Displaying items by tag: Economy

A critical shipment of raw materials has arrived in the UK to keep British Steel’s blast furnaces in Scunthorpe operational. Following the breakdown of talks with Chinese owner Jingye, the UK government intervened, securing coking coal and iron ore from the US and Australia to prevent furnace shutdowns and potential irreparable damage. This action has brought  'huge relief' to workers and offered renewed hope for the plant’s future. British Steel is the UK’s last producer of virgin steel - vital for national infrastructure, defence, and the economy. Nearly three thousand jobs were at stake, and the government passed emergency legislation to secure operations while working on future ownership plans. Concerns mounted when Jingye ceased raw material orders and began selling existing supplies. Government ministers and union leaders stress the strategic importance of maintaining domestic steel production. Meanwhile, tensions with Beijing have escalated, with warnings that foreign ownership of essential industries must be carefully scrutinised. As the furnaces stay lit, questions remain about long-term stability and national control over vital infrastructure.

As April begins, families across the UK face steep increases in household bills—including energy, water, and council tax—placing a particular strain on single parents and low-income households. Citizens Advice warns that millions are already at breaking point, with many spending over 40% of their post-housing income on essentials. Stories from struggling families highlight how even full-time workers are forced to take extra shifts or skip family time to make ends meet. While the minimum wage and some benefits are rising, many say it’s not enough to offset the rising cost of living. Suggestions to save money include switching service providers or seeking council tax reductions. Political leaders remain divided on solutions, while families urge for lasting support in the face of mounting financial pressure.

Donald Trump’s announcement of a universal 10% tariff on all imports into the USA, beginning on 5 April, has sparked global alarm. An additional wave of steepened tariffs on approximately sixty nations, including China and EU countries, begins on 9 April. Trump claims the move will revive American manufacturing, calling it overdue payback for unfair trade practices. However, international leaders warn the tariffs will spark economic turmoil and a potential global trade war. Ursula von der Leyen called it a ‘major blow’, while China, facing a 54% total tariff on some goods, promised ‘resolute countermeasures’. Allies like the UK and Australia have urged restraint, while others, such as Brazil and Canada, plan reciprocal actions. Japan, Taiwan, and South Korea also condemned the move. Trump’s tariffs have rattled long-standing allies, confused diplomatic partners, and raised fears of escalating economic isolation. Critics argue that US consumers may bear the burden, with higher prices and increased global instability looming. For an opinion about what a huge gamble Trump is taking, see

Rachel Reeves' Spring Statement revealed the Office for Budget Responsibility (OBR) has halved the UK's 2025 growth forecast from 2% to 1%. In response, Reeves announced deeper welfare cuts, including freezing the health element of Universal Credit for new claimants until 2030 after a 50% reduction. Cuts to Personal Independence Payments (PIP) eligibility will affect 800,000 people, with an average annual loss of £4,500. These measures are projected to save £4.8 billion by 2030, though 250,000 more people, including 50,000 children, may fall into relative poverty. Defence spending will rise to 2.5% of GDP by 2027 and 3% in the next parliament, funded by a reduction in overseas aid. Departmental budgets will grow by 1.2% above inflation, slightly less than the 1.3% previously forecast, posing significant pressures. Despite criticism from shadow chancellor Mel Stride, Reeves denied this was ‘austerity 2.0’, insisting it would lift families out of poverty.

Rachel Reeves is expected to announce billions of pounds in spending cuts - possibly including welfare - during her spring statement on 26 March. Facing economic challenges and her self-imposed fiscal rules, Reeves cannot borrow for day-to-day spending, leaving cuts as one of her only options. The Treasury is submitting proposals to the Office for Budget Responsibility (OBR) ahead of its economic forecast. Reports suggest that a four-point plan of planning reform, Whitehall cuts, regulation cuts, and welfare cuts will be central to Reeves' strategy. Her fiscal policies require maintaining a £10 billion buffer, yet sluggish growth and rising borrowing costs are forcing difficult decisions. The Government is also bracing for economic impacts from global trade challenges, including Donald Trump’s trade policies. The government faces tough choices between tax hikes or further cuts: the outcome of its decisions will significantly impact public services and financial stability in the coming years.

Donald Trump has imposed a 25% duty on imports from Canada and Mexico and doubled tariffs on Chinese goods to 20%. He says that all three countries have failed to do enough to stem the flow of the deadly opioid fentanyl. These measures could disrupt over $2.2 trillion in trade. China immediately retaliated, announcing new tariffs on US agricultural products and export restrictions on 25 American firms, including those linked to arms sales to Taiwan. Canada and Mexico also pledged countermeasures, with Canada targeting US goods such as beer, wine, and home appliances. Ontario premier Doug Ford even suggested halting nickel shipments and electricity exports to the USA. China, already facing heightened tariffs on semiconductors and electric vehicles, expressed frustration, accusing the US of violating trade agreements. With trade tensions escalating, global markets remain uncertain as major economies brace for economic fallout.

Despite government pledges to lower the cost of living, UK energy bills remain the highest in Europe, as households face another price hike. From April to July, Ofgem’s energy price cap will increase by 6.4%, pushing the average annual bill to £1,847 - a rise of £111 per year. Although wholesale energy prices have dropped due to potential peace talks between Russia and Ukraine, Europe’s gas reserves have been depleted following a cold winter, keeping costs high. Energy firms are offering fixed-rate deals, but experts warn that locking in a contract may prevent customers from benefiting if prices fall later. With 90% of UK households still on standard variable tariffs, millions remain vulnerable to rising costs. The Government insists its plan to make Britain a clean energy superpower will bring long-term relief, but for now, families continue to struggle with rising bills.

Inflation in the UK has surged to 3% in January, reaching a ten-month high, according to the Office for National Statistics (ONS). The rise was driven by higher plane fares, increased food costs, and a sharp jump in private school fees. Analysts had expected a smaller increase of 2.8%. An ONS official explained that airfare prices did not drop as usual after the holiday season, food prices rose, and private school fees jumped significantly due to recent tax changes. Rachel Reeves defended the Government's economic strategy, stating that wage growth is outpacing inflation, putting an extra £1,000 a year in people’s pockets on average. She highlighted her focus on economic growth, cutting regulations, and investing in infrastructure. However, shadow chancellor Mel Stride blamed the Government’s 'record tax hikes and excessive spending', arguing that this rise will cause higher prices, prolonged high interest rates, and financial struggles for families.

The Government has stated it will not immediately retaliate against the renewal of US steel and aluminium tariffs, instead opting for a measured approach. Trade minister Douglas Alexander emphasised the need for a 'cool and clear-headed' response rather than a knee-jerk reaction. The 25% tariffs, set to take effect from 12 March, are designed to reduce foreign imports and boost US steel production. While the UK only exports 10% of its steel to the US, certain specialist suppliers could face severe impacts; the tariffs could also lead to an influx of cheaper foreign steel into the UK, undercutting domestic manufacturers. In response, UK Steel and unions are urging the Government to increase domestic steel purchases and protect jobs. Other nations, including Canada and the EU, have condemned the tariffs and vowed retaliatory measures, while the UK remains committed to diplomatic engagement. Donald Trump, who imposed similar tariffs in 2018, has indicated no exemptions this time, except possibly for Australia.

Major lenders Santander and Barclays have introduced mortgage deals below 4%, signalling increased competition in the sector. These offers follow expectations that the Bank of England will continue to cut interest rates, allowing lenders to lower borrowing costs. Currently, the average two-year fixed mortgage rate is 5.48%, and the five-year average is 5.29%, but further declines are expected as lenders adjust to market trends. 800,000 fixed-rate mortgages under 3% are set to expire annually until 2027, meaning many homeowners will still face higher monthly payments. However, with the Bank of England expected to cut rates further, experts predict continued mortgage rate reductions, offering relief to borrowers. Financial experts are advising homeowners to review their options and switch to better deals where possible. The Bank of England reports that the UK economy grew slightly, by 0.1% in the last quarter of 2024. See