Bank of England governor has said he sees pay as crucial in determining pace of rate reductions

US hoping to get handshake from China over access to rare earths, at meeting in London todayThe presence of US commerce secretary Howard Lutnick at today's talks in London is seen as directly related to China's export ban on rare earth minerals and permanent magnets, critical in aerospace, military and semi-conductor companies worldwide, my colleague Lisa O'Carroll reports.After the call between Donald Trump and Xi Jinping last week, their first since Trump's inauguration in January, the US said Xi had agreed to resume shipments of rare earths to the US, breaking the logjam needed for talks to resume. Continue reading...

Pippa Crerar and Kiran Stacey discuss Rachel Reeves's U-turn on winter fuel payments: will it be enough to undo the damage done by the policy? Plus, they look ahead to this week's spending review as negotiations with ministers go down to the wire. And after its chair dramatically quit the party only to return 48 hours later, what's going on with Reform UK? Continue reading...

Exclusive: Andy Haldane says Labour sloganeering' will not empower regions where Reform is making headwayNigel Farage is the closest to a tribune for the working class", the former Bank of England chief economist has said, in a stark warning for Keir Starmer's Labour party.Andy Haldane said the surge in support for Reform UK in the opinion polls suggested there had been something of a moral rupture" between the government and many voters, which he said should spur Starmer to take action with a radical reset" of its growth plans. Continue reading...

Labour has so far struggled to explain its purpose and the need to do so will be all the more pressing if it raises taxes againRachel Reeves hopes to use Wednesday's spending review to tell a long-overdue story about Labour's purpose in power that looks beyond fixing the Tories' fiscal mess.After the winter fuel U-turn and Labour's battering at the hands of Reform in last month's local elections, the chancellor's team are well aware that voters and backbench MPs need reasons to believe. Continue reading...

Chancellor had anticipated surpluses from final salary schemes would boost investment in UK economyPlans to invest 160bn of surplus funds from final salary pension schemes to boost the UK economy over the next 10 years have been dealt a blow by a Whitehall assessment that found there was likely to be little more than 11bn available to spend.In a knock to Rachel Reeves's growth agenda, a report by civil servants at the Department for Work and Pensions (DWP) found that the expected surpluses in occupational schemes would be used by businesses to offload their pension liabilities to insurance companies. Continue reading...

Economists are concerned, politicians are angry - but the national debt keeps growing, no matter who's in chargeIn this febrile political era, few issues command stronger bipartisan support than the need for fiscal responsibility. Barack Obama and Donald Trump committed to curtail the US national debt on their respective roads to the White House.And yet, no matter the party, Americans have been able to count on one thing above most: the national debt will keep climbing. Continue reading...

Independent Commission on Neighbourhoods calls for spending on mission critical' local regeneration schemesRed wall" Labour MPs are urging Rachel Reeves to fund grassroots social infrastructure" such as parks, community centres and libraries, as well as high-profile transport projects, to ensure voters in left-behind areas can benefit from growth.The Independent Commission on Neighbourhoods (Icon), chaired by the Labour peer Hilary Armstrong and supported by a string of backbenchers, has identified 613 mission critical" local areas. Continue reading...

Optimism is growing in Brussels, but high-risk strategy has only weeks to play out before pause in tariff threat endsIn Brussels' corridors of power, quiet optimism is growing that the EU's hardball strategy to secure a US trade deal is working. While Britain quickly moved to try to cushion the impact of Donald Trump's tariffs with a deal agreed last month - and US-Chinese relations are a tit-for-tat situation - the EU has taken a different stance. We are positioning ourselves between rollover UK' and retaliatory China'," said a Brussels source.The stakes are not just the 706bn in transatlantic trade between the EU and US but the fallout from what diplomats and businesses say is a dangerous assault on the global rules-based system that governs western democracy. Continue reading...

May's jobs report was dragged down by loss of 22,000 federal workers' jobs as Doge cut positionsThe US economy added 139,000 jobs in May, a slowdown compared with recent months as American businesses cope with uncertainty around Donald Trump's continuing trade war.After signs of a strong labor market in April - which was largely seen as resiliency against teetering trade policy from the White House - May saw a drop in new jobs added to the labor market, according to new data from the Bureau of Labor Statistics. The unemployment rate remained steady at 4.2%, unchanged from last month. Continue reading...

For decades, the savings from declining defence spending were effectively ploughed into the health service. Those peace dividend' days are gone

A slow and gentle lifestyle is possible; it's just not sold to us, so it is harder to listen out for

You're not about to see the back of me," insists Lagarde, sporting a necklace reading in charge', following claims she discussed leaving ECB early to run World Economic Forum

European Central Bank makes eighth quarter-point cut in a year as bloc reels from impact of Trump's trade wars

Housing associations want chancellor to class social housing as critical infrastructure to allow for extra spendingHousing bosses representing 1.5m social homes across England will press Rachel Reeves to reclassify affordable housing as critical infrastructure spending, amid a battle between the chancellor and Angela Rayner.There is deep dissatisfaction with the level of funding for social homes in the spending review due next week. Rayner, the housing secretary, is one of the last remaining holdouts in negotiations with the Treasury over departmental spending settlements. Continue reading...

Young voters are worried about their financial future and rising costs, advocacy organisation NextGen America saysYoung people in the US are looking for Democrats to embrace economic populism and authentic candidates willing to fight for them, says the new leader of a group dedicated to youth voter mobilisation.Victoria Yang is the interim president and executive director of NextGen America, an organisation that engages young people through voter education and registration. She succeeds Cristina Tzintzun Ramirez, who held the post for four years. Continue reading...

Rolling coverage of the latest economic and financial news

Rolling coverage of the latest economic and financial news, as US factory output falls again in May

Government argues investment creates skilled jobs, but others say spending elsewhere would have more impact

Nigel Farage claimed last week to speak for the working class but he is still firmly wedded to the rightwing playbookFor a politician who has done more than most to shape Britain's current challenges, nothing seems to stick to Nigel Farage. Not the chaos of the post-Brexit referendum years; or the contradiction of his closed-border English nationalism combined with a fondness for courting nomad capitalists from Malaysia to Mar-a-Lago.This is, of course, because the Reform UK leader is the agitator-in-chief. He has prodded successive prime ministers into action, but has not been in the driving seat himself. Things though are changing. Continue reading...

Confiscating the funds would shock Putin, help Ukraine, and take advantage of disillusionment in the US economyUkraine needs more than long-range missiles and fibre-optic drones in its fight with Russia. What it needs is more money, and lots of it.In particular, the war-torn nation should be handed the 300bn (250bn) of frozen Russian assets stored mostly in accounts hosted by the Euroclear trading system. Continue reading...

It is not the cryptocurrencies message that is raising eyebrows, it is Reform's broader tax and spending policiesThe message Zia Yusuf wanted to send was clear. With a backdrop of the City of London behind him, from the 34th floor of the Shard, the Reform UK chair laid out an economic policy designed to show his party meant business.In a briefing over a full English breakfast for some of the nation's journalists on Friday morning, Yusuf reiterated an announcement the Reform leader, Nigel Farage, had made overnight from another hotel 5,000 miles away in Las Vegas: the party would now accept donations in bitcoin, and if elected to power would make tax and regulatory changes to bolster Britain's adoption of cryptocurrency. Continue reading...

Time and time again over the past four months, reality has failed to match Trump's rhetoricTariffs are easy," Donald Trump claimed in March. For his administration, and the world, they have proven anything but. Now an obscure New York court has blocked his signature trade policy, setting up a battle that looks sure to end up in the supreme court.The plan was simple. For decades, Trump has made the case for tariffs. Now, in his second term, he would dramatically hike them on the world; raise trillions of dollars for the federal government; cut taxes for Americans; and lure manufacturers to the country's industrial heartlands, creating millions of jobs. Continue reading...

President tells Pennsylvania rally tariffs will aid workers but questions raised over nature of Nippon Steel investmentDonald Trump announced on Friday he was doubling foreign tariffs on steel imports to 50%, as the president celebrated a blockbuster" agreement for Japan-based Nippon Steel to invest in US Steel during a rally in Pennsylvania.Surrounded by men in orange hardhats at a US Steel plant in West Mifflin, Trump unveiled the new levies, declaring that the dramatic rate increase would even further secure the steel industry in the United States". Continue reading...

Sale ends state ownership of the banking group, then known as Royal Bank of Scotland, after 2008 rescue

Alan Taylor voted for a 0.5-point cut last month and feels recent economic figures are led by one-off factors

Extra investment lined up for schemes such as energy projects, roads and rails outside London and south-east

Central bank emphasizes nonpartisan role in brief memo after chair Jerome Powell meets with US president

Mauritanian economist who led Arab Bank for Economic Development in Africa will succeed Akinwunmi AdesinaThe African Development Bank has chosen the Mauritanian economist Sidi Ould Tah as its president-elect after three rounds of voting on Thursday afternoon.The election took place in Abidjan, Ivory Coast, at the end of the annual meeting of the continent's biggest multilateral lender. Continue reading...

After a decade helming the African Development Bank, Akinwumi Adesina hands over to his successor this week. He explains his optimism despite the continent's challengesThe man known as Africa's optimist-in-chief" faces one of his toughest challenges this year: handing over the reins of his beloved institution to his successor. After 10 years at the top of the African Development Bank, Akinwumi Adesina will this week see a new president elected at the bank's annual meeting in Ivory Coast before a handover in September.Adesina will be passing on a bank that has grown dramatically during his tenure. In 2015, the capital of the bank was $93bn. Today, the African Development Bank is $318bn." Continue reading...

Challenge to president's policies raises questions about his trade and economic plans

Nigel Farage is using your family finances as a gambling chip on his mad experiment', prime minister will sayKeir Starmer will launch an attack on Nigel Farage by accusing the Reform UK leader of promoting fantasy" tax-and-spending plans that would unleash a Liz Truss-style economic crisis.In a fightback against attempts by Farage to win over blue-collar voters with bold promises on taxes and benefits, the prime minister is to say Reform risks spooking the financial markets and driving up mortgage costs for millions of households. Continue reading...

Wall Street up in early trading after US president commends bloc for calling to quickly establish meeting dates'Donald Trump has indicated there has been progress in US trade talks with the EU, helping send share prices rising on Wall Street, after he commended the bloc for calling to quickly establish meeting dates".I have just been informed that the EU has called to quickly establish meeting dates. This is a positive event, and I hope that they will," Trump wrote on his Truth Social platform on Tuesday, saying the EU would be very happy and successful" if it agreed a deal. Continue reading...

Rolling coverage of the latest economic and financial news, as IMF releases latest healthcheck on UK economy

The organisation, which has been assessing the UK economy, upgrades its growth forecast this year to 1.2%Rachel Reeves should refine her fiscal rules to prevent the need for emergency spending cuts, the International Monetary Fund has suggested in its annual review of the UK economy, as it upgraded its forecasts for UK growth this year.Adding to the clamour from backbench Labour MPs incensed by the government's proposed welfare cuts, the Washington-based organisation said the chancellor should examine ways to avoid having to make short-term savings when there is a downturn in economic forecasts. Continue reading...

Vulnerable countries to pay record $22bn this year, mostly relating to loans issued under Xi Jinping's belt and road initiativeThe most vulnerable nations on Earth are facing a tidal wave" of debt repayments as a Chinese lending boom starts to be called in, a new report has warned.The analysis, published on Tuesday by Australian foreign policy thinktank the Lowy Institute, said that in 2025 the poorest 75 countries were on the hook for record high debt repayments US$22bn to China. The 75 nations' debt formed the bulk of the total $35bn calculated by Lowy for 2025. Continue reading...

Annual rate of food price increases hits 2.8% driven by rising cost of fresh produce but price inflation for all goods is fallingFood inflation in the UK has risen for the fourth month in a row, figures show, driven by increases in the cost of fresh produce, including steak.The annual rate of food price rises hit 2.8% this month, after a 2.6% rise in April, according to the latest shop price data from the British Retail Consortium (BRC). Continue reading...

European leaders call for lowest possible' border taxes after levies postponed from 1 June to 9 JulyEU leaders have expressed hopes for a quick deal to resolve the trade war with the US after Donald Trump announced he was delaying his threatened 50% tariffs for the bloc until 9 July.The US president said on Sunday he would pause the border tax due to be imposed on 1 June, which he had announced two days earlier, after what he called a very nice call" with Ursula von der Leyen. Continue reading...

The Republican budget proposal is a gift to plutocrats. Democrats should clearly make the case for deficits to work for the peopleDonald Trump's One Big Beautiful" budget squeaked through the US House of Representatives last Thursday - a shiny populist package hiding a brutal class agenda. No taxes on tips! Bigger child tax credits! But look closer and the bill is a sleight of hand. The middle-class perks expire in 2028 - just as Mr Trump's second term would end - while permanent tax cuts for the rich, and delayed cuts to means-tested welfare, entrench inequality. It's not a budget. It's a bait-and-switch. Itturns Democrats' fiscal caution into a liability - one that punishes their own base. Republicans understand what Democrats still don't: deficits aren't the danger. It's what you do with them that matters.This bill supercharges inequality: a $1.1tn giveaway to Americans earning more than $500,000 a year - funded by pushing poorer families off Medicaid and food assistance. It slashes green energy subsidies. Experts say it could add $3.1tn to the debt - but it's more than millionaire tax breaks. It raises Immigrationand Customs Enforcement fundingby 365% for detention, 500% for deportations -fuel for MrTrump's crackdown. Continue reading...

Threat of 50% tariffs postponed until 9 July so both sides can reach a good deal' after pressure from European leadersDonald Trump has announced that he will pause his threatened 50% tariffs on the European Union until 9 July, after a very nice call" with EU chief Ursula von der Leyen.The European Commission president announced in a social media post that she had spoken with Trump and secured the delay to give the two sides more time to negotiate. Continue reading...

There is growing unease over the government's direction - a way to restore confidence would be to scrap the cruel' two-child limitThe lady is, it seems, for turning: one of Rachel Reeves's first decisions as chancellor was to strip winter fuel allowance from the vast majority of pensioners. Keir Starmer now says more of them should be eligible.Pressure to shift had become intense after local elections where Labour councillors swept out of power by Reform repeatedly cited voter concern over winter fuel. But last week's botched half U-turn leaves Labour in an embarrassing political mess - and raises fresh questions about its purpose in power. Continue reading...

Amid apparent rising pay, economists are concerned about the consequences of a possible shift in the balance of powerWhen Eastbourne's refuse collectors secured a huge 11% pay rise, increasing to 19% for the lowest paid, it seemed like worker power was back.It was early 2022 and inflation was rocketing on its way to a peak of 11%. In a desperate scramble to keep pace with rising prices to protect their incomes, workers across the UK's public and private sectors took widescale industrial action in a way that brought back memories of the 1970s. What followed was a series of pay deals thrashed out between bosses and employees, with unions often arguing they had been due pay increases for years. Continue reading...

US president's One Big Beautiful Bill Act has rattled the bond market and will inevitably have global consequencesDonald Trump calls his tax and spending plans big, beautiful," and a once-in-a generation opportunity to bolster the prosperity of the US economy. The bond market disagrees.In his latest showdown with Wall Street, after the turmoil unleashed by his liberation day" tariff announcement last month, global financial markets are rattled again, this time by the US president's One Big Beautiful Bill Act. Plans to hit the EU with 50% tariffs on all imports are adding to the investor headache. Continue reading...

Bill will make permanent huge tax cuts to the wealthy and cost the government $4.6tn over the next 10 yearsRepublicans in Congress are trying to pass a new tax and spending bill that may end up being a big, beautiful bill" - but mostly for wealthy Americans.With majorities in both the House and Senate, Republicans are working to pass the One Big Beautiful Bill Act that is set to make permanent huge tax cuts that were established in 2017. Continue reading...

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President says EU imports to US will be subject to levy from 1 June as markets slump in reaction to major escalation'Donald Trump has said he will impose a 50% tariff on all EU imports to the US from 1 June after claiming trade talks between the two trading blocs were going nowhere".In a surprise announcement, the US president posted on his Truth Social platform that his long-running battle to secure concessions from the EU had stalled. Continue reading...

Without bold reform which makes the rich pull their weight, rising inequality risks eroding public trust and fracturing social stabilityBritain for the last decade has experienced a bleak paradox: rising child poverty alongside a dramatic increase in billionaire wealth. This inequality has beentolerated partly because greed has been rehabilitated as virtue. The Billionaire Britain report, published this week by the Equality Trust, reveals what many instinctively feel but few in parliament willadmit: the UK economy has become a machine forthe upward redistribution of wealth.Using Sunday Times Rich List data, the report found that the 50 wealthiest UK families now own more than the poorest half of the population combined. Their opulence is no accident. It's largely built on the labour and consumption of those 34 million other Britons. The gains of society are being hoarded by those least in need. There's a lexicon that sells it all as entrepreneurial spirit" and business dynamism. But the very markets that reward the wealthiest so handsomely are constructed and policed by the state. Governments entrench intellectual property rights, strengthen legal monopolies and write policies that benefit banks and asset markets.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...

IMF is urging countries globally to act to ease stress on public finances, sparking mainly outrage but also supportAs French workers stage yet another public show of discontent about President Emmanuel Macron's raising of the state pension age from 62 to 64, the International Monetary Fund has urged governments to encourage fit, older workers to delay retirement.Its recommendation is that people of the baby boomer generation should stay in work for longer to help balance public finances amid fiscal pressures caused by an ageing global population. Continue reading...

Finance ministers and central bank governors pledge to address economic imbalances', without naming ChinaTop finance officials from the world's seven wealthiest democracies have set aside stark differences on US tariffs and agreed to counter global economic imbalances", a swipe at China's trade practices.Ahead of the meeting of G7 finance ministers and central bank governors there had been doubt about whether there would be a final communique, given divisions over US tariffs and Washington's reluctance to refer to Russia's war on Ukraine as illegal. Continue reading...

Rolling coverage of the latest economic and financial news