US GDP grew at a 3% annualised rate, according to the US Bureau of Economic Analysis.<\/p>\n
Economists polled by Reuters had predicted annualised GDP growth of 2.4%, after a surprise contraction of 0.5% in the first quarter as exporters rushed to get their products into the country ahead of tariffs. Imports count against a country\u2019s GDP.<\/p>\n
Share<\/a><\/p>\n Key events<\/p>\n Show key events only<\/p>\n Please turn on JavaScript to use this feature<\/p>\n The US economic data<\/strong> will surely play into the Fed\u2019s decision for later: even with trade distortions, they buttress the argument that the US economy does not need further support \u2013 whatever the thoughts of Donald Trump on the matter<\/a>.<\/p>\n Neil Birrell<\/strong>, chief investment officer at Premier Miton Investors<\/strong>, a fund manager, said:<\/p>\n As expected, the US economy bounced back strongly in the second quarter, much more than expected, after contracting in the first quarter ahead of the imposition of tariffs. With inflation above target, tariffs about to kick in and the economy looking in reasonable shape, there is virtually no chance of the Fed acting on rates before September, no matter what the President would like them to do.<\/p>\n<\/blockquote>\n Share<\/a> The US Federal Reserve<\/a><\/strong> is expected to leave interest rates unchanged in an announcement later today, despite an onslaught<\/a> of attacks<\/a><\/strong> from the White House against the central bank.<\/p>\n The Fed\u2019s federal open market committee (FOMC) has eight opportunities a year to change interest rates during its scheduled two-day meetings. While the FOMC decreased rates three times in the fall, bringing rates down a full percentage point, it left rates unchanged after its last four meetings. Interest rates currently sit at a range of 4.25% to 4.5%.<\/p>\n Trump is partly to blame for the pause in rate cuts. Fed officials say that the economy has become too unstable to change rates. The Fed has to strike a delicate balance between its \u201cdual mandate\u201d, keeping both unemployment and inflation low. Though the economy was strong at the beginning of the year, Trump\u2019s long slate of tariffs have started to creep into prices, bringing inflation<\/a> up from 2.3% in April to 2.7% in June.<\/p>\n On Wednesday, executives at the consumer goods giant Procter & Gamble said tariffs were \u201cinherently inflationary\u201d<\/a> and that US consumers were \u201cunder some level of stress\u201d<\/a> and that the company, long a bellwether of consumer sentiment, was experiencing slowing sales in the US and Europe.<\/p>\n You can read the full report here:<\/p>\n Share<\/a><\/p>\n There is a big caveat to the US economy\u2019s fast headline growth<\/strong>: it is still being distorted by the big swings in American trade \u2013 exemplified by Donald Trump\u2019s announcement a few minutes before to impose steep 25% tariffs on India<\/a>.<\/p>\n Imports surged in the first quarter, and then fell sharply in the second quarter. And imports count against GDP (to avoid double counting between different countries \u2013 even if imports are useful to that country). The US Bureau of Economic Analysis said:<\/p>\n The increase in real GDP in the second quarter primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP, and an increase in consumer spending.<\/p>\n<\/blockquote>\n Share<\/a>US economy grows at 3% annually, faster than expected<\/p>\n The US economy grew faster than expected<\/strong> in the second quarter of 2025, according to data which make even more distant the prospect of a Federal Reserve<\/a> interest rate cut any time soon.<\/p>\n US GDP grew at a 3% annualised rate, according to the US Bureau of Economic Analysis.<\/p>\n Economists polled by Reuters had predicted annualised GDP growth of 2.4%, after a surprise contraction of 0.5% in the first quarter as exporters rushed to get their products into the country ahead of tariffs. Imports count against a country\u2019s GDP.<\/p>\n Share<\/a>US to impose 25% tariffs on India says Trump<\/p>\n The US will impose tariff of 25% on India<\/strong>, with Donald Trump<\/strong> criticising the world\u2019s fifth-biggest economy for \u201cobnoxious\u201d trade barriers.<\/p>\n Trump wrote in a post on Truth Social, the social network he owns:<\/p>\n While India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country.<\/p>\n<\/blockquote>\n Share<\/a>A Eurofighter Typhoon during a low-level sortie in the Lake District, Cumbria, UK. Photograph: Mark Wright\/BAE Systems<\/p>\n The share price of BAE Systems<\/strong>, Britain\u2019s dominant weapons maker, is down 3.6% today, despite upgrading its sales and profit forecasts for the year thanks to the huge increases in military spending planned by the UK and its allies.<\/p>\n BAE Systems will not be worrying hugely about the share price dip: its shares are still up by 52% during 2025.<\/p>\n BAE Systems\u2019s share price has almost tripled since Russia\u2019s full-scale invasion of Ukraine in early 2022. Photograph: LSEG<\/p>\n BAE has benefited from government spending on the next-generation Tempest fighter jet, due to fly by 2030. The company has also said that it is close to securing further orders for the Typhoon fighter jets that it already builds.<\/p>\n On the Typhoon orders, Charles Woodburn<\/strong>, BAE<\/strong>\u2019s chief executive, said:<\/p>\n There\u2019s definitely interest. But it\u2019s hard to put a timeframe on when those potential next buys might come through.<\/p>\n<\/blockquote>\n There is little sign of a slowdown in sales demand, and a threat to its work on the US-made F-35 fighter jet programme was lifted after activists failed in a challenge to UK involvement. The government successfully argued that exports took precedence over the need to comply with UK laws<\/a> on arms export controls, or any UK obligation to prevent an alleged genocide in Israel.<\/p>\n Woodburn said it was a \u201cstrong operational and financial performance in the first half of the year, giving us the confidence to upgrade our guidance\u201d.<\/p>\n Reuters reported that Woodburn declined to comment on whether BAE was in talks with Boeing and Sweden\u2019s Saab about teaming up on a future replacement for Britain\u2019s Hawk trainer jet, after an earlier report.<\/p>\n Share<\/a><\/p>\n Updated at\u00a008.26 EDT<\/p>\n Toyota halts operations amid tsunami precautions after reporting record sales<\/p>\n The tsunami warnings have thankfully been downgraded in Japan and Hawaii<\/a> \u2013 although other warnings are still in place around the Pacific.<\/p>\n Japan\u2019s Toyota<\/strong> has said that it halted operations at 14 lines in eight plants in Japan, although it will decide whether to restart work as soon as Wednesday evening, according to Nikkei.<\/p>\n Toyota Yaris Cross and Yaris 4 cars are pictured on the assembly line at the Toyota Motor Manufacturing France (TMMF) plant in France. Photograph: Beno\u00eet Tessier\/Reuters<\/p>\n It came after the company bucked the global trend of carmakers reporting falling sales: its output and sales reached a new record<\/strong> in the first half of 2025 \u2013 thanks in part to its focus on hybrid cars that combine a battery with a petrol or diesel engine.<\/p>\n The company did not reveal any financial figures, although it has previously said that it is less exposed to the US tariff turmoil than some rivals because it aims to produce its cars in the markets where it sells \u2013 including within the US.<\/p>\n Reuters reported:<\/p>\n The world\u2019s biggest automaker\u2019s global sales for January-June grew 5.5% year on year to more than 5.1m vehicles, supported by demand for hybrid vehicles, which accounted for about 43% of its worldwide sales over the period.<\/p>\n<\/blockquote>\n Toyota has remained committed to hybrids much more than rivals, which has left it in a good place financially<\/a> as pure electric sales have hit something of a plateau in growth. At the same time, some analysts argue that the company will be left behind in the race to produce the best electric vehicles.<\/p>\n Share<\/a><\/p>\n Updated at\u00a008.31 EDT<\/p>\n Adidas<\/strong> has had a knock-on effect across the trainers world: in the UK, FTSE 100 retailer JD Sports<\/strong> is down 2.5% today after the German shoemaker missed its sales estimates.<\/p>\n However, David Hughes<\/strong>, an analyst at Shore Capital<\/strong>, an investment bank, said JD Sports investors should take heart from the Adidas growth in revenues in the quarter \u2013 despite the hit from tariffs<\/a>.<\/p>\n He wrote that lower levels of discounting and higher full-price sell-through by Adidas were \u201canother sign of strength in the ath-leisure market\u201d. He added:<\/p>\n The growth delivered in the first half gives us more confidence in the strength of the ath-leisure market and in JD\u2019s prospects for a revenue turnaround.<\/p>\n<\/blockquote>\n Share<\/a>Adidas warns of \u20ac200m extra production costs from Trump tariffs Trump\u2019s US import tariffs<\/strong> are expected to cost Adidas<\/strong> up to \u20ac200m more on production costs in the rest of this year as it warned the new tax regime could hit demand if it prompted \u201cmajor inflation\u201d.<\/p>\n The German footwear brand, known for its three-stripe logo, makes most of its product in China and the far east which have targeted by the new US tariff regime and has already warned that prices are likely to have to rise in the US<\/a>.<\/p>\n On Wednesday Bj\u00f8rn Gulden<\/strong>, the chief executive of Adidas<\/strong>, said the group was holding its profit forecast of between \u20ac1.7bn and \u20ac1.8bn, up from \u20ac1.3bn last year, but indicated that was under pressure. He said:<\/p>\n We currently feel confident to deliver it, but of course this might change \u2013 also upwards should headwinds be less than we currently assume.<\/p>\n The year has started great for us and normally we would now be very bullish in our outlook for the full year. We feel the volatility and uncertainty in the world does not make this prudent.<\/p>\n<\/blockquote>\n The company said that the imposition of tariffs had already cost it more than \u20ac10m in extra production costs and this figure would continue to rise.<\/p>\n \u201cWe still do not know what the final tariffs in the US will be\u201d he said, adding \u201cWe do also not know what the indirect impact on consumer demand will be should all these tariffs cause major inflation.\u201d<\/p>\n Gulden made the comments as Adidas revealed sales of the brand increase 12% in the second quarter of the year to \u20ac6bn. Operating profit rose 58% to \u20ac546m as the company, which is bouncing back after being forced to shut down its lucratrive Yeezy collaboration with with Kanye West in 2022<\/a>, said it had reduced discounting.<\/p>\n Gulden said the pace of growth had risen towards the end of the period. The brand is currently outperforming its major rival Nike with both new versions of its vintage footwear styles \u2013 such as an animal print Samba that proved particularly popular with women \u2013 and its running shoes in demand.<\/p>\n Share<\/a><\/p>\n Jillian Ambrose<\/p>\n A view of the Little Cheyne Court wind farm amongst existing electricity pylons on the Romney Marsh in Kent. Photograph: Gareth Fuller\/PA<\/p>\n Britain\u2019s clean energy future risks creating \u201cwinners and losers\u201d if lower-income households are not shielded from the costs added to energy bills to pay for it, the head of the energy regulator has said.<\/p>\n Jonathan Brearley<\/strong>, Ofgem<\/strong>\u2019s chief executive, said a \u201csystematic approach\u201d to sharing the rising costs of the government\u2019s green power ambitions was needed to avoid poorer households facing soaring monthly payments.<\/p>\n The regulator for Great Britain launched a root-and-branch review on Wednesday into how the costs of upgrading the energy networks can be recovered through home energy bills in a way that is fairer.<\/p>\n The review could include plans to cut standing charges for lower-income households<\/a> while wealthier customers pay a higher cost for upgrading the energy system.<\/p>\n You can read the full report here:<\/p>\n Share<\/a>UK housebuilder Taylor Wimpey sets aside \u00a3222m to fix claddingPotentially unsafe cladding being removed from an apartment block in the town centre of Reading after replacement plans were given the all-clear. Photograph: Geoffrey Swaine\/REX\/Shutterstock<\/p>\n The biggest faller on the FTSE 100 is Taylor Wimpey<\/strong>, which is down by 5% after it revealed a \u00a3222m provision to fix potentially dangerous cladding<\/strong>.<\/p>\n Eight years after the Grenfell Tower<\/a><\/strong> fire killed 72 people<\/a>, the housebuilder said that it had found more materials within the walls of older buildings that needed to be replaced because of potential fire safety risks ahead of a UK government deadline.<\/p>\n In response to the Grenfell Tower fire, the government has sought to make developers pay to replace unsuitable cladding<\/a>. Legislation will require landlords of buildings 18m or more in height with unsafe cladding to complete remediation by the end of 2029, and landlords of buildings 11-18m in height to complete remediation by the end of 2031.<\/p>\n \u00a3145m of the cost to Taylor Wimpey related to \u201can expanded scope of works to remediate historical building defects, relating to cavity barriers behind brickwork and render\u201d. Those cavity barriers were not visible without \u201cintrusive investigations\u201d \u2013 removing the outer layer of bricks or cladding to see what was inside.<\/p>\n Another \u00a340m was for cladding that had previously been judged as acceptable, plus \u00a338m for other costs relating to the changes.<\/p>\n Jennie Daly<\/strong>, Taylor Wimpey\u2019s chief executive, said:<\/p>\n The safety of our customers remains our highest priority \u2013 this principle has consistently guided our approach, and we have increased our cladding fire safety provision to reflect findings from updated fire risk assessments and investigations in the first half.<\/p>\n<\/blockquote>\n The company also warned that cladding remediation costs represent a key source of uncertainty.<\/p>\n Share<\/a><\/p>\n The Eurozone economy<\/strong> has grown by 0.1% \u2013 marginally better than the expectation of zero growth from economists.<\/p>\n The reading was marginally better than expected in part thanks to faster-than-expected growth in France<\/a>, the second-largest economy in the EU.<\/p>\n Still, it was a slowdown compared with the 0.6% growth in the first quarter. Some economists have put down that acceleration to companies trying to get ahead of US tariffs by making more products and racing to get exports into the country before the levies took effect.<\/p>\n Economists had expected a lull in demand in the spring during a payback period.<\/p>\n Share<\/a>The Aston Martin Vantage acting as the safety car at the Formula 1 Belgian grand prix. Photograph: Alessandro Martellotta\/Hasan Bratic\/DeFodi Images\/Shutterstock<\/p>\n It is not just tariffs that are causing problems for Aston Martin Lagonda<\/strong>: the British manufacturer issued a profit warning<\/strong> on Wednesday blaming trade disruption, but also the slump in demand for luxury cars in China.<\/p>\n Adrian Hallmark<\/strong>, Aston Martin\u2019s chief executive, said:<\/p>\n China is a big problem child \u2013 no question.<\/p>\n The market for luxury vehicles in China remains extremely subdued.<\/p>\n<\/blockquote>\n Chinese demand for luxury cars \u2013 and other luxury products such as watches, fine wine and clothing \u2013 has been hit by the long-running turmoil in the country\u2019s property market, but also by a political turn away from symbols of excess<\/a> in the nominally communist country.<\/p>\n Aston Martin had previously said it expected to generate an operating profit, but on Wednesday said that operating profits were only \u201cexpected to improve towards breakeven\u201d.<\/p>\n The company said sales in China were broadly flat compared with last year, \u201creflecting a continued weak macroeconomic environment which is leading to supressed demand and [which] is expected to continue at least in the near-term\u201d.<\/p>\n Share<\/a>Germany’s economy shrank 0.1% in second quarter of 2025<\/p>\n The German economy<\/strong> shrank by 0.1%<\/strong> in the spring of 2025, as companies adjusted to the impact of Donald Trump\u2019s tariffs.<\/p>\n Germany is the EU\u2019s largest economy and biggest exporter, so its growth figures are crucial in determining the rate of growth in the eurozone \u2013 data expected at 10am BST.<\/p>\n Economists had expected the decline in output. The country\u2019s federal statistics agency also revised down growth in the first quarter to 0.3%, rather than the preliminary reading of 0.4%.<\/p>\n You can see the tale of Germany\u2019s struggling economy since the coronavirus pandemic in the below chart: note that GDP is below 2022 levels.<\/p>\n Germany’s economy shrank slightly in the second quarter of 2025, continuing a tough run since the coronavirus pandemic. Photograph: Destatis<\/p>\n It came after France<\/strong>\u2019s economy, Europe\u2019s second-largest, significantly outperformed expectations. French GDP grew by 0.3% in the second quarter, according to preliminary data.<\/p>\n That was a surprise acceleration in growth from the 0.1% revised reading for first-quarter growth \u2013 and higher than the 0.1% expected by economists polled by Reuters.<\/p>\n Nicholas Farr<\/strong>, Emerging Europe economist at Capital Economics<\/strong>, a consultancy, also said that the economies of Hungary<\/strong> and Czechia<\/strong> \u201chave held up reasonably well since the introduction of US tariffs in April\u201d, according to data published on Wednesday.<\/p>\n Hungary\u2019s GDP grew by 0.4% in the quarters, an improvement from a 0.1% contraction in the previous quarter. The Czech economy performed a bit worse; growth slowed from 0.8% in the first quarter to 0.2%.<\/p>\n Share<\/a><\/p>\n The first waves have hit Hawaii<\/a> after a powerful magnitude 8.8 earthquake struck off Russia\u2019s far eastern Kamchatka peninsula and triggered tsunami<\/strong> warnings across the Pacific.<\/p>\n You can follow updates on the tsunami warnings here:<\/p>\n The evacuations are of course affecting businesses in the affected areas, including in Japan. Reuters reported:<\/p>\n Automaker Nissan<\/strong> Motor suspended operations at certain domestic factories in Japan to ensure employee safety, Kyodo news agency reported. Three tsunami waves had been recorded in Japan, the largest of 1.3 metres, officials said. Japan\u2019s Chief Cabinet Secretary Yoshimasa Hayashi said there were no injuries or damage reported so far, and no irregularities at any nuclear plants.<\/p>\n<\/blockquote>\n Share<\/a><\/p>\n Updated at\u00a003.43 EDT<\/p>\n A Porsche Taycan GTS model is on display on the Porsche booth during the Auto Show, in Shanghai, China, 23 April 2025. Photograph: Alex Plavevski\/EPA<\/p>\n Porsche<\/strong> has been heavily hit by the US tariffs, but the German sportscar maker has not yet decided to shift production to America.<\/p>\n The carmaker\u2019s chief financial officer, Jochen Breckner<\/strong>, has told reporters this morning that the company is are observing the tariff situation and how the market responds, but there is currently no US production planned, Reuters reported.<\/p>\n Breckner said the EU-US trade deal is good for planning security but burdens Porsche\u2019s business model. Porsche does most of its production in Germany.<\/p>\n Share<\/a><\/p>\n The FTSE 100<\/strong> has dropped 0.5% in the opening trades on Wednesday.<\/p>\n Germany\u2019s Dax<\/strong> is down 0.2%, while France\u2019s Cac 40<\/strong> has dropped 0.15%. The Europe-wide Stoxx 600<\/strong> is down 0.2%.<\/p>\n Share<\/a>HSBC profits fell 29% in second quarter amid Chinese bank and property woes HSBC<\/strong>\u2019s profits fell by a more-than-expected 29% between April and June as its exposure to a Chinese bank and Hong Kong\u2019s troubled commercial real estate sector took its toll.<\/p>\n The London-headquartered bank said it took a $2.1bn (\u00a31.6bn) hit related to its investment in China\u2019s fifth largest lender, Bank of Communications (BoCom), which was diluted as a result of a recapitalisation plan meant to offset the effects of a sluggish Chinese economy and struggling property sector.<\/p>\n The boss of the bank joined a growing chorus of bankers cautioning <\/a>Rachel Reeves<\/a><\/strong> against increasing taxes on banks<\/a> in her autumn budget, warning it risked \u201ceroding\u201d investment and ultimately harming UK growth.<\/p>\n Chief executive Georges Elhedery<\/strong> said that banks in the UK already subject to the highest level of taxes on profits compared to any other sector, and paid more taxes in the UK compared to most other countries. He said placing further financial pressures on lenders could spell trouble for the local economy.<\/p>\n Elhedery told journalists on Wednesday:<\/p>\n Additional taxation on banks does run the risk of eroding our continued investment capacity in in the business and in supporting our customers, and ultimately in delivering growth for the UK.<\/p>\n<\/blockquote>\n Share<\/a>Mercedes-Benz, Porsche and Aston Martin count steep cost of US tariffs<\/p>\n Good morning, and welcome to our live coverage of business, economics and financial markets.<\/strong><\/p>\n Car companies around the world are laying out the cost of Donald Trump\u2019s trade war, with Mercedes-Benz<\/strong> saying tariffs will cost it \u20ac362m (\u00a3313m) while German sportscar maker Porsche<\/strong> saying it would cost \u20ac400m.<\/p>\n British sportscar manufacturer Aston Martin Lagonda<\/strong> also said that it cut production and limited exports to the US to try to limit the financial impact.<\/p>\n The Trump administration raised tariffs of 27.5% on car imports from the EU and UK, causing chaos for German and British carmakers \u2013 although the EU trade deal will cut that to 15%<\/a>, while the UK has secured a 10% tariff on the first 100,000 exports<\/a>.<\/p>\n Mercedes-Benz said the tariffs were \u201ccausing great uncertainty\u201d, and had hit sales, which dropped 9% year-on-year to 453,700 units in the second quarter. Reuters reported that Mercedes said tariffs would cut profits by about 1.5 percentage points, equivalent to a tariff effect of \u20ac362m on the division\u2019s adjusted operating profit.<\/p>\n Ola K\u00e4llenius<\/strong>, Mercedes-Benz<\/strong>\u2019s chief executive, said:<\/p>\n We achieved robust financial results in the second quarter given the dynamic business environment. The best response is to stay on course to deliver desirable and intelligent products, while keeping a tight grip on costs.<\/p>\n<\/blockquote>\n Porsche said the introduction of increased US import tariffs resulted in additional costs of \u20ac400m in the first half of the year as the company protected customers from price increases.<\/p>\n Paint technicians inspect the first production DBX 707 as it prepares to leave the Aston Martin St Athan factory near Barry, Wales. Photograph: Ben Birchall\/PA<\/p>\n The effect of Trump\u2019s trade war was also evident in the UK, where Aston Martin was forced to cut back production and run down stocks at US dealers in order to avoid the tariffs of 27.5%. Those have now been reduced to 10% under the UK\u2019s trade deal with the US \u2013 although only for the first 100,000 exports on a first-come, first-served basis.<\/p>\n Adrian Hallmark<\/strong>, Aston Martin\u2019s <\/strong>chief executive, said:<\/p>\n The evolving and disruptive US tariff situation was unhelpful to our operations in the second quarter. In response, we adjusted production and limited imports through April and May while awaiting confirmation of a trade agreement between the UK and the US, leveraging existing inventory held by our US dealers in that period.<\/p>\n We resumed shipments to the US in June in anticipation of a finalised agreement which came into effect on 30 June 2025. We continue to actively engage the UK government to urge them to improve the quota mechanism to ensure fair access for the whole UK car industry to the 10% rate on an ongoing basis.<\/p>\n<\/blockquote>\n The agenda<\/p>\n 9am BST<\/strong>: Germany GDP growth rate (second quarter; previous: 0.4%; consensus: -0.1%)<\/p>\n<\/li>\n 9am BST<\/strong>: Italy GDP growth rate (second quarter; prev.: 0.3%; consensus: 0.2%)<\/p>\n<\/li>\n\n
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Lauren ArataniUS President Donald Trump points to a document as Federal Reserve chair Jerome Powell fact-checks the numbers on it during a tour of the Federal Reserve Board building last week. Photograph: Kent Nishimura\/Reuters<\/p>\n\n
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Sarah ButlerAdidas products are displayed at the company headquarters in Herzogenaurach, Germany, in March. Photograph: Helen Reid\/Reuters<\/p>\n\n
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Kalyeena MakortoffGeorges Elhedery, HSBC\u2019s chief executive, gestures during an interview in Dubai in 2017. Photograph: Tom Arnold\/Reuters<\/p>\n\n
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