Category Archives: Economics

Caught in the middle: UK firms brace for fallout from Trump’s global trade war

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While UK may not be in direct line of fire, knock-on effects on global trade has British businesses worried

“We’re vulnerable at the moment,” says Fiona Conor, the managing director of Trust Electric Heating, a Leeds-based radiator manufacturer, who has been considering expanding into the US market.

After a predictably unpredictable start to Donald Trump’s second term as US president, Conor is worried her options could be limited, as businesses across the UK brace for a global trade war.

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New inflation numbers are at odds with Donald Trump’s promise to lower prices

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The president repeatedly claimed he would lower prices during the election campaign, but that’s not an easy task

As tens of millions of Americans prepared to watch the Super Bowl this weekend, Donald Trump sat for the customary pre-game presidential interview.

Trump was elected after pledging to bring down prices fast as much of the country grappled with the cost of living after years of heightened inflation. So when the Fox News anchor asked would families start to feel the impact, the president changed the subject.

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Bank of England’s Mann backed rate cut as she sees inflation ‘hump’ easing

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Downturn in jobs market will mean workers will be unlikely to be able to bid up their wages, says policymaker

The Bank of England policymaker Catherine Mann has said she backed a half-point cut in UK interest rates last week because she believes the downturn in the jobs market will make the inflation “hump” this year short-lived.

Mann surprised financial markets last week by switching from voting against the Bank’s last cut, in November, to supporting a half-point reduction.

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Trump announces 25% tariffs on foreign steel and aluminum

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Modified US duties will be enforced ‘without exceptions’, said president, in controversial bid to boost economy

Donald Trump announced 25% tariffs on foreign steel and aluminum on Monday, ramping up his controversial bid to boost the US economy by hiking taxes on imports from overseas.

The modified US duties will be enforced “without exceptions or exemptions”, the president declared, dashing the hopes of countries that hoped to avoid them.

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Asian stock markets mixed after Trump tariffs announcement while gold reaches record high

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Analysts say measures so far have been less than feared but traders still cautious as uncertainty about US policy ‘has basically exploded’

Asian markets were mixed on Tuesday as traders kept a nervous eye on Donald Trump’s next moves after he signed off on 25% tariffs for steel and aluminium imports, having warned of more measures to come.

The president has lived up to his campaign pledges to resume his hardball trade diplomacy to extract concessions on a range of issues, including commerce, immigration and drug trafficking.

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Key payment systems ‘under siege’ by Trump administration, experts warn

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Ex-treasury secretaries caution against administration’s subversion of checks and balances, specifically Musk

A group of five former US treasury secretaries are warning that the Trump administration has put the country’s key payment systems “under siege” and is undermining the checks and balances of the federal government.

The secretaries warned that the administration has compromised roles historically given to nonpartisan career civil servants and have replaced them with “political actors”, according to a New York Times op-ed published on Monday. The secretaries specifically called into question Elon Musk’s so-called “department of government efficiency”, or Doge, and the appointees that Musk has installed within agencies, including the treasury department.

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Trump to announce 25% aluminum and steel tariffs in latest trade escalation

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US president accused of ‘shifting goalposts’ by premier of Ontario for adding further tariffs on top of existing metal duties

Donald Trump has said he will announce new 25% tariffs on all steel and aluminum imports into the US on Monday that would affect “everybody’, including its largest trading partners Canada and Mexico, in another major escalation of his trade policy overhaul.

The US president, speaking to reporters on Air Force One on Sunday, also said he would announce reciprocal tariffs – raising US tariff rates to match those of trading partners – on Tuesday or Wednesday, which would take effect “almost immediately”. “And very simply, it’s, if they charge us, we charge them,” Trump said of the reciprocal tariff plan.

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Trump delays key piece of China tariff plan amid threats to other countries

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President halts plan to put tariffs on low-value packages but says he will impose duties on more countries next week

Donald Trump halted a key part of his tariff attack on China on Friday, as he threatened to impose new US duties on goods from many more countries next week.

Plans to ensure shipments from China to the US worth less than $800 still face tariffs – removing the longstanding duty-free status of low-cast packages – have been delayed to give more time to federal agencies to prepare for the change.

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‘Stagflation’ fears as Bank of England cuts growth forecast and warns of price rises

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UK economy expected to grow by just 0.75% this year, in fresh blow to Rachel Reeves’s attempts to raise confidence

Rachel Reeves’s plans for growth suffered a double blow after the Bank of England halved its forecast for the year and warned households would face mounting pressure from rising prices.

In a downbeat assessment as it cut interest rates for a third time in six months, Threadneedle Street warned people would face a fresh squeeze on living standards from rising inflation even as the economy stalled.

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Unambiguously bleak Bank of England forecasts pave way for spending cuts

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Weak jobs market and above-target inflation will dent Reeves’s growth plans and may wipe out fiscal headroom

With the public finances tight and Rachel Reeves having pledged to balance the books, interest rate cuts are one of the few levers that could boost the UK’s economic growth in the short term, and the chancellor will be glad of the Bank of England’s quarter-point reduction on Thursday – and the clear signal that it is now in cutting mode.

Seven of the monetary policy committee’s (MPC) nine members backed the quarter-point drop, taking the Bank’s policy rate to 4.5%, while two wanted to be more “activist”, proposing a half-point cut. The Bank of England’s governor, Andrew Bailey, said the MPC would be “taking a gradual and careful approach to reducing rates further”.

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Bank of England cuts interest rates to 4.5% and halves UK growth forecast

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Latest quarter-point reduction comes with warning households face inflation of 3.7% by autumn

The Bank of England has cut interest rates to 4.5%, as it halved its UK growth forecasts for the year and warned households would face renewed pressure from rising prices.

With the government under fire over the sluggish economy, the Bank’s monetary policy committee (MPC) voted by a majority of seven to two to reduce its key base rate, down from 4.75%, to provide some financial relief to borrowers.

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EU to tighten checks on goods sold by sites such as Shein and Temu

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European Commission also urges EU lawmakers to phase out exemption on customs duties for parcels under €150

Parcels sent from China by online retailers such as Shein and Temu will face strict new customs controls as part of a crackdown by the European Commission on “dangerous products” flooding the EU market.

Brussels officials also urged EU lawmakers to phase out the exemption on customs duties that is allowed for parcels under €150 (£125), which enables foreign suppliers to sell cheap goods in the bloc without paying the tax.

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Iran reformists urge concessions in attempt to reconnect to west

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Decision expected in next week that could allow country to rejoin international banking system

Iran’s reformists are pressing for the country to make concessions on financial transparency to allow it to reconnect to the global economic system and send a signal to the Trump White House that it is serious about renegotiating a new relationship with the west, including around its nuclear programme.

Tehran is expected in the next week to take decisions that would mean it would be taken off the blacklist of the Paris-based Financial Action Task Force (FATF), the body that tackles money laundering and terrorist financing.

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China has reacted in kind to Trump’s tariffs, but a deal may still emerge

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Beijing will defend its core interests, but its initial response is more cautious than when Trump imposed levies in 2018

Moments after Donald Trump introduced tariffs of 10% on Chinese goods, Beijing retaliated with countermeasures.

China’s finance ministry put tariffs of 10-15% on imports of a range of US goods and its anti-trust regulator announced an investigation into Google. Several US companies were also added to China’s “unreliable entity” list, potentially restricting their ability to conduct business in the country.

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UK grocery inflation slows for first time in six months amid rise in promotions

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Kantar figures could be good news for government as food price rises have fuelled persistent UK inflation

Grocery inflation slowed in January – for the first time in six months – as retailers ramped up promotions to attract budget-conscious shoppers.

The price of groceries increased by 3.3%, easing from 3.7% in December, as the costs of toilet roll and cat food fell but those of chocolate, butter and chilled juices rose, according to analysts at Kantar.

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EU will stand up for itself in face of Trump tariffs threat, Macron says

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French president and other leaders call for cooperation with Washington but vow a robust response if needed

The EU will stand up for itself if its interests are targeted, Emmanuel Macron has said, as the bloc’s leaders urged talks – but a firm response if needed – in response to Donald Trump’s weekend threat to impose punishing tariffs.

“If our commercial interests are attacked, Europe, as a true power, will have to make itself respected and therefore react,” the French president said as he arrived for an informal defence meeting with other leaders in Brussels on Monday.

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Asian stock markets tumble in response to Trump tariffs

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European futures also down more than 3% after Trump indicates tariffs will ‘definitely happen’ in EU countries

Asian sharemarkets tumbled in early trade on Monday after the Trump administration’s imposition of tariffs on Mexico, Canada and China sparked fears of an escalating global trade war.

Taiwan’s Taiex fell 4.4% at the open, led by a more than 6% plunge in semiconductor heavyweight TSMC. Japan’s Topix index was down as much as 2.3% and Korea’s Kospi fell as much as 2.4%, led by major exporters with exposure to global markets, including Canada and Mexico such as electronics manufacturers Samsung and LG, and automaker Kia. China’s sharemarkets remain closed for the lunar new year holidays.

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US gas prices likely to go up with Trump tariffs on Canadian and Mexican oil

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Tariffs on imports mean higher costs for finishing fuels, much of which is likely to be passed on to consumers

US consumers will see higher prices at the gas pump from Donald Trump’s decision on Saturday to apply tariffs on Canadian and Mexican oil, according to analysts and fuel traders.

The likely hike in fuel prices reflects the double-edged nature of Trump’s trade protections, which are designed to bolster domestic business and pressure US neighbors to curb illegal immigration and drug smuggling, but which will also run counter to his promises to tackle inflation.

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AstraZeneca cancels £450m Liverpool investment, blaming UK government funding cuts – business live

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Pharmaceutical company says that it will not go ahead with investment at Speke, near Liverpool

Donald Trump’s White House will invoke emergency powers to introduce tariffs on Canada and Mexico, Reuters reports:

Two sources familiar with the matter said that Trump was expected to invoke the International Emergency Economic Powers Act (IEEPA) as the legal basis for the tariffs, declaring a national emergency over fentanyl overdoses that killed nearly 75,000 Americans in 2023 and illegal immigration.

The statute enacted in 1977 and modified after the 9/11 attacks in 2001 gives the president broad powers to impose economic sanctions in a crisis.

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Rachel Reeves says cabinet ‘united’ in backing Heathrow third runway plan – UK politics live

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Chancellor says she has support of cabinet as climate minister Ed Miliband reported to be sceptical over Heathrow plans

Richard Madeley goes next.

Q: The Ryanair boss Michael O’Leary says you are wrong, and the third runway won’t be built until you are 70. You are 45 now. Why is he wrong?

We’re signing off decisions on wind farms, on solar farms, a commitment to a new stadium at Old Trafford. We are upgrading the Transpennine route to make journey times easier between York and Manchester via Leeds and Huddersfield. Those things are happening right now.

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