Donald Trump continues to dominate the headlines this morning, this time over his spat with Ukraine’s president Zelenskyy. But one of his other big policy positions is also making waves, with pledges to impose a slew of tariffs on global imports leading to a backlash from the US central bank – and warnings of a potential financial downturn that could have implications for the global economy.
Minutes from the US Federal Reserve’s January meeting, released on Wednesday, revealed members of its committee believe Trump’s policies might “hinder the disinflation process”, the BBC reports.
“Business contacts in a number of districts had indicated that firms would attempt to pass on to consumers higher input costs arising from potential tariffs,” the minutes said. They also revealed “elevated uncertainty regarding the scope, timing, and potential economic effects of possible changes to trade, immigration, fiscal, and regulatory policies”.
With inflation rising in the UK too, economists on the other side of the Atlantic are also piping up, reports The Telegraph. It cites City experts who warn “overly optimistic growth and productivity forecasts could force Rachel Reeves into painful spending cuts or prompt higher taxes”.
City experts believe the Office for Budget Responsibility (OBR) has vastly overestimated the economy’s strength, meaning the spending watchdog will likely be forced to slash its forecasts when it issues an official update in March.
The Telegraph also highlights how Rachel Reeves’ push to attract foreign investors “has been dealt a blow” after the UK’s embattled competition watchdog raised concerns over a £800m takeover.
The Competition and Markets Authority (CMA) warned on Wednesday that the acquisition of haulage company Wincanton by American giant GXO Logistics would “likely reduce competition” and raise costs for grocers.
Without concessions from GXO, the CMA could unwind the £764m deal more than a year after it was first completed. GXO hit out at the “disproportionate” CMA decision, claiming that the Wincanton takeover was “pro-growth” and would “deliver efficiencies for UK businesses”.
Read The Grocer’s take on that here…
Elsewhere, The Guardian reports Tesco has “fixed a problem” that forced the supermarket giant to apologise after hundreds of shoppers reported issues with placing online grocery orders.
Consumers took to social media on Wednesday to complain that a wide range of groceries were showing as unavailable when they tried to check out and complete their shop. Some said everyday items such as bread and milk were marked as out of stock when they tried to pay for their online order.
All major outlets are also reporting that consumer confidence has sunk to new lows this morning, according to a new survey from the British Retail Consortium, which claims expectations for the economy worsened for a fifth month running in February. The index of confidence now stands at -37, a record low. Read The Grocer’s piece on this news here…
Finally, Sky News has published an analysis piece looking at how businesses believes ministers have shot themselves in the foot with economic policy so far, “making growth more expensive and thus less likely“.
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