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America’s Treasury secretary has launched a fight to save the Federal Reserve’s chairman after Donald Trump declared his “termination cannot come fast enough”.
Scott Bessent has urged officials not to move against the central banker, according to Politico, for fear of further destabilising financial markets.
Mr Trump has privately discussed firing Jerome Powell for months and replacing him with Kevin Warsh, a former Fed governor, the Wall Street Journal reported on Thursday night.
The US president launched an attack on Mr Powell yesterday, arguing the official “should have lowered interest rates, like the ECB, long ago, but he should certainly lower them now”.
Mr Trump’s complaints came after the Fed chairman indicated he is in no rush to cut US interest rates from the current level of 4.5pc, particularly given the tariffs unleashed on “liberation day” will raise prices for American households.
“The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” Mr Powell said.
The president called for the Fed chairman to go in a post on his Truth Social website, claiming the chairman is “always TOO LATE AND WRONG”.
Asked about the comment at the White House, Mr Trump insisted he could force out the independent head of the Fed and once again attacked the central bank chief for his policy on interest rates.
“He’ll leave if I ask him to, he’ll be out of there,” the president told reporters. “I’m not happy with him. I let him know and if I want him out, he’ll be out of there real fast, believe me.”
Mr Trump appointed Mr Powell to the post in his first term as president. His criticism of the official now raises concerns for the future of the independence of the central bank and its ability to set interest rates based on economic conditions rather than political expedience.
The Fed chairman has long stated he does not believe the president has the power to oust him before his term at the central bank ends in May of next year.
However, he said he is “monitoring carefully” a forthcoming Supreme Court case regarding the firing of officials in other regulatory agencies.
“I don’t think that decision will apply to the Fed but I don’t know,” Mr Powell said at an event in Chicago.
Mr Trump’s call for the Fed to lower interest rates came as the European Central Bank yesterday cut eurozone interest rates to 2.25pc. Christine Lagarde, the president of the ECB, said the “economic outlook is clouded by exceptional uncertainty” as exporters face “new barriers to trade” amid the trade war.
The head of the International Monetary Fund added to the warnings. Kristalina Georgieva said the global economic watchdog will slash its growth forecasts for the world next week when it publishes new projections including the impact of the US president’s tariffs on imports from almost the entire world.
She said: “Our new growth projections will include notable markdowns, but not recession. We will also see mark-ups to the inflation forecasts for some countries. Trade policy uncertainty is literally off the charts.”
Ms Georgieva highlighted “ships at sea not knowing which port to sail to; investment decisions postponed; financial markets volatile; precautionary savings up”.
It comes as the Government scrambles to find a way to spare Britain from the worst effects of tariffs. Rachel Reeves said she will have “conversations with the US administration” next week as she visits Washington DC for the IMF’s annual meetings.
The Chancellor said: “We are in active negotiations at the moment with our US counterparts on a whole range of issues concerning the tariffs for steel and aluminium, and the cars which of course are at 25pc, as well as the headline tariff rate of 10pc.”
White House officials believe a trade deal with Britain can be finalised within three weeks. JD Vance, the US vice-president, has said Mr Trump will agree a “great” trade deal because of his “cultural affinity” with Britain.
Read the latest updates below.
09:17 PM BST
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09:03 PM BST
Wall Street closes with a mixed picture on calmer day
The S&P 500 rose on Thursday, lifted by drug giant Eli Lilly and Apple, as investors weighed up progress in US trade negotiations with Japan, on the one hand, against concerns about higher for longer interest rates.
In preliminary data for the day, the S&P was up 1.1pc at its close 9pm, while the Nasdaq fell 0.1pc and the Dow Jones fell 1.3pc.
Eli Lilly surged 16% after the drugmaker said its experimental pill worked as well as blockbuster drug Ozempic to lower weight and blood sugar in a trial of diabetes patients.
Apple climbed 2pc, with the iPhone recovering from some of its recent deep losses.
However, the Dow was pulled down by health giant UnitedHealth falling 22pc.
08:05 PM BST
Trump held Mar-a-Lago meetings on firing Powell
Donald Trump has spent months privately talking about firing the Fed chairman, according to a report.
The Wall Street Journal reported that the US president has held meetings at Mar-a-Lago in Florida on whether to attempt to oust Jerome Powell before his term ends in 2026. However, sources said that he has not yet made a final decision.
The paper said that Mr Trump had spoken to Kevin Warsh, a former Fed governor, among others. Mr Trump reportedly has considered appointing Mr Warsh to the role.
07:51 PM BST
Wall Street rises on hopes of trade deals
Wall Street is rising this evening on its final day of trading in a holiday-shortened week.
The benchmark S&P 500 is up 0.8pc and the Nasdaq is up 0.4pc. However, the Dow Jones Industrial Average, of 30 leading US companies, is down 0.8pc after one of its members, UnitedHealth, plunged 23pc.
The health care giant reported profit and revenue for the latest quarter that fell short of analysts’ expectations, and it also slashed its forecast for financial results this year.
Uncertainty still remains high about tariffs, but Donald Trump today offered some encouraging signals that negotiations with other countries could lead to lower tariffs, which is what Wall Street is hoping for.
“Had a very productive call with the President of Mexico yesterday,” Trump said on his Truth Social network. “Likewise, I met with the highest level Japanese Trade Representatives. It was a very productive meeting. Every Nation, including China, wants to meet!”
07:34 PM BST
IMF: both US and China need to move to fairer trade
Kristalina Georgieva, the head of the International Monetary Fund, has said that the US and China need to reduce uncertainty and agree on a fairer, rules-based trading system.
Ms Georgieva, speaking at an event in Washington, said: “This feeling of unfairness in some places fits the narrative, ‘we play by the rules while others game the system without penalty.’”
She said that both the US and China had grievances around trade rules, but added: “We would like to see a reduction in uncertainty, and it is hard to get there if the two largest economies are still finding their footing and when, obviously, from the perspective of the world economy, it is important that the result of all this is a more, fairer, rule-based system.”
07:05 PM BST
Trump: Powell will ‘leave if I ask him to’
Donald Trump has suggested that it is up to him whether Jerome Powell stays as Fed chairman.
“He’ll leave if I ask him to, he’ll be out of there”, the US president said.
“I’m not happy with him. I let him know it and, if I want him out, he’ll be out of there real fast, believe me.”
06:55 PM BST
Apple chief lobbied Lutnick over tariffs on iPhones
Apple chief Tim Cook had a phone call with Howard Lutnick, the US commerce secretary, last week about the impact of Donald Trump’s tariffs on iPhone prices, The Washington Post has reported.
Mr Cook also reportedly spoke with other senior figures in the White House. By the end of the week, Mr Trump had agreed to exempt some tech products including smartphones and computers from his tariffs on China.
Wilbur Ross, who was commerce secretary during Mr Trump’s first term, told the paper: “Tim has a very good relationship with the president and rightly so. He has been playing a very careful role in that he obviously has a huge dependency on China but is also hugely important to the US.
“In general, he has a lot of respect because he’s not a public whiner, he’s not a crybaby, but comes with the real voice of reality. It’s no surprise to me that his suggestions are being well received.”
The Telegraph has approached Apple and the US Department of Commerce for comment.
06:25 PM BST
FTSE 100 posts biggest weekly gain in over 2 years
The FTSE 100 index has posted its biggest weekly gain since October 2022 today, ahead of the Easter break.
However, the index closed flat after quiet trading today.
The mid-cap FTSE 250 index closed this afternoon down 0.1pc, but was also higher on the week, with the biggest such jump since January.
06:20 PM BST
European shares clock small losses after rates cut as expected
European shares have closed slightly lower after the European Central Bank eased borrowing rates as expected.
The pan-European Stoxx 600 index ended 0.1pc lower, although they clocked a roughly 4pc weekly jump in a holiday-shortened week.
Trading volumes were relatively small on Thursday ahead of a four-day weekend on account of Good Friday and Easter Monday.
The European Central Bank cut interest rates for the seventh time in a year, bringing its key rate to 2.25pc in a move to prop up confidence as tariffs curb trade.
“With so much uncertainty and inflation finally returning to target, the last thing the ECB wants to do is loosen too early and jeopardise that trajectory,” HSBC economists said.
“And while looser policy can help counter a global slowdown, it can’t do much to influence US trade policy or fix any associated damage to supply chains, or even push firms to borrow more to invest despite the uncertainty.”
Analysts have pared their forecasts for European corporate profitability as tit-for-tat tariffs have dimmed the global growth outlook, triggering market volatility that is reminiscent of the early days of Covid-19.
The Stoxx 600 is down about 10pc from its March record closing high, and more than 5pc down from levels seen before Trump’s now-delayed reciprocal tariffs sparked a global market rout.
06:13 PM BST
Louis Vuitton owner hits out at Brussels as he warns over trade war
European governments urgently need to ease tensions with the United States over Donald Trump’s tariffs, luxury goods billionaire Bernard Arnault has said, adding it would be “Brussels’ fault” if no solution is found.
“European countries should try to manage these negotiations, and not leave them to bureaucrats,” the boss of LVMH told shareholders.
“Europe is not run by a political power, but by a bureaucratic power that spends its time issuing regulations that are unfortunately imposed on all member states and that penalise our business sectors.”
Mr Arnault linked current market turmoil to global trade tensions and said LVMH’s business would suffer.
US tariffs could include a 20pc charge on European fashion and leather goods and 31pc for Swiss-produced watches if fully applied. Last week, Mr Trump paused his reciprocal tariffs on most countries for 90 days, but maintained a general 10pc levy.
In January, Mr Arnault - who is France’s richest man - praised Trump for boosting economic growth and entrepreneurship and referred to a “wind of optimism” after attending his inauguration.
Since then, investor concerns over the possible economic damage of Trump’s trade policies have dragged LVMH’s shares 36% lower, reducing the group’s market capitalisation by more than 100 billion euros ($114 billion).
France’s LVMH has for decades been the world’s dominant luxury group - known for products such as Moët & Chandon Champagne, Hennessy Cognac, Louis Vuitton handbags and Dior perfumes - but this week lost its title as the world’s largest luxury company to rival Hermès.
05:44 PM BST
‘No rush’ to reach trade deals, says Trump
Donald Trump has said he is in “no rush” to reach any trade deals because of the revenues his tariffs are generating, but suggested that it would be easy to find an agreement with the European Union.
While meeting with Italian premier Giorgia Meloni at the White House, he talked up the chances of cutting a tariff deal for the European Union.
“I’m sure we can make a deal, and I’m here to help with that,” Ms Meloni told reporters.
Mr Trump said he “100pc” believed Washington and Brussels could reach a deal but added it had to be a “fair deal”.
Ms Meloni has criticised Mr Trump’s “wrong” 20pc duties on EU exports - which he later suspended for 90 days - but has looked to maintain ties with the US president despite the chaos caused by his tariffs.
Described by Mr Trump as a “fantastic leader” who shares many of his conservative views, Ms Meloni is the first European leader to meet with Trump since his trade war with the bloc began.
Read our live blog on Giorgia Meloni’s meeting at the White House here.
05:31 PM BST
Markets calmer after progress on trade talks
Global markets are calmer today after traders took some heart from trade talks between the US and Japan.
However, the positive mood was curbed by Federal Reserve chairman Jerome Powell saying the Fed would be cautious about cutting interest rates.
With a holiday weekend ahead, investors were reluctant to make big bets.
Donald Trump unexpectedly joined talks in Washington on Wednesday with a delegation from Japan, saying later that “big progress” had been made in the discussions with lead Japanese negotiator Ryosei Akazawa.
Mr Trump gave no details, but it did give some support to those investors betting that some of the effects of tariffs will be negotiated away in time.
The S&P 500 is up 0.6pc, the Nasdaq is up 0.2pc and the Dow Jones is down 0.9pc.
Britain’s FTSE 100 closed flat, while France’s Cac 50 fell 0.6pc and Germany’s Dax fell 0.5pc.
05:28 PM BST
Bessent cautions White House not to fire Powell
Scott Bessent, the US treasury secretary, has reportedly told the White House not to fire Jerome Powell, chairman of the Federal Reserve.
Sacking the Fed chairman would risk destabilising financial markets, Mr Bessent has repeatedly cautioned, according sources who spoke to Politico.
Donald Trump has frequently lashed out at Mr Powell, who he appointed to lead the central bank in 2018. On social media this earlier today, the US president wrote: “Powell’s termination cannot come fast enough!”
He said Mr Powell “is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’ Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now.”
Despite repeatedly criticising the Fed chairman, an aide told CNN last November that Mr Trump was prepared to let Mr Powell see out his term ending in May 2026.
At the time, Mr Powell said he would refuse to resign if Donald Trump asked him to step down, adding that being fired by the president was “not permitted under the law”.
The comments came after reports that Mr Trump’s aides had drawn up a range of proposals for how monetary policy could be run in a second Trump administration, including rolling back the independence of the central bank and ousting Mr Powell.
Economists believe that independent central banks, such as the Fed and the Bank of England, give markets confidence and promote economic stability. The Fed is accountable to the US Congress, rather than Mr Trump personally.
During last year’s US election campaign, Mr Trump’s rival, Kamala Harris, said: “The Fed is an independent entity, and as president, I would never interfere in the decisions that the Fed makes.”
But Mr Trump has argued that the Fed is making the wrong choices on interest rates.
Earlier this month, Mr Trump publicly demanded that Mr Powell cuts interest rates “and stop playing politics!”
04:51 PM BST
Reeves says UK ‘in active negotiations’ on tariffs
Rachel Reeves has said she will be having “conversations with the US administration” next week as the UK looks to secure a trade deal with Washington.
Asked whether the UK is within three weeks of securing a trade deal with the US, the Chancellor told broadcasters: “Those conversations with our US counterparts are ongoing.
“I will be in Washington next week for the International Monetary Fund annual meetings, their spring meetings.
“I will also be having conversations with the US administration whilst I’m there.
“The key thing for the British Government is always acting in the UK’s national interest, and any deal that’s able to be secured will always have front-and-centre British national interest.”
Asked whether any deal could see the 10pc US tariff on goods lifted, she said: “We are in active negotiations at the moment with our US counterparts on a whole range of issues concerning the tariffs for steel and aluminium, and the cars which of course are at 25pc, as well as the headline tariff rate of 10pc.”
She added: “Getting a deal across a whole range of areas... (is) very important for British industry and British jobs, and that is my focus as Chancellor.”
04:49 PM BST
Swiss watch exports to US soared before Trump tariffs
Swiss watch exports to the key US market soared nearly 14pc in March, as retailers raced to stock up before Donald Trump announced his tariffs on countries worldwide.
Analysts have warned that Switzerland’s watchmaking industry could be among the hardest hit by the 31pc import levies for Swiss goods announced in early April - although they have since been paused for 90 days.
But a baseline 10pc tariff on all US imports still took effect on April 5.
In March, Swiss watch exports to the United States jumped 13.7pc compared to a year earlier, rebounding after a 6.7pc drop the previous month, the country’s watchmakers’ federation said.
“We believe the 14pc increase in US exports is significantly inflated by the tariff chaos, as earlier shipments overseas had already begun weeks ago,” said Vontobel analyst Jean-Philippe Bertschy.
The United States has been the biggest market for Swiss watches since 2021, overtaking Hong Kong and China, which had long been the top markets for the industry.
“The US exports probably reflect Swiss producers pushing product and US retailers pulling ahead of US tariffs in April,” said Jon Cox, an analyst at Kepler Cheuvreux.
But he warned that “every indication out there points to a slowdown in the US market”.
04:42 PM BST
Stock markets are mixed ahead of Easter weekend
Wall Street and European stock markets are a mixed picture this afternoon as traders look towards and extended Easter weekend.
Markets on both sides of the Atlantic will be closed tomorrow, but David Morrison, an analyst at Trade Nation, noted that “Mr Trump doesn’t ‘do’ weekends. So tariff updates can come at any time”.
The S&P 500 is up 0.4pc, the Nasdaq is down 0.1pc and the Dow Jones is down 1.1pc.
The FTSE 100 is flat, while France’s Cac 40 is down 0.5pc and Germany’s Dax is down 0.5pc.
04:21 PM BST
China hints at market intervention after trade war escalates
The number two in the Chinese government, Li Qiang, has hinted at a new economic stimulus package after saying that officials need to shore up market confidence at “critical moments”.
Mr Li told a session of the State Council today that officials “must harness the strength of policies, dare to step outside the norm when needed, and deliver a well-coordinated policy mix to ensure the market truly feels the benefits”.
While China’s economy showed surprising strength in the first quarter, many economists have marked down the outlook for the rest of the year thanks to the US tariff hikes being imposed by Donald Trump.
China’s annual GDP climbed 5.4pc according to figures during the last quarter, thanks in part to Beijing’s consumer subsidies, along with an export surge to get ahead of the tariffs.
Economists at UBS, Goldman Sachs, Citigroup and Societe Generale have lowered their forecasts for the country’s 2025 growth in recent weeks, to around 4pc or lower.
But Mr Li said the government should “at critical moments act early and swiftly, with various measures to positively shape market expectations.”
04:06 PM BST
Trump’s trade war will slash global growth, says IMF
Donald Trump’s trade war will hurt global growth and send inflation surging, the head of the International Monetary Fund has warned.
Kristalina Georgieva said the global economic watchdog will slash its growth forecasts for the world next week when it publishes new projections including the impact of the US President’s tariffs on imports from almost the entire world.
“Our new growth projections will include notable markdowns, but not recession. We will also see markups to the inflation forecasts for some countries,” she said.
“Trade policy uncertainty is literally off the charts.”
Uncertainty itself harms growth, the managing director said, as it results in “ships at sea not knowing which port to sail to; investment decisions postponed; financial markets volatile; precautionary savings up.”
Border taxes then hit economies by pushing up costs of goods and of components used by factories. And over time, productivity is undermined by a lack of competition for businesses and a lack of choice for customers.
The scale of Mr Trump’s tax rises, and the response from nations including China, are also particularly fearsome.
“Putting together all the recent tariff increases, pauses, escalations, and exemptions, it seems clear that the US effective tariff rate has jumped to levels last seen several lifetimes ago. Other countries have responded,” she said.
Carnage in markets risks a financial crunch.
“Protracted high uncertainty raises the risk of financial market stress. Earlier this month, we saw unusual movements in some key bond and currency markets,” said Ms Georgieva, noting the fall in the dollar and rise in US Government borrowing costs. “Such movements should be taken as a warning. Everyone suffers if financial conditions worsen.”
The IMF boss acknowledged that not everyone has benefitted equally from globalisation in recent decades, with the US typically more open to imports than the average country and China ramping up subsidies and other protectionism more than the EU or America since the financial crisis.
But she said the main blocs must all change their ways to balance the global economy, including China boosting consumption, America cutting borrowing, and the EU raising defence spending and improving its competitiveness.
03:57 PM BST
Nvidia slumps further as Trump tariffs hit Big Tech
Nvidia shares fell further today, losing as much as 3.6pc, a day after Donald Trump’s trade war caused them to plunge 6.9pc.
It followed a decision by the US president to curb further the sales of artificial intelligence chips to China, which Nvidia said would hit earnings by $5.5bn (£4.2bn) this quarter.
Stephen Innes, of SPI Asset Management, said that the result of the Mr Trump’s latest move was that “traders got smacked ... and markets buckled hard”.
“Big Tech - the supposed fortress of cash flow - was the casualty ... with Nvidia and its peers eating a face-full of policy shrapnel. China might be the target, but let’s be real: US firms are getting caught in the crossfire”.
Nvidia generated $17bn in China in 2024, 13pc of its total sales.
03:41 PM BST
Armed Forces ban electric vehicles from high-security sites on China fears
Britain’s Armed Forces have banned electric vehicles (EVs) from some high-security military sites over fears that Chinese software embedded in them could be used for spying.
The Financial Times reported workers at RAF Wyton, which is home to the National Centre for Geospatial Intelligence, have been told not to park EVs near the base.
In a written Parliamentary question, Lord Coaker, the defence minister, said: “Our policies and procedures take account of the potential threats from all types of vehicle, not just those manufactured in China, and we have issued appropriate internal direction to all drivers and passengers.”
It comes as China ramps up its sales in the UK market, with Auto Trader predicting the Chinese-branded models could win up to 25pc of the British EV market by the end of the decade.
A Ministry of Defence spokesman said: “Protecting national security is the foundation of everything we do. We have strict security procedures in place to ensure all sensitive information is protected.”
03:26 PM BST
Nvidia boss hopes to ‘cooperate’ with China despite chip export controls
The boss of Nvidia said China was a very important market for the chip giant after the US imposed a ban on sales of its H20 artificial intelligence technology to the world’s second largest economy.
Jensen Huang said his company hoped to “continue to cooperate with China” during a meeting with with the head of the China Council for the Promotion of International Trade, according to state broadcaster CCTV.
He had arrived in Beijing earlier in the day at the invitation of the trade organisation.
Vice premier He Lifeng told Huang that China would welcome more US companies, including Nvidia, to further explore the Chinese market.
His visit comes as the US put new restrictions on China-bound shipments of Nvidia’s H20 datacentre GPUs, the only compliant AI chip the company can sell legally to China.
03:02 PM BST
ECB to cut again in June, economists predict
The European Central Bank will continue cutting interest rates at its next meeting in June, according to economists, after warning about the threat from tariffs.
Mark Wall, chief European economist at Deutsche Bank, said: “The forwarding-looking view on the economy implies an expected shock from tariffs, and the characterisation of ‘exceptional’ uncertainty, implies an openness to further monetary easing assuming the trade shock persists and is borne out in the data.
“We continue to expect another rate cut in June and a terminal rate of 1.5pc by year-end.”
02:41 PM BST
Dow plunges as UnitedHealth issues profit warning
The Dow Jones Industrial Average dropped sharply at the opening bell after insurance giant UnitedHealth issued a profit warning.
UnitedHealth’s shares tumbled 18pc after the company lowered its forecast for the year, pushing the Dow down 462.72 points, or 1.1pc, to 39,206.67.
The S&P 500 and the Nasdaq opened higher amid trade talks between the US and Japans.
The benchmark US stock index rose 29.8 points, or 0.6pc at the open to 5,305.45, while the Nasdaq Composite rose 92.8 points, or 0.6pc, to 16,399.973.
02:35 PM BST
Lagarde warns everything could change before next rate decision
Christine Lagarde said she cannot know whether the European economy has hit the “peak of uncertainty” amid the rapid changes in Donald Trump’s trade war.
The ECB president warned there is a “degree of unpredictability which adds to the uncertainty” in the wake of the US president’s “liberation day” tariffs, which he later put on a 90-day pause for all countries except China.
She said the central bank would have to “stand ready for the unpredictable”.
Pointing out that interest rate decisions are made every six weeks, she said: “Think of the number of changes that have happened in the last six weeks”.
02:21 PM BST
Lagarde: Europe to face ‘rerouting of goods’ from countries worse hit by tariffs
The ECB president said she expects Europe to receive goods from countries subject to higher tariffs from the US.
Christine Lagarde said at her press conference: “There will be some redirection, rerouting of goods that will be supplied by markets that are subject to much higher tariffs, even as we speak now.”
However, she said there was uncertainty over the course of action because there was “the prospect of something that could be far more impactful” and a “series” of possible responses that could be made on tariffs by the European Commission.
She said other factors at play as the ECB makes its next decisions on interest rates would be the recent rise in the value of the euro and the “significant decline in the price of commodities”.
“Suffice to say, there will be a negative impact on growth and the net impact on inflation is less than clear.”
She added that the next ECB meeting would take place in June, before the end of Donald Trump’s 90-day pause of his “reciprocal” tariffs.
02:08 PM BST
Tariffs pose ‘negative demand shock’ to economy, says Lagarde
Christine Lagarde said the impact of inflation would only become clearer over time but warned that it would be deliver a “negative demand shock”.
The ECB president said: “Looking at today and the tariffs debate that is going on, as well as the tariff impact, we know that it’s a negative demand shock.
“We can anticipate that it will have some impact on growth but the net impact on inflation will only become clearer over the course of time.”
She said there were “diverging views over the short-term and the longer-term impact”.
“We have a lot of uncertainty still today,” she said.
However, she added that the decision to cut interest rates by a quarter of a percentage point was unanimous, with “no-one to argue in favour” of a heftier half a point cut in the face of tariffs.
02:02 PM BST
ECB president warns banks ‘more concerned’ for customers
Christine Lagarde said banks had loosened their credit standards as they became “more concerned about economic risks faced by their customers”.
However, the ECB president insisted that the Governing Council which sets interest rates was “not precommiting to a particular rate path”.
01:58 PM BST
Lagarde warns of increasing risk to economic growth
Christine Lagarde said geopolitical tensions remain a key source of uncertainty for the eurozone economy, which faces increasing risks to its growth outlook.
She said the disruption to caused to the global trading order had added to the uncertainty around the outlook for inflation.
01:55 PM BST
Lagarde says eurozone must become more competitive
Christine Lagarde said the European economy had likely grown in the first quarter of the year.
However, she said there was an urgent need to make the eurozone more competitive and resilient.
She said most indicators of underlying inflation are pointing to a sustained return of inflation to the ECB’s 2pc target.
01:52 PM BST
Lagarde: Outlook clouded by uncertainty
Christine Lagarde said the “economic outlook is clouded by exceptional uncertainty” as exporters face “new barriers to trade” amid Donald Trump’s trade war.
The President of the European Central Bank warned consumers “may hold back spending” as the tariff war deepens.
She said the trade dispute had come just as European manufacturing “has shown signs of stability”.
01:45 PM BST
ECB ‘has acknowledged trade uncertainty’
Economists said the ECB’s commentary on its latest interest rate cut “clearly points to further policy easing to come”.
Andrew Kenningham, chief Europe economist at Capital Economics, said:
The statement says the outlook for growth has “deteriorated” due to “rising trade tensions”.
01:38 PM BST
Euro falls as ECB warns over growth outlook
The value of the euro fell after the European Central Bank (ECB) said the outlook for growth “has deteriorated owing to rising trade tensions”.
The single currency was last down 0.3pc against the pound to 85.8p and declined 0.4pc versus the dollar to $1.135.
The ECB dropped the word “restrictive” from its description of its interest rate policy, but also signalled that the European economy faces headwinds:
01:27 PM BST
ECB cuts interest rates amid ‘rising trade tensions’
The European Central Bank (ECB) cut interest rates for the seventh time since last year amid worries that Donald Trump’s tariffs could hit economic growth.
Policymakers cut the deposit rate by a quarter of a percentage point to 2.25pc as inflation dropped to 2.2pc in March, close to the bank’s target of 2pc.
The ECB said in a statement that “the outlook for growth has deteriorated due to rising trade tensions”.
It cited “exceptional uncertainty” about the future economic situation, saying future rate decisions would be taken on a meeting by meeting basis.
01:22 PM BST
Tariffs ‘likely’ to push down UK inflation, say economists
Donald Trump’s trade war will push down UK inflation and could speed up the pace of Bank of England interest rate cuts, economists have said.
Inflation dropped further than expected from 2.8pc in February to 2.6pc in March as tariffs helped lower oil and petrol prices.
Paul Dales, chief UK economist at Capital Economics, said the consultancy expects the pace of price rises to slow over the “growing likelihood of goods that were originally destined for the US turning up in the UK instead”.
He said the number of cargo ship visiting UK ports has risen much more sharply in the first few weeks of April than in April in the previous two years.
As a result, the Bank of England is more likely to look past any persistence in core or services inflation in Britain when it decides whether to cut interest rates, he said.
“We still expect the Bank to slow the pace of rate cuts in August,” Dales said.
“But if there is more evidence that core goods inflation is going to be lower, the Bank may cut rates from 4.5pc now to our long-held forecast of 3.5pc a bit earlier than by the middle of 2026.”
12:56 PM BST
Japan finance minister ‘deeply concerned’ about Trump’s tariffs
Japan finance minister said he is “deeply concerned” about economic fallout from Trump’s tariffs, writes Julia Amann
Katsunobu Kato issued the warning about the world’s fourth-largest economy after the first round of US-Japan trade talks got underway on Wednesday, which Donald Trump personally attended in Washington.
“The recent US tariff measures affect various industries and heighten uncertainty,” he told Reuters.
“We’re deeply concerned they could affect Japan’s economy, as well as the global economy, through various routes such as trade and financial markets.”
Kato said that during talks, Japan should explain how it can help the US reduce their huge trade deficit. The US had a trade deficit with Japan worth 9 trillion yen (£48bn) in the year to the end of March.
Trump said on the social media platform Truth Social: “A great honour to have just met with the Japanese delegation on trade. Big progress!”
Japan prime minister Shigeru Ishiba said the negotiations would not be easy, but that talks had “created a foundation for the next steps”.
12:42 PM BST
BP boss insists oil demand will rise after ‘short-term tariff turbulence’
The boss of BP said global energy demand would continue to rise despite the “short-term turbulence” caused by Donald Trump’s tariff trade war.
The oil giant’s chief executive Murray Auchincloss told shareholders at the company’s AGM that energy “is a growth market and demand has never been higher”.
He said: “There may be some short term turbulence, but we remain convinced the world needs more energy and we are one of a few that can provide that energy to the world as an integrated energy company.”
Auchincloss said BP was now sourcing many of the materials it needed for its US operations, especially steel, from within the US to avoid tariffs.
He also made clear the scale of the company’s renewed commitment to surging oil and gas production, listing a series of new or expanded fossil fuel projects.
He told shareholders he planned to reverse BP’s decline in shareholder value relative to competitors like Shell.
The new or expanding projects include approval for 10 new upstream oil and gas projects, developments in Iraq that would generate 3bn barrels of new oil.
In the Middle Eastm BP planned a natural gas joint venture with Adnoc.
He said: “We recognise the valuation gap between BP and our peers. We intend to close it. We’re going to be simpler and more focused.
“Higher value and higher performing We plan to increase oil and gas investment by a fifth to around $10bn a year.”
12:16 PM BST
FTSE 100 poised for weekly gain amid trade deal hopes
The FTSE 100 was on track for a strong weekly gain amid hopes for a trade deal between Britain and the US.
Britain’s flagship stock index was up 3.2pc so far this week, despite a 0.7pc decline today ahead of the Easter break.
The Telegraph revealed that White House officials believe a trade deal with Britain can be finalised within three weeks
Defence stocks Rolls Royce and BAE Systems slipped 3pc and 2.6pc, respectively, weighing significantly on the FTSE 100.
Precious metals miners were down 1.1pc following eight consecutive days of gains amid surging gold prices..
11:43 AM BST
Xi urges Cambodia to ‘resist protectionism’ as Asia tour continues
Xi Jinping has called on Cambodia to “resist protectionism” and oppose “hegemonism” amid the onslaught of US tariffs.
The Chinese leader made the argument for collaboration in an article published in Cambodian media on Thursday, as Xi rounded off his Southeast Asia charm offensive tour with an appearance in Phnom Penh, Cambodia.
Donald Trump imposed a 49c “reciprocal” tariff on Cambodia earlier this month before pausing the levy until July, while China still faces combined levies of 145pc.
Cambodia has long relied on China, its largest creditor, to invest in its infrastructure projects and has spied opportunities for even closer ties, particularly over plans to build a 180km canal from the Mekong River to the coast of the Gulf of Thailand.
On the eve of Xi’s arrival, Meas Soksensan at the Cambodian finance ministry said: “We expect more cooperation including on infrastructure development.”
Xi has trumpeted the positive impact of the nations’ “ironclad friendship” and pledged to “unswervingly support” Cambodia’s development, but signed no new agreements on this trip.
Instead, he delivered a parting swipe at Cambodia’s scam centres which often target Chinese nationals, either as victims or captive workers.
11:34 AM BST
Trump attacks Fed chairman in row over tariffs
Donald Trump launched an attack on the chair of the Federal Reserve after his warning that the US president’s tariffs risked pushing up inflation.
Trump said the departure of “Too Late” Jerome Powell, who he appointed during his first term in office, “cannot come fast enough” as he pushed for the US central bank to lower interest rates.
The President said Powell was always “too late and wrong” and urged him to lower borrowing costs, as the European Central Bank (ECB) is expected to do at its meeting later today.
The Fed chairman had told the Economic Club of Chicago on Wednesday night that the US administration’s tariffs meant “inflation is likely to go up”, adding that the revenues from the tariffs would partially “come to be paid by the public”.
Trump said Powell had issued a report “which was another, and typical, complete ‘mess!’”
He posted on Truth Social: “Oil prices are down, groceries (even eggs!) are down, and the USA is getting rich on tariffs.
“Too Late should have lowered interest rates, like the ECB, long ago, but he should certainly lower them now.
“Powell’s termination cannot come fast enough!”
The Fed’s benchmark interest rate stands at a range of 4.25pc to 4.5pc, where it has been since December following several rate cuts late last year.
11:24 AM BST
Britain restoring EU trade ties ‘more important’ than US trade deal
Restoring closer trade ties with the EU is “more important” to the wider UK economy than a bilateral deal with the US, an economist has said.
Shreyas Gopal of Deutsche Bank said while “mood music” on trade talks between the UK and the US was sounding “healthy”, it should not eclipse negotiations with the EU which will ramp up at the forthcoming summit in May.
He said: “The relative importance of UK goods trade with the US - and thus of a deal - shouldn’t be overstated, with total trade averaging around 4pc of GDP.
“This compares to around 17pc of GDP for total UK goods trade with the EU.”
Mr Gopal said progress appeared to have been made with the bloc on defence, migration and regulatory alignment but it remained to be seen whether the UK could “thread this needle” between two trade warring allies.
He added: “Over the medium term, restoring closer trade ties with the EU is more important to the wider UK economy than the details of a bilateral deal with the US.”
10:52 AM BST
Why stock markets are defying gravity amid tariff chaos
In most quarters, the writing is already on the wall for the US economy.
Jamie Dimon, JP Morgan’s boss, has said that a recession is “likely”, while Larry Fink, his counterpart at BlackRock, has warned that the downturn may have already begun.
Such gloomy forecasts emerged after Donald Trump unleashed his global trade war, as many fear the US president’s tariffs will hammer growth and sting households.
However, even after trillions of dollars were wiped off stock markets, Wall Street is not running for cover just yet.
In fact, traders are gambling on the prospect of vast profits – despite Trump’s outlandish and erratic policy announcements.
Read how Wall Street traders are spying opportunities amid the wreckage of the president’s trade war.
10:22 AM BST
Euro slips ahead of interest rate decision
The euro declined against the pound and the dollar ahead of an expected cut to interest rates by the European Central Bank.
The single currency lost 0.2pc versus sterling to be worth 85.9p and was down 0.2pc against the greenback to $1.138.
The ECB is all but certain to cut interest rates for the seventh time in a year.
It comes as Italian prime minister Giorgia Meloni heads to Washington for talks with Donald Trump aimed at cooling tensions over US tariffs against the EU.
Kenneth Broux, an analyst at Societe Generale, said: “It’s a bit of a Super Thursday for the euro, for the European bond market, but also for the European economy at large... it could be quite a pivotal moment.”
“We’ll see if Meloni can extract maybe some concessions that lead us to a better kind of bilateral trade position ... if the trade position can somewhat be improved, that means that the ECB can be a little bit more relaxed.”
09:58 AM BST
European stocks slump in run up to interest rate decision
European shares fell ahead of the European Central Bank’s interest rate decision later today, where President Christine Lagarde will be asked about the impact of Donald Trump’s tariff policies.
The pan-European Stoxx 600 index fell 0.5pc but remained on track for a 4pc climb this week.
The Dax in Frankfurt declined by 0.2pc while the Cac 40 in Paris fell 0.3pc.
France’s Hermes was last down 1.2pc after the Birkin bag maker posted a rare miss of analyst forecasts for quarterly sales, joining rival LVMH, which also reported sales below expectations earlier this week.
Spirits maker Pernod Ricard dipped 0.5pc after reporting a fall third-quarter sales, partly hurt by tariffs.
Investors will listen to ECB president Christine Lagarde’s comments at a press conference after the central bank is expected to cut interest rates by a quarter of a percentage point.
Emmanuel Cau, an analyst at Barclays, said: “It’s too early for the ECB to really go much more aggressive on the dovish stance.
“So we do expect cuts and a pretty balanced communication but we don’t think they will over-deliver on what the market is pricing in terms of rate cuts and guidance.
“The market wants to see some progress on trade deals, whether it’s China, Europe or Japan and that will be more important than anything else.”
09:30 AM BST
Companies will use tariff uncertainty as ‘scapegoat’, warn economists
Tariff-induced uncertainty “will be the new Covid” and act as a scapegoat for companies’ underperformance, an economist has said.
Ronald J Epstein at Bank of America said the dust was settling on the initial shock from Donald Trump’s global tariff strategy, which spooked markets, angered trading partners and fuelled concerns over recession, stagflation and consumer demand.
He said: “While we expect most companies in our coverage to have a better pulse on 2Q, the second half of the year is laced with uncertainty.”
Mr Epstein warned investors that companies would likely err on the side of caution in delivering outlooks as it remained to be seen how the tariffs would impact supply chains, costs and consumer sentiment in the commercial aerospace and defence industry.
“There are so many unknowns we expect company provided outlooks for the year ahead to be wide-spread (at best) and be fully recanted (at worst),” he said, adding: “Tariff uncertainty will be the new Covid.
“While we appreciate the current environment is dynamic and incredibly hard to predict, we anticipate tariff uncertainty will be the scapegoat for company specific underperformance.”
08:51 AM BST
Hermes to raise prices to combat tariffs
French luxury group Hermes said it would hike its prices in the US to offset the impact of 10pc import tariffs imposed by Donald Trump.
The group’s finance chief Eric Halgouet said the increases would take effect on May 1.
Halgouet did not say by how much prices would be raised, but he said the move would “fully offset” the tariffs impact.
“It will be a complementary price increase that we are currently finalising, but which will allow us to neutralise this impact,” he told reporters during a quarterly earnings presentation.
Hermes – famous for its Birkin handbag, silk scarves and leather goods – usually raises prices once a year and had already announced worldwide increase of between 6pc and 7pc earlier in 2025.
It overtook French rival LVMH as the world’s most valuable luxury group this week after the share price of the Louis Vuitton maker sank on disappointing earnings.
Hermes, also known for the “H” logo on its belts and other goods, posted global sales of €4.1bn euros (£3.5bn) in the first quarter of 2025, an 8.5pc increase from the same period last year.
However, shares were down 2.4pc as earnings missed analyst expectations.
08:30 AM BST
BP faces stormy AGM as tariffs send oil prices plunging
BP faces a stormy AGM today against the backdrop of tariffs that have sent oil prices plummeting.
Brent crude, the international benchmark, has plunged more than 11pc since Donald Trump announced his “liberation day” tariffs, which have triggered fears of a downturn in the global economy that would impact demand for oil and energy company profits.
BP bosses were already expecting clashes between opposing shareholder groups over the company’s net zero U-turn, plus calls for the chairman to go.
Elliott, the US hedge fund, which holds 5pc of BP’s shares, is leading one group of investors demanding the oil major focus harder on energy production, efficiency and profits.
Earlier this year, such pressure saw BP announce a drastic shift away from renewables in favour of investing more into oil and gas with chief executive Murray Auchincloss saying the oil major had gone “too far, too fast” on green energy.
But other pro-net zero shareholders were angered by the retreat. City giant Legal & General (L&G), also a major BP investor, is demanding the scalp of BP’s chairman over the oil giant’s retreat from net zero.
The FTSE 100 fund manager is refusing to support the re-election of chairman Helge Lund at today’s AGM, to be held at its campus in Sunbury, west London.
Lund has already said the next 12 months would be his last in charge but L&G wants him removed today and will vote against his re-election.
The move follows BP’s recent reversal of its 2020 commitment to green energy, which had included a tenfold increase in low-carbon investment and a 40pc reduction in fossil fuel production by 2030.
Over the five years since then BP had seen its shares plummeting, leaving it increasingly exposed to foreign takeovers.
Lund originally supported that policy, however, a few weeks ago at BP’s capital markets day, he and chief executive Murray Auchincloss reversed it.
L&G said it strongly opposed that decision which “represents a financially material and systemic long-term risk to our clients’ portfolios”.
It added: “We are deeply concerned by the recent substantive revisions made to the company’s strategy, coupled with the decision not to allow a shareholder vote on the newly amended climate transition strategy at the 2025 AGM.”
L&G said it was pleased Mr Lund had decided to step down, but should not delay his departure till 2026.
08:23 AM BST
Former MI6 deputy warns UK-US trade deal could risk ‘trouble’ with China
The former deputy head of MI6 has warned the UK “would be in trouble” if it was to agree a trade deal with the US at the expense of China.
The Telegraph revealed that White House officials believe a trade deal with the UK could be agreed “within three weeks”.
Nigel Inkster said such a deal could negatively impact the UK’s relationship with China, who is a “critical supplier” of pharmaceuticals in both the UK and the US.
He told BBC Radio 4’s Today programme: “If it were the case that we had such a deal, I think it would come with strings, and one of those strings would be an expectation that the UK would get with the programme when it came to China.
“We’ve seen a precursor of this with the Huawei 5G saga, which the Americans said, you cannot use a Chinese company to build the 5G. What needs to happen is that the Government needs to look much more carefully at what constitutes critical national infrastructure, and consider what the risks are in any given sector.
“And one of the areas here that worries me quite a lot is the whole pharmaceutical sector, because China is a critical supplier of many pharmaceutical products. Without them, we would be in trouble.”
Asked if the Chinese government could switch off the supply of vital pharmaceuticals in case of future dispute, Mr Inkster said: “It would be an incredibly powerful lever. China has, I think, a fairly clear track record of readiness to use economic coercion.”
08:13 AM BST
UK markets fall after Powell’s inflation warning
The FTSE 100 fell at the start of trading after the chair of the Federal Reserve warned that US tariffs risked stoking inflation.
The UK’s blue-chip index dropped 0.6pc to 8,227.79 while the mid-cap FTSE 250 declined 0.3pc to 19,200.60.
08:01 AM BST
Ford may raise prices in May unless Trump eases tariffs
Ford was said to be considering raising prices on new vehicles in May unless Donald Trump eases his tariffs against the car industry.
The US carmaker has privately warned American politicians that it will be forced to drastically raise prices if the 25pc tariffs against the sector remain in place, according to Automotive News.
An analysis by the Center for Automotive Research published earlier this month revealed that the duties on motoring imports implemented on April 3 will escalate costs for US carmakers by about $108bn (£81bn) this year.
07:54 AM BST
ECB expected to announce interest rate cut
The European Central Bank is all but certain to cut interest rates for the seventh time in a year later today as policymakers seek to prop up an already struggling economy that will take a large hit from US tariffs.
The ECB has been easing borrowing costs rapidly amid easing inflation and the recent turmoil on global markets.
But President Christine Lagarde is unlikely to offer many clues about the future, sticking instead to her line that uncertainty remains far too great for the bank to commit to anything, and it will decide its next steps as data is published.
While Donald Trump has paused most tariffs, many remain in place and volatility in financial markets has already done damage.
The EU faces tariffs of 20pc if it does not reach an agreement with the US before President Trump’s 90-day suspension is over.
JP Morgan economist Greg Fuzesi said: “Cutting the deposit rate 25 basis points to the top of (the neutral) range should be straightforward given the huge uncertainty and the likelihood that the trade war is not just a supply shock but will also likely hit demand.”
07:45 AM BST
Deliveroo boss ‘mindful’ of uncertainty
Deliveroo has reported a pick-up in the rate of order growth and said it is still confident of hitting its profit guidance for the year, despite being “mindful” of growing economic uncertainty.
The delivery app said order growth sped up to 7pc in the first three months of 2025, an acceleration from 6pc in the final segment of last year.
Meanwhile gross transaction value last year, meaning the total cost of people’s baskets plus delivery fees, was up 9pc compared with the same period in 2024.
Founder Will Shu described it as a “strong start” to the year, adding: “We continue to have confidence in delivering our guidance for 2025 whilst, like many others, remaining mindful of the uncertain macroeconomic environment.”
07:38 AM BST
Taiwan chipmaking giant insists customers unfazed by tariffs
The boss of Taiwan’s chipmaking titan TSMC insisted there had been no change in behaviour from customers since the start of Donald Trump’s tariff war as it left its profit forecasts unchanged.
CC Wei said the company would “continue to closely monitor the potential impact to the market demand” but said the business was enjoying “robust demand from our customers”.
TSMC, which manufactures the world’s most advanced microchips for companies including Apple and Nvidia, revealed profits surged 60.3pc in the first three months of the year to NT$361.56 billion (£8.4bn), which was better than analyst predictions.
The company has been in the cross-hairs of Trump, who has accused Taiwan of stealing the US chip industry, imposing a 32pc “reciprocal” tariff on the country before suspending the levy for 90 days.
However, the US president’s levies have so far excluded the semiconductor industry, although on Sunday he said he would announce something on the industry over the next week.
07:36 AM BST
Gold hits record high as Fed chief warns of tariff inflation risk
Gold surged to a fresh record high after the chair of the Federal Reserve warned Donald Trump’s tariffs risk ramping up inflation.
Bullion rose above $3,357 an ounce after Jerome Powell said the Fed was unlikely to make progress tackling inflation this year because of the president’s tariffs.
Gold had already added another 3.5pc on Wednesday in its best day since March 2023 as the dollar fell to a new six-month low.
Money markets indicate that traders think the Fed will cut interest rates three times before the end of the year in an effort to combat an expected downturn in the US economy.
The Fed chairman told the Economic Club of Chicago on Wednesday night: “The administration is implementing significant policy changes, in particular trade… and the effects of that are likely to move us away from our goals.
“So unemployment is likely to go up as the economy slows in all likelihood and inflation is likely to go up as tariffs find their way and some part of those tariffs come to be paid by the public.”
Michael Brown, an analyst at Pepperstone, said: “Gold remains the only real haven right now.”
He predicted the price of bullion would move higher “especially with demand for assets which provide shelter from political incoherence and trade uncertainty only likely to grow, as the 90 day tariff pause rolls on, with little sign of deals being made”.
07:17 AM BST
Good morning
Thanks for joining me. Gold has hit a fresh record high amid increasing demand for safe havens amid Donald Trump’s tariff turmoil.
Bullion rose above $3,357 an ounce after Fed chair Jerome Powell said the levies would likely push inflation higher.
5 things to start your day
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Trump has unleashed chaos – but stock prices are defying gravity | Wall Street traders are spying opportunities amid the wreckage of the president’s trade war
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White House expects UK trade deal ‘within three weeks’ | Britain is in a good position for a fast agreement because it imports more goods from the US than it exports
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China pounces as Trump turns on Europe | Beijing aims to exploit America’s belligerence and forge closer ties with Brussels
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Tom Stevenson: As stock markets swing, remember: it pays to stay calm | History tells us that unless you sell, falling share prices are just numbers on a screen
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Jeremy Warner: Another of America’s corporate giants falls victim to Trump’s friendly fire | Whatever the reason for tariffs, one thing has become clear: it is China, not the US, that stands to reap the rewards
What happened overnight
Asian stocks edged higher as traders took stock of trade negotiations between the US and Japan.
The Nikkei in Japan rose 1.1pc to 34,299.94 as Tokyo and Washington kicked off talks.
Trump, who unexpectedly joined the negotiations, declared “big progress” in the discussions with lead Japanese negotiator Ryosei Akazawa.
Investors were also digesting comments from Federal Reserve chair Jerome Powell, who warned of the risk of slowing growth and rising prices due to tariffs.
The spotlight stayed on technology shares after a bruising session on Wednesday in the wake of warnings from Nvidia and ASML, and ahead of earnings from Taiwan’s TSMC.
South Korea’s Kospi rose 0.9pc to 2,469.52 while the Taiex in Taiwan fell 0.7pc to 19,338.73.
Wall Street fell last night after the chairman of the US Federal Reserve signalled that it would take longer for inflation to reach its target as a result of Donald Trump’s trade war.
The S&P 500 finished the day down 2.2pc at 5,275.70. The Dow Jones Industrial Average, of 30 leading US companies, fell 1.7pc to 39,669.39, while the tech-heavy Nasdaq dropped 3.1pc.
In the bond market, the yield on 10-year US Treasury nosed edged down to 4.282pc from 4.332pc late on Tuesday.