Seeking business partners post-Brexit is sound policy, but even in these darker geopolitical times the UK will ultimately side with the US
Rachel Reeves will fly with a delegation of City grandees to China this week as Labour seeks closer economic links with Beijing as part of its quest for growth.
With the outlook increasingly rocky at home after a run of soft economic data, the chancellor is sorely in need of a positive story to tell.
Continue reading...Unpredictable change will sweep through America, while old problems, from war to inflation, are likely to afflict other countries
The global economy is entering the new year with rising geopolitical tensions looming over its prospects, as the world’s leading central banks attempt to cut interest rates after the worst inflation shock in decades.
Donald Trump’s second term in the White House is expected to dominate the economic agenda. Global trade tensions are on the horizon as the president-elect threatens to impose sweeping tariffs on US imports.
Continue reading...Market share increases after strong demand within country offsets risks from western tariffs on Chinese-made EVs
China’s share of the global electric vehicle market reached 76% in October, the country’s automotive trade body said, reflecting strong demand for EVs in the country even as western tariffs risk hobbling exports.
Between January and October, sales of EVs reached 14.1m units, according to the China Passenger Car Association, with 69% of those sales in China. In October, China’s share surpassed three-quarters.
Continue reading...President-elect threatens retaliation if emerging economies create new currency to rival US dollar
Fears of a global trade war have risen after Donald Trump threatened to impose 100% tariffs on countries in the Brics group if they create a new currency to rival the US dollar.
Writing on his social media platform, Truth Social, on Saturday, Trump declared that he would also act if they supported another currency to replace the dollar.
Continue reading...Canada’s PM to dine with US president-elect at Mar-a-Lago resort, news reports say, days after Trump threatens 25% tariff on Canadian imports
The Canadian prime minister, Justin Trudeau, has arrived in Palm Beach, Florida, ahead of a meeting Donald Trump at his Mar-a-Lago resort, according to media reports, days after the US president-elect threatened the US’s neighbour with import tariffs once he takes office.
The Canadian prime minister’s public itinerary does not list a scheduled visit to Florida. Neither Trudeau’s office nor Trump’s representatives immediately responded to requests for comment.
Continue reading...Figure costed for three multinationals repatriating to US after nomination for commerce secretary hits out at Ireland’s tax regime
Ireland’s prime minister has said the country could lose €10bn (£8.35bn) in corporate tax if just three US multinationals were repatriated to America under a hostile Donald Trump administration.
His remarks come just days after Trump nominated the Wall Street investor Howard Lutnick to lead the Department of Commerce with direct responsibility for trade.
Continue reading...Some experts liken tariffs to a game of whack-a-mole, with trade flows simply rerouted if the potential rewards are big enough
Businesses are bracing for the economic impact of a second Trump presidency, which, if his campaign promises are to be believed, will mean tariffs across nearly all imports to the US, especially those from China.
But amid the gloom over the spectre of a renewed global trade war, some manufacturers may be looking to those who already have a playbook on dealing with aggressive US levies, such as China’s solar companies.
Continue reading...Prime minister wants bilateral at G20 to lead to closer ties with China, which he sees as key to faster growth
Keir Starmer will become the first UK prime minister in six years to meet the Chinese president, Xi Jinping, promising to turn the page on UK-China relations by building “a pragmatic and serious relationship”.
Starmer and the chancellor, Rachel Reeves, have been pursuing a thawing of relations with the world’s second-largest economy on pragmatic grounds, suggesting that the UK cannot achieve its growth ambitions without better terms with China.
Continue reading...European Commission figures predict German economy, usually the engine of the EU, will contract O.1% this year
Germany’s looming general election will be fought against the backdrop of a stagnating economy, the European Commission has forecast, with GDP expected to have contracted in 2024.
The commission’s quarterly forecast suggested Germany, traditionally the engine of the bloc’s economy, will be its weakest performer in 2025, notching up growth of just 0.7% after shrinking by 0.1% this year.
Continue reading...Budapest meeting finds consensus on need to raise growth and productivity as ‘America first’ protectionism looms
EU leaders meeting in Budapest have signed a declaration aimed at boosting the bloc’s ailing competitiveness – a task given added urgency by the threat of “America first” protectionist trade policies promised by the US president-elect, Donald Trump.
The bloc has too many barriers to innovation and must drastically reduce red tape, especially for startups; ramp up investment; make access to capital easier; and raise productivity, the European Commission president, Ursula von der Leyen, said on Friday.
Continue reading...Cash stops short of hoped-for ‘bazooka option’, with critics calling it ‘an accounting exercise’ that will not bolster growth
China has announced 10tn yuan in debt support for local governments and other economic measures, but stopped short of the “bazooka” stimulus package that many analysts had expected.
The fiscal package included raising debt ceilings for local governments by 6tn yuan (£646bn) over three years, so they could replace hidden debt, which authorities said stood at 14.3tn yuan by the end of 2023.
Continue reading...Single Trade Window designed to reduce friction on imports and exports will be halted until at least 2026 amid cost fears
A key part of the UK’s post-Brexit border strategy has been put on pause for more than a year amid government concerns over the cost of implementing the scheme.
The introduction of the Single Trade Window (STW), which is designed to reduce friction for traders moving goods in and out of Britain, had already been delayed from late October to January next year, but will now be halted until at least 2026.
Continue reading...Commitment by Mogadishu’s largest single lender is latest in series of deals to forgive ‘unsustainable’ $4.5bn debt
Somalia has announced that more than $1.1bn (£860m) of outstanding loans will be cancelled by the US, a sum representing about a quarter of the country’s remaining debt.
The announcement is the latest in a series of agreements in which Somalia’s creditors have committed to forgiving its debt obligations.
Continue reading...NIESR warns British economy would be one of the worst affected by protectionist policies
UK growth is likely to be halved by Donald Trump’s victory in the US presidential race if goes on to impose the swingeing new tariffs he has threatened, a leading thinktank has warned.
The National Institute of Economic and Social Research (NIESR) said the protectionist measures planned by the Republican challenger for the White House would result in weaker activity, rising inflation and higher interest rates from the Bank of England.
Continue reading...Downward trend in oil price from higher production, falling demand in China and clean energy to continue
Petrol and food prices will fall over the next two years thanks to a glut in oil production, the World Bank has said, offering hope to consumers that the cost pressures of the past three years could start to ease.
Its analysis found that this year’s downward trend in the oil price resulting from increased production, falling demand in China and the transition to clean energy is set to continue even if the conflict in the Middle East worsens.
Continue reading...New report upgrades outlook for UK economy with growth now forecast at 1.1% rather than 0.7%
The International Monetary Fund has warned the trade tariffs favoured by US presidential candidate Donald Trump could hurt global growth, as it upgraded its forecast for the UK economy.
The Washington-based organisation said tariffs trigger tit-for-tat trade wars that impoverish the economies involved in the dispute and the wider global economy.
Continue reading...Investors disappointed after hoped-for policy plans by Beijing to stimulate economy failed to materialise
Chinese stocks have suffered their worst fall in 27 years after efforts by Beijing to stimulate the world’s second-largest economy disappointed investors.
Stock markets in Asia fell sharply after China’s top economic planning authority failed to announce further measures to improve flagging growth.
Continue reading...Forecast upgrades UK to joint second after US but it is still expected to have highest inflation among G7 countries
The global economy is “turning a corner”, according to the Organisation for Economic Cooperation and Development, which has upgraded the UK’s growth forecast for this year to faster than that of Japan, Italy and Germany.
The OECD’s latest outlook ranked Britain joint second among the G7 developed countries in its latest outlook for the world economy. However, the UK is still expected to have the highest inflation in the group.
Continue reading...Protest letter sent to fund’s head over move to send staff to Moscow for first review since invasion of Ukraine
The International Monetary Fund (IMF) will send staff to Moscow next week to review the Russian economy for the first time since the invasion of Ukraine, in a move that has prompted anger and dismay across European capitals.
Officials of the Washington-based organisation will travel to the Russian capital and meet “stakeholders” before publishing an assessment of the economy and providing recommendations about how the Kremlin might improve its economic handling and tackle issues such as the climate crisis.
Continue reading...Business secretary Jonathan Reynolds says joining Asia-Pacific CPTPP bloc is a ‘real win’ for exporters, even though it will preclude the UK from EU membership
The business and trade secretary, Jonathan Reynolds, has signalled a new twin-track approach to UK trade policy, in which the Labour government will pursue closer ties with the European Union while at the same time seeking new global partnerships further afield.
Writing for the Observer online, Reynolds welcomes the UK’s imminent entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as a “real win” for British exporters.
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