investor sentiment fell significantly at the start of the month after the deal last week between Trump and the European Commission president, Ursula von der Leyen. Continue reading...
Ex-PM's criticism follows Tory leader's article comparing Labour policy to Truss's disastrous mini-budgetThe Conservative leader, Kemi Badenoch, is not telling the truth about the real failures of 14 years of Conservative government", the former Conservative prime minister Liz Truss has said.Writing in the Telegraph, Truss said: In a recent speech Kemi said: From now on, we are going to be telling the British people the truth even when it is difficult to hear.' If she's not willing to tell the truth to her own supporters, the Conservative party is in serious trouble." Continue reading...
by Presented by Pippa Crerar and Kiran Stacey with Ca on (#6Z32T)
Pippa Crerar and Kiran Stacey sit down in a special episode with peer Catherine Ashton to hear from the former EU commissioner and trade negotiator on what she makes of an increasingly unstable world. Find out what it's like to be in a room with world leaders including Benjamin Netanyahu, Xi Jinping and Vladimir Putin ... Continue reading...
Thanks to stockpiling, neither the markets nor consumers have been as badly affected by the trade wars as feared. But signs of trouble are loomingChaotic and unpredictable, keeping up with Donald Trump's volatile trade war - never mind his presidency - can be tough.Back in April after his Liberation Day" tariff announcement, the talk was of the president crashing the global economy. Then, after a Wall Street backlash, the world learned the acronym Taco", which stands for Trump Always Chickens Out". Now, things are heating up again. Continue reading...
City predicts quarter-point drop to 4% when MPC meets on ThursdayBank of England policymakers are widely expected to cut interest rates this week to prevent the economy sliding backwards amid rising unemployment and the hit to global trade from Donald Trump's fresh round of import tariffs.City traders are betting that the Bank's nine-member monetary policy committee (MPC) will reduce the headline rate on Thursday by 0.25 percentage points to 4%, marking the fifth cut since last August and taking interest rates back to where they were in March 2023. Continue reading...
by Callum Jones with charts by Andrew Witherspoon on (#6Z2AC)
Despite president's claims of an economic boom, picture is chaotic - healthy GDP growth but weak jobs figuresAccording to Donald Trump's White House, the US economy is booming, inflation is dead and jobs are surging. A blizzard of economic reports has cast a pall on such claims in recent days.This week's data on Trump's early economic record was mixed - good, mad and ugly - with jobs numbers so weak he reached for the catchphrase he once used to build himself into a reality TV star: you're fired. Continue reading...
US president called on top Fed officials to seize control from chair Jerome Powell if he fails to cut interest ratesDonald Trump called on top Federal Reserve officials to seize control from its chair, Jerome Powell, if he fails to cut interest rates, stepping up his extraordinary attacks on the central bank's independence.The US president called Powell a stubborn MORON" in a series of critical social media posts on Friday, days after the Fed held rates steady for the fifth consecutive time. Continue reading...
by Callum Jones in New York and Michael Sainato on (#6Z1Y4)
US president accused of firing the messenger' as he makes claims without evidence about Erika McEntarferDonald Trump fired the federal government official in charge of labor statistics, hours after data revealed jobs growth stalled this summer, prompting accusations that he is firing the messenger".The US president claimed that Erika McEntarfer, commissioner of labor statistics, had faked" employment figures in the run-up to last year's election, in an effort to boost Kamala Harris's chances of victory. Continue reading...
by Lisa O’Carroll, Helen Livingstone and Graeme Wea on (#6Z240)
Markets tumble as US president unleashes global chaos with rates from 10- to 50% due to take effect next weekLeaders of more than 60 countries have been plunged into a fresh race to secure trade deals with the US after Donald Trump unleashed global chaos with sweeping new tariff rates.Trump's latest blitz triggered a wave of market jitters and fears for jobs in some of the poorest countries, as tariff rates were signed off ranging from 50% to 10%. Continue reading...
by Tom Ambrose (now) and Vicky Graham (earlier) on (#6Z1JF)
Chancellor says the government has got to get the balance right on taxation' after call by Anneliese DoddsA new civil service internship scheme will be open only to working-class students as part of a drive to make Whitehall better reflect the country, the government has said.The programme will give students from lower-income backgrounds the chance to apply for paid government placements. The definition of working class will be based on what jobs applicants' parents held when they were 14 and replaces an existing programme open to all. Continue reading...
The August deadline has come, but the dangers to international relations and to world trade are both as real as everDonald Trump's 1 August tariffs deadline did what it was always intended to do. It kept the markets and the nations guessing amid last-minute uncertainty. It attempted to reassert the global heft of the United States economy to take on and master all comers. And it placed President Trump at the centre of the media story, where he always insists on being.In the event, there were some last-minute agreements struck this week, few of them fair or rational in trade terms, most of them motivated by the desire to generate some commercial order. Some conflicts are still in the balance. There were 11th-hour court challenges too, disputing the president's very right to play the trade war game in this way.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...
Anneliese Dodds urges government not to duck big decisions' in autumn budgetThe Treasury should consider a wealth tax to close the growing gap in the public finances, according to a Labour former shadow chancellor.Anneliese Dodds, who held the role under Keir Starmer in opposition, said ministers must have a full and frank discussion" with the public about the really big decisions" they had to take at this autumn's budget. Continue reading...
Lobby group says shops have already had to put up prices and new increases would leave households strugglingRachel Reeves has been warned by Britain's biggest retailers that tax rises in her autumn budget could trigger higher shop prices, hitting household incomes and the economy.With high street chains closing stores and cutting jobs, the British Retail Consortium (BRC) said two-thirds of finance directors predicted there would be further price increases over the next year, even before any rise in tax in the autumn budget. Continue reading...
Two Federal Reserve governors vote against decision as US GDP grows at an annual rate of 3% in second quarterThe US Federal Reserve left its benchmark interest rate unchanged on Wednesday, even amid intense pressure from Donald Trump to lower rates.Despite an onslaught of attacks from the White House against the Fed, officials at the central bank said that economic uncertainty" remains too high to lower rates. Continue reading...
Live, rolling coverage of business, economics and financial markets as world's biggest economy grows at 3% annualised rate in data distorted by trade warsBritain's clean energy future risks creating winners and losers" if lower-income households are not shielded from the costs added to energy bills to pay for it, the head of the energy regulator has said.Jonathan Brearley, Ofgem's chief executive, said a systematic approach" to sharing the rising costs of the government's green power ambitions was needed to avoid poorer households facing soaring monthly payments.The safety of our customers remains our highest priority - this principle has consistently guided our approach, and we have increased our cladding fire safety provision to reflect findings from updated fire risk assessments and investigations in the first half. Continue reading...
Trump will need to approve pause, say US representatives after negotiations end with sides failing to break deadlock on trade termsUS and Chinese negotiators have agreed in principle to push back the deadline for escalating tariffs, although America's representatives said any extension would need Donald Trump's approval.Officials from both sides said after two days of talks in Stockholm that while had failed to find a resolution across the many areas of dispute they had agreed to extend a pause due to run out on 12 August. Continue reading...
One hopes cogs are turning in Westminster after Pascal Soriot's affectionate talk of US at pharmaceutical giant's half-year resultsIt was an opportunity for Sir Pascal Soriot, as chief executive of AstraZeneca, the UK's finest pharmaceutical firm, to kill the story stone dead if he wished. Does he want to move the company's stock market listing to the US, as reported by the Times a few weeks ago? He declined to answer. Then he did something else: he turned his press conference after Tuesday's half-year numbers into a declaration of love, more or less, for all things American.The US is the country in our industry where innovation is taking place," he said, noting that half the group's sales will be in the US by 2030. The new multibillion-dollar manufacturing facility in Virginia - part of a $50bn investment in the US over the next five years - had progressed to signoff in 33 days. The US administration is considering AstraZeneca's proposals for reducing medicine prices for Americans. We are a very American company," said the French-Australian Soriot at one point, name-checking his various American senior colleagues. Continue reading...
Live, rolling coverage of business, economics and financial markets as economists say risks to the global economy remain firmly to the downside' amid Donald Trump's trade warDonald Trump is in the UK, and by the looks of it he has been talking to someone with an interest in the oil industry: he has said the UK's taxes on North Sea oil make no sense".The US president wrote on the social network he owns, Truth Social, that the UK should incentivize the drillers" and that there was A VAST FORTUNE TO BE MADE for the UK, and far lower energy costs for the people". Continue reading...
Despite reduced tensions and EU trade deal, US policies are highly uncertain', says Washington-based organisationGlobal growth will be stronger than previously expected this year after Donald Trump scaled back his most extreme tariff threats, the International Monetary Fund said as it upgraded the economic outlook for 2025.The Washington-based organisation said a de-escalation in tariffs" by the White House had spurred a recovery in global trade and a broader economic expansion, though US policies remain highly uncertain" and risks to growth firmly on the downside". Continue reading...
BRC says food prices rose by 4% in July from 2024, while CBI blames economic uncertainty for people not spendingBritain's largest retailers struggled to entice shoppers back to the high street in July as the rising cost of meat and butter drove up food prices, adding to the pressure on household finances.According to the latest snapshot from the British Retail Consortium (BRC) food prices rose by 4% in July from a year earlier, up from 3.7% in June and above the three-month average of 3.5%. Continue reading...
Plaintiffs argue president lacks legal power to impose duties under the International Emergency Economic Powers ActDonald Trump's strategy of imposing sweeping tariffs on America's main trading partners will face a major test in the US courts on Thursday, four days after the president hailed the powerful deal" reached with the EU and just hours before a new round of punishing import duties is set to come into effect.Trump has underpinned his tariff policy with an emergency power that is now being challenged as unlawful in the federal courts. On Thursday the US court of appeals for the federal circuit will hear oral arguments in the case, VOS Selections v Trump. Continue reading...
British consumers are splashing out on prestige lip products', according to market research. And these are not the only little treats that are booming with the big ones out of reachName: The lipstick effect.Age: Around since at least the 1930s. Continue reading...
Live, rolling coverage of business, economics and financial markets as European stock market rally fizzles outUK retail sales slumped for the 10th consecutive month in July, according to a survey of the biggest shops that underlined the weakness of Britain's consumer spending.A third of retailers said that sales declined in July, according to a survey weighted by the size of the business, according to the Confederation of British Industry, a lobby group - although that was an improvement from the 46% balance who said sales had declined in June.Retail annual sales volumes continued to fall in July, although the pace of decline moderated from June's sharp drop. Firms reported that elevated price pressures - driven by rising labour costs - and economic uncertainty continue to weigh on household demand, which has contributed to sales volumes falling since October 2024.These trends of weak demand and uncertainty were mirrored across the wider distribution sector, with wholesale and motor trades also seeing declining sales.However, this is thought to partly reflect the acceleration of business investment and purchase decisions by some companies in March, ahead of the implementation of US tariffs in April.After a strong start to the year, uncertainty in the global economy and international trade policy has continued to slow momentum. While the agreement struck with the US offers welcome relief to certain sectors and boosts the trading outlook, the UK's access to a key export market is still reduced from where it was at the start of 2025, which is likely to weigh on growth.Business investment is expected to remain modest until 2027 and while interest rate cuts should reduce debt service costs and make financing cheaper, this will take time to materialise. Until then, businesses face a period of international uncertainty, alongside elevated labour and energy costs. Continue reading...
by Richard Partington Senior economics correspondent on (#6YY9B)
PM could raise tens of billions' while positioning Britain as progressive, say Thomas Piketty and othersKeir Starmer and Rachel Reeves have been urged by a group of the world's leading economists to use the autumn budget to prepare Britain for the introduction of a new wealth tax to tackle extreme" levels of inequality.With the government under pressure to raise taxes, the group of economists, including the French expert on wealth inequality Thomas Piketty, said the UK prime minister could raise tens of billions of pounds" while positioning Britain as a progressive leader on the world stage. Continue reading...
by Kalyeena Makortoff Banking correspondent on (#6YYX4)
Hedge fund chief Ray Dalio warns over public finances, saying Britain will be forced into spending cuts and tax risesOne of the world's most prominent hedge fund investors, Ray Dalio, has warned that the UK is stuck in a doom loop" as it faces a worrying mix of higher taxes, rising debts and slower growth.Dalio, a US billionaire who founded the hedge fund Bridgewater Associates in 1975, said warning signs over the size of debts in western countries were beginning to flash and flicker", but that the UK government's efforts to raise more funds via taxes risked driving its wealthiest taxpayers out of the country. Continue reading...
by Richard Partington Senior economics correspondent on (#6YY4G)
Exclusive: Increasingly extreme weather a threat to production and supply chains in Britain and elsewhereBritain is at risk of a worsening climateflation" crisis amid the fallout from increasingly extreme weather that could drive up food prices by more than a third by 2050.Sounding the alarm over the financial impact for UK households, the Autonomy Institute thinktank said that climate-induced price increases for everyday food items risked pushing almost 1 million people into poverty without urgent government intervention. Continue reading...
Agreement includes 15% baseline tariff for most EU exports to US after deal reached at Scotland crunch talksDonald Trump has announced a deal with the EU to end four months of difficult negotiations between Washington and Brussels and avert a damaging transatlantic trade war, imposing a 15% import tariff on most EU goods - half the threatened rate.The European Commission chief, Ursula von der Leyen, said we have a deal" after a 40-minute meeting with Trump at his Turnberry golf resort in Scotland where the US president is on holiday for the weekend. Continue reading...
Chancellor is advised to give herself more leeway in the next budget before adjusting taxation or spendingThe International Monetary Fund has urged Rachel Reeves to consider ending the pensions triple lock and charging for NHS treatment as it said the UK government risks being knocked off course in meeting its targets to repair the public finances.In a final version of an annual report on Britain'seconomy, the Washington-based organisation said the chancellor should also give herself more leeway in the next budget before adopting fresh tax or spending measures. Continue reading...