Economy

Donald Trump’s Soprano-like threat that the ‘termination’ of Federal Reserve chairman Jerome Powell ‘cannot come fast enough’ has been headlined as one of his wildest thrusts to date, but is actually one of his most conventional. Prickly politicians always resent unelected central bankers, though they also see them as useful scapegoats for economic trouble. Liz Truss longed to fire Andrew Bailey from the Bank of England; Gordon Brown gave Eddie George’s Bank its ‘independence’ but took away so much of its power that George nearly resigned; Margaret Thatcher never accepted the most potent modern governor, Gordon Richardson, as ‘one of us’. Trump’s predecessors took fewer potshots at the Fed because

A deal will be worked out with China to reduce the tariffs. The chairman of the Federal Reserve won’t be fired. Over the last 24 hours, President Trump has softened his stance on two key planks of his economic policy. It is not hard to work out why. For all the bluster, Trump is ultimately a pragmatist – and that makes him a president the financial markets will live with.  The financial markets have soared today, and the dollar has recovered, while gold, the safe haven in troubled times, has dropped by $100 an ounce. The reason? A dramatic shift in American policy. In China, the escalating trade war had

The waves from Donald Trump’s tariff upheaval continue to ripple through the global economy. The International Monetary Fund (IMF) has downgraded its forecasts for global growth to 2.8 per cent for this year and 3 per cent for 2026, down from previous estimates of 3.3 per cent for each year. The UK isn’t immune: the IMF expects British growth to come in at 1.1 per cent this year and 1.4 per cent next year. US growth, meanwhile, falls to 1.8 per cent followed by 1.7 per cent. These cuts were widely expected, but they sharpen the focus on the costs of the current trade tensions. The downward pressure on demand

The White House reportedly expects that a trade deal between the United States and the UK could be signed within the next few weeks. This should be a big deal, at least for the small island if not for the world’s biggest economy. There could be a grand signing ceremony at Buckingham Palace. Or at a state visit to parliament by President Donald Trump. Or, if nothing else, perhaps Paddington Bear could put in an appearance to boost marmalade exports. But there is just one catch. It will have to be sold to the public and business alike – and that will be very hard for the bitterly anti-Trump Starmer

Price rises have unexpectedly eased. The Consumer Price Index rose by just 2.6 per cent in March, down from 2.8 per cent the month before and slightly lower than analysts’ expectations of 2.7 per cent. The figures, just published by the Office for National Statistics, show that the slowdown was driven by falling fuel costs and flat food prices compared to a year ago. Most of the fall was due to lower prices at the pumps, with both petrol and diesel down by 1.6p last month. Meanwhile, prices in some sectors continued to rise – most notably in education, where costs jumped by 7.5 per cent year-on-year, largely due to the introduction

China has retaliated against Donald Trump by raising duties on all American imports to 125 per cent from 84 per cent, declaring that it has no interest in responding further to what it calls a ‘joke’ policy. The higher rate will come into force from tomorrow. The announcement comes after the White House’s clarification that tariffs on Chinese exports have climbed to 145 per cent this year – a move China’s commerce ministry described as ‘economically meaningless’ and a tool for ‘bullying and coercion’. The world’s two largest economies exchange goods worth around $700 billion annually. Beijing has made it clear that it considers American goods effectively unmarketable within its

Donald Trump has peered into the abyss. The US President watched the Wall Street meltdown and the global trading system (from which America benefits as much as anyone) start to collapse, and he hit pause. The conventional narrative will be that Trump has blinked, but I think he simply got what he wanted. Yesterday’s decision to put a 90-day pause on reciprocal tariffs, while increasing the rate on China to 125 per cent, has certainly come as a relief to the markets. The S&P500 was up almost 9 per cent on the news. Investors can breathe again. It would be easy to argue that President Trump has simply chickened out