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The Guardian - UK
The Guardian - UK
Business
Julia Kollewe

US stock markets fall further after Trump curbs chip sales to China; gold hits new record high – as it happened

Inflation United States Nvidia United Kingdom MPC Donald Trump China Bank of England The Bank of England
A trader after the closing bell on the floor at the New York Stock Exchange on 15 April.
A trader after the closing bell on the floor at the New York Stock Exchange on 15 April. Photograph: Brendan McDermid/Reuters

Closing summary

Global stocks and the dollar have sold off after Donald Trump imposed limits on chip sales to China.

Nvidia said it expects a $5.5bn (£4.1bn) hit after his administration barred the chip designer from selling crucial artificial intelligence chips in China.

Trump’s tariffs will send international trade into reverse this year, depressing global economic growth, the World Trade Organization has warned.

In its latest snapshot of the global trading system, the Geneva-based institution says it had previously expected goods trade to expand by a healthy 2.7% this year. As a result of Washington’s trade policy, it is now forecasting a 0.2% decline.

Inflation in the UK and eurozone has slowed, to 2.6% and 2.2% respectively, increasing pressure on the Bank of England and the European Central Bank to cut interest rates further.

Our other main stories:

Thank you for reading. We’ll be back tomorrow. Take care! – JK

Spotify hit by service outage

Spotify has been hit by a service outage which has left many users unable to stream music or use the firm’s app.

The company said in a statement posted on X that it was “aware of some issues” and that it was “checking them out”.

Many users say they have unable to play audio not already downloaded to their music library, with others say the platform’s app is slow or unresponsive.

Spotify has not confirmed the cause of the issue.

According to service status website Downdetector, problems with the music streaming service began at around 1pm, and more than 20,000 reports had been logged by the monitoring site from users flagging issues.

Updated

Bank of Canada holds interest rates

The Bank of Canada has held its policy rate at 2.75%.

The central bank explained its decision in a statement:

The major shift in direction of US trade policy and the unpredictability of tariffs have increased uncertainty, diminished prospects for economic growth, and raised inflation expectations. Pervasive uncertainty makes it unusually challenging to project GDP growth and inflation in Canada and globally.

Instead, the April Monetary Policy Report (MPR) presents two scenarios that explore different paths for US trade policy. In the first scenario, uncertainty is high but tariffs are limited in scope. Canadian growth weakens temporarily and inflation remains around the 2% target. In the second scenario, a protracted trade war causes Canada’s economy to fall into recession this year and inflation rises temporarily above 3% next year. Many other trade policy scenarios are possible. There is also an unusual degree of uncertainty about the economic outcomes within any scenario, since the magnitude and speed of the shift in US trade policy are unprecedented.

Oil rises on potential for US-China talks, Iraq output cut plan

Oil prices have risen as the market hoped for potential trade talks between China and the US, and following a report that Iraq plans to cut oil production in April.

Brent crude rose by 84 cents, or 1.3%, to $65.49 a barrel, while US crude rose by a similar amount to $62.12 a barrel.

Both global benchmarks rose after Bloomberg News quoted an anonymous source as saying that China wants more respect from the Trump administration before agreeing to talks, and that Beijing wants the US to appoint a new main contact in future talks.

UBS analyst Giovanni Staunovo said:

A de-escalation of the trade war between the US and China would reduce the downside in economic growth prospects and limit the downside for oil demand growth.

Donald Trump said he will personally attend a meeting of Japanese and US trade officials today, in a surprise move that shows how keen he is to oversee trade deal negotiations after his barrage of tariffs on imports from many countries (which have mostly been paused for 90 days).

Tokyo sent its economic revitalisation minister Ryosei Akazawa to kickstart the talks, expecting to face US treasury secretary Scott Bessent in Washington.

But Trump weighed in, saying on the social media platform Truth Social:

Japan is coming in today to negotiate Tariffs, the cost of military support, and ‘TRADE FAIRNESS’.

I will attend the meeting, along with Treasury & Commerce Secretaries. Hopefully something can be worked out which is good (GREAT!) for Jaapn and the USA!

Wall Street joins the global stock sell-off

Stocks on Wall Street have fallen after the opening bell, joining the global rout.

The tech-heavy Nasdaq lost 323 points, or 1.9%, to 16,499 while the Dow Jones fell by 190 points, or 0.5%, to 40,179 and the S&P 500 slid by 61 points to 5,335, a 1.1% decline.

Nvidia shares fell by 6.5%. The US chipmaker said it expects a $5.5bn (£4.1bn) hit after Donald Trump’s administration barred the chip designer from selling crucial artificial intelligence chips in China.

Shares in Europe have fallen between 0.3% (FTSE 100) and 0.7% (France’s CAC).

The US dollar has sold off again, down by 0.6% against a basket of major currencies. The pound has given up some of its gains, though, trading 0.2% higher at $1.3262.

Updated

US industrial production falls in March

While US retail sales surprised with a strong gain last month, industrial production fell more than expected, despite higher output at American factories.

Factory output rose at a modest pace, the month before Donald Trump’s announcement of sweeping tariffs.

Overall industrial production, which comprises manufacturing, energy, mining and quarrying, fell by 0.3% in March, while economists had expected a 0.2% dip – the first decline in four months. Output at utilities fell because of warmer weather, while mining and energy extraction rose.

Factory production rose by 0.3% followed by a revised 1% gain in February that was fuelled by a surge in carmaking.

US retail sales jump in March ahead of Trump tariffs

Retail sales in the US rose more than expected in March, suggesting that consumers were racing to snap up goods before the implementation of president Donald Trump’s tariffs.

Retail sales jumped by 1.4% last month, compared with a 0.2% gain in February, according to the US Census Bureau.

The sales surge comes in the month before Trump unveiled steep ‘reciprocal’ tariffs on a many countries on what he called ‘liberation day’ on 2 April – only to pause them for 90 days, with the exception of Chinese imports to the US, on which he slapped a 145% duty.

Sony has already announced that it is raising the price of its PlayStation 5 digital version.

Despite the strong retail sales, US stock market futures are pointing to a lower open on Wall Street – the tech-heavy Nasdaq is seen opening 1.7% lower, down 315 points, while the Dow Jones is set for a 0.3% dip, down 108 points, and the S&P 500 is expected to drop by 50 points, or 0.9%.

Updated

EY, one of the “big four” accounting firms, is being investigated over how it audited the accounts of the Post Office as the postal branch network wrestled with the Horizon software scandal that resulted in hundreds of post office operators being wrongly convicted.

The UK’s accounting regulator, the Financial Reporting Council (FRC), said it had begun an investigation into whether the firm met its standards “with particular reference to matters related to the Horizon IT system”.

The Horizon accounting software was developed by Fujitsu and was at the heart of the Post Office scandal, described as the UK’s most widespread miscarriage of justice, which has been the subject of a long-running inquiry that concluded its hearings in December.

The FRC said:

So as not to interfere with the Post Office Horizon IT inquiry, the opening of this investigation follows the conclusion of the public hearings. While the inquiry was extensive, it purposefully did not encompass the role or knowledge of external auditors in its scope.

UN trade agency: Global growth could slow to 2.3% due to tariffs

Global economic growth is forecast to slow sharply this year because of trade tensions and mounting uncertainty, according to the United Nations’ trade agency.

The UN trade and development agency (UNCTAD) is predicting growth will slow to 2.3% this year from 2.8% in 2024. It said:

Global growth is projected to slow to 2.3% in 2025, placing the world economy on a recessionary path.

Updated

Eurozone inflation dips to 2.2%, paving way for ECB rate cut

Inflation in the eurozone dipped last month, as expected, and paving the way for an interest rate cut from the European Central Bank tomorrow.

The eurozone’s annual inflation rate was confirmed at 2.2% in March, down from 2.3% in February, according to the final estimate from Eurostat, the EU’s statistics office.

Across the European Union, annual inflation was 2.5%, down from 2.7%.

The lowest annual rates were registered in France (0.9%), Denmark (1.4%) and Luxembourg (1.5%). The highest annual rates were recorded in Romania (5.1%), Hungary (4.8%) and Poland (4.4%).

The highest contribution to the annual eurozone inflation rate in March came from services, followed by food, alcohol & tobacco, non-energy industrial goods and energy.

Hugh Lind, economist at the UK think tank Centre for Economics and Business Research, said:

Further falls in inflation will encourage the European Central Bank (ECB) to press ahead with rate cuts amid elevated uncertainty and the recent implementation of tariffs by the US.

Core and services inflation, measures which more accurately reflect domestic price pressure, also dropped in March. Indeed, the tariff policy of the US is likely to have placed downward pressure on both growth and inflation in the eurozone, as demand for European exports falls and Chinese goods are rerouted away from the US. We, therefore, anticipate a 25-basis point cut in the policy rate at tomorrow’s ECB meeting and two further cuts by the end of the year.

German economist Oliver Rakau said on X:

More than £2bn wiped off UK distributor Bunzl amid tariff uncertainty

Growing uncertainty over Donald Trump’s tariffs has wiped more than £2bn from the value of one of the UK’s biggest listed businesses, sending shares in the paper cups to plastic bags distributor Bunzl plunging more than 25%.

The FTSE 100 group, which provides everyday goods for other companies, warned about “macroeconomic uncertainty” as it said sales had been soft in its North American operation.

The chief executive, Frank van Zanten, said he was disappointed with the performance in the first quarter of a “challenging trading environment”.

He said:

We are taking decisive action to improve performance in the group, particularly with regards to execution in our largest business in North America.

Updated

Here’s our full story on Nvidia.

Nvidia has said it expects a $5.5bn (£4.1bn) hit after Donald Trump’s administration barred the chip designer from selling crucial artificial intelligence chips in China, sending shares in one of the US’s most valuable companies plunging in after-hours trading.

The company said in an official filing late on Tuesday that its H20 AI chip, which was designed specifically for the Chinese market, to comply with export controls, would now require a special licence to sell there for the “indefinite future”.

The US government, which is battling China in the race for AI supremacy, told Nvidia the new rules were designed to address the risk that its products might be “used in, or diverted to, a supercomputer in China”.

The chip designer now expects to report $5.5bn in charges in its financial quarter that ends on 27 April, because of stocks of H20 chips and sales commitments.

Away from tariffs, water companies in the UK have missed their targets to reduce pollution with 2,487 incidents recorded in 2024 – twice the limit set by the Environment Agency.

Data revealed under freedom of information law shows the companies were collectively set an Environment Agency target of a 40% reduction in pollution incidents, but instead recorded a 30% increase.

The number of pollution incidents in 2024 was the highest in a decade.

A new report by the charity Surfers Against Sewage using discharge data, sickness data and figures from its app, which uses citizen science to track sewage spills, reveals that the water industry in England failed to hit its targets for reducing pollution incidents for the last investment period of 2020-2025.

Hong Kong Post has suspended goods mail services by sea to the US, and will suspend its air mail postal service for items containing goods from 27 April due to “bullying” US tariffs.

When sending items to the US, people in Hong Kong “should be prepared to pay exorbitant and unreasonable fees due to the US’s unreasonable and bullying acts”, Hong Kong Post said today.

The US is unreasonable, bullying and imposing tariffs abusively.

Hong Kong post will definitely not collect any so-called tariffs on behalf of the US.

Other postal items containing documents only, without goods, would not be affected.

Hong Kong, a special administrative region of China, has been subjected to the same tariffs as China, according to a US government notice.

Hong Kong Post said its suspension was due to the US government’s elimination of the “de minimus” exemption and the increase in tariffs for postal items from Hong Kong containing goods to the US from 2 May.

Hong Kong has long been known as a free and open trading hub, but China’s imposition on the former British colony of a sweeping national security law in 2020 drew criticism from the US and led it to end the financial hub’s special status under US law.

Updated

China tells US to ‘stop whining’ over tariffs as it reports GDP growth spurt

The US needs to “stop whining” about being a victim after “taking a free ride on the globalisation train”, China’s official state media said, as its government reported a spurt of economic growth ahead of an expected hit from Donald Trump’s tariffs.

Last week’s tit-for-tat tariff rises appear to have paused, but the conflict between the two biggest economies is showing no signs of letting up, with Beijing also reiterating its warning that it was “not afraid to fight”.

On Tuesday evening, China Daily, the ruling Chinese Communist party’s (CCP) English-language mouthpiece, published an editorial saying Trump’s frequent claims of the US being “ripped off” were “hoodwinking the US public”. It said:

The US is not getting ripped off by anybody.

The problem is the US has been living beyond its means for decades. It consumes more than it produces. It has outsourced its manufacturing and borrowed money in order to have a higher standard of living than it’s entitled to based on its productivity. Rather than being ‘cheated’, the US has been taking a free ride on the globalisation train.

The US should stop whining about itself being a victim in global trade and put an end to its capricious and destructive behaviour.”

Updated

China unexpectedly appoints new trade negotiator

China unexpectedly appointed a new trade negotiator in the midst of its tariff fight with the US.

The government said today that Li Chenggang is replacing Wang Shouwen, who took part in negotiations for the 2020 trade deal between the China and the US.

Li, 58, is a former assistant commerce minister who was in the role during Trump’s first administration.

Wang, 59, who assumed the No 2 role at the commerce ministry in 2022, was regarded as a tough negotiator and clashed with US officials in past meetings, Reuters reported, citing a source in Beijing’s foreign business community, who described him as “a bulldog, very intense”.

The world’s two largest economies have been steadily increasing tariffs on each other’s goods, after the US president ramped up duties on Chinese imports to the US to 145%, while giving dozens of other countries a 90-day reprieve for a more modest increase in duties. Beijing hit back with a 125% tariff on US goods and has not sought talks with Washington.

The abrupt change happened in the middle of Chinese president Xi Jinping’s tour of southeast Asia, to cement economic and trading ties with close neighbours amid the standoff with the US. Commerce minister Wang Wentao was among senior officials flanking Xi on his visit to Vietnam, Malaysia and Cambodia this week.

Alfredo Montufar-Helu, a senior adviser to the Conference Board’s China Center, said the change was “very abrupt and potentially disruptive” given how quickly trade tensions had escalated and in light of Wang’s experience negotiating with the US since the first Trump administration.

We can only speculate as to why this happened at this precise moment; but it might be that in the view of China‘s top leadership, given how tensions have continued escalating, they need someone else to break the impasse in which both countries find themselves and finally start negotiating.

Updated

Tom Bill, head of UK residential research at Knight Frank, said the housing market is pretty steady, at least for now, as the spring selling season gets under way.

The turbulence created by global trade tensions has put downwards pressure on borrowing costs due to economic slowdown fears, but that won’t necessarily remain the case. The risk is that inflationary forces arising from US tariffs and UK tax changes keep rates higher for longer, which would curb housing demand and prices. For now, activity is steady as the spring market gets underway, with demand particularly strong among needs-driven, equity-rich buyers.

Turning to rents, he said:

Upwards pressure on rents is likely to intensify as landlords leave the sector due to tougher green regulations, higher mortgage costs and the impact of the Renters Rights Bill, which makes it harder to regain possession of a property. Nobody would argue against protecting tenants from unscrupulous landlords, but the new legislation could be a lesson in the laws of unintended consequences.

UK house price inflation accelerates while rent increases slow

House price inflation accelerated in the UK in February, while private rents rose at a slower rate but stayed high.

Figures from the Office for National Statistics showed the average price of a home in the UK increased by 5.4% to £268,000 in the 12 months to February, up from 4.8% in the 12 months to January.

Average house prices increased to £292,000 (up 5.3%) in England, £207,000 (up 4.1%) in Wales, and £186,000 (up 5.7%) in Scotland.

Rents charged to tenants in the private sector rose by 7.7% to an average of £1,332 in the 12 months to March. The annual growth rate is down from 8.1% in February.

Average rents increased to £1,386 (up 7.8%) in England, £792 (up 8.9%) in Wales, and £1,001 (up 5.7%) in Scotland. In Northern Ireland, average rents increased to £838 (up 8.2%) in the 12 months to January.

Good news on UK inflation may be short-lived amid trade war and rising household bills

Here’s some analysis on the slowdown in UK inflation to 2.6% in March from our senior economics correspondent Richard Partington.

Cooling inflation, resilient wage growth, and an economy outperforming expectations. After the turmoil since Donald Trump’s “liberation day”, there are some signs that Britain entered the crisis in reasonable shape.

The trouble is, the good news is unlikely to last long. The bigger-than-expected decline in inflation to 2.6% in March will come as a welcome reprieve for hard-pressed households. But it is a snapshot from a rear-view mirror, on an increasingly rocky journey.

Economists expect inflation to increase sharply next month. And while there is heightened uncertainty over how precisely Trump’s escalating trade war will hit the British economy, the country will not escape unscathed.

April is a truly awful month for households, with rising energy bills and a slew of changes for utilities and other regulated prices, including council tax, broadband and mobile phone bills.

The US president’s trade war could erode the US’s credibility, JPMorgan boss Jamie Dimon has warned, urging Washington to “engage” with Beijing.

Dimon told the Financial Times yesterday that the US remained “a haven” because of its prosperity, rule of law, and economic and military strength, but its economic pre-eminence could come under threat from the president’s attempt to reshape global trade.

A lot of this uncertainty is challenging that a little bit. So you’re going to be reading about this nonstop until hopefully these tariffs and trade wars settle down and go away so people can say, I can rely on America.

He urged the US and China to start engaging, rather than embarking on a tit-for-tat trade war. Trump has imposed 145% tariffs on Chinese imports, prompting Beijing to hit back with 125% duties on US goods. Dimon said:

I don’t think there’s any engagement right now . . . it doesn’t have to wait a year. It could start tomorrow.

His comments come after Trump’s 2 April “liberation day” announcement of steep tariffs on many countries sparked a new trade war and triggered a sell-off of global shares, US government bonds and the dollar.

Updated

Spot gold jumps above $3,300 for first time

Spot gold has gone above $3,300 an ounce for the first time.

The precious metal has extended gains and just hit $3,307 an ounce, up 2.4% on the day, as investors rush into safe-haven investments.

Ole Hansen, head of commodity strategy at Saxo Bank, said:

Trump’s trade war shows no signs of easing after the president ordered a probe into critical minerals, semiconductors and pharmaceuticals, sparking a fresh move towards safe havens and out of stocks.

Recent price upgrades from major banks have given investors the confidence to continue to buy.

ANZ today raised its year-end gold price forecast to $3,600 an ounce and six-month forecast to $3,500.

Updated

European and Asian shares in the red; gold continues to surge

European shares are in the red again, following a rally in the last couple of days when tariff fears eased.

The UK’s FTSE 100 has lost 42 points, or 0.5%, to 8,206. Germany’s Dax has slid by 1.1%, France’s CAC is down 0.9% and Italy’s FTSE MiB is 1% lower. Asian shares also sold off, with markets in Taiwan, Hong Kong and South Korea worst hit, down between 1.2% and 2%.

Markets have been spooked after Nvidia said it expects a $5.5bn (£4.1bn) hit after Donald Trump’s administration barred the US chip designer from selling crucial artificial intelligence chips in China.

US stock futures are pointing to declines on Wall Street later, with the Nasdaq seen opening 2.3% lower.

Oil prices have also fallen, amid expectations of lower demand for crude as Trump’s tariffs take their toll on the world economy. Brent crude and US crude are both about 0.5% lower, at $64.38 and $61.02 a barrel respectively.

Gold is scaling new peaks, rising by 2.2% to $3,299.1 an ounce. The precious metal is seen as a safe investment in times of turmoil.

The dollar has slumped by 0.8% against a basket of major currencies. The pound has gained by 0.38% against the greenback to $1.3280.

Updated

UK recruiters warn of hiring challenges due to trade wars

Recruitment companies Hays, Robert Walters and PageGroup have warned that companies will struggle to hire in the coming months, as trade wars escalate.

Hays reported a 9% drop in net fees in the quarter to 31 March, with the UK and Ireland the worst performer, where feels fell by 13, compared with declines of 11% in Australia and New Zealand, 9% in Germany and 7% in the rest of the world.

Permanent hiring has been worse hit than temporary and contracting, with fees down by 14% versus a 6% drop for temporary hires.

The company said:

Given increasing macroeconomic uncertainty, we expect near term market conditions to remain challenging and, although we have limited forward visibility, we believe this is likely to persist into 2026. Permanent markets remain difficult, notably in Germany and EMEA, due to longer time to hire but Temp & Contracting are more resilient.

Yesterday, fellow UK recruiter Robert Walters warned that US tariffs were likely to weigh on the hiring market in the short term as it reported a 16% drop in income it earns from fees and consulting services in the first quarter.

A week ago, PageGroup withheld its financial forecast and implemented cost-cutting due to what it called “increasingly unpredictable“ conditions resulting from tariffs imposed by the US president.

Trade wars are likely to discourage employers from taking on new staff, who already face political uncertainty in major European economies such as Germany and France.

Robert Walters’ chief executive Toby Fowlston said:

Increased uncertainty regarding the flow of global trade due to tariffs is likely to be a further headwind to client and candidate confidence in the near term, limiting visibility on the outlook for the balance of the year.

Updated

The Conservatives have put out their response to the inflation figures.

Shadow chancellor Mel Stride said inflation remained above the Bank of England’s 2% target and was expected to increase further this year “because of the chancellor’s choices”.

The Conservatives left Labour with inflation bang on target but the chancellor’s reckless union payouts, tax hikes, and borrowing binge is driving up the cost of living.

Be in no doubt, the chancellor’s choices are keeping inflation higher for longer and working families are paying the price.

UK inflation to head higher again in coming months but markets bet on three rate cuts

Financial markets are betting on an interest rate cut from the Bank of England meeting at its May meeting, estimating an 86% probability.

They have fully priced in three quarter-point rate reductions this year.

The pound pared gains after the inflation data but is now up 0.3% again against the dollar at $1.3268.

Sterling traded at $1.2919 on 1 April, the day before Donald Trump’s ‘liberation day’ when he announced a wave of global tariffs, and has risen 2.7% against the dollar since then.

Matt Swannell, chief economic advisor to the EY Item Club forecasting group, said:

A sharp pickup in inflation from April is all but guaranteed. Ofgem’s 6.4% increase to its price cap, after a large fall last year, means we expect the energy component will add 0.7ppts to CPI inflation in April. A significant increase in water bills means the contribution from the core goods category is also set to rise. In addition, we expect businesses to pass on some of the increase in labour costs caused by the recent rises in employers’ National Insurance Contributions (NICs) and the National Living Wage onto consumers. Inflation is likely to peak in the autumn, before starting to cool as the contribution from the energy category fades.

The MPC has lowered Bank Rate at alternate meetings since its cutting cycle began last summer. With MPC members highlighting the substantial uncertainty associated with the potential inflationary impact of US tariff increases, and the large time lag before the committee sees hard data on how the NICs and National Living Wage rises are playing out, we think the MPC will be content with sticking to its cut-hold tempo for the time being. We expect the next rate cut to come at the MPC’s May meeting.

Updated

Inflation will head higher again in the coming months, as Rob Wood, chief UK economist at Pantheon Macroeconomics, explained, although he sees room for interest rate cuts in May, June and November, in the wake of US tariffs which have clouded the economic outlook.

Looking ahead, February was the calm before the storm of annual price resets, government-set price hikes and tax rises boost headline CPI inflation to 3.5% in April and then to a peak of 3.7% in September, in our view.

We agree with the monetary policy committee that the impact of US tariffs on UK inflation will be ambiguous. Some goods previously destined for the US could be diverted to the UK at knockdown prices, slowing inflation and weaker growth will raise unemployment. But large firms may attempt to raise prices everywhere to absorb the cost of US tariff hikes. For instance, Sony raised the price of their PS5 digital games console by 11% in Europe and 10% in the UK from April 14 in response to US tariffs. We also cannot rule out retaliation by the UK government in the coming months, while fracturing global supply chains and weaker trade driving slower productivity growth will be inflationary.

But the MPC has to set policy based on the balance of risks in the medium term as well as the central case. ‘Liberation Day’ has created a much worse worst-case growth scenario than the MPC had to contend with before. Accordingly, the MPC can afford an extra precautionary rate cut this year, so we look for three more reductions in 2025, compared to two before Mr. Trump’s interventions.

It’s a finely balanced call, but we look for back-to-back 25bp cuts in May and June, with another cut in November. That call is highly sensitive to president Trump’s actions, the dataflow and the MPC’s comments; we have heard little from rate setters since ‘Liberation Day’. Rate setters will be cautious—one extra rate cut is a small response to a large economic shock in the form of tariffs—because inflation remains too high for comfort, as does wage growth.

Food price inflation also slowed in the UK, to an annual rate of 3% in March from 3.3% in February, bringing some relief to households still struggling with the cost of living crisis.

Prices for confectionery prices fell this year but rose a year ago. This was partially offset by higher prices for milk, cheese and eggs.

Meanwhile, prices for clothes and footwear rose at an annual rate of 1.1% in March compared with a 0.6% drop in February. Prices usually rise in March as new spring fashions enter the shops, and the increase this year was relatively large following an unusual fall ini prices in February the ONS said.

Jonathan Moyes, head of investment research at the Bristol-based investment service Wealth Club, said:

Whisper it quietly though, were it not for a global trade war, the UK consumer would be in excellent shape. Wage growth is running at 5.6%, a further three interest rate cuts this year will drive mortgage rates lower, food inflation is slowing, as is eating out and travel.

Plus with the oil price in the low 60s, energy prices look to have peaked. If the UK can escape the worst of the global trade war, it might not all be doom and gloom for the UK consumer this year, and we haven’t said that for a while.

As for UK inflation, the Office for National Statistics explained that prices for recreation and culture rose by 2.4% in the 12 months to March, down from 3.4% in February. Prices were unchanged on the month.

The largest downward effect came from games, toys and hobbies, and from data processing equipment, where prices fell this year but rose a year ago.

Transport also helped bring inflation down, as the average price of petrol fell by 1.6p a litre between February and March to stand at 137.5p a litre, down from 144.8p a year ago. Diesel prices fell by 1.6p per litre in March to 144.8p per litre, down from 154.1 in March last year.

Price rises within the restaurants and hotels sector also slowed, to the lowest rate since July 2021.

However, while UK inflation slowed last month, it is likely to go up again in the coming months, economists warn.

Updated

Introduction: Asian shares sell off as US curbs on Nvidia chip sales to China fuel trade fears; UK inflation slows to 2.6%

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Asian shares have sold off as US chipmaker Nvidia took a hit from US curbs on chip sales to China, highlighting the damage from the escalating trade war between Washington and Beijing.

Nvidia said it expects a $5.5bn hit after Donald Trump’s administration barred the chip designer from selling its H20 chip in China.

Japan’s Nikkei is down 1.5% while Hong Kong’s Hang Seng lost 2.4% and markets in Shanghai and Shenzhen fell by 0.5% and 1.57% respectively.

Last night Donald Trump ordered an investigation into potential new tariffs on all US critical minerals imports, which comes after similar probes into pharmaceutical and semiconductor imports.

Gold, seen as a safe-haven asset, has jumped by 1.9% to $3,289 an ounce, setting another record high.

Inflation in the UK has slowed more than expected, increasing pressure on the Bank of England to lower interest rates next month.

Annual consumer price inflation fell to 2.6% in March from 2.8% in February, slightly less than the 2.7% forecast by economists.

Inflation was dragged lower by falling fuel prices and flat prices in recreation and culture, which were partly offset by higher prices for clothing and footwear.

The core inflation rate, which strips out volatile energy and food and is closely watched by the Bank of England, dipped to 3.4% from 3.5%.

The chancellor, Rachel Reeves, said:

Inflation falling for two months in a row, wages growing faster than prices and positive growth figures are encouraging signs that our Plan for Change is working, but there is more to be done.

I know many families are still struggling with the cost of living and this is an anxious time because of a changing world. That is why the government has boosted pay for three million people by increasing the minimum wage, frozen fuel duty and begun rolling out free breakfast clubs in primary schools.

China’s economic growth in the first quarter beat expectations, underpinned by consumption and industrial production, but the latest US tariffs of 145% have clouded the outlook.

The world’s second-biggest economy grew by 5.4% between January and March, the same as in the previous quarter.

Industrial production grew more strongly than expected in March, and at the fastest rate since June 2021. Output increased by 7.7% year on year, up from 5.9% in February. All major sectors grew faster. In the first quarter, industrial production grew by 6.5%.

The Agenda

  • 10am BST: Eurozone inflation final for March

  • 1.30pm BST: US Retail sales for March

  • 2.15pm BST: US Industrial production for March

  • 2.45pm BST: Bank of Canada interest rate decision

Updated

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Massive “Thirst” Over Guy In Joe Biden’s Family Easter Pic As Internet Finds Out Who He Is
"He looks like he writes poetry."
Bored Panda
Bored Panda
Jared Leto Labeled “Hollywood’s Most Persistent Predator” After Woman Unleashes Bombshell Allegations
"Hollywood's most persistent predator"
Bored Panda
Bored Panda
I can tell this new Netflix comedy series is going to have a sad twist
The Four Seasons will have light and shade
T3
T3
How Alex Wiltschko went from Google Brain to giving computers the sense of smell
Osmo is an AI olfactory company that has raised $60 million from Lux and Google Ventures.
Fortune
Fortune
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