Economy

Home improvement retailer Kingfisher became the latest British company to report a negative impact from U.K. Finance Minister Rachel Reeves’ October budget — as she prepares her latest update on the state of the British economy.
Top on the businesses’ list of complaints is higher employment costs after the government pledged in October to increase national insurance contributions from employers and raised the country’s “national living wage” by 6.7% from April 1.
The Confederation of British Industry said Reeves “must inject business with a serious confidence boost” on Wednesday.

Rachel Reeves, UK chancellor of the exchequer, outside 11 Downing Street ahead of presenting her budget to parliament in London, UK, on Wednesday, Oct. 30, 2024. 
Bloomberg | Bloomberg | Getty Images

Home improvement retailer Kingfisher became the latest British company to report a negative impact from U.K. Finance Minister Rachel Reeves’ October budget — as she prepares her latest update on the state of the British economy.
In its annual earnings release on Tuesday, Kingfisher, which owns home improvement retailer B&Q, said the government’s policies had “raised costs for retailers and impacted consumer sentiment,” with sales of big-ticket items falling.

It is the latest in a line of British businesses that have criticized Reeves’ bumper tax-rising budget since autumn. The companies will now be keeping a close eye on Reeves’ Spring Statement, when she’s set to update lawmakers on her latest spending and taxation plans at 12:30 p.m. London time Wednesday.
Top on the businesses’ list of complaints is a higher employment cost after the government pledged in October to increase national insurance contributions from employers and raised the country’s “national living wage” by 6.7% from April 1.
On Sunday, Reeves defended the tax rises ahead of the Wednesday statement, telling Sky News the government “took the action that was necessary to ensure our public services and public finances were on a firm footing.”
However, a number of consumer-facing businesses have flagged concerns with the Labour government’s economic policies in their earnings reports this quarter. They include supermarket giant Tesco, which said its higher national insurance contributions could add up to £250 million ($324 million) to annual costs, while the chairman of pub chain JD Wetherspoon, Tim Martin, said the changes will cost every one of his pubs £1,500 per week. 
Regis Schultz, CEO of sportswear retailer JD Sports, said the policies mean it was tempting for businesses to reduce staff numbers and hours, “which will be bad news for the economy.” 

It comes as the U.K. battles economic sluggishness, rising prices and widespread uncertainty as a result of U.S. President Donald Trump’s global trade tariffs.
The Office for Budget Responsibility (OBR), the country’s independent public finances watchdog, is reportedly expected to downgrade the U.K.’s growth forecasts for 2025 on Wednesday, halving its previous 2% estimate.
AB Foods, which owns budget fashion retailer Primark, blamed the Labour government’s budget as contributing to broader consumer weakness in the country. Finance Director Eoin Tonge told analysts that customers across its brands were cautious, citing “a shock and a fear, that’s driven people to pull in their horns.” That view was shared by clothing retailer Frasers Group, which said it saw weaker consumer confidence around the budget announcement. The company’s Chief Financial Officer Chris Wootton told Reuters the company “felt we’d been kicked in the face.”
The slew of negative corporate commentary is expected to pile pressure on Reeves ahead of her Spring Statement.
The British Retail Consortium has called on the government to “inject confidence into the economy,” warning that April’s rise in tax contributions and the minimum wage will generate £5 billion in additional costs for retailers, giving “many no option but to push prices up.”
The Confederation of British Industry (CBI) said Reeves “must inject business with a serious confidence boost” on Wednesday.
“As an immediate priority the government should re-commit to not raising the business tax burden further over the course of this Parliament,” Louise Hellem, chief economist of the CBI, said in a statement. “Setting an ambitious goal for R&D spending, making it easier to invest in skills and taking measures to reduce the regulatory burden on business would be encouraging moves that would show the government understood what business needs to see from them.”
Goldman Sachs Chief Equity Strategist Peter Oppenheimer meanwhile told CNBC on Monday that concerns over consumer and business confidence will see Reeves focus on cutting costs rather than raising taxes this week, but said the government’s focus on boosting growth was “a laudable objective, a difficult thing to do.”
CNBC has reached out to the U.K. Treasury for comment.
— CNBC’s Holly Ellyatt contributed to this report. More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldThe US has put dozens of Chinese entities on an export blacklist in the Trump administration’s first big effort to slow China’s ability to develop advanced artificial intelligence chips, hypersonic weapons and military-related technology.The US commerce department on Tuesday added more than 70 Chinese groups to the “entity list”, which requires any American company selling technology to them to have a licence. In most cases, the licence request is denied.Among the listed groups are six Chinese subsidiaries of Inspur, a big cloud computing group that has worked with US chipmaker Intel, including one based in Taiwan. The Biden administration put Inspur on the entity list in 2023 but came under criticism for not adding its subsidiaries. Inspur did not immediately respond to a request for comment.The US said the subsidiaries were targeted for helping develop supercomputers for military use and obtaining American-made technology to support projects for China and the People’s Liberation Army. It added that the subsidiaries had developed large AI models and advanced chips for military use.“We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” said Howard Lutnick, the US commerce secretary. “We are committed to using every tool at the department’s disposal to ensure our most advanced technologies stay out of the hands of those who seek to harm Americans.”The US has not provided any public evidence to support the blacklisting of Beijing Academy of Artificial Intelligence for supporting China’s military modernisation. BAAI is a leading non-profit AI research institute set up in 2018 to bring together industry and academia. It regularly releases open source AI models and other tools and holds an annual conference to convene global experts in the field.The blacklisting of BAAI comes after Washington targeted Zhipu in January. The start-up is a frontrunner among Chinese AI groups developing large language models. BAAI did not immediately respond to a request for comment.In most cases, the restrictions will apply to non-US companies that export products containing American technology to the Chinese groups under an extraterritorial tool known as the “foreign direct product rule”.The US also targeted four groups — Henan Dingxin Information Industry, Nettrix Information Industry, Suma Technology and Suma-USI Electronics — that are involved in developing exascale superconductors for military purposes, such as nuclear weapons modelling. Washington said the groups provided “significant manufacturing capabilities” to Sugon, an advanced computer server-maker put on the entity list in 2019 for building supercomputers for military use.The Chinese embassy in Washington said the US had “time and again overstretched the concept of national security and abused state power to go after Chinese companies”.“We firmly oppose these acts taken by the US and demand that it immediately stop using military-related issues as pretexts to politicise, instrumentalise and weaponise trade and tech issues, and stop abusing export control tools such as entity lists to keep Chinese companies down,” said Liu Pengyu, the embassy spokesperson.The Biden administration imposed export controls on China targeting quantum computing and AI chips under its “small yard, high fence” policy. But critics accused it of failing to close loopholes that let some Chinese companies avoid restrictions.Meghan Harris, a semiconductor policy expert at Beacon Global Strategies, said it was telling that the first significant action on export controls “corrects what was viewed as a major gap in the Biden administration’s listing of Inspur, which left major subsidiaries unrestricted”.“While a solid first action by the Trump team that will be seen as strengthening controls and fixing errors, it’ll take a bit more time to work up the weightier policy decisions,” she added.Jeffrey Kessler, under-secretary of commerce for industry and security, said his bureau was “sending a clear, resounding message” that the administration would prevent US technology “from being misused for high performance computing, hypersonic missiles, military aircraft training and [Unmanned Aerial Vehicles] that threaten our national security”.The US also added 10 entities based in China, South Africa and the UAE to the list over links to the Test Flying Academy of South Africa, a flight school that Washington put on the entity list in 2023 after discovering it was hiring western fighter jet pilots, including from the UK, to train Chinese pilots.Additional reporting by Ryan McMorrow in Beijing More

The additions included companies that are customers of Intel and Nvidia, and one firm that was the focus of a New York Times investigation last year.The Trump administration on Tuesday added 80 companies and organizations to a list of companies that are barred from buying American technology and other exports because of national security concerns.The move, which targeted primarily Chinese firms, cracks down on companies that have been big buyers of American chips from Nvidia, Intel and AMD. It also closed loopholes that Trump administration officials have long criticized as allowing Chinese firms to continue to advance technologically despite U.S. restrictions.One company added to the list, Nettrix Information Industry, was the focus of a 2024 investigation by The New York Times that showed how some Chinese executives had bypassed U.S. restrictions aimed at cutting China off from advanced chips to make artificial intelligence.Nettrix, one of China’s largest makers of computer servers that are used to produce artificial intelligence, was started by a group of former executives from Sugon, a firm that provided advanced computing to the Chinese military and built a system the government used to surveil persecuted minorities in the western Xinjiang region.In 2019, the United States added Sugon to its “entity list,” restricting exports over national security concerns. The Times investigation found that, six months later, the executives formed Nettrix, using Sugon’s technology and inheriting some of its customers. Times reporters also found that Nettrix’s owners shared a complex in eastern China with Sugon and other related companies.After Sugon was singled out and restricted by the United States, its longtime partners — Nvidia, Intel and Microsoft — quickly formed ties with Nettrix, the investigation found.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 Conference Board’s measure for future expectations tumbled 9.6 points to 65.2, the lowest reading in 12 years.
The board’s monthly confidence index of current conditions slipped to 92.9, a 7.2-point decline and the fourth consecutive monthly contraction.

Shoppers walk near a Nordstrom store at the Westfield UTC shopping center on Jan. 31, 2025 in San Diego, California.
Kevin Carter | Getty Images

Consumer confidence dimmed further in March as the view of future conditions fell to the lowest level in more than a decade, the Conference Board reported Tuesday.
The board’s monthly confidence index of current conditions slipped to 92.9, a 7.2-point decline and the fourth consecutive monthly contraction. Economists surveyed by Dow Jones had been looking for a reading of 93.5.

However, the measure for future expectations told an even darker story, with the index tumbling 9.6 points to 65.2, the lowest reading in 12 years and well below the 80 level that is considered a signal for a recession ahead.
The index measures respondents’ outlook for income, business and job prospects.
“Consumers’ optimism about future income — which had held up quite strongly in the past few months — largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations,” said Stephanie Guichard, senior economist, global indicators at The Conference Board.
The survey comes amid worries over President Donald Trump’s plans for tariffs on U.S. imports, which has coincided with a volatile stock market and other surveys showing waning sentiment.
The fall in confidence was driven by a decline in those 55 or older but was spread across income groups.

In addition to the general pessimism, the outlook for the stock market slid sharply, with just 37.4% of respondents expecting higher equity prices in the next year. That marked a 10 percentage point drop from February and was the first time the view turned negative since late 2023.
The view on the labor market also weakened, with those expecting more jobs to be available falling to 16.7%, while those expecting fewer jobs rose to 28.5%. The respective February readings were 18.8% and 26.6%.
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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.An unnamed large employer’s late supply of earnings information to the UK statistics agency risks skewing the country’s main official measure of wage growth, raising doubts about data that guides monetary policy. The Office for National Statistics said in a little-noticed footnote to its release of earnings figures last week that “as an exception”, it was working on revisions that could go further back in time than usual, “to allow for late and updated returns we received from one business to be included, as part of improving the quality of these estimates”. Including the mystery employer could have “a small impact at whole-economy level”, the ONS said, as the agency promised a full explanation when it published the revisions. The earnings figures issued by the ONS are based on a survey of businesses, and are closely watched by the Bank of England when taking interest rate decisions.The ONS also said last week it was reviewing the way it adjusts earnings figures to account for seasonal fluctuations — an exercise it conducts periodically — and that “if required” it would implement revisions to its entire historical series of wage data in “the early part of 2025”. The revisions are potentially important because the strength of UK wage growth on almost any measure has been a puzzle for analysts, at a time when the economy and jobs market are stagnant. The latest ONS figures showed average weekly earnings — excluding bonuses — were 5.9 per cent higher in the three months to January than one year earlier.Private sector wage growth was running even higher, at 6.1 per cent, after apparently accelerating at the end of 2024, even as employers cut back on hiring after tax rises on businesses outlined in chancellor Rachel Reeves’ October Budget. The BoE, which has become increasingly vocal about its concerns over the quality of the UK’s official statistics, drew attention last week to discrepancies between the ONS earnings figures and other data that suggested pay growth, while still strong, had been easing. The BoE also focused attention on recent volatility in GDP data, ongoing problems with official labour market data and “the importance for policymaking of high-quality and reliable official data across the full range of economic and labour market statistics”. The earnings figures have not been affected by a drop in response rates by households to the ONS labour force survey that underpins the jobs data.But Andrew Goodwin, chief UK economist at the consultancy Oxford Economics, said that on top of well-publicised issues with jobs, population, trade and price data, other problems with ONS statistics were emerging “that are yet to be officially acknowledged”. These included “extreme” swings in retail sales figures around the turn of the year, and an emerging pattern of GDP growth tailing off in the middle of the calendar year, which suggested problems with seasonal adjustments, he claimed. Goodwin said the earnings figures are “arguably the most important series for the Bank of England”, as they offer an indicator of inflationary pressures in the economy.The ONS, which first flagged the potential revisions in February, said it could not yet be more precise about when they would be implemented, or identify the employer concerned.However, the agency noted that both its survey-based data and separate figures based on tax records showed similar, “relatively strong” wage growth. The ONS said it regularly reviewed its approach to seasonal adjustments as new data became available, and that one-off impacts such as the Covid pandemic “need to be carefully considered and accounted for in any detailed analysis”.  More

Americans are increasingly anxious about their jobs and finances as the Trump administration’s trade policies and government cutbacks stoke concern about the economy.Consumer confidence tumbled this month to its lowest level since January 2021, the Conference Board reported on Tuesday, extending a decline that has been underway since shortly after President Trump was elected last fall. The short-term outlook for “income, business and labor market conditions” fell to its lowest reading in 12 years, the business group reported, signaling consumer angst about a deterioration in economic conditions in the coming year.Economists have warned that Mr. Trump’s plans for sweeping tariffs on the United States’ biggest trading partners could reignite inflation. Whiplash from shifting trade policies, and investors’ concern about a potential slowdown in the American economy, fueled a stock-market sell-off earlier this month. Households are bracing for higher inflation over the next year, according to the survey, with 12-month inflation expectations rising to 6.2 percent, from an outlook of 5.8 percent in February. (Over the most recent 12 months, the inflation rate was 2.8 percent, according to the Consumer Price Index for February.)Consumers are “spooked” by the Trump administration’s trade wars, cuts to the federal government by the so-called Department of Government Efficiency and the recent stock market sell-off, said Bill Adams, the chief economist for Comerica Bank.“When people fear for their jobs, they will cut back on discretionary spending on vacations and going out, and delay big purchases like new houses, cars or appliances,” Mr. Adams said. He added that the length of the downturn in consumer sentiment was hard to predict.Stephen Miran, the chair of the White House Council of Economic Advisers, played down the drop in consumer confidence in an interview with CNBC on Tuesday. “Folks often let their political views influence their views of the economy,” he said.The latest Conference Board survey added to growing evidence that uncertainty about tariff policies is making consumers less confident about the economic outlook and more worried about inflation. Data from the University of Michigan released this month showed consumer sentiment plummeting 11 percent from February as Americans of all ages, income groups and political affiliations turned even more downbeat.Some company executives warn of a pullback in consumer spending, too. Delta Air Lines cut its financial forecast for the first three months of the year, citing lower demand for domestic travel, while the chief executive of the clothing retailer Burlington cautioned its investors that tariffs “could hurt discretionary spending.” More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldCredit rating group Moody’s has warned on the US fiscal outlook, saying President Donald Trump’s trade tariffs could hamper the country’s ability to cope with a growing debt pile and higher interest rates.The rating agency said on Tuesday that America’s “fiscal strength is on course for a continued multiyear decline”, having already “deteriorated further” since it assigned a negative outlook to America’s top-notch triple A credit rating in November 2023.While Moody’s highlighted the “extraordinary” economic resilience of the US and the role of the dollar and the Treasury market as backbones of the global financial system, its analysts also warned on Tuesday that the policies of the second Trump administration — including sweeping tariffs and plans for tax cuts — could do more harm than good for government revenues.“The potential negative credit impact of sustained high tariffs, unfunded tax cuts and significant tail risks to the economy have diminished prospects that these formidable strengths will continue to offset widening fiscal deficits and declining debt affordability,” Moody’s said. “In fact, fiscal weakening will likely persist even in very favourable economic and financial scenarios,” they added.Moody’s warning comes amid a furious debate on Capitol Hill and inside the Trump administration over how to place the US on a more sustainable fiscal path. Analysts and investors have warned that the US’s rapidly rising debt and deficit could ultimately dent demand for Treasuries, which form the bedrock of the global financial system. Pimco, one of the world’s biggest bond managers, said late last year that “sustainability questions” had made it hesitant to purchase long-term Treasuries. The federal budget deficit reached $1.8tn for the fiscal year ending September 30, up 8 per cent from the previous year. When Moody’s lowered its outlook on the US’s credit rating to negative just over two years ago, it highlighted sharply higher debt servicing costs and “entrenched political polarisation”. America’s credit rating is watched closely because it plays a critical role in the country’s debt affordability — with higher ratings and positive outlooks typically translating into lower borrowing costs. Moody’s said on Tuesday that US “debt affordability remains materially weaker than for other triple A-rated and highly rated sovereigns”, with even the most positive economic and financial scenarios highlighting “increasing risks that the deterioration in US fiscal strength may no longer be fully offset by its extraordinary economic strength”.The rating agency conceded that it expected the world’s biggest economy to “remain strong and resilient”. But its analysts added that “the evolving US government policy agenda on trade, immigration, taxes, federal spending and regulations could reshape parts of the US and global economy with significant long-term consequences”.While Trump has repeatedly stated his preference for lower US borrowing costs, the Fed last week held interest rates steady in a range of 4.25 per cent to 4.5 per cent — with its policymakers predicting roughly two quarter-point cuts over the course of 2025. Moody’s said it anticipated a federal funds rate of 3.75 per cent to 4 per cent by the end of the year. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The price of copper is likely to set new records this year at $12,000 or more a tonne, according to several of the world’s largest trading houses, lifted by growing global demand and the threat of US President Donald Trump’s trade tariffs.Trading houses Mercuria and Trafigura and hedge fund Frontier Commodities said at the Financial Times’ Commodities Summit in Lausanne on Tuesday that they expected the price on the London Metal Exchange to move higher this year.The London copper price hit a record of almost $11,000 in May 2024. After falling back late last year, it has risen in 2025 and was trading at about $10,000 on Tuesday. “I think we’ll see higher than $12,000,” said Kostas Bintas, global head of metals and minerals at Mercuria. The copper market was “experiencing tightness”, he added.Bintas said huge US imports of copper had reshaped the market, which is normally dominated by Chinese demand. He estimates that about 400,000 to 500,000 tonnes of copper is at present on its way to the US. Traders have rushed to import copper into the US ahead of the potential imposition of tariffs on the metal following an investigation that Trump has instigated into “the threat to national security from imports of copper”.The threat of US tariffs has driven a widening gap between the London and New York prices for the metal. This spread had risen on Tuesday to more than $1,350 a tonne. Levies of 25 per cent have already been introduced on all US aluminium and steel imports.Demand for copper should also expand as a result of developed economies such as the US and EU needing to upgrade their electricity grids, said traders.This investment would require huge amounts of the metal, said Aline Carnizelo, managing partner at Frontier Commodities, who also believes copper could test $12,000.Copper is used in a wide variety of industries, including technology, construction and renewable energy, and is key for electrical wiring and power grids.Graeme Train, head of metals and minerals analysis at Trafigura, said copper could hit a new high but cautioned that the global economy was “a little fragile” and that some uncertainty remained in the market about whether the US would impose tariffs on copper.Nevertheless, US metal buyers continue to seek out copper, since “there is not a quick solution” to increasing domestic supplies, he added.Copper stocks in Comex warehouses in the US rose to close to their highest level in February since 2019. Copper in those facilities is stored on a so-called duty paid basis, meaning any taxes and levies on the metal must have been settled. As a result, it would not be hit with additional tariffs.The volume of copper waiting to leave the LME network of warehouses is also close to a four-year high.Meanwhile, commodities exchange ICE Futures Europe said on Tuesday that it planned to launch futures contracts for key battery metals this year. The group will launch eight new index settled, monthly contracts covering lithium carbonate, hydroxide, spodumene and cobalt. ICE Futures Europe president Chris Rhodes told the FT’s Commodities Summit that the development of a liquid secondary market was important for the “bankability” — or ease of financing — of cobalt and lithium projects, with the prices of both metals having been hit by oversupply. “Often what you hear from end users is, ‘I’ll be able to do more physical deals if I have a hedge contract,’” he said.In October last year, rival CME Group, which also competes with the LME, launched futures on spodumene, while it also has a cobalt contract. More