While inflation has declined sharply from its peak in 2022, price increases have remained above Fed's target rate of 2%Consumer prices remained relatively stable in February even as some economists have warned that prices could rise again amid Donald Trump's trade war and stock markets have fallen on fears of a recession.According to the Bureau of Labor Statistics latest Consumer Price Index (CPI), which tracks the prices of a range of goods and services, the annualized inflation in February was 2.8%, a 0.2% decrease from January's year-over-year rate of 3%. The month-by-month price increase for all goods minus the volatile food and energy industries was 0.2%, compared with January's 0.4%. Continue reading...

Large tax cuts for the rich, import tariffs, and the competing interests of Republican nationalists and the techno-right is a dangerous combinationWhat connects Donald Trump's approach to trade, tax and government spending? Is there a Trumpian theory of economics - Maganomics? Trump, like most politicians, would doubtless reject any claim that he was following a particular ideological blueprint, but then, as John Maynard Keynes said: Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist."It's certainly difficult to attribute Trump's policies to the intellectual influence of any one strand in economic thinking. The most obvious frame is the dual one identified by Harvard economist Dani Rodrik, who describes it as a combination of economic nationalism and the techno-right. The former, represented by long-term Trump confidantes Peter Navarro and Steve Bannon, wants to rebuild America's traditional industrial strength behind tariff walls while deporting as many immigrants as possible; the latter, represented of course by Elon Musk, to engineer a great leap forward into an AI-enabled libertarian future.Jonathan Portes is professor of economics and public policy at King's College London and a former senior civil servant Continue reading...

The release of economic data was moved to 7am in 2020, and research has suggested that if the time was reverted, the ONS website could crashThe UK's embattled statistics agency cannot reverse a pandemic-era decision to release official data on the state of the economy before financial markets open because its creaking website could crash, it has emerged.The Office for National Statistics (ONS) had sought views on whether to revert to releasing statistics - such as GDP and inflation data - at 9.30am. The releases were moved forward to 7am in March 2020 to allow investors time to digest consequential data - such as the subsequent record contraction in the economy - before the start of London stock market trading at 8am. Continue reading...

US president announces new 50% tariff on Canadian metal imports from tomorrow

Philip Wood, Daniel Scharf and Sheila Triggs respond to an article by Rowan Williams calling for a refocusing of Labour's goals on wellbeing, not wealthBravo! I never thought I would find myself in full agreement with that woolly liberal Rowan Williams, but I do now (When politicians tell us to focus on growth we need to ask: Why, and for whom?', 8 March). As a green social democrat, I am appalled by the intellectual vacuity of our neoliberal growth orthodoxy, so enthusiastically pursued by Labour. We seem to be oblivious to how the neoliberal revolution since the 1970s has immiserated most of our population. It has led to inequality and soaring rates of poverty and illness; a largely non-unionised, exploited workforce; impoverished public services; knackered infrastructure and an environmentin crisis.Instead of the trickle down of wealth created by rentier capitalism, to be taxed and invested in better infrastructure, public services and general wellbeing, we have had this wealth from growth sucked up into the top 1%. Dhananjayan Sriskandarajah (Opinion, 7 March) outlines how 38% of all turnover of non-financial businesses in Britain went through foreign companies, especially US businesses. He quotes Angus Hanton as rightly saying that we have become a vassal" state, with our assets being destructively exploited by US economic predators. We need Labour to begin a counter-revolution, not further servility to this economic madness, by taking back into full public ownership our precious infrastructure, public services and strategic industries such as steel-making and green power generation and distribution. Continue reading...

British PM has discussed issue with president, as US trade war with Canada escalatesKeir Starmer has said he will not hit back with immediate counter-tariffs if Donald Trump imposes 25% levies on all steel and aluminium imports to the US on Wednesday.The prime minister discussed the issue with Trump in a phone call on Monday and is prepared for the tariffs to be imposed at 4am UK time on 12 March. Continue reading...

US currency has lost all the gains it enjoyed since Trump won election and hits lowest level since mid-OctoberThe euro and the pound have risen against the dollar to their highest level since the week of the US election, as the greenback sank against other leading currencies amid mounting Trumpcession" fears.The European single currency rose by a cent to $1.093, breaching the $1.09 barrier for the first time since Donald Trump won the presidential race. Sterling hit $1.2956, its highest since 8 November, with both currencies strengthening after the US president escalated his trade war with Canada by lifting planned tariffs on metal imports. Continue reading...

Industries across the country are bracing for the impact of the Trump administration's worldwide tariff regime

Jewellery purchases linked to 14 February give lift to otherwise lacklustre month, British Retail Consortium saysAn increase in Valentine's Day gift-buying brought relief for retailers last month amid February's grey days", as consumers held back from spending on big-ticket items, according to industry figures.Jewellery purchases linked to Valentine's Day were one of the highlights of an otherwise lacklustre month when sales inched ahead, the British Retail Consortium (BRC) said. Continue reading...

New York stock market posts heavy losses, as investors have a wake-up call' about risks of recession under Donald Trump

Premier Doug Ford says province won't back down' until US president retracts duties on CanadaThe Canadian province of Ontario is imposing a 25% surcharge on electricity exports to the states of New York, Michigan and Minnesota in protest against Donald Trump's tariffs, the premier, Doug Ford, said on Monday.President Trump's tariffs are a disaster for the US economy. They're making life more expensive for American families and businesses," Ford said in a statement. Continue reading...

Donald Trump's brinkmanship and stop-start approach to tariffs rattle investors

Commission for Healthier Working Lives warns against cutting benefits and calls for proactive route for 8m affectedProviding more support for people in ill health to stay in work could save the UK government more than 1bn, according to a report warning ministers against cutting benefits.As the chancellor, Rachel Reeves, looks for savings before the 26 March spring statement, the cross-sector Commission for Healthier Working Lives has called for a new approach to supporting the 8 million people in Britain with a work-limiting health condition. Continue reading...

Yolanda Diaz Perez's leftwing government has championed employment reform similar to Labour's proposals - and she tells British business there is nothing to fearSpain's leftwing deputy prime minister, Yolanda Diaz Perez, has a message for Labour politicians as the UK government's employment rights bill takes its next step to becoming law this week: take heart from our success.With business groups in the UK issuing dire warnings about the impact of the workers' rights package, Diaz, the minister of labour and social economy, remembers her own government's battle when it thrashed out radical labour laws that came into force in 2022. We went through nine months of hell, literally. We had the press against it, academia, research centres - everybody was saying this was going to contribute to unemployment and not eradicate it," sherecalls. Continue reading...

US policy changes won't have a large direct effect on the Australian economy but a global trade war can only be a drag on growth

KPMG/REC report shows decline in people being placed in roles continues, while unemployment is rising, says BDOCompanies are putting the brakes on hiring new staff amid a subdued" economic outlook and rising wage bills, according to the latest business surveys.In signs of a weakening UK labour market, the consultancy KPMG and the trade body the Recruitment and Employment Confederation (REC) said a marked decline in the number of people being placed in permanent and temporary roles continued in February, although hiring declined at a slower pace than in January. Continue reading...

UK appears to be out of US eyeline for now but it would not be immune to slowdown triggered by rising tariffsForget the Trump put", as financial analysts called the bet that the US president's policies would unleash a winning era for the nation's stock markets. By Friday, the chat was of the Merz spurt".The decision by Friedrich Merz, the German chancellor-in-waiting, to cut a deal on ditching Germany's debt brake - still to be confirmed by the outgoing parliament - marked a seismic shift. Continue reading...

More government borrowing, more abandoned pets, more sourdough baking. Our panel looks at the ramifications of the pandemic, for better and for worse, on education, health, arts and life in the UKThere is an omerta, or code of silence, around 2020 - a blind spot. Most people don't want to dwell on the pandemic, the trauma, the boredom, the anxiety and the uncertainty about when it would end, or if it would end, whether the rules would change or why the rules hadn't already changed, and work out who was a covidiot or a superspreader or a doom monger.But like a forgotten mask in an old coat pocket, the effects of the Covid pandemic are still with us. The lockdowns and the fear of being near other people, the restrictions on freedom and the despair of isolation - and the virus that killed more than 200,000 people - have all had profound impacts on Britain, on life at work and at home, and in the NHS, in schools and theatres, and on the rest of the economy. Continue reading...

Even Berlin and Brussels are bending fiscal rules in the face of Russia's threat. Will the chancellor still stick to hers?As the Nobel laureate Robert Lucas quipped during the 2008 financial crisis: I guess everyone is a Keynesian in a foxhole." Donald Trump's upending of the postwar security consensus has underlined the enduring wisdom of Lucas's observation. But now, instead of bank bailouts and emergency bond buying, European firepower is being directed at bombs, tanks and drones in the desperate fight to secure the continent's border with Russia.Berlin and Brussels - typically capitals of financial orthodoxy - have been convinced that this approach is required once again. Under the plan put forward by Germany's chancellor-in-waiting, Friedrich Merz, Berlin is on the brink of relaxing its debt brake" rule to pave the way for spending on defence and infrastructure worth an additional 1tn (840bn) over the coming decade. Continue reading...

Life expectancy, homelessness and young people's mental health were among the areas where Britain performed poorly despite spending more than other countriesBritain performed worse than most other developed nations in its response to the Covid pandemic, according to an Observer analysis of international data, five years on from the first lockdown.The UK spent more money than most other countries on economic help yet still ended up with larger drops in life expectancy, more people too sick to work, huge levels of homelessness and soaring mental health problems among young people. Continue reading...

UK manufacturing is unloved and underinvested - but the defence industry is more essential than ever in a changing political ageInvest in Britain. You might make a fortune. Take a punt on a fintech company or an artificial intelligence startup. Better still, join the rest of the world by targeting property, which is the go-to asset class for 80% of global investments seeking a stellar payout.Whatever you do, avoid retail. And steer clear of manufacturing, which needs lots of startup capital and precision engineering, and offers only slim margins and modest returns as a reward for all that effort. Continue reading...

As the US president warns of a a little short-term interruption', businesses are struggling to make decisions amid heightened uncertaintyDonald Trump declared there to be no room left" for a deal with Canada and Mexico this week, launching a trade war against his nation's closest allies that he presented as an effort to protect America's soul.Then he pulled back. It wasn't his first feint and retreat. It probably won't be the last. Continue reading...

Officials said to be looking at whether producers have conspired to increase prices or have held back supplyThe justice department has reportedly opened an investigation into what is driving the sharp rise in egg prices, including whether top producers have conspired to increase them.Officials are also said to be looking at whether companies have held back supply. Their investigation is in its early stages, and may not lead to any formal action, according to the Wall Street Journal, which cited sources familiar with the matter. Continue reading...

US dollar hits four-month low after February's US jobs report shows rise in jobless rate and hiring

FTSE 100 drops and is on track for its worst week in a year, as Germany's Dax index slides

Quarter-point cut to deposit rate, to 2.5%, comes as Trump prepares to impose tariffs on EU exports to US

Selling off assets to foreign owners, deregulating markets, and liberalising financial services only leads to inequality and instabilityIn 1994, I joined a march protesting against how the World Bank and the International Monetary Fund - backed by the US - were forcing governments in the global south to follow what was called the Washington consensus".We argued that privatising state assets, deregulating markets, and liberalising financial services to attract external investment was leaving countries more unstable, more unequal and more dependent on foreign actors. Decades on, I am horrified that an approach that wreaked havoc in the global south is still being pursued in the UK.Dhananjayan Sriskandarajah is the chief executive of the New Economics Foundation and author of Power to the People. He is a former chief executive of Oxfam GB and secretary general of Civicus, a global alliance of civil society organisations Continue reading...

The GOP budget seeks vast cuts to Medicaid, food assistance and more. Instead, let's build an economy for everyoneFamilies in the US are exhausted. They deserve a government that chooses them over billionaire donors. The Republican budget plan that passed the House last week calls for $4.5tn in tax giveaways for the ultra-rich and corporations. It will be paid for with enormous cuts to Medicaid, food assistance and other federal programs that serve our families and the working class. These are the folks Elon Musk refers to as the parasite class".The agenda of the billionaire president and the richest man in the world is crystal clear: making the rich richer while working families struggle. Continue reading...

After a call with top executives at GM, Ford and Stellantis, president approves one-month exemption from tariffsDonald Trump has temporarily spared carmakers from sweeping US tariffs on goods from Canada and Mexico, one day after an economic strike on the US's two biggest trading partners sparked warnings of widespread price increases and disruption.The US president extended his aggressive trade strategy at midnight on Tuesday by targeting the country's two closest neighbors with duties of 25%. Continue reading...

Berlin's big bazooka' proposal sends industrial stocks surging but fiscal sea change also hikes borrowing costs

The chancellor-elect's proposals for gamechanging spending on defence and infrastructure are the right response to a new eraThree days after Russia's invasion of Ukraine in February 2022, the German chancellor, Olaf Scholz, created a 100bn special fund to modernise Germany's armed forces. Vladimir Putin's aggression, he told a stunned Bundestag in explanation, meant that Europe was living through a Zeitenwende, or turning point.Mr Scholz was right. But it has taken the return of Donald Trump to the White House to lay bare the full scale of the emerging threat to European values, security and economic interests. For leaders across the continent, the dawning realisation of what Trump 2.0 means for the transatlantic alliance constitutes a second historic moment of jeopardy and decision.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...

Although UK may avoid tariffs, overall productivity could be impacted by tit-for-tat tariffs between economiesA full-blown trade war would pose a substantial" threat to the British economy, Bank of England governor Andrew Bailey has warned.Donald Trump struck Canadian and Mexican imports with new duties of 25% at midnight on Tuesday, and also levied extra 20% tariffs against Chinese goods, triggering retaliatory moves. He also threatened to place sweeping 25% tariffs on EU imports last week. Continue reading...

Many plan to boycott US goods and say they will not cross the border while Trump is in officeSince Donald Trump began his tariff threats against Canada and his jokes' about making Canada the 51st US state, I have not bought a single product originating in the US," said Lynne Allardice, 78, a retired business owner from New Brunswick, Canada.Not a single lettuce leaf or piece of fruit. I have become an avid reader of labels and have adopted an anywhere but the US' policy when shopping. I will not visit the States while Trump remains in office, and most of the people I know have adopted the same policy." Continue reading...

Tariffs are dampening consumer confidence and fears of a downturn seem to be weighing on the dollar

Prices highly likely' to rise almost immediately, retailers say, after 25% duty hits exports from Mexico and CanadaAmericans have been warned to brace for higher prices within days of Donald Trump pulling the trigger on Monday, imposing US tariffs on goods from Canada and Mexico and hiking tariffs on China.Global stock markets came under pressure again on Tuesday, with leading indices falling sharply - and the benchmark S&P 500 losing all its post-election gains - as Canada, Mexico and China vowed to retaliate, and investors balked at the prospect of an acrimonious trade war. Continue reading...

Chancellor says increased military spending should support British jobs and British industries'Rachel Reeves has said UK companies and jobs will be prioritised under the government's plans for a significant increase in defence spending, with an aim to support left behind" industrial towns and the economy at large.Announced by Keir Starmer last week amid growing fears over Donald Trump's commitment to European security, the government will increase defence spending to 2.5% of GDP by 2027 - worth an additional 6bn a year. Continue reading...

Canadian dollar and Mexican peso hit their lowest levels in a month, and UK's FTSE 100 posts biggest one-day fall of the year

Markets tumble around world as US president's levies against Canada, Mexico and China are implemented

Government to expand coverage of employment rights bill, according to reportAgency workers will reportedly be included in a ban on exploitative" zero-hours contracts as part of changes to the UK government's employment bill.Under the new rules, employers will have to offer agency workers a contract that guarantees a minimum number of hours every week, the BBC reported. Continue reading...

Donald Trump has said there is no room' left for negotiation with Mexico and Canada on planned tariffs. He also said the US would institute tariffs at 20% on China. All Mexican exports to the US face a levy of 25% under the plans. Most Canadian exports will face a 25% tariff, with 10% for energy products

Policy Exchange report blames austerity for breakdown in policing and criminal justice

Companies will never solve the climate emergency alone. The impetus for change needs to come from governmentIt would be very easy to be sharply critical of BP, given its sudden volte-face on its environmental commitments. Under pressure from a shareholder, Elliott Management, it has abandoned the green ambitions it announced in 2020 and pivoted squarely back to an overwhelming focus on oil and gas.While easy, it would arguably be unhelpful, and perhaps even misguided. Because viewed in the round, this isn't really about BP: it's about capitalism at large, and its inability to respond to the climate crisis in the manner we need.Brett Christophers is a professor in the Institute for Housing and Urban Research at Sweden's Uppsala University and author of The Price is Wrong: Why Capitalism Won't Save the PlanetDo 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 government and the City want to push regular savers into risky investments, but we're right to be wary, says David RedshawThere are good reasons why cash Isa holders like me don't want to convert to share-based investments (Cash Isas: pressure grows against rumoured move to 4,000 allowance, 1 March). We don't trust the City or governments. After Margaret Thatcher and Nigel Lawson's deregulation of the City in 1986, people were encouraged to become part of the shareholder democracy". This worked until it didn't. In 1990, the splurge of loose cash and cheap shares dulywentpop.In the end people will decide for themselves. It's all very well investment firms telling us that a share instrument will perform better than cash over a period - but what period? Suppose great volatility arrives out of nowhere - where economic cycles are so short that they are measured in the lifetime of a lettuce. The bankers were back taking their bonuses long ago, and are now asking the chancellor to allow them to hold less capital. Continue reading...

Global Times signals Beijing's likely countermeasure after US president threatened a further 10% duty to come into force on TuesdayChina is preparing countermeasures against fresh US import tariffs that are set to take effect on Tuesday, China's state-backed Global Times reported, with American agricultural exports likely to be targeted.Donald Trump last week threatened China with an extra 10% duty, resulting in a cumulative 20% tariff, while accusing Beijing of not having done enough to halt the flow of fentanyl into America, something China said was tantamount to blackmail". Continue reading...

With Trump's true intentions clear, new thinking is needed to fund UK defence, be it fully seizing Russian assets or reversing Hunt's NI cutsPrincipled political resignations are rare at Westminster, so Anneliese Dodds's departure on Friday, over Labour's cuts in aid to fund defence spending, was a significant moment.In her powerful resignation letter, Dodds rightly highlighted the heavy costs of the cuts for some of the world's poorest people, compounding the damage caused by the Trump administration shutting US aid projects. Continue reading...

Last week's much-trumpeted Anglo-US meeting has not reduced concerns about Ukraine, Nato or tariffs - or boosted confidence in the UK governmentMost people I know were concerned about the prospect of a second Trump presidency; but we did not have a vote. However, those Republicans who elected him should have been mindful of the old Chinese proverb: be careful what you wish for.A classic example has been provided recently in the columns of the New York Times. On 17 December, the rightwing columnist Bret Stephens wrote: Here's a thought for Trump's perennial critics, including us on the right. Let's enter the new year ... by dropping the lurid comparisons to past dictators, by not sounding paranoid about ... the ever-looming end of democracy." Continue reading...

Participants commit to not spending money for 24 hours to resist Trump administration and Musk's cuts

UK's balanced trade with the US, Trump's fondness for Britain, and new invitation for a state visit at Buckingham Palace, make the UK popular with investors today

London and Washington aim to avoid obstacles and forge a narrower agreement, likely with a focus on tech and AI

A weak economy, higher borrowing costs and increased defence spending will mean tough decisionsRachel Reeves is rapidly running out of wriggle room amid higher borrowing costs, stubborn inflation, a sluggish economy and a promise to find billions of pounds for additional defence spending.On Tuesday, the chancellor will get the final verdict from the Office for Budget Responsibility (OBR) before her 26 March spring statement on whether her fiscal rules have been smashed apart by increasing financial pressures since last autumn's budget. Continue reading...