Rolling coverage of the latest economic and financial news

Rising fruit and vegetable prices contribute to jump in annual food price inflation in June to 3.7%Britain's largest retailers are warning that food prices are being driven up by hot weather hitting harvest yields, as the latest UK heatwave pushes temperatures close to record levels.The British Retail Consortium (BRC) said rising fruit and vegetable prices had contributed to a jump in food price inflation in June, while retailers also passed on tax rises and employment costs to consumers. Continue reading...

Report says concerts attracted record 23.5m fans, leading to unprecedented spend across British economyA wave of big-name acts including Taylor Swift, Charli xcx and Bruce Springsteen helped to attract a record of more than 23 million live music fans in the UK last year, leading to an unprecedented 10bn of spending across the UK economy.A report from the industry body UK Music estimates that 23.5 million music tourists" attended concerts and festivals last year, up almost a quarter on the 19.2 million in 2023. Continue reading...

Trump officials hail U-turn as Mark Carney says decision to rescind digital services tax means revival of trade talksThe United States has said that Canada's prime minister, Mark Carney, caved" to demands from the White House after his government abruptly scrapped their digital services tax on US technology companies, which was set to go into effect on Monday.It's very simple. Prime Minister Carney and Canada caved to President [Donald] Trump and the United States of America," the press secretary, Karoline Leavitt, said in a daily briefing. Continue reading...

UK-US trade deal kicks in today, lowering tariffs for British carmakers and aerospace sectorUK households hit by squeeze on living standards despite fastest growth in G7Karim Haji, global and UK head of financial services at KPMG, said:May's uptick in mortgage approvals bucks the downward trend we've seen throughout the year so far. The gradual easing of interest rates could be helping to boost confidence and demand amongst mortgage borrowers.The cost of living remains high, but a drop in consumer borrowing in May signals that rising incomes are starting to feed through to the cost of day-to-day expenses.It is incredibly positive news to see an increased number of mortgage applications approved. It is one of the loudest signals of them all regarding consumer affordability, and it is also a massive vote of confidence from lenders in the longer-term prospects of the economy too.As we head into the summer months, we have witnessed on average the number of viewings per property available see an uplift of around 30% compared to the month previous. On top of this, we have also seen the UK Government make a pledge to create a National Housing Bank which could bring significant investment to help build 500,000 new homes, enabling a potential greater degree of flexibility for those who aspire to buy. Continue reading...

Concerns over conduct of bosses at Lincolnshire site, with ministers saying workers had been badly let down'

ONS confirms GDP growth at 0.7% between January and March but households saving less of disposable income

Vacancies for graduate jobs, apprenticeships, internships and junior jobs with no degree requirement have dropped 32%, Adzuna finds

Binary rules and twice-yearly OBR forecasts have turned chancellor's moves into grim spectator sportThere are many lessons for Labour's bruised leadership from last week's embarrassing U-turn on welfare cuts, but one is surely that how - and when - fiscal policy is set is not working.Binary fiscal rules, a slim margin for error (less than 10bn), and the Office for Budget Responsibility's twice-yearly forecasts have combined to turn tax and spending decisions into a grim spectator sport. Continue reading...

In the second in a series, the Guardian looks at how Grangemouth struggles as Reform UK hopes to win votes

Next week, a UN summit in Seville will discuss the future of financing the world's poorer nations. It should first concede that the old methods have failedIt is 2025, and the architecture of economic power remains grossly tilted against the nations of the global south. Nowhere is this imbalance more acute - and more enduring - than in the debilitating impact of sovereign debt.From the vast countries of Africa to the scattered but strategically vital small island developing states (Sids) of the Caribbean and the Pacific, debt has become a modern form of bondage - the chains that restrict growth, sovereignty and the basic human dignity of nations struggling to define their own path to development. Continue reading...

Rebel MPs will try to lay new amendment on Monday giving colleagues a chance to delay bill despite No 10 concessionsKeir Starmer is battling to stem the revolt over his cuts to disability benefits, with about 50 Labour MPs concerned the new concessions will create a two-tier" system where existing and new claimants are treated differently.Senior government sources insisted things were moving in the right direction" for No 10, with the whips phoning backbenchers to persuade them to support the bill on Tuesday. Continue reading...

Government's concessions over welfare cuts leave chancellor with a growing hole in her budgetRachel Reeves is expected to extend a freeze on income tax thresholds to raise fresh funds after the government's U-turn on welfare cuts left her with a growing budget hole.The chancellor was already facing pressure to backtrack on pledges not to increase taxes further as she attempted to fix public services and grow the economy while meeting her fiscal rules. Continue reading...

Rolling coverage of the latest economic and financial news

In first assessment since pandemic in 2020, World Bank urges other countries to step up supportExtreme poverty is accelerating in 39 countries affected by war and conflict, leaving more than a billion people to go hungry, according to the World Bank.Civil wars and confrontations between nations, mostly in Africa, have set back economic growth and reduced the incomes of more than a billion people, driving up extreme poverty faster than anywhere else", the Washington-based body said. Continue reading...

European Commission president says EU will defend the European interest as needed' as Trump threatens 50% steel tariffsThe European Commission president, Ursula von der Leyen, has said the EU is ready for a trade deal with Donald Trump, but all options remain on the table".Von der Leyen said she was analysing the latest US negotiating document received on Thursday. Our message today is clear, we are ready for a deal," she told reporters, after briefing EU leaders at a summit in Brussels. At the same time, we are preparing for the possibility that no satisfactory agreement is reached ... and we will defend the European interest as needed. In short, all options remain on the table." Continue reading...

Cancer Research UK says this is more than any other health condition and 350,000 years of productivity are lostPeople dying early of cancer costs the UK economy 10.3bn a year, more than any other health condition, a study has revealed.That is the total cost of the 350,000 years of lost productivity recorded across Britain every year because adults have died prematurely of the disease, according to Cancer Research UK (CRUK). Continue reading...

Devereux Review on the UK's main statistics body also says a revision of past figures may be requiredThe UK's main statistics body needs a 10m overhaul and its top role split in two after a series of management failings and errors that have plagued the organisation for several years, a scathing report has found.The Devereux Review on performance and culture of the Office for National Statistics (ONS) found deep-seated" issues that called for radical measures and warned of the likelihood that past statistics would need to be revised. Continue reading...

Andrew Bailey says slack appearing in labour market, after Keir Starmer tells businesses they have made a huge difference'

Andrew Bailey warns of significant decline in wage growth in year ahead' as Bank prepares for interest rates decision

Data shows 16.1% jump as Bank of England suggests influx of cheaper goods could bear down on inflationChinese exports to the UK jumped in May, according to data from Beijing, raising the prospect of a flood of cut-price goods as firms look for alternative markets to avoid Donald Trump's tariffs.Data published by the Chinese government showed a 16.1% increase in exports to the UK in May compared with the same month last year, hitting the highest level since February 2022. Continue reading...

New strategy to focus on more agile' modest agreements, as opposed to wide-ranging dealsBritain has focused too much on trying to sign major trade deals with other countries, ministers have said, as they lay out the case for a big shift in post-Brexit trade policy.The change forms the heart of the government's new trade strategy, which ministers will publish on Thursday. Continue reading...

Louis Taylor, CEO of state-owned lender, targets investment in eight key UK sectors as he prepares defence at Covid inquiryLouis Taylor is caught between two eras. The chief executive of the British Business Bank (BBB) has spent much of his tenure attempting to revive the state-owned lender's image after a battering from the fraud-hit pandemic loan scheme under the last government, and will soon have to defend its actions at the Covid inquiry.But until then, he can focus on the BBB's gleefully landed fresh 10bn mandate linked to the centrepiece industrial strategy Labour hopes will boost a flagging economy as it nears the end of its first year in power. Continue reading...

Disruption between St Pancras and Gare du Nord after theft of cables at Lille leave passengers stranded

Andrew Bailey says OBR projections - which the chancellor uses to calculate headroom - shouldn't be over-interpreted'The Bank of England governor, Andrew Bailey, has waded into the controversy over Rachel Reeves's fiscal rules with a warning against over-interpreting" the Office for Budget Responsibility's forecasts.The chancellor announced spending cuts in her spring statement in March to rebuild headroom of 9.9bn against her fiscal rules based on projections from the OBR. Continue reading...

Bailey says the BoE doesn't know how trade wars will play out, as UK brings in new restrictions on steel imports

The ex-president spent billions reforming the US economy for the long term - but the Democrats lost. Labour must learn that prices in the here and now matter too

Rolling coverage of the latest economic and financial news

Oil prices could rise if Iran goes ahead with threat to shut down shipping in the strait of HormuzUS strikes on Iran could damage global economic growth, the head of the International Monetary Fund has warned.Director Kristalina Georgieva told Bloomberg TV that the IMF was watching energy prices closely, warning a rise in oil prices could have a ripple effect throughout the global economy. Continue reading...

Plan to drive growth in eight sectors through measures such as trade support and cutting energy prices

Nigel Farage defends policy to top up poorest workers from 250,000 landing fee' on rich UK newcomers

Tackling inflation from companies raising prices during cost shocks requires more than adjusting interest ratesThe heatwave that gripped much of the UK this week was the latest sweltering reminder that the climate emergency is already making daily life more volatile.Many of the places most brutally exposed to out-of-kilter weather patterns and natural disasters are in the global south, and rightly demand solidarity from the wealthier countries responsible for most historical emissions. But the costs of the emergency are being felt everywhere. Continue reading...

In the first in a series, the Guardian maps out the rise in support for Farage and how parties are targeting the UK's deindustrialised areasWhen Nigel Farage called for the nationalisation of British Steel on a visit to the Scunthorpe steelworks this spring, it was a marked change in direction for a man who had spent almost all of his political career campaigning for a smaller, Thatcherite state.Two years earlier, he had questioned why British taxpayers' money should be thrown into keeping the fires of the very same blast furnaces burning. Back in 2018 he told an interviewer: I supported Margaret Thatcher's modernisation and reforms of the economy. It was painful for some people, but it had to happen." Continue reading...

Groceries Code Adjudicator calls on suppliers to share their experiences of working with AmazonThe number of companies collapsing across England and Wales jumped last month, in a sign of the economic pressures hitting firms.There were 2,238 company insolvences in England and Wales during the month, which is 8% higher than in April and 15% more than in May 2024.This latest rise in corporate insolvencies reflects the harsh reality many businesses face: fragile demand is not keeping pace with rising costs. Even the increasingly-likely prospect of rate cuts in August won't do much to fix this - insolvency levels will remain elevated for the foreseeable future.Sectors like hospitality are having a particularly challenging time in this environment, in no small part due to the impact on labour costs of April's National Insurance and minimum wage increases. These businesses are now approaching what are some of their peak months and will be hoping for strong trading to bolster their resilience. If this doesn't materialise, then they could be facing a short road ahead. Continue reading...

Research warns poorer governments prioritising debt payments over essential development spendingDeveloping countries need a fresh round of debt relief, to prevent money urgently needed for health and education being diverted to creditors, according to a major new report commissioned by the late Pope Francis.The Jubilee report, produced by a panel of experts chaired by Nobel prize-winning economist Joseph Stiglitz, argues for debt restructuring, along the lines of the Heavily Indebted Poor Countries initiative (HIPC). Continue reading...

May figure second highest for month on record amid fears chancellor is struggling to keep within spending rules

Analysts say households are remaining cautious under dark shadow of inflation'Confidence among UK consumers has improved but remains fragile in the face of expected petrol price rises amid escalating conflict in the Middle East, according to a leading index.The latest snapshot from the data company GfK says sentiment improved by two points in June but remained in negative territory at -18, well below the -12 of a year ago. A reading above zero indicates optimism; below indicates pessimism. Continue reading...

UK central bank split 6-3 on interest rate decision, and warns that escalating Middle East conflict is pushing up energy prices

Lower interest rates will be a lever for growth but the Middle East conflict and rising food prices will have troubled MPC

Governor says rates still on downward path but hard to predict timing of reductions in highly unpredictable' world

Blockage of strait of Hormuz, through which about 25% of world's oil passes, could shock energy market, says Wael Sawan Business live - latest updatesAn escalation in the Middle East conflict could have a huge impact on global trade", the boss of the oil company Shell has warned, as Donald Trump suggested the US could enter the air war between Israel and Iran.Shell, one of the biggest traders of oil and natural gas in the world, said it had contingency plans in case the conflict disrupted flows from the region. There is a risk that a blockage in the strait of Hormuz could shock the energy market. Continue reading...

Hours before the decision, the president called the Fed's chair, Jerome Powell, stupid' for anticipated rate holdThe US Federal Reserve kept interest rates on hold, but signaled it might make two cuts this year, as Donald Trump continues to break with precedent and demand lower rates.Policymakers at the American central bank lifted their projections for inflation this year, as the US president stands by his controversial tariff plans, and downgraded their estimates for economic growth. Continue reading...

Heidi Alexander vows to sort out' HS2 project which is delayed beyond 2033; UK inflation dips to 3.4%

Annual rate slows in May from 3.5% in April despite record increase in chocolate prices

Rolling coverage of the latest economic and financial news

Chancellor is keen to mollify wealthy global investors and attract foreign investment into the UK

Starmer should secure deal as soon as possible to exempt UK steel from US levies, says Community union

Rolling coverage of the latest economic and financial news

Concerns raised that section 899 could backfire and also undermine dollar's safe haven statusForeign investment into the US could be threatened by Donald Trump's new revenge" taxes, analysts have warned.A provision within the president's One Big Beautiful Bill Act will allow the US to apply higher taxes on foreign individuals, businesses and investors connected to jurisdictions that impose unfair foreign taxes" on US individuals and companies. Continue reading...

Healthy scepticism is needed because flaw is that large language models remain prone to casually making things upFrom helping consultants diagnose cancer, to aiding teachers in drawing up lesson plans - and flooding social media with derivative slop - generative artificial intelligence is being adopted across the economy at breakneck speed.Yet a growing number of voices are starting to ask how much of an asset the technology can be to the UK's sluggish economy. Not least because there is no escaping a persistent flaw: large language models (LLMs) remain prone to casually making things up. Continue reading...