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      UK Aims to Cut Billions in Welfare Amid Budget Crunch

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      Changing disability allowances is a particularly contentious move within Prime Minister Keir Starmer’s center-left Labour Party.Britain’s center-left government outlined plans on Tuesday to curb spiraling welfare costs as it attempts to juggle a difficult set of competing objectives: saving public money, incentivizing work and protecting the most vulnerable.The announcement follows weeks of tense internal debate within the governing Labour Party, led by Prime Minister Keir Starmer, about how to cut Britain’s spending on welfare, which has risen sharply since the Covid-19 pandemic.“The status quo is unacceptable but it is not inevitable,” Liz Kendall, the work and pensions secretary, said in Parliament, promising “decisive action” to get those who can work into employment, protect those who cannot, and save five billion pounds (about $6.5 billion) by 2030.For Labour, a party that sees itself as the creator and guardian of Britain’s post-World War II welfare state, cutting support for some of the most vulnerable in society is especially contentious.But Britain, with a total population of about 68 million, now has more than 9.3 million people of working age across England, Scotland and Wales who are not employed, a rise of 713,000 since 2020. Of those, 2.8 million receive long-term sickness payments or related welfare, according to the government, which expects the number to grow to more than four million if nothing is done. The government spent £65 billion on sickness payments last year.Facing mounting pressure to increase military spending, at a time when public services including the health system are badly underfunded, and economic growth is sluggish, Britain’s Treasury is searching for cuts to public programs.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      China Outlines Plan to Bolster Consumption in Face of Trump Tariffs

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      Beijing’s leaders are ordering fiscally strapped local governments to spend more to help workers, consumers and businesses.The Chinese government and the Communist Party jointly issued a lengthy list of planned initiatives on Sunday to get people to spend more, in yet another move by Beijing to offset potential harm from its escalating economic warfare with Washington.The road map for economic stimulus included larger pensions, better medical benefits and higher wages — measures that could bolster China’s lagging domestic consumption. But it assigned many of these tasks to the country’s local governments, many of which are struggling under enormous debts and plummeting revenues from the sale of state land.The action comes as China’s leaders are searching for ways to rebalance the economy away from its current dependence on an ever-rising trade surplus, which reached almost $1 trillion last year. President Trump has already imposed 20 percent tariffs on China’s shipments to the United States. Countries in Europe, Latin America, Africa and the Middle East are also raising tariffs on China’s flood of manufactured-goods exports.Part of the document released on Sunday seemed aimed at reassuring the Chinese public that their investments were safe, so that they would start spending money again. The authorities promised to undertake “multiple measures to stabilize the stock market” and to underpin the real estate market, which has been marred by falling property prices.A housing market crash has wiped out much of the savings of China’s middle class in the past three years. Chinese households have responded by curtailing their spending on hotels, restaurants and other services and stuffing savings into bank deposits that pay very little interest.One bright spot of late for China has been its stock markets. In the United States, the tariffs and uncertainty caused by Mr. Trump’s policies dragged the S&P 500 last week into a correction, down more than 10 percent from its peak. But China’s markets are positive, partly on enthusiasm for the country’s progress in developing its own artificial intelligence programs. Hong Kong’s stock market, where many Chinese companies trade, is up about 20 percent since Mr. Trump’s inauguration.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      China’s Economic Plan Is Light on Detail as Trade War Intensifies

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      The country’s top leaders set an optimistic growth target but gave few hints of how to achieve it as their export-led strategy is challenged by rising tariffs on Chinese goods.For months, China has promised to help its people spend more to turn the economy around, while taking few concrete measures.On Wednesday, the country’s top leaders pledged to “vigorously” boost spending but once again offered limited details and little money to back it up.The government’s budget and annual work report, released on the most important day in China’s political calendar, during the meeting in Beijing called the National People’s Congress, set an optimistic target of 5 percent growth but gave scant indication of how the economy would get there without another surge in exports this year. China’s reliance on trade for growth faces fresh challenges as the United States and many other countries have raised tariffs on Chinese goods.“The headwinds remain very strong on growth: The property market hasn’t stabilized and consumer confidence remains low,” said Tao Wang, chief China economist at UBS. “Now we have a fresh wave of tariffs and who knows what else will come. Policy needs to do the heavy lifting.”Here are some key takeaways from China’s budget — and what it means for one of the world’s biggest economies.Beijing to consumers: Spend, spend, spend!China is one of the few places in the world with deflation, an economic condition in which many prices are falling. That might sound appealing to Americans struggling with hefty bills for groceries and other expenses, but it can be a crippling problem: Many companies and households have seen their earnings shrink in recent years. Deflation also raises the cost of debt payments and encourages consumers to put off purchases on the expectation of prices being lower in the future.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      China Signals Confidence in Economy Despite Sluggish Growth and U.S. Trade War

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      As Chinese leaders meet in Beijing, they are striking a confident posture in the face of pressure and uncertainty from the United States.China’s top leaders sought to project confidence in the country’s economy on Wednesday despite sluggish growth, an escalating trade war with the United States and growing geopolitical uncertainty caused by the Trump administration.The government will aim to expand China’s economy by “around 5 percent” this year, said Premier Li Qiang, China’s highest-ranking official after Xi Jinping, at the opening of the annual session of the country’s rubber-stamp legislature.“Achieving this year’s targets will not be easy, and we must make arduous efforts to meet them,” Mr. Li said, acknowledging that the economy faced many challenges. But he struck a positive note about the country’s prospects, saying: “The underlying trend of long term economic growth has not changed and will not change. The giant ship of China’s economy will continue to cleave the waves and sail steadily toward the future.”The meeting in Beijing, called the National People’s Congress, is a tightly scripted political pageant, showcasing how Mr. Xi plans to lead China through what he has often described as “great changes unseen in a century” around the world.That vision includes lifting China’s technological prowess and self-reliance and beefing up its military capabilities so it can dominate the Asia-Pacific region. It is focused on strengthening the ruling Communist Party’s grip on power by making national security a priority for all facets of Chinese society.Security at the legislative session, which brings around 3,000 delegates to the Great Hall of the People, is also a top priority. Uniformed and plainclothes police and soldiers were posted at several checkpoints on major roads near the venue and on pedestrian bridges, while entrances at nearby subway stations were temporarily closed.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Japan’s Economy Recovered In Second Half But Barely Grew in 2024

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      Though it recovered in the second half of the year, Japan’s economy barely grew in 2024 as a depreciated yen fueled inflation and strained households.For decades in Japan, it was accepted as gospel: A weak currency makes companies more competitive and bolsters the economy.Part of that promise came true last year: As the yen tumbled to a 37-year low against the dollar, big brands like Toyota Motor reported the highest profits in Japanese history. Stocks soared to record highs.Yet for the majority of Japanese households, the weakened yen has done little more than drive up the costs of basic living expenses, such as food and electricity. Figures released Monday showed that while Japan’s economy picked up pace in the second half of 2024, its inflation-adjusted growth rate for the full year slowed to 0.1 percent. That was down from 1.5 percent the prior year.Attempting to stimulate exports by weakening a currency has long been a policy tool for countries seeking economic growth: President Trump has said he wants a weaker dollar to help American manufacturing. Japan provides an example of what can happen when a depreciated currency, even if it helps exports, crushes consumer purchasing power by worsening inflation.“In economics, they teach us that everything has a benefit and a cost, and it’s about asking which is greater,” said Richard Katz, an economist who focuses on Japan. Of the yen trading at around 153 to the dollar, “this is clearly not the way to run a railroad,” Mr. Katz said. “It would be good to take a lesson from this.”The figures released on Monday show that household spending shrank slightly in 2024, after expanding in the previous three years. Unlike in the United States, where strong consumption helped the economy surge back after the Covid-19 pandemic, prolonged weak spending in Japan has left its real gross domestic product barely above prepandemic levels.

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      Japan consumer confidence index
      Source: Cabinet Office of JapanBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      China Pledges More Stimulus to Shore Up Flagging Economy

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      At a meeting to set the party’s economic policy agenda, China’s leadership said it would borrow more and cut interest rates in a bid to bolster growth.China’s top leaders on Thursday pledged more stimulus measures to shore up the country’s economy, building on steps they have taken in recent months to bolster growth.At an annual gathering of the Chinese Communist Party and the cabinet, led by the country’s top leader, Xi Jinping, officials agreed that the government should allow a bigger budget deficit, borrow more and cut interest rates, the state television broadcaster said on Thursday.The statements suggest a willingness by Beijing to take more aggressive steps to increase spending, part of a shift that began in September to turn around years of weak consumer demand, lackluster growth and declining prices.China “will need to maintain economic growth and maintain overall stability of employment and prices next year,” the state broadcaster said at the conclusion of the two-day Central Economic Work Conference, which sets the economic agenda for the upcoming year.The Chinese government typically uses the conference to signal priorities that could translate into policy action in the next year, and to agree on budget details that will be announced at the spring legislative session.Earlier this week, the ruling Politburo gave a rare public acknowledgment that Beijing needed to take a stronger approach on the economy, when it indicated it would be more willing to lower interest rates. It was the first time that China’s leaders had eased their stance on monetary policy since the aftermath of the global financial crisis 14 years ago.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Steel Maker ThyssenKrupp to Slash 11,000 Jobs in Germany

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      The venerable steel producer, which has been struggling against high energy prices at home and growing competition from abroad, is the latest company in Europe to cut its work force.ThyssenKrupp, the largest steel maker in Germany, said Monday that it would eliminate up to 11,000 jobs by 2030, a decision that comes as the country struggled to overcome economic weakness that has hindered growth for nearly two years.The overhaul is aimed at returning ThyssenKrupp to profitability in the face of pressure from Asian competitors and high energy prices. Compounding the challenges, President-elect Donald J. Trump has threatened to impose tariffs on all goods imported to the United States. ThyssenKrupp was among those hurt by the tariffs Mr. Trump imposed on steel and aluminum during his first term in office.ThyssenKrupp said that it would reduce the amount of steel it produced each year down to no more than 10 U.S. tons, from the current level, 12.6 U.S. tons, which would allow it to eliminate 5,000 jobs. Another 6,000 jobs will be cut through the sale of business activities or turning to external providers, the company said without elaborating.“Urgent measures are required to improve ThyssenKrupp Steel’s own productivity and operating efficiency and to achieve a competitive cost level,” the company said in a statement.On Tuesday, ThyssenKrupp reduced the value of its steel division by 1 billion euros, or $1.04 billion, after posting a yearly net loss of €1.4 billion, or $1.2 billion. The company has been struggling for years to decarbonize its steel production, as the price of powering its existing coking plants has soared.Germany, Europe’s largest economy, has not had significant growth in the past two years. On Friday, the economy recorded 0.1 percent growth from July to September, but it was forecast to contract over the entire year. Economists do not expect to see a return to growth in 2025, unless the government can make significant changes quickly.Dozens of companies have announced plans over the past few months to reduce their work forces in Germany. On Friday, the auto supplier Bosch said it would cut 5,500 jobs beginning in 2027. Ford Motor said Wednesday it would eliminate 4,000 jobs in Europe, primarily in Germany.Workers at Volkswagen, Germany’s biggest automaker, are planning to begin staging warning strikes in the coming days, as they fight management plans to reduce their numbers and close up to three of the company’s 10 factories in Germany. In October, Volkswagen reported a 42 percent drop in quarterly profit and warned of an “urgent need” to cut costs amid growing competition from Chinese automakers. More

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      What the Collapse of Germany’s Ruling Coalition Means

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      After decades of relative stability, the country has entered a new era of political fragmentation and will hold new elections at a precarious time.The collapse of its governing coalition is an extraordinary moment for Germany, a country known for stable governments. It has happened only twice before in the 75 years since the modern state was founded.But like a marriage that has finally ended after years of fighting, the spectacular breakup on Wednesday night of Chancellor Olaf Scholz’s three-party coalition was expected by most and welcomed by many.A recent national poll found that a majority of Germans wanted to end the “traffic light” coalition, named for the colors of the parties that made it up — red for the Social Democratic Party, yellow for the pro-business Free Democratic Party and green for the Greens. Only 14 percent still had confidence in the coalition, according to the same poll.Although the opposition is pushing for Mr. Scholz to end the government sooner, Wednesday’s announcement will very likely lead to early elections in March, at a precarious time for Germany both domestically and internationally.Here’s what we know about the collapse of the coalition.How did we get here?On Wednesday night, Mr. Scholz fired his finance minister, Christian Lindner, who is the head of the Free Democrats, over disagreements about the 2025 budget and the economy in general. That precipitated the end of the coalition.The coalition was initially both successful and popular. But a constitutional court ruling late in 2023, barring the government from repurposing finances left over from the pandemic, spelled the beginning of the end.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More