Annual rate of food price increases hits 2.8% driven by rising cost of fresh produce but price inflation for all goods is fallingFood inflation in the UK has risen for the fourth month in a row, figures show, driven by increases in the cost of fresh produce, including steak.The annual rate of food price rises hit 2.8% this month, after a 2.6% rise in April, according to the latest shop price data from the British Retail Consortium (BRC). Continue reading...

European leaders call for lowest possible' border taxes after levies postponed from 1 June to 9 JulyEU leaders have expressed hopes for a quick deal to resolve the trade war with the US after Donald Trump announced he was delaying his threatened 50% tariffs for the bloc until 9 July.The US president said on Sunday he would pause the border tax due to be imposed on 1 June, which he had announced two days earlier, after what he called a very nice call" with Ursula von der Leyen. Continue reading...

The Republican budget proposal is a gift to plutocrats. Democrats should clearly make the case for deficits to work for the peopleDonald Trump's One Big Beautiful" budget squeaked through the US House of Representatives last Thursday - a shiny populist package hiding a brutal class agenda. No taxes on tips! Bigger child tax credits! But look closer and the bill is a sleight of hand. The middle-class perks expire in 2028 - just as Mr Trump's second term would end - while permanent tax cuts for the rich, and delayed cuts to means-tested welfare, entrench inequality. It's not a budget. It's a bait-and-switch. Itturns Democrats' fiscal caution into a liability - one that punishes their own base. Republicans understand what Democrats still don't: deficits aren't the danger. It's what you do with them that matters.This bill supercharges inequality: a $1.1tn giveaway to Americans earning more than $500,000 a year - funded by pushing poorer families off Medicaid and food assistance. It slashes green energy subsidies. Experts say it could add $3.1tn to the debt - but it's more than millionaire tax breaks. It raises Immigrationand Customs Enforcement fundingby 365% for detention, 500% for deportations -fuel for MrTrump's crackdown. Continue reading...

Threat of 50% tariffs postponed until 9 July so both sides can reach a good deal' after pressure from European leadersDonald Trump has announced that he will pause his threatened 50% tariffs on the European Union until 9 July, after a very nice call" with EU chief Ursula von der Leyen.The European Commission president announced in a social media post that she had spoken with Trump and secured the delay to give the two sides more time to negotiate. Continue reading...

There is growing unease over the government's direction - a way to restore confidence would be to scrap the cruel' two-child limitThe lady is, it seems, for turning: one of Rachel Reeves's first decisions as chancellor was to strip winter fuel allowance from the vast majority of pensioners. Keir Starmer now says more of them should be eligible.Pressure to shift had become intense after local elections where Labour councillors swept out of power by Reform repeatedly cited voter concern over winter fuel. But last week's botched half U-turn leaves Labour in an embarrassing political mess - and raises fresh questions about its purpose in power. Continue reading...

Amid apparent rising pay, economists are concerned about the consequences of a possible shift in the balance of powerWhen Eastbourne's refuse collectors secured a huge 11% pay rise, increasing to 19% for the lowest paid, it seemed like worker power was back.It was early 2022 and inflation was rocketing on its way to a peak of 11%. In a desperate scramble to keep pace with rising prices to protect their incomes, workers across the UK's public and private sectors took widescale industrial action in a way that brought back memories of the 1970s. What followed was a series of pay deals thrashed out between bosses and employees, with unions often arguing they had been due pay increases for years. Continue reading...

US president's One Big Beautiful Bill Act has rattled the bond market and will inevitably have global consequencesDonald Trump calls his tax and spending plans big, beautiful," and a once-in-a generation opportunity to bolster the prosperity of the US economy. The bond market disagrees.In his latest showdown with Wall Street, after the turmoil unleashed by his liberation day" tariff announcement last month, global financial markets are rattled again, this time by the US president's One Big Beautiful Bill Act. Plans to hit the EU with 50% tariffs on all imports are adding to the investor headache. Continue reading...

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...

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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...

Rolling coverage of the latest economic and financial news

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...

As pressure grows on chancellor to rethink constraints she imposed on herself, No 10 adds to her problems

Impact of agreements on food, energy and defence may not be huge but chancellor believes it will draw investors to UK

Long-term US borrowing costs hit 18-month high over 5%, as bond market flashes warning signals'

Tariffs impact demands considerable downgrade', to 0.9% this year and 1.4% in 2026, says European Commission

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...

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...