Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Fears are mounting that Donald Trump’s trade war will hurt the UK economy, even as the US president backtracks over some of his tougher measures.
Even though Britain is getting off relatively lightly with a 10% tariff, new trade disruption is likely to damage economic growth.
AndrewBailey, the governor of the Bank of England, sounded the alarm in Washington last night, where the International Monetary Fund’s Spring Meeting is taking place.
Baileytold an Institute of International Finance event that the UK’s open economy was vulnerable to a global trade war.
Baileyexplained:
The Bank will release its latest economic forecasts in two weeks, when it is widely expected to cut UK interest rates.
Earlier this week the IMF cut its forecast for UK growth this year to 1.1%, down from 1.6% predicted in January
The UK government has been pushing for a trade deal with the US. But on Wednesday, chancellor Rachel Reeves dashed hopes of an early breakthrough in negotiations, stressing that the UK is “not going to rush” into a deal.
Financial markets rallied yesterdayafter Trump said his tariffs on China would come down “substantially”, but not to zero.
These hints that the US might de-escalate tensions with Beijing are lifting the “mood music” in the markets, reportsMichael Brown,senior research strategist at brokeragePepperstone.
Brownadds:
9am BST: IFO survey of Germany’s business climate
11am BST: CBI’s industrial trends survey of UK manufacturing
1pm BST: IMF to release Global Policy Agenda report
1.30pm BST: US weekly jobless claims data
1.30pm BST: US durable goods orders
Several UK-listed companies are telling investors this morning that they don’t expect major damage from the US’s new trade war.
Unilever, the consumer goods giant, told the City that it expects a “limited and manageable” hit to its earnings from tariffs.
Unilever, which owns Marmite, Dove and several ice cream brands, said it was sticking to its targets for 2025, but added:
Pizza makerDomino’stold shareholders that its initial assessment of newly introduced tariffs shows “minimal direct impact”, adding:
Engineering firmSenior, which makes high technology components and systems, is taking a similar line. It told investors this morning:
There are signs that some investors are looking to move money out of US assets and into Europe instead, fund manager Jupiter says this morning.
Jupitertold shareholders that there was “elevated market volatility” across asset classes in April “as a result of trade policies” (a reference to the crash, and partial rebound, after Trump’s ‘Liberation Day’ tariff announcement).
Jupitersays this will “undoubtedly have an impact on client risk appetite”, adding:
Volatility isn’t all bad, though –Jupiterreckon mispriced assets present an opportunity for active asset managers.
It also reported a £1bn drop in assets under management in the last quarter, to £44.3bn, driven by net outflows of £500m and negative market movements of £500m.
Donald Trump’s tariff flip-flopping is continuing this week, with reports that the US president is planning to spare carmakers from some of his most onerous tariffs.
According to the Financial Times, the US is now planning to exempt car parts from the tariffs that Trump is imposing on imports from China to counter its role in fentanyl chemical exports, as well from those levied on steel and aluminium
The u-turn comes after intense lobbying by industry executives over recent weeks, who have been warning the White House about the damage that tariffs will cause
But it won’t spare the car industry completely from Trump’s trade war.
As the FT explains:
Morehere(£).
ACEA’s latest European car sales report shows a continued decline in demand for fossil fuel-powered vehicles.
While new battery-electric car sales grew by 23.9% in the first three months of 2025, to 412,997 units, petrol car registrations saw a significant decline of 20.6%, with all major markets showing decreases.
Franceexperienced the steepest drop,ACEAreports, with petrol registrations plummeting by 34.1%, followed byGermany(-26.6%),Italy(-15.8%), andSpain(-9.5%).
The diesel car market declined by 27.1%.
Tesla’s share of the European car market has dropped again, following protests against the car maker’s CEO, Elon Musk.
Tesla’smarket share in the European Union, the UK and the EFTA trade zone (Iceland, Liechtenstein, Norway, and Switzerland) fell to 2% in March, down from 2.9% in March 2024.
Total sales in the month fell to 28,502, down from 39,684 a year ago, new data from theEuropeanAutomobileManufacturers’Association(ACEA) this morning show.
During 2025 so far,Tesla’smarket share in the EU/UK/EFTA has dropped to 1.6%, from 2.5% in January-March 2024. Its sales are down 37%, to 54,020 from 86,027 in Q1 2024.
That’s despite a near-24% increase in overall battery-electric car sales in Europe so far this year.
Overall, car sales across Europe dipped by 0.2% in March, and are down 1.9% so far this year.
Earlier this week,Teslareported a sharp tumble in profits and revenuesin the first quarter of 2025 amid a backlash against his role in the Trump White House, where he has been driving cutbacks to federal services.
Protests againstMusk, andTesla, have been taking place in the US andacross Europein recent weeks, prompting reports of a European consumer backlash bysome Tesla ownersand prospective buyers.
Tesla’srecent sales decline has also been blamed on its ageing lineup of models(its Model Y has just been updated) and intense competition from rivals such as China’s BYD, as well as the backlash from Musk’s embrace of rightwing politics.
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Fears are mounting that Donald Trump’s trade war will hurt the UK economy, even as the US president backtracks over some of his tougher measures.
Even though Britain is getting off relatively lightly with a 10% tariff, new trade disruption is likely to damage economic growth.
AndrewBailey, the governor of the Bank of England, sounded the alarm in Washington last night, where the International Monetary Fund’s Spring Meeting is taking place.
Baileytold an Institute of International Finance event that the UK’s open economy was vulnerable to a global trade war.
Baileyexplained:
The Bank will release its latest economic forecasts in two weeks, when it is widely expected to cut UK interest rates.
Earlier this week the IMF cut its forecast for UK growth this year to 1.1%, down from 1.6% predicted in January
The UK government has been pushing for a trade deal with the US. But on Wednesday, chancellor Rachel Reeves dashed hopes of an early breakthrough in negotiations, stressing that the UK is “not going to rush” into a deal.
Financial markets rallied yesterdayafter Trump said his tariffs on China would come down “substantially”, but not to zero.
These hints that the US might de-escalate tensions with Beijing are lifting the “mood music” in the markets, reportsMichael Brown,senior research strategist at brokeragePepperstone.
Brownadds:
9am BST: IFO survey of Germany’s business climate
11am BST: CBI’s industrial trends survey of UK manufacturing
1pm BST: IMF to release Global Policy Agenda report
1.30pm BST: US weekly jobless claims data
1.30pm BST: US durable goods orders