Key events
EY, one of the “big four” accounting firms, is being investigated over how it audited the accounts of the Post Office as the postal branch network wrestled with the Horizon software scandal that resulted in hundreds of post office operators being wrongly convicted.
The UK’s accounting regulator, the Financial Reporting Council (FRC), said it had begun an investigation into whether the firm met its standards “with particular reference to matters related to the Horizon IT system”.
The Horizon accounting software was developed by Fujitsu and was at the heart of the Post Office scandal, described as the UK’s most widespread miscarriage of justice, which has been the subject of a long-running inquiry that concluded its hearings in December.
The FRC said:
So as not to interfere with the Post Office Horizon IT inquiry, the opening of this investigation follows the conclusion of the public hearings. While the inquiry was extensive, it purposefully did not encompass the role or knowledge of external auditors in its scope.
UN trade agency: Global growth could slow to 2.3% due to tariffs
Global economic growth is forecast to slow sharply this year because of trade tensions and mounting uncertainty, according to the United Nations’ trade agency.
The UN trade and development agency (UNCTAD) is predicting growth will slow to 2.3% this year from 2.8% in 2024. It said:
Global growth is projected to slow to 2.3% in 2025, placing the world economy on a recessionary path.
Eurozone inflation dips to 2.2%, paving way for ECB rate cut
Inflation in the eurozone dipped last month, as expected, and paving the way for an interest rate cut from the European Central Bank tomorrow.
The eurozone’s annual inflation rate was confirmed at 2.2% in March, down from 2.3% in February, according to the final estimate from Eurostat, the EU’s statistics office.
Across the European Union, annual inflation was 2.5%, down from 2.7%.
The lowest annual rates were registered in France (0.9%), Denmark (1.4%) and Luxembourg (1.5%). The highest annual rates were recorded in Romania (5.1%), Hungary (4.8%) and Poland (4.4%).
The highest contribution to the annual eurozone inflation rate in March came from services, followed by food, alcohol & tobacco, non-energy industrial goods and energy.
Hugh Lind, economist at the UK think tank Centre for Economics and Business Research, said:
Further falls in inflation will encourage the European Central Bank (ECB) to press ahead with rate cuts amid elevated uncertainty and the recent implementation of tariffs by the US.
Core and services inflation, measures which more accurately reflect domestic price pressure, also dropped in March. Indeed, the tariff policy of the US is likely to have placed downward pressure on both growth and inflation in the eurozone, as demand for European exports falls and Chinese goods are rerouted away from the US. We, therefore, anticipate a 25-basis point cut in the policy rate at tomorrow’s ECB meeting and two further cuts by the end of the year.
German economist Oliver Rakau said on X:
Quite significant impact from early-Easter on tourism related CPI items. Excluding those, eurozone services inflation actually edged up in March on my calculation. A bounce this month is thus quite likely, although I doubt it will have any bearing on near-term policy moves. pic.twitter.com/PvOqZZcpNU
— Oliver Rakau (@OliverRakau) April 16, 2025
More than £2bn wiped off UK distributor Bunzl amid tariff uncertainty
Growing uncertainty over Donald Trump’s tariffs has wiped more than £2bn from the value of one of the UK’s biggest listed businesses, sending shares in the paper cups to plastic bags distributor Bunzl plunging more than 25%.
The FTSE 100 group, which provides everyday goods for other companies, warned about “macroeconomic uncertainty” as it said sales had been soft in its North American operation.
The chief executive, Frank van Zanten, said he was disappointed with the performance in the first quarter of a “challenging trading environment”.
He said:
We are taking decisive action to improve performance in the group, particularly with regards to execution in our largest business in North America.
Here’s our full story on Nvidia.
Nvidia has said it expects a $5.5bn (£4.1bn) hit after Donald Trump’s administration barred the chip designer from selling crucial artificial intelligence chips in China, sending shares in one of the US’s most valuable companies plunging in after-hours trading.
The company said in an official filing late on Tuesday that its H20 AI chip, which was designed specifically for the Chinese market, to comply with export controls, would now require a special licence to sell there for the “indefinite future”.
The US government, which is battling China in the race for AI supremacy, told Nvidia the new rules were designed to address the risk that its products might be “used in, or diverted to, a supercomputer in China”.
The chip designer now expects to report $5.5bn in charges in its financial quarter that ends on 27 April, because of stocks of H20 chips and sales commitments.
Away from tariffs, water companies in the UK have missed their targets to reduce pollution with 2,487 incidents recorded in 2024 – twice the limit set by the Environment Agency.
Data revealed under freedom of information law shows the companies were collectively set an Environment Agency target of a 40% reduction in pollution incidents, but instead recorded a 30% increase.
The number of pollution incidents in 2024 was the highest in a decade.
A new report by the charity Surfers Against Sewage using discharge data, sickness data and figures from its app, which uses citizen science to track sewage spills, reveals that the water industry in England failed to hit its targets for reducing pollution incidents for the last investment period of 2020-2025.
Hong Kong Post has suspended goods mail services by sea to the US, and will suspend its air mail postal service for items containing goods from 27 April due to “bullying” US tariffs.
When sending items to the US, people in Hong Kong “should be prepared to pay exorbitant and unreasonable fees due to the US’s unreasonable and bullying acts”, Hong Kong Post said today.
The US is unreasonable, bullying and imposing tariffs abusively.
Hong Kong post will definitely not collect any so-called tariffs on behalf of the US.
Other postal items containing documents only, without goods, would not be affected.
Hong Kong, a special administrative region of China, has been subjected to the same tariffs as China, according to a US government notice.
Hong Kong Post said its suspension was due to the US government’s elimination of the “de minimus” exemption and the increase in tariffs for postal items from Hong Kong containing goods to the US from 2 May.
Hong Kong has long been known as a free and open trading hub, but China’s imposition on the former British colony of a sweeping national security law in 2020 drew criticism from the US and led it to end the financial hub’s special status under US law.
China tells US to ‘stop whining’ over tariffs as it reports GDP growth spurt
The US needs to “stop whining” about being a victim after “taking a free ride on the globalisation train”, China’s official state media said, as its government reported a spurt of economic growth ahead of an expected hit from Donald Trump’s tariffs.
Last week’s tit-for-tat tariff rises appear to have paused, but the conflict between the two biggest economies is showing no signs of letting up, with Beijing also reiterating its warning that it was “not afraid to fight”.
On Tuesday evening, China Daily, the ruling Chinese Communist party’s (CCP) English-language mouthpiece, published an editorial saying Trump’s frequent claims of the US being “ripped off” were “hoodwinking the US public”. It said:
The US is not getting ripped off by anybody.
The problem is the US has been living beyond its means for decades. It consumes more than it produces. It has outsourced its manufacturing and borrowed money in order to have a higher standard of living than it’s entitled to based on its productivity. Rather than being ‘cheated’, the US has been taking a free ride on the globalisation train.
The US should stop whining about itself being a victim in global trade and put an end to its capricious and destructive behaviour.”
China unexpectedly appoints new trade negotiator
China unexpectedly appointed a new trade negotiator in the midst of its tariff fight with the US.
The government said today that Li Chenggang is replacing Wang Shouwen, who took part in negotiations for the 2020 trade deal between the China and the US.
Li, 58, is a former assistant commerce minister who was in the role during Trump’s first administration.
Wang, 59, who assumed the No 2 role at the commerce ministry in 2022, was regarded as a tough negotiator and clashed with US officials in past meetings, Reuters reported, citing a source in Beijing’s foreign business community, who described him as “a bulldog, very intense”.
The world’s two largest economies have been steadily increasing tariffs on each other’s goods, after the US president ramped up duties on Chinese imports to the US to 145%, while giving dozens of other countries a 90-day reprieve for a more modest increase in duties. Beijing hit back with a 125% tariff on US goods and has not sought talks with Washington.
The abrupt change happened in the middle of Chinese president Xi Jinping’s tour of southeast Asia, to cement economic and trading ties with close neighbours amid the standoff with the US. Commerce minister Wang Wentao was among senior officials flanking Xi on his visit to Vietnam, Malaysia and Cambodia this week.
Alfredo Montufar-Helu, a senior adviser to the Conference Board’s China Center, said the change was “very abrupt and potentially disruptive” given how quickly trade tensions had escalated and in light of Wang’s experience negotiating with the US since the first Trump administration.
We can only speculate as to why this happened at this precise moment; but it might be that in the view of China‘s top leadership, given how tensions have continued escalating, they need someone else to break the impasse in which both countries find themselves and finally start negotiating.
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.
