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Wall Street has dropped after it was revealed that there was weak demand in a auction of US government debt.
The S&P 500 has lost 1.3pc today, while the Dow is down 1.7pc and the Nasdaq is weaker by 1.1pc.
George Saravelos, of Deutsche Bank, said: “The market has reacted very negatively to a poor US Treasury auction.
“The most troubling part of the market reaction is that the dollar is weakening at the same time. To us this is a clear signal of a foreign buyer’s strike on US assets and the associated US fiscal risks we have been warning for some time. At the core of the problem is that foreign investors are simply no longer willing to finance US twin deficits at current level of prices.
“It is hard for US equities to stay resilient in this environment.”
Investors are worried about the Trump administration’s tax cut and spending bill, with Republicans still divided over the details of the legislation. Some continue to argue the bill does not sufficiently cut spending.
Analysts said the bill could add between $3 trillion and $5 trillion to the federal government’s $36.2 trillion (£27 trillion) debt.
The effective interest rate on US government debt surged this evening, with 20-year Treasuries up at 5.122pc, from 4.998pc yesterday. The 30-year Treasuries are yielding 5.088pc, up from 4.979pc yesterday. Meanwhile, 10-year Treasuries rose to 4.595pc from 4.491pc yesterday.
Read the latest updates below.
08:12 PM BST
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05:45 PM BST
Britain ‘faces worst growth among world’s biggest economies’
The UK will be the slowest growing of the world’s biggest economies this year, Morgan Stanley has predicted.
In a note issued on Tuesday, the Wall Street bank forecast that the British economy would expand by just 0.8pc this year, versus 1pc for both Japan and the eurozone and 1.5pc for the US. China’s economy is expected to grow at 4.5pc and India’s at 6.2pc.
The dour forecast comes despite the UK recording the fastest growth in the first quarter of this year out of all G7 countries.
Morgan Stanley’s prediction is unusually pessimistic. Most economists expect the UK to outpace the eurozone this year.
The bank did not expand on its UK forecast but, in a separate note issued last week, it said government spending was a potential “upside risk” to its 2025 forecast. This means heavy spending by Labour could cause Britain to perform better than it expects.
While it is downbeat on 2025, Morgan Stanley expects UK growth to bounce back next year, with GDP expanding 1.3pc. That would trump the US at 1pc, the eurozone at 0.9pc and Japan at 0.5pc, and is more bullish than the consensus estimate in the City for the UK of 1.2pc.
05:27 PM BST
Bitcoin hits record high
Bitcoin hit a record high on Wednesday, driven by a wave of optimism over cryptocurrency legislation in the United States.
The world’s most popular cryptocurrency surged to reach an all-time peak of $109,499.80, surpassing its previous high set on January 20 when Donald Trump was sworn in as US president.
Bitcoin has jumped in recent weeks as expectations that industry-backed legislation would successfully pass through the US Congress.
Michael Novogratz, of Galaxy Digital, told Bloomberg TV: “It’s the shift of approach from Gary Gensler [the former head of the Securities and Exchange Commission] and the SEC to this Trump administration, which has embraced our industry.
“That freed up the animal spirits both here and abroad.”
Mr Trump has championed cryptocurrencies and cheered as Bitcoin hit $100,000 for the first time in December. He posted on Truth Social: “Congratulations Bitcoiners … You’re welcome!!!”
In March, Mr Trump said that Bitcoin would form part of a US strategic reserve of cryptocurrencies.
04:46 PM BST
FTSE struggles amid inflation worries
The London Stock Exchange struggled today after higher than expected inflation signalled that interest rates could remain at their current level for longer. The FTSE 100 closed up 0.1pc while the domestically focused FTSE 250 lost 0.7pc.
Miners were among the biggest risers after gold and silver prices rose, while JD Sports shares sank after sales dropped.
04:20 PM BST
Jobs at risk as Harvey Nichols considers axing hampers and own-brand food
Dozens of jobs are at risk at Harvey Nichols as part of an overhaul that could see the luxury retailer stop selling its own food products and hampers.
The department store business is undergoing a three-year turnaround programme under recently-appointed boss Julia Goddard in order to return the firm to profit.
The company has told staff it is launching a consultation that will affect around 5pc, or roughly 70, of the group’s 1,400-strong workforce.
Bosses have put forward restructuring proposals, which could see it stop a number of “non-core” parts of its business.
It said it is therefore looking at potentially shutting down its own-brand food products, hampers and corporate food offering, and its online food marketplace.
It comes as Ms Goddard, who became chief executive last year, seeks to sharpen its fashion, beauty and hospitality offering to help improve its fortunes.
Harvey Nichols said it has secured a raft of new fashion brands and is pushing forward with a major refurbishment of its Knightsbridge store to attract more customers.
A company spokeswoman said: “Harvey Nichols is undergoing a significant transformation to re-establish the brand as a British icon and flagship destination.
“As part of this transformation, we have already secured 75 new fashion brands for 2025.
“In line with this strategy and the focus on our core fashion and beauty edit, we are putting forward proposals regarding the non-core areas of our business and the restructuring of some of our teams.
“We are committed to supporting all affected employees through this transition and ensuring the long-term success of our business.”
04:09 PM BST
Gold and silver surge amid worries over inflation and overspending
Silver has jumped 1.2pc and gold by 1pc today on concerns over inflation and increased debts by major governments.
Russ Mould, investment director at AJ Bell, said: “Gold is nudging its way back to $3,300 an ounce, after a pullback from April’s all-time high, and silver is having another go at forging above $33 an ounce, which would be the next step on a potential return to last October’s 12-year high near $35.
“The fresh gains by silver are helping to push Fresnillo and Hochschild Mining [higher on the London Stock Exchange], as the higher silver goes, the higher their profits and cash flow are likely to be.”
03:37 PM BST
Weak jobs market will limit pay rises, says economist
Britain’s weak jobs market will prevent an inflation spike from supporting major wage growth, a leading economist has said.
Paul Dales, chief UK economist at Capital Economics, said: “The bigger-than-expected jump in CPI inflation in April suggests that the persistence of inflation is a bit stronger and/or businesses are passing on more of the recent rises in taxes than we thought. Either way, the rebound in inflation is going to be bigger than we previously thought.
“That casts some doubt on expectations that interest rates will continue to be cut gradually...
“We still think that the softer labour market will prevent this rebound in CPI inflation from supporting wage growth like it did in 2021-23. But the risks of that happening have risen. The Bank was never going to cut interest rates at the next meeting in June. But the chances of a cut at the following meeting in August are now a little lower.”
03:30 PM BST
Pound remains stronger as market bets on slower rate cuts
The pound remains up against the dollar this afternoon after inflation figures suggested that interest rates could remain higher for longer.
Meanwhile, the dollar fell for a third day against a range of currencies, after Donald Trump failed to convince Republican holdouts to back his sweeping tax bill.
Sterling is up 0.2pc against its American rival, while the US dollar index (the US currency against a basket of major currencies) has fallen 0.6pc.
David Morrison, an analyst at Trade Nation, said: “The British pound climbed sharply following the release of hotter-than-expected UK inflation data. Sterling jumped 0.5pc against the US dollar before pulling back.
“The initial move reflected a shift in market expectations around the Bank of England’s policy path as inflation proves stickier than anticipated. This has reduced the likelihood of another rate cut at the Bank’s August meeting. Sterling made similar gains against the euro, before pulling back.”
01:57 PM BST
Marks & Spencer leads FTSE 100 despite cyber attack chaos
Marks & Spencer shares soared on Wednesday, putting the high street retailer in pole position on the FTSE 100 despite it suffering from a devastating cyber attack.
Shares in M&S were up by around 4pc in the early afternoon as investors cheered the retailer posted its highest profits since 2010 in the 12 months to March.
The rally came despite bosses warnings that it faces a hit of as much as £300m from a cyber attack, which has left it struggling with availability across its stores in recent weeks.
The British benchmark index was up 0.03pc on Wednesday as it approached 2pm.
Rival retailer JD Sports was the biggest faller on the FTSE. Shares in JD fell by more than 8pc after the company warned over the potential impact of US tariffs.
01:18 PM BST
Dollar falls amid worries over Trump tax bill
The dollar dropped for its third day against numerous currencies on Wednesday amid uncertainty over Donald Trump’s efforts to push through a major tax bill.
Mr Trump has been pushing to convince Republican holdouts to back his so-called “big, beautiful bill” of sweeping tax cuts.
It follows a downgrade of the US sovereign by Moody’s last week, while mounting concerns over the US’s mountain of debt are further fuelling concerns.
01:00 PM BST
Inflation surges higher than expected – what you’re saying
12:36 PM BST
Badenoch attacks Starmer over inflation in the commons
Kemi Badenoch, the Conservative leader, attacked Sir Keir Starmer over Wednesday’s inflation figures during Prime Minister’s Questions.
She said: “Inflation was 2pc when Conservatives left office. It’s now nearly double that. But when will he recognise that it’s Labour’s budget driving up inflation?”
Sir Keir responded by saying Ms Badenoch “can’t resist grabbing any opportunity to talk the country down.”
He added: “She doesn’t mention the growth figures, the interest rate figures, record investment. Wages up more than prices, 200,000 jobs created, four trade deals.”
She retorted: “He knows that inflation was brought down by us, 2pc, bang on target. We were reacting to a war in Ukraine that brought inflation up all over Europe, while he is doing trade deals with countries like the US and India. Their inflation is going down. It’s going up here.
“We warned him repeatedly that this is exactly what would happen, what his policies would do. We called it ‘Awful April’. The Prime Minister came into office saying that he would tackle the cost of living crisis. He has failed.”
Sir Keir responded: “She talks of their record, the disastrous Liz Truss mini-budget, inflation through the roof, they left a £22 billion black hole. Living standards at an all time low. Energy prices through the roof, mortgages through the roof. Mr. Speaker, we’re taking measures to bring prices down.”
He pointed to the fact that supermarkets welcomed his trade deal with the EU and argued it will bring prices down for consumers.
11:38 AM BST
Trump tariffs will destabilise Europe, warns central bank
The European Central Bank (ECB) has warned Donald Trump’s tariff policies could escalate into a trade war that could squeeze the “fragile” finances of governments in the eurozone, writes Hans van Leeuwen.
ECB vice-president Luis de Guindos used the bank’s semi-annual stability review to take a swipe at the US president’s trade tactics and publicly questioned whether they would fix the problem he aimed to solve.
He warned that Trump-fuelled tensions “could escalate into a trade war” that threatened to sap European growth, stoke inflation and put extra pressure on debt-strapped governments’ budgets.
“While global imbalances remain a long-standing issue in the policy debate, it is not clear that tariffs are the best-placed policy instrument to address them,” Mr de Guindos said in a foreword to the review.
The report lamented that just as the eurozone’s own economic risks had seemed to be easing, “external sources of uncertainty, notably those associated with the unpredictability of a broad range of US policies, have soared”.
“A lack of clarity surrounds several important economic policy domains, including trade, regulatory and fiscal policies, as well as the level of commitment of the new US administration to international cooperation,” the ECB report said.
The ECB’s uncharacteristically direct criticism of Mr Trump comes as the EU scrambles to land a trade deal with the White House.
Besides the Trump administration’s “baseline” 10pc global tariff, the US president set out his plan on “liberation day” last month to impose a 20pc levy on all imports from the EU, later describing the bloc as “nasty”.
A subsequent 90-day pause gives Brussels until early July to try and dial that back, but negotiations with Washington have proceeded only slowly and the European Commission has readied almost €100bn (£84.5bn) of retaliatory tariffs.
A transatlantic trade war could hit not only export-focused companies on the front line, the ECB said, but also sap eurozone confidence and thus “engulf sectors that are less exposed to the direct effects of tariffs”.
Mr de Guindos told reporters that the ECB did not expect a recession, although “growth is going to be low”.
So far, eurozone financial markets have functioned smoothly in response to the initial tariff turmoil, the ECB said. But there was still the risk of disorderly price swings, an increase in credit risk for banks, and a squeeze on “fragile” government finances – particularly as European countries boost defence spending.
The ECB warned there could be renewed concern about their sustainability of the huge debt piles of eurozone governments and their budget deficits. If government bond yields went up, this could “spill over” into higher borrowing costs for companies and banks, it added.
The bigger concern would be any market loss of confidence in the US government bond market. Mr de Guindos told reporters that US fiscal policy was “one area of concern for financial stability”.
The ECB review said there had been some “atypical shifts away from some traditional safe havens like US Treasuries and the US dollar”.
Some of the sell-off in US government bonds might have been a technical trading response to market volatility, the ECB said. But it “might also have reflected perceptions of a more fundamental regime change, with investors seeming to reassess the riskiness of US assets”.
If this was the case, it “would have potentially far-reaching consequences for the global financial system”, in which the US dollar and sovereign bond market are typically a safe haven and anchor.
Mr de Guindos said that if the EU continued to integrate its markets, the euro could play an increasingly important role as a global reserve currency.
11:26 AM BST
JP Morgan economist: door to a June rate cut ‘appears shut’
Allan Monks, an economist at JP Morgan, has added his voice to a chorus of city experts predicting that interest rates will remain where they are through June.
He said: “The surprise will reinforce the Bank of England’s hawkish bias. The door to a June cut appears shut and the likelihood of an August cut (still our base case) has shifted lower.”
10:58 AM BST
The best mortgage rates on the market right now
As hopes of more than one rate cut this year fade in the wake of rising inflation, securing a good deal on a mortgage is more important than ever.
The heady days of rock-bottom rates and near-free loans are long gone. The difference of a few percentage points between deals can cost you thousands of pounds over the length of the mortgage.
To help you navigate this, Telegraph Money has launched mortgage “best buy” tables with live data, so you can stay informed about the latest rates.
10:52 AM BST
Reform UK deputy accuses Labour of ‘breaking Britain’ with budget
Richard Tice, the deputy leader of Reform UK, hit out at the government following Wednesday’s inflation data and called on the Chancellor to change course on tax rises.
He said: “Labour are breaking Britain due to their disastrous budget and woeful economic mismanagement.
“Hard-working Brits are feeling the pinch and will continue to do so until Starmer and Reeves admit their tax rises have failed and finally reverse course.”
10:42 AM BST
Labour has unleashed a new wave of inflation on households
Inflation has jumped to its highest rate in more than a year following a sharp increase in household bills.
Prices, as measured by the consumer prices index, rose by 3.5pc in the year to April, according to the Office for National Statistics (ONS).
Statisticians blamed one-off increases in gas, electricity and water bills for the steep rise.
However, businesses have warned that Rachel Reeves’s record tax raid will force them to raise prices further, piling more pressure on households and keeping interest rates higher for longer.
10:23 AM BST
Inflation jump ‘will hurt hospitality sector’
One area where inflation has eased is the hospitality sector: restaurant and hotels inflation cooled to 2.7pc in April, according to the Office for National Statistics (ONS).
However, Saxon Moseley, head of leisure and hospitality at consulting firm RSM, said the prospect of higher food prices would deal a blow to firms that have already been hit by the Chancellor’s tax raid on employers.
He said: “When factoring in alcohol, the rise in food inflation jumps to 4pc year-on-year, which is yet another cost increase that will put a dent in operators’ margins.
“Unfortunately, there’s only so much they can keep increasing prices, particularly as consumer confidence is already fragile. Operators must tread a fine line between passing on these costs and not putting consumers off.”
Kate Nicholls, the chief executive of trade body UK Hospitality, added: “It’s clear that, on top of continuing hikes in utility prices, the raft of additional costs from the Budget, which came into force in April, is putting unsustainable cost pressure on already strapped businesses.
“Regrettably, that forces up prices and so fuels inflation. This strengthens the need to tackle the ongoing cost of doing business crisis. The Government must look to bring down costs for businesses and it’s critical that the Bank of England meets market expectations to lower interest rates in the coming months.”
10:18 AM BST
UK bonds fall as inflation soars
UK bonds have dropped in the wake of data showing higher-than-expected inflation in April.
Two-year gilt yields rose by three basis points to a seven-week high of 4.08pc on Wednesday as the pound surged to its strongest point since early 2022.
10:05 AM BST
Oil prices soar amid reports Israel plans to strike Iran
Oil prices surged in response to reports that Israel is preparing to strike Iranian nuclear facilities, putting the deal that Donald Trump has been pursuing with Tehran at risk.
Brent prices leapt by around 1.4pc, bringing the cost of a barrel to $66.24. West Texas Intermediate also surged by as much as 3.5pc.
It comes after CNN last night reported that, according to several US intelligence officers, Israeli leaders were considering striking Iran, in a move that would squeeze supply and spark further unrest in the region.
The Middle East supplies around a third of the world’s crude oil. Nuclear talks between the US and Iran could also pave the way for more barrels being released, however Israel’s plans have thrown this into question.
Warren Patterson and Ewa Manthey at Dutch bank ING warned: “Such an escalation would not only put Iranian supply at risk, but also in large parts of the broader region.
The prospect of higher oil prices will add to worries over inflation in the UK.
09:40 AM BST
Traders predict just one more rate cut this year after inflation blow
Traders are betting that the Bank of England will cut interest rates just once more this year after inflation surged to its highest point since early 2024.
Traders now think it is likely there will be just one more quarter-point cut from the Bank after higher-than-expected inflation raised concerns about whether the pace of price rises is too strong.
Money markets indicate there is now a 50pc chance of a cut to rates in August, down from 60pc before the shock inflation data. The pound rose by 0.6pc to its strongest level since February 2022 on the back of the news.
Sanjay Raja, chief economist at Deutsche Bank, said: “This will almost certainly be the death knell for a June rate cut, however. While August still seems likely in our view, it certainly has become a lot more interesting and balanced.”
It comes after the Bank of England’s chief economist Huw Pill said on Tuesday he believed interest rates had come down too quickly. Mr Pill, a key member of the Bank’s Monetary Policy Committee (MPC), voted against reducing rates from 4.5pc to 4.25pc earlier this month.
Luke Bartholomew, deputy chief economist at Aberdeen, added: “We think a quarterly profile of rate cuts remains appropriate, but the chance of the easing cycle speeding up any time soon has fallen.”
Costas Milos, professor of finance at the University of Liverpool, said: “The inflation jump to 3.5pc in April matches the peak in inflation which the Bank of England expects for the period from July to September 2025 period. This is telling us how bad today’s inflation reading is.
“The problem is that the big increase in inflation will create a momentum in inflation which will be fuelled further by Trump’s tariff wars. In my view, this very momentum in inflation might push inflation to as high as 4pc, that is, way above the Bank of England’s forecast.”
He added: “The majority of MPC members will most likely vote to keep interest rates at 4.25pc in June. That said, I would not be surprised if a vote is cast in favour of a slight increase in interest rates to 4.5pc.”
09:02 AM BST
No more interest rate cuts this year, warns private bank
The Bank of England will not cut interest rates again this year as inflation will he driven up by Rachel Reeves’s decision to push up employer wage costs, according to an economist at a private bank.
Andrew Wishart, senior UK economist at Berenberg, said strong underlying inflation in services and wage growth would prevent further reductions in interest rates from their present level of 4.25pc.
He said: “With pay growth still at 5-6pc year-on-year and the employer National Insurance (NI) contributions hike effectively raising companies labour costs by another two percentage points it is difficult to see price pressures cooling much over the remainder of the year.”
He said that survey data indicated that services inflation could rise further.
“That would be evidence that demand is solid enough for companies to pass on increases in their costs, and force the Bank of England to take an extended pause in their cutting cycle until services inflation is on a downward path again.”
08:45 AM BST
Pound rises as economists expect caution over rate cuts
The value of the pound jumped as hopes for interest rate cuts were rocked by the stronger-than-expected jump in inflation.
Sterling was up 0.3pc against the dollar to $1.343 after the consumer prices index jumped from 2.6pc to 3.5pc, which was higher than analyst forecasts.
Rob Wood, chief UK economist at Pantheon Macroeconomics, said inflation was “likely” to average around 3.5pc this year, although the latest jump was down to “erratic” factors such as travel prices.
He added that Donald Trump’s trade war could yet slow growth enough to ease inflation.
Megan Greene, a member of the rate-setting Monetary Policy Committee (MPC) at the Bank of England, has said she expects tariffs to bring down inflation in Britain.
But Mr Wood warned the US president “seems to be walking back his more ruinous tariffs”.
He said: “We think the MPC will have to proceed cautiously. We stick with two more rate cuts this year, but are very close to reducing that to only one.
“Cuts on a precise quarterly schedule — August and November — are also far from certain. Opportunistic ‘skips’ by the MPC are possible.”
08:21 AM BST
UK markets drop after inflation blow
The FTSE 100 declined at the start of trading after official figures showed inflation surged faster than expected in Britain.
The UK’s flagship stock index fell 0.2pc to 8,767.88 while the mid-cap FTSE 250 dropped 0.6pc to 20,962.08.
08:08 AM BST
Inflation figures ‘deal blow to prospective home purchases’
Peter Stimson, director of mortgages at lender MPowered, warned the jump in inflation would deliver a blow to prospective home buyers.
He said: “The swaps market - which determines mortgage interest rates - had already been pricing in a jump in inflation today and a delay in the next base rate cut. But with Britain’s inflationary problem back with such vengeance, the odds on a base rate cut in August have lengthened too.
07:56 AM BST
‘Concern’ over rising food and drink prices
The Food & Drink Federation (FDF) it is concerned to see food and non-alcoholic drink inflation climbing to 3.4pc as per the ONS data.
Six categories of food and drinks saw prices rise in double digits: butter (19.9pc), edible offal (14.7pc), chocolate (14.6pc), lamb and goat (13.8pc) beef and veal (12.2pc), and cocoa and powdered chocolate (10.2pc).
The trade organisation forecasted that food and non-alcoholic drink inflation could average 4.3pc over 2025 and could rise by as high as 4.8pc by the end of the year.
Its director of sustainability and industry growth, Balwinder Dhoot, said: “Food and drink manufacturers continue to work hard to protect shoppers from rising prices and safeguard the UK’s food security.
“It’s imperative that government reflects the importance of our sector to the UK economy and the nation’s food supply by making growth a top priority in its upcoming food and industrial strategies.”
07:35 AM BST
Inflation jump ‘casts doubt on June rate cut’
Suren Thiru, economics director at Institute of Chartered Accountants in England and Wales (ICAEW), said rising inflation makes the prospect of a cut to interest rates in June unlikely.
He said: “This inflation surge highlights the brutal hit to household and business finances from April’s multitude of eyewatering bill rises and tax hikes, with higher energy costs in particular driving an uncomfortably large increase in the headline rate.
“Rising services and core inflation suggest that the double blow for businesses from the rising National Insurance and National Living Wage has further fuelled underlying price pressures, more than offsetting the downward squeeze from a wilting labour market.”
“While the aftershocks from ‘awful April’ should keep inflation above 3pc for a while, it could start drifting downwards as lower energy bills kick in, assisted by July’s expected fall in Ofgem’s energy price cap.
“These figures probably rule out a June rate cut and while policymakers should view April’s spike as a temporary blip, the size of the increase means an August policy loosening is far from a done deal.”
It comes after Huw Pill, the Bank of England’s chief economist, said on Tuesday he believed interest rates had been brought down too fast, after the Bank’s Monetary Policy Committee (MPC) voted to cut rates from 4.5pc earlier in May.
Mr Pill said: “In my view, that withdrawal of policy restriction has been running a little too fast of late, given the progress achieved thus far with returning inflation to target on a lasting basis.”
“I remain concerned about upside risks to the achievement of the inflation target.”
07:28 AM BST
Reeves to meet Bessent this week in bid to bring down US tariffs
Rachel Reeves and US treasury secretary Scott Bessent will hold talks this week over tariffs imposed by Donald Trump.
The talks, which will take place at the G7 finance ministers’ meeting in Canada, will be Reeves’ first in-person discussions with Mr Bessent since the US and the UK agreed a trade deal earlier in May.
The agreement slashed tariffs on Britain’s car and steel industries but left a 10pc baseline charge on other goods. While hailed as a “full and comprehensive” agreement by Mr Trump, it did not specify when tariff reductions will come into force
07:22 AM BST
Further price pain expected as more than half of firms plan increases, warns BCC
Stuart Morrison, research manager at the British Chambers of Commerce (BCC), said: “Businesses are facing a perfect storm of cost pressures which is fuelling inflation alongside rising household bills. While April’s jump was expected, the scale, to 3.5pc, is concerning.
“With the national insurance hike, minimum wage rise and global tariffs, our research shows 55pc of businesses are expecting to put up prices in the coming months.
“Firms urgently need to see a clear tax roadmap identifying when the burdens of national insurance and business rates will ease. Upcoming strategies on industry, trade and infrastructure must live up to business expectations and help drive investment.”
However, he said Sir Keir Starmer’s ‘reset’ deal with Europe, which was signed on Monday, would be “good news” for businesses.
“Coupled with recent trade announcements with the US and India, it provides a pathway to growth. But with inflation clouds gathering, the Government must accelerate efforts to help business, not ease off.”
07:16 AM BST
Soaring bills pour fuel on inflation
Here’s Grant Fitzner, director general of the Office for National Statistics (ONS), who highlights the effect that soaring bills have had on the rate of inflation.
“Significant increases in household bills caused inflation to climb steeply. Gas and electricity bills rose this month compared with sharp falls at the same time last year due to changes to the Ofgem energy price cap.
07:00 AM BST
5 things to start your day
Good morning
Inflation has soared to 3.5pc in the wake of Chancellor Rachel Reeves’s tax raid.
1) Blow for struggling factories as Starmer ties Britain to EU carbon tax | Trade deal commits UK to emissions caps as industry grapples with sky-high energy costs
2) Spain struck by phone and internet blackouts | Telefonica’s botched system upgrade leaves callers struggling to phone emergency services
3) Thames Water drops plan to pay bosses bonuses from £3bn rescue loan | The Environment Secretary told MPs he was ‘very happy’ the so-called retention payments were withdrawn
4) Ports demand £120m for ‘obsolete’ Brexit border posts | EU trade deal creates unforeseen costs as expensive checkpoints become redundant
5) Nationalised railway faces £1bn blow from cheaper private rivals | Taxpayers will have to bail out state-run operator struggling to compete on ticket prices, report finds
What happened overnight
Major stock indexes eased while longer-dated U.S. Treasury yields inched higher on Tuesday, with investors focused on U.S. fiscal concerns as Congress debated a bill for sweeping tax cuts.
In the US, the S&P 500 fell by 0.39pc on Tuesday, in what marked the end of a six day winning streak. The Dow Jones Industrial Average finished 0.27pc lower, while the Nasdaq 100 index fell 0.37pc.
“The main driver is a consolidation day,” said Briefing.com analyst Patrick O’Hare. “The market has just been so red hot.”
Investors have also been fixated on higher yields in the Treasury market. Moody’s highlighted the deficit last week in a downgrade of the US credit rating.