Stephen Miran says rates should be below 3% by end of year and dismisses fears of US president's tariffs stoking inflationStephen Miran, Donald Trump's new appointee on the Federal Reserve's interest-rate-setting board, has doubled down on his calls for the central bank to more aggressively cut interest rates.Last week, the Fed cut interest rates by a quarter point, bringing rates down to a range of 4% to 4.25% - the lowest it's been since early 2023. Out of 12 voting board members, Miran was the only one to vote against the crowd. He wanted a half-point cut, not a quarter-point cut. Continue reading...

Robert Thomas responds to an article about family firms that will be hit by changes to the rules for inheritance taxI am 83 next birthday and, so that my descendants escape the potential inheritance tax bill of 6m-plus, I'll have to survive until October 2032 (Our plans could be derailed': family firms say Labour tax rises will force fire sales, 16 September). My firm is property-based. In the event of an earlier demise, sites will require disposal within six months, cruelly affecting investment, growthand employment.In my case the tax has turned into an ageist lottery. At the moment plans are afoot to rig up a life-support unit at home with an instruction to pull the plug on the appointed day, seven years hence. Any suggestions for relief, Rachel?

Starmer's global talent taskforce' examines plans to make it easier for foreign academics and digital experts to relocate to UK

Qualified candidates struggle in a sluggish market due to Trump tariffs, AI screening and vanishing entry-level rolesWhen Philip Kowalski lost his job earlier this year as a USAID contractor working on aid to Ukraine due to Doge cuts, he was confident in his credentials: a master's degree from the University of London and years of hands-on experience managing American foreign aid contracts that he thought would help him land on his feet.Instead, he found himself adrift in what he calls a massive pool of unemployed people who are highly qualified all competing for the same tiny pool of available jobs". Continue reading...

Move is a blow to big tech companies, which rely heavily on visas to hire staff from overseas, particularly India

TBI says poll data threatens Keir Starmer's ambition for UK to become artificial intelligence superpower'Nearly twice as many Britons view artificial intelligence as a risk to the economy than regard it as an opportunity, according to Tony Blair's thinktank.The Tony Blair Institute warned that the poll findings threatened Keir Starmer's ambition for the UK to become an AI superpower" and urged the government to convince the public of the technology's benefits. Continue reading...

LVMH owner Bernard Arnault, who could take 1bn hit, says proposed 2% levy aims to destroy liberal economy'Europe's richest man, the luxury goods magnate Bernard Arnault, has said that a wealth tax that could cost him more than 1bn (817m) would be deadly for France's economy.The French founder of LVMH Moet Hennessy Louis Vuitton said in a statement to the Sunday Times that calls for a 2% wealth tax on all assets aims to destroy the liberal economy, the only one that works for the good of all". Continue reading...

Economic benefits of generative AI, which may take time to show, put ahead of impact of datacentres on energy and waterJensen Huang, the boss of the chipmaker Nvidia, had some advice for UK ministers last week as they signed a multibillion-pound tech deal with the US: burn more gas.I've every confidence that the UK will realise that it takes energy to grow new industries," he said. Sustainable power like nuclear and wind and of course all of that solar is all going to contribute. But I'm also hoping that gas turbines can also contribute." Continue reading...

If Reeves swipes some of the huge gains amassed from property and pensions, the lucky generation cannot argue - but willThe most infamous example of middle-income baby boomers seeking retribution for the loss of their accumulated wealth occurred in Germany in 2009, when a retired builder and his pensioner accomplice took their financial adviser hostage after more than 2m of stock market investments had crashed.In the UK, the chancellor, Rachel Reeves, is unlikely to face the same prospect if she swipes some of the gains baby boomer's have amassed from property and pensions in her November budget, but those affected are still going to seek their revenge. Continue reading...

Rolling coverage of the latest economic and financial news, as August borrowing hits highest level since 2020August's jump in borrowing means there are difficult fiscal decisions" on the horizon for Rachel Reeves to tackle, says the EY ITEM Club.Matt Swannell, chief economic advisor to the EY ITEM Club, explains:In August, the Government borrowed 18bn, the largest August deficit in five years and 5.5bn more than the OBR expected. As the Budget approaches, this leaves the UK finances in a fragile position. So far this fiscal year, the Government has borrowed 83.8bn, outstripping the OBR's 72.4bn forecast.However, the Government's performance against its primary fiscal rule will be judged by the progress made on the current budget, which accounts for how much it borrows to cover day-to-day spending. In August, the current budget deficit was 13.6bn, up from 9.6bn at the same time last year. Across the fiscal year-to-date, the current budget is in deficit by 62bn, well above the OBR's March forecast of 46.6bn. The OBR expects a marked reduction in current borrowing in the latter half of this fiscal year, so it looks like it will only become more difficult to carefully manage the day-to-day finances from here."The pound has sunk on this data, and is testing support at $1.3500, it is the second worst performing currency in the G10 FX space today, and is lower by 0.33% vs. the USD. The UK's bond market is extremely fragile, 10-year and 30-year yields rose sharply on Thursday, although global long end yields were higher, the UK was the weakest performer across Europe and the US.UK bond yields could rise further on this news, especially as the Bank of England is maintaining its careful and gradual' approach to loosening monetary policy. Although the BOE has reduced the amount of bonds that it is offloading from its balance sheet, especially long end bonds, they are still shrinking their balance sheet albeit at a slower pace. Thus, the BOE cannot be relied on to relieve pressure on the long end of the Uk Gilt curve. Continue reading...

Food inflation pushes consumers to the limits of what they are willing to spend, costing retailers salesWhen George Osborne came unstuck with his pastygate" budget 13 years ago, a Greggs sausage roll cost 66p: a price from another planet for consumers in 2025.The Conservative chancellor's plan to impose VAT on hot food - including Cornish pasties and sausage rolls - would have imposed a 20% price rise. The backlash - led in part by the Newcastle-based bakery chain - was swift: Osborne, branded posh and out of touch, was forced into an embarrassing U-turn. Continue reading...

The LFW organiser's new boss, Laura Weir, wants to embed fashion into government thinking and lure back famous brandsThe Prince and Princess of Wales's private garden at Kensington Palace has been commandeered by Burberry, which is building a tent the size of a minor airport for its show on Monday. The mid-century fortress by Eero Saarinen that once housed London's American embassy, recently reopened as a luxury hotel, is dressing the ballroom for the 20th anniversary show by Roksanda on Saturday night.But the biggest transformation of London fashion week is happening not on the catwalk but in the boardroom, where the British Fashion Council (BFC) is under the new leadership of Laura Weir as CEO, a former newspaper magazine editor and Vogue fashion editor. Continue reading...

Worsening public finances mean Rachel Reeves will almost certainly announce tax rises in November budgetUK government borrowing rose to a five-year high in August, official figures show, fuelling growing expectations for Rachel Reeves to raise taxes at the autumn budget.Figures from the Office for National Statistics (ONS) showed public sector net borrowing - the difference between public spending and income - rose to 18bn in August, 3.5bn more than in the same month a year earlier. Continue reading...

The Bank of England's disposal of the bonds it bought after the 2008 financial crisis is being slowed downThe Bank of England has announced that it will scale back its multibillion-pound quantitative tightening" programme.The process is significant for the UK economy and the public finances. But how will it work? Continue reading...

Hearing on 5 November sets up major test of the president's use of executive power to drive his economic agendaThe US supreme court will hear oral arguments on the legality of Donald Trump's sweeping global tariffs on 5 November, a crucial hearing on the president's aggressive economic agenda.The court announced earlier this month it would hear the case after a lower appeals court ruled that the US president had overstepped his authority by using a federal law meant for emergencies to impose most of his broad tariffs on the world. Continue reading...

BoE votes to cut its stock of government bonds at a slower pace over the next year

Retailer says economic outlook clouded by fall in job opportunities and government overspendingBosses at the clothing and homeware chain Next are forecasting years of anaemic" growth across the UK, with the retailer claiming that regulation, government spending and higher taxes will hurt jobs and productivity.The FTSE 100 company, which is headed by the Conservative peer Simon Wolfson, said that while it did not believe the economy was heading towards a cliff edge", the weakening outlook gave the company another reason to be cautious". Continue reading...

Decision on government debt holdings could reduce market jitters and Treasury's borrowing costsThe Bank of England has left interest rates on hold at 4% and will slow the pace of its quantitative tightening" programme in the year ahead to avoid distorting jittery government bond markets.The central bank's nine-member monetary policy committee voted 7-2 to leave borrowing costs unchanged, after five cuts since summer 2024, including a reduction last month. Continue reading...

Pensions triple lock should also go, says Ruth Curtice, a former civil servant who says it's nice to be allowed to say what you think'She clearly has to fix the problem. I think it's one thing to come back twice. We don't want to be here a third time." Bluntness served Ruth Curtice well in her past life as a senior Treasury official. These days, she deploys it publicly, as chief executive of the Resolution Foundation - urging Rachel Reeves to think the unthinkable before November's crunch budget.In the course of half an hour's conversation in her bright white Westminster office, Curtice says the chancellor must be ready to ditch Labour's manifesto tax pledges, scrap the pensions triple lock, lift the two-child limit on benefits - and forget the idea that a new wealth tax is the answer to anything. Continue reading...

Prime minister seeks to make best of difficult state visit by US president with package of commitments by US firmsKeir Starmer has sought to navigate a politically treacherous state visit by Donald Trump with an announcement of 150bn of US investment in the UK, as the president was kept safely within the confines of Windsor Castle.As thousands of protesters voiced their anger in London at a Stop Trump Coalition protest, the US president was escorted by the king and queen through a first day that ended in a state banquet but kept him out of reach of his critics. Continue reading...

Rates now stand at a range of 4% to 4.25% as reduction comes amid concern of political pressure on independent central bank from Trump

Central bank moves to set rates at range between 4 and 4.25% but decision unlikely to satisfy Donald TrumpThe US Federal Reserve cut interest rates on Wednesday, its first rate cut since December, as the central bank moved to stabilize a wobbling labor market even as Donald Trump's tariffs continue to push up prices.Rates are now at a range of 4% to 4.25% - the lowest since November 2022. But the decision is unlikely to satisfy Trump, who has lambasted the Fed for acting too late" and called for a far bigger cut. Continue reading...

Food prices rise at fastest rate since January 2024 with vegetables, milk, cheese and fish going up; US Federal Reserve widely expected to cut rates later todayThe pound is little changed versus the dollar following the inflation data, at $1.3636, but hovering at a two-month high.Victoria Scholar, head of investment at the investing platform interactive investor, said:In light of today's data, it still looks like the Bank of England is on track to keep interest rates unchanged at tomorrow's decision meeting. While inflation is clearly stuck significantly higher than target, there was nothing too surprising in this inflation report - CPI came in line with forecasts, and consequently there wasn't much of a reaction from sterling.Elevated inflation, notably higher than the 2% target makes it harder for the central bank to continue on its monetary loosening path, raising the likelihood of a higher-for-longer interest rate environment which could have negative effects on borrowing and the housing market. Continue reading...

Poor cocoa harvests have triggered multiple rounds of shrinkflation while luxury brands struggle to make profits

Annual August rate released as Bank of England considers holding interest rate at 4% to tackle rising prices

Tom Athron says stricter rules on country of origin and end of de minimis' exemptions are up and sales downThe boss of upmarket retailer Fortnum & Mason has said Donald Trump's trade war has hit sales of its luxury tea exports to the US and forced up prices.Tom Athron, the London-based retailer's chief executive, said Trump's stricter country of origin rules and the end of the de minimis" cost exemption for parcels worth less than $800 (587) had hit customers across the Atlantic. Continue reading...

Former Bank chief economist Andy Haldane says left-behind communities need investment to stem populist tideDefeating far-right populism will require Labour to radically overhaul its arid" approach to raising living standards in left-behind communities, the former Bank of England chief economist has said.Andy Haldane warned that Labour's growth plans were failing to support parts of the country where voters feel neglected and disenfranchised. Continue reading...

Weaker growth outlook would set chancellor on course to break her fiscal rules without significant action in budgetThe Office for Budget Responsibility is expected to downgrade its key productivity forecast, the Guardian understands, setting Rachel Reeves on course to break her fiscal rules without significant action in the budget.The government's independent watchdog has carried out a stocktake" of its forecast models over the summer, and Treasury officials privately acknowledge the result will inevitably be a weaker growth outlook. Continue reading...

Manufacturers say new rules on passing on assets threaten investment and future survival of businessesUnassuming wooden crates filled with brake pads and metal springs are piled high in the loading bay of the Broadbent factory close to Huddersfield city centre. Shipping them out to Nigeria and Ghana remains the day job for Simon Broadbent, but the manufacturer's owner has a growing issue nagging at him - the fate of his 160-year-old business in the face of Labour's tax overhaul.Broadbent has emerged as a reluctant challenger to plans by the chancellor, Rachel Reeves, to strip family firms of the ability to pass on their businesses tax free from next April. Campaigners, including the manufacturers association Make UK, say the tax overhaul threatens the backbone of the British industrial sector. Continue reading...

Pensioners will be rejoicing at the prospect of an inflation-busting rise to the state pension from April next year," says analystThere is some relief in the UK's cost of living squeeze this morning - grocery price inflation has slowed.British grocery inflation fell to 4.9% over the four weeks to 7 September, data from Worldpanel by Numerator shows. That's down from 5% the previous month, but means grocery prices are still rising a little faster than wages.Supermarkets' own lines now make up 51.2% of all sales, up from 50.9% a year ago.Sales of these products grew by 5.9% this period, just ahead of brands at 5.3%, but it's the premium own label goods which are the real standout performers.State pensioners look on course to get an 4.7% uplift in their state pension next year as average wage growth remained robust. Such an increase would see a full new state pension rise from its current level of 230.25 per week to 241.05 per week from April. Those retiring on the basic state pension would see their weekly income increase from 176.45 per week to 184.75.However, the hike is not yet set in stone. We are awaiting the final piece of the triple lock puzzle - September's inflation data to be published next month and if this surpasses 4.7% then we could see an even bigger increase. However, given that inflation currently sits at 3.8% it seems likely that wage growth will be the key figure here.Those on the new state pension will receive the uplift but those on the basic state pension will only receive it on their main state pension. Any further top ups such as the state second pension are usually uprated in line with inflation instead, so they won't get the full benefit of the triple lock on their entire payment.Pensioners will be rejoicing at the prospect of an inflation-busting rise to the state pension from April next year as a result of the triple lock guarantee, with the latest ONS earnings growth figure coming in at 4.7% for the period between May and July of this year.Under the triple lock guarantee, the state pension will rise by the highest of average earnings growth in May to July, September's inflation figure or 2.5%. Provided inflation doesn't spike above 4.7% in September, all stars point to these latest earnings figures boosting the new state pension to 12,534.60 from April 2026 - putting it above 12,000 for the first time ever and perilously close to the frozen personal allowance. Continue reading...

An inflation-busting rise in payments is likely to reignite debate about the system introduced in 2011

Increase will put further pressure on Rachel Reeves as ONS figures show pay growth slowing and job losses rising

Firms are reluctant to hire and unemployment is rising, as inflation dulls the impact of higher wages

Senate votes 48-47 to confirm Stephen Miran as Fed governor but court rules Cook may remain in placeSenate Republicans voted on Monday to confirm a senior Trump official to the Federal Reserve's board of governors as the White House raced to strengthen the US president's control over the central bank ahead of its latest meeting.Hours before Fed policymakers convene for their September decision on interest rates, the Senate voted 48 to 47 to confirm Stephen Miran - already chair of Donald Trump's council of economic advisers - as a governor. Continue reading...

Chancellor hosting Downing Street talks with Treasury secretary, which are aimed at securing more US investmentRachel Reeves will host the bosses of top US and UK financial firms in Downing Street on Tuesday morning, as Donald Trump begins his official state visit.The meeting, which will be jointly hosted by US Treasury secretary, Scott Bessent, will be attended by senior figures from BlackRock, Barclays and Blackstone, who will have roundtable talks with officials hoping to highlight economic cooperation between the two countries. Continue reading...

The US and China have reached a framework deal on short-video app TikTok at talks in Madrid today, US treasury secretary Scott Bessent has saidToday's warnings about higher food prices coming in the UK are likely to cause fresh worries about how long borrowers will have to wait until Bank of England policymakers vote for another cut, reports Susannah Streeter, head of money and markets at Hargreaves Lansdown.Streeter adds:They are set to leave the base rate unchanged on Thursday and aren't expected to make a move until next Spring.The Food and Drink Federation is forecasting food inflation could reach 5.7% by the end of December and still be running at 3.1% by the end of 2026. Higher employer and packaging taxes are being blamed for increasing costs for companies, which they can no longer absorb.I'm delighted that we are on track to deliver yet another period of double-digit revenue growth and a strong profit performance, whilst maintaining our globally leading customer service standards.Our strategy as set out at our full year results is working and we have an exciting pipeline of further value to deliver for customers in H2. Our Five Star membership programme continues to go from strength to strength as our customers realise the exceptional value that it offers. This, combined with our ongoing efforts to broaden our product range, is an increasingly key driver of our performance. Continue reading...

Slowing growth in factory output and retail sales prompts calls for fresh economic stimulus

Discount supermarket's UK boss says potential budget measures may weigh on consumer spending decisions

Agreements include plan to build 12 reactors in Hartlepool with Centrica, creating 2,500 jobs, and fast-tracking UK and US safety checks

Greatest damage from heat, drought and flooding done in Cyprus, Greece, Malta and BulgariaThe violent weather that battered Europe this summer caused short-term economic losses of at least 43bn, according to an EU-wide estimate, with costs expected to rise to 126bn by 2029.The immediate hit to the economy from a single brutal summer of heat, drought and flooding amounted to 0.26% of the EU's economic output in 2024, according to the rapid analysis, which has not been submitted for peer review but is based on relationships between weather and economic data that were published in an academic study this month. Continue reading...

Ex-MPC members say quantitative tightening' should be scaled back or halted entirely, saving the Treasury up to 10bn a yearAndrew Bailey has been urged by former Bank of England policymakers to ease pressure on the government's borrowing costs by cutting back its bond-selling plans.In a crunch week for the economy, four influential ex-members of the Bank's monetary policy committee (MPC) said a change in course was needed. Continue reading...

Recent data shows stagflation, stagnant growth and price inflation, is possible as economy shaken by uncertaintyIt's a strange time for the US economy. Prices are rising, jobs growth has stalled, uncertainty is everywhere and stock markets have soared to record highs. Against this background a scary word last used in the 1970s is being uttered again: stagflation.Stagflation is the term that describes stagnant" growth combined with inflation" of prices. It means that companies are producing and hiring less, but prices are still going up. It's a scenario that some economists say can be worse than a recession. Continue reading...

Economy does feel stuck", says Treasury spokesperson, after UK GDP is unchanged in JulyThe pound has weakened since today's GDP report showed the UK economy failed to grow in July.Sterling is down 0.2% at $1.355 against the US dollar this morning.If the third quarter is not going to be a disaster for the UK economy, then growth in August and September will need to do the heavy lifting.The pound is extending losses on this news and is eroding some of Thursday's gains. For now, GBP/USD is hanging on to $1.3550, however, if bond yields start to rise on the back of this data, then we could see pound weakness later on Friday. The pound is the third worst performer in the G10 FX space so far today. Continue reading...

Official GDP figures confirm widely expected slowdown after strong expansion in first half of the year

Chancellor calls economy stuck, not broken' but there are signs her policies have added to the UK's economic headwinds

Economists say trade war is driving up US prices, as inflation picks up in August

New CPI update shows prices increased 2.9% over the last year, but Wall Street optimistic Fed will cut interest ratesInflation rose slightly in August as companies continued to push the cost of tariffs on to consumers.The newest update to the consumer price index (CPI), which measures a basket of goods and services, showed that prices increased 2.9% over the last year - the highest since January. Core CPI, which excludes energy and food costs, stayed stable at 3.1% after going up in July. Continue reading...

George Weston, CEO at ABF, also said food price inflation had peaked and would now start to easeThe chief executive of the Kingsmill owner Associated British Foods (ABF) has warned Rachel Reeves not to give consumer sentiment another whack" in her upcoming budget, despite signalling that food price rises had peaked and will now start to ease.George Weston, the chief executive of the ABF conglomerate which also owns the fashion chain Primark and produces sugar and cooking ingredients, said recent food price inflation had been driven by employers passing on increases to labour costs announced in Reeves' first budget as chancellor last year. Continue reading...

Key figures from No 10 and No 11 appointed to group include Torsten Bell, new economic adviser Minouche Shafik and comms chief Tim Allan

Fall to 40.9m in first six months of year pushes share price down, with order book lower than year agoHalf-year profits at Vistry Group, one of Britain's biggest housebuilders, have more than halved as buyer demand comes under pressure from concerns over the economy, affordability struggles and slower-than-hoped interest rate cuts.The company, which owns Bovis Homes, Countryside and Linden Homes, said its pre-tax profit in the first six months of the year fell by 55% to 40.9m. Continue reading...