Category Archives: Economics

EU to put tariffs of up to 38% on Chinese electric vehicles as trade war looms

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Move, to be applied provisionally from July, would trigger duties of more than €2bn a year

The EU has notified Beijing that it intends to impose tariffs of up to 38% on imports of Chinese electric vehicles, triggering duties of more than €2bn (£1.7bn) a year and a likely trade war with China.

The tariffs will be applied provisionally from next month in line with World Trade Organization rules, which give China four weeks to challenge any evidence the EU provides to justify the levies on imported EVs.

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US inflation eases slightly as economic anxiety looms over presidential election

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Consumer price index rose 3.3% in May, as Federal Reserve is due to announce latest decision on interest rates

Inflation cooled slightly in the US last month, as consumers’ frustration over high prices continues to loom over November’s presidential election.

The consumer price index rose at annual pace of 3.3% in May, slipping back from the previous month’s reading of 3.4%.

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Post-Brexit ‘mess’ as Italian driver’s lorry held for 55 hours at UK border post

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Antonio Soprano says he was told to walk to a McDonald’s for food as there was none at Sevington

An Italian lorry driver has described the UK’s new post-Brexit controls as a “mess” after his lorry was held at a government-run border post for more than two days.

Antonio Soprano, 62, who was stopped while bringing plants into the country from central Italy, said he was offered nothing to eat during his 55-hour ordeal and instead was told by border officials that he should walk to a McDonald’s more than a mile away to get a meal.

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EU expected to impose import tariffs on Chinese electric vehicles

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Experts believe Beijing will retaliate with measures that could hit European exports from cheese to cognac

The EU is expected to notify China that it will impose tariffs on electric vehicle imports this week, firing the starting gun on a potential summer trade war with Beijing.

A formal pre-disclosure of tariffs could happen as early as Wednesday, after a lengthy investigation into China’s state subsidies for its car manufacturing, which is predicted to conclude that massive support continues to be concentrated on the EV sector.

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US adds 272,000 jobs as labor market holds unexpectedly strong amid high interest rates

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Figures show unexpected resiliency of job market as officials try to tamp down 3.4% inflation

The US economy added 272,000 jobs in May, a sign the labor market continued strong amid high interest rates, the Bureau of Labor Statistics announced on Friday.

The number of May jobs was far higher than the 190,000 economists had expected and topped April’s gains, when a revised 165,000 jobs were added to the economy. The unemployment rate rose to 4% for the first time since January 2022, up from 3.9% in April.

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UK watchdog warns Tories over PM’s ‘£2,000 tax rise’ claim

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Rishi Sunak failed during TV debate to make clear how he had calculated Labour’s spending policies, says OSR

The UK’s statistics watchdog has warned the Conservatives over Rishi Sunak’s claim that Labour would raise taxes by £2,000, saying it failed to make clear how the figures were calculated.

In a rap over the knuckles for the prime minster, who made the claim during a leadership debate on ITV on Tuesday evening, the Office for Statistics Regulation (OSR) said the case demonstrated how all party campaigners needed to offer the public a transparent view of tax and spending policies.

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Watchdog ends investigation into description of UK economy ‘going gangbusters’

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Exclusive: ONS official’s remarks, not intended as comment on overall state of the economy, were later used by Sunak

The UK’s statistics watchdog has closed an investigation into remarks made by an official about the economy “going gangbusters” that were cited by Rishi Sunak.

It was looking into the comments made by chief economist of the Office for National Statistics (ONS) last month amid concerns that politicians could misuse economic data in the run-up to the election.

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Eurozone business activity grows as expected ECB interest rate cut looms

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A 25 percentage point cut to main lending rate is forecast amid growth in Germany, Italy and Spain

Business activity grew across the eurozone at the fastest rate in a year in May while inflation cooled, according to data that will be welcomed by the European Central Bank (ECB) in advance of expected interest rate cuts tomorrow.

The latest HCOB purchasing managers’ index (PMI) data, compiled by S&P Global, showed private sector output expanded in most economies covered by the euro currency after growth in Germany, Italy and Spain was only marginally offset by a downturn in France.

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UK clothing sales to EU plummet as Brexit red tape deters exporters

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Small and medium-sized firms badly hit as huge drop in apparel sales helps fuel 18% slide in all-non food exports

UK exports of clothing and footwear to the EU have dived since Brexit, according to a new study that shows the extent to which complex regulations and red tape at the border have deterred firms from sending goods across the Channel.

Exports of clothing and footwear sold to EU countries have fallen from £7.4bn in 2019 to £2.7bn in 2023, helping fuel an 18% slump in sales of all non-food goods exports to countries covered by the EU single market, according to the consultancy Retail Economics and online marketplace Tradebyte.

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Falling UK inflation not leading to rise in spending, report finds

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May recorded the lowest spending growth since February 2021, Barclays’ snapshot of card activity shows

Consumer spending growth is at its weakest in more than three years as higher council tax bills and the rising cost of broadband and mobile phones eat into household budgets, a report has said.

The monthly snapshot of credit and debit card activity from Barclays found an improvement in consumer confidence as a result of falling inflation was not leading to a pickup in spending.

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European and Canadian central banks expected to cut interest rates this week

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New lower rates of 3.75% and 4.75% respectively are likely to be introduced this week after drops in inflation

Borrowers in the eurozone and in Canada are expected to get some relief from high interest rates this week.

After recent drops in inflation, the European Central Bank (ECB) and the Bank of Canada (BoC) are forecast to lower their benchmark rates in the coming days.

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Tory national service policy would leave UK’s poorest areas worse off, IFS warns

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Thinktank says proposal to pay for scheme by scrapping shared prosperity fund would downgrade efforts to level up country

Rishi Sunak’s election pledge to introduce mandatory national service would leave the UK’s poorest regions millions of pounds worse off, a thinktank has warned.

The prime minister announced last weekend that if he was re-elected, every 18-year-old would have to spend time in a competitive, full-time military commission or spend one weekend a month volunteering in “civil resilience”.

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Inflation in UK shops falls amid price cuts on furniture and TVs

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Biggest drop since November 2021 as ‘unseasonable’ weather pushes retailers to continue promotions

Shop price inflation has eased to the lowest level since November 2021 after retailers cut the price of big purchases such as furniture and TVs as households keep a tight rein on spending amid cost of living pressures and poor weather.

Prices rose at an annual rate of 0.6% in May, down from 0.8% in April – the slowest pace since November 2021 – according to the latest monitor from the British Retail Consortium (BRC) trade body and the market research firm NielsenIQ.

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Federal Reserve concerned over ‘lack of further progress’ in bid to tame inflation

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While price growth has fallen sharply, with April’s 3.4% lower than March’s 3.5%, it is still higher than Fed’s medium-term goal of 2%

Policymakers at the Federal Reserve have expressed concern over stalling progress in their fight to bring down inflation.

Although price growth has fallen sharply since peaking at its highest levels in a generation two years ago, it has remained stubbornly above where officials want it to be.

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Majority of Americans wrongly believe US is in recession – and most blame Biden

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Exclusive Harris poll for the Guardian shows 55% believe economy is shrinking, in troubling sign for president’s re-election bid

Nearly three in five Americans wrongly believe the US is in an economic recession, and the majority blame the Biden administration, according to a Harris poll conducted exclusively for the Guardian. The survey found persistent pessimism about the economy as election day draws closer.

The poll highlighted many misconceptions people have about the economy, including:

55% believe the economy is shrinking, and 56% think the US is experiencing a recession, though the broadest measure of the economy, gross domestic product (GDP), has been growing.

49% believe the S&P 500 stock market index is down for the year, though the index went up about 24% in 2023 and is up more than 12% this year.

49% believe that unemployment is at a 50-year high, though the unemployment rate has been under 4%, a near 50-year low.

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Big drop in UK inflation rate disguises more disappointing details

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Service sector inflation, monitored closely by Bank of England, barely budged in April

The annual inflation rate fell sharply in April. Prices are rising more slowly than at any time in almost three years. Inflation is lower in the UK than it is in the EU.

Even so, the latest bulletin on the cost of living from the Office for National Statistics was mildly disappointing. April’s inflation figure was always going to be good, with a sharp fall guaranteed by the fact the energy price increases of a year earlier were not repeated.

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UK inflation falls by less than expected to 2.3%, reducing chance of June rate cut

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Drop in April is smaller than forecast but level is still lowest in almost three years

UK inflation fell to 2.3% in April – its lowest level for almost three years – but the decline was smaller than expected, denting hopes of an early interest rate cut.

City analysts had forecast the annual increase in the cost of goods and services would fall to 2.1%, close to the Bank of England’s 2% target.

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Productivity soars in sectors of global economy most exposed to AI, says report

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Employers in UK, one of 15 countries studied, willing to pay 14% wage premium for jobs requiring AI skills

The sectors of the global economy most heavily exposed to artificial intelligence (AI) are witnessing a marked productivity increase and command a significant wage premium, according to a report.

Boosting hopes that AI might help lift the global economy out of a 15-year, low-growth trough, a PwC study found productivity growth was almost five times as rapid in parts of the economy where AI penetration was highest than in less exposed sectors.

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UK cannot afford to give ‘cold shoulder’ to China, says City minister

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Bim Afolami’s comments distance British government from protectionist moves by US

The UK cannot afford to give the “cold shoulder” to China, the City minister said on Monday, in comments that will distance the British government from the Biden administration’s protectionist crackdown.

Addressing financial services bosses at the City Week conference in London’s Guildhall, Bim Afolami said it was “crucial” to engage with strategic competitors such as Beijing, and that the UK risked losing control of its economic future if it failed to find common ground.

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Dow Jones Industrial Average hits 40,000 points for first time; UK reality TV stars charged over FX scheme – as it happened

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Strong quarterly results and hope of interest rate cuts drive DJIA to new alltime high

A group of business leaders have warned Rishi Sunak that the government’s migration policies risk weakening the UK university sector, the Financial Times reports, undermining a key reason for companies to invest in the country.

The FT explains:

In a letter to Rishi Sunak, bosses at groups including miners Anglo American and Rio Tinto and industrial conglomerate Siemens, said they were “deeply concerned” by widening funding gaps and declining international student applications that were “a result of government policy”.

They said this risked “undermining the positive impact that international students have on our skills base, future workforce, and international influence”, as well as reducing the funding available for research and industry collaboration.

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