Closing post
Time to recap…
A 17-month period of expansion in the UK’s services sector came to an abrupt end in April as uncertainty created by Donald Trump’s tariff war hit new orders and exports.
A poll of purchasing managers in services businesses showed that the US president’s tariff campaign had sent a chill through the sector, which accounts for about three-quarters of the UK economy, hitting business confidence about the prospects for the years ahead.
Service sector export sales were particularly subdued, with total new work from abroad decreasing at the fastest pace since February 2021, during the Covid pandemic.
Smaller domestic services companies also said tax increases introduced by the chancellor, Rachel Reeves, were weighing on costs and had led to them laying off workers at a faster rate in April.
At 49.0 in April, down from 52.5 in March, the headline seasonally adjusted S&P Global UK services PMI activity index was the lowest since January 2023. A score of more than 50.0 represents expansion.
In other news…
The US trade deficit has widened to a record level in March, as American companies scrambled to import goods before new tariffs came into effect.
Britain and India have agreed a long-desired trade deal that ministers said would add £4.8bn a year to the UK economy by 2040.
The deal promises a boon for the UK’s car and alcohol industries, which have suffered from the impact of Donald Trump’s tariffs in the US.
India’s tariffs on British whisky and gin will be halved from 150% to 75% before reducing to 40% by the 10th year of the deal, according to the business department.
UK car sales have dropped 10% in April, a decline blamed on “a fragile economic backdrop and weakened consumer confidence.
Ford, Mattel and Ferrari have all warned that tariffs will eat into their profits.
The Irish government revised down its economic outlook as global trade uncertainty caused by US President Donald Trump’s tariff tirade threatens growth.
Canada is likely to fall into recession this year due to the US trade war, ratings agency Fitch warned.
FTSE 100's record run continues
The UK stock market’s longest running winning streak on record just got a little longer!
The FTSE 100 index of blue-chip shares in London has ended the day up one point, or 0.07%, at 8597 points.
That means the Footsie has now risen for 16 sessions in a row, extending the record set at the end of last week.
Gold miners led the FTSE 100 risers today, with Endeavour Mining up 5,2% and Fresnillo gaining 4.7%, followed by supermarket chain Sainsbury’s (3.4%).
This rally means the FTSE 100 has recovered all the losses it suffered in early April, when it plunged to just 7,544 points in the market panic after Donald Trump’s “Liberation Day” tariff announcement.
The recovery began when the president u-turned, and delayed most tariffs for 90 days.
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