Business
Rachel Reeves, Britain’s chancellor of the exchequer, laid out her Spring Statement, a sort of mini-budget. With official forecasters lowering the economy’s expected growth rate this year to 1% and the government facing high borrowing costs, Ms Reeves announced further cuts to incapacity benefits and stricter eligibility requirements for disability allowance. This, she said, would allow her to keep within her fiscal rules. There were no tax rises, and defence spending was increased. Annual inflation was forecast to come in at 3.2% in 2025, up from a previous estimate of 2.6%.
Indonesia’s central bank intervened to prop up the rupiah after it fell to levels last seen during the Asian financial crisis of 1998. The currency has been hit by market concerns about the government’s finances amid a big public-spending increase, and by the global uncertainty over trade.
Not ready for take-off
London’s Heathrow airport went on a PR defensive after shutting down entirely for 18 hours when a fire at a local electricity substation knocked out its critical systems. The closure of the international hub led to chaos in flight schedules. Many airlines will want compensation. Questions were raised about why the airport relied on just one substation. Britain’s National Grid insisted that the network was capable of supplying it with power.
A federal judge set June 23rd as the start of Boeing’s trial on a criminal charge of misleading regulators about the safety of its 737 MAX aircraft ahead of two fatal crashes in 2018 and 2019. Boeing pleaded guilty last July, but the families of the crash victims objected to the terms of the plea deal. The judge rejected the guilty plea in December, citing the use of diversity measures to select a monitor to oversee Boeing’s compliance with the deal, rather than choosing a monitor on merit. Boeing hopes to avoid the trial by resolving the matter with the Justice Department.
There was some much-needed good news for Boeing when Donald Trump selected it to build the American air force’s Next Generation Air Dominance fighter jet. Dubbed the F-47 (in part after Mr Trump’s term as America’s 47th president) the jet will replace Lockheed Martin’s F-22 Raptor.
Hyundai, a South Korean conglomerate best known for producing cars, announced that it would invest $21bn in America, including a steel plant in Louisiana and various factories to supply it with parts and materials. Marking the announcement, Donald Trump claimed this was proof that his tariffs policy was working as intended. “Money is pouring in,” he said. Hyundai already has big established investments in America. By announcing its latest deal now it hopes to win carve-outs from Mr Trump’s trade levies.
Mr Trump’s latest salvo in that trade war was to announce 25% tariffs on all imports of vehicles and car parts, to take effect soon. On April 2nd Mr Trump will also announce wide-ranging reciprocal tariffs on countries he thinks have an unfair trade advantage with America. He calls it “Liberation Day”.
Copper prices shot up amid speculation that the Trump administration will soon impose punitive tariffs on imports of the metal, which has upended the market. Traders have been sending their purchases of copper, which is widely used in pipes, cables and electric cars, to American warehouses linked to COMEX, America’s main commodities-trading platform, to avoid the duties. Copper prices in New York are now much higher than on the London Metal Exchange.
SAP overtook Novo Nordisk to become Europe’s most-valuable company by stockmarket capitalisation. Based in Germany, SAP, a provider of business software, has benefited from hype surrounding artificial intelligence. Novo Nordisk, by contrast, has seen its share price fall by half since June as the hype around its bestselling weight-loss drugs, Ozempic and Wegovy, recedes.
Schadenfreude
Tesla’s sales in Europe fell sharply in February, down by 40% year on year, and by 76% in Germany, where Elon Musk has expressed support for the hard right. This was despite a 26% overall rise in sales of battery-electric vehicles, according to the European Automobile Manufacturers’ Association. The left, which once embraced Mr Musk for his green credentials, has turned against him. In America the FBI has created a task-force to tackle what it describes as acts of “domestic terrorism” against Tesla cars and facilities.
Nike’s stock dropped to a five-year low, after it forecast another big decrease in revenue. The sportswear company listed a litany of challenges, from weak demand in China to tariffs and “geopolitical dynamics”. All a far cry from its mantra of “Just do it”.