Closing post
Time to recap….
UK businesses should be legally required to report major cyber-attacks, the boss of Marks & Spencer has suggested as he claimed two hacks involving “large British companies” had gone unreported in recent months.
In evidence to MPs about the impact of the massive cyber-attack on M&S that forced it to close down its online store for almost seven weeks, the retailer’s chair, Archie Norman, said the business was still in “rebuild mode”.
He said its key online clothing distribution centre in Castle Donington in Leicestershire was still offline, adding: “It would not be an overstatement to describe [the attack] as traumatic” and “like an out of body experience”.
German finance minister Lars Klingbeil has warned that the EU is ready to impose retaliatory measures against US goods if a “fair” deal to resolve their trade dispute can’t be reached.
The UN has warned that the Trump administration’s decision yesterday to extend a negotiating deadline for tariff rates to 1 August is prolonging the period of uncertainty and instability for countries.
Japan and South Korea have both said they will continue trade negotiations with the White House, while South Africa has queried US claims about their trade situation, following the new tariffs announced last night.
The UK’s public finances are on an unsustainable long-term trajectory, given the growing cost of state pensions and the mounting climate emergency, the Office for Budget Responsibility has warned.
Richard Hughes, who chairs the budget watchdog, said government debt would rise to 270% of GDP by 2070 – up from less than 100% today – if current policies were left unchanged.
He said:
“The UK public finances are in an unsustainable position in the long run. The UK cannot afford the array of promises that it has made to the public.”
After dropping yesterday, Wall Street is very calm in early trading after investors digested Donald Trump’s latest tariff announcements.
The Dow Jones industrial average, which tracks 30 large US companies, has slipped by 3 points to 44,402 (a teensy fall of 0.0084%).
The broader S&P 500 share index has risen by 0.087%, up 5 points at 6,235 points.
On those rising bond yields…Kathleen Brooks, research director at XTB, says Donald Trump’s trade polities are weighing on the bond market.
She explains
The bond market is reflecting a potential EU/ US trade agreement.
European bond yields are rising sharply on Tuesday. The 10-year German Bund yield is higher by 5bps and yields are rising at a faster pace in Germany than in the UK and the US. Japanese long end bond yields are also rising sharply.
Whereas German yields are rising because of a rumored positive trade deal between the EU and the US, Japanese yields are rising because there are concerns that a bad trade deal with the US will push up Japan’s government borrowing needs.
UK 10-year bond yields hit one-month high
Back in the bond market, UK borrowing costs have jumped to their highest level in a month.
The yield, or interest rate, on 10-year UK government debt has risen by 0.06 percentage points to 4.64%, the highest since 9 June.
That means borrowing costs are higher than during last week’s bond market wobble, amid fears that Rachel Reeves might be replaced by a less market-friendly chancellor.
Other UK bond yields have also risen this morning. These moves follow the OBR’s warning that the UK public finances are on an unsustainable path.
The UK isn’t alone, through – US and German bond yields are also rising today, as the markets digest Donald Trump’s new flurry of tariff announcements.
As well as threatening to push up inflation, the new tariffs – and the extention of the deadline for negotiations to 1 August – will cut the changes of early interest rate cuts by the US Federal Reserve.
Updated
Rishi Sunak joins Goldman Sachs as senior adviser
Former UK prime minister Rishi Sunak is returning to Goldman Sachs, to take on a role as a senior adviser, the Financial Times reports.
Sunak, who spent the first few years of his career at Goldman as a summer intern then a junior analyst, will help advise clients on geopolitical and economic issues.
The bank’s chief executive David Solomon says:
“I am excited to welcome Rishi back to Goldman Sachs in his new capacity as a senior adviser.”
Efinancialcareers reported in 2022 that Sunak didn’t refer to his time at Goldman on his LinkedIn profile, despite working there between 2001 and 2004.
The head of the Office for Budget Responsibility has issued a firm warning that the UK’s public finances are on an unsustainable long-term trajectory.
Richard Hughes told a press briefing on the OBR’s new Fiscal risks and sustainability report:
“The UK public finances are in an unsustainable position in the long run. The UK cannot afford the array of promises that it has made to the public.”
One of the many factors undermining the public finances is the pensions triple lock, which the OBR shows will push up the national debt:
The triple lock has cost around 3x more than expected.
— Office for Budget Responsibility (@OBR_UK) July 8, 2025
In our central projection, the triple lock explains 1.6pts of the 2.7% of GDP rise in state pension spending. If recent volatility persists, it could add a further 1.5pts; a steadier path could reduce it by 1.3pts. pic.twitter.com/GvtPn1nsnC
Most of the countries which received new tariff letters from the White House yesterday are now facing higher or similar rates than those announced on Liberation Day, points out Deepali Bhargava, ING’s regional head of research for Asia-Pacific.
Bhargava says there are three main points to take from Donald Trump’s announcements:
The overall outcome is clearly worse than expected. Only three countries in Asia – Cambodia, Bangladesh and Laos – received tariff rates which were lower than on ‘Liberation Day’. Despite lower rates, they remain high and penalising in the 35-40% range, much higher than the 20% Vietnam got.
These steeper tariffs may reflect Trump’s growing frustration with stalled negotiations with certain countries like Japan, Korea, Thailand and Malaysia, which all received a higher or unchanged tariff rate.
More importantly, they seem to signal a broader strategy targeting Asia’s trade links with China – particularly transshipment practices. The letters indicate that transhipped goods will be subject to higher tariffs, but there’s no mention of the rate that’ll be applied.
Bhargava adds that countries like India, Singapore, and the Philippines, which are not on the new tariff list, may be closer to finalising trade deals with the US, potentially giving them a competitive edge.
Germany warns EU is ready to retaliate in trade war
Germany’s finance minister Lars Klingbeil has warned that the EU was prepared to retaliate against the US, in the Trump trade war, if necessary.
Klingbeil told the lower house of the German parliament:
“If we don’t reach a fair trade deal with the U.S., the EU is ready to take counter measures.”
As covered earlier, the EU still hopes to conclude an agreement in principle this week with Donald Trump over tariffs, although it now has until 1 August to complete a deal.
This morning, the European official leading talks with Donald Trump’s administration said the EU is “working flat out” to secure a trade deal with the US.
The EU trade commissioner Maroš Šefčovič told the European parliament that the EU was continuing “to engage closely with our US counterparts on the tariffs placed on European goods”.
“I want to assure you that we are working flat out to secure a fair and mutually beneficial negotiated solution, but we need to be prepared for all outcomes and be ready to rebalance if necessary.”
South Africa queries Trump's tariff claims
Donald Trump’s latest trade war maneuvers continue to reverberate through the global economy today.
South Africa’s president Cyril Ramaphosa has said that Trump’s proposed imposition of a 30% tariff on South African goods relied on a “contested interpretation” of the balance of trade with the US and was “not an accurate representation” of trade data, my colleague Rachel Savage in Johannesburg reports.
In a statement released by the presidency, Ramaphosa said:
“In our interpretation of the available trade data, the average tariff [on] imported goods entering South Africa stands at 7.6%. Importantly, 56% of goods enter South Africa at 0% most favoured nation tariff, with 77% of US goods entering the South African market under the 0% duty,”
Since 2009, South Africa has benefited from tariff-free access to the US for goods including cars and citrus fruit, under the African Growth and Opportunities Act. In 2024, the US imported $14.7bn of South Africa goods and the goods trade deficit was $8.8bn, according to the United States Trade Representative.
South Africa has been a target of Trump, who cut aid to the country in February, claiming white people suffered racial discrimination in the country. Trump then ambushed Ramaphosa in an Oval Office meeting in May with false claims there is a “genocide” against white farmers.
Ramaphosa said South African officials had most recently met US officials at the US-Africa Summit in Angola on 23 June, where they learned of “a template with which the US wishes to engage sub-Saharan Africa on matters of trade.” They haven’t received this template yet, he said.
He added:
“South Africa will continue with its diplomatic efforts towards a more balanced and mutually beneficial trade relationship with the United States. We welcome the commitment by the US government, that the 30% tariff is subject to modification at the back of the conclusion of our negotiations with the United States.”
Updated
Post Office scandal may have led to more than 13 suicides, inquiry finds
More than 13 people may have killed themselves as a result of the Post Office Horizon IT scandal, while it drove at least 59 more to contemplate suicide, according to the first findings from the public inquiry into what has been labelled the worst miscarriage of justice in UK history.
The 162-page volume one report from Sir Wyn Williams, the retired judge who chaired the hearings, looks at the “human impact” on the more than 1,000 post office operators wrongly accused of taking money from their branches because faulty software showed a shortfall.
It also covers the issue of compensation, arguing that the Post Office and its advisers had in many cases adopted an “unnecessarilyf adversarial attitude” towards making initial offers to those seeking redress, who now number 10,000.
While the scandal has been linked to four suicides, Williams said it was possible that the total could be more than 13, as indicated by the Post Office in March, but that some deaths have not been reported. A further 19 people turned to alcohol abuse, with some saying they could not sleep at night without drinking first.
Here’s the full story:
Our Politics Live blog is tracking the report, with Sir Wyn Williams starting to give a statement on the report now.
Archie Norman’s comments about cyber-attacks come a day after David Davis MP told the House of Commons that one company has paid a “very large sum” to a hacker.
Davis explained yesterday:
There have been a number of major cyber-attacks, ransomware attacks and associated blackmail of major companies.
It has come to my attention that one such company paid a very large sum to its blackmailer recently. I will share the name with the Home Secretary afterwards; it would not be appropriate to share it in the Chamber.
As covered earlier, M&S’s chair declined to say if it had paid a ransom to its cyber-attackers.
M&S chair: two recent cyberattacks on large British companies have not been reported
Intriguingly, Marks & Spencer’s chairman has revealed that there have been two cyber-attacks on UK companes since the spring, which have not been reported.
Archie Norman tells MPs that it is “apparent” to M&S that “quite a lot of serious cyber attacks never get reported” to the UK’s National Cyber Security Centre (NCSC).
Discussing the lessons that can be learned from M&S’s cyber-attack this year, Norman says:
In fact, we have reason to believe there’s been two major cyber-attacks on large British companies in the last four months which have gone unreported.
Norman adds that it wouldn’t be “regulatory overkill” to force companies of a certain size to report “material” attacks to the NCSC, within a time limit.
Updated
With the benefit of hindsight, M&S would have liked to have brought forward its capital spend on technology to strengthen its IT architecture, Archie Norman admits.
But he insists the company had been investing in its IT, tackling its legacy systems, in the years running up to its cyber-attack.
He reveals that seven years ago, 80% of M&S’s systems were based on ‘on the ground’ servers, including an IBM mainframe which the company had to migrate off before it could tackle other issues.
Updated
Archie Norman uses his appearance before the Business and Trace committee to call for more resources for the UK’s cyber-defences.
He tells MPs:
If you want a growth economy, you need a cyber-resilient economy.
People are more likely to invest in the UK if they believe they’ll be better protected against attacks such as the M&S hack, he suggests, adding that the government was right to reference this issue in its industrial strategy.
M&S chair won't say if ransom was paid
Archie Norman is then pressed on the issue of whether M&S paid a ransom to its cyber-attackers – and again swerves the question.
He says:
We’ve said that we’re not discussing any of the details of our interactions with the threat actor, including that subject. But, that subject is fully shared with the NCA [National Crime Agency] and the relevent authorities.
Norman gives two reasons – first, it’s not in the public interest to go into that subject, as it is a matter of live law enforcement.
Second, the threat actor is looking for publicity, and M&S wants to limit the amount of oxygen they have.
Archie Norman then gives credit to M&S’s general counsel & company secretary, Nick Folland, who is seated alongside him.
Folland, Norman reveals, is responsible for the fact M&S “curiously doubled our insurance cover last year”, giving Folland a grateful pat on the arm.
Update: Folland later explains that M&S changed its policy, so that the company would take the first cost of a cyber-incident but was covered for “the worst case scenario”.
He credits M&S colleagues with that recommendation.
Updated
Archie Norman explains to MPs that the initial entry into M&S’s systems took place on 17 April.
M&S became aware of the attack on 19 April [Easter Saturday], he adds, and called its first crisis management meeting that evening.
It alerted all the relevent authorities the following day, or when they were back from the Easter break, and then went public on Tuesday 22 April.
Other retailers should have been alerted by the National Cyber Security Centre (NCSC), he adds.
M&S: Castle Donington automated warehouse will be back online 'imminently'
Q: How long will the ‘rebuild’ take?
Archie Norman says this is a frustrating issue. People think that restarting an IT system is a matter of “changing a fuse and turn the lights back on”. It’s not like that.
He says:
It will be months. We’ll still be…doing rebuilding in months to come, but the customer will not see anything different from the end of this month.
We hope it’s the end of this month, it may be before that.
He explains that a third of M&S’s clothing and home business sales are made online, so each week the systems were offline it was losing £10m in profit.
M&S’s big automated system at Castle Donington comes back online, hopefully, imminently, he adds.
Norman: Cyber-attack would have 'kippered' us in the past
Archie Norman then tells MPs that the cyber-attack hasn’t really affected its future.
And he takes some of the credit!
He says M&S was a “fairly broken business” when he joined as chairman [in September 2017]. Then, its share price was “tracking down”, profits were less than half as much as today, there was £2bn of debt and its systems in a “pretty decrepid state.”
Norman tells the Business and Trade Sub-Committee on Economic Security, Arms and Export Controls:
“I have to say, if this had happened then, I think we’d have been kippered.”
This year, Norman adds, M&S was “muscled up”, on the back of £870m profits, with £425m on the balance sheet.
We strongly believe we need to come out of this stronger, Norman adds, giving the parliamentary table a thump, comparing it to the business changes made in the Covid-19 pandemic.
M&S chair Archie Norman doesn’t seem to answer the question of whether M&S paid a ransom demand to its cyber hackers.
He tells MPs that this is generally a business decision and a principles decision. But, he explains, often a cyber-victim is facing a lengthy, and costly, programme of rebuilding their IT systems once a hack has taken place, whether they pay up or not.
Norman explains:
The question you have to ask, and all businesses should ask, is when they look at the demand, what are they getting for it?
Maybe they’ve exfiltrated data that you don’t want published, maybe there’s something there.
But in our case, substantially the damage had been done.
Norman also insists that M&S didn’t “leave the backdoor open” as some media reports have claimed. He tells the committee that M&S has a large “attack surface”, due to its large number of contractors, some of whom are overseas.
In that situation, a company needs to assume that their perimeter is permeable, and that attackers can probably get into their systems if they try hard enough.
A second lesson for a company as old as M&S is that you have old, legacy systems, which makes it hard to compartmentalise its IT operations.
M&S chair says cyberattack was carried out by 'DragonForce'
Archie Norman then gives a broad outline of the M&S hack, telling MPs that the company believes the instigator of the cyberattack was a group called “DragonForce”.
The M&S chairman explains that attackers don’t send a letter announcing their identity, saying:
We didn’t even hear from the threat actor for approximately a week after they penetraded our systems.
Instead, security advisors “recognise the threat actor by the attack factor, in other words the pattern they use”, Norman explains.
The M&S attack has been previously linked to a hacking collective known as Scattered Spider.
Norman points out, though, that attackers works through intermediaries, explaining:
We believe there was the instigator of the attack, believed to be DragonForce, a ransom operation based we believe in Asia.
[DragonForce have been dubbed as “Ransomware-as-a-Service group”, who develop malware and lease it to affiliates].
Norman says M&S decided not to deal with the threat actor directly, and would leave that to the professionals.
Threat actors typically communicate through the media – in this case, principally through the BBC, he adds:
Norman says he’s sure the BBC handled this “completely properly”, adding:
“It was sometimes an usual experience to be brushing your teeth in the morning, when someone comes onto the BBC with a communnication from the people who are allegedly attacking your business.”
M&S chair: Cyber-attack was traumatic
Speaking of cyber-crime… Archie Norman, the chairman of Marks and Spencer, is telling MPs that the cyber-attack which disrupted the company’s operations this week was a “traumatic” experience for M&S.
Norman, a veteran retailer, has explained to a sub-committee of the Business and Trade committee that the attack was an “out of body” experience, which he could only compare to the shock and disruption of a hostile takeover bid.
He tells MPs:
“It’s very rare to have a criminal actor in another country, or in this country – we’re never quite sure – seeking to stop customers shopping at M&S.
Essentially trying to destroy your business, for purposes which are not entirely clear, but partly, undoubtely, ransom, extortion.
Norman then explains that everyone at M&S was affected by the attack, which was reported in mid-April.
Shop staff had to work in ways they’d not worked for 30 years, putting in extra hours to “keep the show on the road”.
While M&S’s cyber team probably only had three hours sleep a night, or none at all, for a week, Norman suggests, saying:
“It’s not an overstatement to describe it as traumatic. And it has endured some weeks.
We’re still in the rebuild mode, and we will be for some time to come.”
M&S reopened its website to shoppers on 1 June, after halting online orders for six weeks due to the attack, which is estimated to cost up to £300m in profits this year.
Updated
OBR: Cyber-attacks could hurt UK finances
Cyber-crime is another threat to the UK public finances, the OBR adds.
Its fiscal risks report points out that “a series of major cyber-attacks” have hit the UK this year, adding:
Cyber-attacks have continued to intensify, as evidenced by the recent attacks on the Legal Aid Agency, HMRC, and Marks & Spencer. We estimate that a cyberattack on critical national infrastructure has the potential to temporarily increase borrowing by 1.1 per cent of GDP.
That fiscal impact comes from increased government spending, such as emergency response and system recovery, and wider macroeconomic effects, including reduced tax receipts.
Updated
The UK’s pensions bill is set to keep rising sharply, the OBR points out:
Spending on the state pension has risen steadily over the past eight decades.
It rose from around 2 per cent of GDP in the mid-20th century to around 5 per cent of GDP (£138 billion) today, and is estimated to rise further to 7.7 per cent of GDP by the early 2070s in our central long-term projection.
OBR: public debt on track to hit 270% of GDP by the 2070s
The top line, long-term forecast from the Office for Budget Responsibility is that public debt is on track to hit 270% of GDP by the 2070s, based on current tax and spending policy settings.
That would be almost three times higher than its current level of around 95% of GDP.
The OBR says:
Over the long term, the demographic pressures of an ageing population and rising costs of healthcare and other age-related expenditures are still, on current policy settings, projected to push borrowing above 20 per cent and debt above 270 per cent of GDP by the early 2070s.
The OBR points out that UK national debt has been pushed up since 2010 by two major shocks – the Covid pandemic and the energy crisis.
It implicitely criticises recent chancellors for not tackling the resulting rise in underlying debt, saying:
The UK economy has been particularly hard hit by those shocks, and government support to affected firms and households has been relatively generous by international standards. But in the aftermath of the shocks, debt has also continued to rise and borrowing remained elevated because governments have reversed plans to consolidate the public finances.
Planned tax rises have been reversed, and, more significantly, planned spending reductions have been abandoned. The more persistent fiscal deficits and ratcheting up of debt that resulted have been accommodated by successive loosening of the fiscal rules.
The OBR is concerned that slowing the rise in UK public debt has become “more challenging” as economic growth has slowed and interest rates risen.
They warn:
Despite the tax-to-GDP ratio rising to the highest level in the period since 1950, borrowing is still 3 per cent of GDP above the level that would be needed to durably stabilise debt.
And the Government has left itself very small margins against its objectives of restoring the current budget to balance and getting net financial liabilities to fall by the end of the decade. Despite this, public expectations of what government can and should do in response to emerging threats and future emergencies seem to be rising.
OBR: Tariffs, defence costs and ageing populations are all risks
A number of major global risks to the UK economy have “crystallised”, the Office for Budget Responsibility warns.
Its singles out Donald Trump’s trade war, and Russia’s invasion of Ukraine, saying:
In particular, as foreshadowed in our 2022 report, rising geopolitical tensions have given rise to the largest increase in effective global tariff rates in over a century and put the UK and other European countries under pressure to increase defence spending to their highest levels since the end of the Cold War.
The OBR also cites rising pensions and healthcare costs, saying;
Over the long term, the demographic pressures of an ageing population and rising costs of healthcare and other age-related expenditures are still, on current policy settings, projected to push borrowing above 20 per cent and debt above 270 per cent of GDP by the early 2070s.
OBR warns UK public finances are in a vulnerable position
Newsflash: The UK public finances have fallen into a “relatively vulnerable position” and are facing mounting risks, the country’s fiscal watchdog is warning.
The Office for Budget Responsibility has just issued its latest Fiscal risks and sustainability report. It warns that the UK’s ability to respond to future shock has been substantially eroded, with underlying public debt is now at its highest level since the early 1960s and projected to rise further.
The OBR says:
Efforts to put the UK’s public finances on a sustainable footing after a series of global shocks have met with only limited and temporary success in recent years, leaving the UK with the sixth-highest debt, fifth-highest deficit, and third-highest borrowing costs among 36 advanced economies.
Against this more vulnerable backdrop, the risks to the fiscal outlook are mounting, including: the sustainability of state and private pensions and the sector’s demand for government debt; risks to assets and liabilities on the public balance sheet and the Government’s new net financial liabilities target; and the combined costs of climate damage and the net zero transition.
The OBR’s report paints a concerning position about the UK pubic finances, showing the challenge facing chancellor Rachel Reeves.
It points out that:
at the end of last year, the UK government’s deficit was 5.7% of GDP, around 4 percentage points higher than the advanced-economy average. This is the third highest among 28 advanced European economies, and the fifth highest among 36 advanced economies – after France, Slovakia, the US, and Israel.
At 94% of GDP, UK government debt is the fourth highest among advanced European economies, and the sixth highest among advanced economies (after Japan, Greece, Italy, France, and the US).
And with its 10-year bond yielding 4.5% at the end of June, the UK government faces the third-highest borrowing costs of any advanced economy after New Zealand and Iceland.
Updated
New trade war deadline creates instability, UN trade agency says
The Trump administration’s decision to extend a negotiating deadline for tariff rates to 1 August is prolonging the period of uncertainty and instability for countries, the executive director of the United Nations trade agency has warned.
Pamela Coke-Hamilton, executive director of the International Trade Centre, told reporters in Geneva:
“This move actually extends the period of uncertainty, undermining long-term investment and business contracts, and creating further uncertainty and instability.”
Updated
Trump’s policies do not add up to a coherent strategy, fears Holger Schmieding, chief economist at Berenberg.
He fears the new US tariffs will weaken the country, explaining:
On the one hand, his administration is perceiving China as the key geopolitical threat to US interests. Underscoring that point, Trump has threatened to levy additional tariffs of 10% on all countries that align themselves with the fragile “BRICS” alliance of non-Western countries.
On the other hand, his new threats of 25% tariffs on Japan and South Korea can only hurt the relationship with these countries. Both Japan and South Korea are close geopolitical allies of the US right next door to China. Both had tried hard to strike deals with the US in recent weeks. They may well succeed in doing so before the new 1 August deadline.
But Trump’s narrow “America first” approach once again puts unnecessary stress on alliances that the US will need for any coherent geopolitical strategy. With tariffs, policy uncertainty and disrespect for multinational institutions and allies, Trump weakens the economic and geopolitical position of the US.
Goldman Sachs lifts forecast for US stock market
Overnight, Goldman Sachs has lifted its forecast for the US S&P 500 share index.
Goldman is now forecasting a 3% gain on the S&P 500 over the next three months, to 6,400 points, and an 11% gain in 12 months time, to 6,900 points.
It cites expectations of U.S. interest rate cuts and continued fundamental strength of major large-cap stocks as key drivers of its positive outlook, meaning it has lifted its price/earnings forecast.
The bank told clients:
Earlier and deeper Fed easing and lower bond yields than we previously expected, continued fundamental strength of the largest stocks, and investors’ willingness to look through likely near-term earnings weakness support our revised S&P 500 forward P/E forecast of 22x (from 20.4x).
Updated
The International Chamber of Commerce is hoping to see “positive movement” on trade talks in the coming days, now that Donald Trump has set new tariffs on some US trading partners.
John Denton, secretary general of the International Chamber of Commerce, says:
It is clear that the threat of punitive tariffs will remain on the table for some of America’s largest trading partners. Our hope is that the letters being sent this week will fire the starting gun for a concerted effort secure win-win deals — providing a true reset for global trade relations and removing the cloud of uncertainty currently hanging over major investment decisions.
The indication from the Administration that smaller economies will have their tariffs fixed at the baseline 10% rate is extremely welcome from a global development perspective.
While the situation is clearly fluid, we’re hoping to see some positive movement in the days ahead — not just to keep tariffs low, but to bring back some much-needed certainty for business operations and investment.
UK consumer confidence has dipped as workers worry that business activity is deteriorating, a new survey from YouGov shows.
The overall index of UK consumer morale, produced by YouGov and the Centre for Economics and Business Research (Cebr), dipped by 0.5 points in June, to 108.6 points.
Worsening perceptions of business activity among workers dragged the index down, countering an improvement in confidence about househod finances.
The survey also found:
Business activity measures for the past 30 days (-3.3) and next 12 months (-2.3) fell
Workers felt worse about their job security over the past 30 days (-3.0), although outlook improved (+1.3)
Measures tracking retrospective opinion of household finances (+0.8) and outlook for the next 12 months (+1.4) rose
Updated
The markets are shrugging at Trump’s latest tariff announcements, reports Bill Blain, market strategist at Wind Shift Capital.
Blain points out:
A year ago the idea a sovereign nation would blithely impose crippling global tariffs on its long-established friends, allies and competitors, and expect them to bend over and say; “thank you sir, can I have some more…” would be dismissed as the mad haverings of a dystopian crackpot….
Today it’s happening and no one bats an eyelid.
That’s because markets have concluded that last night’s tariffs are “just another TACO Trump ploy”, he adds:
Deals will get done, and resumed its upwards trajectory. The bottom line is no one expects the global trading economy to disappear in a sudden puff of logic because Trump delights in throwing spanners in the works.
History shows global trade is resilient to both hot and cold conflict, and swiftly adapts.
European stock markets have also opened higher, led by Germany.
The German DAX index rose by 50 points, or 0.2%, to 24,125, in early trading, amid some relief that European negotiators have another three weeks to reach a trade deal with Washington.
France’s CAC has inched up by 0.1%, with Spain’s IBEX gaining 0.14%.
Jochen Stanzl, chief market analyst at CMC Markets, says:
Donald Trump has once again retreated from imposing tariffs, allowing the DAX to rise above the 24,000-point mark. It appears that investors are eager to test the previous week’s highs once more, but the success of this endeavor will depend on the daily news regarding trade policy, which is expected to remain volatile. The trade issue continues to be a source of uncertainty for the stock market, and without a trade agreement with the U.S., a sustainable continuation of the rally could prove challenging.
This morning, the European Union faces both positive and negative news. On the positive side, the pause on tariffs has been extended until August. Trump seems to be sticking to his pattern of initially making threats before showing a willingness to negotiate. He likely understands that implementing reciprocal tariffs would be more harmful than beneficial to the ongoing discussions.
However, the negative aspect is that sector-specific tariffs on cars, auto parts, aluminum, and steel will remain in effect until August 1. This latest development is not cause for great celebration, as the EU has struggled to effectively counter the already high tariffs that are currently in place during the negotiations.”
The London stock market has opened slightly higher.
The FTSE 100 share index has risen by 12 points, or 0.14%, to 8819 points, with mining companies among the risers.
Malaysia’s trade ministry has said it will press ahead with talks towards a “comprehensive” trade agreement with the US, after receiving its letter from Donald Trump announcing a new 25% tariff.
In a statement today, Malaysia’s Ministry of Investment, Trade and Industry (MITI) said the country was committed to “continued engagement with the US towards a balanced, mutually beneficial and comprehensive trade agreement”, adding:
“Specifically, MITI will continue discussions with its US counterparts in good faith to address outstanding issues, clarify the scope and impact of the announced tariffs, and pursue avenues for the timely conclusion of our negotiations.”
Not every stock market is taking Trump’s new tariffs in their stride.
Malaysia’s major share index has dropped by 0.55% so far today, while Thailand’s SET 50 has lost 0.5%.
Malaysia is now facing a 25% tariff on US exports, while Thailand’s new tariff rate was set at 36%.
EU still hopes to conclude trade agreement in principle this week
The EU still hopes to conclude an agreement in principle this week with Donald Trump over tariffs, after it was granted an extension of three weeks for talks.
Ireland’s deputy prime minister Simon Harris revealed the bloc had been given until 1 August to conclude talks or face tariffs on imports of up to 50%.
In exchange for accepting a 10% baseline tariff, the EU is looking for a series of concessions, my colleague Lisa O’Carroll in Brussels reports.
This includes a reduced tariff quota for car imports and steel, currently attracting import duties of 27.5% and 50% respectively.
This addresses Germany’s critical demand for concessions for its beleaguered car industry. The compromise would centre on manufacturers with plants in the US including major German brands Mercedes Benz, BMW and Volkswagen.
And the EU is looking for concessions on medical devices and wine and spirits, which currently attract a 10% tariff.
The EU also wants the tariff relief to kick in immediately an agreement is signed, and not have to wait weeks, as the UK did for formal text to be registered by the White House.
Uncertainty remains over Trump’s threatened tariffs on pharma, Harris said, warning “This is obviously an area of significant concern to Ireland.”
In a statement issued last night he added:
“My understanding is that we can now expect an extension of the current status quo until August 1 to give further time for the EU and the US to reach an agreement in principle on a mutually beneficial agreement that works for both sides.
“However, it remains the position of the EU and the Irish government that we would like to conclude discussions on a trade agreement before August 1. I remain cautiously optimistic about reaching agreement in principle on a Framework Agreement.
“I want to be clear that while it is likely there will be some form of tariffs going forward, their imposition even at a lower rate is bad for consumers, jobs, economic growth and investment.”
Bangladesh to hold further trade talks
Bangladesh will hold further negotiations with the United States to push for deeper tariff cuts, even as US President Donald Trump slapped a 35% levy on goods from the South Asian nation.
Officials are scheduled to hold crucial trade negotiations with the Trump administration from July 9-10 to seek a solution, Commerce Adviser to the interim government Sk. Bashir Uddin said in an interview from Washington.
“We will give and try our best to find mutually win-win proposition,” he said, adding that the goal is to find a “common ground,” Bloomberg reports.
Bangladesh will hold further negotiations with the United States to push for deeper tariff cuts, even as Trump slapped a 35% levy on goods from the South Asian nation https://t.co/Cg06ZRJebr
— Bloomberg (@business) July 8, 2025
German exports to US tumble as tariffs frontloading ends
German exports fell sharply in May, new data shows, as the surge in demand to beat Donald Trump’s tariffs earlier this year faded.
Exports to the US from Germany fell by 7.7% on monthly basis in May, statistics body Destatis reports. On an annual basis, German exports to the US were 13.8% lower than in May 2024.
Overall, German exports fell by 1.4% in May compared to the previous month, while imports dropped by 3.8%.
Exports to China fell by 2.9% month-on-month, but sales to the UK jumped by 15.1% compared with April.
Im Mai 2025 sind die deutschen #Exporte gegenüber April 2025 um 1,4 % und die #Importe um 3,8 % gesunken. Im Vergleich zum Vorjahresmonat Mai 2024 stiegen die Exporte um 0,4 % und die Importe um 4,2 %. Weitere Infos: https://t.co/pIdWneRhWd #Außenhandel pic.twitter.com/dAwFxsNcaS
— Statistisches Bundesamt (@destatis) July 8, 2025
Carsten Brzeski, global head of macro at ING, explains that the frontloading reversal continued in May, fully wiping out the surge seen in February and March, saying:
Today’s data suggest that the boost to exports was almost exclusively driven by US frontloading. However, this effect has now dissipated.
Looking ahead, German exports are still facing rough headwinds. While the EU did not receive a new tariff letter from the White House yesterday, the risk of (more) tariffs hangs like a sword of Damocles over German and European exporters. And there is more: the strengthening of the euro, not only vis-à-vis the US dollar but also in nominal effective terms, is adding to exporters’ concerns.
China warns Trump on tariffs, and threatens retaliation on supply chain deals
China has fired a warning shot at the US over the Trump trade wars.
An editorial in the People’s Daily newspaper warned Washington not to reignite trade tension by restoring tariffs on its goods next month (when the deadline for a US-China trade deal expires)
It declared:
“One conclusion is abundantly clear: dialogue and cooperation are the only correct path.”
Reiterating Beijing’s view that Trump’s tariffs amount to “bullying”, the paper added:
“Practice has proven that only by firmly upholding principled positions can one truly safeguard one’s legitimate rights and interests.”
The article was signed “Zhong Sheng”, or “Voice of China”, a term the paper uses to express views on foreign policy.
It also threatened retaliation against nations that strike deals with the United States to cut China out of supply chains.
Japan and South Korea to continue trade talks with the US
Japan and South Korea have both said they will continue talks with the US to agree trade deals.
Japan’s Prime Minister Shigeru Ishiba said today that Japan would continue negotiations with the United States to seek a bilateral trade deal that benefits both countries.
Japan has received a proposal from the United States to continue trade discussions until the newly set August 1 deadline, Ishiba said in a meeting with cabinet ministers to discuss Japan’s strategy in dealing with U.S. tariffs.
South Korea said it planned to intensify trade talks with the United States and considered U.S. President Donald Trump’s plan for a 25% tariff from August 1 as effectively extending a grace period on implementing the levies.
President Lee Jae Myung’s office said U.S. Secretary of State Marco Rubio had indicated the new deadline, which extends a previous July 9 date, meant there was still time to reach an agreement. Reuters reports.
South Korea’s Industry Ministry said Seoul would “step up negotiations during the remaining period to reach a mutually beneficial result,” adding":
“We also plan to use it as an opportunity to improve domestic systems and regulations to resolve the trade deficit that is a major interest of the United States.”
Donald Trump's new tariff rates
If you missed it last night, here are the new tariffs which Donald Trump announced in a flurry of letters to world leaders:
Goods from Bangladesh: 35% US tariff
Bosnia and Herzegovina: 30%
Cambodia: 36%
Indonesia: 32%
Japan: 25%
Kazakhstan: 25%
Laos: 40%
Malaysia: 25%
Myanmar: 40%
Serbia: 35%
South Africa: 30%
South Korea: 25%
Thailand: 36%
Tunisia: 25%
Reminder: These rates will be charged on imports into the US from these countries, and paid by the importer.
Michael Brown, senior research strategist at bokerage Pepperstone, says “President Trump got his random number generator out again yesterday”, adding:
I won’t even waste time in trying to find the logic behind those levels because, frankly, I’m not sure there is any. Some sit higher than the 2nd April original levy, and some are marginally lower.
What’s most important is that none of them come into effect for another three-and-a-half weeks, giving the Trump Administration plenty of wriggle room to set this all up as another ‘escalate to de-escalate’ manoeuvre. Or, as we more commonly know it in these parts – TACO!!
Updated
Introduction: Asia-Pacific markets shrug off new Trump tariff threats
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The TACO trade is back! Many Asia-Pacific stock markets are rising today, despite Donald Trump’s decision to ramp up his trade war by announcing new tariffs on 14 US trading partners.
There’s relief that Trump has announced a new pause before these new levies kick in – a new three-week reprieve kicks the can down the road to 1 August, rather than tomorrow.
This delay will give countries to negotiate trade deals with the US.
Asked if 1 August deadline was firm, Trump indicated it wasn’t exactly concrete, saying last night:
“I would say firm, but not 100% firm. If they call up and they say we’d like to do something a different way, we’re going to be open to that.”
That has encouraged traders to conclude that Trump Always Chickens Out (TACO).
So while there were losses on Wall Street last night after the first tariff letters were released, markets across Asia are taking the news in their stride.
In Tokyo, the Nikkei 2225 has risen by 0.3%, up 118 points to 39,705 points, even though Japan has been threatened with a new 25% tariff from 1 August (slightly higher than the 24% rate announced back in April, before Trump’s 90-day pause which expires tomorrow).
South Korea’s KOSPI has gained nearly 2%, even though Seoul has also received a letter announcing a new 25% tariff.
China’s CSI300 index has climbed by 0.8%. European markets are expected to open flat.
More letters are expected to be sent later this week.
Stephen Innes, managing partner at SPI Asset Management, says traders are pricing in “delay, maybe even dysfunction”, rather than a resolution of the trade war. But that’s enough to keep them bidding.
Innes writes:
Markets didn’t lurch because they’ve seen this show before. Tariff hike, rhetoric spikes, and then—like clockwork—comes the sudden pivot: “We’re still open to talks.” This is policy by poker tell. And by now, investors are familiar enough with the bluff to call it and fade the fear.
However…Ipek Ozkardeskaya, senior analyst at Swissquote Bank, fears there is too much “unexplained optimism”, adding:
The deadline extension is not good news, per se. It simply adds to the uncertainty. It’s yet another sign that the deadline won’t be a line in the sand, and that tariffs set in the coming days and weeks won’t be carved in stone, either.
They will be constantly changed — raised, lowered — and used as a go-to threat in every situation.
The agenda
9.30am BST: UK’s Office for Budget Responsibility to release its latest Fiscal risks and sustainability report
10am BST: Marks & Spencer chair Archie Norman to face business and trade committee to discuss M&S’s cyber attack
11am BST: Office for Budget Responsibility press conference
12pm BST: Post Office Horizon IT Inquiry to release Volume 1 of its Final Report
Updated
