by Richard Partington Senior economics correspondent on (#6X2GK)
Markets suggest quarter-point reduction to 4.25% is almost certain but some economists say Bank must go furtherThe Bank of England is poised to cut interest rates on Thursday amid growing concerns over the hit to UK jobs and growth from Donald Trump's increasingly erratic global trade war.In the Bank's first intervention since the US president's liberation day" tariff policy announcement sent shock waves through the world economy, Threadneedle Street is expected to reduce its key base rate from the current level of 4.5%. Continue reading...
There is an opportunity for Britain in areas such as green finance, though it needs to keep clear red lines over securityThe US is urging countries to agree new trade deals. The perceived risk is a bipolar world, where countries have to choose between the US and China. What are the implications for the UK?In all likelihood this choice is avoidable. The global economy is so interconnected, fragmentation is more likely than a bipolar world. Continue reading...
The president's protectivist trade vision is deeply flawed. But he has picked up on something Democrats are missingTrying to understand Donald Trump's across-the-board tariffs based solely on economic theory won't work. As the US president himself said: Chronic trade deficits are no longer merely an economic problem, they're a national emergency that threatens our security and our very way of life." That may be why, as many economists have pointed out, there's simply no good economic case for his plans.But few commentators have understood that facts and figures aren't the whole point of the tariffs. As always, economics is part of a broader political vision. The tariffs help Trump make his claim that a way of life is under threat and he alone can protect it. Continue reading...
Deputy governor Clare Lombardelli calls for more women and people from poorer backgrounds to take key subjectEconomics has an image problem, says Clare Lombardelli, a deputy governor at the Bank of England.With few children from poorer backgrounds studying the subject and only a small proportion of women pursuing it to undergraduate level, the profession is heavily weighted towards men from well-to-do backgrounds. Continue reading...
Traffic is down at America's busiest port complex - and anxious dock workers are fearful of further economic harmSouthern California may be known for celebrities and glitz, but the true action has long been about 40 miles away from Hollywood, in a place where high-visibility coveralls and hardhats dominate.For the past 25 years, the San Pedro Bay port complex - comprising the Port of Los Angeles and the Port of Long Beach - has been the celebrity of the shipping world and an economic driver of California's huge economy. The busiest seaport in the western hemisphere and one of the busiest in the world, approximately 15,000 longshore workers usually pull shifts around the clock, moving billions of dollars' worth of cargo in cars, agriculture, auto parts, toys, clothes and furniture. Continue reading...
by Joanna Partridge and Michael Sainato on (#6X18M)
FTSE 100 records its longest winning streak as Washington releases better-than-expected hiring figuresMarkets on both sides of the Atlantic rose on Friday after hiring in the US slowed less than expected in April, offering a glimmer of hope that the world's largest economy was in a better-than-feared position to withstand the fallout from Donald Trump's tariffs.On Wall Street the S&P 500 was up 1.5% and the Dow Jones rose 1.3% by early afternoon on Friday, while European markets closed sharply higher after official figures showed the US workforce grew by 177,000 last month. Continue reading...
Goods worth less than $800 will be subject to 120% levy meaning prices on Chinese exports will probably increaseAt one minute past midnight on Friday, eastern time, a US tariff exemption that has fuelled the rise of companies such as Shein and Temu, and stocked the wardrobes of millions of Americans with cheap fast fashion and other household goods, closed. As part of Donald Trump's flurry of tariffs on China, the US is closing a loophole that allowed low-value goods to be shipped into the US without paying any import fees. The de minimis" loophole, known by the Latin phrase for of little importance", was a big scam going on against our country", the US president said on Wednesday. We put an end to it." Continue reading...
Workforce saw an additional 177,000 jobs added even as Trump has pressed ahead with sweeping tariffs on importsHiring in the US slowed in April, according to official figures, with the workforce adding 177,000 jobs as Donald Trump's aggressive trade strategy clouded the economic outlook.As the White House pressed ahead with sweeping tariffs on overseas imports, claiming this would revitalize the US economy, employers across the country continued to add jobs at a steady pace. Continue reading...
President acknowledged his tariff war with China could lead to a toy shortage and costlier productsDonald Trump on Wednesday acknowledged that his tariffs could result in fewer and costlier products in the United States, saying American kids might have two dolls instead of 30 dolls", but he insisted China will suffer more from his trade war.The US president has tried to reassure a nervous country that his tariffs will not provoke a recession, after a new government report showed the US economy shrank during the first three months of the year. Continue reading...
Pittsburgh residents, workers and business owners react to the increasingly fraught trading reality now upending supply chains and hitting pricesIn a lot of ways it feels like Covid 2.0. So many things are getting disrupted so quickly." Like so many businesses across Donald Trump's America, Matt Katase's craft brewery, Brew Gentlemen, is having to contend with a bafflingly uncertain trading environment.The brewery's chief operating officer, Alaina Webber, says: For the first time, as a company in operation going on 15 years, we've started to get explicit emails that say: On this existing order, you are now going to see a 30%, then to a 130% increase.'" Continue reading...
The deal with Javier Milei shows how America-first dealmaking is bending global finance to serve authoritarian and extractive endsIt is famed for hard-nosed bargaining with crisis-hit countries, so why did the International Monetary Fund throw a $20bn lifeline to the serial defaulter Argentina - despite alarm on its board? The answer is that the country's rightwing leader, Javier Milei, is Donald Trump's favourite president". Amid unease over handing a third of the IMF's global lending to its largest debtor, the deal passed with $12bn upfront. The IMF has long been intellectually compromised - promoting stability while enforcing neoliberal orthodoxy. Under Mr Trump, it is ethically compromised too.Mr Milei's bailout marks the second Trump-era rescue for Argentina. In 2018, the fund handed Buenos Aires a record $57bn - but cut it off when its then president, Mauricio Macri, a Trump family friend, was not re-elected. That deal now looks nakedly political. With the US holding an effective board veto, the fund's independence was always fragile. It's now completely subordinated. A US takeover of the IMF threatens deeper instability than any Argentinian default.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...
Initial training to be offered in north-west England, as report shows disparities in access to the subjectThe Bank of England is backing a drive to put more economics teachers into state schools, as a report has revealed young people from disadvantaged backgrounds are the least likely to study the subject.Targeting students in the north-west of England in its first year, the scheme will aim to overcome huge shortages of teachers across the state sector with the skills to teach economics. Continue reading...
Temu and Shein among fast-fashion sites affected by drop in first three months of this year but sales in rise to EUExports to the US from Chinese online shops such as Temu and Shein have plunged in the face of Donald Trump's trade war, as shipping from China to the EU has increased.Official Chinese data showed its total e-commerce shipping to the US dropped 65% by volume in the first three months of the year, but rose by 28% in Europe. Continue reading...
Fellow carmakers Stellantis and Mercedes withdraw financial guidance for year over impact of trade warThe British sportscar maker Aston Martin is limiting exports to the US in the face of Donald Trump's tariffs, while its counterparts Stellantis and Mercedes withdrew their financial guidance for the year, blaming the uncertainty around changing US policy on import levies.Aston Martin, known for producing the cars driven by James Bond in the spy films, said it was currently limiting imports to the US while leveraging the stock held by our US dealers". Continue reading...
Index of activity drops to lowest reading since December 2023 as a result of sharp changes' in international tradingChina's factory activity slowed in April, with Beijing blaming sharp changes" in the global economy as it fights a widening trade war with the US.Punishing tariffs introduced by Donald Trump that reached 145% on many Chinese products came into force in April, and Beijing responded with 125% duties on imports from the US. Chinese exports soared more than 12% last month as businesses rushed to get ahead of the punishing tariffs. Continue reading...
Plans to protect UK from extreme weather are inadequate, Climate Change Committee says in scathing assessmentLabour is putting people, the economy and the environment in increasing peril by failing to act on the effects of the climate crisis, the UK's climate watchdog has said.Flooding, droughts and heatwaves are all increasing in severity due to climate breakdown, but current plans to protect people, land and infrastructure against extreme weather have been judged inadequate in a scathing assessment of the UK's preparedness. Continue reading...
US president will curb some duties on foreign parts in domestically manufactured cars, administration saysDonald Trump unveiled plans to water down his sweeping tariffs for US carmakers on Tuesday by curbing some duties on foreign cars and parts, granting a reprieve to an industry that warned his strategy would increase costs for American manufacturers by tens of billions of dollars.Carmakers subject to a 25% tariff on imports will not be subject to other levies Trump has imposed, for example, on steel and aluminum. US automakers will also be allowed to apply for tariff relief on a proportion of the costs imposed for imported parts, although that relief will be phased out over the next two years. Continue reading...
by Richard Partington Senior economics correspondent on (#6WY73)
Trussell report finds that higher levels of poverty mean Britain is losing out on 38bn a year of potential outputKeir Starmer has been warned that Labour's tough stance on benefits is costing Britain's economy billions of pounds each year while adding to the pressure on public services by pushing more people into poverty.With the government under fire over its planned benefit cuts, the anti-poverty charity Trussell said that failing to tackle hunger and hardship would have severe human costs and cause damage to the wider economy and public finances. Continue reading...
Rolling coverage of the latest economic and financial newsBack in Beijing, China's foreign ministry has said President Xi Jinping had not spoken to Donald Trump.The ministry also denied that the two administrations are in talks to strike a tariff deal, which contradicts a claim from Trump last week.As far as I know, the two heads of state have not called each other recently,I would like to reiterate that China and the U.S. have not conducted consultations or negotiations on the tariffs issue. Continue reading...
Exclusive: Countries are struggling to manage expensive loans, with much of debt transacted through LondonDiplomats from eight southern and east African countries have signed a letter calling on the UK government to support a private member's bill that aims to speed up debt restructurings, after economic crises meant countries were unable to pay back loans.Poor countries' economies have been hit by a series of global events in recent years, including the coronavirus pandemic, which reduced growth; the Russian invasion of Ukraine, which sent inflation soaring; and raised US interest rates, which have pushed up the cost of international loans to often unaffordable levels. Continue reading...
EY Item Club predicts GDP of only 0.8% this year as Ipsos poll shows three-quarters of Britons expect economy to get worseThe UK economy is set to slow sharply for the next two years as Donald Trump's global tariff war weighs on consumer spending and business investment, a study by a leading forecaster has predicted.The findings by EY Item Club, which is sponsored by the big four accountancy firm EY, come as a separate survey reported that confidence in Britain's economy has fallen to the lowest level on record. Continue reading...
Trump's tariffs will make it tougher for emerging economies to service loans but debt relief has fallen off the political agendaPope Francis's vast funeral in Rome on Saturday featured a certain amount of politicking amid the splendour, against the magnificent backdrop of St Peter's Basilica.If the meeting between Volodymyr Zelenskyy and Donald Trump results in progress towards a less inequitable peace than the one currently envisaged by the US, perhaps that will be fitting, given the late pontiff's consistent calls for an end to war. Continue reading...
Number of visitors sinks 11.6% in March as deportations and tariffs make US a less appealing destinationEvery summer, Cheryl travels to Iowa, from her home in St Kitts. She rents a three-bedroom house for her and her US-based adult children. She usually rents a car, too, and the family go out for dinners and explore local attractions. Cheryl typically spends $10,000 on the trip.Not this year. Continue reading...
Experts warn of slowing economy after score based on Americans' financial outlooks fell by 32% since JanuaryUS consumer sentiment plummeted in April after Donald Trump's trade war threw the global economy into chaos, according to a new report.The index of consumer sentiment, a score based on a monthly survey asking Americans about their financial outlooks, fell by 32% since January - the largest drop since the 1990 recession, according to the University of Michigan's Institute for Social Research. Continue reading...
Few policymakers mention US president by name, but his tariffs dominate IMF-World Bank meetingKristalina Georgieva's favourite film, the International Monetary Fund boss told the audience at a packed panel event in Washington on Thursday, is Tom Hanks's cold war romp Bridge of Spies.In one of the stranger digressions in a frequently strange week, Georgieva recalled the moment when Hanks's character, a US lawyer, tells the Soviet spy he has been appointed to defend that he will probably be executed. You don't seem alarmed," Hanks says to him; to which the spy - played by Mark Rylance - replies, Would it help?" Continue reading...
The president aims to boost US manufacturing, but insiders warn tariffs will increase costs and destroy businessesAcross the US, many executives leading apparel and textiles businesses are scratching their heads.Tariffs of 145% on goods from China, and tariffs of 10% on goods from much of the rest of the world, have been billed by the White House as a once-in-a-generation efffort to boost domestic manufacturing. Continue reading...
by Heather Stewart in Washington and Richard Partingt on (#6WVGK)
Andrew Bailey says UK not close to recession but he would be encouraged' if trade deal with US were agreedThe Bank of England's governor, Andrew Bailey, has said the UK economy faces a growth shock" as a result of Donald Trump's trade policies.Speaking on the sidelines of the International Monetary Fund (IMF) meetings in Washington, Bailey said that while he did not think the UK was close to recession at the moment, we are certainly quite focused on the growth shock". Continue reading...
President's comments follow Chinese government's denial of baseless' claim that Washington was close to dealThe US and China held talks on Thursday to help resolve the trade war between the world's two largest economies, Donald Trump said.We may reveal it later, but they had meetings this morning, and we've been meeting with China," the US president told reporters at the White House. Continue reading...
by Eleni Courea Political correspondent on (#6WVWV)
The UK is being dragged in opposing directions by international forces in its quest for growthRiding two horses is hard enough, but diplomats are joking in private that Keir Starmer and Rachel Reeves are trying to ride three.At the International Monetary Fund summit in Washington this week, Reeves sought to position the UK as a beacon of free trade that is open to business with the EU, US and China. Continue reading...
Unilever and Procter & Gamble indicate more increases could be on way as Trump policy affects ingredient costsThe companies that make leading brands including Magnum ice-creams, Nescafe coffee and Ariel washing liquid have indicated that more price increases could be on the way as ingredient costs rise amid Donald Trump's tariff war.Procter & Gamble, whose products include Pampers nappies and Oral-B toothpaste as well as Ariel, said new US tariffs could cost it up to $1.5bn (1.1bn) a year, forcing it to put up prices again on top of a 1% year-on-year rise in the first three months of 2025. Prices of the group's beauty products, which include Olay and Pantene, rose 3% in the quarter. Continue reading...
Kristalina Georgieva calls for trade policy settlement and says tariff wars have spiked uncertainty off the charts'IMF managing director Kristalina Georgieva has urged the US to strike trade deals urgently to limit the damage to the global economy from Donald Trump's tariff policies.Speaking at a press conference at the IMF's spring meetings in Washington, Georgieva declined to criticise the US administration directly; but warned that what she called major trade policy shifts" had spiked uncertainty off the charts". Continue reading...
by Sandra Laville Environment correspondent on (#6WV05)
Exclusive: plan to let firms sidestep environmental laws by paying into nature levy would add cost and delay, says letter to MPsLeading economists, former government advisers and ecologists are calling for a key section of the government's planning bill to be changed because it creates a licence to kill nature".Sir Partha Dasgupta, professor emeritus of economics at the University of Cambridge, ecology professor Sir John Lawton and Dr Tom Tew, a former chief scientist of Natural England, are among the signatories to a letter to MPs that warns them to ignore government slogans and false rhetoric about nature and wildlife being a block to growth. Continue reading...
In today's newsletter: The chancellor faces a pivotal moment in the US as she navigates high-stakes negotiations with the Trump administrationGood morning. I'm Annie Kelly, I'll be bringing you First Edition alongside Archie for the next few weeks.It's probably fair to say the annual spring meeting of the International Monetary Fund (IMF) has not traditionally been an event high on drama. Not so this year, as Rachel Reeves and her fellow finance ministers from around the globe have been blown into Washington DC on the chilly winds of global economic chaos caused by Donald Trump's America First" economic policies, pithily described in a recent Guardian leader as part oligarchic enrichment scheme, part mobster shakedown".Ukraine | At least nine people have been killed and more than 60 wounded in a massive" missile attack on Kyiv, according to Ukraine's state emergency service. It is among the deadliest attacks on the capital of the three-year war.Labour | Keir Starmer is under pressure from more than 60 Labour MPs to allow thousands of young Europeans to live and work in the UK, a move seen as key to unlocking a more ambitious trade reset with Brussels.Health | Adults with severe peanut allergies can be desensitised by daily exposure, according to the first clinical trial of its kind. After being given steadily increasing doses of peanut flour over a period of months, two-thirds of the trial participants were able to eat the equivalent of five peanuts without reacting.NHS | NHS staff are so tired they are dying in car crashes and posing a major threat to patients, the service's safety watchdog will warn on Thursday. Fatigue among frontline personnel causing them to make mistakes is a significant" risk to patients, according to the Health Services Safety Investigation Body (HSSIB).Music | Oasis fans have collectively lost more than 2m to scams since tickets for its reunion tour went on sale last year, a major bank has estimated. Lloyds Banking Group based the calculation on the volume of fraud reports made by its own customers. Oasis fans make up more than half (56%) of all reported concert ticket scams so far this year, losing 436 on average. Continue reading...
Expectations that the Fed will cut short-term interest rates and falling consumer confidence could indicate what is aheadImagine you are sailing a ship through dense fog, looking out for land. Your lookout spots species of birds typically found offshore. It now seems likely that you are approaching land, but it is impossible to know for sure until you see the coastline. If a US recession is land, the birds" are already swooping into view. But these sightings offer no guarantees of what lies ahead, only probabilities.An inverted yield curve, when the long-term interest rate falls to or below the short-term rate, is commonly considered to be a predictor of recession. The 10-year bond rate did fall below the three-month Treasury rate in March, although the two are now at about the same level. In any case, the yield curve does not actually tell us much. It simply reflects financial market expectations that the US Federal Reserve might cut short-term interest rates in the future, which in turn reflects expectations that economic activity might falter. Continue reading...
With Rachel Reeves in the US, some clarity is needed: the global economy has been mismanaged and the Federal Reserve does deserve criticism Continue reading...
by Gwyn Topham Transport correspondent on (#6WT8V)
Virgin Atlantic founder says erratic' decisions from US president have been awful for everyone'Sir Richard Branson has attacked Donald Trump's policies as doing so much damage" to the world, adding that he did not believe the US president's actions were backed by most Americans.The Virgin Atlantic founder warned that the erratic and unpredictable" actions of the White House were undermining business, although he singled out Trump's policy on Ukraine as the one that should worry the world the most". Continue reading...
US president says tariffs on imported goods will come down from 145% rate but insists we're doing fine with China'Donald Trump said during a White House news conference that high tariffs on goods from China will come down substantially, but it won't be zero".Trump's remarks were in response to earlier comments on Tuesday by treasury secretary Scott Bessent, who said that the high tariffs were unsustainable and that he expects a de-escalation" in the trade war between the world's two largest economies. Continue reading...