Global markets have become inured to the US president's posturing over the past year, but economists warn they may be a little bit complacent' in anticipating a short conflict in the Middle EastInvestors over the past year have learned that Donald Trump has a boundless capacity to quickly reverse course in the face of acute political or market pressures.But a week since the United States and Israel launched missile strikes on Iran, there are fears the war could morph into a protracted conflict.Patrick Commins is Guardian Australia's economics editor Continue reading...

Reports Kuwait was cutting output pushed up cost of barrel of Brent crude to highest weekly gain since Covid pandemic beganThe Iran conflict has driven the oil price past $90 a barrel to its highest weekly gains since the Covid-19 pandemic six years ago, threatening a fresh rise in global inflation.Reports that Kuwait had begun cutting production of oil at some fields after running out of space to store it drove the cost of a barrel of Brent crude to as high as $91.89 at one point on Friday - its highest since April 2024 and up from about $72.50 just before war broke out. Continue reading...

Seafarer tells of explosions in the sky as thousands stuck on vessels after strait of Hormuz is effectively closed to shipping Maritime and port workers: how is the Middle East conflict affecting you?Thousands of seafarers are trapped on tankers in the Gulf after the strait of Hormuz was effectively closed to shipping by the escalating war on Iran.The Guardian spoke to a crew member on one of the stranded tankers that typically ferries vast quantities of oil from the Middle East to ports around the world. Continue reading...

FTSE 100 and France's CAC down 1.5%; Germany's DAX and Italy's FTSE MIB down 1.6%; the Dow Jones was down 2%

Rolling coverage of the latest economic and financial news

Green card holders are now ineligible for loans through the SBA as agency carries out Trump's America First' agendaThe US federal agency in charge of helping small businesses has cut off an essential line of funding for immigrant entrepreneurs for the first time in the agency's history.Legal residents, or green card holders, are now ineligible for loans backed by the Small Business Administration (SBA). The change was first announced in February and comes as the agency carries out an America First" agenda under SBA administrator Kelly Loeffler, a billionaire and staunch Donald Trump loyalist who was appointed last February. Continue reading...

Reports of attack on US registered tanker in Gulf lifts crude by 3% to $84 a barrel as gas price also starts to climb

Economic ripples from US-Israel attacks will soon become waves, engulfing everything from energy prices to foodIn retaliation for the US-Israeli missile attacks, Iran has launched what amounts to all-out economic warfare. Should the conflict continue even for another week, its impacts will start to be felt around the world as the third price surge since the pandemic washes through global markets.For Britain, a further turn of the screw on living standards arrives just as political instability mounts at home, with the Labour and Conservative parties facing existential challenges to their left and right. Continue reading...

Iranian blockade of the strategic strait of Hormuz is hitting global fertiliser supply chainThe global fertiliser supply chain could face significant disruption if the effective closure by Iran of the strait of Hormuz persists, prompting concerns from analysts about crop production and food security.Passage through the waterway, located off Iran's southern coast, has mostly stopped since the US and Israel launched their attacks at the weekend. Continue reading...

The surge in energy prices could fuel higher inflation and raise interest rates, threatening a new UK cost of living crisis

Warning comes as OBR projections in the spring forecast are expected to show public finances moving in the right directionSoaring global energy prices as a result of the widening Middle East conflict will jeopardise Rachel Reeves's plan to conquer inflation and rekindle growth, economists have warned as she prepares to deliver her spring forecast later today.Responding to the latest projections from the independent Office for Budget Responsibility (OBR), the chancellor will insist she has the right economic plan for our country, in a world that has become more uncertain". Continue reading...

Europe and Asia will take an economic hit if the supply of Qatari LNG is halted by the closure of the strait of Hormuz

Strait of Hormuz is effectively closed and vessels rerouted, sending some freight costs surging

QatarEnergy says it has halted production of liquefied natural gas after attacks on Ras Laffan and Mesaieed sites

Rachel Reeves's upcoming spring forecast has not led to slowdown, as property tax rumours did in November

The narrow shipping route on Iran's southern border carries one-fifth of global seaborne crude oil, one-fifth of LNG shipments and one-third of the most widely used fertiliserDonald Trump's attempt to overthrow the Iranian government by force could trigger a new wave of cost-of-living pressures that embattled governments and central banks around the world will struggle to deal with.The US-Israel attack on the Middle Eastern country at the weekend is the latest in a long series of global economic shocks. Continue reading...

Effects of extended conflict between US and Iran could also lead to higher interest rates and hit economic growth

Funding uncertainty is main concern, despite Labour's pledge to revitalise construction, survey shows

Chancellor urged to reform Office for Budget Responsibility to open way to more public investmentRachel Reeves must reform the Office for Budget Responsibility (OBR) to open the way to more public investment, an alliance of thinktanks has argued ahead of the chancellor's spring forecast on Tuesday.With Keir Starmer's government under intense pressure after Labour's defeat by the Greens in Thursday's Gorton and Denton byelection, the thinktanks called on Reeves to review the watchdog's remit. Continue reading...

In the 90s, we internalised an ideal of cool that appeared nonchalant and effortless. Now, young people are unafraid to say they want something and are going to work hard to get itOh no, striving is cool now. Never stop grinding and listen ... Stop doing anything else but working," as Pharrell Williams told the Grammys audience last month. The Times recently announced that trying really hard and talking about it" was in, typified by Timothee Chalamet's continued commitment to the pursuit of greatness", which he announced last year, along with being so fucking locked in" to cinema. We're all supposed to be paying for our big dreams in sweat again, it seems.What's wrong with that? Nothing, really - but an open admission that you're ambitious, you want something specific and hard to attain from your life, and intend to work single-mindedly for it doesn't come naturally to me and my gen X brethren (apart from Williams, apparently, aged 52). We internalised an idea of cool that involved the appearance of, if not actual, effortlessness that's hard to shake. Continue reading...

After 18 months of policy U-turns and political turmoil we are told not to expect any last-minute policy rabbitsPoliticians tend to hate being boring but Rachel Reeves will be delighted if Tuesday's spring forecast is judged by voters and financial markets to be reassuringly dull.After Labour's catastrophic Gorton and Denton byelection result, the chancellor's future, along with that of the prime minister, is on the line, as backbench MPs fret about the party's electoral prospects. Continue reading...

Aggression feeds a sense that the US is operating outside global norms and helps to fuel a more complex currency outlook

Average life satisfaction still below pre-pandemic peak despite improving economic outlook, reports ONSThe proportion of people in the UK who feel dissatisfied with life has failed to improve since the pandemic despite the economic outlook improving, official figures show.The Office for National Statistics said a survey of personal wellbeing in the UK showed average life satisfaction remained below its pre-pandemic peak, despite the rate of gross domestic product per person rising since 2021. Continue reading...

Benchmark 30-year fixed mortgage rate fell to 5.98% from 6.01% last week, the lowest level since September 2022The average long-term US mortgage rate slipped this week below 6% for the first time since late 2022, good news for home shoppers as the spring home-buying season gets rolling.The benchmark 30-year fixed mortgage rate fell to 5.98% from 6.01% last week, mortgage buyer Freddie Mac said on Thursday. One year ago, the rate averaged 6.76%. Continue reading...

Borge Brende admitted dining with the convicted sex offender on three occasions between 2018 and 2019The boss of the World Economic Forum (WEF) has quit following criticism of his connections to the disgraced financier Jeffrey Epstein.Borge Brende said he will step down as president and chief executive after more than eight years leading the body, which is best known for its annual meeting held each January in the Swiss mountain resort of Davos. Continue reading...

Rolling coverage of the latest economic and financial newsArtificial intelligence is boosting productivity in the euro zone but it is not yet causing a wave of layoffs due to greater automation of labour, European Central Bank President Christine Lagarde has claimed.Testifying to the European Parliament's Economic and Monetary Affairs committee this morning, Lagarde said:What we are seeing for the moment is that it's increasing productivity. But we are not yet seeing consequences in terms of labour market and waves of redundancies that are feared, and that you know we will be extremely attentive going forward."Our transformation continues with pace and intensity. We are consistently achieving outcomes that were not possible before our transformation. With our new capabilities and mindset, we have navigated challenges from supply chain to tariffs, and delivered a strong performance in 2025, all while we built the foundations for significant growth for years to come." Continue reading...

We want to hear how people across the UK are managing their money as Rachel Reeves prepares to set out the latest economic outlookNext Tuesday the chancellor, Rachel Reeves, will update the country on the state of the economy when the spring forecast is delivered to parliament.The government is not expected to make major announcements on taxes and spending but will include the latest forecasts for growth, details of the UK's financial position and hint at the changes we might expect in future. Continue reading...

Some say the technology is devaluing their work, while others reckon it is not yet - and might never be - good enough to replace them entirelyWorkers grappling with the rapid growth of artificial intelligence have said they feel devalued" by the technology and warned of a downward trajectory in the quality of work.Recent analysis by the International Monetary Fund found AI would affect about 40% of jobs around the world. Its head, Kristalina Georgieva, has said: This is like a tsunami hitting the labour market." Continue reading...

In today's newsletter: With the latest supreme court ruling exposing the president's tariff plans as unlawful, US politicians and the American people have found them to be unworkable. Where does Trump go from here?Good morning. Let's delve into the two Ts shaping the global economy right now: tariffs and Trump.Last week, the US supreme court ruled that Donald Trump had unlawfully used executive powers to impose sweeping global tariffs. In a 6-3 decision, the court found that the 1977 law Trump relied on did not give him the authority he claimed to introduce tariffs across the world. The ruling dealt a significant blow to a central plank of the president's economic and geopolitical agenda.US news | Donald Trump proclaimed his first year in office a success at the State of the Union address overnight, even as his presidency is dogged by low public approval ratings before November's midterm elections.UK news | Peter Mandelson condemned the police for his arrest and claimed he was only taken into custody because detectives had wrongly believed he was about to flee the country.Reform | Unions and renters' groups criticised Reform UK after the party's business spokesperson pledged to introduce a great repeal act" that would abolish Labour legislation on workers' rights and protection for tenants.Education | Teachers and schools face a huge ask" implementing the government's special needs proposals, according to education leaders and MPs who otherwise gave the plans a cautious welcome.Health | Almost half the public delay or avoid contacting their GP surgery when they are ill, mainly because they think they will struggle to get an appointment, a survey found. Continue reading...

The US president fights 1970s battles in a financialised age. America faces not a payments crisis but a slow erosion of industrial and technological powerWhen the US supreme court voted 6-3 last Friday to strike down Donald Trump's tariffs, he was incandescent. Two judges he had elevated - Neil Gorsuch and Amy Coney Barrett - were suddenly recastas traitors to the cause. Both were, he insinuated, under the sway of foreign interests. The court ruled that the tariffs overstepped the powers the US Congress granted under the 1977 International Emergency Economic Powers Act. Mr Trump responded by reaching for a 1974 trade law, invoking international payments problems" to slap on a 10% tariff for 150 days.Mr Trump was moulded by the 1970s. His political DNA was formed in that era's crises and he governs as if America were still in the Nixon era of shock politics. In some ways there are parallels. The political mobilisation around economic insecurity echoes that period, as does distrust in elite authority. This explains why many populist politicians on the right reach for the 1970s, which fits the mood of decline and rivalry and offers a narrative of restoring strength". Internationally, Mr Trump also sees the world through the 1970s lens of industrial rivalry and trade grievance. But the world today is in a far more financialised and interdependent state. Continue reading...

Huw Pill warns combined effect of national insurance and minimum wage rises have acute' effect on youth employmentThe negative effect of a combined increase in employers' taxes and minimum wages has been particularly acute" for young people, the Bank of England's chief economist has warned.Huw Pill said on Tuesday that the increase in national insurance contributions (NICs) from April last year and the government's efforts to equalise the national living wage" had caused a particular problem for young people trying to find jobs. Continue reading...

US president had said he would raise levy to 15% after last week's supreme court rulingDonald Trump's new global tariffs have taken effect at 10%, even though last weekend he had threatened a higher rate, of 15%, providing some relief" for British businesses, according to a lobby group.After the US president suffered a defeat at the hands of the supreme court on Friday, which struck down his sweeping liberation day" tariffs imposed last year, he angrily reacted by announcing a 10% global tariff, which he raised to 15% on Saturday in a post on his social media platform, Truth Social. Continue reading...

Economies such as the UK, India, Japan and the EU raced to hammer out agreements, but the blanket rate has left them wondering where they standAmerica is WINNING again," Donald Trump declared last week, unveiling the first batch of Japanese-backed projects under a mooted $550bn investment surge into the US as part of his trade pact with Tokyo.After the US president tore up the global economic order in 2025, Japan was one among the countries scrambling to strike a deal. They pledged to dramatically increase investment in the US in exchange for lower US tariffs on Japanese exports. Continue reading...

Markets slide after EU halts ratification of US trade deal, as businesses prepare for new 15% global tariff to start tomorrow

Joint ventures on defence, green energy and telecoms suggest how country could join bloc in stages rather than wait for full statusWhen the first Ukrainian-designed drone to be made in a German factory rolled off the production line last month, Volodymyr Zelenskyy knew it marked a turning point for the economy.With drone-making joint ventures also well advanced in Finland and Denmark, war-torn Ukraine has shown how its businesses can adapt and break out of their bomb-threatened domestic confines, becoming more integrated into the EU's industrial network with each passing day. Continue reading...

Advertised roles dropped 3% last month to 695,000 - first dip below 700,000 since January 2021, job site Adzuna saysThe number of job vacancies in the UK has tumbled to the lowest level in five years, research suggests, falling to levels not seen since the pandemic.The number of jobs being advertised slid by 3% in January to 695,000, according to the job search site Adzuna, marking the first time advertised vacancies have dropped below 700,000 since January 2021. Continue reading...

Readers respond to an article by Larry Elliott which argued that all is not lost for the beleaguered partyThe plans set out by Larry Elliott certainly suggest a way forward for the Starmer government (If Keir Starmer is ousted, Labour could still win the next election. Here's how that would work, 19 February). But politics and political approval also involve a balance sheet in which there has to be some recognition of the negative ways in which support had been lost. For many liberals, old" Labour voters and sections of the left, Keir Starmer lost credibility on three issues: the relatively trivial one of freebies", and the much more substantive ones of benefit cuts for the most vulnerable and policies concerning Gaza.All the political choices taken in these contexts ignored values and ideals with long histories, not least of democratic commitment to the mitigation of the abuse of power and the needs of the most powerless. Policies about various locations for domestic investment might be welcome, but the question remains of how to define policies that, rather than ignoring what has been lost, recognise the importance of those values that have, for many of us, simply been ignored. That they continue to be ignored is a matter of shame.

Promise comes as minister admits to uncertainty' about new 15% levy on imports from around the world

Upping tariffs may have lifted the president's mood but it is a headache for the Federal Reserve and its next chairDonald Trump and Denis Healey don't have much in common. One of the greatest prime ministers Britain never had shares little of his famous hinterland with what some historians see as one of the worst occupants of the White House.But Trump would be well advised to remember Healey's first law of holes - when you're in one, stop digging Continue reading...

Friedrich Merz to meet Xi Jinping in Beijing, with goods worth 251bn traded between two countries in 2025China has overtaken the US as Germany's top trading partner, figures have shown, as the chancellor, Friedrich Merz, prepares for his first visit to Beijing since taking office.Merz will head to China on Tuesday and will be welcomed with military honours on Wednesday in Beijing by the prime minister, Li Qiang, before later meeting the president, Xi Jinping, for talks over dinner, his spokesperson Sebastian Hille said. Continue reading...

Without AI you will be a weaker and poorer nation', says former UK chancellor two months into job at US firmThe former chancellor George Osborne has said countries that do not embrace the kind of powerful AI systems made by his new employer, OpenAI, risk Fomo" and could be left weaker and poorer.Osborne, who is two months into a job as head of the $500bn San Francisco AI company's for countries" programme, told leaders gathered for the AI Impact summit in Delhi: Don't be left behind." He said that without AI rollouts they could end up with a workforce less willing to stay put" because they might want to seek AI-enabled fortunes elsewhere. Continue reading...

Treasury spokesperson says disability benefits would also be limited under Reform, but Bank of England would stay independentReform UK would restore the two-child benefit cap in full, Robert Jenrick has announced, in a major U-turn for the party that critics said would plunge hundreds of thousands of children into poverty.In his first speech as Reform's Treasury spokesperson, Jenrick said the party had changed tack since Nigel Farage last year said he would scrap the two-child limit and suggested his party wanted to go much further to encourage people to have children". Continue reading...

FTSE 100 hits record high after UK inflation falls to 3% in January, thanks to cheaper petrol and air fares, and a slowdown in food inflationThe chances of an interest rate cut next month have risen this morning, following the news that UK inflation fell to 3% in January.The money markets are now indicating that a quarter-point rate cut is now an 81.5% chance, up from 77% last night - and around 65% last week.Inflation fell sharply in January, providing some relief to UK consumers at the start of the year. Prices are clearly moving in the right direction, with closely watched core and services inflation continuing their downward trend from previous months.Behind the headline figure, motorists were helped as petrol pump prices continued to decline in January to their lowest level since summer 2021. Food inflation also fell after the Christmas period but is still a key area to watch in 2026 as it accounts for a large part of the UK's everyday spending. Industry barometers suggest that weekly supermarket shops are still elevated with fresh produce prices rising over the month.The cost of raw materials for businesses fell over the past year, driven by lower crude oil prices, while the increase in the cost of goods leaving factories slowed." Continue reading...

How do we solve the predicted entrenched disparity arising out of the great wealth transfer? We ask economists for their suggestions

January annual drop is lowest level since March 2025, although still above Bank of England's 2% target

City traders expect cut to UK interest rates next month after jobless rate rises to 5.2%

Programme launched by last Tory government was worked on by Deloitte and IBM but was paused in 2024

ONS figures raise the prospect of a further interest rate cut by Bank of England in the spring

Falls in inflation and interest rates could leave Britain better off this year, but at the cost of high unemployment

Competing domestic priorities, Treasury borrowing limits and already nervous lenders are among the many obstaclesKeir Starmer has few options if he wants to increase annual defence spending by up to 14bn before the end of this parliament.In last summer's spending review, the government set out plans to increase defence spending from 2.3% of national income, or gross domestic product (GDP), in 2024-25 - about 66bn, to 2.6% in 2028-29. Continue reading...