Tariff uncertainty ‘could wipe 2.4% off world economy’
Uncertainty over the US-driven trade war risks spilling over and depressing consumer sentiment and financial markets, a new report has warned, with a severe impact on global growth.
In a new report ahead of President Trump’s self-proclaimed “Liberation Day” next Wednesday, Oxford Economics have examined the impact of high uncertainty over tariffs.
Their work shows that prolonged tariff uncertainty would lower global GDP by 0.7% to 1.7% by 2028, but that hit would be larger – knocking up to 2.4% off the world economy – if financial markets and consumer sentiment were also depressed.
The report says:
“The recent US stock market correction appears to have been partially triggered by investors realising that Trump may follow through with his tariff threats and that this will hurt the US economy. Similarly, consumer sentiment has weakened due to tariff-induced inflation fears.”
“Should continuing policy uncertainty depress financial markets and consumer sentiment more severely, above and beyond the recent US stock market correction, we estimate the drop in global GDP would be significantly larger – ranging from -1.1% to -2.4% in 2028.”
Key events
UK prime minister Keir Starmer has said the UK “reserves the right to respond” to American tariffs.
Following US President Donald Trump’s decision to slap a 25% import tax on cars, Starmer said his Government was involved in ongoing discussions with the White House aimed at “mitigating the impact” of any levies but that ultimately “our national interest has to come first”.
Asked whether the UK reserves the right to respond to tariffs during a visit to Yorkshire, he said:
“Yes, of course. Obviously, any tariffs are concerning and we’re working hard with the industries and sectors likely to be impacted.
“None of them want to see a trade war, which is why we’re engaged in discussions with the United States about mitigating the impact of tariffs.
“Now, that’s what we’re working hard on, but in answer to your question, yes – in the end, our national interest has to come first, which means all options are on the table.”
US PCE inflation measure rises
A closely watched measure of inflation in the US has risen higher, suggesting cost of living pressures in America are rising even before new tariffs kick in.
The core PCE price index rose by 2.8% in February, up from 2.6% in January, and higher than expected.
Core PCE is the Federal Reserve’s preferred inflation measure, so this may deter them from cutting US interest rates soon, especially as US firms may soon be passing on more new tariffs on imports to consumers.
The report also shows that US personal incomes rose by 0.8% in February, due to a pick-up in wages.
But inflation-adjusted consumer spending only edged up 0.1%, with households choosing to save more instead. That could be a drag on economic growth.
Thames Water’s CFO departs
Troubled UK utility firm Thames Water has just announced the imminent departure of its finance chief, at a crucial time for the company.
Alastair Cochran, Thames’s chief financial officer, will step down from his role “at the end of March 2025”, which doesn’t give him much time to clear his desk!
Cochran’s departure comes just a few weeks after Thames Water secured a £3bn emergency loan to restructure its business, giving it more time to avoid falling into administration.
But it also come as the company, which has nearly £20bn in debt, is in talks with six bidders about a possible takeover.
Thames Water Utilities Limited’s chairman, Sir Adrian Montague says:
“On behalf of the Board I would like to offer our sincere thanks to Al for his service. He has overseen significant changes to the Company during his time on the Board and Executive.
At the request of the Board, alongside his role as CFO, he served as joint CEO maintaining stability for the business before the appointment of the current Chief Executive.
He has led the work to put TWUL’s finances on a more stable footing, overseeing the first stages of our equity raise and financial restructuring, laying the foundations for the wholesale recapitalisation of the business. We wish him the very best for the future.”
Thames hasn’t, yet, got a permanent replacement for Cochran. Instead, it has asked its Director of Group Finance, Stuart Thom, to act as interim CFO “whilst longer term arrangements are put in place”.
Tariff uncertainty ‘could wipe 2.4% off world economy’
Uncertainty over the US-driven trade war risks spilling over and depressing consumer sentiment and financial markets, a new report has warned, with a severe impact on global growth.
In a new report ahead of President Trump’s self-proclaimed “Liberation Day” next Wednesday, Oxford Economics have examined the impact of high uncertainty over tariffs.
Their work shows that prolonged tariff uncertainty would lower global GDP by 0.7% to 1.7% by 2028, but that hit would be larger – knocking up to 2.4% off the world economy – if financial markets and consumer sentiment were also depressed.
The report says:
“The recent US stock market correction appears to have been partially triggered by investors realising that Trump may follow through with his tariff threats and that this will hurt the US economy. Similarly, consumer sentiment has weakened due to tariff-induced inflation fears.”
“Should continuing policy uncertainty depress financial markets and consumer sentiment more severely, above and beyond the recent US stock market correction, we estimate the drop in global GDP would be significantly larger – ranging from -1.1% to -2.4% in 2028.”
Over in Berlin, a German government spokesperson has declared that “nothing is off the table” with regards to potential responses to the threat of US tariffs.
Asked whether countermeasures could target U.S. tech companies, the spokesperson said “at the moment, nothing is off the table, but instead everything is being looked at.”
He added:
“Decisions must be made jointly and in consideration of the costs and benefits within the European Union and under the leadership of the European Commission – this process is under way.”
Back in Beijing, Sean Stein, president of the U.S.-China Business Council, has been discussing today’s meeting between president Xi and global CEOs.
Stein says:
“The CEOs I spoke with, and I spoke with a lot of them, felt it was worth it.
“Not only did the president acknowledge various challenges facing companies and industry, in many cases he pledged the government would take action.”
During the meeting, Xi urged global business leaders to push back against protectionism, saying:
“Some countries are building a small yard with high fences, erecting tariff barriers, politicizing business issues, using them as tools and weapons.
I hope you will share your sensible views and take actions to push back against the retrogressive rules and the zero-sum games.
Mark Sweney
Chelsea FC owner and chairman Todd Boehly is considering making a bid for the owner of the Scotsman and Yorkshire Post, in a move seen as a pre-cursor to making a potential offer for The Telegraph.
National World, the London-listed owner of more than 100 regional titles, said that it had received confirmation that Boehly-controlled Eldridge Media Holdings (EMH) is considering making a proposal to buy the company.
Boehly has been in talks with David Montgomery, the former boss of the parent of the Mirror and executive chairman of National World, about a potential tie-up to buy the Daily and Sunday Telegraph which has been up for sale for almost two years.
Montgomery’s National World, which was an underbidder in the protracted auction of the Telegraph titles, is currently in the process of a shareholder-approved takeover by its largest investor.
“The company acknowledges, for the purposes of the takeover code, that it is in receipt of an approach from EMH regarding a possible offer for the entire issued and to be issued share capital of the company,” said National World in a statement to markets on Friday.
“The National World board will consider the terms of any proposal put forward by EMH that may deliver superior value to National World shareholders than the scheme [of arrangement relating to the current sale process]”.
Boehly and Montgomery have been in talks about a potential deal that would combine National World and the Telegraph titles, and also involve other third-party backers, at a price below the £500m-plus level being sought by the Telegraph’s current backers.
RedBird IMI, which drives most of its funding from Sheikh Mansour bin Zayed Al Nahyan, the vice-president of the UAE and owner of Manchester City football club, paid £600m to take control of Telegraph Media Group in November 2023 from the Barclay family.
However, RedBird IMI was forced to put the titles back up for sale in the spring after the British government published legislation to block foreign states or associated individuals from owning newspaper assets in the UK.
Dovid Efune, the British owner of the New York Sun, had several weeks of exclusivity late last year to push through a £550m deal to buy the titles.
However, Efune has so far failed to raise the financial backing to get the deal over the line and RedBird IMI is pursuing talks with other potential bidders.
MPs demand answers over faulty ONS data
Newsflash: MPs have raised fresh concerns with the UK’s Office for National Statistics over its failure to produce accurate data.
The Treasury committee are demanding answers from the ONS about “the latest troubling errors and delays in trade data and Producer Price Index data”, which they say will widen concerns about how reliable ONS data is.
Dame Meg Hillier MP, chair of the Treasury Committee, has asked national statistian Sir Ian Diamond to explain what’s going on.
She wants to know:
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the nature and cause of the errors identified in the trade data, why the errors were revealed now, and when the ONS first had knowledge of the errors;
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the nature and cause of the “problem” identified with the Producer Price Index (PPI) and Services Producer Price Index (SPPI) methodology, why the problem was revealed now, and when the ONS first had knowledge of the problem;
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your latest assessment of the impact on the PPI and SPPI and the impact on linked data series, such as GDP; and
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when you expect publication to resume, and when you expect the PPI and SPPI to be restored to full quality
January’s trade data was delayed by two weeks, until this morning, and shows a small widening in the UK’s trade in goods deficit.
The ONS warned last week that there are errors in its growth figures after spotting problems with the ‘factory gate’ price data (PPI) it uses to calculate the size of Britain’s economy. PPI data has now been suspended, which means we can’t tell how much UK manufacturers are raising, or lowering, prices by.
This comes on top of the well-known problems with the ONS’s labour force data, which led to Diamond being hauled before the Treasury Committee last month. He told MPs that more money would help lift the response rates to the ONS’s surveys, which have slumped since the pandemic.
Rise in UK house purchases in February ahead of stamp duty changes
Property transactions across the UK jumped last month, as first time buyers rush to avoid the rise in stamp duty coming in April.
HMRC reports that there were 108,250 UK residential transactions in February, which is 13% more than in January and 28% higher than February 2024.
This suggests that first-time buyers brought forward their purchasing decisions to avoid the increase in stamp duty from 1 April, when the threshold at which first-time buyers start paying stamp duty will return to £300,000, from the current rate of £435,000.
UK monthly property transactions got a stamp duty bump as buyers rushed to complete in February 2025 before the taxation holiday came to a close. UK residential transactions in February 2025 were 28% higher than February 2024 and 13% higher than January 2025 at 108,250. pic.twitter.com/L1kbQfN2vr
— Emma Fildes (@emmafildes) March 28, 2025
Tom Bill, head of UK residential research at Knight Frank, said:
“The jump in February proves that nothing moves the UK housing market quite like a change in stamp duty. We expect a similar increase in March but what happens next will be more important in assessing the health of the property market.
The underlying reality feels reasonably stable but there are still risks in the shape of persistent inflation and stubbornly-high mortgage rates, unpredictable US trade policy and an autumn budget where speculation will focus on tax rises. We expect UK prices to rise by 2.5% this year.”
World leaders are continuing to react to Donald Trump’s imposition of a 25% tariff on car imports, and the looming “Liberation Day” levies expected next week.
India is attempting to placate the US president, by offering tariff cuts on imports of U.S. farm products like almonds and cranberries.
In a series of meeting in New Delhi with Brendan Lynch, the assistant U.S. trade representative for South and Central Asia, India agreed to cut tariffs on bourbon whiskey and agricultural products such as almonds, walnuts, cranberries, pistachios and lentils, Reuters reports.
Other leaders are less conciliatory, with Canada’s prime minister, Mark Carney, warning yesterday that the era of deep ties with the US “is over”.
Spain’s prime minister Pedro Sanchez has today called on the US administration to reconsider new tariffs on goods imported from Europe.
