Category Archives: Economics

Trump temporarily spares carmakers from US tariffs on Canada and Mexico

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After a call with top executives at GM, Ford and Stellantis, president approves one-month exemption from tariffs

Donald Trump has temporarily spared carmakers from sweeping US tariffs on goods from Canada and Mexico, one day after an economic strike on the US’s two biggest trading partners sparked warnings of widespread price increases and disruption.

The US president extended his aggressive trade strategy at midnight on Tuesday by targeting the country’s two closest neighbors with duties of 25%.

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European markets soar as Germany moves to lift ‘debt brake’ and raise defence spending

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Berlin’s ‘big bazooka’ proposal sends industrial stocks surging but fiscal sea change also hikes borrowing costs

European financial markets have rallied sharply and German borrowing costs have soared after the country’s prospective leaders announced a historic deal to loosen its “debt brake” rule to boost spending on defence.

The yield – in effect the interest rate – on 30-year German government bonds rose by about 25 basis points to 3.08% in its biggest daily increase since October 1998.

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Rachel Reeves vows to use defence spending to support UK’s ‘left behind’ industrial towns

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Chancellor says increased military spending should support ‘British jobs and British industries’

Rachel Reeves has said UK companies and jobs will be prioritised under the government’s plans for a significant increase in defence spending, with an aim to support “left behind” industrial towns and the economy at large.

Announced by Keir Starmer last week amid growing fears over Donald Trump’s commitment to European security, the government will increase defence spending to 2.5% of GDP by 2027 – worth an additional £6bn a year.

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UK ban on zero-hours contracts ‘to include agency workers’

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Government to expand coverage of employment rights bill, according to report

Agency workers will reportedly be included in a ban on “exploitative” zero-hours contracts as part of changes to the UK government’s employment bill.

Under the new rules, employers will have to offer agency workers a contract that guarantees a minimum number of hours every week, the BBC reported.

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China likely to target US agriculture, state media reports, as Trump tariff deadline nears

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Global Times signals Beijing’s likely countermeasure after US president threatened a further 10% duty to come into force on Tuesday

China is preparing countermeasures against fresh US import tariffs that are set to take effect on Tuesday, China’s state-backed Global Times reported, with American agricultural exports likely to be targeted.

Donald Trump last week threatened China with an extra 10% duty, resulting in a cumulative 20% tariff, while accusing Beijing of not having done enough to halt the flow of fentanyl into America, something China said was tantamount to “blackmail”.

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UK awarded its lowest ranking for workplace gender equality in a decade

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‘Sluggish’ pace in tackling gender pay gap and worsening employment levels push UK back to 18th in PwC index of OECD countries

Women’s worsening unemployment and participation in the workforce has pulled the UK behind Canada to its lowest ranking for workplace equality among large economies in a decade.

The “sluggish” pace of change on women’s earnings relative to men’s – which means closing the gender pay gap could take more than 30 years at the current pace – has knocked the UK back one place to 18th in the Women in Work Index produced by advisory firm PwC.

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Chinese manufacturing surges despite threat of higher Trump tariffs

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Fastest expansion in three months as Chinese factories return to growth as new orders rise

China’s manufacturing activity expanded at the fastest pace in three months in February, despite the looming threat that Donald Trump will impose tariffs this week.

Production at China’s factories returned to growth last month, an official survey showed, thanks to higher new orders and purchase volumes.

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Trump’s threatened 25% tariffs on EU imports could trigger ‘economic turmoil’

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US president’s plan could prove to be an economic shock to both blocs, German thinktank says

Donald Trump’s threatened 25% tariffs on EU imports could trigger “economic turmoil”, sharply push down growth and send inflation soaring, according to a German thinktank.

The Kiel Institute said the US president’s promise on Wednesday that he would impose the levies “very soon” was a profound moment in the postwar relationship between Washington and Brussels and could prove to be an economic shock to both parties.

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Ukraine’s economy could grow by 5% next year if hostilities end, EBRD says

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European reconstruction bank will help rebuild country if peace is agreed but a lasting end to conflict is needed

The war-torn Ukrainian economy could expand by 5% next year if a ceasefire is agreed, the European Bank for Reconstruction and Development (EBRD) has predicted – but prospects for reconstruction depend on a lasting peace.

The London-based lender has invested $6.2bn (£4.9bn) in projects in Ukraine over the course of the three-year conflict.

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Sadiq Khan aims to add £100bn to London’s economy by 2035

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Capital’s mayor wants return to productivity growth, which has struggled to recover from 2008 financial crisis

Sadiq Khan, the mayor of London, has announced an ambitious plan to add more than £100bn to the capital’s economy within a decade.

Unveiling what he is calling the London growth plan, Khan said he was allocating hundreds of millions of pounds in devolved funding in an attempt to return the annual productivity growth of the London economy to the levels seen before the 2008 financial crisis.

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Donald Trump orders new tariff investigation into US copper imports

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President opens new front in assault on global trade norms as advisers claim China moving to dominate copper market

Donald Trump on Tuesday opened yet another front in his assault on global trade norms, ordering a new investigation into possible tariffs on copper imports to rebuild US production of a metal critical to electric vehicles, military hardware, semiconductors and a wide range of consumer goods.

Trump, looking to thwart what his advisers see as a move by China to dominate the global copper market, signed an order directing commerce secretary Howard Lutnick to start a new national security investigation under Section 232 of the Trade Expansion Act of 1962, the same law that Trump used in his first term to impose 25% global tariffs on steel and aluminum.

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German parliament in race against time to sign off on new defence fund

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Friedrich Merz, expected to be next chancellor, has spoken of urgent need for ramped-up defence, but ‘blocking minority’ could form in future Bundestag

Germany’s outgoing parliament could be asked to sign off on a new defence fund in its final weeks as the conservative winners of Sunday’s election seek to balance geopolitical demands with the looming pressures of a new Bundestag hostile to military spending.

Since the victory of his CDU/CSU alliance, Friedrich Merz has spoken of the urgent need for Europe to ramp up its own defence capabilities, saying it needs “independence from the USA” amid an unpredictable Trump administration and a looming threat from Russia.

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Willingness to ease off ‘debt brake’ may decide the German election

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Rule dating from 2009 that limits borrowing looks vulnerable as main political parties promise to revive stalled economy

Germany is used to running its economy with the brake on. Ever since the 2008 financial crisis Berlin has sought to burnish a reputation as the world capital of fiscal discipline, with a near-pious aversion to debt and pride in strong government finances.

Under a rule known as the “debt brake” – introduced in 2009 by Angela Merkel to show Germany was committed to balancing the books after the banking crash – the federal government is required to limit annual borrowing to 0.35% of GDP.

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UK hiring on the rise as confidence lifts, research suggests

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Companies increase hiring for first time since June, and households more optimistic about their finances

Companies have ramped up hiring in recent weeks while consumer confidence has started to rise, research suggests, in a boost for Rachel Reeves as the government looks for signs of economic growth.

The chancellor has received a fillip after the market research company GfK’s consumer index improved from -22 in January to -20 in February as households said they were more optimistic about their personal finances and the economic outlook.

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UK inflation jumps to 3%, reducing chance of early interest rate cut

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Annual CPI inflation rate hit 10-month high in January in blow to ministers amid rise in food bills and fuel costs

UK inflation accelerated faster than expected at the start of this year, eating into workers’ wages and reducing the chance of an interest rate cut next month.

The consumer prices index (CPI) measure rose to 3% in January, the Office for National Statistics reported, up from 2.5% in December.

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Trump threatens 25% tariffs on foreign cars and semiconductor chips

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White House has raised threat of levies as a means to bolster US economy, ignoring warnings trade wars could derail it

Donald Trump stood firm against warnings that his threatened trade war risks derailing the US economy, claiming his administration could hit foreign cars with tariffs of around 25% within weeks.

Semiconductor chips and drugs are set to face higher duties, Trump told reporters at a news conference on Tuesday.

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UK marketplace sellers face ‘second Brexit’ hit from Trump’s US import rules

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End of ‘de minimis’ policy for Chinese goods also expected to hit bigger fashion retailers such as Asos and Boohoo

Many UK-based independent sellers on marketplaces such as eBay and Amazon could suffer a significant hit to US sales from planned changes to import rules under Donald Trump, with experts comparing the impact to a second Brexit.

The new rules, which mean all parcels originating or made in China and being sold into the US must pay import duty – of as much as 15% on fashion items – and an additional 10% tariff, are also expected to impact bigger online clothing retailers such as Asos and Boohoo.

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Trump policies make US ‘scary place to invest’ and risk stagflation, says Stiglitz

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Uncertainty created by tariffs and contempt for rule of law will deter investment, says top economist

Donald Trump’s tariff threats have made the US “a scary place to invest” and may unleash stagflation, the Nobel prize-winning economist Joseph Stiglitz has said.

“It risks the worst of all possible worlds: a kind of stagflation,” Stiglitz said in an interview with the Guardian.

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Reeves warned UK inflation will push public sector unions to seek higher pay rises

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Plan for ‘reasonable’ 2.8% rises may prove insufficient, forcing chancellor to find billions in extra funding

Rachel Reeves has been warned public sector unions will demand higher pay increases to compensate for accelerating inflation, heaping pressure on the chancellor to find billions of pounds in extra funding.

The government made recommendations in December for a 2.8% pay rise for teachers, NHS staff and other public sector workers for the financial year beginning in April, saying it was a “reasonable amount” given forecasts for the economy.

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UK firms mull biggest layoffs in a decade as business confidence slumps

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Impending tax rises from autumn budget fuel collapse in sentiment and rising redundancy intentions, surveys show

UK employers are preparing for the biggest redundancy round in a decade amid collapsing business confidence as firms brace for tax increases from April that Rachel Reeves announced in her autumn budget.

In a fresh blow for the chancellor, the Chartered Institute of Personnel and Development (CIPD), which represents human resources professionals, said a survey of 2,000 employers showed redundancy intentions at their highest level in 10 years, barring the Covid pandemic.

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