UK car exports to the US halved in May<\/p>\n
UK car production has slumped to a 76-year low, as Donald Trump\u2019s trade war hurt the British auto industry.<\/strong><\/p>\n Shipments to the US fell by 55.4% last month, according to new data from the Society of Motor Manufacturers and Traders<\/strong>.<\/p>\n The SMMT<\/strong> says:<\/p>\n This was primarily due to the imposition by the US administration of a supplementary 25% Section 232 tariffs on cars from March which depressed demand instantly forcing many manufacturers to stop shipments.<\/p>\n However, with the trade agreement negotiated by government due to come into effect before the end of June, this should hopefully be a short-lived constraint.<\/p>\n<\/blockquote>\n There was weakness elsewhere too, though. Shipments to the EU fell by 22.5%, while output for the UK domestic market tumbled by 42%.<\/p>\n Overall, UK car and commercial vehicle production fell by 32.8% in May. That\u2019s the lowest performance for the month since 1949, if you exclude 2020, when Covid lockdowns forced factories to shut or cut capacity.<\/p>\n Share<\/a><\/p>\n Updated at\u00a005.24 EDT<\/p>\n Key events<\/p>\n Show key events only<\/p>\n Please turn on JavaScript to use this feature<\/p>\n Closing post<\/p>\n Time to wrap up\u2026.<\/strong><\/p>\n US stock markets have hit record highs<\/a> after America reached an agreement with China to speed up rare-earth shipments.<\/p>\n The S&P 500 index, and the Nasdaq, both hit new peaks amid news of wider efforts to end the trade wars<\/a> between the US and the world\u2019s biggest economies.<\/p>\n Donald Trump said on Thursday that the US had signed a deal with China<\/a> the previous day, without providing additional details, and that there might be a separate deal coming up that would \u201copen up\u201d India.<\/p>\n China confirmed the details of the deal on Friday, and reiterated that it will continue to approve the export permits of controlled items.<\/p>\n European markets also rose, with the FTSE<\/strong> 100<\/strong> closing at its highest level in over a week. Asia-Pacific markets hit three-year highs<\/a>.<\/p>\n There were signs that the trade war has hurt the UK auto sector, with shipments to the US halving in May<\/a>.<\/p>\n Nike has said it expects costs to increase by about $1bn<\/a> (\u00a3728m) as a result of Donald Trump\u2019s tariff war as the sportswear company looks to reduce its manufacturing in China.<\/p>\n The European pharmaceutical industry has urged Brussels not to retaliate if Donald Trump brings in threatened tariffs on imported drugs, amid fears he could impose the levies as early as next week.<\/p>\n There was relief in London after the US announced it plans to drop the \u2018revenge tax\u2019 section of Donald Trump\u2019s new tax and spending bill<\/a>.<\/p>\n In other news\u2026<\/p>\n An increase in demand for weight loss drugs, including Mounjaro and Wegovy, as well as demand among its generation Alpha customer base for beauty products is driving expansion at Superdrug.<\/p>\n Barclays and its former chief executive Jes Staley are facing a class action lawsuit in the US over claims they defrauded and misled investors over Staley\u2019s relationship with the child sex offender Jeffrey Epstein.<\/a><\/p>\n The police criminal inquiry into the Post Office<\/a> Horizon IT scandal is investigating more than 45 individuals, with seven formally identified as main suspects.<\/p>\n Share<\/a><\/p>\n London\u2019s stock market has ended the day at its highest closing level in over a week.<\/strong><\/p>\n The FTSE<\/strong> 100<\/strong> index of blue-chip shares has closed 63 points higher at 8799 points, up 0.7% today. That\u2019s its highest close since 18 June.<\/p>\n Share<\/a><\/p>\n Hopes that the US and EU will reach some form of a trade agreement before the 9 July deadline expires are also lifting markets.<\/strong><\/p>\n Bloomberg<\/strong> reports <\/a>that European Commission President Ursula von der Leyen told EU leaders at a summit yesterday that she was confident a deal could be reached before the deadline to avoid an economically damaging escalation, according to people familiar with the matter.<\/p>\n Share<\/a><\/p>\n The boss of Barclays<\/strong> bank has welcomed the news that the White House wants to drop the \u2018revenge taxes\u2019 proposal, Section 899<\/a>, from Donald Trump\u2019s tax and spending bill.<\/p>\n Barclays<\/strong> CEO C.S. Venkatakrishnan<\/strong> told Reuters:<\/p>\n \u201cThe developments on 899 are welcome progress and a significant outcome for a great many UK companies like Barclays that invest in the US and support economic growth in both countries.\u201d<\/p>\n<\/blockquote>\n Share<\/a><\/p>\n The Nasdaq<\/strong> is on track to enter a new bull market today, Reuters reports, adding:<\/p>\n The tech-heavy index was last up 0.4% at 20,243 points, surpassing its record high of 20,204 on December 16.<\/p>\n It had tumbled 26.8% from its previous peak, marking a bear market days after Trump\u2019s \u201cLiberation Day\u201d reciprocal tariffs on April 2.<\/p>\n<\/blockquote>\n Share<\/a><\/p>\n Sportswear brand Nike are the top riser on the S&P 500 in early trading.<\/strong><\/p>\n Nike\u2019s<\/strong> shares have jumped 15%, driven by hopes that its turnaround plan may be working, despite the company reporting a drop in profits for the last quarter yesterday.<\/p>\n As reported earlier<\/a>, Nike told analysts last night that the US tariffs on Chinese-made goods will cost it $1bn, and it plans to take steps including moving manufacturing out of China.<\/p>\n Share<\/a><\/p>\n Elior Manier, <\/strong>market analyst at OANDA<\/a>\u2019s MarketPulse<\/strong>, says the US-China trade deal breakthrough announced overnight has lifted markets.<\/p>\n Stocks have also rallied through the week, on relief that the Israel-Iran ceasefire has held.<\/p>\n Manier writes that stock markets have been \u201con a frenzy\u201d this week, adding:<\/p>\n \u201cMarkets are awaiting and getting a few good news on the US trade deals \u2013 The latest is the White House announcing that the July 9 is in the end not too important, and Trump mentioning the completion of a Deal with China, however the details are still missing.<\/p>\n \u201cTaking a step back to the daily chart highlights just how volatile equities have been in the first half of 2025.<\/p>\n \u201cOne of the key emerging themes is the market\u2019s increasingly muted reaction to Trump-related developments \u2014 especially now that the Israel-Iran conflict is fading from the headlines.<\/p>\n<\/blockquote>\n Share<\/a>Wall Street hits record highs Photograph: Brendan McDermid\/Reuters<\/p>\n Boom! America\u2019s stock market has hit a new record high, as hopes of trade deal progress lift shares.<\/strong><\/p>\n The S&P<\/strong> 500<\/strong> has just touched an intraday record high at the start of trading in New York. It gained 0.2% to 6,153.55 points, surpassing the previous peak set in mid-February.<\/p>\n This milestone underlines that the markets have recovered from their slump in early April, when Donald Trump\u2019s trade wars sparked a heavy selloff (before recovering when the president delayed his tariffs for 9o days).<\/p>\n The tech-focused Nasdaq<\/strong> index has also hit a new record high, as optimism around artificial intelligence and hopes of interest rate cuts lifted technology stocks.<\/p>\n NASDAQ COMPOSITE REACHES FIRST RECORD SINCE DECEMBER<\/p>\n The Nasdaq Composite Index has hit an intraday record high for the first time since December 16, driven by continued strength in AI and tech stocks. Investor confidence in earnings resilience and a softer Fed stance is\u2026<\/p>\n \u2014 Naeem Aslam (@NaeemAslam23) June 27, 2025<\/a><\/p><\/blockquote>\n The overnight comments from US commerce secretary Howard Lutnick<\/a>, who said the White House has imminent plans to reach agreements with a set of 10 major trading partners, may be cheering Wall Street today.<\/p>\n Share<\/a><\/p>\n Updated at\u00a009.54 EDT<\/p>\n The future of UK bank TSB is growing closer to being resolved.<\/strong><\/p>\n Santander<\/strong> and Barclays<\/strong> are the main contenders left in the race to acquire TSB from its current owner, Sabadell, Bloomberg reports.<\/p>\n The two banks are said to be the only ones in the data room, analysing a possible bid.<\/p>\n Earlier this month, Sabadell<\/strong> said it has received interest from prospective buyers.<\/p>\n Share<\/a><\/p>\n The 0.4% decline in nominal US incomes last month \u201cis not quite as bad as it looks\u201d, reports Harry<\/strong> Chambers<\/strong>, assistant economist at Capital<\/strong> Economics<\/strong>, who tells clients:<\/p>\n It was mainly due to a drop back in social security payments, which were boosted in April by changes in the Social Security Fairness Act.<\/p>\n<\/blockquote>\n Chambers<\/strong> also points out that the 0.1% drop in consumer spending was due to a \u201chuge drag from spending on motor vehicles and parts\u201d.<\/p>\n Share<\/a>US personal income fall, as PCE inflation rises<\/p>\n Just in: US personal incomes fell last month, just as the Federal Reserve\u2019s preferred inflation measure rose.<\/strong><\/p>\n Personal income decreased by 0.4% in May, according to estimates released today by the US Bureau of Economic Analysis.<\/strong><\/p>\n This data measures the income which Americans receive from wages and salaries, Social Security and other government benefits, dividends and interest, business ownership, and other sources.<\/p>\n Personal consumption, a measure of spending, dipped by 0.1% in the month.<\/p>\n The BEA also reported that the PCE price index rose by 2.3% in the year to May, up from 2.2% in April. Core PCE inflation (which strips out food and energy) rose to 2.7% from 2.6%.<\/p>\n More startling economic data for May:<\/p>\n \ud83d\udcca Personal income down 0.4%<\/p>\n \ud83d\udccaPersonal spending down 0.1%<\/p>\n \ud83d\udccaReal (inflation-adjusted) spending down 0.3%.<\/p>\n \u2014 Joel Griffith (@joelgriffith) June 27, 2025<\/a><\/p><\/blockquote>\n This combination of falling incomes, weakening spending and rising prices may alarm the Fed, which is under pressure from Donald Trump to cut interest rates despite its concerns about inflation.<\/p>\n Share<\/a><\/p>\n Updated at\u00a008.39 EDT<\/p>\n China\u2019s central bank has warned that its economy still faces \u201cdifficulties and challenges\u201d such as weak domestic demand and persistently low inflation.<\/strong><\/p>\n In a statement following its quarterly monetary policy meeting, the People\u2019s Bank of China (PBOC)<\/strong> also points to global challenges, saying:<\/p>\n \u201cThe external environment has grown increasingly complex and challenging, with weakening momentum in global economic growth, rising trade barriers, and diverging economic performance among major economies.\u201d<\/p>\n<\/blockquote>\n Share<\/a>Heathrow warns of weakening demand for US business travel<\/p>\n Heathrow Airport has warned that the US travel market is becoming \u201cmore challenging\u201d, dut to rising economic uncertainty across North America.<\/strong><\/p>\n In its latest investor report, released this morning, Heathrow says it is seeing \u201csome early signs of softness on business-heavy routes\u201d, a trend that appears linked to economic uncertainty than geopolitical reasons.<\/p>\n Heathrow cautions:<\/p>\n Transatlantic travel remains a core strength in our network however, we acknowledge the overhanging uncertainty in this market and we continue to monitor airline and passenger behaviour closely as the summer progresses.<\/p>\n<\/blockquote>\n Share<\/a>Relief as US drops Trump’s ‘revenge taxes’<\/p>\n There\u2019s relief today that the White House are dropping Donald Trump\u2019s \u2018revenge tax\u2019, which could have hurt UK businesses.<\/strong><\/p>\n Last night, US treasury secretary Scott<\/strong> Bessent<\/strong> announced he was asking Congress to remove the Section 899 protective measure from Trump\u2019s \u201cOne, Big, Beautiful Bill\u201d, which is currently being debated.<\/p>\n Section 899 would have allowed the US to impose retaliatory taxes on any company from a country that imposed unfair taxes on US companies. This could have hurt many FTSE 100 companies who have significant operations across the Atlantic.<\/p>\n Bessent<\/strong> says the US has reached an agreement with the G20 that US companies will not be subject to the new OECD global minimum tax regime.<\/p>\n He says:<\/p>\n OECD Pillar 2 taxes will not apply to U.S. companies, and we will work cooperatively to implement this agreement across the OECD-G20 Inclusive Framework in coming weeks and months.<\/p>\n<\/blockquote>\n After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests. President Trump paved the way for this historic achievement. On January 20, the President issued two\u2026<\/p>\n \u2014 Treasury Secretary Scott Bessent (@SecScottBessent) June 26, 2025<\/a><\/p><\/blockquote>\n Pillar 2 set a minimum global tax rate of 15%, and was designed to ensure large multinational enterprises pay a minimum level of tax on the income arising in each jurisdiction where they operate.<\/p>\n The Section 899 breakthrough follows talks between the UK government and the Trump administration about exempting British companies from these \u201crevenge taxes\u201d<\/a>.<\/p>\n An HM<\/strong> Treasury<\/strong> spokesperson says:<\/p>\n \u201cThe removal of Section 899 is welcome news for British businesses and comes after the Chancellor raised concerns directly with her G7 counterparts on behalf of those businesses.<\/p>\n \u201cThis work will continue with global partners to ensure the international tax system provides a level-playing field, while combatting aggressive tax planning and avoidance.\u201d<\/p>\n<\/blockquote>\n Rachel Reeves<\/strong> has welcomed Bessent\u2019s<\/strong> \u201cimportant action\u201d, adding:<\/p>\n Look forward to further work with global partners to ensure a level playing field on tax.<\/p>\n We are breaking down barriers and delivering in Britain\u2019s national interest.<\/p>\n<\/blockquote>\n Important action by @SecScottBessent<\/a>, after intensive collective effort, providing certainty for business.<\/p>\n Look forward to further work with global partners to ensure a level playing field on tax.\u00a0<\/p>\n We are breaking down barriers and delivering in Britain’s national interest.<\/p>\n \u2014 Rachel Reeves (@RachelReevesMP) June 26, 2025<\/a><\/p><\/blockquote>\n\n
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