US economy added 143,000 new jobs last month, fewer than expectedHong Kong's appeal to the WTO (see earlier post) comes as Donald Trump's new trade war is further blurring the lines between Hong Kong and Beijing.This is threatening to erode the city's main selling point as a global financial hub, reports Bloomberg, explaining:When Trump slapped a 10% levy on China this week, that action for the first time also applied to Hong Kong goods, after the president in 2020 signed an executive order to remove the city's special privileges.One day later, the US Postal Service put a ban on incoming Chinese parcels that also swept up the commerce center, before reversing course hours later.Early indicators of housing demand point to another month or two of decent performance for the housing market ahead of the Stamp Duty changes.But over 2025 as a whole, we think that the housing market will show only a modest improvement, given the Bank of England's gradual and cautious approach will see interest rates fall slowly against a backdrop of stretched housing affordability." Continue reading...

Labor department data shows 143,000 jobs added with unemployment rate steady at relatively low 4%Hiring across the US economy moderated in January, but the labor market continued to grow at a steady pace during the transition period between Joe Biden and Donald Trump's presidencies.New data from the labor department released on Friday showed 143,000 jobs added to the economy in January, short of the 168,000 expected by economists. The unemployment rate remained steady at a relatively low 4%, edging slightly downward from 4.1% in December. Continue reading...

UK economy expected to grow by just 0.75% this year, in fresh blow to Rachel Reeves's attempts to raise confidenceRachel Reeves's plans for growth suffered a double blow after the Bank of England halved its forecast for the year and warned households would face mounting pressure from rising prices.In a downbeat assessment as it cut interest rates for a third time in six months, Threadneedle Street warned people would face a fresh squeeze on living standards from rising inflation even as the economy stalled. Continue reading...

The stock market is not the economy - as shown by the new closing high after the Bank of England's rates cutNever confuse a stock market index with a symbol of national economic health. The truth of that old piece of wisdom was demonstrated on Thursday as the FTSE 100 went on a rip-roaring run - up 104 points, or 1.2%, to a new closing high of 8,727 - while the Bank of England cut interest rates because the UK economy was flat on its back.The point always to remember about the Footsie is that its constituents are an international crew, or at least they operate internationally. Goldman Sachs' analysts calculated recently that, in aggregate, only 22% of the revenues of FTSE 100 companies were generated in the UK. North America, at 29%, and the Asia-Pacific region, at 23%, are more important. Think of the likes of index heavyweights AstraZeneca, BP, GSK and Shell: their UK revenue exposures are measured in low single-digit percentages. Continue reading...

UK central bank cuts interest rates to 4.5%, and warns growth will be half as fast as expected this year, sending pound sliding

From iron ore to beef prices, a global trade war triggered by the US would cause significant disruption for consumers and businesses

Decision will lead to lower borrowing costs for those on trackers - but fixed-rate deals will stay the same

Weak jobs market and above-target inflation will dent Reeves's growth plans and may wipe out fiscal headroom

Latest quarter-point reduction comes with warning households face inflation of 3.7% by autumn

Growth forecasts likely to be downgraded, with rate-setting committee tipped to cut lending rate from 4.75% to 4.5%

Rolling coverage of the latest economic and financial newsThe eurozone's private sector returned to growth, marginally, last month, a new survey shows.S&P Global's monthly poll of purchasing managers across the euro area has found that the region's economy was able to eke out growth in January, for the first time since August.The slow pace of growth in the services sector, which was evident almost all of last year, continued at the start of 2025. Putting it more positively, growth at service companies played a crucial role in keeping the eurozone economy in expansion over the past year.Sluggish, but slightly accelerating growth in new orders and employment gives hope that this sector will gain a bit more momentum in the first quarter of this year.Demand growth has subsided in line with a tight monetary stance, and the positive output gap in the economy is narrowing. Housing market activity has eased, and house price inflation has lost pace. There are signs that economic activity is stronger than preliminary national accounts figures imply, however, and wage costs continue to rise.Although inflation has eased and inflation expectations have fallen, inflation pressures remain, which calls for a continued tight monetary stance and caution regarding decisions going forward. This is compounded by elevated global economic uncertainty. Continue reading...

European Commission also urges EU lawmakers to phase out exemption on customs duties for parcels under 150Parcels sent from China by online retailers such as Shein and Temu will face strict new customs controls as part of a crackdown by the European Commission on dangerous products" flooding the EU market.Brussels officials also urged EU lawmakers to phase out the exemption on customs duties that is allowed for parcels under 150 (125), which enables foreign suppliers to sell cheap goods in the bloc without paying the tax. Continue reading...

Fears grow for global trade, with major indices likely to plunge as US trading partners quickly retaliate, raising chance China and EU will follow suit

From rising gilt yields to higher inflation, the UK may suffer indirectly from US tariffsDonald Trump has announced the US is to put tariffs on imports from Canada and Mexico, and increase those on Chinese goods, and suggested he will bring in similar levies on items from the EU. What could these new charges mean for the UK? Continue reading...

Continue reading...

British policymakers watch nervously, fearing a weaker pound and inflation even if US tariffs are not applied directly

The UK is likely to make a cut this week; Trump has made it very clear he wants his central bank to follow suitThe Bank of England is preparing to announce a cut in UK interest rates on Thursday, with central banks around the world facing increased scrutiny as Donald Trump ramps up his attacks on the US Federal Reserve.Trump wants lower borrowing costs to boost the economy, even though the US has maintained the highest rate of growth in the G7 richest nations for several years and has every prospect of topping the G7 poll in 2025. Continue reading...

Canada's prime minister makes televised address after Donald Trump signed an order authorising drastic tariffs of up to 25% on Canada's exports to the US. In retaliation for Trump's tariffs, Trudeau announced a 25% tariff phased in across C$155bn ($107bn) worth of American products

Rachel Reeves is all for growth; her party and the country needs it. But still we hear nothing about the most obvious solution...In 1935, Sinclair Lewis wrote a satirical book, It Can't Happen Here, about a lying demagogue, Buzz Windrip, who rises to power and transforms the American scene for the worse within months.There were fears of parallels with the plot of the book when Trump first became president. This time, the fears are far more serious, as Trump's barrage of executive orders challenges the constitutional checks and balances designed by the founding fathers to inhibit the autocratic desires of a future wrong'un becoming president. Continue reading...

The chancellor's apparent volte-face in backing a third runway has left many in her party disillusioned and led them to label it as an act of desperationIn 2020, Rachel Reeves, the MP for Leeds West and Pudsey, was clear why she opposed expansion of nearby Leeds Bradford airport. It would, she said, significantly increase air and noise pollution", so on environmental grounds, it should not happen.By the autumn of 2021, as shadow chancellor, Reeves was the senior Labour figure chosen to lead her party's hugely ambitious plans for a green industrial revolution. Continue reading...

Rachel Reeves's s bold infrastructure plans for Heathrow, transport, housing and more rely on training a new generation of construction professionals before the shovels go in the groundEven a nonexistent Heathrow third runway or HS2 northern leg have arguably done their bit for the economy: keeping a small army of planners, lawyers and lobbyists busy over years of tussle between the builders and the blockers", as Rachel Reeves has styled them.Now the blockers are, as the chancellor made clear in laying out her vision for turbocharged infrastructure growth, as welcome as rare bats or newts at a construction site. But are the builders ready to take their turn? Continue reading...

A third Heathrow runway, planning law reform to build more houses and a windfall tax on oil and gas - but will it all make up for the cost of Brexit?

Economists fear full-on, tit-for-tat trade war as US also imposes tariffs on Mexico and ChinaMark Carney, the favourite to replace Justin Trudeau as the Canadian prime minister, has vowed that his country is going to stand up to a bully" after Donald Trump imposed 25% tariffs on goods coming in from Canada.There are now 25% tariffs on goods coming into the US from Canada and Mexico, while China is being hit with tariffs of 10% on imported goods, leading some economists to fear the outbreak of a full-on, tit-for-tat trade war. Continue reading...

As the US president imposes import taxes on three key trading partners, we examine potential repercussionsDonald Trump has vowed to impose sweeping tariffs on imports from Canada, Mexico and China.There will be 25% tariffs on goods coming into the US from Canada and Mexico, and 10% on imports from China from this weekend. Continue reading...

Voters in Biden's home town turned to Trump to lower prices, but some are wary of the president's economic plansThe annual Downtown on Ice festival is under way in Scranton, Pennsylvania. Ice sculptures are dotted around the city - there was little chance of them melting as an Arctic blast pulled temperatures down to 15F (-9C).Inside Boscov's, a 100-year-old department store, Sue Sloan says she can't wait for spring. The 60-year-old housekeeper says she's also looking for other changes. Everything is so expensive," she says. Food prices, eggs, meat, gas, electricity, everything. It's terrible," she says. Continue reading...

Elton John, Paul McCartney and thousands of other artists have called for protection from data crawling. The government must listenAsked for a definition of intellectual property and ChatGPT answered: IP refers to creations of the mind that are legally recognized and protected from unauthorized use by others." The bot's summary helpfully ended: Intellectual property laws exist to encourage innovation and creativity by granting creators exclusive rights over their work for a certain period.Too bad that the tech giants behind such artificial intelligence (AI) tools have chosen to play fast and loose with the rules. As Silicon Valley bosses were expressing concerns about the distillation" of their models with the launch of the Chinese DeepSeek chatbot earlier this week, the House of Lords was debating legislation to protect against unfettered datacrawling by AI.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...

The chancellor's growth speech was not perfect - but it is a start after decades of underinvestment in BritainPity Rachel Reeves, the chancellor of the exchequer. Before she had even got through her highly anticipated growth speech" on 29 January, criticism flooded social media and the airwaves. Her approach is too scattered, some said, and too reliant on measures whose impact will be felt only over the long term. Some programmes run counter to the government's environmental commitments, others said, and they are not evenly distributed across the UK. It is all too expensive. The Ryanair chief executive, Michael O'Leary, even went so far as to declare publicly that Reeves hasn't a clue".Don't get me wrong: the speech was not perfect. But perfection is not possible under the UK's current economic and financial conditions, and to pursue an elusive optimum would be to make the perfect the enemy of the good. Moreover, Reeves's speech did succeed in five areas. Continue reading...

Pharmaceutical company says that it will not go ahead with investment at Speke, near LiverpoolDonald Trump's White House will invoke emergency powers to introduce tariffs on Canada and Mexico, Reuters reports:Two sources familiar with the matter said that Trump was expected to invoke the International Emergency Economic Powers Act (IEEPA) as the legal basis for the tariffs, declaring a national emergency over fentanyl overdoses that killed nearly 75,000 Americans in 2023 and illegal immigration.The statute enacted in 1977 and modified after the 9/11 attacks in 2001 gives the president broad powers to impose economic sanctions in a crisis. Continue reading...

Head of ONS Prof Sir Ian Diamond summoned days after review of statistics widenedThe head of the Office for National Statistics has been summoned for a grilling by MPs next week amid concerns the UK's faulty economic data has become virtually unusable".The cross-party Treasury select committee has asked Prof Sir Ian Diamond to appear before it, after the ONS conceded in December that it might not be able to launch a new series to replace the problematic labour force survey (LFS) until 2027. Continue reading...

If enacted tariffs will increase inflation, slow economic growth, and result in US consumers footing the billAs Donald Trump threatens to slap steep tariffs on many countries, he is boasting that his taxes on imports will be a boon to the US economy, but most economists strongly disagree - many say Trump's tariffs will increase inflation, slow economic growth, hurt US workers and result in American consumers footing the bill for his tariffs.Virtually all economists think that the impact of the tariffs will be very bad for America and for the world," said Joseph Stiglitz, an economics professor at Columbia University and a winner of the Nobel prize in economic sciences. They will almost surely be inflationary."The Guardian is co-publishing this piece with the Century Foundation Continue reading...

Refugee Council says many refugees themselves could also be prosecuted' under proposalsRichard Madeley goes next.Q: The Ryanair boss Michael O'Leary says you are wrong, and the third runway won't be built until you are 70. You are 45 now. Why is he wrong?We're signing off decisions on wind farms, on solar farms, a commitment to a new stadium at Old Trafford. We are upgrading the Transpennine route to make journey times easier between York and Manchester via Leeds and Huddersfield. Those things are happening right now. Continue reading...

Live coverage of business, economics and financial news as ECB cuts main interest rate by 0.25 percentage points in effort to support European economiesIt was a flash reading on the Eurozone economy, so we don't have the details on what the drivers were. But it's clear that it was a weak end to 2024.But the European Central Bank might be able to spur a bit of economic growth in the eurozone with looser monetary policy.This marks a weak end to last year, following positive growth in the first three quarters of 2024. As a result, first estimates suggest that the currency bloc as a whole grew by 0.7% in 2024. Declining activity in Germany - the Eurozone's largest economy - has weighed on the bloc's growth, with German GDP contracting by 0.2% on the quarter. This suggests Germany has now seen annual declines in activity for two consecutive years.In 2025, further loosening of monetary conditions is expected to provide a modest uptick in activity for both Germany and the Eurozone, with growth expected to amount to 0.3% and 1.0% respectively. Continue reading...

Reduction by quarter of a point to 2.75% aims to stimulate economy, which stagnated in last quarter of 2024The European Central Bank has cut interest rates to ease the cost of borrowing across the 20-member eurozone as growth stagnates in the region.The central bank cut rates by a quarter of a point to 2.75%, in line with expectations, after a run of bad news showing the bloc's largest nations - France and Germany - suffering a slowdown in economic growth. Continue reading...

In her big plan to get the economy growing again the chancellor, Rachel Reeves, has prioritised growth over almost everything else. But at what cost? John Harris speaks to the Labour MP Clive Lewis about concerns that climate action is taking a back seat. Plus, the columnist Gaby Hinsliff talks us through whether the party's quest for growth will work

We used to call this trickle-down economics', and we learned a long time ago that it is a mythListening to Rachel Reeves today, I could hear the faint strains of a heckler. Not among the VIPs in that Oxfordshire hall but far outside, from a woman in Newcastle. I have told her story before: as the Brexit vote loomed, a London professor warned the geordie heathens that leaving Europe would harm the UK's economy. Then one of the aforementioned heathens yelled back: That's your bloody GDP. Not ours."

The chancellor's measures might have some economic effect but her big speech lacked any sense of political purposeMinisterial speeches have two functions. They tell the audience what the government is doing and they explain why. Both elements were present when RachelReeves addressed an audience in Oxfordshire on Wednesday, but there was a lot more policy than argument. The chancellor listed many actions to kickstart growth in the economy. There will be a lot of new infrastructure and new transport links - including expansion of Heathrow and other airports. The area between Oxford and Cambridge will be developed into Britain's Silicon Valley. Ms Reeves pledged more international trade and more state subsidies for green technology.The list was long, the persuasion was cursory. The chancellor's economic case is that weak productivity growth has been the malaise holding back Britain's economy. The remedy is a supply-side assault on regulation. The government will ease rules that are deemed to have thwarted crucial developments in the past. It certainly can take too long and cost too much to build in Britain. The saga of HS2 - approved in 2012, started in 2017, not due for completion until 2033 and likely to cost nearly double the original 37.5bn estimate - is a parable of that dysfunction.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...

This live blog is now closed, you can read more on this story hereReeves says the supply side of the economy has been held back.Politicians have lacked the courage to confront the factors holding back growth.They have accepted the status quo. They have been the barrier, not the enablers, of change.Without economic growth, we cannot improve the living standards of ordinary working people, because growth isn't simply about lines on a graph. It's about the pounds in people's pockets, the vibrancy of our high streets and the thriving businesses that create wealth, jobs and new opportunities for us, for our children and grandchildren.We will have succeeded in our mission when working people are better off. Continue reading...

The chancellor has made an assault on the barriers, but the uncertain global backdrop is out of her hands

The term has Keynesian roots and was explored in a 2009 book. Problem is, it can mean very different things to different people ...We're all sick of Britain being in the slow lane ... we want to see a revival of those animal spirits so that we can grow the economy and bring investment here," said Rachel Reeves on her return from Davos last week. Plainly a memo has gone round: in a radio interview this morning, business secretary Jonathan Reynolds claimed Labour's willingness to take bold decisions unleashes the animal spirit, the sense of something exciting happening". When Reeves set out her plan for growth this afternoon, she reprised many of her Davos themes. She's on a strange crusade against newts and bats, holding wildlife concerns responsible for Britain's anti-growth mindset; she thinks bringing down net migration and fearlessly growing the economy are compatible and equal priorities; she's putting a hell of a lot of faith in extra airport runways. But at least this time she wasn't saying we should be more like Trump.But what does animal spirits" mean? Does it mean what Reeves thinks it means? Is it a useful concept? And how do we get hold of some of these spirits? Continue reading...

The bank says that the shift to digital banking has prompted further branch closesRachel Reeves has confirmed that the Labour government will back a third runway at London's Heathrow airport.If that sounds familiar, it is because it has been heavily trailed in the last week. And readers with longer memories might remember a succession of Labour and Conservative governments saying they would back it.So I can confirm today that this government supports a third runway at Heathrow and is inviting proposals to be brought forward by the summer.We will then take forward a full assessment through the airport National Policy Statement. This will ensure that the project is value for money, and our clear expectation is that any associated surface transport costs will be financed through private funding, and it will ensure that a third runway is delivered in line with our legal, environmental and climate objectives.The unusual timing of the Qwen 2.5-Max's release, on the first day of the Lunar New Year when most Chinese people are off work and with their families, points to the pressure Chinese AI startup DeepSeek's meteoric rise in the past three weeks has placed on not just overseas rivals, but also its domestic competition. Continue reading...

Around the world, soaring inflation has pushed voters to turn on incumbent governments.But one country bucked the trend - Mexico, where the leftwing Morena party recorded a landslide victory. The key to its success? A policy platform built on minimum salary rises, labour reforms and price controls on staples.So are there lessons to be learnt from the country's success for Anthony Albanese's Labor party?Senior business reporter Jonathan Barrett tells Nour Haydar why so many governments didn't survive high inflation, and what Labor could learn from the country that bucked the trend

In economic growth speech, chancellor says move would make UK world's best-connected place to do business'

Businesses should avoid panic amid fears US will attempt to repatriate jobs and taxes, says Danny McCoy

Comments by Christine Lagarde seen as veiled warning to Donald Trump, who demanded Federal Reserve lower interest rates immediately'Political interference in central bank policymaking could harm plans to bring down inflation, the head of the European Central Bank (ECB) has said.In a veiled warning to Donald Trump, after the US president last week demanded the Federal Reserve immediately" lower interest rates, the ECB president, Christine Lagarde, said meddling by politicians could lead to greater economic volatility and sharply rising prices. Continue reading...

Pippa Crerar and Kiran Stacey talk through what Keir Starmer's first phone call with Donald Trump since the inauguration means for the special relationship'. Also, as the chancellor, Rachel Reeves, prepares for a big speech on growth, does she have any new plans to boost the economy? And will they work?Click here to buy tickets to Pippa Crerar's Guardian Live event with the health secretary, Wes Streeting Continue reading...

While Rachel Reeves may be facing financial headaches, the turmoil is bringing serious good news for saversThe economic headwinds that have been buffeting the chancellor, Rachel Reeves, might be a headache for her, but they have brought positive news for some of those looking for a better deal on their savings.We have heard a lot recently about turmoil in the bond markets and higher UK government borrowing costs - but they are also pushing up the interest you can earn on some fixed-rate savings accounts. Continue reading...

CBI says businesses plan to cut jobs and raise prices while debt charity says millions are facing worries'The government is under growing pressure to get momentum back into the economy amid warnings that businesses plan to cut jobs and raise prices, while millions of families believe their finances will worsen this year.Before a major speech this week by the chancellor, Rachel Reeves, designed to restate Labour's commitment to improving the economy, the CBI said private sector firms were urgently assessing their budgets to offset measures announced in last October's budget. Continue reading...

Across the world, exporters to the US are preparing for an era of disruption if tariffs are imposedDonald Trump, a self-declared big believer" in tariffs on foreign goods, has promised to use them to boost the US economy, revitalize America's industrial heartlands, and reward the tens of millions of voters who sent him back to the White House.Come make your product in America," the president told top executives gathered at the World Economic Forum in Davos this week, promising low taxes to those who take him up on the invitation. But if you don't make your product in America - which is your prerogative - then, very simply, you will have to pay a tariff." Continue reading...

Engaging with councils, universities and developers will be key to bringing the economy back to lifeIt has been a tough beginning to the year for Rachel Reeves. The chancellor has found herself in the spotlight as debt interest costs spiralled, while consumer and business confidence fell. Manufacturers, hampered by high energy costs and the consequences of Brexit, are struggling, while Donald Trump's threats against those who dare to trade with the US are unsettling.It's not a completely new situation. Since the budget, Reeves has been criticised for the mix of tax rises and higher borrowing needed for what is only a modest rise in government spending over the next couple of years. Businesses are angry that much of the tax burden has fallen on them. Consumers, uncertain about the nation's prospects, hunker down. If they spend big, it's on a foreign holiday to escape the gloomy atmosphere at home. Continue reading...

The EU is facing a torrid year ahead from enemies both within and without. But it is still far from a lost causeEurope is in trouble. Multiple, long-simmering external and internal challenges are coming to the boil. Taken together, they comprise the modern EU's biggest existential test since its creation in the early 1990s. But strong, united leadership is lacking. Questioning Europe's will to survive, Poland's prime minister, Donald Tusk, warned last week of a spiritual crisis", of a palpable mood of uncertainty, of loss."The EU's borders, democracies, laws and liberties are threatened by an aggressive Russian nihilism. Relations with the US, transatlantic blood brother and key Nato partner, are coming under unprecedented strain. China, an expansionist, authoritarian superpower, circles like a predatory foe. The economies of leading countries, notably Germany, are contracting or stagnating. Continue reading...