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President Donald Trump has postponed tariffs on Mexico and Canada that he had imposed earlier this week, the latest twist in fast-shifting trade policy that has shaken financial markets.
The president signed an executive order on Thursday granting an exemption to threatened 25pc tariffs that will last until April 2. The surprise about-turn from the President follows a sell-off on Wall Street amid fears about the impact of tariffs on the US’s economy. Mexico and Canada are the US’s two biggest trading partners.
Mr Trump said he had postponed the tariffs on Mexico “as an accommodation, and out of respect for” Claudia Sheinbaum, the president of Mexico.
He wrote on Truth Social: “Our relationship has been a very good one, and we are working hard, together, on the border, both in terms of stopping illegal aliens from entering the United States and, likewise, stopping fentanyl. Thank you to President Sheinbaum for your hard work and cooperation!”
However, the US president stepped up his personal attacks on his Canadian counterpart. He wrote on social media: “I think that Justin Trudeau is using the tariff problem, which he has largely caused, in order to run again for Prime Minister. So much fun to watch!”
Canadian Liberal party members will select a successor to Mr Trudeau on March 9 after he announced his resignation in January. A national election is expected soon after.
The extension was announced after US commerce secretary Howard Lutnick told CNBC earlier in the day that both countries would probably receive a one-month exclusion.
“It’s likely that it will cover all USMCA [United States-Mexico-Canada Agreement] compliant goods and services, so that which is part of President Trump’s deal with Canada and Mexico are likely to get an exemption from these tariffs,” Mr Lutnick told the broadcaster earlier this afternoon.
The USMCA is a trade deal with Mexico and Canada that covered $1.8 trillion (£1.4 trillion) worth of trade in 2022, including cars, clothing and textiles, and agricultural products. The deal was struck by President Trump during his first term and came into force in 2020.
Mr Lutnick said his “off the cuff” estimate was that the change would involve more than 50pc of the goods imported from Mexico and Canada.
He was speaking shortly after stocks plunged on Wall Street at the start of trading. Donald Trump’s global trade war has alarmed investors just as fears grow that an AI-fuelled bubble on US markets is ready to burst.
The tech-heavy Nasdaq Composite dropped as much as 3.1pc, the benchmark S&P 500 fell up to 2.2pc and the Dow Jones Industrial Average declined by as much as 1.5pc on a roller-coaster week for stocks. However, the markets partially recovered after Mr Lutnick’s comments but still remained down during the day.
Rabobank strategist Matthew Cairns said: “The notion of starting a trade war, which will result in retaliation from the countries that are targeted means there will be additional pressure on the US.
“That is not a great story for equities and earnings growth because US households are going to be poorer.”
Investors were already grappling with a deepening global sell-off in bond markets after Mr Trump shook up the world order with his tariffs and by withholding military aid to Ukraine.
Read the latest updates below.
08:33 PM GMT
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08:21 PM GMT
Trump says there will be no more car industry extensions
Donald Trump said this evening that there would be no exemption for the US car industry from tariffs against Canadian and Mexican imports next month. He said he told car producers their exemption would be a short-term deal.
Mr Trump on Wednesday exempted carmakers from his punishing 25pc tariffs on Canada and Mexico for one month as long as they comply with existing free trade rules.
08:20 PM GMT
Trudeau says real estate logic doesn’t apply to global trade
Justin Trudeau has suggested that Donald Trump is erroneously trying to apply the logic of real estate deals to global trade.
The Canadian prime minister said: “A win-lose between us would actually be worse for them [Americans] than a win-win. That’s true in international trade, in relations between nation states.
“It perhaps is not true in real estate deals, (where) a win-lose is probably better for someone who is experienced in business deals than a win-win.”
08:03 PM GMT
Trump includes Canada in tariff delay
President Donald Trump has postponed tariffs on Mexico and Canada that he had imposed earlier this week, the latest twist in fast-shifting trade policy that has shaken financial markets.
The exemption, which will expire on April 2, covers both of the two largest US trading partners. Mr Trump had earlier only mentioned an extension for Mexico, but the has now signed a tariffs order that covers Canada as well.
06:44 PM GMT
Reynolds to lobby Lutnick tonight over steel tariffs
Jonathan Reynolds, the business secretary, is to lobby his American counterpart this evening as he seeks an exemption for the UK from fresh tariffs on steel and aluminium imports.
The Financial Times reported that Mr Reynolds has promised to “stand up” for British steel companies when he talks to US commerce secretary Howard Lutnick tonight.
He said that it is “very strongly in the US’s interests” to exempt the UK, pointing to “the supply of steel to the US Navy for the submarine programme”.
06:28 PM GMT
Bank of America questions logic of Trump’s plan for cars
The logic behind Donald Trump’s month-long delay to tariffs on US car companies has been questioned by Bank of America analysts.
John Murphy and John P. Babcock said: “For the first time there was some indication by the administration of what they are specifically trying to achieve in the auto industry - the reshoring of auto production and jobs in the US.
“Admittedly, there is some potential for complete vehicle assembly, but building out capacity and staffing a plant would take 3+ years. However, for most auto parts it is not viable as it would be even more expensive to produce in the US than paying the 25pc tariff.”
Yesterday, when the delay was announced, US markets rebounded. But the analysts said: “The market has cheered the news, but it may be too early to claim victory”.
06:01 PM GMT
US Treasury secretary says he’s ‘not worried’ about inflation
US Treasury secretary Scott Bessent has said he is not concerned that President Donald Trump’s tariffs will be inflationary.
“The (Trump) economic programme is a whole-of-government, holistic program,” he told the Economic Club of New York. “Across a continuum, I’m not worried about inflation.”
05:41 PM GMT
Trump considering ‘all in’ sanctions on Russia
The US will go “all in” on sanctions against Russian energy if helps cause a ceasefire in Ukraine, US Treasury secretary Scott Bessent has said.
Sanctions on Russia “will be used explicitly and aggressively for immediate maximum impact” at Donald Trump’s guidance, he said in comments reported by Bloomberg.
He also said the US would increase sanctions on Iran to “shutdown” the country’s oil industry. “Making Iran broke again will mark the beginning of our updated sanctions policy,” he said.
05:38 PM GMT
Trade deals ignored the real American Dream, says US Treasury secretary
Designers of trade deals lost sight of the American Dream, US Treasury secretary Scott Bessent said this afternoon.
He said: “Access to cheap goods is not the essence of the American Dream. The American Dream is ... the concept that any citizen can achieve prosperity, upward mobility, economic security. For too long, designers of multilateral trade deals have lost sight of this.
“International economic relations that do not work for the American people must be re-examined.
“This is what tariffs are designed to address – levelling the playing field such that the international trading system begins to reward ingenuity, security, rule of law, and stability – not wage suppression, currency manipulation, intellectual property theft, non-tariff barriers, and draconian regulations.”
He admitted that tariffs would be inflationary, saying they would deliver a “one time price adjustment”. But he added: “For those who say, ‘Oh, the tariffs are a tax, and they’re inflationary.’ So you’re saying taxes are inflationary? Which I’d like to challenge a lot of my Democratic friends to.”
05:22 PM GMT
FTSE 100 drops further amid tariff uncertainty
The FTSE 100 fell again today as investors digested the effect of US tariff announcements from earlier in the week.
London’s blue-chip index dropped 0.8pc.
It comes days after US President Donald Trump continued rolling out his aggressive trade policy against Canada, Mexico and China.
European stocks had been given a temporary reprieve on Wednesday evening, when Mr Trump temporarily spared car manufacturers from tariffs on Canada and Mexico.
But concerns over the wider uncertainty caused by the policy persisted, experts said.
Dan Coatsworth, investment analyst at AJ Bell, said: “There wasn’t any bad news to cause a minor sell-off, it’s just one of those days where investors reassessed their portfolios given the uncertain economic and geopolitical backdrop.”
Meanwhile, US shares were also down as Mr Trump’s tariff plan “leaves more questions than answers, clouding the outlook for the US economy,” he added.
The S&P 500 was down 1.1pc while the Dow Jones had fallen 0.6pc as UK markets closed.
05:06 PM GMT
US and European stocks gyrate on tariffs and growth
US stocks fell this afternoon as investors worried over the impact of tariffs on inflation and growth but eurozone shares advanced on a rate cut and spending optimism.
Wall Street’s main indices wobbled as Donald Trump suspended most tariffs on Mexican goods for a month.
“Indices were trying to bounce off their earlier lows after Howard Lutnick, the US Secretary of Commerce, said that the tariff reprieve is likely to include all USMCA products,” said City Index analyst Fawad Razaqzada, referring to the free trade agreement that links Canada, Mexico and the United States.
US stocks had bounced higher Wednesday after the Trump administration delayed tariffs on cars and car parts imported from Canada and Mexico for one month.
Wall Street’s main indices still remained lower this afternoon, however.
In Europe, Frankfurt’s Dax index hit a new record as plans for a massive German defence and infrastructure investment programme stoke optimism for pulling the eurozone’s largest economy out of recession.
France and other eurozone markets ended the day higher after the European Central Bank followed through with an expected quarter-point cut in interest rates.
The Dax rose 1.6pc, France’s Cac 40 rose 0.3pc and the pan-European Stoxx 600 rose more than 0.1pc. However, on Wall Street, the Dow Jones is down 1.1pc, the S&P 500 is down 1.7pc and the Nasdaq is down 2.2pc.
04:59 PM GMT
Mexican president thanks Trump for tariff delay
Claudia Sheinbaum, the president of Mexico, has publicly thanked the US president for delaying tariffs.
She wrote on X: “Many thanks to President Donald Trump. We had an excellent and respectful call in which we agreed that our work and collaboration have yielded unprecedented results, within the framework of respect for our sovereignties. We will continue to work together, particularly on migration and security issues, which include reducing the illegal crossing of fentanyl into the United States, as well as weapons into Mexico.”
04:50 PM GMT
Canada’s January trade surplus at 32-month high as firms stockpile
Canada’s trade surplus in January exceeded expectations by a wide margin to post a 32-month record as fears of tariffs from the US pushed exports of cars and energy products higher, especially south of its border, data showed on Thursday.
It posted a trade surplus of C$3.97bn (£2.16bn), more than double the amount in December, Statistics Canada said, and posted a record surplus with top trading partner the United States.
“This uncertainty is creating major swings in the data, and we are just getting started,” said Andrew DiCapua, an economist at Canadian Chamber of Commerce.
Donald Trump has often indicated that he is unhappy that his country imports more from Canada than it exports and analysts have said that tariffs are also a tool for Trump to reverse this deficit.
However, data shows that its deficit with Canada, which is its second biggest trading partner, is much smaller than its other two top trading partners - Mexico and China.
According to US government data the deficit with Mexico is almost 2.5 times that of Canada, while it is just a fifth of what the US has with China.
Stuart Bergman, chief economist at Export Development Canada, said that without energy exports, the US would actually run a surplus with Canada.
04:44 PM GMT
Trump delays tariffs on Mexico
Donald Trump has delayed tariffs on Mexico but no word yet on Canada.
The US president wrote on Truth Social that, having spoken with Claudia Sheinbaum, president of Mexico, he was pausing the tariffs until April 2.
He said: “I did this as an accommodation, and out of respect for, President Sheinbaum. Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping illegal aliens from entering the United States and, likewise, stopping fentanyl. Thank you to President Sheinbaum for your hard work and cooperation!”
04:17 PM GMT
IMF warns over ‘significant’ impact of Trump tariffs
Donald Trump’s recently-imposed tariffs against Mexico and Canada could have a “significant” economic effect on the two close US allies, the International Monetary Fund warned this afternoon.
Speaking to reporters in Washington DC, IMF communications director Julie Kozack said: “If sustained, the impact of the US tariffs on Canada and Mexico can be expected to have a significant adverse economic impact on those countries, given their very strong integration and exposure to the US market.”
Alongside the existing tariffs already in effect, Trump has also promised to introduce reciprocal levies on April 2 - hitting trading partners with the same tariff and non-tariff barriers they impose on the United States - while also threatening to add new duties on other imports including semiconductors and cars.
Economists warn that these levies will have a negative economic effect on both the US and its trading partners, slowing down growth and pushing up prices.
04:15 PM GMT
Trump accuses Trudeau of playing politics in tariff war
Donald Trump has claimed that his Canadian counterpart is trying to use the tariff war to remain as prime minister.
“I think that Justin Trudeau is using the Tariff [sic] problem, which he has largely caused, in order to run again for Prime Minister. So much fun to watch!” he claimed.
Mr Trudeau announced his resignation in January. He said: “I intend to resign as party leader, as prime minister, after the party selects its next leader through a robust nationwide competitive process.”
Canadian Liberal party members will select a successor to Mr Trudeau on March 9. A national election is expected soon after.
Mr Trudeau’s office declined to comment.
04:00 PM GMT
Bank of England rate-setter warns over trade war turbulence
A Bank of England rate-setter has warned of the impact from “increasing incidence of protectionist trade policies and sanctions”.
Catherine Mann, in a speech to the Reserve Bank of New Zealand, said: “As a small open economy, the UK is of course not the only ship in the water. Small ships can be easily rocked by the waves generated by larger ships (e.g. the US and euro area).”
The rate-setter, who unexpectedly voted for a half-percentage point cut in interest rates last month, said that navigating “choppy financial markets, shock-ridden economies, and sticky expectations” with larger cuts to “more effectively communicate the stance of policy and influence the economy”.
03:44 PM GMT
German industrial giant cuts jobs as it warns over trade war
Germany industrial giant Thyssenkrupp has warned over escalating tariffs as it announced plans to cut 1,800 jobs at its car parts unit.
“Discussions about new tariffs are creating uncertainty,” said Volkmar Dinstuhl, chief executive of Thyssenkrupp’s automotive division.
“The outlook for the global automotive industry remains weak,” he said. “We cannot escape these pressures.”
European car suppliers have struggled in recent years as the continent’s car companies have lost ground to Chinese rivals and struggled with the transition to electric vehicles.
03:35 PM GMT
Trudeau expects a trade war to last for the ‘foreseeable future’
Canadian prime minister Justin Trudeau has said he expects Canada and the US to be in a trade war for the foreseeable future after having what he called a colourful but constructive call with Donald Trump this week.
Mr Trudeau said the two sides discussed tariffs, and that they are “actively engaged in ongoing conversations in trying to make sure these tariffs don’t overly harm” certain sectors and workers. He also reiterated that “we will not be backing down from our response tariffs until such a time as the unjustified American tariffs are Canadian goods are lifted.”
03:33 PM GMT
Trump ‘likely’ to delay Mexico and Canada tariffs, says Lutnick
US Commerce Secretary Howard Lutnick said all goods and services that are compliant with the United States-Mexico-Canada Agreement (USMCA) trade agreement will likely be excluded from Donald Trump’s tariffs for one month.
“It’s likely that it will cover all USMCA compliant goods and services, so that which is part of President Trump’s deal with Canada and Mexico are likely to get an exemption from these tariffs,” he told CNBC.
“The reprieve is for one month,” he said.
With that, I will take my leave and place you in the furiously-typing hands of Alex Singleton.
03:19 PM GMT
Trump poised to backtrack on tariffs as Wall Street plunges
Donald Trump will not impose tariffs on goods that comply with a trade deal between the US, Canada and Mexico, a top US official has said as Wall Street stocks plunge.
The US president could make a decision later today on whether to suspend the levies on goods that adhere to the United States-Mexico-Canada Agreement, known as the USMCA, Commerce Secretary Howard Lutnick told CNBC.
Car shares jumped on Wednesday after Mr Trump announced he would impose a one-month delay to his 25pc tariffs for motoring companies that are subject to the USMCA deal.
03:03 PM GMT
Wall Street plunges as Trump’s tariff war alarms investors
Stocks plunged on Wall Street as Donald Trump’s global trade war alarmed investors just as fears grow that an AI-fuelled bubble on markets is ready to burst.
The tech-heavy Nasdaq Composite dropped as much as 2pc, the benchmark S&P 500 fell 1.6pc and the Dow Jones Industrial Average declined by as much as 1.4pc on a roller-coaster week for stocks.
The main US indexes had rebounded on Wednesday after President Trump announced a one-month delay to tariffs for car makers subject to a trade deal with Mexico and Canada.
However, stocks sank today after weak results from semiconductor maker Marvell Technology fuelled fears of an AI sell-off just as the US administration’s trade war with its nearest allies hots up.
Rabobank strategist Matthew Cairns said: “The notion of starting a trade war, which will result in retaliation from the countries that are targeted means there will be additional pressure on the US.
“That is not a great story for equities and earnings growth because US households are going to be poorer.”
02:48 PM GMT
Lagarde urges Europe to build strength in trade war with Trump
The president of the European Central Bank urged the European Union to show its strength as it prepares to take on Donald Trump in his global tariff trade war.
Christine Lagarde said “you have to negotiate from a position of strength” when asked how Europe should respond to the looming threat of levies from the world’s largest economy.
The US president has repeatedly threatened to impose tariffs on the EU, saying he would announce reciprocal tariffs on April 2.
Ms Lagarde said: “We know that tariffs, and particularly with retaliation, are not good at all and are net negative on pretty much all accounts.
“Around the table of the Governing Council we all agreed that it was net negative when it happens and it’s even negative before it happens because the uncertainty that is generated and the undermined confidence that results from just the threat of those tariff increases and potential retaliations are putting a break on investment, on consumption decisions, on employment, on hiring and all the rest of it.”
02:35 PM GMT
Wall Street plunges amid global trade war
The main US stock indexes opened lower amid uncertainty about a global trade war.
The S&P 500 fell 56.8 points, or 1pc, to 5,785.87​, while the Nasdaq Composite dropped 348.2 points, or 1.9pc, to 18,204.528.
The Dow Jones Industrial Average fell 158.1 points, or 0.4pc, at the open to 42,848.49.
02:26 PM GMT
ECB ‘not going to change policy’ based on market upheaval, says Lagarde
Christine Lagarde said the European Central Bank would not rapidly change its plans on interest rates following the recent surge in government borrowing costs around the world.
After the surge in borrowing costs this week, the ECB president said she would be “very attentive to what’s happening” but added “we are not going to be changing a policy stance as a result of a market determination of the last 24 hours”.
She indicated she was not concerned by the sharp rise in borrowing costs as sovereign bond yields have moved up together and remained in a similar relationship to each other.
She said policymakers would “need to be vigilant” to changes in the economic landscape, which “at the moment is clouded with uncertainty”.
She added said policymakers “have to be agile to respond to the data” and did not rule out cutting interest rates again or pausing reductions.
02:16 PM GMT
Lagarde warns risks ‘are all over’ for inflation
Christine Lagarde said risks and uncertainty could be found “all over” for inflation as she insisted the ECB was not precommitting to a path on interest rates.
The ECB president said policymakers would pause their programme of interest rate cuts if the data suggests that is ther right decision.
02:12 PM GMT
ECB will watch Brussels summit closely, says Lagarde as Europe prepares to rearm
The European Central Bank president said she would be closely watching the meeting of European leaders in Brussels to see how they set out their support for Ukraine.
Christine Lagarde said the ECB would be “very attentive of what is going to come out of today’s meeting in Brussels”, as leaders meet to discuss support for Ukraine.
She added that she needed to understand Germany’s defence spending plans before passing judgement, after the likely next chancellor of Europe’s largest economy set out plans for €500bn of spending.
Ms Lagarde said “everything is going to be a factor of the details” of the plans, adding the proposals by Friedrich Merz and his expected coalition partners were a work in progress.
02:03 PM GMT
Lagarde says trade policy uncertainty could hit growth
Christine Lagarde said that ongoing uncertainty about global trade policies risked dragging down growth, amid the threat of tariffs from Donald Trump’s administration.
The European Central Bank president said there were “two-sided” risks to inflation as a result.
Following Germany’s plan to create a €500bn fund for defence and infrastructure spending, Ms Lagarde said an increase in such spending could add to growth but also risked driving up inflation.
01:56 PM GMT
Lagarde warns of tariff threat to exports
The president of the European Central Bank said tariffs posed a threat to the eurozone’s exports, which she said would benefit from rising global demand if levies are not imposed.
Christine Lagarde warned uncertainty has increased and threatened to dampen the single currency area’s economy.
01:54 PM GMT
ECB cuts growth projections
European Central Bank president Christine Lagarde has begun her press conference.
She highlighted that ECB staff have again marked down their growth projections for the eurozone – to 0.9pc for 2025, 1.2pc for 2026 and 1.3pc for 2027.
She said manufacturing remains a drag on growth and suggested high levels of uncertainty were holding back investments and exports.
She said: “But growth should be supported by higher incomes and lower borrowing costs.”
01:47 PM GMT
US trade deficit hits record high as companies race to beat Trump tariffs
The US trade deficit surged to a record high as companies raced to import goods before Donald Trump’s tariffs came into effect.
In a blow to the President, the gap in goods and services widended by 34pc in January from the previous month to $131.4bn (£101.9bn).
The value of imports rose by 10pc to an unprecedented $401.2bn, while exports increased 1.2pc.
Mr Trump promised in the US election campaign to impose tariffs to encourage American companies to buy US goods.
01:42 PM GMT
Next move for ECB ‘less clear’ after rate cut, say economists
The direction of travel for eurozone interest rates is becoming less clear, according to economists as Germany ramps up spending plans and as Donald Trump imposes tariffs on his allies.
The European Central Bank cut interest rates to 2.5pc in the sixth reduction since June but policymakers suggested borrowing costs were “becoming meaningfully less restrictive”.
Carsten Brzeski of ING said that the decision to cut interest rates was a “no-brainer” in the face of looming US tariffs on European goods and high geopolitical uncertainty, as well as falling headline inflation.
He said: “At the same time, the new phrase ‘monetary policy is becoming meaningfully less restrictive’ indicates that ECB policy rates are approaching neutral territory.”
He added: “The most important question ahead of today’s meeting was not so much whether the ECB would cut interest rates again but rather what comes next after today’s meeting.
“Here, developments of the last days will have triggered an even more heated debate between doves and hawks on whether or not more rate cuts are needed.
“If eurozone governments do indeed take over the baton and big fiscal stimulus is coming, the ECB will no longer need to do the heavy work to support eurozone growth.”
Jack Allen-Reynolds of Capital Economics suggested policymakers “are clearly becoming more cautious about further rate cuts” as the consultancy cut its estimate for the deposit rate to eventually fall to 2pc, rather than the previously projected 1.5pc.
He added: “Looser fiscal policy and the risk of tariffs add to the uncertainty.”
Christine Lagarde will hold her press conference on the interest rate decision imminently.
01:32 PM GMT
Euro rises as ECB expected to slow rate cuts
The value of the euro rose back towards its four-month high as the European Central Bank (ECB) signalled it was coming towards the end of its series of interest rate cuts.
The single currency was up 0.2pc against the dollar at more than $1.08 and gained 0.3pc versus the pound to be worth 83.9p.
Policymakers reduced the deposit rate from 2.75pc to 2.5pc today but said borrowing costs were “becoming meaningfully less restrictive”.
This changed its previous guidance that rates remained restrictive. It said: “The disinflation process is well on track.”
The ECB has cut borrowing costs six times since June, when interest rates stood at a record high of 4pc following the inflation crisis triggered by Vladimir Putin’s invasion of Ukraine.
01:24 PM GMT
ECB raises forecasts for inflation
Policymakers at the European Central Bank raised their forecasts for inflation this year, prompting traders to reduce bets on further interest rate cuts later this year.
The Governing Council projected inflation would hit 2.3pc this year, compared to previous predictions of 2.1pc.
However, it lowered its estimate for 2027 from 2.1pc to 2pc. Inflation in 2026 is expected to fall to 1.9pc.
The Governing Council said: “Monetary policy is becoming meaningfully less restrictive, as the interest rate cuts are making new borrowing less expensive for firms and households and loan growth is picking up.
“At the same time, a headwind to the easing of financing conditions comes from past interest rate hikes still transmitting to the stock of credit, and lending remains subdued overall.”
01:17 PM GMT
Eurozone interest rates cut to 2.5pc
The European Central Bank has cut interest rates from 2.75pc to 2.5pc as expected but suggested it may slow down the pace of reductions.
Policymaker said interest rates were “becoming meaningfully less restrictive”.
12:57 PM GMT
Recruiter issues jobs market warning amid ‘geopolitical uncertainty’
Recruiter agency Robert Walters revealed profits plummeted last year and warned “geopolitical uncertainty” had knocked confidence in the jobs market, as the world faces the threat of tariffs from Donald Trump’s administration.
The company’s earnings were nearly wiped out, slumping from £20.8m in 2023 to £500,000 in 2024 as net fee income slumped 14pc.
Chief executive Toby Fowlston said trading had continued to be “muted” in the first few weeks of the year and cautioned that “improvement in end markets is unlikely to be seen before the latter part of 2025”.
Shares were up as much as 4pc as Robert Walters cut its own workforce by 17pc, or nearly 700 roles, over the year to 3,294 as it looked to cut costs in the face of challenging job markets.
Mr Fowlston said the firm would “ensure its cost base is appropriate for the current conditions” over the year ahead.
He said: “The conversion of interviews to accepted offers remains the most significant area of challenge as ongoing macro-economic uncertainty continues to impact candidate and client confidence, which extends the time-to-hire.”
He warned: “Looking ahead, a high degree of macro-economic and geopolitical uncertainty remains across the majority of our markets, notably in the UK, France and Germany.”
12:38 PM GMT
German borrowing costs rise amid hopes of economic growth
Germany’s government borrowing costs have risen further as investors expect a boost to growth, economists have suggested.
Yields on 10-year German bunds were last up five basis points at 2.84pc, after hitting their highest since October 2023 at 2.93pc.
They jumped nearly 30 basis points on Wednesday, recording the biggest daily rise since German reunification in 1990.
It comes after Friedrich Merz promised to alter the debt rules of Europe’s largest economy to create a €500bn fund to spend on defence and infrastructure.
However, economists said this should not raise concerns about the sustainability of its debts.
Hubert de Barochez of Capital Economics said the moves in bond markets come as investors expect more government spending and higher interest rates.
However, he said the changes in bond markets “don’t seem to reflect any concern about debt sustainability or financial stability”.
He said: “Given Germany’s healthy fiscal position, a larger deficit coupled with higher funding costs shouldn’t pose any threat to debt sustainability.”
Mark Haefele of UBS Global Wealth Management added: “The bold fiscal plan has the potential to boost growth and support euro zone assets.”
12:01 PM GMT
Europe can ‘absolutely’ meet defence demands, says Saab boss
Europe’s defence sector has the capacity to meet rising demand for military equipment, the boss of aerospace and defence manufacturer Saab has said.
Micael Johansson urged EU member states to speed up contract talks as they scramble to boost defences amid concerns the US is turning its back on Ukraine and the Continent.
Europe is racing to boost military spending in a “sea change” moment for the bloc as Washington threatens to pull back aid.
European Union leaders are set to discuss a proposal to mobilise up to €800bn (£670bn) at an emergency defence summit today.
It comes after Germany’s likely next chancellor announced plans to alter the debt rules of Europe’s largest economy to create a €500bn fund to invest in defence and infrastructure.
Defence companies have rallied as a result, with London-listed BAE Systems, Europe’s biggest defence company, surging nearly 15pc this week.
Asked if Europe can step up, Saab chief executive Mr Johansson said: “We can do it, absolutely.”
“It’s not done in a week or a month ... but I’m completely convinced that it can be done,” he told Reuters.
11:40 AM GMT
Wall Street on track for slump amid global trade war
US stock indexes are poised to fall at the opening bell on Wall Street amid uncertainty about Donald Trump’s ongoing global trade war.
The President announced a one-month delay on tariffs for car makers that comply with an existing free trade agreement with Mexico and Canada.
However, manufacturers such as General Motors, Ford and Tesla were down over 1pc after rising on Wednesday in response to the exemption.
Against the tariff backdrop, US stocks have witnessed increased volatility over the past few sessions.
Wall Street’s main indexes closed higher over 1pc on Wednesday but the benchmark S&P 500 is down this year and the Russell 2000 index of smallcap companies has fallen nearly 6pc.
Analysts have warned that tariff uncertainty has resulted in individuals holding back on consumption and corporate executives delaying investment decisions.
In premarket trading, the Dow Jones Industrial Average was down 1pc, the S&P 500 had fallen 1.1pc and the Nasdaq 100 had dropped 1.3pc.
11:20 AM GMT
Lagarde expected to outline response to German defence spending
The European Central Bank is expected to cut interest rates today in a meeting which has even more of a spotlight in the wake of the mass rearmament drive in Germany and the rest of Europe.
The euro was steady at just under $1.08 and just shy of a four-month peak it had touched in early Asian trading, despite expectations that policymakers will reduce interest rates today from 2.75pc to 2.5pc.
The single currency is on course for a rise of more than 4pc this week, its strongest weekly performance since March 2009, as surging bond yields and the threat of tariffs led traders to reduce their bets on further rate cuts this year.
Julien Lafargue, a strategist at Barclays Private Bank, said: “This (ECB) meeting could be very interesting given the current context.”
He said ECB president Christine Lagarde “will most certainly be asked about how the ECB intends to respond” to the European-wide increase in defence spending.
11:07 AM GMT
German parliament to debate changing debt rules ‘next week’
Germany’s lower house of parliament is expected to debate a boost in infrastructure spending and sweeping changes to state borrowing rules to boost defence funding from March 13.
The Bundestag lower house will vote on the reforms on March 18, according to Reuters.
The German CDU and the centre-left SPD, who are in talks to form a government, will need a two-thirds parliamentary majority to pass their plans to reform the debt brake and create a €500bn fund for infrastructure.
The Greens have said they will negotiate hard before potentially giving their much-needed backing to debt reforms aimed at reviving a struggling economy and spend more on defence.
The pro-business FDP will also support a boost to defence spending, but it has said it will not support a special fund for infrastructure.
10:47 AM GMT
Bond market sell-off deepens as Trump upends world order
A global sell-off in bond markets has deepened after Donald Trump shook up the world order with his tariffs and withholding military aid to Ukraine.
Investors dumped sovereign debt at a rapid pace as the US president’s tactics prompted Germany’s likely next chancellor to announce plans to rip up the fiscal rules of Europe’s largest economy.
The yield on 10-year German bunds - a benchmark for eurozone government borrowing costs - surged at the fastest pace since 1990 on Wednesday as Friedrich Merz announced plans for a €500bn fund for spending on defence and infrastructure.
Mr Merz said on Tuesday that he would do “whatever it takes” on defence, after Mr Trump announced the US was suspending military aid to Ukraine. Washington subsequently suspended intelligence sharing with Kyiv.
The bond market move continued today, with the German 10-year bund yield rising as much as 14 basis points to 2.93pc, dragging the debt costs of other European nations higher with it.
In a worrying sign for Chancellor Rachel Reeves as she battles to balance the public books, the yield on 10-year UK gilts climbed another three basis points to 4.72pc, up from 4.53pc before Mr Merz’s announcement.
Deutsche Bank analyst Jim Reid said: “The reality is that I still don’t think the enormity of the (German) news has got close to being fully comprehended and digested by global investors yet.
“This is a seismic shift of the most epic proportions and perhaps only fast money and nimble investors have responded so far.”
10:26 AM GMT
FTSE 100 tumbles ahead of ECB decision
UK stocks have tumbled harder than European competitors ahead of a crucial meeting of the European Central Bank, which is likely to include a reaction to Donald Trump’s trade war.
The FTSE 100 was down 1pc, while Germany’s Dax hovered around a 0.2pc rise and France’s Cac fell around 0.4pc.
ECB president Christina Lagarde will give a press conference later when she is expected to set out how the eurozone’s central bank will react to tariffs and a dramatic increase in spending from Germany.
HSBC was the biggest drag on the FTSE 100, falling as much as 5.2pc amid renewed speculation over an official east-west split and the uncertainty of an ongoing boardroom reshuffle.
The bank dropped the terms “eastern markets” and “western markets” from two new business divisions within months of creating them, amid speculation over a spin off of its Asian operations.
On Tuesday it was announced that Ian Stuart, head of the UK business, would move to become inaugural group customer and culture director.
Aerospace manufacturer Melrose also fell up to 12.2pc but the FTSE 100 was propped up by miners Glencore and Anglo American rising up to 3.8pc and 3.3pc respectively.
Consumer goods company Reckitt Benckiser was rewarded with a 3.4pc lift despite seeing sales and profits fall after a weak cold and flu season, while betting group Entain’s share price was buoyed by a 6pc revenue rise.
10:04 AM GMT
Construction activity slumps as confidence rocked
The uncertainty caysed by Doanld Trump’s tariffs comes as Britain’s construction activity plunged last month to its lowest level since May 2020, according to new figures.
The latest S&P Global construction purchasing managers’ index (PMI) showed the sector contracted in February, registering a reading of 44.6, which was sharply down from 48.1 in January and below analyst expectations of 49.7.
The fall was driven by steep declines in housing and civil engineering, while cost inflation also hit its highest point in nearly two years.
It comes despite Government moves to pledge policy support to boost the development of new homes.
Tim Moore, economics director at S&P Global, said: “Sharply declining order books rippled through the UK construction sector in February, which led to accelerated reductions in output volumes, employment and input buying.
“Weak demand conditions were attributed to entrenched caution among clients, against a backdrop of subdued consumer confidence and lacklustre economic performance.
“Aside from the pandemic, total industry activity decreased at the steepest pace since December 2019.”
09:37 AM GMT
Pound climbs during Trump trade war
The pound has surged since Donald Trump first announced plans to impose tariffs on his nearest allies.
Sterling has risen 3.9pc since the start of February when the US president first announced plans to impose levies on Mexico, Canada and China.
The pound was trading at $1.24 back then, but has since climbed to tip above $1.29 at one point today.
The dollar has also slumped against the euro during that time, with the single currency up 5pc against the greenback since the beginning of last month.
The euro has surged by 3.9pc verus the US currency this week after Germany announced plans to set up a €500bn fund to invest in defence and infrastructure, sending bond yields surging.
The pound has now pulled back slightly against the dollar, falling 0.2pc on the day to just below $1.29, and was 0.1pc lower versus the euro, which is worth 83.8p.
09:23 AM GMT
German government borrowing costs highest since 2023
Germany’s government borrowing costs have hit their highest level since the eurozone sovereign debt crisis amid a promised surge in spending.
The relentless march of bond market yields had continued today, with Germany’s benchmark yield up to its highest since 2023.
Commentators are scrambling to work out what the dramatic changes in debt markets mean for the European economy:
08:52 AM GMT
Car shares surge as Trump delays tariffs
European shares rose after Donald Trump exempted car makers from his 25pc tariffs on Canada and Mexico for one month.
The Dax in Frankfurt rose 1.2pc after its best day in three years on Wednesday, while the Cac 40 in France climbed 0.5pc.
Car and parts makers jumped as much as 2.2pc, with shares of Mercedes-Benz up 4.5pc, Volvo up 3.9pc, BMW rising 3.1pc, Stellantis advancing 2.9pc and Volkswagen up 2.4pc.
Additionally, investors looked ahead to the European Central Bank’s rate decision, which is likely to result in a quarter-point cut.
European banks led sectoral gains, rising more than 2pc to a fresh record high.
08:31 AM GMT
ECB outlook ‘suddenly rewritten’ as Germany to ramp up spending
Investors will closely follow the language of European Central Bank president Christine Lagarde later as Germany prepares to rip up its debt rules.
Policymakers are widely expected to cut interest rates from 2.75pc to 2.5pc but traders now favour only one more cut for the rest of the year.
It comes as Germany’s likely next chancellor announced €500bn in spending plans for defence and infrastructure, sending the cost of government borrowing surging around the world.
It prompted a massive surge in stock markets, with Germany’s Dax stock index experiencing a rollercoaster week which saw its best day since 2022 on Monday, worst day since 2022 on Tuesday and best day since 2022 agains on Wednesday.
The Dax is up 1.2pc in early trading.
Deutsche Bank analyst Jim Reid said: “All that will create an interesting backdrop for today’s ECB decision, along with President Lagarde’s press conference.
“In terms of the decision itself, it’s widely expected they’ll announce another 25bp cut in their deposit rate, taking it down to 2.5pc, and bringing the total cuts to 150bps since last summer.
“However, the potential for a huge fiscal impulse has suddenly rewritten the medium-term outlook, leading to speculation about whether they’ll stop cutting quicker than previously thought.”
08:13 AM GMT
UK stocks rise amid strengthening pound
UK-focused stocks rose at the open amid a surge in the pound as Donald Trump altered his tariff plans.
The domestically-focused FTSE 250 rose 0.3pc to 20,194.05 after the US president pulled back on some of his tariffs hikes, weakening the dollar as investors were left uncertain about the commitment of the White House to its trade agenda.
The benchmark FTSE 100 fell 0.2pc to 8,737.38, with many of its companies impacted by the slump in the dollar, owing to their measuring of their profits in the US currency.
08:01 AM GMT
Traders expect fewer eurozone interest rate cuts ahead of German spending splurge
The European Central Bank (ECB) will only cut interest rates two more times this year, money markets indicate as Germany is expected to ramp up spending on defence and infrastructure.
Traders now favour just two more reductions in borrowing costs this year, including one expected at the ECB’s next meeting later today.
Earlier this week, money markets had priced in three cuts but markets are rapidly realigning after Donald Trump announced tariff plans and withdrew military aid from Ukraine.
It prompted Germany’s likely next government to announce plans for €500bn fund that will rewrite its long-standing debt rules.
As a result, government borrowing costs have rocketed higher.
07:51 AM GMT
Government borrowing costs surge further
German government borrowing costs have continued to climb at the start of trading after their sharpest increase since the reunification in 1990.
The 10-year bund yield - a benchmark for eurozone debt costs on bond markets - rose another 12 basis points to 2.92pc, having rocketed by nearly 30 basis points on Wednesday.
The announcement of a €500bn fund to spend on infrastructure and defence continues to send the cost of government borrowing higher across Europe.
The 10-year gilt yield climbed 14 basis points to 4.68pc while France’s equivalent bond climbed 13 basis points to 3.62pc.
07:46 AM GMT
Stocks rise as Trump delays tariffs for car makers
European markets were on track to open higher following a rally on Asian markets after Donald Trump announced a one-month tariff delay on car imports from Mexico and Canada.
The Hong Kong stock exchange was up more than 3pc, with Chinese stocks were also climbing as Beiking vowed to “further expand” fiscal spending in 2025 to boost growth.
The Shanghai Composite index advanced 1.2pc to 3,381.10.
South Korea’s Kospi jumped 0.7pc to 2,576.16.
07:33 AM GMT
Global bond market sell-off as Germany rips up debt rules
Global currencies have surged against the dollar as they were also influenced by a rapid sell-off in bond markets, which has pushed yields higher.
Japan’s 10-year bond yield rose at its fastest pace since 2009 overnight as Asian markets caught up with the moves in Europe on Wednesday.
European bond yields - a proxy for government borrowing costs - surged higher as Germany’s likely next chancellor Friedrich Merz proposed a €500bn (£419bn) defence and infrastructure fund under an overhaul of the debt limits on Europe’s largest economy.
The German 10-year bund yield rose by nearly 30 basis points in the biggest daily jump since German reunification in 1990.
DBS analysts wrote to clients: “The upshot is that a chunk of US exceptionalism has faded in the rates space.
“We suspect that the divergence in fiscal stances between the US - perceived austerity - and eurozone - aggressive spending - would be in play for the medium term.”
07:32 AM GMT
Pound surges as Trump tariffs backfire
The pound jumped to a four-month high against the dollar as Donald Trump’s tariff plans backfired.
Sterling rose above $1.29 for the first time since November as the US president announced a one-month reprieve for car makers from his tariffs against Mexico and Canada.
The dollar slumped against a range of major currencies amid uncertainty about Mr Trump’s next move.
Brad Bechtel of Jefferies said: “The dollar adjustment continues at a rapid rate as the market prices the impact of tariffs squarely on the US, via growth impact, and not on the countries being tariffed.
“We are in the midst of the downswing now and its unclear how far it can run.”
Kyle Rodda, an analyst at Capital.com said US trade policy “remains the biggest uncertainty for the markets”, although he said the exemption for car makers from tariffs “supported hopes that rational heads prevail in the White House, and that even if trade relations don’t improve, at least they won’t get any worse”.
07:26 AM GMT
Good morning
Thanks for joining me. The pound has climbed to a four-month high against the dollar as Donald Trump’s upheaval of global trade backfired.
Sterling rose 0.1pc to tip above $1.29 for the first time since November as the US currency was hit by uncertainty about the US president’s next move.
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What happened overnight
Asian markets climbed after US President Donald Trump announced a one-month tariff delay on car imports from Mexico and Canada.
The White House announced on Wednesday an exemption on any cars coming through the North American neighbours’ free trade pact, after Trump held talks with the “Big Three” US carmakers - Stellantis, Ford and General Motors.
US manufacturers have been among the most exposed to Mr Trump’s trade policy, which saw 25pc blanket tariffs imposed on Mexico and Canada earlier this week - with a lower rate for Canadian energy.
Wednesday’s tariff delay buoyed global markets and lifted the motoring sector, with Honda up 2pc and Suzuki up 1pc, although Toyota fell back in Tokyo trading losing 0.9pc.
Tokyo’s Nikkei 225 index gained 0.9pc to 37,759.95.
Hong Kong’s Hang Seng index jumped 2.6pc to 24,216.93 following Chinese government reports to the annual legislative session that showed a greater resolve by Beijing to boost consumer spending and other domestic demand.
The Shanghai Composite index advanced 1.1pc to 3,377.22.
South Korea’s Kospi jumped 0.7pc to 2,577.31, while the S&P/ASX 200 in Australia slipped 0.5pc to 8,100.20.
Taiwan’s Taiex shed 0.4pc, while the SET in Bangkok also lost 0.4pc.
On Wednesday, gains for Ford Motor and GM stocks helped lead Wall Street higher.
The Dow Jones Industrial Average rose 1.1pc, to 43,006.59, the S&P 500 rose by the same percentage, to 5,842.63, and the Nasdaq Composite rose 1.5pc, to 18,552.73.
US Treasury yields climbed as investors mulled developments on Mr Trump’s tariffs. The yield on benchmark 10-year US Treasury notes rose to 4.281pc after reaching 4.284pc in trading, its highest since Feb 27. They had yielded 4.239pc a day earlier.