The president aims to boost US manufacturing, but insiders warn tariffs will increase costs and destroy businessesAcross the US, many executives leading apparel and textiles businesses are scratching their heads.Tariffs of 145% on goods from China, and tariffs of 10% on goods from much of the rest of the world, have been billed by the White House as a once-in-a-generation efffort to boost domestic manufacturing. Continue reading...
by Heather Stewart in Washington and Richard Partingt on (#6WVGK)
Andrew Bailey says UK not close to recession but he would be encouraged' if trade deal with US were agreedThe Bank of England's governor, Andrew Bailey, has said the UK economy faces a growth shock" as a result of Donald Trump's trade policies.Speaking on the sidelines of the International Monetary Fund (IMF) meetings in Washington, Bailey said that while he did not think the UK was close to recession at the moment, we are certainly quite focused on the growth shock". Continue reading...
President's comments follow Chinese government's denial of baseless' claim that Washington was close to dealThe US and China held talks on Thursday to help resolve the trade war between the world's two largest economies, Donald Trump said.We may reveal it later, but they had meetings this morning, and we've been meeting with China," the US president told reporters at the White House. Continue reading...
by Eleni Courea Political correspondent on (#6WVWV)
The UK is being dragged in opposing directions by international forces in its quest for growthRiding two horses is hard enough, but diplomats are joking in private that Keir Starmer and Rachel Reeves are trying to ride three.At the International Monetary Fund summit in Washington this week, Reeves sought to position the UK as a beacon of free trade that is open to business with the EU, US and China. Continue reading...
Unilever and Procter & Gamble indicate more increases could be on way as Trump policy affects ingredient costsThe companies that make leading brands including Magnum ice-creams, Nescafe coffee and Ariel washing liquid have indicated that more price increases could be on the way as ingredient costs rise amid Donald Trump's tariff war.Procter & Gamble, whose products include Pampers nappies and Oral-B toothpaste as well as Ariel, said new US tariffs could cost it up to $1.5bn (1.1bn) a year, forcing it to put up prices again on top of a 1% year-on-year rise in the first three months of 2025. Prices of the group's beauty products, which include Olay and Pantene, rose 3% in the quarter. Continue reading...
Kristalina Georgieva calls for trade policy settlement and says tariff wars have spiked uncertainty off the charts'IMF managing director Kristalina Georgieva has urged the US to strike trade deals urgently to limit the damage to the global economy from Donald Trump's tariff policies.Speaking at a press conference at the IMF's spring meetings in Washington, Georgieva declined to criticise the US administration directly; but warned that what she called major trade policy shifts" had spiked uncertainty off the charts". Continue reading...
by Sandra Laville Environment correspondent on (#6WV05)
Exclusive: plan to let firms sidestep environmental laws by paying into nature levy would add cost and delay, says letter to MPsLeading economists, former government advisers and ecologists are calling for a key section of the government's planning bill to be changed because it creates a licence to kill nature".Sir Partha Dasgupta, professor emeritus of economics at the University of Cambridge, ecology professor Sir John Lawton and Dr Tom Tew, a former chief scientist of Natural England, are among the signatories to a letter to MPs that warns them to ignore government slogans and false rhetoric about nature and wildlife being a block to growth. Continue reading...
In today's newsletter: The chancellor faces a pivotal moment in the US as she navigates high-stakes negotiations with the Trump administrationGood morning. I'm Annie Kelly, I'll be bringing you First Edition alongside Archie for the next few weeks.It's probably fair to say the annual spring meeting of the International Monetary Fund (IMF) has not traditionally been an event high on drama. Not so this year, as Rachel Reeves and her fellow finance ministers from around the globe have been blown into Washington DC on the chilly winds of global economic chaos caused by Donald Trump's America First" economic policies, pithily described in a recent Guardian leader as part oligarchic enrichment scheme, part mobster shakedown".Ukraine | At least nine people have been killed and more than 60 wounded in a massive" missile attack on Kyiv, according to Ukraine's state emergency service. It is among the deadliest attacks on the capital of the three-year war.Labour | Keir Starmer is under pressure from more than 60 Labour MPs to allow thousands of young Europeans to live and work in the UK, a move seen as key to unlocking a more ambitious trade reset with Brussels.Health | Adults with severe peanut allergies can be desensitised by daily exposure, according to the first clinical trial of its kind. After being given steadily increasing doses of peanut flour over a period of months, two-thirds of the trial participants were able to eat the equivalent of five peanuts without reacting.NHS | NHS staff are so tired they are dying in car crashes and posing a major threat to patients, the service's safety watchdog will warn on Thursday. Fatigue among frontline personnel causing them to make mistakes is a significant" risk to patients, according to the Health Services Safety Investigation Body (HSSIB).Music | Oasis fans have collectively lost more than 2m to scams since tickets for its reunion tour went on sale last year, a major bank has estimated. Lloyds Banking Group based the calculation on the volume of fraud reports made by its own customers. Oasis fans make up more than half (56%) of all reported concert ticket scams so far this year, losing 436 on average. Continue reading...
Expectations that the Fed will cut short-term interest rates and falling consumer confidence could indicate what is aheadImagine you are sailing a ship through dense fog, looking out for land. Your lookout spots species of birds typically found offshore. It now seems likely that you are approaching land, but it is impossible to know for sure until you see the coastline. If a US recession is land, the birds" are already swooping into view. But these sightings offer no guarantees of what lies ahead, only probabilities.An inverted yield curve, when the long-term interest rate falls to or below the short-term rate, is commonly considered to be a predictor of recession. The 10-year bond rate did fall below the three-month Treasury rate in March, although the two are now at about the same level. In any case, the yield curve does not actually tell us much. It simply reflects financial market expectations that the US Federal Reserve might cut short-term interest rates in the future, which in turn reflects expectations that economic activity might falter. Continue reading...
With Rachel Reeves in the US, some clarity is needed: the global economy has been mismanaged and the Federal Reserve does deserve criticism Continue reading...
by Gwyn Topham Transport correspondent on (#6WT8V)
Virgin Atlantic founder says erratic' decisions from US president have been awful for everyone'Sir Richard Branson has attacked Donald Trump's policies as doing so much damage" to the world, adding that he did not believe the US president's actions were backed by most Americans.The Virgin Atlantic founder warned that the erratic and unpredictable" actions of the White House were undermining business, although he singled out Trump's policy on Ukraine as the one that should worry the world the most". Continue reading...
US president says tariffs on imported goods will come down from 145% rate but insists we're doing fine with China'Donald Trump said during a White House news conference that high tariffs on goods from China will come down substantially, but it won't be zero".Trump's remarks were in response to earlier comments on Tuesday by treasury secretary Scott Bessent, who said that the high tariffs were unsustainable and that he expects a de-escalation" in the trade war between the world's two largest economies. Continue reading...
by Kiran Stacey Political correspondent on (#6WSNQ)
UK officials say text is agreed on deal to cut president's tariffs on British steel, aluminium and carsRachel Reeves was due in Washington on Tuesday evening for what could be a pivotal week for a proposed US-UK trade deal.Officials say an agreement is ready to sign but may have to be ripped up at the last minute should the US president impose tariffs on pharmaceuticals. Continue reading...
The US president's economic agenda collides with fragile financial systems, triggering market fears, investor flight and developing nation chaosWake up! When the most sober of global institutions, the International Monetary Fund, abandons its usual technocratic calm to sound the alarm on the political roots of global financial instability, it's time to pay attention. The IMF is warning of anon-negligible risk of a $1tn hit to global output, as Donald Trump'serratic America first" agenda - part oligarchic enrichment scheme, part mobster shakedown - collides with a perfect storm of global financial vulnerabilities.Such a shock would be equivalent to a third of that experienced in the 2008 crisis. But it would be felt in a much more fragile and politically charged environment. This time, the crisis stems not just frommarkets but from the politics at the heart of the dollar system. The IMF's latest Global Financial Stability Report sees the danger in Mr Trump's trade policies, especially his liberation day" announcements, whichhave pushed up America's effective tariff rate tothe highest in over 100 years. Continue reading...
by Jillian Ambrose Energy correspondent on (#6WSJF)
Bosses from automotive, manufacturing and energy warned MPs about effect of Trump tariffsBritain's manufacturers will start cutting jobs within weeks" unless the government can strike a deal to safeguard the UK economy from Donald Trump's trade war, industry leaders have told MPs.Senior executives from the UK's automotive, manufacturing and energy sectors warned a committee of MPs to expect job losses this summer if the US moves ahead with a swathe of global trade tariffs set out by Trump earlier this month. Continue reading...
Jerome Powell is a soft target for the president amid economic instability. But getting rid of him would only invite more chaosUS stock markets, Treasury bonds and the dollar itself are sliding amid the tariff turmoil and Donald Trump needs a soft target. It was probably only a matter of time before he intensified his attacks on Jerome Powell, chair of the US Federal Reserve. It is an easy narrative to blame the dull central banker with orthodox worries about anchoring inflation expectations. Nor is Powell able to engage in tit-for-tat soundbites. Unlike Trump, he must measure the impact on markets of his every word.The open question is how far Trump intends to push things. Monday's reaction in financial markets was strong because it seemed for the first time that the president could be serious about removal. Powell's termination cannot come fast enough!" declared Trump, which was several notches beyond his usual whine about urging the Fed to hurry up with cuts in interest rates. Continue reading...
The International Monetary Fund, a global financial body, said the long-term impact of Trump's tariffs would be negative for the global economy. Pierre-Olivier Gourinchas, the IMF's chief economist, also said the organisation revised down growth for the UK partly due to the impact of the tariffs but also domestic factors in the UK economy
Spanish PM says industrial and technological plan' will ensure country commits to spending 2% of GDP on defenceSpain has announced a 10.5bn investment plan to ensure it will reach its long-delayed Nato commitment of spending 2% of its GDP on defence this year, saying it has become obvious only Europe will know how to protect Europe" from now on.The country - which lags well behind other western nations by dedicating about 1.3% of its GDP to defence spending - is one of the Nato members that has been pressured by the Trump administration to increase its spending, and had previously committed to hitting the 2% threshold by 2029. Continue reading...
WTTC says 5.3% decline in tourist spend suggests policies such as increased air passenger duty have had impactThe government has been accused of sabotaging" the UK's tourism industry, after figures showed international visitors spent more than 2bn less last year than they did before the pandemic.The World Travel and Tourism Council (WTTC) - which found in a new study that people visiting the UK spent 40.3bn in 2024, down 5.3% on 2019 - said that the government has made deliberate policy choices" that had created barriers to travel". Continue reading...
US president's chief trade adviser is intellectual driving force behind global tariffs and trade war with ChinaElon Musk called him dumber than a sack of bricks" but, in the raw contest for political power, Peter Navarro has outsmarted the billionaire.The tumult in global trade shows that for now it is the 75-year-old economist, not Musk, who has Donald Trump's ear in the Oval Office. Continue reading...
The Treasury seems to think relaxing financial rules will boost growth. There's little evidence for this idea - and every reason to believe it could exacerbate risksIn its desire to ensure the City of London remains attractive after Brexit, the Treasury seems to have forgotten one of the major lessons of the 2008 financial crisis: when regulation is lax, risks accumulate. This month, it launched a consultation about whether it was time to lighten the rules governing alternative asset managers, including private equity and hedge funds, in the belief that doing so will boost growth. There is little evidence to support this idea, and every reason to think it could exacerbate systemic risks.The proposal is consistent with Rachel Reeves's belief that expanding the financial sector will deliver economic prosperity. The chancellor has suggested that post-crisis regulations went too far". Those regulations included an EU directive targeting alternative investment funds. Before 2008, these funds operated mostly in the dark. There was no means of systematically tracking the leverage they were using, nor the dangers this might pose. Continue reading...
The media likes to advertise well-known metrics like unemployment and the lipstick index', but the truth is that no one really knowsAs someone who keeps a close eye on the economy, I often bump into those strange metrics that people like to write about that, supposedly, unlock the secret of whether or not a recession is looming.Given what's going on, it's no surprise that they are back again. Just last week Bloomberg reported a cut in spending at hair stylists. There's the lipstick index" - in tough economic times, women load up on lipstick instead of spending their dwindling funds on bigger-ticket items. Former Fed chair Alan Greenspan liked to follow men's underwear sales because hey, when times are tough, we guys are not willing to buy new shorts. Continue reading...
As Rachel Reeves heads to US for IMF meetings, stance appears unaltered despite chaos unleashed by White HouseKeir Starmer and Rachel Reeves have underlined how much the world has changed after Donald Trump's liberation day", with the UK prime minister even declaring an end to globalisation.But as the chancellor prepares to fly to Washington this week to meet her global counterparts at the International Monetary Fund meetings, Labour appears to see the risks purely in terms of the hit to international trade. Continue reading...
Where once the world came together to fight the credit crunch, Trump's tariffs will set a more divisive testWhen the world's finance ministers and central bank governors gather at the International Monetary Fund in Washington this week, it may kindle memories of another meeting, also held against the backdrop of a global economic crisis, in autumn 2008.Then, as the aftershocks from the collapse of Lehman Brothers ripped through financial markets, central banks coordinated drastic emergency rate cuts, and the UK chancellor, Alistair Darling, urged his G7 counterparts to emulate the UK's approach and shore up stricken banks. Continue reading...
Analysts trace a link between financial security and a troubling, increasingly devil-may-care, attitude to political riskSteve Coogan wants people to see his new film, The Penguin Lessons, and think about how they might be living in a wealthy cocoon, disengaged from the world.The film's central character - a Briton teaching expat children in Argentina - rescues a penguin and tries to help local people persecuted by the rightwing government. Re-enacting a true story, Coogan is showing how it's possible to be involved in local communities even when the protagonist is an outsider. Continue reading...
Price of cocoa - chocolate's key ingredient - has climbed over past year and tariffs on imports will keep prices highFor many Americans celebrating Easter, the holiday is incomplete without chocolate: chocolate bunnies and eggs, bars tucked into Easter baskets, candy hidden in plastic eggs for Easter egg hunts.But rocketing cocoa costs will mean higher prices for chocolate candy this year, and Donald Trump's tariffs on all imports will likely keep prices high for the foreseeable future. Continue reading...
by Richard Partington Senior economics correspondent on (#6WQQ2)
Expectations of inflation, and recent waves of price rises, could be self-fulfilling and fuel greedflation' - and it may not only apply to US consumersOver the past few years consumers have grown used to seeing prices rise at an exorbitant rate. The cost of everything - from used cars to utility bills and the humble loaf of bread - has rocketed in the worst inflation shock across advanced economies since the 1980s.While inflation has cooled in the past year, talk of fast-rising prices is back on the agenda from Donald Trump's escalating trade war. Continue reading...
by Jessica Elgot Deputy political editor and Richard on (#6WQ3E)
Figures in No 10 feel the Office for Budget Responsibility's twice-yearly reports undermine Rachel Reeves' plan to scrap the spring statementWhen Labour was riding high in opposition, the Office for Budget Responsibility was a near sacrosanct institution. Its manifesto pledged Labour would never sideline the OBR for political convenience".But emerging from a punishing spring statement, inside No 10 the former devotees have turned sceptics. The fiscal rules remain untouchable - despite Labour MPs' grumbles - but there is intense frustration at the institution that marks the government's homework. Continue reading...
Ministers are ready to be relentless over planning reform. There is a skills gap though - and they must be brave enough to fill itAmid the shock of the Office for Budget Responsibility (OBR) halving its growth forecast last month, one remarkable finding gets too little attention. It predicts housebuilding will rise to its highest level in 40 years, adding 0.2% growth or 6.8bn by 2029-30, potentially rising to more than 0.4% by 2034-35. The government has said that housing scores the biggest positive growth effect from a zero-cost policy" the OBR has ever forecast.This is especially remarkable given that 2024 saw the fewest planning permissions granted for new homes for a decade, and the worst on record, according to the Home Builders Federation (HBF). Planning applications plummeted when the last government scrapped councils' mandatory housing targets, but since Labour reimposed a national planning policy framework, applications in the works have risen by more than 160%.Polly Toynbee is a Guardian columnist Continue reading...
The true scale of what's happening is hard to grasp, so our irrational brains reach for measly acts of self-denialMost of us, confronted with daily forecasts of recession and economic downturn, have an emotional response that expresses itself in a range of behaviours. Big purchases may be deferred or cancelled. Travel plans are revisited. We might review our childcare spend and wonder if we should go out less - all rational decisions in the face of the rising cost of living. Then there are the irrational gestures, those that have little meaning financially but offer us, via small acts of self-denial, an opportunity to feel we're doing something morally rigorous. It's these, in my case, that have lately been triggered.For me, the barometer has always been coffee, a small but ineradicable source of guilt that has only grown as the price of a single flat white creeps up towards 4. Forgoing this small pleasure neither damages my day, nor, on the other hand, does anything significant towards improving my finances. Assuming a one-coffee-a-week spend, the choice to wait until I get home to make coffee will save me about 200 a year. And yet, each time I pass Caffe Nero and keep walking, I'm so proud of myself you would think I'd donated a kidney.Emma Brockes is a Guardian columnist Continue reading...
Exclusive: civil servants beef up security rules for sensitive negotiating papers over fears posed by hostile US trade policyUK officials are tightening security when handling sensitive trade documents to prevent them from falling into US hands amid Donald Trump's tariff war, the Guardian can reveal.In an indication of the strains on the special relationship", British civil servants have changed document-handling guidance, adding higher classifications to some trade negotiation documents in order to better shield them from American eyes, sources told the Guardian. Continue reading...
World Trade Organization says trade between US and China is expected to plunge by 81% in decoupling'Donald Trump's tariffs will send international trade into reverse this year, depressing global economic growth, the World Trade Organization has warned.In its latest snapshot of the global trading system, the Geneva-based institution says it had previously expected goods trade to expand by a healthy 2.7% this year. As a result of Washington's trade policy, it is now forecasting a 0.2% decline. Continue reading...
First homeowners' grants have long been the go-to policy by state and federal governments. And yet here we are in 2025 with a worsening housing affordability crisis
Notices show Trump administration setting stage for levies on both sectors on national security groundsThe Trump administration is kicking off investigations into imports of pharmaceuticals and semiconductors into the US as part of an attempt to impose tariffs on both sectors on national security grounds, notices posted to the Federal Register on Monday showed.The filings scheduled to be published on Wednesday set a 21-day deadline from that date for the submission of public comment on the issue and indicate the administration intends to pursue the levies under authority granted by the Trade Expansion Act of 1962. Such inquiries need to be completed within 270 days after being announced. Continue reading...
by Richard Partington Senior economics correspondent on (#6WME4)
Accountants' institute says first quarter of 2025 was harrowing' for companies amid tax rises and US tariffsUK business confidence has fallen to the lowest level for more than two years amid growing concern over tax rises and Donald Trump's escalating trade war, according to a survey.Highlighting the risks to the economy, the Institute of Chartered Accountants in England and Wales (ICAEW) said the first quarter of the year had been harrowing" for companies across Britain. Continue reading...
by Jasper Jolly in London and Callum Jones in New Yor on (#6WKQK)
Chinese customs official says trade has diversified away from US in recent years and plays up vast domestic market'China has played down the risk of damage to its exports from Donald Trump's tariffs, with an official saying the sky won't fall", as stock markets rose amid signs of a retreat on electronics restrictions.The US president claimed his strategy was working on Monday, with record levels of investment. Addressing reporters at the White House, he continued to threaten new tariffs on pharmaceutical goods. Continue reading...
The deal signed last week between the centre-right CDU and centre-left SPD paves the way for vital investment in Europe's biggest economySome years ago, hundreds of German finance ministry staff dressed in black and formed a giant zero to salute their boss, Wolfgang Schauble, as he left office. It was a tribute to Mr Schauble's extreme fiscal conservatism, which had delivered Germany's first balanced budget in the postwar period. Amid resurgent prosperity in the Angela Merkel years, the so-called black zero - symbolising a constitutional prohibition on public debt- had gradually acquired cult status.As a new administration prepares to take power in Berlin, it seems unlikely that human euro signs will welcome the latest politician to take on MrSchauble's former role. But in dramatic fashion, the spending tapsare set to be turned on. Via a swiftly staged Marchvote in the outgoing Bundestag, debtbrake" dogma was consigned to history by the chancellorelect, Friedrich Merz. The way was thus paved for groundbreaking expenditure on defence, and the overhaul of an economy being left behind in achanged, suddenly menacing world.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...