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    Global trade war intensifies and shares tumble as China hits back at Trump tariffs

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    Share prices tumbled around the world on Friday – with Britain’s FTSE 100 suffering its worst drop since the start of the Covid-19 pandemic – as the global trade war intensified with China’s retaliatory imposition of a 34 per cent tariff on imports of all US products.Trillions of dollars have been wiped from the markets since Donald Trump announced a range of import taxes on goods from other countries. British exports to the US face a blanket 10 per cent levy. Sir Keir Starmer is due to hold talks with world leaders over the weekend, as nations reel from the economic hit and decide whether to reciprocate with tariffs on Washington. The prime minister was yesterday urged not to retaliate by his predecessor Sir Tony Blair, who said that such a move would not be in the UK’s “best interests”.Economists warn that escalating the situation could generate a spike in inflation and weaken growth, even triggering recession.The collapse in share values creates a big dent in many British pension funds, and there are fears that China will respond to the US tariffs by flooding other countries with cheap exports, further harming British firms. Wall Street saw a second day of bruising losses on Friday, while London’s top stock market fell 4.95 per cent to a five-year low – its biggest single-day decline since March 2020.Downing Street rejected Mr Trump’s claim that the British government is “happy” about the 10 per cent rate, which is half of the 20 per cent levy being imposed on European Union members, and much lower than the rate imposed on many other nations.Aboard Air Force One, Trump told reporters he had had a “very good dialogue” with Sir Keir, adding: “I think he was very happy about how we treated them with tariffs.”But a spokesperson for No 10 was clear, saying “We are disappointed” – and added: “We’ll be engaging with international leaders over the weekend… It is a changing, shifting global economic landscape.”Analysts for AJ Bell estimate that about £3.8 trillion has been wiped off the value of the global stock market since Mr Trump’s announcement, which he billed as “Liberation Day” for the US economy.“It caps off a horrible week for financial markets and dragged share prices even lower,” said Dan Coatsworth, an investment analyst at AJ Bell. “It’s also bad for the world in general, as we now have a repeat of the heightened geopolitical tensions between the US and China that dominated Trump’s first term.” Mr Coatsworth added that the president’s “tactics have caused shockwaves in every corner of the world”.As well as share prices, the value of the US dollar and even gold fell on Friday.US Federal Reserve chair Jerome Powell described the tariffs, along with their likely economic and inflationary impacts, as “significantly larger than expected” and said they were “highly likely” to lead to “at least a temporary rise in inflation” in the US.In the stand-off between the US and China, Beijing imposed reciprocal tariffs and announced controls on exports of medium and heavy rare-earths, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, to the US.In Japan, prime minister Shigeru Ishiba said Mr Trump’s tariffs had created a “national crisis” as a plunge in banking shares set Tokyo’s stock market on course for its worst week in years.Investment bank JPMorgan said it now believes there is a 60 per cent chance of the global economy entering recession by the end of the year, up from 40 per cent previously.EU trade commissioner Maros Sefcovic said he would speak to his US counterparts before responding.“The EU will respond in a calm, carefully phased, and above all, unified way, as we calibrate our response,” he said on social media. “We will not shoot from the hip.”The prime minister has said he is reluctant to make a quick decision on tariffs.In the House of Commons this week, Liberal Democrat leader Sir Ed Davey urged the prime minister to team up with European and Commonwealth countries to “stand against Trump’s tariffs and for free trade”.Sir Keir replied: “I really do think it is not sensible to say the first response should be to jump into a trade war with the US.” More

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      How might Trump tariffs affect UK business on ‘Liberation Day’?

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      Liberation Day – as the White House grandly calls the unveiling of its new trade policy – is finally upon us.But what it actually means and what the impact will be is still not clear, as president Donald Trump keeps businesses and world leaders waiting until Wednesday to unveil the next round of tariffs.While Mr Trump has suggested all nations will be hit with additional levies – and Sir Keir Starmer has admitted the UK is unlikely to escape the new measures – it’s still far from certain exactly which industries will bear the brunt this time, with steel, aluminium and auto parts already subject to additional import costs.Here’s a look at what’s already known, what could happen, and what investors are doing as uncertainty reigns.Market responseThe top end of the UK stock market has performed relatively well this year, considering concerns over growth, inflation, still-high interest rates and the wider geopolitical landscape.The FTSE 100 is up more than 5 per cent year-to-date, in contrast to the US’ S&P 500 being down around the same amount. The uncertainty has hit smaller businesses more, with the FTSE 250 down 5.2 per cent in 2025 and the AIM All-Share Index down 4.3 per cent.More recently, while there was a sell-off on Monday ahead of these new tariffs, it eventually wasn’t as steep as had initially looked the case and Tuesday saw investors buying once more on price weaknesses, perhaps hinting that some saw limited further downside in share price terms, even with new tariffs to come.It has always been a fool’s game at guessing the stock market’s most immediate, very next move, but AJ Bell analysis notes that while the biggest tech stocks in America – the so-called Magnificent Seven – have lost a combined $2.3 trillion in the first quarter of this year, they “have strong growth prospects well into the future” and “that status makes them natural candidates to attract widespread buying when markets are more upbeat”.In the UK, defence stocks in particular have fared strongly so far, with a domestic political strategy based on increased spending in this area pushing share prices higher – while the price of gold, a traditional safe haven for investors, has repeatedly hit new record highs this year and is predicted by some analysts to rise even further across 2025.How bad could it get?Price hikes and job losses could have a total global economic toll of $1.4 trillion (£1.1 trillion) under the worst-case scenario according to Aston Business School. That is if “full global retaliation with reciprocal tariffs” is the eventual outcome, which would see the US economy in particular hit.Naturally, if the entire planet is affected to that scale, the UK wouldn’t be exempt, but there’s still scope for changing trade paths, perhaps seeking out partners to increase back-and-forth business with if a reliance on the US is no longer plausible.Quite aside from the businesses involved, government spending could also be impacted. Last week, Rachel Reeves noted the government was laying out savings to restore £9.9bn of headroom for government expenditure.One assessment of a worst-case scenario involving Trump tariffs and the UK suggests that would be entirely and immediately wiped out.David Miles, from the Office for Budget Responsibility’s (OBR) Budget responsibility committee, told MPs: “If tariffs at 20 – 25 per cent were put on the UK and maintained for five years, our assessment of what that does is that it will knock out all the headroom that the government currently has.“Had we made that a central forecast, and had the government not changed policy at all knowing that we were going to take that as our central forecast, then the headroom would have pretty much all gone.”Mr Miles noted the improbability of the “extreme” scenario, which would include a term beyond the next US presidential elections, but the OBR further noted the hit to business confidence across the UK caused by the uncertainty around tariffs and other costs.A more optimistic viewAt the other end of the scale, there’s the perspective that some changes could in fact mean the UK might actually benefit from a trade war. Again, it’s important to note that’s on a broad, all-encompassing term – there would still be businesses or industries negatively affected within that.But the OBR noted that if the UK avoided involvement in a trade war, reciprocal tariffs and the like, some redirected trade flows could end up increasing business this side of the water.Much of that is based around the fact that the UK-US trade deficit is far more reasonably balanced than, for example, the EU-US one.Professor Irina Surdu-Nardella, of Warwick Business School, told CNBC tariffs could yet have a limited impact on the UK.“Effects would be relatively limited to industries such as fishing and mining,” Ms Surdu-Nardella said, pointing to the “service-focused nature of the UK economy” meaning much of it would be unscathed by import tariffs.Of course, there’s also the possibility that Mr Trump and Mr Starmer find an agreement whereby British companies end up entirely unaffected by the whole process, potentially giving them a foothold to gain further business with overseas customers. 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      in UK Politics

      Relax planning laws and build more homes for prosperity, says Skipton chief

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      For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emailsSign up to our free breaking news emailsEyebrows were raised little more than a year ago when Stuart Haire jumped from HSBC, where he ran UK personal and private banking, to become chief executive of Skipton Building Society.He was very much near the top of the global giant’s star executive chart, having held senior roles within M&S Bank, First Direct and John Lewis Financial Services, as well as HSBC UK. Compared to the mighty HSBC, the Skipton was seen as something of a backwater. He’s smiling, nodding, when this reaction is put to him. He remembers it well.Here he is, though, 49 and having just presented an impressive set of annual results, with a performance that would do any financial powerhouse proud. He laughs at the memory. “What people don’t realise is that if we were to demutualise – and we’re not going to – Skipton would go straight into the FTSE 100 of biggest listed companies.”His is an organisation with £37.2bn of total assets, more than 1,300 branches and 1.2 million members.As well as the main building society business, Skipton owns Connells, Britain’s largest estate agents with more than 80 high street brands including Hamptons, Bairstow Eves, William H Brown and Connells. It is responsible for one in ten houses bought and sold in the UK. Skipton also has a financial advisory subsidiary, a commercial estate agency and an AI software firm in New Zealand. “We’ve a range of interesting businesses, it was part of the attraction,” says Haire. “We’ve got very strong businesses and we have no shareholders – we just have customers who are our owners. It’s a breath of fresh air.”The group turned in pre-tax profits of £333.4m, up by more than £30m. Mortgage advances increased 6.3 per cent to £6.7bn, helping Skipton lift its market share by 12.7 per cent – this, despite the mortgage market being stagnant for most of the year.Savings balances also rose, by 15.4 per cent to £26bn. Again, savings market share increased, 10.7 per cent. This, too, against a savings market that grew only 1.7 per cent.Mortgage arrears of three months or more, were 0.23 per cent – against an industry average of 0.91 per cent.It may be 170 years old, and still based in picturesque Skipton, in North Yorkshire, but the society has long earned a reputation for innovation. Haire is keen for it to continue, launching Britain’s only available deposit-free mortgage, Track Record. He’s rightly proud of increasing the number of first-time buyers helped by 40 per cent. Track Record received over £62m in applications.It is genuinely deposit-free. “If you can prove you’re paying rent and the mortgage repayments will be less, then it’s likely you will get a mortgage offer. We want to assist people who don’t have part of the equity saved up, we want to help them get started as homeowners.”It also unveiled Income Booster, which allows more than one person’s income to go towards buying a home. Again, aimed at giving first-time buyers a lift.He has focused Skipton on two watchwords: homes and money. “There are too many people in the UK who desperately feel that they will never have a home of their own. Be they aspiring homeowners or renters. And that needs to change.“Homes and money are vital for individual prosperity, and for our country to thrive. The Skipton Group sits at the nexus of homes and money, and we want to drive collaborative change across the UK housing sector, to help more people put these stable foundations in place, and to help unlock opportunity and build long-term financial wellbeing, home by home, right across Britain.”He wants to see planning laws relaxed and the whole process speeded up. “We’ve got the largest estate agency in the UK. As a country, we need more houses.”For first-time buyers some areas are prohibitively expensive and in places such as Skipton, there is an additional pressure, from second-home owners. “It’s not just about the financial aspects, local and central government have got to do more. We’ve got to do more with planning permission, we must be making sure we’re getting more homes built and in locations where people want to live.”Last year saw Skipton become the Which? Recommended Mortgage Provider. It was awarded the Your Mortgage – Best First Time Buyer Mortgage Lender, together with being named, at the What Mortgage Awards 2023, Best National Building Society for the 10th year in a row.“Looking ahead, our ambition is to make a positive impact to tackle the UK’s housing crisis by enabling more first-time buyers to realise their homeownership aspirations.”Skipton, he says, “has great potential to drive transformative change in the housing market and financial services industry, leveraging our collective capability to drive change, influence decision makers and campaign on the issues that matter to our members and wider society.”Savers are not forgotten. “We’re supporting our savers, passing on over 75 per cent of 2023’s base rate increases, which is above our competitors, while even our lowest rate on an instant-access account is well ahead of the market average.”Saving members received £148m more interest than if they had taken market average rate saving products. They were able to take advantage of “member only“ offers.“What attracted me to Skipton is its unwavering member-focused purpose and its huge potential to help more people.”Skipton Building Society offers Britain’s only deposit-free mortgageHe says Skipton is a society that has always believed in keeping things simple, no frills. It’s in the DNA. “Its roots are here, in Yorkshire. We’re a massive local employer and we ensure that one per cent of our profits go to charity. We’re very much aware of our history and responsibility.”Haire himself is from Glasgow – “a scumbag from Glasgow is how I am viewed in these parts,” he jokes. “I was always taught never to get ahead of myself, never to let ego get in the way. That’s also true of the people of Yorkshire. They work exceptionally hard and they’re very proud.”In the year ahead, he is expecting rates to remain high. “They will come down but not by so much.”He’s predicting “low growth” for the economy. “We’re starting to see confidence return. There are signs of real green shoots. In the housing market, mortgage applications are up 14 per cent, viewings are up 12 per cent and sales are up 12 per cent. Confidence is returning.”Unlike HSBC, you sense, the Skipton has given him mission and purpose. More

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      in UK Politics

      What does the Autumn Budget mean for house prices?

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      For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Jeremy Hunt announced that stamp duty cuts will only last until 21 March 2025 in his Autumn Budget on Thursday. The new time limit will now add “urgency […] More

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      in UK Politics

      Paris overtakes London as Europe’s largest stock market

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      Sign up to our free Brexit and beyond email for the latest headlines on what Brexit is meaning for the UK Sign up to our Brexit email for the latest insight Britain has lost its position as Europe’s largest stock market, as Paris overtook London for the first time since records began in 2003. While […] More