US regional bank shares recover some of Thursday's losses, as Trump cools on threat of 100% tariff on China

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

A cost of living crisis is not inevitable if there is the will to stop companies extracting profits from Britain's essential servicesThe profound squeeze on living standards has become the defining, explosive feature of British politics. Each week seems to bring more pain in the form of higher bills. Water bills are forecast to rise again next year, on top of the energy price cap that recently increased to 1,755 a year. For rightwing populists, the cost of living crisis is the gift that keeps on giving, allowing them to blame the experience of declining living standards on migrants and perceived outsiders". Unless Britain's crisis of livability is addressed, Labour will probably be the handmaiden of a Reform victory.We often hear that the cost of living crisis is caused by rising energy prices linked to Vladimir Putin's war on Ukraine, or by disruption caused by the climate crisis. These factors, while hugely important, are not the whole story. The structure of Britain's economy amplifies the effects of inflation and makes life more expensive. When external shocks hit our economy, they translate into people paying even higher prices here than they do elsewhere. This is because essential services, such as energy, housing and transport, have been designed as opportunities for profit extraction.Mathew Lawrence is director of the Common Wealth thinktank Continue reading...

Firms too scared to take a chance on youngsters when taxes and minimum wages are higher, expert says

Unemployment rate rises slightly to 4.8% but ONS says falls in payroll numbers and vacancies are levelling off

Inflation also hitting sales, says industry body, as Barclays says credit card spending fell in SeptemberUK retail sales growth cooled last month as concerns over inflation and looming tax increases in Rachel Reeves's autumn budget weighed on British consumers.In a snapshot before the chancellor's tax and spending event next month, the British Retail Consortium (BRC) said total sales rose more slowly in September than in recent months. Continue reading...

Author of influential report on the gig economy says new watchdog can make progress on workers' rightsLabour has appointed Tony Blair's former policy chief to lead Britain's new jobs market watchdog being created by the government to enforce its strengthening of workers' rights.Matthew Taylor, who led the influential Taylor report on the gig economy and modern working practices for Theresa May's government, will become the chair of the Fair Work Agency when the body launches next April. Continue reading...

Trump has threatened 100% tariffs after Beijing's fresh curbs on rare earths, a month before deadline to agree a dealWith nearly a month to go before the deadline for the US and China to reach a deal in their trade war, goodwill between the two countries appears to have been swept off the table in recent days. China announced that it was once again restricting the export of critical minerals, prompting the US president, Donald Trump, to announce tariffs of 100% on US-bound Chinese exports, scuppering - at least for now - hopes that global economic turmoil could be averted. Continue reading...

Wall Street rallies at the open as fears over US-China trade war easeThe National Lottery operator Allwyn is to merge with Greece's leading gambling company OPAP to create a global listed gaming giant worth about 16bn (13.9bn).Allwyn, which owns a near-52% controlling stake in Athens-headquartered OPAP, has agreed an all-share tie-up with OPAP that will see the combined group renamed Allwyn. Continue reading...

US S&P 500 and Nasdaq Composite indexes rise and cryptocurrencies rebound after Trump post on Truth Social

Thinktank says UK could raise significant funds by tackling some of the longstanding inefficiency and unfairness' in tax systemRachel Reeves must avoid a half-baked dash for revenue" or risk damaging economic growth as the chancellor seeks to close a large gap in next month's budget, the Institute for Fiscal Studies has said.The tax and spending thinktank has warned there was a danger the chancellor would create unnecessary economic damage" if she chooses to stitch together unrelated tax-raising measures to cut the shortfall in government revenues and keep within her fiscal rules. Continue reading...

Beijing says it will act if US president doesn't stand down, while investors brace for trade war turmoilBeijing has told the US it will retaliate if Donald Trump fails to back down on his threat to impose 100% tariffs on Chinese imports as investors brace for another bout of trade war turmoil.China's commerce ministry blamed Washington for raising trade tensions between the two countries after Trump announced on Friday that he would impose the additional tariffs on China's exports to the US, along with new controls on critical software, by 1 November. Continue reading...

Influential economists want replenishment of funds and new ways to define countries in need before this week's IMF and World Bank meetingsTop economists are demanding urgent action on debt relief in Washington this week, as analysis from the campaign group Debt Justice shows struggling governments are cutting back on health and education.As finance ministers and central bankers gather for the International Monetary Fund (IMF) and World Bank annual meetings, influential experts including the Nobel laureate Joseph Stiglitz, and leading economists Mariana Mazzucato and Jayati Ghosh, are urging them to turn debt into hope". Continue reading...

Labour embraced the forecaster's powerful role, but now finds itself scrambling in the face of gloomy projections

Chancellor hopes to raise enough funds to stop damaging speculation about breaching fiscal rules

President suggests layoffs will be a lot' and in Democrat areas as unions for federal workers take the matter to court - key US politics stories from 10 October at a glanceMass firings of US federal workers have begun, as Republicans work to exert pressure on Democrat lawmakers to end a government shutdown. The White House budget office said the layoffs were substantial", with unions for federal workers taking the matter to court. President Donald Trump said of the job losses it'll be a lot" and suggested those losing their jobs would be in areas that were Democrat oriented".The government shutdown comes as the US president has revived the trade war with China, this time promising to increase tariffs on Chinese imports by 100%. His administration is also considering using visa restrictions and sanctions against countries that support the International Maritime Organization's net zero framework" proposal. Continue reading...

My father, Eric Potts, who has died aged 89, was an economist working in engineering and manufacturing businesses, in a period of considerable change for those industries.He began his career as a graduate apprentice at Rolls-Royce, in Derby, in the early 1960s. Joining the marketing department of the Weir Group, Glasgow, he rose to the top position, before being made marketing director at Weir Polypac, Hartlepool, in 1980. Continue reading...

Jeremy Cross says disjointed policies are trapping people in poverty and isolation, while Monica Hall considers the cost of potholes. Plus letters from Derrick Joad and Colin BurkeGeorge Monbiot is correct that cuts in public services cost far more than the money saved (It hurt when I crashed my bike into a pothole - and it taught me the true price of austerity, 4 October).I am a trustee of a small charity in Kent, The Social Justice Network, which runs a number of projects, including supporting refugees and their families to settle locally. Recently we welcomed a family of 10 (parents and eight children aged five to 16) from another county. The council had worked hard to house the family in its area but was unable to, despite having accepted its duty to do so. As a result of a forced move of nearly 100 miles at 24 hours' notice, the father lost his job and isnow benefit capped. Removing the two-child limit would make this family only marginally better off as they would still face the family benefit cap. Continue reading...

Business leaders are prioritising automation through AI to fill skills gaps, rather than training junior employees, survey findsBusiness leaders may be pulling up the ladder' behind them, by focusing on AI tools rather than taking on new staff, warns Kate Field, global head human and social sustainability at the BSI.Field explains:As roles are streamlined or eliminated before experience can be gained, we risk eroding the professional aspirations of people at the very start of their careers and before they've had the chance to flourish.Our findings suggest a troubling trend: senior leaders may be pulling up the ladder', prioritizing short-term productivity over long-term workforce resilience. If left unchecked, this could have lasting consequences, from weakening our skills pipeline, deepening generational inequality and our research suggests, dividing large companies and SMEs.Half (51%) of the respondents working in SMEs say AI is crucial to the growth of their organization, compared with nearly seven in ten respondents in large organizations (69%). This is reflected in its impact being felt; 70% of large businesses reported AI saves money compared to just half of SMEs (51%). Continue reading...

US president's threat to impose 92% tariffs targeting major manufacturers put family-run firms in the firing line as wellIt's a real pity," laments Antonio Rummo of Donald Trump's latest target in his ever-evolving tariff war: Italian pasta. Rummo is the sixth-generation grandson of the founder of Pasta Rummo, who opened a wheat mill in Benevento in southern Italy in 1846, using the family's three horses to lug grain from the surrounding Campania region and Puglia to produce fresh pasta.Demand for premium pasta in the US has been growing," says Rummo. Appreciated by consumers for a traditional processing method that guarantees it will cook to al dente perfection, sales of Pasta Rummo have been thriving. Continue reading...

Why UK steel sector is alarmed by prospect of punitive tariffs from its biggest customerThe EU shocked the UK steel industry on Tuesday with an announcement of 50% import tariffs - with no apparent carve-out for metal crossing the Channel.UK Steel, an industry lobby group, said the plan poses an existential threat" to British steelmakers. Here's what you need to know. Continue reading...

Kristalina Georgieva outlines mounting risks to economic stability before fund's annual meetings next week

Precious metal having biggest rally since 1970s amid political uncertainty in US, France and JapanThe price of gold has risen above $4,000 (2,980) per ounce for the first time as investors continue to seek a safe place to put their money at a time of global political and economic uncertainty.The spot price of gold - the real-time market value of gold and viewed as the global benchmark - had reached $4,031.54 by 8am in London on Wednesday morning, after climbing 1.2% during early trading. Continue reading...

ONS says public borrowing estimates have been out by 200m-500m a month since JanuaryMistakes in recent public finances data mean government borrowing has been overstated by a cumulative 3bn, the Office for National Statistics has said.In a fillip that gives Rachel Reeves a little bit more wriggle room in her November budget, the ONS said its estimates of public borrowing had been out by 200m-500m a month since January. Continue reading...

Research finds it would take average worker saving all their earnings for 52 years to match wealth of richest 10th of societyIt would take the average earner in the UK 52 years' worth of earnings to become as wealthy as the richest 10%, according to new research by the Resolution Foundation.In a new report, the influential thinktank analyses the Office for National Statistics' latest wealth and assets survey, which covers the Covid pandemic period of 2020-22. Continue reading...

Starmer says UK in discussions with EU over Brussels plan to double import tariff to 50%, which unions warn could kill UK steel industryThe EU has announced it will match Donald Trump's steel tariffs, doubling levies on imports to 50% in a decision condemned as an existential threat" to the industry in the UK.With 80% of British exports going to the EU, the change poses the UK steel industry's biggest ever crisis, according to the lobby group representing the sector, while unions said they could kill off the industry. Continue reading...

Company says more roles will be at risk unless UK government supports tariffs to protect industry

Investors rattled by resignation of French PM but country is not alone in trying to grapple with political maths

Mel Stride outlines plans to slash 47bn a year from public spending, including 23bn welfare cut

Rolling coverage of the latest economic and financial news, as France's prime minister resigns unexpectedly

From Ohio to Florida, the US government's clampdown on students from abroad threatens rural universities and local businessesFor a town of 20,000 residents a few miles from the Indiana state line in rural Ohio, the city of Oxford boasts an outsized number of international eateries.On High Street, the Phan Shin Chinese restaurant sits a few doors down from the Happy Kitchen, another Chinese food joint, which is next door to the Krishna Indian restaurant. There's a French bakery and even a Uyghur restaurant selling central Asian fare. Continue reading...

In Johnstown, thousands live in poverty - and voters went for Trump. How are people feeling as his devastating cuts take hold?Ernest Hairston has a plan. He's going to buy a car and find a job, then he'll be able to start saving for a down payment on a house.A car this year, house next. That's his plan. But first, he has to fix his health. Continue reading...