Influx of cheap Chinese imports could drive down UK inflation, economists say
The UK is poised for an influx of cheap Chinese imports that could bring down inflation amid the fallout from Donald Trump’s global trade war, leading economists have said,After figures showed China’s trade surplus surpassed $1tn (£750bn) despite Washington’s tariff policies hitting exports to the US, the Bank of England said the UK was among the nations emerging as alternative destinations for the goods,Stephen Millard, a deputy director at the National Institute of Economic and Social Research, said: “There is an expectation that given the high tariffs the US are imposing on China, that China will divert its trade elsewhere and one of those places will be the UK,”This month Catherine Mann, an external member of the Bank’s rate setting monetary policy committee, told MPs on the Treasury committee there were early signs of trade diversion affecting UK inflation,“Import prices have started to moderate on the back of sterling appreciation and some of the spillover of the diversion of Chinese products from the US tariff burdens to other places, including to our docks.
Not a lot.Actually less than I would’ve thought.But it’s there.”Official figures released by Beijing this month show China’s trade surplus reached more than $1tn in the year to November for the first time, as manufacturers shipped more to non-US markets to sidestep Trump’s tariffs.While exports to the US plummeted by 29% year-on-year, sales to markets elsewhere ballooned, including a 15% rise in exports to the EU and 9% jump to the UK compared with the same period a year earlier.
In its November monetary policy report, the Bank said Chinese exports to the UK and euro area had increased, while those to the US had declined.“Early evidence suggests [tariffs] are having a relatively limited effect on global growth and a slightly disinflationary impact on the UK, driven mainly by trade diversion,” the report said.Headline inflation in the UK is running at 3.2% and is forecast to drop close to the 2% target set by the government by the middle of 2026.Measures in Rachel Reeves’s autumn budget – including relief on energy bills and fuel duty – are expected to cut the headline rate by as much as 0.
5 percentage points.This month the Bank cut its base rate by a quarter-point to 3.75% amid cooling inflationary pressures.Financial markets predict Threadneedle Street will probably reduce borrowing costs by at least another quarter-point in 2026 amid weaker levels of economic growth and rising unemployment.China ranks as the UK’s largest market for imports behind Germany, with £70bn shipped to Britain in the year to June, an increase of 4.
1% from a year earlier.Cars, telecoms and sound equipment were the main imports.Millard said the impact on UK inflation from an increase in Chinese imports was unlikely to be large, but could still add to a slowdown in the headline inflation rate in 2026.“There is potential for a fall in the price of Chinese imports as they attempt to sell more into the UK, which could have a reasonable effect on our import price index,” he added.Diversion of Chinese exports has rung alarm bells for European manufacturers worried about being undercut by a cheap influx of goods, leading to pressure on EU leaders and the UK government to respond.
The French president, Emmanuel Macron, said after a visit to Beijing in December that the EU could be forced to take “strong measures” to curb a ballooning imbalance between Chinese imports and exports with the 27-nation bloc,In the UK, ministers have pledged to protect domestic steel producers from a mounting glut of the metal on global markets, much of which comes from subsidised Chinese producers,However, buyers could benefit from lower prices, with the potential to alleviate concerns over inflationary pressures re-emerging next year,Jack Meaning, the UK chief economist at Barclays, said there was limited evidence of trade diversion from China so far, but suggested import prices in the UK were on track to moderate in 2026 amid weaker growth in the world economy,“Our forecast is for core goods inflation to decelerate as we move through 2026, from about 1.
5% in 2025 to below 1%,” he said.“Part of that story is a more global slowdown; a reorganising of excess demand in the global economy, coming into the UK as a small open economy.”
‘Why should we pay these criminals?’: the hidden world of ransomware negotiations
They call it “stopping the bleeding”: the vital window to prevent an entire database from being ransacked by criminals or a production line grinding to a halt.When a call comes into the cybersecurity firm S-RM, headquartered on Whitechapel High Street in east London, a hacked business or institution may have just minutes to protect themselves.S-RM, which helped a high-profile retail client recover from a Scattered Spider cyber-attack has become a quiet, often word-of-mouth, success.Many of the company’s senior workers are multilingual and have a minimal online footprint, which reveals scant but impressive CVs suggestive of corporate or government intelligence-based careers.S-RM now claims the UK’s largest cyber-incident response team
Louis Gerstner, man credited with turning around IBM, dies aged 83
Louis Gerstner, the businessman credited with turning around IBM, has died aged 83, the company announced on Sunday.Gerstner was chair and CEO of IBM from 1993 to 2002, a time when the company was struggling for relevance in the face of competition from rivals such as Microsoft and Sun Microsystems.After becoming the first outsider to run the company, Gerstner abandoned a plan to split IBM, which was known as Big Blue, into a number of autonomous “Baby Blues” that would have focused on specific product areas such as processors or software.IBM’s current chair and CEO, Arvind Krishna, told staff in an email on Sunday that this decision was key to the company’s survival because “Lou understood that clients didn’t want fragmented technology, they wanted integrated solutions.”“Lou arrived at IBM at a moment when the company’s future was genuinely uncertain,” he wrote
Nvidia insists it isn’t Enron, but its AI deals are testing investor faith
Nvidia is, in crucial ways, nothing like Enron – the Houston energy giant that imploded through multibillion-dollar accounting fraud in 2001. Nor is it similar to companies such as Lucent or Worldcom that folded during the dotcom bubble.But the fact that it needs to reiterate this to its investors is less than ideal.Now worth more than $4tn (£3tn), Nvidia makes the specialised technology that powers the world’s AI surge: silicon chips and software packages that train and host systems such as ChatGPT. Its products fill datacentres from Norway to New Jersey
From shrimp Jesus to erotic tractors: how viral AI slop took over the internet
Flood of unreality is an endpoint of algorithm-driven internet and product of an economy dependent on a few top tech firms In the algorithm-driven economy of 2025, one man’s shrimp Jesus is another man’s side hustle.AI slop – the low-quality, surreal content flooding social media platforms, designed to farm views – is a phenomenon, some would say the phenomenon of the 2024 and 2025 internet. Merriam-Webster’s word of the year this year is “slop”, referring exclusively to the internet variety.It came about shortly after the advent of popular large language models, such as ChatGPT and Dall-E, which democratised content creation and enabled vast swathes of internet denizens to create images and videos that resembled – to varying degrees – the creations of professionals.In 2024, it began to achieve peak cultural moments
More than 20% of videos shown to new YouTube users are ‘AI slop’, study finds
More than 20% of the videos that YouTube’s algorithm shows to new users are “AI slop” – low-quality AI-generated content designed to farm views, research has found.The video-editing company Kapwing surveyed 15,000 of the world’s most popular YouTube channels – the top 100 in every country – and found that 278 of them contain only AI slop.Together, these AI slop channels have amassed more than 63bn views and 221 million subscribers, generating about $117m (£90m) in revenue each year, according to estimates.The researchers also made a new YouTube account and found that 104 of the first 500 videos recommended to its feed were AI slop. One-third of the 500 videos were “brainrot”, a category that includes AI slop and other low-quality content made to monetise attention
How Las Vegas police ended up with a fleet of free Tesla Cybertrucks
The Las Vegas police department rolled out a new fleet of tactical vehicles to city streets last month: all Tesla Cybertrucks. The steel cars, wrapped in black-and-white vinyl, come decked out with warning lights and flashing sirens on the roof. They seem to be heftier, more angular versions of a traditional police car. Las Vegas is the first city in the US to grant its officers access to a battalion of the futuristic trucks, which have become synonymous with the Tesla CEO, Elon Musk, the richest person in the world.“They represent something far bigger than just a police car,” Sheriff Kevin McMahill said at a recent press conference showcasing the vehicles
The Las Vegas Raiders and the thin line between tanking and incompetence
The Ashes inspiration, overpreparation and bold tactics: a history of Australia v England two-day Tests | Geoff Lemon
Piastri intrigue, Picklum magic and Gout goes global: reflections on a year of Australian sport | Jack Snape
‘I like No 3’: Bethell always looks the part and now has chance to shine in Ashes
I was there: Europe’s dramatic Ryder Cup win signed off a strange week
Matthew Potts poised to play in fifth Ashes Test after England rule out Gus Atkinson