Stock markets, however, are well above their session lows after Treasury Secretary Scott Bessent said the administration could announce some trade agreements as early as this week.
Mark Hackett, chief market strategist at US insurer Nationwide, said: “The market is going to seesaw depending on tariff discussions… we are susceptible to the news cycle with a lack of actual fundamental things to trade on.
“Until we get some news of actual deals being signed, we’re going to be susceptible to these fluctuations.”
Tariff-driven uncertainty has led consumers, businesses and even the US Fed to adopt a wait-and-watch mode.
The Fed starts its two-day meeting on Tuesday, with the central bank widely expected to stay put on interest rates.
The S&P 500 is down 0.4pc, while the Nasdaq and Dow Jones are down by 0.5pc.
The Kremlin has claimed that Europe is “shooting itself in the foot” with a proposal to halt all Russian gas imports by the end of 2027.
The European Commission said it will propose legal measures next month to phase out the EU’s imports of all Russian gas and liquefied natural gas in an effort to end its decades-old energy relations with its former top gas supplier.
A Kremlin spokesman was reacting to comments by EU energy commissioner, Dan Jorgensen, who said it would be unwise for Europe to return to Russian energy, even if there is a peace deal in Ukraine.
The FTSE 100 closed roughly flat this afternoon, on a day when peers in France, Germany and the US fell.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “It’s closed higher, by a whisker, for the 16th session in a row.
“Investors have been finding appeal in the defensive nature of the index and looking for assets which could present value amid the uncertainty.
“Worries about trade turmoil have been soothed a little by a deal signed between the UK and India and hopes for fresh accords between the US and the rest of the world.”
Ferrari has reported robust demand for its supercars and a rise in earnings after announcing potential price rises in March.
Shipments to Europe and the Americas rose 8pc and 3pc respectively year on year and net revenue climbed 13pc to €1.79bn (£1.52bn) in the first quarter, the company announced on Tuesday.
The results showed Ferrari’s resilience to potential demand side shock, or possible stockpiling, as the Maranello-based manufacturer announced in March that it would be raising prices by as much as 10pc to accommodate Donald Trump’s tariffs.
The company sells one in four of its cars in the US but is less exposed to the Chinese market than some of its fellow carmakers, limiting sales in the region to 10pc of total shipments to lessen the impact of tariffs.
Ferrari’s global shipments ticked up 1pc year on year, pegged back by a 25pc slump in greater China which resulted in a 21pc sales drop in the fourth quarter.
Donald Trump has hit out at Canadian imports ahead of a meeting with the country’s prime minister, Mark Carney.
On his Truth Social platform, the US president said: “We don’t need their Cars, we don’t need their Energy, we don’t need their Lumber, we don’t need ANYTHING they have, other than their friendship, which hopefully we will always maintain. They, on the other hand, need EVERYTHING from us!”
You can follow the latest from his meeting with Mr Carney on our dedicated live blog.
US Treasury secretary Scott Bessent has told lawmakers that his department is on the “warning track” near its limit under federal debt rules.
He pledged to “share with Congress when we believe we are” in terms of approaching the theoretical date when the US Treasury would be unable to pay its bills on time. However, he said that the US government would never default.
He told a House of Representatives committee: “We do not have a revenue problem: we have a spending problem. We have to bring this spending under control.”
Hugo Boss is stockpiling and rerouting products manufactured in China to non-US markets amid Donald Trump’s tariff war.
Daniel Grieder, the chief executive, said the German fashion house was sourcing more products for the US market from countries such as Peru and Turkey to circumvent tariffs.
The US became the brand’s single biggest market in 2023, representing around 15pc of annual sales. Clothing made in China currently makes up around 4pc of the company’s volume sold in the country.
Mr Grieder, who has sought to reach younger audiences with campaigns fronted by David Beckham, voiced concern over a “notable deterioration” in US consumer spending in the first quarter.
“We are currently taking a rather cautious stance regarding consumer behavior in the US,” he said on an earnings call on Tuesday after reporting lower revenues compared to last year.
He said: “The situation here in the States is very pressured.
“When you go into outlet centres, what is really a big concern is that the traffic went down something like 20pc to 30pc.”
The chief executive said the company had not yet made a decision to raise prices.
US Treasury secretary Scott Bessent has said that the Trump administration could announce trade agreements with some of America’s largest trade partners as early as this week. However, he gave no details on which countries were involved.
He said the administration was negotiating with 17 major trading partners, but had not yet engaged with China, the world’s second-largest economy after the United States.
US Treasury secretary Scott Bessent has said there is nothing in US economic data which shows that the American economy is currently in a recession.
This is despite a contraction in the first quarter gross domestic product (GDP).
Mr Bessent told the US House Appropriations Committee that he expected an upward revision of the first quarter GDP data after having looked at a detailed analysis.
The US Commerce Department reported last week that GDP decreased at a 0.3pc annualised rate last quarter, the first contraction reported in three years.
Wall Street’s main indexes remain down during trading this afternoon after Donald Trump’s latest plans for pharma tariffs renewed worries of the impact of a trade war.
Drug giant Eli Lilly dropped 3.1pc, while Merck slipped about 2.6pc and Pfizer was down 0.4pc after the news.
The S&P 500 is down 0.4pc, the Nasdaq is down 0.5pc and the Dow Jones is down 0.3pc.
Scott Bessent, the US Treasury secretary, was repeatedly challenged this afternoon at a US House of Representatives hearing over who pays tariffs.
In a heated exchange with Mark Pocan, the representative from Wisconsin, Mr Bessent said the issue was “complicated”.
“That’s exactly the problem,” said Mr Pocan. “You’re a very educated person. You have a very impressive bio. You cannot answer the question of who pays tariffs because you won’t answer it. You say it’s a complicated issue. It’s not complicated. Consumers pay Trump’s tariff tax.”
Scott Bessent has said he thinks the US will receive a “substantial reduction” in tariffs on American goods as Donald Trump wages his trade war around the world.
The US treasury secretary insisted nothing in economic data he has seen so far suggests the US is in recession, days after employment figures showed the American economy added more jobs than expected in April.
Appearing at a hearing in the House of Representatives, Mr Bessent said President Trump’s agenda is already “bearing fruit”, suggesting trade deals could be announced as soon as this week.
Donald Trump’s trade war will trash hopes of a recovery in the British economy this year, credit ratings agency Moody’s has warned.
The UK will grow more slowly than the US, Canada or eurozone this year as the economists slashed forecasts for almost the entire world.
Britain is set for GDP growth of just 0.8pc, Moody’s said, down from 1.1pc last year and well below the 1.3pc expansion previously anticipated for this year.
That is weaker than in the US, which is set to grow by 1pc, down from earlier projections of 2pc, as well as Canada and the eurozone, which are each expected to grow by 0.9pc.
Moody’s also cut its forecast for global growth from 2.5pc to 1.9pc.
It comes after the IMF and the Office for Budget Responsibility also chopped back forecasts for the British economy on trade turmoil, which comes on top of tax increases including the £25bn National Insurance Contributions raid on employers.
“Tariff increases on countries and high sectoral tariffs on products such as steel and aluminum will weigh on global trade and investment decisions with considerably negative growth consequences for most G20 economies,” said the economists.
“Uncertainty surrounding global economic policies is likely to take a toll on consumer, business and financial activity. Despite a pause and reduction in some tariffs, policy uncertainty and trade tensions – especially between the US and China – are likely to dampen global trade and investment.”
The US should avoid recession as long as there is no repeat of the crunch in financial markets which followed Mr Trump’s “liberation day” tariff announcements of 2 April, the analysts said.
But the repeated on-again off-again pattern of trade war policies is itself dangerous.
“Frequent changes in tariff announcements — and the potential for tariffs to reset to levels announced on 2 April in July — add a degree of unpredictability,” Moody’s warned.
“Not knowing where these policies will settle can be even more damaging to economic activity than direct effects of tariffs because it hamstrings economic planning.”
In Britain’s case, car, steel and aluminium exports to the US incur a 25pc tariff, with other goods facing a 10pc levy.
The US Federal Reserve is expected to disappoint Donald Trump when it announces its next interest rate decision tomorrow.
The US central bank has begun its two-day discussion over interest rates, with policymakers widely expected to leave borrowinv costs on hold again as they await clarity on the economic impact of the US tariff rollout.
The President’s on-again, off-again rollout has unnerved investors, and caused analysts to pare back their forecasts for growth this year and to hike their inflation outlook.
President Trump has also criticised Fed chairman Jerome Powell for not cutting interest rates.
The US central bank has a dual mandate to tackle both inflation and unemployment, primarily by hiking and lowering its benchmark lending rate, which acts like a throttle or brake for demand.
Both the inflation and unemployment rates are close to where the Fed wants them, making another rate cut pause this week overwhelmingly likely.
That would leave the bank’s key lending rate at between 4.25pc and 4.5pc, where it has sat since last December.
Financial markets see a roughly 98pc chance that the Fed will vote to pause this week.
Wall Street’s main indexes opened lower after Donald Trump said he plans to impose tariffs on the pharmaceutical industry within two weeks.
The Dow Jones Industrial Average fell 218.6 points, or 0.5pc, at the open to 41,000.19.
The S&P 500 fell 44.5 points, or 0.8pc, to 5,605.87​, while the Nasdaq Composite dropped 221.0 points, or 1.2pc, to 17,623.21.
US companies nearly doubled the amount of pharmaceutical goods they imported in March as Donald Trump threatened to impose tariffs on the sector.
The value of pharmaceutical imports rose from $20.9bn (£15.6bn) in March to $50.4bn (£37.6bn).
Donald Trump on Monday signed an executive order aimed at boosting domestic pharmaceutical production, and warned that he will impose import tariffs on the sector in the next two weeks.
Canada’s trade deficit narrowed to C$506m (£272.7m) in March, beating expectations as imports fell at a faster rate than the drop in exports.
The data could irk Donald Trump ahead of his meeting with Mark Carney, the Canadian prime minister, at the White House later on today, as tariff-induced stockpiling drove the US trade deficit to an all-time high.
Imports of goods dropped 1.5pc in March, driven by a 2.9pc slump in imports from the US after Canada imposed retaliatory tariffs on its neighbour following the US president’s 25pc tariff on Canadian steel and aluminium.
Exports to the US also dropped by 6.6pc but was almost compensated by an increase in exports to the rest of the world, with overall exports slipping 0.2pc, Statistics Canada said.
Canada’s overall exports for March came in at C$69.9bn, down from C$70.04bn in February.
In volume terms, exports were up 1.8pc in March with lower prices primarily leading to the drop.
Analysts polled by Reuters had estimated that the total trade deficit would widen to C$1.56bn in March, up from a revised C$1.41bn in February.
Narendra Modi said Britain and India have agreed a free trade deal in a boost for Sir Keir Starmer amid the global trade war.
The Indian prime minister said the two nations had reached an “historic milestone” which would “catalyse trade, investment, growth, job creation, and innovation in both our economies”.
He said he looked forwarding to welcoming his “friend” Sir Keir to India soon.
The US trade deficit reached a new record in March as imports surged before Donald Trump’s “liberation day” tariff rollout.
The overall trade gap of the world’s largest economy jumped 14pc to $140.5bn (£104.9bn), the Commerce Department said in a statement on Tuesday.
This was the widest deficit for a month on record, dating back to 1992.
Imports rose 4.4pc to an all-time high of $419.0bn in March, with goods imports soaring 5.4pc to a record $346.bn.
Exports climbed 0.2pc to $278.5bn, also a record high, with exports of goods increasing 0.7pc to $183.2bn.
The government reported last week that the trade deficit cut a record 4.83 percentage points from GDP last quarter, resulting in the economy contracting at a 0.3pc annual rate, the first decline since the first quarter of 2022.
The head of Airbus has urged Europe to impose tariffs on Boeing aircraft should negotiations with the US collapse.
Donald Trump has rolled out a levy of 10pc on imports from most countries around the world but has suspended a higher tariff of 20pc on products from the EU while the sides negotiate.
Guillaume Faury, chief executive of Airbus, said if negotiations “do not result in a positive outcome, I imagine that there will be – and that’s what we wish – reciprocal tariffs on airplanes to force a higher level of negotiation”.
Mr Faury said any response should be similar to the strategy used in a previous spat during the first Trump administration.
Mr Trump imposed a 10pc tariff on the European aviation sector in 2019 after the World Trade Organisation ruled that the EU had illegally subsidised Airbus, raising the levy to 15pc in 2020.
The WTO later ruled that the US also provided illegal aid to Boeing, prompting the EU to impose a 15pc tariff on Boeing planes.
The tariffs were subsequently lifted under president Joe Biden in 2021.
Downing Street has heaped praise on the British film industry after Donald Trump threatened to impose 100pc tariffs on films produced outside the US.
The Prime Minister’s official spokesman described British film as “a world-class industry” and “a beacon of talent” which “showcases the best of our creativity and culture”.
He added: “Talks are ongoing with the US on an economic deal, so we are not going to get into a running commentary of the details on that.
“As we have said across the board, any introduction of tariffs will be disappointing but we will always take a calm and steady approach to our discussions with the US to put British interests first.”
The United States is staring down the barrel of high inflation regardless of Donald Trump’s appetite for rowbacks on tariff, economists have warned.
James Egelhof and Guneet Dhingra of BNP Paribas said the havoc wreaked by tariffs has done irreparable damage in the short term.
They said: “An obvious inflation shock lies just ahead. Even if tariffs were fully removed – an unlikely scenario – the economy is now probably committed to a period of high inflation, given the supply chain disruptions that have already occurred.”
The economists expected looming inflation and growth “holding up well” to convince the Federal Reserve to remain on hold.
Yet they warned that businesses were still pricing in the expectation that parties would step away from the brink of trade war.
They said: “Businesses are revising – but not abandoning – their hiring and spending plans, according to the ISMs, underpinned by a belief – which we share – that tariff moderation is likely.”
The European Union is expected to impose retaliatory tariffs on €100bn (£84.7bn) worth of US goods should trade talks with the Trump administration end in failure.
Brussels could share its plans with EU countries as early as Wednesday, with a consultation expected to last a month, according to Bloomberg.
It comes as the EU’s trade chief Maros Sefcovic warned that Donald Trump’s potential tariffs on pharmaceuticals, semiconductors, critical minerals, lumber and trucks could see the US collect a further €100bn from companies in those industries in the European Union.
The potential tit-for-tat escalation comes after Xi Jinping urged the EU to stand up to “bullying” and signalled he was ready to work with leaders in the bloc.
The Chinese leader’s comments came as China publicly confirmed for the first time it was suspending sanctions against some European politicians.
Xi said: “China and the EU should uphold multilateralism, defend fairness and justice, oppose unilateral bullying.”
President Xi has sought to portray China as a more reliable trading partner after the US launched and then suspended tariffs against trading partners around the world.
The 27-nation bloc faces 25pc US import tariffs on steel, aluminium and cars, as well as “reciprocal” tariffs of 10pc for almost all other goods, which could rise to 20pc when Mr Trump’s 90-day pause runs out.
European trade commissioner Mr Sefcovic said the bloc does not feel under undue pressure to accept an unfair trade deal with the US.
He told the European Parliament: “We do not feel weak. We do not feel under undue pressure to accept a deal which would not be fair for us.
“I can tell you that our phones are not stopping ringing all the time because everyone wants to accelerate free trade agreement negotiations with us.”
The trade chief said US tariffs now covered 70pc of EU goods trade to the US, which could rise to 97pc should the extended tariffs come into force.
The recent tariff disruption is spurring a flurry of contract cancellations which have prompted UK companies to issue profit warnings, according to a report from consultancy EY-Parthenon.
Of the 62 profit warnings issued by UK-listed companies during the first quarter, 40pc cited delays or cancellation to contracts or orders as a primary cause – the highest proportion in the last 25 years.
Jo Robinson, partner at EY-Parthenon Partner, said: “We put the ongoing rise in profit warnings that cite contract and order cancellations or delays down to the impact the ongoing economic uncertainty is having on business confidence, and this will likely only be exacerbated by the recent tariff disruption.”
The Governor of California has called for $7.5bn in federal tax credits to carry out Donald Trump’s ambitions of using tariffs to bring film-making to the US.
The US president has mooted a 100pc tariff on films produced outside of the US to shore up Hollywood, which he said was dying “very fast death”.
Mr Trump, in remarks reported by CNBC, blamed Gavin Newsom, the California Governor, for allowing Hollywood to be “decimated by other countries”, describing him as a “grossly incompetent man”.
He added: “Hollywood doesn’t do very much of that business, they have the nice sign, and everything’s good, but they don’t do very much.”
Mr Newsom has responded by suggesting the incentive of a federal film tax credit system, at least ten times the size of California’s annual $750m programme.
He said: “America continues to be a film powerhouse, and California is all in to bring more production here.
“We’re eager to partner with the Trump administration to further strengthen domestic production and Make America Film Again.”
The chief financial officer of Argentex and four directors have resigned after their foreign exchange broker teetered on the brink of collapse last month.
The company became one of the first known casualties of global financial market turmoil stemming from Donald Trump’s tariff policies.
Jim Ormonde, the chief executive, also left last month after the London-based brokerage announced on April 22 that it had suspended trading in its shares following a “rapid and significant” cash squeeze in the wake of Mr Trump’s tariffs.
Argentex, which in 2020 was worth £232m, had amassed US dollar trades for its clients but did not ensure the company had enough collateral, according to Bloomberg.
The company has since agreed to a heavily discounted takeover of £3m from rival IFX Payments, securing £20m to pay off margin costs.
Shares in the company have fallen 92pc since trading resumed on Tuesday.
The European Union does not feel under undue pressure to accept an unfair trade deal with the United States, the bloc’s trade chief has said.
Maros Sefcovic, the European commissioner for trade, told the European Parliament: “We do not feel weak. We do not feel under undue pressure to accept a deal which would not be fair for us.
“I can tell you that our phones are not stopping ringing all the time because everyone wants to accelerate free trade agreement negotiations with us.”
The EU trade chief branded Donald Trump’s sabre rattling over further tariffs as “unjustified” and “not acceptable”.
The US president has mooted tariffs on imports of pharmaceuticals, semiconductors, critical minerals, lumber and trucks which could see the US collect a further €100bn from those in the European Union.
Mr Sefcovic, said: “The projection is that the US might now collect as much as €100bn ($113.bn) if the ongoing investigations result in tariffs.
“These import taxes are unjustified and cause economic harm on both sides of the Atlantic. The situation as such is not acceptable.”
The trade chief said US tariffs now covered 70pc of EU goods trade to the US, which could rise to 97pc should the extended tariffs come into force.
The 27-nation bloc faces 25pc US import tariffs on steel, aluminium and cars, as well as “reciprocal” tariffs of 10pc for almost all other goods which could rise to 20pc when Mr Trump’s 90-day pause runs out.
Mr Sefcovic said a negotiated solution with the US remained the EU’s clear and preferred outcome, but the US needed to “show its readiness to make progress”.
The European Union’s excessive red tape is sending the cost of making small cars soaring, two of Europe’s largest carmakers have warned.
John Elkann, chairman of Stellantis, and Luca de Meo, the chief executive of Renault, have issued a joint plea against EU regulations which favour larger, premium models and make smaller cars more expensive.
Mr de Meo, in a joint interview with French newspaper Le Figaro, said: “What we are asking for is a differentiated regulation for smaller cars.
“There are too many rules designed for bigger and more expensive cars, which means we can’t make smaller cars in acceptable profitability conditions.”
He added: ”European rules mean that our cars are ever more complex, ever heavier, ever more expensive, and most people simply can’t afford them any more.”
Mr Elkann, stressing that EU car sales were at disastrous levels, said having specific regulations for smaller cars was a “strategic” matter.
He said that pledges made by Ursula von der Leyen, president of the European Commission, to help the European car industry were “still just words and the results are not there”.
While European Commission President Ursula von der Leyen has pledged to help the EU auto industry, “for the moment, these are still just words and the results are not there,” said Elkann, who is running Stellantis on an interim basis while searching for a new CEO.
Stellantis suspended its financial guidance for the year last week citing uncertainty tied to Donald Trump’s tariffs.
The dollar has struggled on Tuesday morning as investors showed signs of impatience over radio silence on mooted US trade deals.
The greenback was last down 0.5pc on the Japanese yen at 142.99, and also lost ground versus European currencies with the euro and pound both up 0.2pc at $1.1341 and $1.3328 respectively.
Jane Foley, head of FX strategy at Rabobank, said: “What’s clear this morning is some of the optimism we had last week around trade deals has faded.”
She said the market would soon “get impatient” and start to pay more attention to the warnings from companies about the damage to the world economy from tariffs.
In recent weeks investors had been growing more optimistic that the US would reach deals that pare back tariff levels.
China’s growth exports will have ground to a halt in April on the back of Donald Trump’s tariffs, economists have forecasted.
Anna Zhou and Helen Qiao at Bank of America expect China’s exports to have grown by 0.5pc year-on-year, marking a sharp slowdown from the stockpiling-driven 12.5pc seen in March.
They said: “Investors are increasingly worried about the drag from tariffs on exports starting from April.
“April’s trade data likely marks the beginning, rather than the peak, of a sustained period of external demand weakness – assuming no meaningful change in the tariff situation.”
New export orders have tanked to the lowest level since Dec 2022, according to a Chinese manufacturing index.
The economists said data suggested some relief from exports to the rest of the world buoyed by rerouting demand, but warned “risks of waning external demand looms large”.
The official release of April trade data is scheduled for May 9.
Xi Jinping said China was ready to work with leaders in the European Union as uncertainty created by Donald Trump’s trade war lingers.
The Chinese leader urged the EU to oppose bullying, echoing language used by Beijing to describe the tirade of US tariffs, according to the state news agency Xinhua.
Xi spoke on the 50th anniversary of diplomatic ties between China and the EU.
He said: “Healthy, stable China-EU ties not only promote mutual achievements, but also illuminate the world.”
China said it would welcome visits by European Council president Antonio Costa and European Commission president Ursula von der Leyen at an appropriate time to jointly hold a new round of meeting of leaders of both sides.
The price of gold has back towards its record highs amid the ongoing uncertainty over tariffs.
Bullion was up as much as 2.3pc to $3,387 an ounce after Chinese investors returned from a five-day holiday, resuming activity from the world’s largest buyer of bullion.
Gold rose nearly 3pc on Monday, having climbed more than 28pc since the turn of the year amid a race by investors to the safe-haven asset.
Germany’s flagship stock index slumped as German conservative leader Friedrich Merz failed to secure enough votes to become leader of Europe’s largest economy.
The Dax was down 1.1pc to 23,085.43 after the embarrassing defeat for the expected next chancellor.
Merz, 69, led his CDU/CSU conservatives to win a federal election in February and has spent much of the period since making agreements to build a coalition.
On Monday they signed a coalition deal with the centre-left Social Democrats, who won just 16.4pc, their worst result in German post-war history.
However, Merz won just 310 votes in the Bundestag, having needed 316 to secure a majority.
The lower house of parliament now has 14 days to elect Merz or another candidate chancellor with an outright majority – and could attempt another vote already on Tuesday.
The largest part of Britain’s economy shrank for the first time in nearly one and a half years last month as Donald Trump’s tariffs knocked confidence, a closely watched survey showed.
The S&P Global UK Services PMI slipped from 52.5 in March to 49 in April, the first time it has been below the 50 mark separating growth from contraction since October 2023.
Tim Moore, economics director at S&P Global, said: “UK service sector output slipped into contraction for the first time in one-and-a-half years as heightened business uncertainty weighed on order books during April.
“Export conditions were particularly weak, with new business from abroad falling to the greatest extent since February 2021.
“Survey respondents often commented on the impact of global financial market turbulence in the wake of US tariff announcements.
“Businesses in the technology and financial service sectors noted rising risk aversion and delayed spending decisions among clients, especially in relation to major investment plans.
“Consumer service providers meanwhile cited subdued domestic economic conditions and challenges with passing on rising payroll costs, especially those in the hospitality and leisure sectors.”
BlackRock boss Larry Fink and Citigroup chief executive Jane Fraser will be among the top American bosses to visit Saudi Arabia at the same time as Donald Trump next week.
The US president will make his first scheduled trip overseas since returning to the White House as US executives attend the Saudi-US Investment Forum.
Also heading to Riyadh will be Blackstone’s Steve Schwarzman, Franklin Templeton’s Jenny Johnson, and Alphabet’s Ruth Porat.
It comes as Trump targets oil and gas-rich Gulf states as potential sources of investment for US goods under his tariff war.
Andrew Bailey hasn’t always been lucky during his time at the Bank of England.
Entering Threadneedle Street just as the pandemic swept the globe before struggling through the cost of living crisis and the invasion of Ukraine, the Governor has faced more than his fair share of shocks in the past four years.
So he will have been grateful for one small mercy: the timing of Donald Trump’s “liberation day” tariffs gave Bailey and his colleagues on the Monetary Policy Committee (MPC) more than a month to work out what on Earth is going on before their May interest rate meeting.
Deliveroo has agreed to a takeover by its US rival DoorDash in a deal worth around £2.9bn.
San Francisco-based DoorDash will pay 180p a share in cash for London-listed Deliveroo in a move set to create a combined company with a presence across 40 countries and handling about $90bn (£67.7bn) of orders each year.
The businesses said: “The combination with Deliveroo will strengthen DoorDash’s position as a leading global platform in local commerce, enabling the combined entity to better serve businesses, consumers and couriers.”
Deliveroo, which was co-founded by chief executive Will Shu in 2013, operates in nine countries and works with more than 130,000 riders across the world. It made sales of around £2bn in 2024.
Mr Shu said: “We are now at the beginning of a transformative new chapter.”
DoorDash was also set up in 2013, co-founded by chief executive Tony Xu, who has led the company ever since.
It operates in over 30 countries and delivers more than 2.5bn orders a year, helping it notch up revenues of $10.7bn (£8bn) in 2024.
The deal is expected to complete in the final three months of 2025 but will need to be approved by Deliveroo’s shareholders.
Government borrowing costs rose to their highest in three weeks as investors braced for debt sales from the United States and Europe’s largest economy.
German 10-year bond yields dropped nearly 30 basis points in April as investors took refuge from Donald Trump’s tariff plans.
However, German yields have risen 10 basis points so far in May as stocks have recovered. On Tuesday, yields edged higher to 2.55pc, their highest since mid-April.
UK government borrowing costs were also higher by nearly six basis points to 4.56pc as the market focused on debt sales.
Friedrich Merz will become Germany’s new chancellor today and is expected to launch a wave of government spending fuelled by debt, as Europe’s largest economy relaxes its debt rules.
Germany was expected to reopen an outstanding 30-year bond on Monday, according to a lead manager, while the US will auction $42bn in 10-year notes.
The FTSE 100 opened higher following the Bank Holiday weekend as it looked to continue its record-breaking run of gains.
The UK’s benchmark stock index, which is considered to be a defensive market against the threats posed by Donald Trump’s tariffs, gained 0.3pc to 8,618.26.
The FTSE 100 has risen for a record-breaking 15 consecutive trading sessions.
The mid-cap FTSE 250 rose 0.5pc to 20,340.28.
China’s services sector saw new order growth slacken from March, weighed by uncertainty caused by US tariffs, a private sector survey showed.
China’s economy continues to face persistent deflationary risks despite stronger-than-expected economic growth in the first quarter, supported by government stimulus.
The Caixin/S&P Global services purchasing managers’ index (PMI) fell to 50.7 from 51.9 in March, its lowest reading since September. The 50-mark separates expansion from contraction.
This was broadly in line with China’s official survey, which showed services activity easing to 50.1 from 50.3 in the previous month. The Caixin PMI is considered a better read of trends among more export-oriented and smaller firms.
The Caixin services survey showed new business growth slowed to its weakest since December 2022, though export orders edged up slightly, partly due to a tourism recovery.
Zichun Huang of Capital Economics said the drop in the PMI provides “further evidence that the trade war is weighing on economic activity in China, even beyond the manufacturing sector”.
“While some caution is clearly warranted, we suspect that firms are overestimating how much damage US tariffs will do,” she said.
Ford has warned of a $1.5bn (£1.1bn) hit to profits as Donald Trump’s trade tariffs wreak havoc on automotive industry supply chains.
The US giant warned of “substantial” risks and suspended its market guidance in the latest sign of the pressure car makers are under.
Bosses had previously forecast operating profits of between $7bn and $8.5bn for 2025.
But the company, which is one of the Big Three manufacturers based in Detroit, Michigan, said on Monday night it now expects Mr Trump’s taxes on goods imported to the US to cost it at least $2.5bn, of which about $1bn it can offset through various measures.
It pointed to “industrywide supply chain disruption” tied to Mr Trump’s duties and unpredictability about the future, including whether he will increase them further.
“These are substantial industry risks, which could have significant impacts on financial results, and that make updating full year guidance challenging right now given the potential range of outcomes,” Ford said.
Mr Trump has repeatedly insisted that his tariffs will restore American domestic manufacturing, by incentivising companies to import fewer parts or vehicles.
The US president hit foreign automotive imports with tariffs of 25pc, triggering warnings from industry that the taxes will push up prices and wreak financial havoc.
However, Jim Farley, Ford’s boss, has said the company will not increase the price of its vehicles until it sees how rivals respond to added tariff costs.
Automakers have been given some relief. Mr Trump spared imports subject to the auto tariffs from paying additional levies targeting other goods, such as steel and aluminum.
The White House said it would also phase in tariffs on auto parts over a period of two years, to give companies time to reshore production in the US.
These were “really important steps forward,” said Sherry House, Ford’s finance chief, on Monday.
She added that Ford was also waiting for clarification over whether it can pay lower tariffs on cars imported from Mexico, depending on their US content.
The company’s exposure to the duties is lower than some other car makers, as Ford makes 80pc of the cars it sells in the US domestically.
Last week, rival General Motors slashed its profit forecast and warned of a $5bn hit from Mr Trump’s tariffs.
For the first quarter, Ford said profits fell 65pc to $471m as it was forced to slow production at some plants to prepare for new vehicle launches.
Thanks for joining us. Donald Trump’s tariffs will deliver a $1.5bn (£1.1bn) blow to Ford’s finances, the car manufacturer has warned.
The US motoring giant axed its profits guidance and said it expects taxes on goods imported to the US to cost it at least $2.5bn, of which it can offset about $1bn.
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Shares were mixed in Asia after stock indexes fell on Wall Street, snapping a nine-day winning streak.
China’s services sector activity fell to its lowest level since September in a further sign the escalation of President Trump’s trade war is hitting the world’s second-largest economy.
A drastic increase in tariffs on US imports of Chinese products, to 145pc, has caused a sharp drop in shipping and other logistics.
“Overall optimism among Chinese firms weakened to the lowest level since this series began in April 2012, resulting in further job cuts in April,” said the report by Caixin, a financial media group.
Still, Chinese markets advanced after reopening from “Golden Week” holidays. The Shanghai Composite index added 1pc to 3,311.89, while the Hang Seng in Hong Kong was up 0.7pc at 22,651.65.
Taiwan’s Taiex slipped less than 0.1pc
In Australia, the S&P/ASX 200 lost 0.2pc to 8,148.40.
On Monday, rhe S&P 500 fell 0.6pc to 5,650.38, ending its longest winning streak since 2004.
The Dow Jones Industrial Average declined 0.2pc and the Nasdaq composite shed 0.7pc.
