The ever-evolving trade war between the US and China dominated the focus this week, with the uncertainty continuing to haunt markets. However, there is scope for optimism amid all the mixed messaging from the White House as signs of a potential deescalation mounted, sending global stocks higher.
On Friday, reports emerged that China had quietly eased tariffs on some US semiconductors and pharmaceuticals. Donald Trump sowed further confusion by claiming he had spoken with Chinese president Xi Jinping – something China's government denies.
In the UK, pressure mounted on chancellor Rachel Reeves as figures revealed the government borrowed far more than expected in the last financial year. The overshoot prompted economists to warn she may have no option but to increase taxes to plug the widening gap.
Here are some highlights from the last seven days, plus a glimpse at the week ahead.
Key moments from last week
The European Union's case around Apple (AAPL) revolved around its App Store preventing developers from linking to sites outside of the company's marketplace. ·JOSH EDELSON via Getty Images
The technology behemoths fell foul of the first antitrust sanctions from a landmark new law aimed at curbing the power of Big Tech.
The European Union's case around Apple (AAPL) revolved around its App Store preventing developers from linking to sites outside of the company's marketplace. Meanwhile, Meta (META)'s Instagram was punished for its model of advert-free services on the image-sharing platform.
The rise in debt was particularly alarmingly in March, when public expenditure was £6.2bn higher than the same month last year, outweighing an increase in tax receipts.
The UK's public spending watchdog had warned last month that, despite cuts to welfare, the government’s fiscal headroom remains historically small at £9.9bn.
Ruth Gregory, deputy chief UK economist at Capital Economics, said: “This raises the chances that if the chancellor wishes to stick to her fiscal rules, more tax hikes in the autumn budget will be required.”
While the UK is not directly in the line of fire from the most severe US tariffs, Bailey, the central bank's governor, warned that the ripple effects of trade disruption would be felt globally, particularly by open economies such as Britain.
He also pointed to persistent structural weaknesses in the UK economy, noting that “weak productivity growth” has continued to constrain output since the financial crisis.
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Investors will be keeping an eye out for commentary on potential disruption from tariffs from Mag 7 companies Apple (AAPL), Microsoft (MSFT), Meta (META) and Amazon (AMZN) when they report in the coming week.
Fears of a tariff-induced recession and the effect this could have on fuel demand have weighed on oil prices, adding to pressure on the likes of Shell (SHEL.L), which is set to report on Friday 2 May.
Major UK-listed banks are also set to be in the spotlight on the London market, with HSBC (HSBA.L), Lloyds (LLOY.L), Barclays (BARC.L) and NatWest (NWG.L) all slated to report in the coming week.
Wednesday morning sees the release of the closely watched Nationwide house prices survey, with consensus pointing to a very slight drop in April from the previous month. Analysts see a soft market in the coming months after a stamp duty break came to an end.
Later that day, eurozone economic growth will be in the spotlight with a GDP reading for the first quarter.
Wednesday is a big day for the US too, with a slew of data that will include quarterly GDP growth, inflation and personal spending.
Back in the UK, focus will switch to the property market on Thursday with the release of mortgage approval figures.
End note: Farewell Pope Francis
US president Donald Trump and France's president Emmanuel Macron watch as the coffin of Pope Francis is carried by pallbearers during his funeral Mass in St. Peter's Square at the Vatican today. ·REUTERS / Reuters
The world said goodbye to the 266th pontiff this week after his death at the age of 88 on Easter Monday.
His relationship with his predecessor, Pope Benedict XVI, and in particular their contrasting ideologies and personalities, was the subject of the 2019 Netflix movie The Two Popes. Based largely on actual events behind Vatican walls, the film centres on the often humorous philosophical sparring between the traditionalist Benedict (Anthony Hopkins) and the progressive future Pope Francis (Jonathan Pryce).
The Two Popes saw a roughly five-fold increase in streaming in the wake of Francis' death, according to data from the analytics company Luminate.
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