Gold jumps above $3,300 and global shares sell off after US curbs chip sales to China; UK inflation slows – business live

Key events

Tom Bill, head of UK residential research at Knight Frank, said the housing market is pretty steady, at least for now, as the spring selling season gets under way.

The turbulence created by global trade tensions has put downwards pressure on borrowing costs due to economic slowdown fears, but that won’t necessarily remain the case. The risk is that inflationary forces arising from US tariffs and UK tax changes keep rates higher for longer, which would curb housing demand and prices. For now, activity is steady as the spring market gets underway, with demand particularly strong among needs-driven, equity-rich buyers.

Turning to rents, he said:

Upwards pressure on rents is likely to intensify as landlords leave the sector due to tougher green regulations, higher mortgage costs and the impact of the Renters Rights Bill, which makes it harder to regain possession of a property. Nobody would argue against protecting tenants from unscrupulous landlords, but the new legislation could be a lesson in the laws of unintended consequences.

UK house price inflation accelerates while rent increases slow

House price inflation accelerated in the UK in February, while private rents rose at a slower rate but stayed high.

Figures from the Office for National Statistics showed the average price of a home in the UK increased by 5.4% to £268,000 in the 12 months to February, up from 4.8% in the 12 months to January.

Average house prices increased to £292,000 (up 5.3%) in England, £207,000 (up 4.1%) in Wales, and £186,000 (up 5.7%) in Scotland.

Rents charged to tenants in the private sector rose by 7.7% to an average of £1,332 in the 12 months to March. The annual growth rate is down from 8.1% in February.

Average rents increased to £1,386 (up 7.8%) in England, £792 (up 8.9%) in Wales, and £1,001 (up 5.7%) in Scotland. In Northern Ireland, average rents increased to £838 (up 8.2%) in the 12 months to January.

Average UK house prices increased by 5.4%, to £268,000 in the year to February 2025, up from 4.8% in the 12 months to January 2025.

Average UK private rents increased by 7.7% in the year to March 2025, this is down from 8.1% in February 2025.

➡️ https://t.co/ML1PXPMPpo pic.twitter.com/dhbEsTeKnr

— Office for National Statistics (ONS) (@ONS) April 16, 2025

Good news on UK inflation may be short-lived amid trade war and rising household bills

Here’s some analysis on the slowdown in UK inflation to 2.6% in March from our senior economics correspondent Richard Partington.

Cooling inflation, resilient wage growth, and an economy outperforming expectations. After the turmoil since Donald Trump’s “liberation day”, there are some signs that Britain entered the crisis in reasonable shape.

The trouble is, the good news is unlikely to last long. The bigger-than-expected decline in inflation to 2.6% in March will come as a welcome reprieve for hard-pressed households. But it is a snapshot from a rear-view mirror, on an increasingly rocky journey.

Economists expect inflation to increase sharply next month. And while there is heightened uncertainty over how precisely Trump’s escalating trade war will hit the British economy, the country will not escape unscathed.

April is a truly awful month for households, with rising energy bills and a slew of changes for utilities and other regulated prices, including council tax, broadband and mobile phone bills.

The US president’s trade war could erode the US’s credibility, JPMorgan boss Jamie Dimon has warned, urging Washington to “engage” with Beijing.

Dimon told the Financial Times yesterday that the US remained “a haven” because of its prosperity, rule of law, and economic and military strength, but its economic pre-eminence could come under threat from the president’s attempt to reshape global trade.

A lot of this uncertainty is challenging that a little bit. So you’re going to be reading about this nonstop until hopefully these tariffs and trade wars settle down and go away so people can say, I can rely on America.

He urged the US and China to start engaging, rather than embarking on a tit-for-tat trade war. Trump has imposed 145% tariffs on Chinese imports, prompting Beijing to hit back with 125% duties on US goods. Dimon said:

I don’t think there’s any engagement right now . . . it doesn’t have to wait a year. It could start tomorrow.

His comments come after Trump’s 2 April “liberation day” announcement of steep tariffs on many countries sparked a new trade war and triggered a sell-off of global shares, US government bonds and the dollar.

Jamie Dimon, CEO of JPMorgan Chase, speaks to the Economic Club of New York
Photograph: Mike Segar/Reuters

Spot gold jumps above $3,300 for first time

Spot gold has gone above $3,300 an ounce for the first time.

The precious metal has extended gains and just hit $3,307 an ounce, up 2.4% on the day, as investors rush into safe-haven investments.

Ole Hansen, head of commodity strategy at Saxo Bank, said:

Trump’s trade war shows no signs of easing after the president ordered a probe into critical minerals, semiconductors and pharmaceuticals, sparking a fresh move towards safe havens and out of stocks.

Recent price upgrades from major banks have given investors the confidence to continue to buy.

ANZ today raised its year-end gold price forecast to $3,600 an ounce and six-month forecast to $3,500.

European and Asian shares in the red; gold continues to surge

European shares are in the red again, following a rally in the last couple of days when tariff fears eased.

The UK’s FTSE 100 has lost 42 points, or 0.5%, to 8,206. Germany’s Dax has slid by 1.1%, France’s CAC is down 0.9% and Italy’s FTSE MiB is 1% lower. Asian shares also sold off, with markets in Taiwan, Hong Kong and South Korea worst hit, down between 1.2% and 2%.

Markets have been spooked after Nvidia said it expects a $5.5bn (£4.1bn) hit after Donald Trump’s administration barred the US chip designer from selling crucial artificial intelligence chips in China.

US stock futures are pointing to declines on Wall Street later, with the Nasdaq seen opening 2.3% lower.

Oil prices have also fallen, amid expectations of lower demand for crude as Trump’s tariffs take their toll on the world economy. Brent crude and US crude are both about 0.5% lower, at $64.38 and $61.02 a barrel respectively.

Gold is scaling new peaks, rising by 2.2% to $3,299.1 an ounce. The precious metal is seen as a safe investment in times of turmoil.

The dollar has slumped by 0.8% against a basket of major currencies. The pound has gained by 0.38% against the greenback to $1.3280.

UK recruiters warn of hiring challenges due to trade wars

Recruitment companies Hays, Robert Walters and PageGroup have warned that companies will struggle to hire in the coming months, as trade wars escalate.

Hays reported a 9% drop in net fees in the quarter to 31 March, with the UK and Ireland the worst performer, where feels fell by 13, compared with declines of 11% in Australia and New Zealand, 9% in Germany and 7% in the rest of the world.

Permanent hiring has been worse hit than temporary and contracting, with fees down by 14% versus a 6% drop for temporary hires.

The company said:

Given increasing macroeconomic uncertainty, we expect near term market conditions to remain challenging and, although we have limited forward visibility, we believe this is likely to persist into 2026. Permanent markets remain difficult, notably in Germany and EMEA, due to longer time to hire but Temp & Contracting are more resilient.

Yesterday, fellow UK recruiter Robert Walters warned that US tariffs were likely to weigh on the hiring market in the short term as it reported a 16% drop in income it earns from fees and consulting services in the first quarter.

A week ago, PageGroup withheld its financial forecast and implemented cost-cutting due to what it called “increasingly unpredictable“ conditions resulting from tariffs imposed by the US president.

Trade wars are likely to discourage employers from taking on new staff, who already face political uncertainty in major European economies such as Germany and France.

Robert Walters’ chief executive Toby Fowlston said:

Increased uncertainty regarding the flow of global trade due to tariffs is likely to be a further headwind to client and candidate confidence in the near term, limiting visibility on the outlook for the balance of the year.

An Intreo job Centre in Dublin. Photograph: Niall Carson/PA

The Conservatives have put out their response to the inflation figures.

Shadow chancellor Mel Stride said inflation remained above the Bank of England’s 2% target and was expected to increase further this year “because of the chancellor’s choices”.

The Conservatives left Labour with inflation bang on target but the chancellor’s reckless union payouts, tax hikes, and borrowing binge is driving up the cost of living.

Be in no doubt, the chancellor’s choices are keeping inflation higher for longer and working families are paying the price.

UK inflation to head higher again in coming months but markets bet on three rate cuts

Financial markets are betting on an interest rate cut from the Bank of England meeting at its May meeting, estimating an 86% probability.

They have fully priced in three quarter-point rate reductions this year.

The pound pared gains after the inflation data but is now up 0.3% again against the dollar at $1.3268.

Sterling traded at $1.2919 on 1 April, the day before Donald Trump’s ‘liberation day’ when he announced a wave of global tariffs, and has risen 2.7% against the dollar since then.

Matt Swannell, chief economic advisor to the EY Item Club forecasting group, said:

A sharp pickup in inflation from April is all but guaranteed. Ofgem’s 6.4% increase to its price cap, after a large fall last year, means we expect the energy component will add 0.7ppts to CPI inflation in April. A significant increase in water bills means the contribution from the core goods category is also set to rise. In addition, we expect businesses to pass on some of the increase in labour costs caused by the recent rises in employers’ National Insurance Contributions (NICs) and the National Living Wage onto consumers. Inflation is likely to peak in the autumn, before starting to cool as the contribution from the energy category fades.

The MPC has lowered Bank Rate at alternate meetings since its cutting cycle began last summer. With MPC members highlighting the substantial uncertainty associated with the potential inflationary impact of US tariff increases, and the large time lag before the committee sees hard data on how the NICs and National Living Wage rises are playing out, we think the MPC will be content with sticking to its cut-hold tempo for the time being. We expect the next rate cut to come at the MPC’s May meeting.

Inflation will head higher again in the coming months, as Rob Wood, chief UK economist at Pantheon Macroeconomics, explained, although he sees room for interest rate cuts in May, June and November, in the wake of US tariffs which have clouded the economic outlook.

Looking ahead, February was the calm before the storm of annual price resets, government-set price hikes and tax rises boost headline CPI inflation to 3.5% in April and then to a peak of 3.7% in September, in our view.

We agree with the monetary policy committee that the impact of US tariffs on UK inflation will be ambiguous. Some goods previously destined for the US could be diverted to the UK at knockdown prices, slowing inflation and weaker growth will raise unemployment. But large firms may attempt to raise prices everywhere to absorb the cost of US tariff hikes. For instance, Sony raised the price of their PS5 digital games console by 11% in Europe and 10% in the UK from April 14 in response to US tariffs. We also cannot rule out retaliation by the UK government in the coming months, while fracturing global supply chains and weaker trade driving slower productivity growth will be inflationary.

But the MPC has to set policy based on the balance of risks in the medium term as well as the central case. ‘Liberation Day’ has created a much worse worst-case growth scenario than the MPC had to contend with before. Accordingly, the MPC can afford an extra precautionary rate cut this year, so we look for three more reductions in 2025, compared to two before Mr. Trump’s interventions.

It’s a finely balanced call, but we look for back-to-back 25bp cuts in May and June, with another cut in November. That call is highly sensitive to president Trump’s actions, the dataflow and the MPC’s comments; we have heard little from rate setters since ‘Liberation Day’. Rate setters will be cautious—one extra rate cut is a small response to a large economic shock in the form of tariffs—because inflation remains too high for comfort, as does wage growth.

Food price inflation also slowed in the UK, to an annual rate of 3% in March from 3.3% in February, bringing some relief to households still struggling with the cost of living crisis.

Prices for confectionery prices fell this year but rose a year ago. This was partially offset by higher prices for milk, cheese and eggs.

Meanwhile, prices for clothes and footwear rose at an annual rate of 1.1% in March compared with a 0.6% drop in February. Prices usually rise in March as new spring fashions enter the shops, and the increase this year was relatively large following an unusual fall ini prices in February the ONS said.

Jonathan Moyes, head of investment research at the Bristol-based investment service Wealth Club, said:

Whisper it quietly though, were it not for a global trade war, the UK consumer would be in excellent shape. Wage growth is running at 5.6%, a further three interest rate cuts this year will drive mortgage rates lower, food inflation is slowing, as is eating out and travel.

Plus with the oil price in the low 60s, energy prices look to have peaked. If the UK can escape the worst of the global trade war, it might not all be doom and gloom for the UK consumer this year, and we haven’t said that for a while.

As for UK inflation, the Office for National Statistics explained that prices for recreation and culture rose by 2.4% in the 12 months to March, down from 3.4% in February. Prices were unchanged on the month.

The largest downward effect came from games, toys and hobbies, and from data processing equipment, where prices fell this year but rose a year ago.

Transport also helped bring inflation down, as the average price of petrol fell by 1.6p a litre between February and March to stand at 137.5p a litre, down from 144.8p a year ago. Diesel prices fell by 1.6p per litre in March to 144.8p per litre, down from 154.1 in March last year.

Price rises within the restaurants and hotels sector also slowed, to the lowest rate since July 2021.

However, while UK inflation slowed last month, it is likely to go up again in the coming months, economists warn.

Introduction: Asian shares sell off as US curbs on Nvidia chip sales to China fuel trade fears; UK inflation slows to 2.6%

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Asian shares have sold off as US chipmaker Nvidia took a hit from US curbs on chip sales to China, highlighting the damage from the escalating trade war between Washington and Beijing.

Nvidia said it expects a $5.5bn hit after Donald Trump’s administration barred the chip designer from selling its H20 chip in China.

Japan’s Nikkei is down 1.5% while Hong Kong’s Hang Seng lost 2.4% and markets in Shanghai and Shenzhen fell by 0.5% and 1.57% respectively.

Last night Donald Trump ordered an investigation into potential new tariffs on all US critical minerals imports, which comes after similar probes into pharmaceutical and semiconductor imports.

Gold, seen as a safe-haven asset, has jumped by 1.9% to $3,289 an ounce, setting another record high.

Inflation in the UK has slowed more than expected, increasing pressure on the Bank of England to lower interest rates next month.

Annual consumer price inflation fell to 2.6% in March from 2.8% in February, slightly less than the 2.7% forecast by economists.

Inflation was dragged lower by falling fuel prices and flat prices in recreation and culture, which were partly offset by higher prices for clothing and footwear.

The core inflation rate, which strips out volatile energy and food and is closely watched by the Bank of England, dipped to 3.4% from 3.5%.

The chancellor, Rachel Reeves, said:

Inflation falling for two months in a row, wages growing faster than prices and positive growth figures are encouraging signs that our Plan for Change is working, but there is more to be done.

I know many families are still struggling with the cost of living and this is an anxious time because of a changing world. That is why the government has boosted pay for three million people by increasing the minimum wage, frozen fuel duty and begun rolling out free breakfast clubs in primary schools.

China’s economic growth in the first quarter beat expectations, underpinned by consumption and industrial production, but the latest US tariffs of 145% have clouded the outlook.

The world’s second-biggest economy grew by 5.4% between January and March, the same as in the previous quarter.

Industrial production grew more strongly than expected in March, and at the fastest rate since June 2021. Output increased by 7.7% year on year, up from 5.9% in February. All major sectors grew faster. In the first quarter, industrial production grew by 6.5%.

The Agenda