UK economy shrinks by 0.3% in April
The Bank of England has revised down its growth forecast for 2026 to 1.25%. (AP pic)
LONDON : Britain's economic output contracted by a worse-than-expected 0.3% in April, when shockwaves from US President Donald Trump's announcement of wide-ranging tariffs hit the global economy, official data showed today.
A Reuters poll of economists had forecast that Britain's gross domestic product would fall by 0.1% in April compared with March's level.
Britain's economy expanded by 0.7% in the first quarter of 2025, outstripping growth in other countries in the Group of Seven advanced economies and prompting the Bank of England (BoE) to revise up its full-year growth forecast to 1% last month.
However, the BoE revised down its growth forecast for 2026 to 1.25% and said it expected the tariffs to knock 0.3% off British output in three years' time.
BoE policymakers who are expected to hold interest rates next week are faced with competing forces of stubborn inflation and a relatively sluggish economy.
A closely-watched business survey earlier this month suggested much of the economy returned to tepid growth.
Business surveys of British firms have generally been downbeat and shown firms slowed their hiring and investment plans due to big increases in labour costs announced by finance minister Rachel Reeves last October.
Data published this week showed a fall in consumer spending in May.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malay Mail
43 minutes ago
- Malay Mail
Musk–Trump tension hits Sabah's space dream, official says as state eyes foreign investment for launch site
KOTA KINABALU, June 14 — The recent tensions between American billionaire Elon Musk and United States President Donald Trump have posed a setback to Sabah's space ambitions. 'This is relevant because we are targeting investment from Elon Musk's side. Most of the world's major commercial space programmes are based in the United States, followed by Europe. We are also considering China. All this requires firm decisions at the federal level,' explained Science, Technology and Innovation Sabah Ministry (KSTI) Permanent Secretary, Datuk Mohd Hanafiah Mohd Kassim. From a global perspective, he said there is currently congestion in satellite launches due to a shortage of launch platforms. 'There is a bottleneck. Rocket operations are also very costly. That's why we're focusing on developing the ground-based operation site. In the future, God willing, with proper training, Malaysians – particularly Sabahan talents – can move further into the space sector,' he told reporters during KSTI's Sabah Excellent Service Awards ceremony at the Magellan Sutera Harbour Resort yesterday, which was graced by KSTI Minister Datuk Ariffin Mohd Arif. Hanafiah said the study on the proposed Sabah Space Centre is nearing completion, with the final report expected by the end of July. 'It was supposed to be completed earlier, but delays occurred due to pending information from several government offices. The new target for completion is by the end of July. It's nearly done,' he said. Once the study is finalised, planning for the project's implementation phases can begin, including identifying the budget requirements. 'Before we can proceed, the first step would be budgeting. The space industry is highly advanced and demands substantial funding, so foreign investment will be essential. Essentially, they will be the ones carrying out the implementation,' he said. He also emphasised that the project has the potential to create job opportunities for the people of Sabah. In addition to Sabah, the states of Pahang and Sarawak are also vying to become Malaysia's launch site. 'There are three states involved, if I'm not mistaken. But everything is still undecided. Each state is likely conducting its own study. Once completed, the findings will be presented to the state governments and subsequently brought to the federal level. Only then will a final site be selected,' he said. Nevertheless, Hanafiah expressed optimism that Sabah has the capability to be chosen as the launch site. Touching on the awards ceremony, he said it is part of the Sabah Government's policy to recognise the contributions of public servants. Three categories were presented: Special Awards under the Permanent Secretary, Special Awards under the Minister, and the Excellence Service Awards. — The Borneo Post
Free Malaysia Today
3 hours ago
- Free Malaysia Today
Stocks slump, oil prices surge as Middle East erupts
Gold rose 1.4% to US$3,431 per ounce, nearing its April peak of US$3,500 as conflict boosted safe haven demand. (AP pic) NEW YORK : World stock markets fell on Friday, and oil prices surged, as Israel launched military strikes on Iran, sparking inflows into safe havens such as gold and the dollar. Early on Friday, US President Donald Trump urged Iran to make a deal over its nuclear programme – the primary target of the strikes – saying there was still time for the country to prevent further conflict with Israel. But later in the day, Iran fired missiles at Israel in response to the attacks; explosions were heard over Tel Aviv and Jerusalem as sirens sounded on Friday night across the country. Worries that the conflict could disrupt Middle Eastern oil and gas supplies pushed prices sharply higher. Global benchmark Brent crude futures settled 7% higher at US$74.23 a barrel, after earlier soaring over 13%, while US crude finished at US$72.98 a barrel, up 7.62%. US natural gas climbed about 3% and European gas prices jumped over 5% to their highest intraday level in 10 weeks. Gold, a safe haven in times of global uncertainty, rose 1.4% to US$3,431 per ounce, bringing it close to the record high of US$3,500.05 from April. ADVERTISEMENT VIDCRUNCH Next Stay Playback speed 1x Normal Quality Auto Back 360p 240p 144p Auto Back 0.25x 0.5x 1x Normal 1.5x 2x / Skip Ads by The rush to safety was matched by a dash out of risk assets. The Dow Jones Industrial Average fell 1.8%, the S&P 500 dropped 1.1%, and the Nasdaq Composite lost 1.3%. European shares dropped 0.9%, briefly hitting its lowest level in three weeks, and in Asia, major bourses in Japan, South Korea, and Hong Kong fell over 1% each. An escalation in the Middle East – a major oil-producing region – adds uncertainty to financial markets at a time of heightened pressure on the global economy from President Trump's unpredictable trade policies. 'The re-emergence of major conflict in the Middle East should raise geopolitical stress, including sharply higher oil prices,' Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute, said in an email. Samana added, though, that the conflict should represent a buying opportunity for long-term investors, including in US large-cap stocks and commodities. Investors will also keep close watch on planned protests across US cities on Saturday, amid heightened concerns following immigration raids in Los Angeles. Two-way pull for bonds US 10-year Treasury yields rose 5.6 basis points to 4.413%, as markets absorbed a sudden shock to commodity and stock prices, reversing some of the declines after four days mainly in the red. 'This is a flight-to-safety event. But markets are struggling a bit, and in the fixed income space you have an oil-price shock that is inflationary, and so you should see markets expecting an even more hawkish Fed,' said James Rossiter, head of global macro strategy at TD Securities. 'On the other hand, you have the flight to safety, which should push bond yields lower.' Some traders were attracted to the dollar as a haven, with the dollar index up about 0.5% to 98.16, retracing most of Thursday's sizeable decline. The Swiss franc briefly touched its strongest level against the dollar since April 21, before trading 0.1% lower at around 0.811 per dollar. Another safe haven, the Japanese yen, fell 0.34% to about 144 per dollar, giving up earlier gains of 0.3%. The euro was down 0.3% at US$1.15, after rising on Thursday to the highest since October 2021. 'Clearly if the conflict in the Middle East is short term in nature, the weakness in USD will likely continue,' Arun Bharath, chief investment officer at Bel Air Investment Advisors, said in an email. If not, he added, the fundamental factors that suggest further weakness for the dollar might be offset by a geopolitical premium for it.
The Star
3 hours ago
- The Star
Trump urged EchoStar, FCC chair to cut a deal on spectrum -Bloomberg
FILE PHOTO: A satellite model is placed on EchoStar Satellite Services logo in this picture illustration taken April 4, 2022. REUTERS/Dado Ruvic/Illustration/File photo WASHINGTON (Reuters) -President Donald Trump urged EchoStar Corp Chairman Charlie Ergen and Federal Communications Commission Chair Brendan Carr to reach a deal over the fate of the company's wireless spectrum licenses, Bloomberg reported on Friday. EchoStar shares were up 52% in after-hours trading Friday on the report. On Thursday, Trump met with Ergen and he telephoned Carr, who came to the White House to join the meeting, Bloomberg reported. The White House and EchoStar declined to comment. The FCC did not immediately respond to a request from Reuters for comment on Friday. EchoStar has been trying to shield its cache of wireless spectrum licenses from the threat of revocation by the FCC. U.S. satellite TV provider DirecTV terminated its agreement to acquire EchoStar's satellite television business last year, which includes rival Dish TV, over a failed debt-exchange offer. In May, the FCC told EchoStar it was investigating the company's compliance obligations to provide 5G service in the U.S., questioning EchoStar's buildout extension and mobile-satellite service. EchoStar said the FCC disclosure was "harming EchoStar's ongoing deployment and threaten its viability as a wireless provider as well as endanger the video and broadband satellite services upon which millions of consumers rely." The company added "the possibility of reversing prior grants of authority related to spectrum for which EchoStar paid billions and in which it invested billions more, in contravention of long-standing commission precedent." EchoStar has previously disclosed that it missed roughly $500 million in interest payments, citing uncertainty around the ongoing FCC review. (Reporting by David Shepardson; Editing by Leslie Adler and David Gregorio)
