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...

Downgrades by Treasury watchdog could force chancellor to raise taxes or cut spending at budget to meet fiscal rulesRachel Reeves is braced for revised forecasts by the Office for Budget Responsibility (OBR) to blow a 20bn hole in her tax and spending plans before the autumn budget.Even without changing the totals the chancellor set out in her spending review on Wednesday, a weaker forecast from the the Treasury's independent watchdog could force her to find significantly more money at the budget to meet her non-negotiable" fiscal rules. Continue reading...

Labour has helped get ball rolling by lifting the bankers' bonus cap but we have seen before how this play endsAs the old ways of turning a profit become more difficult - from assembling cars to selling soap powder - politicians of all stripes want the City to inject some dynamism into the economy.From Labour to Reform, the siren call of London's financial district is strong. If only, they ask, the wheels of the banking industry could be cranked to spin faster, surely much more money could be generated and we would all be rich. Continue reading...

As he steps down after 14 years, Paul Johnson says politicians and voters refuse to accept economic tradeoffsIn my lifetime, who have been the big chancellors?" says Paul Johnson, as he prepares to hang up his spreadsheets as the director of the Institute for Fiscal Studies. You've had Healey, Lawson, Clarke, Brown. Arguably Osborne. We haven't had one since then. They're the long-lasting ones."The fact that Rachel Reeves is not on that list will elicit no surprise in No 11, where Johnson is seen as a nitpicking critic, naive about the constraints of politics. Continue reading...

Exclusive: As the shortest day of the year draws near, government study shows how earlier sunsets curb economic activity and public transport trips

Rachel Reeves is increasing overall budgets after deep Tory cuts, but some departments face bigger spending cuts than othersRachel Reeves usually avoids any mention of the word austerity" in connection with her fiscal policies, but on Wednesday, she decided to tackle the argument head on.In this spending review, total departmental budgets will grow by 2.3% a year in real terms," she told MPs as she announced the next stage of her spending review. Continue reading...

Blistering analysis by outgoing chief concludes chancellor likely to end up gnat's whisker' away from tax risesYou can only conclude that Paul Johnson is demob-happy. The director of the Institute for Fiscal Studies is off to run an Oxford college in a couple of weeks and seems determined to go out with a bang. Normally, the scourge of chancellors and all things Treasury is quite measured in what he says. Borderline wonkish in his forensic analysis of financial statements. Choosing his words carefully as he peels back the political spin to deliver his verdict on the true state of the public finances. But for his last outing we got to see the real Paul. Paul Unplugged.The IFS press conference has become something of a tradition. The place where budgets and spending reviews come to die the day after they were delivered. Where the numbers aren't given a chance to lie. Johnson is nothing if not equal opportunities: no chancellor of either party is given a free pass. If there are discrepancies to be found, the IFS can be sure to find them. To be awarded a grade B from Paul is the sort of result a chancellor can only dream about. Continue reading...

Investors turn away from weakening US economy and erratic policy after Trump repeats tariff threatsThe dollar sank to its lowest level in more than three years on Thursday and the FTSE 100 closed at a record high as Donald Trump's latest trade threats and the weakening economy appeared to bring forward interest rate cuts by the Federal Reserve.Foreign exchange traders sold the dollar in favour of the yen and the euro, which both climbed by about 1% against the US currency to leave it almost 10% down on its value against a basket of currencies since the beginning of the year. Continue reading...

UK economy shrank by 0.3% in April, biggest fall since October 2023, as trade with the US slumped.. but FTSE 100 ends at new record close

Institute for Fiscal Studies says Treasury figures for projected efficiency savings are not credible

Worse than forecast April GDP data shows challenge facing Rachel Reeves to kickstart growth to fund spending review

Economics editor Heather Stewart explores the winners and losers of the government's spending reviewThe last few weeks have proved difficult for Rachel Reeves. In public, the news has been dominated by Labour's U-turn on the winter fuel allowance. In private, the Treasury has been caught up in wrangle after wrangle with ministers, all negotiating what their departments would receive in the spending review.Reeves' speech to parliament on Wednesday announcing the review was a chance to tell a more positive story - particularly for a government accused of lacking direction and ambition. Continue reading...

NPCC's Gavin Stephens says settlement in spending review will cover little more than inflationary pay rises

Rachel Reeves has announced big boosts to capital spending, but is squeezing the budgets of most government departments. How happy will ministers be?

Rolling coverage of the latest economic and financial news

Agreement struck in London will increase supply of rare earth minerals and magnets for US car industry Business live - latest updatesDonald Trump has endorsed the US-China trade deal struck in London that will ramp up supplies of rare earth minerals and magnets needed for the automotive industry, saying it will take total tariffs on Beijing to 55%.Acknowledging that his Chinese counterpart, Xi Jinping, still needed to give his final approval on the terms agreed late on Tuesday night at Lancaster House, the US president disclosed the pact would also facilitate Chinese students' access to US colleges. Continue reading...

Rachel Reeves said the new Border Security Command will receive up to 280m more a year by the end of the spending review period. She also promised that all spending on hotels for asylum seekers waiting for their cases to be heard will stop by the end of this parliament

The chancellor announced spending on health, housing, defence, and infrastructure. But will it be felt by ordinary voters? Continue reading...

Annualized inflation hit 2.4% in May, up from 2.3% in April, as Trump pushes ahead with controversial trade plansUS prices continued to rise in May as companies and consumers grappled with Donald Trump's tariffs. The president has repeatedly pledged to lower costs across the economy.Annualized inflation ticked higher, to 2.4%, in May, up from 2.3% in April. On a month-to-month basis, the consumer price index rose by 0.1%, down from 0.2% the previous month. Continue reading...

Rachel Reeves has delivered her spending update - here are the main pointsThe chancellor talks up the government's economic record and the decisions made at the budget. She makes the obligatory mention of the Conservatives' 14 years of mismanagement and decline" and the supposed 22bn fiscal hole. We are renewing Britain," she says - while accepting that many Britons have yet to feel it". This spending review will change it, she says. Continue reading...

Households seeking safety net in time of global volatility, according to Bank of England's chief cashierBritons are hoarding physical cash amid extreme economic uncertainty and to provide a safety net for possible banking system outages such as the recent one in Spain, according to the Bank of England's chief cashier.Victoria Cleland said on Tuesday that UK households were building a cash contingency pot, much as they did during the Covid and cost of living crises. Continue reading...

Rolling coverage of the latest economic and financial news, including latest UK labour market reportElsewhere in UK retail, Mark Ashley's Frasers Group has confirmed that it is in the race to buy Revolution Beauty and is considering a cash-only offer for the struggling beauty firm, which put itself up for sale last month.Revolution Beauty said on Monday that Frasers is one of a number of parties conducting due diligence as part of the formal sale process announced on 21 May". Frasers put out a statement today, confirming its participation in the sale process, but adding that there can be no certainty that an offer will be made. Continue reading...

Washington-based lender cuts its forecast for world GDP growth, blaming Donald Trump tariffs

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...