Economy

Economy Minister Katherina Reiche on Friday called for her country to take more risks and speed up investment into infrastructure.
“On the top of the agenda is an investor booster,” she told CNBC.
The German economy has long been sluggish, and little reprieve is in sight.

09 May 2025, Bavaria, Gmund Am Tegernsee: Katherina Reiche (CDU), Federal Minister for Economic Affairs and Energy, takes part in the Ludwig Erhard Summit. Representatives from business, politics, science and the media are taking part in the three-day summit. Photo: Sven Hoppe/dpa (Photo by Sven Hoppe/picture alliance via Getty Images)
Picture Alliance | Picture Alliance | Getty Images

Germany needs to take more risks and boost its stagnant economy with a decade of investment in infrastructure, German Minister for Economic Affairs and Energy Katherina Reiche said Friday.
“The next decade will be the decade of infrastructure investments in bridges, in energy infrastructure, in storage, in maritime infrastructure… telecommunication. And for this, we need speed. We need speed and investments, and we need private capital,” Reiche told CNBC’s Annette Weisbach on the sidelines of the Tegernsee summit.

While 10% of investments could be taken care of with public money, the remaining 90% relied on the private sector, she said.
The newly minted economy minister also addressed regulation coming from Brussels, warning that it could hinder companies from investments and start-ups from growing if it is too restrictive. Germany has had to learn that investments comes with risks “and we have to kind of be open for taking more risks,” she said.

Initiating regulatory changes will in fact be one of the most important jobs for the new German government, Veronika Grimm, member of the German Council of Economic Experts, told CNBC on the sidelines of the Tegernsee summit.
“It will be important to adjust regulation, so removing or changing innovation-stifling regulation so that more is possible again in many areas of technology,” she said in comments translated by CNBC.
“And then of course it is about improving the environment or businesses, making it more attractive so that we are competitive again,” Grimm said.

On the edge of recession

Germany’s economy contracted slightly on an annual basis in both 2023 and 2024 and the quarterly gross domestic product has been flipping between growth and contraction for over two years now, just about managing to avoid a technical recession. Preliminary data for the first quarter of 2025 showed a 0.2% expansion.
Forecasts do not suggest much of a reprieve from the sluggishness, with the now former German government last month saying it still expects the economy to stagnate this year.
“This country needs an economic turnaround. After two years of recessions the previous government had to announce again [a] zero growth year for 2025 and we really have to work on this. So on the top of the agenda is an investor booster,” economy minister Reiche said.
Lowering energy prices, stabilizing the security of energy supply and reducing bureaucracy were among the key points on the agenda, she added.
This is despite a major fiscal U-turn announced earlier this year, which included changes to the country’s long-standing debt rules to allow for additional defense spending and a 500-billion-euro ($562.4 billion) infrastructure package.
Several of Germany’s key industries are under pressure. The auto industry for example is dealing with stark competition from China and now faces tariffs, while issues in housebuilding and infrastructure have been linked to higher costs and bureaucratic hurdles.
Trade is also a key pillar for the German economy and therefore uncertainty from U.S. President Donald Trump’s changing tariff policies are weighing heavily on the outlook. More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldThe US unveiled a “fast track” investment process for allied countries, days before President Donald Trump visits Gulf nations that have pledged to sink billions of dollars into US businesses and infrastructure including AI. Gulf states, which are estimated to manage 40 per cent of the world’s sovereign wealth and are some of the biggest investors in the US, have long lobbied to ease what they consider onerous administrative requirements that can slow down their spending in the US. The United Arab Emirates in particular is in a hurry to partner with American technology firms as it pushes to become the region’s pre-eminent hub for artificial intelligence. The UAE announced in March that it would invest $1.4tn in the US over 10 years.The US Department of Treasury on Thursday said it would launch a portal where its Committee of Foreign Investment in the US (Cfius) would gather information from overseas investors before they file for an investment. It also said the department was “focused on increasing efficiencies in the Cfius process” to allow more investment from partner countries where “there is verifiable distance and independence from foreign adversaries or threat actors”.Abu Dhabi has sought to convince US officials that it has opted to partner with America on AI and has shunned China, and wants better access to powerful semiconductors made by US firms such as Nvidia. US Treasury secretary Scott Bessent said the agency was “committed to maintaining and enhancing the open investment environment that benefits our economy while making sure that process efficiencies do not diminish our ability to identify and address national security risks that can accompany foreign investment”.President Trump will next week visit Saudi Arabia, Qatar and the UAE, accompanied by US executives. Although Riyadh has already pledged to invest $600bn in the US over the next four years, and the UAE has touted $1.4tn worth of investments in the coming decade, analysts anticipate that details of investment plans are likely to be discussed during the presidential visit. President Trump signed an America First Investment Policy directive in February, promising to make the US “the world’s greatest destination for investment dollars” while preventing investment from Chinese government entities and other “foreign adversaries”.   More

This article is an on-site version of our Inside Politics newsletter. Subscribers can sign up here to get the newsletter delivered every weekday. If you’re not a subscriber, you can still receive the newsletter free for 30 daysGood morning. The Labour government has reached a limited agreement with Donald Trump on trade, securing reductions in punitive tariffs on car and steel exports, but failing to reverse a 10 per cent levy that applies to most goods. Some thoughts on the broader politics of that below. Inside Politics is edited by Georgina Quach. Follow Stephen on Bluesky and X, and Georgina on Bluesky. Read the previous edition of the newsletter here. Please send gossip, thoughts and feedback to [email protected] coming From the Labour government’s perspective, the biggest and most important thing about the deal the British government has reached with Donald Trump is that it provides considerable relief for Jaguar Land Rover from Trump’s tariffs. Maybe other countries will get a better deal by settling later than the UK, or not at all, but the company most sharply hit has received a reprieve from the extra 25 per cent tariffs on cars and metals that had been previously set by Trump’s administration:British exports of steel and aluminium would now be zero-rated for tariffs, according to the UK government, while the first 100,000 British cars sold in the US annually — the vast majority of the total — would be subject to a reduced 10 per cent levy.The ghost at the feast here is USMCA, the deal that Donald Trump struck with Canada and Mexico in his first term. Now he regards that deal as inadequate and is pursuing an aggressive land-grab against both his immediate neighbours.The biggest problem with this deal from a UK perspective, however, isn’t that Trump may renege on it. It is that success in negotiating with Trump leaves the government ill-equipped to prepare British taxpayers for further tax increases or spending cuts in November, when one or both are essentially guaranteed to follow in this year’s Budget. Equally important, it means that no one is asking whether the British government might be better off holding fire to get a deal that includes relief for pharmaceuticals, or if the government’s changes to the “non-dom” tax regime should be rethought now that so many affluent Americans are looking to escape Trump’s America.Students aged 16-19 are invited to enter FT Schools’ blog competition in partnership with the Political Studies Association and ShoutOut UK by May 25. The winner and two runners up, if UK based, get to go along to a “Have I got fake news for you” parliament event in which I am a panellist. Details here. Now try thisI’m off to the pictures to see Sinners. However you spend it, have a wonderful weekend! Top stories todayGo fund me | Leading fund managers have warned at a Downing Street meeting that sentiment towards the London stock market is at “rock bottom” and urged ministers to consider mandating UK pension funds to allocate at least 5 per cent of their investments to domestic equities.Cars, cows, crops | The leaders of the US and the UK hailed the trade pact signed between the two sides on Thursday as “historic”, but experts warned it still leaves the UK facing higher tariffs on exports to the US than before Donald Trump took office. Here are the winners and losers. Warrington has £1.9bn in debt | Ministers will send in a team of experts to debt-laden Warrington council after government inspectors warned that its high-risk borrowing and investment strategy had been used to avoid making “transformational” savings.‘Colleagues . . . let rip about welfare’ | Keir Starmer will be warned that he faces his biggest rebellion yet as up to a quarter of his parliamentary party raised concerns about cuts to disability benefits, the Times reports. More than 80 Labour MPs have signed a private letter laying out their worries about the scale and pace of welfare cuts.Recommended newsletters for youWhite House Watch — What Trump’s second term means for Washington, business and the world. Sign up hereFT Opinion — Insights and judgments from top commentators. Sign up here More

This article is an on-site version of our Unhedged newsletter. Premium subscribers can sign up here to get the newsletter delivered every weekday. Standard subscribers can upgrade to Premium here, or explore all FT newslettersGood morning. The US and UK struck the first Trump-era trade deal yesterday. It was underwhelming. In return for more buying of US farm goods and removing a tariff on US ethanol, the UK will be exempted from metal levies, and will enjoy lower tariffs on (a few) cars. Other promises and frameworks were laid out, without any timelines. Email us: [email protected] and [email protected].  How Berkshire has changed Earlier this week we presented a sketch of Warren Buffett’s formula for success at Berkshire Hathaway. Buy safe, high-quality assets; fund them with low-cost, long-duration liabilities, many of them provided by a large, sophisticated insurance operation; use leverage but manage it carefully; and stick to your strategy for many decades, building a sterling reputation that acts as a powerful stabiliser for the business.I think that’s a fair, if high-level, picture of Berkshire over the past 40 years or more. But while the model is stable, it is not static. Much has already been written (some of it by Buffett himself) about the change in what sort of companies Berkshire has invested in — from undervalued “cigar butts” in the early years to high-quality, stable franchises at fair prices as Berkshire grew.But what constitutes a stable high-quality franchise has changed over the years, and Berkshire has managed to change with it, by fits and starts. A way to see this is by looking at the biggest stocks in the company’s public equity portfolio. Here are the top five holdings from 1984, 2004 and 2024:Staples (General Foods, Gillette, Coca-Cola) and finance (Geico, Amex, Bank of America) are a continuous theme. But publishing (Washington Post, Time) fell away and tech (Apple) rose. It’s important to note that Berkshire never, that I know of, nailed the timing of these transitions. It hardly left publishing at the top, got into tech too late by Buffett’s own admission, and got back into food in a big way (Kraft/Heinz) just as that industry lost its edge to the retailers and saw a structural decline in profitability. But the proof of the business model is that this didn’t matter, or didn’t as much as getting things right eventually, and continuously strengthening the boring, cash generative, wholly-owned insurance and industrial segments.Another point of change: Berkshire appears to have reduced the amount of leverage it uses over the past 25 years. Here is a crude measure — assets net of cash divided into common equity:Similarly, over the past 20 years or so, cash and short-term Treasuries as a proportion of total assets has risen, and has leapt in the past two years:  The jump in cash like assets is widely understood to reflect the fact that riskless short-term Treasuries now offer a real yield, and that there are few big assets at what Buffett and his team consider acceptable prices. They have been net sellers of stocks, notably Apple, for several years.It is interesting to consider whether Berkshire’s leaders have decided to deleverage the company because their risk appetites have changed — or decided that, in a riskier world, deleveraging Berkshire is necessary to keep risk stable. Taiwanese dollar, et alThis week saw a lot of movement in Asian currencies, particularly the Taiwanese dollar. It appreciated 6.5 per cent in just two days, its largest leap in decades. The Korean won, the Indonesian rupiah, the Thai baht and the Singapore dollar popped, as well:This is a consequence of Donald Trump’s tariffs. The US’s appetite for foreign goods leaves its trade partners flush with dollars, which they invest in the US (though the direction of causality is not always clear; there is something of a “chicken or the egg” problem here). Taiwan, which runs a massive trade surplus with the US, is disproportionately invested in the US, relative to the size of its economy; we recommend reading Alphaville’s great series on this.A large share of Taiwan’s US assets are owned by the island’s life insurance companies, who have taken advantage of the dollar’s strength and the Federal Reserve’s high rates to make what amounts to a carry trade: their assets are in stronger, high-yielding US dollars and Treasuries, and their policy liabilities are in weaker, low-yielding Taiwanese dollars. As the Alphaville pieces lay out, this trade has been under-hedged. The insurers do not own a lot of Taiwanese dollars, and their derivative hedges are too small to cover all the currency risk.This week’s ructions mostly reflected an unwinding of these big dollar positions. The life insurers and other dollar-leveraged investors in Asia dashed for local currencies when it began to look like dollar weakness would be here to stay. Speculation probably played a role, too, particularly in Taiwan. Investors, aware of the mismatched liabilities, likely piled into the local currency. They might have also been inspired by rumours that the Central Bank of the Republic of China, Taiwan’s central bank — which facilitates the insurers currency hedges and is believed to have intervened in the currency in the past — would not intervene to keep the Taiwanese dollar down. The bank’s leadership might see a strong currency as a way to sweeten the Trump administration in trade negotiations, or think the currency will inevitably be stronger in the new tariff regime, and saw no point in getting in its way. The Taiwanese government denied the former, but the latter could be at play.Things have settled down some, but most of the currencies have finished the week up against the dollar. This might be an early sign of a structural shift, which could be solidified by trade deals. From Daleep Singh, chief global economist at PGIM:There are many Asian countries . . . that are eager to strike trade deals with the US. As part of those deals, there might be a greater tolerance of Asian currency appreciation [by those countries’ central banks] . . . Trade wars lead to capital wars. Asian currencies could be allowed to appreciate, while external surpluses in the region are allowed to narrow. That causes the US capital account surplus to decline, as there will be fewer overseas investors showing up at our Treasury auctions.If Asian currencies appreciate meaningfully against the dollar, that has broad implications. US consumers will be poorer in real terms as imports from silicon chips to toys become more expensive. Treasury yields, all else being equal, will be higher. US risk assets could be cheaper, given a higher discount rate.There are still tailwinds behind the dollar, however. As James Athey at Marlborough Group notes, other currency risks could be uncovered as the Asian currencies appreciate, especially if changes come suddenly or drive the currencies above the values that global rate differentials would imply. Companies and central banks might then intervene by buying dollars and Treasuries, or selling domestic currencies. Also, high US rates remain appealing. “The Fed is showing that it is not in a hurry to cut rates . . . and most other central banks are cutting,” said Mark Farrington at Farrington Consulting, an FX consultancy. Trump’s tariffs imply less trade and fewer dollars flowing abroad, and, as a result, stronger foreign currencies and less Treasury purchases. For the time being, the US dollar still has a lot of privilege. But the rotation away from the dollar may have only just begun.(Reiter)One good readNo, globalisation didn’t hollow out the US middle class.FT Unhedged podcastCan’t get enough of Unhedged? Listen to our new podcast, for a 15-minute dive into the latest markets news and financial headlines, twice a week. Catch up on past editions of the newsletter here.Recommended newsletters for youDue Diligence — Top stories from the world of corporate finance. Sign up hereFree Lunch — Your guide to the global economic policy debate. Sign up here More

Show video infoThe UK has clinched the first deal with the US since President Donald Trump ignited a trade war, winning cuts to punitive tariffs on car and steel exports but failing to reverse a flat 10 per cent levy that applies to most goods.The pact was unveiled on Thursday by the US president in the Oval Office, with UK Prime Minister Sir Keir Starmer joining by phone. Both leaders effusively praised the strength of the relationship between their countries.But the scope of the US-UK deal is limited, many of the details have to be ironed out and the end result still leaves Britain facing a tougher trading relationship with America than before Trump introduced sweeping global tariffs last month.US stocks rose after the announcement, with investors encouraged by the prospect of further deals — including with China — to limit the damage of the levies that have choked trade. The S&P 500 rose more than 1 per cent, to its highest intraday level since March 27, before ceding ground and ending the day 0.6 per cent higher.Stocks in much of Asia rose on Friday morning. Japan’s broad Topix climbed 1.3 per cent while Taiwan’s benchmark index was up 1.7 per cent. Chinese markets were flat. The US dollar was flat on Friday against a basket of a half-dozen trading partner currencies.US Treasury secretary Scott Bessent and senior Chinese officials are scheduled to meet in Switzerland this weekend to try to de-escalate the tariff war between the world’s two largest economies. “I will tell you that China very much wants to make a deal. We’ll see how that works out,” Trump said. Asked if he would consider lowering US tariffs on Chinese imports, the US president replied: “Right now, you can’t get any higher. It’s at 145 [per cent], so we know it’s coming down.”The US-UK agreement, described by Trump as “full and comprehensive”, will keep in place the 10 per cent American levies on most British exports that Trump imposed last month.According to the text of the agreement released later on Thursday, the two sides were set to continue negotiating tariff reductions on “sectors of importance”.Show video infoBut it crucially offers the UK a reprieve from the extra 25 per cent tariffs on cars and metals that had been previously set by the Trump administration and were of particular strain to Britain. British exports of steel and aluminium would now be zero-rated for tariffs, according to the UK government, while the first 100,000 British cars sold in the US annually — the vast majority of the total — would be subject to a reduced 10 per cent levy.“This historic deal delivers for British business and British workers, protecting thousands of British jobs in key sectors including car manufacturing and steel,” Starmer said.In exchange, the UK will offer US farmers and ranchers improved market access through a lower-tariff quota system, but without altering its food standards, paving the way for some beef imports. The UK will remove its tariff on up to 1.4bn litres of US ethanol.“Our biggest concern is that . . . agricultural sectors have been singled out to shoulder the heavy burden of the removal of tariffs for other industries in the economy,” said Tom Bradshaw, president of the UK National Farmers’ Union.Trump and Starmer’s teams also agreed to work on a digital trade pact to deepen co-operation and to address US concerns about the UK’s digital services tax targeting Big Tech, which stays in place for now. Both sides agreed to negotiate further on pharmaceutical goods, which US officials have said would have tariffs applied to them in a matter of weeks.“The US and UK have been working for years to try and make a deal, and it never quite got there. It did with this prime minister,” Trump said at the White House, flanked by JD Vance, the vice-president, Howard Lutnick, the US commerce secretary, and Lord Peter Mandelson, the UK ambassador to Washington. Addressing workers at the Jaguar Land Rover factory in the West Midlands, Starmer said the accord was the start of a process. “This is jobs saved, not job done,” he said. “We will continue to build on this agreement.”He said he had also negotiated “preferential treatment” for the UK if Trump decides in future to raise tariffs on pharmaceuticals or other sectors, including films.But Andrew Griffith, Conservative trade spokesperson, said the agreement was disappointing, calling it “a Diet Coke deal, not the real thing”. Tory leader Kemi Badenoch said: “We’ve just been shafted.”The US accord with the UK could provide a template for American negotiations with other countries — with India, Vietnam, Japan and South Korea seen as the closest to reaching agreements with Washington. But Trump warned the US would insist that overall levies on countries with large trade surpluses with America could remain well over 10 per cent. “Some will be much higher,” he said. “The template of 10 is probably the lowest,” he added. The US-UK deal also raised questions among legal and trade experts over whether it was in keeping with World Trade Organization rules that require tariffs to be applied equally.Ignacio García Bercero, a former senior European Commission official now at the Bruegel think-tank, said the UK decision to cut tariffs for US exporters without extending the same deal to other countries risked legal challenges.Under the WTO’s “most favoured nation” concept, countries must offer the same tariffs rates to all countries, unless they are reduced via a bilateral trade deal that covers “substantially all trade”, which the UK-US pact announced on Thursday does not.“It is concerning if the UK has offered preferential tariff concessions to the US. In the absence of any commitment by the US to eliminate tariffs on other countries, this cannot be justified,” Bercero added.But one trade lawyer, who declined to be named, pointed out that WTO rules allow trade deals to be phased in. “They could say it’s the beginning of free trade agreement negotiations and then take 10 to 15 years to ‘conclude’,” they said.Additional reporting by Kate Duguid in New York and Arjun Neil Alim in Hong Kong More

Twenty years ago, economics was cool. Thanks in part to the publication of Freakonomics, economists were regarded as dispensers of brilliant and unexpected solutions to everyday problems. Whether you were trying to catch terrorists or figure out which wine to serve with dinner, all you needed to do was ask an economist.It is striking how popular the contrary position has now become: whatever policy position you might be contemplating, if economists are against it, it can’t be that bad. Brexit? The economists hate it; sign me up. Tariffs? Economists have been against them for centuries; bring on the Tariff Man. (As always, there is an exception to prove the rule. After the recent election in Canada, Prime Minister Mark Carney joked that unlike most politicians who campaigned in poetry and governed in prose, he campaigned in prose and would govern in econometrics.)Against this backdrop, it was intriguing to see Stefanie Stantcheva recently receive the prestigious John Bates Clark Medal, the same award that Steve Levitt, co-author of Freakonomics, won back in 2003. But while Levitt won the award for the clever data-detective work that was later made famous by Freakonomics, Stantcheva won in part for asking the public what they think about areas such as inflation, energy and trade. These are issues on which economists regard themselves as experts.Take inflation, which had seemed to be a solved problem in rich countries until the past few years. Why did it return? Economists broadly agree on the reasons, although not on their relative importance: governments borrowed and spent freely during the pandemic; supply chains were strained; energy prices spiked after Russia’s invasion of Ukraine in 2022; central banks hesitated to respond. But what do the American citizens surveyed by Stantcheva and her colleagues think? Maybe the public and the economists aren’t so far apart after all: they blame action by the Federal Reserve, increases in production costs, and most of all, government spending. If that looks very much like the economic consensus to you, you may be right.It is only on closer scrutiny that public attitudes to the causes of inflation start to look odd. For example, many people think that increases in interest rates cause inflation, whereas economists think the opposite. Perhaps people have confused cause and effect: fire engines are often spotted close to fires, paracetamol goes hand in hand with a headache and whenever interest rates are high, there’s an inflation problem. Or perhaps it is simply that people think of inflation as a reduction in their purchasing power and few things reduce purchasing power more reliably than an increase in your debt payments. Another Stantcheva project investigated “zero-sum thinking”, a topic that seems more abstract, even philosophical, but which perfectly captures the new zeitgeist. There are many ways to describe Donald Trump’s approach to government, or the philosophy of the new Reform party in the UK, but “zero sum” is a useful one.The zero-sum thinker frames the world in terms of winning and losing, us and them. If one person is to get richer, someone else must get poorer. If China is doing well, then the US must logically be doing badly. Jobs go either to the native born, or to foreigners. In contrast, the centrist dads among us see win-win solutions.Stantcheva and her colleagues at Harvard’s Social Economics Lab have been asking: what sort of person tends to see the world as zero sum? There are some surprising findings. For example, there are few clearer refutations of a zero-sum mindset than a thriving city, in which people flock to be with others, and the social, cultural, educational and financial opportunities that result. Yet Stantcheva’s research found that urban areas are more prone to zero-sum thinking than rural ones, perhaps reflecting our failure to build new homes. One puzzle in modern politics has been the rise of populists who grab ideas from both the political left and right. Stantcheva’s work (with Nathan Nunn, Sahil Chinoy and Sandra Sequeira) helps to clarify why this might happen. For example, a zero-sum thinker tends to be in favour of more redistribution and in favour of affirmative action — traditionally leftwing policies — but also in favour of strict immigration rules. Rightwing populists also think affirmative action is important, they just think it’s important and wrong. The old-fashioned win-win thinker tends to like immigration (more opportunities for everybody) and think that affirmative action and redistribution are a sideshow, because a rising tide lifts all boats.My own biases are firmly against zero-sum thinking. I’m always on the lookout for smart ideas that can make life better for everyone. But Stantcheva’s work strongly suggests that zero-sum thinking isn’t some sort of senseless blind spot. When people see the world in dog-eat-dog terms, they usually have a reason.Young people in the US tend to see the world as zero sum, reflecting the fact that they have grown up in a slower-growth economy than those born in the 1940s and 1950s. A similar pattern emerges across countries: the higher the level of economic growth a person grew up with, the less likely they are to see the world in zero-sum terms. People whose ancestors were enslaved, forced on to reservations or sent to concentration camps are more likely to see the world in zero-sum terms. And, intriguingly, while people with little education are often zero-sum thinkers, people with PhDs may be more zero-sum than anyone, which speaks volumes about the scramble for scarce scholarships and research positions in elite education.The world is full of opportunities for mutual benefit, so zero-sum thinking is a tragedy and a trap. But it is not a mystery. If we want to understand why so many people see the world in zero-sum terms, we only have to look at the fact that our dysfunctional politics and our sluggish economies have needlessly produced far too many zero-sum situations. Fix that problem and maybe economics will one day be cool again. Find out about our latest stories first — follow FT Weekend Magazine on X and FT Weekend on Instagram More

Much of the agreement President Trump unveiled Thursday still needs to be negotiated, but the administration said the deal with one of America’s closest allies would be the first of many.President Trump announced on Thursday that the United States intended to sign a trade deal with Britain that would bring the two nations closer and roll back some of the punishing tariffs he issued on that country’s products.Both sides consider a trade pact deeply beneficial, and a deal has been under discussion since Mr. Trump’s first term. But the announcement on Thursday was scant on details, reflecting the haste of the Trump administration’s efforts to negotiate with more than a dozen nations and rework the global trading system in a matter of months.The agreement, which Mr. Trump said would be the first of many, would include Britain’s dropping its tariffs on U.S. beef, ethanol, sports equipment and other products, and buying $10 billion of Boeing airplanes. The United States in return said it would pare back tariffs that Mr. Trump has put on cars and steel, though it will leave a 10 percent levy in place for all British exports.Neither government has said when they expect the agreement to be finalized. A document released by the Trump administration on Thursday evening listed half a dozen general priorities, and said the countries would immediately begin negotiations “to develop and formalize” them.The British government said it was still pushing to bring down the 10 percent tariff on most other goods. American officials said they would push Britain to reconsider a tax on technology companies. Officials from both governments will need to meet in the coming months to hammer out more specific language, leaving open the potential for disagreements.Nevertheless, the leaders of both nations hailed their cooperation in joint announcements on Thursday that invoked the deep relationship between their countries. Speaking from the Oval Office, with Prime Minister Keir Starmer of Britain on speakerphone, Mr. Trump called it a “great deal for both countries.” Mr. Starmer noted that it was the 80th anniversary of the Allies’ victory in Europe in World War II.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

Bank of England Governor Andrew Bailey told CNBC on Thursday that the U.K. was heading for more economic uncertainty, despite striking a trade deal with the U.S.
“A U.K.-U.S. trade agreement is very welcome… But the U.K. is a very open economy,” Bailey said.
The central bank chief said he was not surprised the BOE voted only narrowly to cut rates on Thursday, as there were risks on both sides of the outlook.

Bank of England Governor Andrew Bailey attends the central bank’s Monetary Policy Report press conference at the Bank of England, in the City of London, on May 8, 2025.
Carlos Jasso | Afp | Getty Images

Bank of England Governor Andrew Bailey told CNBC on Thursday that the U.K. was heading for more economic uncertainty, despite the country being the first to strike a trade agreement with the U.S. under President Donald Trump’s controversial tariff regime.
“The tariff and trade situation has injected more uncertainty into the situation… There’s more uncertainty now than there was in the past,” Bailey told CNBC in an interview.

“A U.K.-U.S. trade agreement is very welcome in that sense, very welcome. But the U.K. is a very open economy,” he continued.
That means that the impact from tariffs on the U.K. economy comes not just from its own trade relationship with Washington, but also from those of the U.S. and the rest of the world, he said.
“I hope that what we’re seeing on the U.K.-U.S. trade side will be the first of many, and it will be repeated by a whole series of trade agreements, but we have to see that happen of course, and where it actually ends up.”
“Because, of course, we are looking at tariff levels that are probably higher than they were beforehand.”

In Bank of England’s Monetary Policy Report released Thursday, the word “uncertainty” was used 41 times across its 97 pages, up from 36 times in February, according to a CNBC tally.

The U.K. central bank cut interest rates by a quarter percentage point on Thursday, taking its key rate to 4.25%. The decision was highly divided among the seven members of its Monetary Policy Committee, with five voting for the 25 basis point cut, two voting to hold rates and two voting to reduce by a larger 50 basis points.
Bailey said that while some analysts had perceived the rate decision as more hawkish than expected — in other words, leaning toward holding rates elevated than slashing them rapidly — he was not surprised by the close vote.
“What it reflects is that there are two sides, there are risks on both sides here,” he told CNBC.
“We could get a much more severe weakness of demand than we were expecting, that could then pass through to a weaker outlook for inflation than we were expecting.”
“There’s a risk on the other side that we could get some combination of more persistence in the inflation effects that are gradually working their way through the system,” such as in wages and energy, while “supply capacity in the economy is weaker,” he said. More