Exclusive: Chancellor tells Guardian that UK will retain red lines such as no free movement but there will be future areas where we can do more'

Rolling coverage of the latest economic and financial newsJapan's economy has shrunk for the first time in a year, helping to cement the UK's position as the fastest growing member of the G7 so far this year.New data today shows that Japan's real gross domestic product (GDP) contracted by 0.7% in annualised terms (or -0.2% during the quarter), a larger fall than expected.Japan's GDP contracted by more than expected in Q1, falling 0.2% over the quarter. The contraction was the first in a year and reflected weakness in exports, likely due in part to the yen appreciation in the first three months of the year that would have impacted Japan's export competitiveness. The partial offset, and main positive within the data was that domestic demand remained strong.In addition, Japan's potential growth rate is estimated by BoJ staff at around 0.5% year-on-year. This equates to a quarterly growth rate of around 0.1%, which is lower than for many economies and means any deviations below this can easily result in a contraction.UK: +0.7% growth in January-MarchItaly: +0.3% growthGermany: +0.2% growthFrance: +0.1% growthUS: a -0.1% contractionJapan: a -0.2% contraction Continue reading...

We'd like to hear from people in the UK looking for work how they have experienced visiting a Jobcentre branch, and whether they'd found it helpfulWe'd like to hear how people in the UK looking for work have experienced visiting Jobcentre branches.Have you found your visit to a Jobcentre helpful? Did the support offered by the Jobcentre match your expectations? Has the Jobcentre helped you find work? Tell us. Continue reading...

UK economy posts its fastest quarterly growth in a year, outpacing rivals, in growth spurt ahead of trade war disruption

President rebukes tech firm after reports it will switch assembly of iPhones for US market from China to IndiaDonald Trump has admonished Apple and its chief executive over the tech firm's reported plans to source production of US-bound iPhones from India.The US president said he had a little problem" with Apple's Tim Cook, after reports that the company is planning to switch assembly of handsets for the US market from China to India. Continue reading...

Watchdogs could cut capital rules as Trump's deregulation drive opens door to rollback of post-crisis protections

After two sickly quarters, upbeat growth data and UK trade deal with US paint brighter picture

GDP rise follows stronger levels of business investment as firms rushed to beat Donald Trump's tariffs

Sutton Trust opportunity index' measured factors such as children on free school meals passing key GCSEsThe top 20 constituencies with the best social mobility in England are all in London, according to research from a leading education charity that underscores the stark regional divide in children's life chances.In a report published on Thursday, the Sutton Trust has put together an opportunity index" by analysing six measures of mobility. These include the share of children on free school meals who achieve passes in GCSE maths and English; who complete a degree by age 22; and who make it into the top 20% of earners by age 28. Continue reading...

From Beltway Virginia to Pittsburgh, it is not just sacked workers feeling the impact but whole local economiesNaomi Anderson was on leave looking after her young baby when she was told her US Department of Agriculture job helping farmers in developing countries was being cut. A former volunteer with the Peace Corps, which sends young Americans overseas to projects in emerging economies, Anderson had expected to spend her whole career in international development.I had taken this job two years ago expecting to stay here for at least 10 years, and you know, we had started to make a community and build up our life here. In January, we had started looking at buying a home," she says. Continue reading...

UK accused of aligning with US in move that could compel firms to exclude Chinese products from supply chains

Bank of England's Catherine Mann wary of pricing power', with companies looking to rebuild profit margins by hiking prices

Bureau of Labor Statistics figures show April inflation rate of 2.3% as Americans report economic anxiety under TrumpThe pace of inflation slowed in April, the month that Donald Trump announced his sweeping liberation day" tariffs on the US's largest trading partners.The annual inflation rate was 2.3% in April, down from an annual rate of 2.4% March, according to a new inflation report from the Bureau of Labor Statistics (BLS). Continue reading...

Cut in low-value de minimis' tariff marks further de-escalation of trade war and will benefit Shein and Temu

Effects of chancellor's measures evident as companies reduce hiring and push down on wage growth

ONS figures also reveal slide in job vacancies amid rise in employer national insurance contributions

Donald Trump has blinked", says analyst, at Washington and Beijing cut reciprocal tariffs by 115 percentage points, for 90 days at least

Markets rally after Washington and Beijing agree to drastically cut reciprocal tariffs as US treasury secretary says neither side wants a decoupling'

The president's retreat suggests he might negotiate elsewhere, but leaves corrosive uncertainty in its wake

Exclusive: Harris poll for Guardian finds people reconsidering major life events such as having children or buying a homeAmericans are reconsidering major life events including marriage, having children and buying a home amid economic anxiety in the opening months of the Trump presidency, according to an exclusive poll for the Guardian.Six in 10 Americans said the economy has affected at least one of their major life goals, according to the Harris poll, citing either lack of affordability or anxiety around the current economy. Continue reading...

Surveys show employer confidence at record low, prompting job cuts and hiring freeze

We need a trade block, a D7, that would mirror Nato. An economic attack on one would be an attack on all

Boost to 40bn UK aerospace industry as Rolls-Royce engines and aircraft parts reportedly excused by US commerce secretaryBritish plane parts are set to be exempted from US import tariffs as part of the evolving trade agreement with Donald Trump's administration, it has been reported.The US commerce secretary, Howard Lutnick, has said that engines from Rolls-Royce and similar plane parts would be able to enter the US market without tariffs, as part of a trade deal with the UK announced last week. Continue reading...

Bank's move appears to go against the theory that rate cuts will lead to rising inflation and higher wage demands

US president praises very good' discussions as top US and Chinese officials meet over trade war triggered by Trump's tariff blitzDonald Trump has hailed a total reset" in US-China trade relations after the first day of talks between top American and Chinese officials in Geneva aimed at defusing a trade war sparked by his tariff rollout.The US president praised the very good" discussions and deemed them a total reset negotiated in a friendly, but constructive, manner". Continue reading...

Exclusive: PM says he has ambitious plans for partnership and argues Britons have moved on from BrexitThe UK has ambitious" plans to secure a closer trading partnership with the EU, Keir Starmer has said, as he argued the British public had moved on from Brexit.Before a UK-EU summit, the prime minister urged people to look forward, not back" as the country embarked on a new era of its relationship with the bloc. Continue reading...

Rolling coverage of the latest economic and financial news

Prop-maker at Shepperton Studios fears for future after post by US president throws sector into uncertaintyIt is a sunny May afternoon in leafy Surrey, and Richard St Clair is carefully preparing a bomb. It is not real, but it will look like it is when shown on a Netflix TV show. Across the workshop a colleague is cheerfully sandpapering a pile of hip bones for the 28 Years Later zombie film - trailers suggest a lot of skeletons will be involved.They are working at db Props, a small company based at Shepperton Studios that has made everything from Thor's hammer to Alan Turing's computer in The Imitation Game. Continue reading...

Analysts say the news boosts business confidence, helps an EU trade reset and shows the UK is a good place to invest - but it's unlikely to turbo-charge GDPYou wait three years for a trade deal and then two come along at once.As of Monday, the UK had not announced a free trade agreement since 2022, when Boris Johnson's government signed one with New Zealand, ranked 52nd among global economies. Continue reading...

Meeting aimed at de-escalating trade war after Chinese exports beat expectations despite slump in tradeDonald Trump has floated cutting tariffs on China from 145% to 80% before a weekend meeting as he looks to de-escalate the trade war.Top US officials are expected to meet a high-level Chinese delegation this weekend in Switzerland in the first significant talks between the two nations since Trump provoked a trade war with stiff tariffs on imports. Continue reading...

After US talks, Andrew Bailey says Britain must do everything it can to improve trading relations with bloc

Move follows run of downbeat economic data and looks to cushion UK from Trump's trade war fallout

David Redshaw and Andrew Webb respond to an article by the bank of England's Clare LombardelliClare Lombardelli is right about the problems of economics teaching (It's pretty bad': Bank of England top official on the lack of female economics students, 5 May), and it's illustrated right there in her article - the idea that a quarter-point cut in the Bank of England base rate is going to make much difference in the present volatile Trumpist world.The obsession with interest rates by financial and economics wonks has always been a wonder to behold. Acres of newsprint are expended on it. But it was the great JK Galbraith who put it into perspective when he said that people, companies and banks will spend, borrow or lend when they feel confident to do so, and not because of where the interest rate is at any given moment. Continue reading...

Bank policymakers split 5-2-2 over this month's interest rate decision

There are many reasons why the US runs persistent trade deficits - a strong dollar is but one of themNow that US President Donald Trump's tariff war is in full swing, investors around the world are asking: what's next on his agenda for upending the global economic order? Many are turning their attention to the Mar-a-Lago Accord" - a plan proposed by Stephen Miran, chair of Trump's Council of Economic Advisers, to coordinate with America's trading partners to weaken the dollar.At the heart of the plan is the notion that the dollar's status as the world's reserve currency is not a privilege but a costly burden that has played a major role in the deindustrialisation of the American economy. The global demand for dollars, the argument goes, drives up its value, making US-made goods more expensive than imports. That, in turn, leads to persistent trade deficits and incentivises US manufacturers to move production overseas, taking jobs with them. Continue reading...

Experts say there are competitive products available despite expected Bank of England rate cutBritain's savers are being urged to act now" to take advantage of the best rates before they start falling.With a Bank of England interest rate cut on Thursday considered a near-certainty, experts cautioned against apathy" and said there were still competitive products available for those looking for a better deal on their savings. Continue reading...

India has made concessions in trade negotiations, leaving UK heralding deal as most significant' since BrexitIt is not exactly the deepest and most comprehensive trade deal the UK has ever entered, but the timing of the announcement that Keir Starmer has clinched a free trade deal with India could not be more fortunate.Over the weekend, the US president, Donald Trump, hinted he was on the verge of announcing his first trade deal, prompting speculation it could be with Japan, South Korea or India. Continue reading...

Smaller companies say costs of Rachel Reeves's tax rises led to them lay off more workers in April

Almost two-thirds of people believe economy will get worse in next 12 months amid tariffs uncertainty and Ukraine warConsumer confidence in the UK economy has fallen to the lowest levels since the height of the cost of living crisis, as people worry about the impact of US tariffs and Russia's war in Ukraine.Almost two-thirds of people believe the economy will get worse in the next 12 months, while only 11% think it will improve, according to a survey from the consumer group Which?. Continue reading...

Officials say administration exploring all options' after president declared 100% tariff on non-US-produced filmsThe White House said on Monday that no final decisions have been made about imposing tariffs on foreign films, just a day after Donald Trump declared a 100% tariff on all movies produced outside the United States - an announcement that sparked widespread alarm across the global film industry.Although no final decisions on foreign film tariffs have been made, the administration is exploring all options to deliver on President Trump's directive to safeguard our country's national and economic security while Making Hollywood Great Again," White House spokesperson Kush Desai said. Continue reading...

The US president is blaming Biden's economy'. In fact, there is one key cause of the poor showing - and it's not his predecessorWhile Donald Trump delusionally asserts that we're celebrating the most successful first 100 days of any administration in American history", last week's economic news emphatically refutes that. Trump's commerce department reported on Wednesday that the US economy - in a sharp and dismaying reversal - shrank in the first quarter of this year.That of course is when Trump returned to the White House, but Trump, true to form, denied that he was in any way responsible for the surprisingly bad economic news. Trump, who has spent his life blaming others and refusing to admit mistakes, was quick to blame Joe Biden for the downturn. The nation's gross domestic product declined at a 0.3% annual rate in the quarter, after adjusting for inflation.Steven Greenhouse is a journalist and author focusing on labor and the workplace, as well as economic and legal issues Continue reading...

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...

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...

Development may be indication China is softening on beginning negotiations over American 145% tariffs