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British factories’ export orders fall at fastest in five years on Trump tariffs
The downturn in British manufacturing continued for a seventh month in April as new export orders fell at the fastest pace in five years amid global uncertainty over Donald Trump’s tariffs, according to a closely followed survey.
The UK’s manufacturing purchasing managers’ index (PMI) edged up to 45.4 in April, but remained well below the 50 mark that connotes growth, according to data company S&P Global.
That was slightly up from the 44.9 reading in March, and the 44 preliminary reading for April, but signs for the future were negative:
Panellists reported that rising economic and trade uncertainties (including prospective US tariffs) had drained confidence from both consumer and business-to-business clients, resulting in an increased reluctance to commit to new contracts.
The outlook for exporters was, perhaps unsurprisingly, very weak, as companies try to assess what will happen to US trade policy. S&P Global said:
New export orders fell at the quickest pace in almost five years, with demand from the US, Europe and mainland China all lower.
Key events
Rolls-Royce says it can ‘offset’ Trump tariffs despite industry ‘uncertainty’
The share price of jet engine maker Rolls-Royce has risen by 2.7% after it said that it could “offset the impact of announced tariffs” imposed by Donald Trump.
Rolls-Royce shares plunged as low as £5.62 last month after Trump’s “liberation day” turned into something more like devastation day, as shocked investors rushed to absorb the possible impact of tariffs on the global economy.
However, the price has recovered to £7.74 on Thursday, leaving it near its all-time high of £8.18 hit in mid-March.
Rolls-Royce’s share price gain has been extraordinary under the leadership of Tufan Erginbilgic. The former BP boss took over at an opportune moment, just as the long-haul air travel was recovering from the pandemic. Yet investors have also lapped up his strategy of negotiating better deals with customers.
On Thursday, ahead of Rolls-Royce’s annual investor meeting, Erginbilgic suggested that customers may be covering the impact of US tariffs, which are 10% on imports from the UK, and up to 25% on some steel and aluminium products:
The recently announced global tariff increases have created a degree of uncertainty for the industry. We expect to offset the impact of announced tariffs on our business through the mitigating actions we are taking. We are closely monitoring the potential indirect impact on economic growth and inflation, and will continue to take the necessary actions.
He also said the company had “confidence in our guidance for 2025”, with underlying operating profit of between £2.7bn-£2.9bn and the same amount of cash generated.
Lauren Almeida
Lloyds Banking Group has reported a 7% drop in pre-tax profit to £1.5bn in its first quarter, and is bracing for the ripple effect from Trump’s tariffs on its balance sheet.
The high street bank said that it has set aside £309m to account for possible bad debts, compared with previous guidance of £274m, as it added a £35m net charge to prepare for the possible impact on the economic outlook from President Trump’s tariffs.
Overall it was a mixed bag for the bank in the first quarter. Net income increased 4% year-on-year to £4.39bn, but profits still slipped mainly due to higher costs and impairment charges. Loans increased by £7.1bn £466.2bn, which included growth of £4.8bn in UK mortgages. The bank expects that national house prices will grow by 2.9% this year.
Lloyds shares slipped 1.3% in early trading.
‘No harm’ in China engaging with White House trade approach, says Chinese state media
China would be open to talks on tariffs with the US after the White House approached it, according to Chinese state media on social media.
Yuyuan Tantian, an account affiliated to CCTV, a state broadcaster, said there was “no harm” to China engaging with the US, according to a post on Chinese social network Weibo. It cited anonymous sources, saying:
The US has proactively reached out to China through multiple channels, hoping to hold discussions on the tariff issue.
Some caution over the report may be warranted. Reuters explains:
Yuyuan Tantian is not among China’s most authoritative state media outlets. The Global Times, which is owned by the newspaper of the governing Communist Party, People’s Daily, has often been first to report China’s next steps in trade disagreements over the past few years.
Guo Jiakun, a spokesperson for China’s foreign ministry, on Wednesday said: “as far as I know, there have been no consultations or negotiations between China and the U.S. on tariffs”.
What is clear, however, is that Donald Trump wants talks. His strategy, such as it is, appears to have been hitting countries with huge tariffs in order to force them into a rushed negotiation. Trump said yesterday there was a “very good chance” of a deal with China.
National Grid, the FTSE 100 company that owns the UK’s electricity network, has appointed Shell oil executive Zoë Yujnovich as chief executive after the retirement of John Pettigrew.
Yujnovich was until recently working at FTSE 100 oil company Shell, where she was director of integrated gas and upstream (oil production) and a member of the executive committee. She previously led the Iron Ore company of Canada, part of Rio Tinto.
Pettigrew intends to retire after serving as chief executive for nearly a decade.
Spain and Portugal’s huge power blackout on Monday have thrust public attention on something that the energy industry has been warning for a long time: electricity grids need huge investment to make them ready for the transition away from fossil fuels.
Yujnovich said:
I firmly believe in the vital function energy companies play in driving change and creating value. On both sides of the Atlantic National Grid has an essential role to play in making energy secure, affordable and reliable for our customers and communities. I’m excited about leading National Grid as it delivers on the growth opportunities ahead.
Bet365 owners consider £9bn sale of gambling empire
The billionaire Coates family behind Bet365 are weighing up a sale of their online gambling empire that could value the business at £9bn, the Guardian has learned.
The company, headed by Denise Coates, has held talks with Wall Street banks and US advisers in recent weeks about a full or partial sale, sources familiar with the matter said.
Informal discussions explored options for a potential sale, including a medium-term plan to float the business on a US stock exchange.
One option on the table includes a partial sale to a private equity investor, with the Coates family retaining a stake before an eventual listing. It could also see a spin-off of part of the business, rather than a full listing of the Stoke-on-Trent-based firm.
A second source said they were also aware of discussions with private equity groups about taking a pre-float stake.
One person with knowledge of the talks said Bet365 had reached the “beauty parade” stage, where companies sound out banks they think could help them extract maximum value from any deal.
Bet365 did not return requests for comment.
You can read the full story here:
The FTSE 100 has fallen by a mild 0.2% to 8,479 points in the opening trades on Thursday.
Tesla chair denies Musk successor search; Bank of Japan cuts forecasts on tariff shock
Good morning, and welcome to our live coverage of business, economics and financial markets.
Tesla’s chair has denied that the electric car company is looking for a replacement for Elon Musk, after the billionaire spent several months focusing on serving Donald Trump even as the carmaker’s profits slumped.
The US manufacturer posted a statement on X, the social network owned by Musk, from chair Robyn Denholm saying the company was “highly confident in his ability to continue executing on the exciting growth plan ahead”, and claiming a report on possible successors was “erroneous”.
It came after a report by the Wall Street Journal that said that “Board members reached out to several executive search firms to work on a formal process for finding Tesla’s next chief executive, according to people familiar with the discussions.” The report said that the board members contacted the search firms a month ago, amid turmoil in Washington.
After Tesla reported a 9% drop in sales in the first quarter of 2025, Musk announced that he would reduce his time leading the so-called Department of Government Efficiency to focus on the carmaker.
Note a small but important discrepancy between Denholm’s denial and the WSJ report: Denholm said that it was “absolutely false” that the “Tesla board had contacted recruitment firms”. The WSJ report suggested that “board members” made the contacts.
Bank of Japan cuts growth forecasts on Trump tariffs
Donald Trump’s tariff chaos will cut economic growth in Japan, the world’s fourth-largest economy, according to new forecasts from its central bank.
The Bank of Japan cut its economic growth forecast for the fiscal year ending March 2026 to 0.5%, down from 1.1% projected three months ago. It also slashed its growth forecast to a 0.7% expansion for the following fiscal year from 1.0% in January, according to Reuters. The Bank said:
Japan’s economic growth is likely to moderate as trade and other policies in each jurisdiction slow overseas growth and weigh on corporate profits. Thereafter, Japan’s economy will see growth accelerate as overseas economies resume a moderate growth path.
The bank’s inflation forecast suggested that consumer prices would hit its target of 2% annual growth towards the end of 2026, down from 3.6% in March 2025.
The agenda
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9:30am BST: UK consumer credit borrowing (March; previous: £1.36bn; consensus: £1.2bn)
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9:30am BST: UK mortgage approvals (March; prev.: 65,481; cons.: 64,800)
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9:30am BST: US initial jobless claims (March; prev.: 222,000; cons.: 224,000)