Bill will make permanent huge tax cuts to the wealthy and cost the government $4.6tn over the next 10 yearsRepublicans in Congress are trying to pass a new tax and spending bill that may end up being a big, beautiful bill" - but mostly for wealthy Americans.With majorities in both the House and Senate, Republicans are working to pass the One Big Beautiful Bill Act that is set to make permanent huge tax cuts that were established in 2017. Continue reading...
by Phillip Inman in London and Dominic Rushe in New Y on (#6XG4G)
President says EU imports to US will be subject to levy from 1 June as markets slump in reaction to major escalation'Donald Trump has said he will impose a 50% tariff on all EU imports to the US from 1 June after claiming trade talks between the two trading blocs were going nowhere".In a surprise announcement, the US president posted on his Truth Social platform that his long-running battle to secure concessions from the EU had stalled. Continue reading...
Without bold reform which makes the rich pull their weight, rising inequality risks eroding public trust and fracturing social stabilityBritain for the last decade has experienced a bleak paradox: rising child poverty alongside a dramatic increase in billionaire wealth. This inequality has beentolerated partly because greed has been rehabilitated as virtue. The Billionaire Britain report, published this week by the Equality Trust, reveals what many instinctively feel but few in parliament willadmit: the UK economy has become a machine forthe upward redistribution of wealth.Using Sunday Times Rich List data, the report found that the 50 wealthiest UK families now own more than the poorest half of the population combined. Their opulence is no accident. It's largely built on the labour and consumption of those 34 million other Britons. The gains of society are being hoarded by those least in need. There's a lexicon that sells it all as entrepreneurial spirit" and business dynamism. But the very markets that reward the wealthiest so handsomely are constructed and policed by the state. Governments entrench intellectual property rights, strengthen legal monopolies and write policies that benefit banks and asset markets.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...
IMF is urging countries globally to act to ease stress on public finances, sparking mainly outrage but also supportAs French workers stage yet another public show of discontent about President Emmanuel Macron's raising of the state pension age from 62 to 64, the International Monetary Fund has urged governments to encourage fit, older workers to delay retirement.Its recommendation is that people of the baby boomer generation should stay in work for longer to help balance public finances amid fiscal pressures caused by an ageing global population. Continue reading...
Finance ministers and central bank governors pledge to address economic imbalances', without naming ChinaTop finance officials from the world's seven wealthiest democracies have set aside stark differences on US tariffs and agreed to counter global economic imbalances", a swipe at China's trade practices.Ahead of the meeting of G7 finance ministers and central bank governors there had been doubt about whether there would be a final communique, given divisions over US tariffs and Washington's reluctance to refer to Russia's war on Ukraine as illegal. Continue reading...
We'd like to hear from UK employers how tightened visa rules may affect their business, and why they have been recruiting from abroad instead of from the UKThe government's immigration white paper aims to reduce the number of people arriving in the UK significantly" by introducing restrictions across various forms of visas.Changes include the requirement of degree-level qualifications rather than those that are roughly equivalent to A-levels for skilled work visa applicants. Continue reading...
by Richard Partington Senior economics correspondent on (#6XCDH)
Almost a decade after the referendum, there are challenges to be tackled at Monday's gathering hosted by Keir StarmerKeir Starmer is hosting the first UK-EU summit since Brexit on Monday as the government pushes to reset" the relationship with Britain's largest trading partner to boost the economy.Almost a decade on from the EU referendum, and five years since Britain's formal withdrawal, there are clear economic challenges to tackle, while public disappointment with the Brexit deal negotiated by Boris Johnson's Conservatives is rising among remain and leave voters alike. Continue reading...
Report suggests Rachel Reeves could be forced to spend 5.1bn if last year's downward trend continuesThe chancellor, Rachel Reeves, could be forced to spend more than 5bn and employ 92,000 extra workers across the public sector if declines in productivity continue until 2030, according to analysis of official figures.The Centre for Economics and Business Research (Cebr), an economic consultancy, said more workers would be needed by the end of the decade to achieve the same level of service, after a decline last year in the amount produced each hour by the average public sector worker. Continue reading...
Ministers seem to think a more conciliatory approach to corporate behemoths is good for growth. The evidence suggests otherwiseGovernments chase private investment. Few ask who really benefits. Recently, Labour has been genuflectingto the tech industry in the hope that Britain will become the destination for an AI boom. American tech firms have enjoyed numerous meetingswith the secretary of state, Peter Kyle, and ministers have taken aim at competition regulation, a vital tool for tackling corporate power. In doing so, Labour risks undermining its attempts to build a more productive, higher-wage economy.Just as the EU is adopting a tougher stance on big tech and AI, Labour is moving in a more conciliatory direction. Last week, ministers handed the Competition and Markets Authority (CMA), the regulator with the power to break up big tech firms, a new steer" to prioritise growth. At Labour's investment summit last October, Sir Keir Starmer had a friendly conversation with the former Google boss Eric Schmidt, and pledged to make the CMA take growth as seriously as this room does". The government then installed Doug Gurr, the former head of Amazon UK, as the regulator's new chair. Continue reading...
Proposed rule change could pave way for president to fire economists whose figures prove politically inconvenientSummarizing his befuddlement with numbers, Mark Twain observed that there were lies, damned lies and statistics".The acerbic phrase later become so deeply embedded in popular consciousness that it once formed the title to an episode of The West Wing, NBC's portrayal of a fictitious US president played by Martin Sheen. Continue reading...
Loss of Moody's triple-A rating comes amid concerns about fiscal trajectory and widening budget deficitUS government debt may come under more pressure this week after the credit ratings agency Moody's stripped the US of its top-notch triple-A rating.Moody's dealt a blow to Washington last Friday, when it downgraded the US and warned about rising levels of government debt and a widening budget deficit. It cut its US credit rating by one notch to AA1, becoming the last of the big three agencies to downgrade the country from a triple-A rating. Continue reading...
Rate-setters would fuel growth by clarifying policy and bringing rates low enough to encourage investmentHow can the Bank of England avoid being a loyal and trusted friend to Nigel Farage? That's easy. It could say the cost of borrowing will tumble over the next year, step by certain step, until it settles at a level that is low enough to boost growth.Each cut in interest rates from today's 4.25% to 3%, or even better 2.5%, would be used by businesses to boost production, make crucial investments or pay down debts, making them more financially secure. Continue reading...
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...
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...
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...
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...
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...
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...
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...
by Pippa Crerar in Oslo and Lisa O'Carroll on (#6X63B)
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...
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...