Evelyn Reynolds

The International Monetary Fund on Tuesday raised its U.K. growth forecast for 2024 to 0.7%.
It is the latest in a string of upgrades for the U.K.’s economic outlook, giving the country’s new government a boost.
Goldman Sachs earlier this month nudged its 2025 forecast for the U.K. economy 0.1 percentage point higher, citing the Labour party’s fiscal plans.

Seen through the branches of trees in Ruskin Park are the lit porches of terraced period homes and in the distance, the growing development at Nine Elms, on 14th May 2024, in London, England. 
Richard Baker | In Pictures | Getty Images

LONDON — The International Monetary Fund on Tuesday lifted its 2024 growth outlook for the U.K. to 0.7% from 0.5%, providing a further boost to the country’s new government.
Looking ahead, the Washington, D.C.-based IMF reiterated its forecast for 1.5% U.K. growth in 2025 in the July update of its World Economic Outlook.

The upgrades come after two years of stagnation, with the U.K. falling into a shallow recession in the second half of 2023. However, GDP growth in May came in above analyst expectations at 0.4%, while summer events including the Euro 2024 soccer championship and even Taylor Swift’s Eras Tour are expected to bolster economic activity.
Investment bank Goldman Sachs earlier this month nudged its 2025 forecast for the U.K. economy 0.1 percentage point higher, to 1.6%. It cited the fiscal plans of the new Labour government led by Prime Minister Keir Starmer, which include planning reform and closer trade ties with the European Union.
Deutsche Bank on Friday joined Goldman in brightening its U.K. outlook, with economists saying in a note they now expect gross domestic product growth of 1.2% this year, well above their earlier 0.8% forecast.
The country’s GDP in May showed the strength of sectors across professional services and construction, Deutsche Bank said, with the Euros tournament expected to provide a further boost to hospitality and leisure.
Analysts at Jefferies, meanwhile, said in a recent note that the size of Labour’s parliamentary majority would make the U.K. appear “relatively stable,” and that in tandem with regulatory reform may raise the attractiveness of assets in the country.

It comes as the Bank of England is expected to start bringing down interest rates in the coming months. U.K. inflation hit the central bank’s 2% target in May, and economists polled by Reuters see it declining further to 1.9% in Wednesday’s print.
Other economies given a 2024 growth upgrade by the IMF on Tuesday included the euro zone, which it lifted by 0.1 percentage point to 0.9%, Spain, up 0.5 percentage point to 2.4%, and China, up 0.4 percentage point to 5%.
It lowered its forecast for the U.S. economy by 0.1 percentage point to 2.6%.
The organization sees worldwide growth at 3.2% this year, and said global activity and world trade were firmer, particularly due to strong exports from Asia.
However, it warned that the services sector was broadly holding up the disinflation process, complicating monetary policy decisions.
“Upside risks to inflation have thus increased, raising the prospect of higher-for-even-longer interest rates, in the context of escalating trade tensions and increased policy uncertainty,” the IMF said in the World Economic Outlook.
— CNBC’s Sophie Kiderlin and Vicky McKeever contributed. More

The International Monetary Fund warned that inflation remained stubbornly high and that protectionism posed a risk to the global economic outlook.The United States economy is growing more slowly than expected and inflation remains stubbornly high around the world, two developments that pose risks to the global economy, the International Monetary Fund said on Tuesday.The I.M.F.’s most recent World Economic Outlook report underscored the lingering vulnerabilities that could derail a so-called soft landing for the world economy — one in which a global recession is avoided despite aggressive efforts by central banks to tame rapid inflation by making it more expensive to borrow money.The new report said the I.M.F. still expected growth in global output to hold steady at 3.2 percent in 2024. That would be unchanged from its April projections. The fund also expected growth to be slightly higher next year, at 3.3 percent. However, the closely watched projections included several caveats and warned that the global economy was in a “sticky spot.”Most notable were signs of weakness in the United States, which has helped power the global recovery from the pandemic. The I.M.F. now expects the United States economy to grow more slowly than it did previously as a result of weaker consumer spending and a softening job market.The report forecast that U.S. economic growth would increase to 2.6 percent in 2024 from 2.5 percent in 2023, a slight downgrade from its previous projection of 2.7 percent. “The United States shows increasing signs of cooling, especially in the labor market, after a strong 2023,” Pierre-Olivier Gourinchas, the I.M.F.’s chief economist, said in an essay that accompanied the report.Global inflation is still expected to ease to 5.9 percent this year from 6.7 percent in 2023. But the I.M.F. noted that prices for services remained hot. That could force central banks — which have raised interest rates to their highest levels in years — to keep borrowing costs elevated longer, putting growth at risk for both advanced and developing economies.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

The Biden administration declined to pursue a union complaint of labor abuses in Mexico, raising new concerns about offshoring.Over the past few years, as major manufacturers have announced plans to ramp up production in Mexico, labor unions have raised concerns that American jobs will be sent abroad.Now, the concerns have prompted the United Automobile Workers union, a prominent backer of President Biden, to criticize an administration decision not to pursue accusations of labor abuses by a Mexican subsidiary of Caterpillar, the agriculture equipment maker.In late June, the administration informed a group of unions that it would not pursue a complaint that the subsidiary had retaliated against striking union members by making it difficult for them to find alternative employment, a form of blacklisting.The government’s ability to police such violations, under a provision of the United States-Mexico-Canada Agreement, the successor to the North American Free Trade Agreement, is meant to reduce the incentive for American employers to move jobs to Mexico in search of weaker labor protections. The U.A.W. argues that, by declining to use its authority under the trade agreement in this case, the Biden administration may be encouraging companies to relocate work.Caterpillar workers in Mexico “face harassment and blacklisting for daring to stand up, with no help from the U.S.M.C.A.,” Shawn Fain, the president of the U.A.W., said in a statement. The U.A.W. was among several labor groups that brought the complaint.The Biden administration would not comment on the complaint, but pointed to two dozen other cases it had pursued under the trade agreement. Caterpillar did not respond to requests for comment.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Jerome H. Powell, the chair of the Federal Reserve, avoided signaling when the Fed would cut rates at a time when some economists are wondering why officials would wait.Jerome H. Powell, the chair of the Federal Reserve, avoided sending a clear signal about when the central bank would begin to cut interest rates even as he welcomed a recent cool-down in inflation.“Today I’m not going to be sending any signals one way or the other on any particular meeting,” Mr. Powell said while speaking at the Economic Club of Washington on Monday. “Just to ruin the fun right at the beginning.”The Fed’s chair was speaking after several inflation reports in a row suggested that price increases were moderating in earnest, a development that had spurred some economists to think that it could make sense for officials to cut interest rates sooner rather than later. The Fed meets at the end of July and then again in September, and investors have been largely expecting that officials will begin to lower borrowing costs at the September meeting.Economists at Goldman Sachs wrote in a research note on Monday that cutting rates this month could be appropriate, given how much inflation had come down.“If the case for a cut is clear, why wait another seven weeks before delivering it?” Jan Hatzius, Goldman’s chief economist, wrote in the note, explaining that while his team still thinks that a rate cut in September is more likely, there is a “solid rationale” for an earlier move.But Mr. Powell did little to open the door to an earlier move during his Monday remarks. While he said recent inflation reports had added to central bankers’ confidence that price increases were coming down, he avoided giving a clear signal about when officials would have enough confidence to lower borrowing costs.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Powell referenced the idea that central bank policy works with “long and variable lags” to explain why the Fed wouldn’t wait for its target to be hit.
The central bank is looking for “greater confidence” that inflation will return to the 2% level, Powell said.
The Fed’s next policy meeting is at the end of July.

Federal Reserve Chair Jerome Powell said Monday that the central bank will not wait until inflation hits 2% to cut interest rates.
Speaking at the Economic Club of Washington D.C., Powell referenced the idea that central bank policy works with “long and variable lags” to explain why the Fed wouldn’t wait for its target to be hit.

“The implication of that is that if you wait until inflation gets all the way down to 2%, you’ve probably waited too long, because the tightening that you’re doing, or the level of tightness that you have, is still having effects which will probably drive inflation below 2%,” Powell said.
Instead, the Fed is looking for “greater confidence” that inflation will return to the 2% level, Powell said.
“What increases that confidence in that is more good inflation data, and lately here we have been getting some of that,” he said.
Powell also said he thinks a “hard landing” for the U.S. economy was not “a likely scenario.”
Monday was Powell’s first public speaking appearance since the consumer price index report for June showed cooling inflation, with prices actually falling month over month.

Powell said at the beginning of his appearance that he was not intending to make any signals about when the Fed might start to cut interest rates. The central bank’s next policy meeting is at the end of July.
Powell made the remarks as part of a discussion with David Rubenstein, chairman of the Economic Club of Washington, D.C., and co-founder of The Carlyle Group, where the Fed chair previously worked.
The target range for the federal funds rate is currently 5.25% to 5.50%. That is up from a range of 0% to 0.25% during the Covid-19 pandemic, and a range of 1.50%-1.75% before that health crisis.
The federal funds rate influences, directly or indirectly, the cost of money throughout the economy, such as mortgage rates.
“People I don’t know will always say, ‘hey, cut rates.’ Somebody said that in the elevator this morning,” Powell said jokingly.

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On a blighted industrial corridor in a struggling section of Erie, Pa., a long-abandoned iron factory has been humming with activity for the first time in decades. Construction crews have been removing barrels of toxic waste, knocking down crumbling walls and salvaging rusted tin roofing as they prepare to convert the cavernous space into an events venue, advanced manufacturing hub and brewery.The estimated $25 million project is the most ambitious undertaking the Erie County Redevelopment Authority has ever attempted. It was both kick-started and remains heavily funded by various pots of money coming from Biden administration programs.Yet there is no obvious sign of President Biden’s influence on the project. Instead, the politician who has taken credit for the Ironworks Square development effort most clearly is Representative Mike Kelly, a Pennsylvania Republican who voted against the 2021 bipartisan infrastructure law that is helping to fund the renovation.It is one example of a larger problem Mr. Biden faces in Pennsylvania, a swing state that could decide the winner of the 2024 election. In places like Erie, a long-struggling manufacturing hub bordering the Great Lake that is often an election bellwether, Mr. Biden is struggling to capitalize on his own economic policies even when they are providing real and visible benefits. Now, an assassination attempt on former President Donald J. Trump at a rally in Butler County, Pa., could further influence voters, though exactly how it will sway them remains unclear. But Mr. Biden’s standing in his home state was already growing precarious before a gunman opened fire on Saturday, killing one attendee and injuring Mr. Trump.In a poll of likely Pennsylvania voters conducted from July 9 to 11, just before the shooting, 48 percent said they would vote for Mr. Trump and 45 percent said they would vote for Mr. Biden in a two-way race.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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Federal Reserve Chair Jerome Powell is set to address the Economic Club of Washington, D.C., on Monday as traders look for hints about when the central bank will cut interest rates. Powell will partake in a discussion with David Rubenstein, chairman of the Economic Club and co-founder of The Carlyle Group.

These will be Powell’s first remarks since Thursday’s consumer price index report, which showed that prices went down in June on a monthly basis.
Powell did deliver two days of testimony on Capitol Hill last week, where he said that the Fed viewed the risks between rising inflation and a slowing economy to be more balanced now. He also said the central bank did not need to wait for inflation to actually reach its 2% target before cutting rates.
The Federal Reserve has a policy meeting at the end of July, but a rate cut is seen unlikely at that time. Traders have instead focused on the September meeting as a potential cut. More

Donald J. Trump’s presidency was a major turn away from the Republican Party’s long embrace of free-market economics. If the Republican platform is any indication, a second Trump term would be a near-complete abandonment.The 2024 platform, which was released last week and is expected to infuse the Republican National Convention that starts in Milwaukee on Monday, promises action on what have become Mr. Trump’s signature issues: It pledges to pump up tariffs, encourage American manufacturing and deport immigrants at a scale that has never been seen before.What it lacks are policy ideas that have long been dear to economic conservatives. The platform does not directly mention fiscal deficits, and, apart from curbing government spending, it does not make any clear and detailed promises to rein in the nation’s borrowing. Other policies it proposes — including cutting taxes and expanding the military — would most likely swell the nation’s debt.The Republican platform also does not mention exports or encouraging trade. And while the document insists that the party will lower inflation, long a pertinent issue for economic conservatives, it fails to lay out a realistic plan for doing that. Chapter One of the document, titled “Defeat Inflation and Quickly Bring Down All Prices,” suggests that oil-friendly policies, slashed government spending, decreased regulation, fewer immigrants and restored geopolitical stability will lower price increases. But few economists agree.In fact, many analysts have said Mr. Trump’s suggestions on the campaign trail so far could lift prices, particularly his proposals to deport immigrants en masse and apply tariffs of perhaps 10 percent on most imports and levies of 60 percent on goods from China.“Measures to reduce migration and to protect the economy through tariffs and trade blockages are all highly inflationary,” Steven Kamin, a former Fed staff official who is now at the conservative American Enterprise Institute, said in an interview last week. When it comes to both deficits and trade, he said, there is a “populist dismissal of the prescriptions of academics and elites.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More