Move follows run of downbeat economic data and looks to cushion UK from Trump’s trade war fallout
Bank of England policymakers have cut interest rates by a quarter point to 4.25% to cushion the UK economy against the impact of Donald Trump’s trade war.
The widely expected move from the Bank’s monetary policy committee (MPC), its fourth cut since last August, should lead to cheaper mortgages for homeowners.
Continue reading...Exclusive: Treasury threat an example of ‘scare tactics’ to help force through private sector deal, sources suggest
Whitehall officials have been at loggerheads over the fate of Thames Water since the Treasury told the environment department that it would have to meet the cost of a multibillion pound temporary nationalisation.
Britain’s biggest water company recently came within days of running out of money. Thames is in a desperate race to find a buyer willing to inject cash, with the US private equity firm KKR in pole position.
Continue reading...Decline in output and new orders in April allied with rising uncertainty is prompting layoffs, survey finds
Britain’s factories suffered a slump in export orders last month as Donald Trump’s globally unsettling tariff regime sent overseas demand for UK goods tumbling at the fastest pace in five years.
Manufacturers reported rising economic and trade uncertainties in April as some tariffs took effect and other threatened border taxes loomed, forcing them to lay off workers for a sixth consecutive month.
Continue reading...Exclusive: Countries are struggling to manage expensive loans, with much of debt transacted through London
Diplomats from eight southern and east African countries have signed a letter calling on the UK government to support a private member’s bill that aims to speed up debt restructurings, after economic crises meant countries were unable to pay back loans.
Poor countries’ economies have been hit by a series of global events in recent years, including the coronavirus pandemic, which reduced growth; the Russian invasion of Ukraine, which sent inflation soaring; and raised US interest rates, which have pushed up the cost of international loans to often unaffordable levels.
Continue reading...Experts warn of slowing economy after score based on Americans’ financial outlooks fell by 32% since January
US consumer sentiment plummeted in April after Donald Trump’s trade war threw the global economy into chaos, according to a new report.
The index of consumer sentiment, a score based on a monthly survey asking Americans about their financial outlooks, fell by 32% since January – the largest drop since the 1990 recession, according to the University of Michigan’s Institute for Social Research.
Continue reading...Chancellor says wages are growing faster than prices but acknowledges many are still struggling with the cost of living
A government minister has reiterated the call for the Unite union to accept a deal and end the bin strike in Birmingham.
Speaking on GB News this morning, Lillian Greenwood, parliamentary under-secretary of state for the future of roads, said residents were facing “a completely unacceptable situation”
Continue reading...Lasting damage has been done not only to Trump’s political credibility but to globalisation as a system
At the beginning of this helter-skelter week, Downing Street was declaring globalisation not only dead but a failure. Now, only five trading days later, the autopsy is still under way but the victim may instead be economic populism, strangled by Wall Street, the citadel of globalisation. Donald Trump’s so-called liberation day may in fact have been the anti-globalist’s entombment day.
In an effort to deny even a tactical retreat, Trump’s aides insist the White House goal all along was not to weaken globalism, or even to protect the US economy with tariffs, but instead to get into a negotiation to lower tariffs around the world and to punish China. As cover stories go, it is hardly credible, partly because the tariffs were repeatedly lauded by Trump as a macroeconomic revenue-raising measure, or a means to bolster US manufacturing.
Continue reading...Union leaders have welcomed moves towards public ownership but it is not an auspicious environment for nationalisation
Blast furnaces have been making steel in Britain for 300 years, ever since they helped start the Industrial Revolution. This weekend, parliament will sit for the first Saturday in decades as it tries to keep the last two furnaces running for a bit longer.
Keir Starmer has recalled MPs to discuss emergency powers to direct steel companies, including British Steel’s Scunthorpe steelworks, to “preserve capability and ensure public safety”. The move would be short of nationalisation, but it would give the government more influence on the steel industry than at any point since Margaret Thatcher.
Continue reading...Call to prioritise reset with Europe comes after top adviser to Trump downplays prospect of US tariffs being reduced
Ministers should focus on rebuilding bridges with the EU, Labour politicians have said, after a senior adviser to Donald Trump downplayed the prospect of a breakthrough with the US.
MPs said the government should “prioritise our trading relationship with the EU” and “get a sugar rush of growth” instead of banking on the prospect of preferential treatment from Washington.
Continue reading...It would take an ‘extraordinary deal’ for any country to improve on 10% rate, says Kevin Hassett
A senior economic adviser to Donald Trump has said it would take “an extraordinary deal” for any country, including the UK, to improve on the 10% tariff rate the US has imposed almost worldwide, pouring cold water on Downing Street’s hopes for a breakthrough.
Trump succumbed to pressure from plunging financial markets on Wednesday and temporarily reduced “retaliatory” tariffs on all countries’ goods to 10%, except those from China, which face a rate of 145%.
Continue reading...Sarah Breedon says too early to judge impact on inflation of ‘most significant change in trade policy in a century’
UK economic growth will be hit by US tariffs, which are the biggest trade policy change in a century, a senior Bank of England official has warned.
Sarah Breeden, the Bank’s deputy governor for financial stability, said on Thursday that business activity was likely to be adversely affected by Donald Trump’s tariff regime, dragging down the UK’s already weak growth rate.
Continue reading...Former PM says it is also the moment for the UK to go even further in renewing ties with the EU
Gordon Brown has called for an “economic coalition of the willing” to respond to Donald Trump’s tariffs with coordinated economic policies, including a reduction of interest rates.
The former prime minister also said it was a moment for the UK to go even further in renewing ties with the EU, suggesting it should mean “collaboration that is even more extensive than removing post-Brexit trade barriers”.
Continue reading...Carmakers will be given more flexibility over targets on transitioning to electric vehicles
Keir Starmer has said the government will step in to support key British industries, as business grapples with the economic turmoil unleashed by Donald Trump’s global tariffs.
As the government attempts to counter the impact of the White House hitting the UK with a 10% base levy on exports to the US, the prime minister will promise to help shelter vulnerable sectors and will implement key parts of the industrial strategy months early.
Continue reading...PM says he will use policy to shelter British businesses following the stock market turmoil prompted by Trump’s announcement
Starmer orders economic reset amid Trump’s tariff mayhem
Welcome back to our live coverage of the economic fallout from Donald Trump’s announcement of sweeping tariffs last week.
Almost $5tn (£4tn) was wiped off the value of global stock markets after the US president made his shock announcement last Wednesday, which included a 10% base tariff on imports into the US from the UK.
Continue reading...UK prime minister to speak to international leaders this weekend to ‘maintain stability and strengthen our partnerships abroad’
Trump claims Starmer ‘very happy’ about tariffs
Downing Street has refused to confirm President Trump’s claim that Keir Starmer was “very happy” about the treatment the UK is getting under the new US global tariff regime. (See 9.32am.) Asked about the president’s words at the morning lobby briefing, the PM’s spokesperson said that the government had already set out its position yesterday and that it was “disappointed” by the US tariff policy.
Livia Tossici-Bolt has been sentenced at Poole magistrates’ court to a conditional discharge for two years for two charges of breaching a “buffer zone” outside an abortion clinic in Bournemouth, PA Media reports. See 11.22am.
Continue reading...Chancellor says autumn budget enabled £25bn of extra investment into NHS and shorter waiting lists
Rachel Reeves has defended the £40bn in tax increases in autumn’s budget as businesses brace for their impact, saying NHS waiting lists would now be higher if she had not taken action.
Employers are set for a £25bn increase in national insurance contributions (NICs), which comes into force on 6 April, at the same time as consumers are being hit by a slew of increases in bills for everything from utilities to car tax.
Continue reading...Starmer said that a future trade deal with the US might lead to the UK getting some exemptions from the tariffs
Richard Hughes, chair of the Office for Budget Responsibility, is giving evidence to the Treasury committee. There is a live feed here.
Hughes started by telling the committee that he wrote to the chancellor earlier this year to say that, when his five-year term ends later this year, he would like to have a second term in office.
We are of course negotiating an economic deal which will, I hope … mitigate the tariffs.
The US is our closest ally. Our defence, our security, our intelligence are bound up in a way that no two other countries are.
So it’s obviously in our national interest to have a close working relationship with the US, which we’ve had for decades, and I want to ensure we have for decades to come.
We are obviously working with the sectors most impacted at pace on that.
Nobody wants to see a trade war but I have to act in the national interests.
Continue reading...Rising costs and global uncertainty may force chancellor to turn to pensioners and wealthier taxpayers
Ministers may have to target pensioners and wealthier taxpayers at the autumn budget, as senior government figures voiced fears brutal welfare reforms would still not go far enough to tackle rising costs.
The Institute for Fiscal Studies warned the chancellor may be forced to consider a freeze on tax thresholds, hikes to capital gains and potentially pension taxes.
Continue reading...Department for Work and Pensions says thousands, including children, will be hit by chancellor’s announcement, as OBR forecasts UK growth to halve in 2025
Rachel Reeves will not be raising taxes in the spring statement today, even though there are many people on the left who would prefer taxes to rise as an alternative to public spending being cut. Reeves came into office promising only one budget-type event a year, and that is one reason why she is not hiking taxes today. But mainly it’s because she thinks Britons are relatively highly taxed already, because Labour was elected on a manifesto ruling out most of the obvious possible tax rises and because she’s not convinced a sweeping wealth tax would work.
But that has not stopped campaigners calling for a wealth tax, and yesterday about 300 people attended a ‘Tax the Super-Rich’ rally outside the Treasury. It was organised by charities and social justice campaign groups, but one of the speakers was Carla Denyer, co-leader of the Green party, which is in favour of a wealth tax.
Across the country, inequality is soaring and people are being left behind, struggling to make ends meet and dealing with broken public services, all while the very richest get richer. Choosing to make cut after cut to the poorest and most marginalised, while leaving the vast resource of the extreme wealth of the super rich untouched, is immoral, harmful, and will not deliver for our communities or the economy.
Continue reading...Chancellor will announce plans to fund 18,000 social homes before fraught spring statement on Wednesday
Rachel Reeves will plough £2bn into affordable housing in a bid to “sweeten the pill” of the spending cuts being announced at this week’s spring statement.
The chancellor made the surprise announcement of the new cash – a down payment on the June spending review – as the Treasury bids to demonstrate that it remains focused on investment, rather than cuts. It will fund 18,000 affordable and social homes, part of the target to build 1.5m homes over the course of the parliament.
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