UK chancellor confident of Gulf trade deal, as she faces 20bn-plus hit to public finances from UK productivity downgradeSteve Bates, executive chairman of the Office for Life Sciences, said a good US deal" would quickly resolve" the issue of a lack of confidence of big pharmaceutical companies such as AstraZeneca and MSD in the UK, and its impact on investment decisions.Quizzed by MPs on the science committee, Bates, who took up his new job at OLS in September after running the BioIndustry Association for 13 years, said:So I think a good deal with the USA can quickly resolve it, is the simple answer for that.I'm saying that if the UK can get a fantastic domestic business environment allied to access to global markets, that's a fantastic base from which any companies would want to grow for the world.I think for brand new, innovative medicines, it's likely there will be some price increase.If you go back to 2015 the spend on medicines was about 12% [of total NHS spending] if you go back earlier, it was higher, it was about 14%. It's now about 9%. So there is a possibility of increasing percentage spend. Continue reading...

Rachel Reeves faces bigger-than-expected hit in 26 November budget from revised OBR forecast

Which? finds products shrinking while supermarkets keep prices flat or risingToothpaste, coffee and even heartburn medicine are among the latest products quietly shrinking in size while shoppers pay the same price, piling more pressure on household grocery budgets.Consumer watchdog Which? found a range of new examples of shrinkflation as brands cut back on quantity and quality in an effort to reduce their own costs. Continue reading...

Five ways the chancellor could mitigate a UK inflation rate that is harming households - and Labour's vote shareAfter more than three years of the cost of living crisis, Rachel Reeves is well aware of the harm inflation is inflicting on UK households - and on Labour's share of the vote.While figures out last week suggested that the annual rate of price increases may now have peaked, the chancellor focused on its continuing human impact, saying: For too long, our economy has felt stuck, with people feeling like they are putting in more and getting less out. That needs to change." Continue reading...

For weeks now, thousands of Sydneysiders have queued for up to hours at a time, hoping to cash in on the soaring price of gold. Investors view the precious metal as a safe haven during times of economic uncertainty and despite fluctuating prices, gold is having its biggest rally since the 1970s.

While the European countries have brought their spending under control, the US president's tax cuts and defence spending will lead to increased borrowingDonald Trump is on course to push US debt levels above those of Italy and Greece by the end of the decade after wide-ranging tax cuts and increased defence spending, according to International Monetary Fund (IMF) forecasts.Illustrating the rising debt levels in Washington and efforts made by Rome and Athens to bring spending under control after the 2008 financial crash and Covid-19 pandemic, the IMF predicts the US will see its debts climb from 125% to 143% of annual income by 2030, while Italy's will flatline at about 137%. Continue reading...

A decade ago, a prominent analysis was falsely cast as a call for austerity. Our real offence was suggesting there might be a trade-off between debt and growthIt's not easy being a centrist economist in today's polarised, social media-driven world, where every idea is quickly forced into one ideological camp or another. To paraphrase a remark often attributed to Leon Trotsky, centrist economists may not be interested in war but war is interested in them.My 2016 book The Curse of Cash, which explored the past, present and future of money, is a case in point. After its publication, I received more than 20 death threats, some clearly from drug dealers and gun owners outraged by my call to phase out $100 bills, and others from crypto evangelists who considered my support for regulation an act of treason. Continue reading...

In her new book Having it All, Corinne Low outlines how stubborn expectations around work and home fail to accommodate working womenWhen Corinne Low gave birth to her son in 2017, everything seemed to be lining up. A tenure-track economist at the University of Pennsylvania's Wharton School, she was working in a career she had long dreamed of. Her husband, stepchild and baby lived in New York City and the two-hour commute to Philadelphia was inconvenient but sustainable. She was embarking on a journey to do it all: a working mom, supporting her family with a career she loved.As track repairs tripled her commute time, things suddenly felt like they were falling apart. Instead of getting home in time to put her baby son to bed, Low found herself sobbing while breast pumping in an Amtrak bathroom. Continue reading...

Argentina is counting the cost of its turn to Javier Milei. Politicians from Donald Trump to Giorgia Meloni and Nigel Farage will be closely watching what happens nextCambio, cambio." Under the blazing sun, dozens of money changers are hawking US dollars along Florida Street, a bustling pedestrian strip in Buenos Aires. Known as arbolitos (little trees"), they are thriving ahead of the 26 October midterm elections in a country long used to saving in the greenback.The best time to buy is now," says one arbolito, declining to give her name. [The dollar] went down a little but it is a fake-out - it'll rise again." Continue reading...

Anxiety and economic stress among federal employees as Republicans and Democrats remain deadlocked on billMore furloughs, more anxiety and more economic stress are bearing down on federal employees as the shutdown of the federal government continues into its fourth week with Republicans and Democrats at a standstill on negotiating a budget deal.There's no sight of this ending and we're starting to wonder if we're going to be made whole and if this is going to continue into the next round of pay, which is what we're headed into now. On Friday, we will be missing our first full paycheck," Johnny Jones, council secretary treasurer for the American Federation of Government Employees (AFGE) TSA Council 100, and a TSA employee in Dallas-Fort Worth, Texas, said. Continue reading...

We hear your stories of how you balance the family finances, from buying own brands to cutting right back on weekly shopFood prices are ridiculous, but it's the fact they are still rising that is keeping me awake at night," says Nikki of the strain caused by higher grocery bills.The mother of two from Aberdeenshire adds: My weekly shop with in-between top-ups now costs in excess of 220 and is fast becoming unaffordable. Before 2020, I was spending 135 a week." Continue reading...

Increase was largely driven by a 4.1% increase in gasoline prices despite Trump's campaign pledge to end inflation'Prices continued to rise in September, increasing at an annual rate of 3%, according to the latest government inflation report.The September 2025 consumer price index (CPI) was published approximately two weeks later than usual due to the federal government shutdown, which haltedall Bureau of Labor Statistics operations. Continue reading...

Insiders say chancellor is planning a tax raid on partnership structures that could raise 1.9bn

Shares in oil companies jump after US sanctions Russian energy firms, while manufacturers see weak prospects aheadYesterday's weaker-than-expected UK inflation report has sparked chat that the Bank of England could cut interest rates sooner than expected.Deutsche Bank say there is now an interesting debate" on whether there may be enough ammunition for the Bank's monetary policy committee to cut borrowing costs as soon as its next meeting in early November.What's the case for November? Relative to the Bank's projections, growth has surprised to the downside, private sector AWE growth has surprised to the downside, unemployment has risen in line with Bank expectations, and inflation now sits a healthy amount below the Bank's projections. Indeed, one could make the argument that the ingredients for a November rate cut are there.So, why not November? We think three things will be important for the MPC to see before dialling down restrictive policy again. One, the MPC may want to see some indicative signs that inflation expectations are coming down - and we should see some signs of tempering in the coming months as spot CPI slows in Q4-25. Two, the Budget. Consolidation is one part of the puzzle. The other is what the Chancellor does to trim 2026 CPI - something we think will be very important given our projections of ~2.6% y/y CPI next year. And third, pay settlements. The MPC has yet to see the Low Pay Commission's NLW announcement and subsequently what that does to pay settlements. We won't have much detail on private sector pay deals until after the November meeting. Put simply, there's a lot more information to be had in December than November.The chips manufactured by the affected manufacturers are important parts used in electronic control units, etc., and we recognize that this incident will have a serious impact on the global production of our member companies.We hope that the countries involved will come to a prompt and practical solution." Continue reading...

The world will be pushed into a recession, but perhaps we can build something more promising from the piecesThe world economy hinges on the success or failure of artificial intelligence. It's becoming apparent that we are probably doomed either way.Employment growth is stuck and wage growth is slowing, especially among low-paying jobs. Loan delinquencies are rising, driving an increase in bankruptcies. Consumer confidence has collapsed. And reckless policymaking is taking its toll. Donald Trump's trade war is cutting farmers' access to the Chinese market and manufacturers' access to Chinese rare-earth magnets. His clampdown on migration is hitting access to labor, from agriculture to healthcare. The drawn-out government shutdown is starting to sap economic growth. Continue reading...

Annual September rate confounds forecasts of a rise, as pace of food price growth slows for first time since March

Inflation figures raise chance of December interest rate cutEurostar is to start running doubledecker trains through the Channel tunnel to meet growing demand for international rail travel from the UK - but not until 2031.The rail operator announced it had signed a 2bn (1.7bn) deal for at least 30 - and up to 50 - new trains from the manufacturer Alstom. Continue reading...

Policymakers under pressure for rethink after price growth in UK remained at 3.8% in September

Hourly rate to increase by 95p to 14.80 in London and by 85p to 13.45 for the rest of the countryAlmost half a million workers are to receive a pay boost after it was announced that the real living wage paid voluntarily by 16,000 UK companies will rise to 13.45 an hour.Distinct from the national living wage, which is a statutory minimum, the real living wage is calculated each year based on the cost of essentials, and is paid by more than half of the companies in the FTSE 100. Continue reading...

Economic development strategist who helped make Glasgow a cultural centre of international standing in the 1980s and 90sWhen Stuart Gulliver arrived in Glasgow in 1978 to work as an economic development strategist, the city was desperately in need of a plan. Its population had crashed by almost 25% in the previous 20 years. Its swagger as the empire's second city, with a Manhattan-style grid and a wealth of grandiloquent but by then decaying architecture, had evaporated. Its factories, shipyards and steelworks were closing.The people of Glasgow were getting steadily poorer and sicker. And as one wit suggested at the time, its only tourists were people who had got lost trying to go somewhere else. Continue reading...

Chancellor, who is expected to announce tax rises and spending cuts, says effect of leaving bloc worse than predictedRachel Reeves has blamed a heavier than anticipated blow from Brexit and austerity for forcing her to take action to balance the books at next month's budget.In her clearest attempt to draw Brexit into the framing of her imminent tax and spending decisions, the chancellor said leaving the EU was turning out to have caused more damage than official forecasters had previously outlined. Continue reading...

Investment in offices falls amid uncertainty over pricing, volatile geopolitics and the economy

Andrew Bailey says a close look is needed at the private credit market after collapse of two big US firmsThe governor of the Bank of England, Andrew Bailey, has warned recent events in US private credit markets have worrying echoes of the sub-prime mortgage crisis that kicked off the global financial crash of 2008.Appearing before a House of Lords committee, the governor said it was important to have the drains up" and analyse the collapse of two leveraged US firms, First Brands and Tricolor, in case they were not isolated events but the canary in the coalmine". Continue reading...

Rising debt interest and welfare costs push public finances deeper into red before Rachel Reeves's budget

Public finances figures contain no shocks but will underline need for either hefty tax rises or spending cuts

This live blog is now closed. You can read the full report here:

Crash that hit apps and websites around world demonstrates urgent need for diversification in cloud computing'Experts have warned of the perils of relying on a small number of companies for operating the global internet after a glitch at Amazon's cloud computing service brought down apps and websites around the world.The affected platforms included Snapchat, Roblox, Signal and Duolingo as well as a host of Amazon-owned operations including its main retail site and the Ring doorbell company. Continue reading...

GDP rises by 4.8% year on year between July and September, down from second-quarter growth rate of 5.2%

Andrew Ross Sorkin's new book 1929 takes readers back to the crash that changed the US and looks at what we can learn from it todayAndrew Ross Sorkin's first book, Too Big to Fail, was a bestseller about the financial crisis of 2008, published the following year. His second, 1929, out this week, takes readers Inside the Greatest Crash in Wall Street History - and How it Shattered a Nation".It's been 16 years between books, but Sorkin hasn't been idle. A columnist for the New York Times, he founded its DealBook newsletter and summit; he's a Squawk Box co-anchor for CNBC; and after Too Big to Fail was filmed by HBO, he co-created Billions, a huge hit for Showtime starring Damian Lewis and Paul Giamatti. Continue reading...

First Brands and Tricolor failures raise concerns for wider financial sector, including traditional banksThe collapse of two US firms, First Brands and Tricolor, has shone a light on private credit and its growing influence in the global economy.The failures have led to ballooning losses at traditional banks, and, coupled with worries about the health of US regional banks, have raised concerns about weak lending standards and potential threats from an opaque corner of the so-called shadow banking sector. Continue reading...

European stock markets have fallen after two US regional lenders disclosed on Thursday that they were exposed to alleged fraud by borrowers

Worries over private credit, tax and spend, skittish bond markets and tariff chaos dominate meeting in WashingtonThe security blanket is covering us, but maybe we have a foot out in the cold." That was the typically colourful warning from the International Monetary Fund's managing director, Kristalina Georgieva, this week to its gathering of finance ministers in Washington.At its spring meetings in April, the IMF said the erratic trade policies emanating from the White House, half a mile away from its glass and steel HQ, amounted to a major negative shock" for the global economy. Continue reading...

Boost for Rachel Reeves as bond yield falls while she considers tax rises and spending cuts in budget

Wall Street sounds alarm over strain throughout car lending market as experts warn of potential risks for wider economyAlarm bells are ringing on Wall Street. The recent collapses of Tricolor, a used car seller and sub-prime auto lender, and First Brands, an auto parts supplier, have put the finance industry on edge, almost two decades after problems in the sub-prime mortgage lending market set the stage for the global financial crisis.When you see one cockroach, there are probably more," Jamie Dimon, the JPMorgan Chase CEO, ominously cautioned analysts this week, after the US's largest bank disclosed a $170m charge tied to Tricolor's bankruptcy. Everyone should be forewarned on this one." Continue reading...

International Monetary Fund managing director Kristalina Georgieva urges more attention to the non-bank financial institutions, as the world may have a foot out in the cold"Britain's trade deficit has widened, partly due to a drop in exports to the European Union and the US.New trade data shows that UK exports to the United States fell by 700m in August, due to falls in exports of machinery and transport equipment, chemicals and material manufactures."The fall in exports of machinery and transport equipment was because of reduced exports of both aircraft and mechanical power generators (intermediate) to Germany, while the decrease in exports of chemicals was because of reduced exports of medicinal and pharmaceutical products to Germany and Ireland.The ONS also reported that the total underlying trade deficit widened in August to 5.2bn, up 1.7bn, led by a rise in imports from the EU.The UK's favourable trade deal with the US is reaping no identifiable growth benefits as yet for the UK, the ONS reported that exports of goods to the US, including precious metals, was lower by 0.7bn. The trade deficit was down to trade in goods, where the deficit widened by 3bn in the three months to August, the trade in services surplus increased by 1.3bn in the same period. Continue reading...

Kristalina Georgieva urges vigilance over very significant shift of financing' after collapse of Tricolor and First BrandsThe head of the International Monetary Fund has admitted that worrying about the risks building up in non-bank lending markets keeps her awake at night.Kristalina Georgieva on Thursday urged countries to pay more attention to the private credit market, after the failure of the sub-prime auto lender Tricolor and the car parts supplier First Brands. Continue reading...

Manufacturing and health sectors boost growth but ONS revises down figures for July

Inflation and a worsening job market are top of mind for many Americans, even among the president's Maga baseDonald Trump is not making America feel great again.Nine months into the second Trump administration, Americans are feeling pretty crummy. More than half - 53% - believe the economy is worsening, according to the latest survey conducted by Harris for the Guardian. That's just slightly better than the 58% who thought it was going downhill in late April, when financial markets were still reeling from the president's liberation day" tariffs. About 60% think the cost of living has gotten worse since the start of the year; 47% say the job market is worse. Continue reading...

Exclusive poll: Inflation remains a concern despite president's pledge to reduce prices on day one'

Thinktank urges chancellor to take bold' action on benefits and pensions to placate jittery financial markets

Party has promised to stand back as weakened prime minister prepares for crucial no-confidence voteThe French Socialist party says it will fight to introduce a flagship wealth tax to raise revenue by targeting France's richest people, as the divided parliament prepares to begin debating next year's budget.Boris Vallaud, the head of the Socialist party grouping in parliament, said on Wednesday that taxing very high-wealth individuals in France was one of our principal battles and we're going to put all our energy into it". Continue reading...

Exclusive: Chancellor hints at rises and calls out past scaremongering' over VAT on private schools and changes to non-domsRachel Reeves has said higher taxes on the UK's wealthy will form part of next month's budget, as she shrugged off the scaremongering" and bleating" of her critics, and stressed her determination to repair the public finances.Speaking in Washington, where she is attending the annual meetings of the International Monetary Fund (IMF), the chancellor told the Guardian there won't be a return to austerity" and hinted at tax increases for the most well-off. Continue reading...

Exclusive: Impact of austerity cannot be undone by end of parliament despite above-inflation funding, analysis findsCouncils in England will still be poorer by the end of this parliament than they were in 2010 despite Labour's funding increases, according to analysis by the Institute for Government (IfG).Funding cuts from 2010 to 2019 were so severe that they left gaps that could not be filled even by five years of above-inflation increases, leaving local authorities increasingly reliant on emergency funding and capable of providing only legally mandated services, the report shows. Continue reading...

Rolling coverage of the latest economic and financial newsSemiconductor firm ASML is continuing to benefit from the AI boom, but also expects a significant fall in demand from China next year.ASML, which makes machines which make chips, has reported a small slowdown in sales in the last quarter this morning. It posted total net sales of 7.5bn in the third quarter of this year, down from nearly 7.7bn in Q2.On the market side, we have seen continued positive momentum around investments in AI, and have also seen this extending to more customers, both in leading-edge Logic and advanced DRAM. On the other hand, we expect China customer demand, and therefore our China total net sales in 2026, to decline significantly compared to our very strong business there in 2024 and 2025.This suggests that the slump in the demand for luxury is starting to level off. There was also growth in sales to China, which had been hit by a slump in recent years. Analysts now expect the leather goods sector, especially Luis Vuitton and Christian Dior, could fuel growth for this sector into next year. Continue reading...

Ratio would be highest since aftermath of second world war, with UK among G20 countries forecast to peak above

Labour is misreading the economics - leaving it unable to deal with the G7's worst inflation and flat living standardBloomberg's headline said it all: UK Faces Worst G-7 Inflation and Flat Living Standards, IMF Says". The International Monetary Fund warns that inflation will be higher in the UK than in any other major advanced economy - including in the US, where Donald Trump's tariffs are driving up costs for American consumers. This while GDP growth per head crawls at 0.4%, the weakest of any major economy. Real wages have stagnated for 11 months. Meanwhile, official figures show that unemployment has climbed to 4.8%, the highest since spring 2021. Forget talk of Britain's upgraded growth"; the economy, under Labour, is running hot only for those collecting profits.The Joseph Rowntree Foundation (JRF) projects that by 2029 average disposable incomes will be 570 lower than today, a fall of 1.3% - the sharpest drop in living standards since records began in 1961. This isn't a simple case of prices getting ahead of demand. What Britain faces is profit inflation: prices are rising while wages stand still. As Lord Keynes noted, this isatransfer from labour to capital - an increase in mark-ups, not in productivity.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...

According to fund's World Economic Outlook, Britain is on course to average 3.4% this year and 2.5% in 2026

Rolling coverage of the latest economic and financial news

Government bond markets also under increasing pressure, says Global Financial Stability Report

UK and global GDP growth forecasts upgraded for this year but immigration controls could have negative impact