Agreement includes 15% baseline tariff for most EU exports to US after deal reached at Scotland crunch talksDonald Trump has announced a deal with the EU to end four months of difficult negotiations between Washington and Brussels and avert a damaging transatlantic trade war, imposing a 15% import tariff on most EU goods - half the threatened rate.The European Commission chief, Ursula von der Leyen, said we have a deal" after a 40-minute meeting with Trump at his Turnberry golf resort in Scotland where the US president is on holiday for the weekend. Continue reading...
Chancellor is advised to give herself more leeway in the next budget before adjusting taxation or spendingThe International Monetary Fund has urged Rachel Reeves to consider ending the pensions triple lock and charging for NHS treatment as it said the UK government risks being knocked off course in meeting its targets to repair the public finances.In a final version of an annual report on Britain'seconomy, the Washington-based organisation said the chancellor should also give herself more leeway in the next budget before adopting fresh tax or spending measures. Continue reading...
New figures show that the Golden state's rate of investor-owned homes is 19%, with mountain regions up to 83%One in five homes in California is owned by investors, new data reveals, in the latest sign of an affordability crisis that shows no end in sight.The figures, which come from the data tracker BatchData and were analyzed by the Orange County Register, show that California's overall percentage of investor home ownership sits at 19%. Continue reading...
The world's assets are piling up in the hands of the few as growth is built on widening gaps. That's not just unfair - it's economically unsustainableThis year's global wealth report by the City bank UBS confirms what is self-evident but rarely confronted: while riches are accumulating, their distribution remains starkly unbalanced. In the 56 countries and economic areas surveyed, the report says global personal wealth grew 4.6% in 2024. However, not all boats have been lifted by this tide. The gap is growing between those who hold assets and those who don't.The figures are shocking: just 60m of the world's adults - 1.6% of the population - have net personal wealth of $226tn, or 48.1% of all the world's riches. At the other extreme, four in 10 adults - 1.57bn people - have only $2.7tn, or just 0.6% of all the world's personal wealth. Economists now argue that inequality is no longer a by-product of growth but a condition of it.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...
Live, rolling coverage of business, economics and financial markets as policy rate left at 2%The FTSE 100 has gained 1% midway through the morning session, helped by bumper results from kitchen supplier Howden Joinery and Dettol-to-Durex manufacturer Reckitt Benckiser.They are up 10% and 9.3% respectively. Airtel Africa's share price is now up 7.5%, while BT has gained 6.7%.Kitchen and interior fittings supplier Howden Joinery reported a rise in first-half profit on Thursday, helped by price hikes and market share gains in a challenging environment.The company's pre-tax profit rose 4.4% to 117m for the six months through June 2025.Consumer-goods company Reckitt Benckiser reported market-beating adjusted profit as cost savings paid off and raised its full-year outlook. The UK company on Thursday said first-half adjusted operating profit, which strips out exceptional and other one-off items, rose 1.8% on year to 1.71bn.Reckitt said the rise reflects efficiency improvements and early delivery of costs savings.Particularly worrying is the sustained impact of the budget measures on employment. Higher staffing costs have exacerbated firms' existing concerns over payroll numbers in the current environment of weak demand, resulting in another month of sharply reduced headcounts in July.The weak growth trajectory and sustained culling of jobs will add to pressure on the Bank of England to cut rates again at its next policy meeting in August. It seems likely that the disappointing growth and labour market trends will increasingly dominate the inflation forecasting narrative, encouraging policymakers to look through' the recent rise in price pressures and instead focus on helping to revive growth. Continue reading...
by Kalyeena Makortoff Banking correspondent on (#6YVSX)
Charlie Nunn says higher taxation would be inconsistent with chancellor's drive for growthBusiness live - updatesThe boss of Britain's largest mortgage lender has warned Rachel Reeves that increasing taxes on banks in her autumn budget would damage Labour's plan for the City of London to power an economic recovery.Charlie Nunn, the chief executive of Lloyds Banking Group, said a rise in bank taxation wouldn't be consistent" with the chancellor's overtures as the government pushes to reboot growth. Continue reading...
Rate would apply to most goods but bloc still hardening retaliatory measures in case Trump does not agree dealThe EU and the US are nearing a trade deal that would place 15% tariffs on most imports from the bloc, it has emerged.The tariff rate, which would mirror a deal struck this week between the US and Japan, would apply to most goods, with some exceptions for products including aircraft and medical devices, according to diplomats with knowledge of the talks. Continue reading...
by Richard Partington Senior economics correspondent on (#6YTZJ)
US president says Japanese imports will face 15% levy instead of threatened 25%, prompting reports of a similar deal with the EUFinancial markets around the world have rallied after Donald Trump announced a trade deal with Japan and speculation that a similar deal would soon be reached with the European Union.Share prices rose sharply in Tokyo, where the Nikkei index of leading Japanese companies increased by 3.5%. European markets followed, with the FTSE 100 gaining 0.4% to close at a fresh record high of 9,061. US markets posted further gains with the Dow Jones rising by over 1% and the S&P closing up 0.78% at a record high. Continue reading...
by Heather Stewart and Richard Partington on (#6YV75)
Chancellor under pressure to recruit new experts as John Van Reenen and Anna Valero return to academiaIn the run-up to her crunch autumn budget, Rachel Reeves will seek to recruit a heavyweight economic adviser after the role of John Van Reenen is reduced.Van Reenen, a well-respected professor from the London School of Economics (LSE) and an expert in productivity, has been chief economic adviser to the chancellor since Labour came to power. Continue reading...
This small cutback is hardly a draconian austerity purge for a country that is broke. But the howls of outrage show a rational debate is unlikelyFrance is skint, but the French are in denial. To judge by the howls of outrage from the left and the hard right of the French political spectrum, you would think the prime minister, Francois Bayrou, had just taken a Javier Milei-style chainsaw to public services, announced Doge-style mass layoffs or imposed swingeing pay cuts.But it was Bayrou's suggestion that the French should give up two of their 11 cherished public holidays - Easter Monday and 8 May, the anniversary of the end of the second world war in Europe - and work instead to increase economic output and hence government revenue that provoked the anger.Paul Taylor is a senior visiting fellow at the European Policy Centre Continue reading...
by Anna Bawden Health and social affairs corresponden on (#6YS2W)
Exclusive: Research on burden of antibiotic resistance for 122 countries predicts dire economic and health outcomesSuperbugs could cause millions more people to die worldwide and cost the global economy just under $2tn a year by 2050, modelling shows.A UK government-funded study shows that without concerted action, increased rates of antimicrobial resistance (AMR) could lead to global annual GDP losses of $1.7tn over the next quarter of a century. Continue reading...
From Rachel Reeves to the MPC, and thinktanks to unions and lobby groups, many of the authoritative voices we hear discussing economics are femaleRachel Reeves is rightly proud of being the first female chancellor of the exchequer, but she is far from alone: the commanding heights of economic policymaking in the UK are becoming much less male.At a Westminster thinktank event last week about whether Labour is still a mission-led government", one of the most striking things was not the panel's answer, which you can probably guess, but the fact that it was made up of three women, and one token man. Continue reading...
The White House is trying to drive out the Federal Reserve chair. Critics warn it would be a costly bid to pass the buckMemo from the White House: inflation is right on track", it declared this week, citing the latest official data. Price growth is now very low", according to Donald Trump. The actual statistics paint a markedly different picture.Just six months after he regained power, in part by promising to rapidly reduce prices, Trump has presided over the chaotic rollout of tariffs on an array of overseas products that many have argued risk having the exact opposite effect. Continue reading...
Rolling coverage of the latest economic and financial newsBusinesses are still in tough" times, despite the drop in insolvencies in June, cautions David Hudson, restructuring advisory partner at FRP.Hudson says:The slight fall in insolvencies this month offers a glimmer of relief - especially for hospitality and retail businesses, which are now reaping the benefits of record hot weather. However, we're still in tough territory. Consumer confidence remains stubbornly low, growth is stuttering - with GDP dipping again in May. June's unexpected jump in inflation will only serve to continue eroding profit margins and consumer demand.This environment is forcing businesses to fight on multiple fronts. Many will likely only be experiencing breathing space after dramatically paring back costs. Until demand shows a more sustained recovery and input costs ease further, there's a risk that this reprieve is just a pause rather than a turning point." Continue reading...
Political economist and author who promoted ideas such as time banks and community sharingIn his 1989 book Building Futures, David Boyle, who has died aged 67 from complications linked to Parkinson's, argued that mainstream economics was failing cities and a new localism could save them. This emphasis on communities rather than large-scale centralised development tied in with the broad theme that David saw as running through his work: The importance of human-scale institutions over centralised ones, human imagination over dull rationalism, and the human spirit over technocratic reduction."Funny Money: In Search of Alternative Cash (1999) explored local economic systems found mainly on a journey through the US. Exchanging services within community systems run by volunteers can be facilitated through time banks". The idea of the time dollar", representing one hour of help, whether grocery shopping or preparing a tax return, was popularised by the Washington law professor Edgar Cahn. Continue reading...
Pre-tax profits fall 24% despite rise in Sports Direct sales, driven by closures of House of Fraser and Game storesA challenging" luxury market and retreat from gaming have prompted a fall in sales and profits at Mike Ashley's Frasers.The group, which is majority owned by the billionaire former Newcastle United owner, said sales fell by 7.4% to 4.7bn and pre-tax profits slid by 24% to 379.5m as it closed some of its House of Fraser department stores and Game video game shops. Continue reading...
The chancellor's emollient speech to City bosses this week was alarming. There are better ways to revive Britain's fortunesRachel Reeves was in full Iron Lady mode when she delivered her Mansion House speech to the City's finest this week. Regulation was acting like a boot on the neck" of business, choking off enterprise and innovation. Cutting red tape would have a ripple effect" on the whole economy. Regulators should not give way to the temptation of excessive caution" but instead boldly regulate for growth. It could have been any Tory chancellor since Nigel Lawson speaking.If Reeves seriously believes this stuff she is heading for a rude awakening. Chancellors don't need a crystal ball to tell them where financial deregulation leads; they can read the many books detailing what happened last time this was tried. The global financial crisis of 2008 came about because policymakers bowed to the pressure from big finance to sweep away burdensome" regulations, pledging that more funds could be channelled into productive investment as a consequence.Larry Elliott is a Guardian columnist Continue reading...
Crew leaves after investor disquiet over company's lacklustre performance; UK food prices rise most since February 2024 but economists still expect August rate cutThe pound has gained since the inflation figures were released, while yields on UK government bonds have also climbed.The pound is up by 0.2% against the dollar at $1.3410. The FTSE 100 index is steady, up by 0.2%.Is an August rate cut in jeopardy? No, we don't think so. There's enough of a slowdown in GDP and the labour market to warrant a gradual and careful' easing of monetary policy. But the onus now rests on the labour market to shape how far and how fast the MPC can cut this year and next.Today's CPI data spells more pressure for consumers thanks to the surge in food prices, but the overall picture doesn't quite spell the end for any further rate cuts. Core goods and services inflation was broadly contained, and the focus shifts now to the job numbers tomorrow to see if there are further signs of weakness that might keep the Bank of England on course to ease policy in upcoming meetings. Continue reading...
De-dollarisation is not a threat to global stability. Countries are simply questioning the rules of a game long rigged in Washington's favourFor more than eight decades, the US dollar has reigned supreme as the world's reserve currency - a position cemented at the Bretton Woods Conference in 1944 and reinforced by America's postwar industrial power and military dominance.Today, that supremacy is facing growing resistance from multiple directions - from African revolutionary movements to economic recalibrations in Europe, and from the counterbalance efforts of Brics nations to the geopolitical entanglements of Ukraine and Israel. Continue reading...
In today's newsletter: Rachel Reeves has announced the biggest financial regulation reforms in a decade' - but are they enough to spark the economy?Good morning. The chancellor, Rachel Reeves, has vowed to cut back regulation in the UK financial sector in a bid to unlock growth.Reeves has announced a raft of changes in what the Treasury describes as the biggest financial regulation reforms in a decade". Her plans include loosening rules on the financial sector, increasing innovation, and allowing lenders to offer mortgages at more than 4.5 times a buyer's income.Defence | Personal information about more than 33,000 Afghans seeking relocation to the UK after the Taliban takeover was released in error by a defence official - and the Ministry of Defence tried for nearly two years to cover up the leak and its consequences at the cost of 2bn, it can be revealed.UK news | Two men who carried out a moronic mission" to fell one of the most loved and photographed trees in the UK have been jailed. Daniel Graham, 39, and Adam Carruthers, 32, were each given prison sentences of four years and three months for an act of criminal damage that caused the Sycamore Gap tree to crash down in 2023.US politics | Republican lawmakers have moved to block a Democratic effort to force the release of the so-called Epstein files, a near-mythological trove of undisclosed information about the convicted sex offender Jeffrey Epstein at the centre of an internal political war among US conservatives.Television | MasterChef presenter John Torode will not return to the BBC cooking show after producers Banijay UK said his contract would not be renewed. Torode had earlier said he was the subject of an allegation of using racist language that was upheld as part of an inquiry into the behaviour of his former co-presenter Gregg Wallace.Tax and spending | HM Revenue and Customs has been sharply criticised by parliament's spending watchdog for being unable to track how many billionaires pay tax in the UK. Highlighting significant opportunities to collect more revenue", it called on the tax authority to take immediate action. Continue reading...
London stock market hits new peak, Thames Water reports 1.6bn loss, and Rachel Reeves outlines Leeds reforms' for financial servicesThe FTSE 100 has also benefitted from the TACO trade this year - the bet that Trump always chickens out when his policies cause mayhem in the markets.As this chart shows, shares in London slumped in early April after the US president announced high new tariffs on US trading partners. Continue reading...
Events such as the Iberian power blackout have led some to go back to physical money, but others are not convincedIt was while walking to his local Co-op that Ty, a 27-year-old student in Brighton, noticed a strangely long queue for the cashpoint.In the shop, a staff member told Ty the payment systems were down after a cyber-attack. It was cash only. But Ty didn't need to join the queue. Instead, he felt vindicated. It was another instance that justified his recent switch to using physical currency instead of digital payments. Continue reading...
by Kalyeena Makortoff and Heather Stewart on (#6YN4P)
Chancellor to announce raft of deregulation changes as City regulators move to pare back transparency rulesRachel Reeves will claim that cutting red tape for City firms will have trickle-down benefits for households across Britain, as she tries to drum up support for a new financial services strategy.A raft of regulatory reforms are due to be announced by the chancellor on Tuesday, in what the Treasury says will be the biggest financial regulation reforms in a decade". It will come before her Mansion House address to City bosses during a dinner at Guildhall in London on Tuesday evening. Continue reading...
by Richard Partington Senior economics correspondent on (#6YN4R)
Retail body says sales up by 3.1% year on year in June after drop in May, but Barclays finds shoppers are cautiousRetail sales in the UK recovered in June as hot weather drove spending on electric fans, sports and leisure equipment, but households remained under pressure from high living costs.The snapshot from the British Retail Consortium (BRC) showed total sales grew by 3.1% year on year in June, after a sharp drop in May, as record-breaking temperatures and promotional offers encouraged consumers to spend. Continue reading...
Energy secretary says it is not clear if opposition have any net zero policyAs Rowena Mason revealed recently, No 10 has issued guidance that in effect bans civil servants from any level of speaking at events where journalists are present.Today the Times has published a letter signed by almost 30 experts - including former senior officials, thinktank leaders, academics and union leader - saying this policy is a mistake because it is having a chilling effect on public discussion" and that it should be withdrawn. They say:The government's new guidance that prevents public officials from participating properly in public or stakeholder events is a mistake. Effective government relies on public servants, whose salaries are paid by the taxpayer, hearing directly from businesses, charities, academics and citizens to help them make better policy. They should be able to explain government activity to those same groups. Continue reading...
EU trade commissioner says we want to use every minute until 1 August to find a negotiated solution'Donald Trump's threatened 30% tariffs on European goods would eliminate transatlantic trade, the EU's chief negotiator with the US has said, while voicing hope that a deal remained possible.Maro efovi, the EU trade commissioner, said a tariff of 30% or more would have a huge impact, making it almost impossible to continue" current transatlantic trade, which is worth 4.4bn (3.8bn) a day. Continue reading...
Rolling coverage of the latest economic and financial news, as Andrew Bailey insists: I think the path [for interest rates] is down".A Bank of England interest rate cut next month is looking more likely, according to the latest city pricing.The money markets are indicating there's now an 85% chance that the Bank cuts interest rates at its next meeting on 7 August, up from 76% at the end of last week.Friday's disappointing GDP figures, combined with these weak jobs figures boost the case for the Bank of England to cut interest rates in August. The central bank's governor Andrew Bailey told The Times slack' was opening up in the labour market, and he believes the path is downward' for interest rates.All eyes are on Wednesday's inflation report with CPI expected to remain at remain around 3.4% in June, roughly unchanged for the third consecutive month." Continue reading...
The expanding group of emerging powers is building new rules, new tools and a shared industrial future - with or without Donald TrumpThe Brics summit in Brazil last week revealed a loose alliance of emerging powers becoming more complex - and perhaps more consequential. For Brics, heft matters. It now counts 11 member states - including Indonesia, which joined this year - representing half the world's population and 40% of the global economy, outpacing the G7 by $20tn.Yet its size hides its contradictions. The grouping's call for more inclusive global institutions sounds welcome, but there is a preponderance of autocracies within its own ranks. Brics is right that international law should be upheld in Middle Eastern conflicts. But it climbs down from its moral pedestal by condemning Ukraine's strikes on Russian infrastructure - while staying silent on Moscow's relentless attacks on civilians. Continue reading...
With the UK still shaking off the psychological side-effects of Covid, Rachel Reeves might want to broaden her aimsEvery parent who battled their way through home schooling during the long months of lockdown, and every vulnerable person forced to shield themselves away, can have had little doubt that the Covid pandemic was an unhappy time.But research by the non-profit consultancy Pro Bono Economics (PBE), suggests that the nation's wellbeing has never fully recovered from the plunge it took in mid-2020. Continue reading...