Money blog: Trump warns 'very, very bad' EU on tariffs - as he sets date to hit China (2025)

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  • Where on Earth do you start with a stocks and shares ISA?
  • Landlord withholding your deposit? Here's how you can fight it
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09:43:05

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09:39:25

Markets shift in response to Trump return

By James Sillars, business and economics reporter

Donald Trump must be back in the White House.

There are a lot of market shifts in play early this morning, with much for investors to take in.

Trump tariff threats are dominating sentiment, with the prospect of 10% tariffs on US imports from China next month weighing heavily in Asian stock markets.

Their European counterparts, currently spared a Trump name check, have rallied further, with the FTSE 100 0.3% higher.

The pound is down on the day slightly, but a cent higher versus the dollar than was the case this time yesterday at $1.23.

Sterling was also lower against the euro but still in the €1.18 ballpark.

The bond markets are continuing to reflect jitters over the UK's public finances.

While long-term borrowing costs have eased back from levels not seen since 1998 seen earlier this month, there was an initial rise in the wake of the latest public borrowing figures being published.

They showed a higher-than-expected level of borrowing for the month and a rise in debt interest payments.

However, investors were likely soothed by the fact that borrowing in the financial year to date is still within levels predicted by the Office for Budget Responsibility.

The yield - the effective interest rate demanded to hold UK bonds - was later up to 19 basis points lower on the day but settled just slightly lower.

The decline was in line with sentiment elsewhere, including the US and Germany.

09:14:01

UK borrowing hits highest level in four years

Government borrowing has hit its highest level in four years, rising to nearly £18bn.

Office for National Statistics figures show public sector net borrowing stood at £17.8bn last month - the third highest for any December on record.

Borrowing was £10.1bn higher than the same month last year and more than the £14.1bn expected by most economists.

The figure was driven higher largely by soaring debt interest payments, the ONS said.

The data comes as Rachel Reeves, the chancellor, is under pressure as growth stutters despite her election pledge to turbocharge the economy.

08:25:01

Trump's tariff talk might come as minor relief for China

ByNicole Johnston, Asia correspondent

China has been bracing for Trump tariffs, and now it knows what the US president is aiming for.

Trump said his government is "talking" about imposing 10% tariffs from 1 February.

This may come as a minor relief for the Chinese government. At least it's not as high as the 60% Trump had suggested before the election.

However, it does show that Trump has China in his sights. What's unclear is whether 10% is his opening salvo or part of a wider negotiation tactic involving the future of TikTok.

Trump blames China for producing the chemicals used to make fentanyl. These chemicals end up in the hands of cartels in Mexico and fuel the devastating opioid crisis in the US.

China insists it is cracking down on illegal production, and it's not its fault the US has a drug problem.

Beijing also says it wants a fair, open and non-discriminatory business environment.

07:40:11

Trump gives date for tariffs

Across his US election campaign, Donald Trump repeatedly raised the prospect of using tariffs against other countries.

In a nutshell, this taxes imports - the idea being to make US products more appealing, though some argue tariffs simply drive prices up for everyone.

For the first time overnight, Trump gave a date for potentially bringing them in.

He vowed to hit the European Union (EU) with tariffs and said his administration was discussing imposing an additional 10% tariff on goods imported from China from 1 February because, he claimed, fentanyl was being sent from China to Mexico and Canada, then on to the US.

"The European Union is very, very bad to us, so they're going to be in for tariffs. It's the only way... you're going to get fairness," he said.

07:17:38

Where on Earth do you start with a stocks and shares ISA?

For this week's guide, Kirsty Stone, a chartered financial planner fromThe Private Office,tells us how to get started with a stocks and shares ISA...

What is astocks and shares ISA?

This is a type of ISA that you can use to invest in shares, funds, investment trusts or bonds.

You don't have to pay UK income tax or capital gains tax on money you earn from investments made through a stocks and shares ISA.

"You can contribute up to £20,000 per year into your ISAs - this could includestocks and shares ISA, cash ISAs, lifetime ISAs or a combination, but it's important to remember that this limit applies across all ISAs you open in a single tax year," Stone says.

What are the pros of having one?

"If you've been thinking about growing your savings and you have regular surplus income or capital set aside which is not needed in the short term, astocks and shares ISAcould be an option worth considering," Stone says.

"The beauty of an ISA is that the returns you earn are all tax-free, which can really help your money grow faster compared to regular savings accounts, where interest is often taxable - and so too are capital gains if you sell investments that are not held within a stocks and shares ISA wrapper."

If you have a medium or long-term savings goal, Stone says a stocks and shares ISA is worth considering over a cash ISA.

"Over the long term, investing in stocks and shares has traditionally provided better returns than leaving your money in a regular cash-based savings account," she explains.

"Historically, the stock market has offered stronger growth, especially if you're willing to invest for the long term (typically a minimum of 5, 10, or even 20 years). However, of course, like all investments, there are risks involved."

What are the cons?

Unlike a savings account where your money is guaranteed to grow either at a fixed or variable rate, astocks and shares ISAis subject to market fluctuations.

This means that investment returns are not guaranteed and you may get back less than originally invested.

"The value of your investments can go up, but it can also go down, and in the short term, you have to be prepared to ride out these fluctuations," Stone says.

Many investment platforms or providers also charge a fee to have astocks and shares ISA, she adds, saying it is important to shop around and compare platforms.

What can you do to get started?

For someone who hasn't invested before, Kirsty warns the world of investing can be very daunting - but you can seek independent financial advice from a professional to help you.

"For those who do not wish to do this, you'll need to decide what markets or assets to allocate your ISA contribution to, how to diversify it and how much risk you're comfortable taking with your investment," she says.

"If you're unsure about how to pick investments or feel intimidated by the choices available, you might find it helpful to start with a prebuilt portfolio by the company you choose to open your ISA account with."

These portfolios can factor in what level of investment risk you wish to take and any ethical or sustainable preferences you have with your savings.

Stone says: "Often investing in a fund rather than an individual share of a company offers a greater level of diversification and lessens the risk of one individual company doing poorly as a fund will normally hold dozens of companies at any given time."

If you are already investing outside an ISA, Stone suggests considering switching to astocks and shares ISA.

Unlike pensions or other locked-in investment vehicles, you can withdraw your money whenever you need from astocks and shares ISA, she says.

This is for general information only, does not constitute individual advice and should not be used to inform financial decisions.

06:43:25

UK mortgage rules could be about to change

Every Wednesday, we take an overview of the mortgage market with industry experts and round up the best rates withMoneyfactscompare.co.uk.

In the past week we've had rumblings of changes to mortgage rules.

The Financial Conduct Authority, the UK's financial regulator, is planning to simplify the stricter lending rules brought in after the 2008 financial crisis.

This could potentially make it easier for people to secure a loan.

The FCA indicated it would act just weeks after the prime minister asked every UK regulator to examine ways to boost growth.

The regulator says it is right to question whether the rules are too strict given the low numbers of borrowers missing repayments or having homes repossessed.

But analysts are concerned that any changes don't go too far.

Rachel Springall, finance expert at Moneyfacts, said: "As murmurs for relaxing lending rules circulate, such a shake-up could be a lifeline for those who don't presently tick all the boxes to get a mortgage. However, any changes to lending criteria, such as income multiples, must be done carefully to ensure consumers can comfortably afford their mortgage.

"If consumers borrow too much, then it can see them fall into negative equity if house prices plummet, which in turn could result in a spike of mortgage defaults."

Elsewhere, banks and building societies say they are expecting the demand for mortgages to fall during the first half of this year.

Simon Gammon, managing partner, Knight Frank Finance, said: "Clearly, the lenders think that the beginning of 2025 will be another period of sluggish activity in the housing market. As things stand, this is likely to prove true."

He highlighted recent bond market volatility, which could have an impact on the cost of some mortgages.

Here's a look at the lowest rates available for first time buyers...

Moneyfacts also rounds up what it calls "best buys", which look beyond the lowest rates and take in incentives and fees...

In the wider housing market, despite the warnings outlined above, property prices have seen their biggest new year bounce since 2020, according to Rightmove.

The estate agent said the average asking price has risen by just under £6,000 in January.

This took the average asking price to £366,189, although this is still £8,942 below a record set in May 2024, reflecting affordability constraints, it added.

21:00:01

Automatic pension enrolment threshold frozen for year

The minimum amount staff will have to earn before they are automatically enrolled in a workplace pension will remain at £10,000 for another year, the government has confirmed.

Pensions minister Torsten Bell said it was "important" that automatic enrolment "works for individuals, supporting those for whom it makes economic sense to save towards their pensions" while "ensuring affordability for employers and taxpayers".

The coalition government introduced automatic enrolment in 2012 to increase the number of employees working in private sector jobs saving into workplace pensions for retirement.

Ian Futcher, a financial planner at wealth manager Quilter, said the decision to freeze the threshold "provides stability" but is "a missed opportunity to drive higher contributions".

"The government's decision puts the onus on individuals to ensure they're saving enough for their future," he said.

"While AE [automatic enrolment] has transformed pension saving, those relying solely on minimum contributions may find themselves falling short of the retirement they desire."

19:40:01

Promising start to 2025 for homeowners

Average house prices have risen in the biggest New Year bounce since 2020, according to Rightmove.

The property website said the average asking price for a home coming to market across the UK has increased by 1.7% - or £5,992 - in January.

The rise was a sign of "some new year optimism," with a "record number of early-bird new sellers coming to market" since Boxing Day, Rightmove said.

In its house price index report, the number of new properties coming to market, the volume of buyers contacting estate agents and the number of sales being agreed are all ahead of the same period last year.

Rightmove property expert Colleen Babcock said new sellers "have started the year with a bang," but warned of uncertainties around the incoming changes to stamp duty in spring.

From 1 April, the "nil rate" stamp duty threshold for first-time buyers will reduce from £425,000 to £300,000 in England and Northern Ireland.

Ms Babcock said: "Many buyers are still affordability-stretched, with high mortgage rates restricting borrowing power and limiting what they can afford to pay."

Rightmove has forecast an average asking price increase of 4% across this year, while Zoopla expects average UK house prices to increase by 2.5%.

18:45:01

Gen Z turning down 'unethical' jobs, survey finds

Two in five Gen Z workers in Britain have turned down or avoided applying for jobs they consider "unethical," a survey has found.

Carried out by Co-operatives UK, the poll of workers between 18 and 27 years old also found 42% have considered quitting jobs because a company doesn't have enough social purpose or strong enough values.

Dominic Kendal-Ward, Co-op group secretary and general counsel, said: "Gen Z is driving a real shift in what people expect when they choose where they work."

He continued: "They’re looking for roles that align with their values – whether that's a focus on fairness, sustainability, or creating a positive impact."

The survey found as many as 61% of young workers placed as much importance on their employers’ values as their pay.

Some 90% of respondents felt "like a cog in a wheel of a faceless organisation".

Money blog: Trump warns 'very, very bad' EU on tariffs - as he sets date to hit China (2025)

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