Chancellor Rachel Reeves has described the latest GDP figures as “disappointing”.Following this morning’s news that the UK economy contracted by 0.1% in May, Reeves points to the government’s efforts to support households financially:“Getting more money in people’s pockets is my number one mission.While today’s figures are disappointing, I am determined to kickstart economic growth and deliver on that promise.“The choices we have made in our first year in government have seen us extend the £3 bus fare cap, fund Free School Meals for over half a million more children, press ahead with plans to deliver free breakfast clubs for every child in the country and increase the National Minimum and National Living Wage, giving a pay rise to 3 million workers.

“There’s more to do, that’s why in the Spending Review we boosted investment and jobs, through better city region transport and record funding for affordable homes, as well as backing major projects like Sizewell C.”[Reminder: economists had expected the UK economy returned to growth in May, but GDP has actually fallen by 0.1% during the month, pulled down by a fall in manufacturing output].Time to recap…Britain’s economy unexpectedly shrank in May, fuelled by sharp declines in manufacturing and construction.The Office for National Statistics said gross domestic product fell by 0.

1% in May, missing City predictions of a 0.1% monthly expansion.This is the second monthly fall inn a row, driven by a drop in production and construction outout.Chancellor Rachel Reeves described the drop in output as “disappointing’, saying:“Getting more money in people’s pockets is my number one mission.While today’s figures are disappointing, I am determined to kickstart economic growth and deliver on that promise.

“The choices we have made in our first year in government have seen us extend the £3 bus fare cap, fund Free School Meals for over half a million more children, press ahead with plans to deliver free breakfast clubs for every child in the country and increase the National Minimum and National Living Wage, giving a pay rise to 3 million workers.“There’s more to do, that’s why in the Spending Review we boosted investment and jobs, through better city region transport and record funding for affordable homes, as well as backing major projects like Sizewell C.”Economists suggested that the economy was now suffering the backlash from the jump in activity earlier this year, ahead of Donald Trump’s new tariffs.The drop in activity puts more pressure on the Bank of England to lower interest rates, some experts suggested.Rising trade war tensions are threatening to hurt global growth, after Donald Trump announced the US will impose a 35% tariff on imports from Canada from the beginning of August.

News of the plan knocked stock markets,After hitting a fresh intraday high at the start of trading in London, the FTSE 100 share index moved lower – it’s now down 42 points or 0,5% at 8932 points,Germany’s DAX and France’s CAC are both down almost 1%, while stocks have opened lower on Wall Street too,The pound has weakened too, touching its lowest level in nearly three weeks against the US dollar, below $1.

35.Have a lovely weekend.GWMay’s unexpected 0.1% decline in GDP will make depressing reading for Rachel Reeves before a tough budget in the autumn, our economics editor Heather Stewart writes.Stronger-than-expected growth would have helped to alleviate the squeeze on the public finances – but there is nothing in this latest data pointing to an upturn, she points out.

More here:Wall Street has opened in the red.A day after hitting record highs, the S&P 500 share index is down 32 points or 0.5% at 6,247 points.The tech-focused Nasdaq composite index has dipped by 0.36%.

Joshua Mahony, chief market analyst at Rostro, says the growing tariff threat gives investors an incentive to diversify away from US assets.Mahony says:Another day, another tariff announcement from Donald Trump, with the President seeking to levy a 35% tariff on their Canadian neighbours on 1 August.The Canadian reliance on US market exports provides a huge sensitivity to any measures that might damage demand seen from US businesses and consumers.Nonetheless, while we saw a sharp initial pullback for the Canadian dollar, much of the initial move has abated after a US official clarified that items under the USMCA may be exempt.Mahony adds that fact that Trump is warning of higher tariffs suggests any weakness evident today could be just the beginning…Luxury fashion group Louis Vuitton has become the latest company to fall victim to cyber-attack.

Bloomberg are reporting that Louis Vuitton UK has said hackers have stolen some customer data.They explain:On July 2, an unauthorized third party accessed the systems of the British unit of LVMH Moet Hennessy Louis Vuitton SE’s flagship brand and took information such as names, contact details and purchase history.No financial data like bank details were accessed, the company said in an email to customers on Friday.“While we have no evidence that your data has been misused to date, phishing attempts, fraud attempts, or unauthorized use of your information may occur,” the email said.The company has notified relevant authorities, including the Information Commissioner’s Office.

Louis Vuitton UK says hackers have stolen some customer data as the luxury brand becomes the latest target in a string of cyberattacks against retailers https://t,co/IdGW402lqQCanada’s jobs markets appears to have shrugged off the threat of a trade war with the US,The latest Canadian jobs report shows that employment increased by 83,000 (+0,4%) in June and the employment rate rose by 0,1 percentage points to 60.

9%.The unemployment rate fell 0.1 percentage points to 6.9%.WOW 😮 GO Canada 🇨🇦 🎉 ⬆️ +83.

1K job added in June (biggest rise this year)⬆️ Unemployment rate drops to 6.9% from 7% ⬆️ Participation rate rises⬆️ Almost all part time work but...⬆️ Full time jobs also increaseSterling is continuing to slide against the US dollar.

It’s now dropped below $1.35, for the first time since Monday 23 June, nearly three weeks ago.Disappointment over this morning’s GDP report has hit the pound.On the other side of the trade, investors are dropping risky assets and moving into safe-havens.Kit Juckes, foreign exchange expert at French bank Société Générale, says the reaction to Donald Trump’s trade war threats is “very conventional”, explaining:That is to say, risk aversion has increased, the US yield curve is steepening, equities are weaker, safe havens are doing well and the dollar is benefitingPennon Group, the water company behind last year’s parasite outbreak in Devon, has announced its chief executive is retiring.

Susan Davy is stepping down from Pennon after five years as CEO, during which time it acquired Bournemouth Water, Bristol Water and SES (Surrey and East Sutton) Water.Davy saysIt has been an honour to serve as chief executive officer of Pennon.Running a water company is always interesting, often challenging, but totally fulfilling.I have enjoyed taking responsibility for the provision of a sustainable service to millions of homes.As a long-term resident in the South West of England, our home region, I have been proud to lead the extraordinary team at Pennon whether in the offices, at reservoirs, on the road or in depots.

This is vital work, and our people never shirk from that responsibility.The approval of our investment plans by Ofwat made this a natural juncture to retire from Pennon.This has been my life for the past 30 years, and now it’s right I hand this huge responsibility to the next generation of leaders.I look forward to working closely with David and the Board for the remainder of my tenure.”Pennon hit the headline last year when South West Water division caused a diarrhoea and vomiting outbreak in Devon caused by polluted water.

There was then a row after Davy received a pay increase of £300,000, taking her annual pay up to £860,000,She did also give up a bonus, meaning her pay was £237,000 lower than it otherwise might have been,Following today’s GDP reading, how far down will the Bank of England’s policy interest rate go?Professor Costas Milas, of the Management School at University of Liverpool, has taken a stab at this poser, telling us:I have tried to answer this (admittedly) difficult question by looking at the impact of trade uncertainty on the UK economy in an empirical model which looks at the interactions of the BoE’s policy rate, UK inflation, GDP growth and financial pressures,From the plot below, a trade uncertainty shock raises UK inflation by a total of 0,5 percentage points within four quarters.

But as the trade shock takes its toll on GDP growth (the latter drops by a total of 0.8 percentage points within six quarters), the total effect on inflation turns negative two years from now.The BoE responds by lowering interest rates.Two years from now, Bank Rate is close to 2 percentage points lower than today.The model illustrates of what we could expect in the next two years based on what we know today.

..China and the United States have agreed to manage differences while expanding fields of cooperation, according to a Chinese foreign ministry statement on Friday.The statement comes after a meeting between Chinese Foreign Minister Wang Yi and U.S.

Secretary of State Marco Rubio on the sidelines of a regional summit in Malaysia.Wang told Rubio that China hopes the U.S.will view China with an “objective, rational and pragmatic attitude” and formulate its policy with the goal of peaceful coexistence, the statement added (via Reuters).Here’s the details of the US trade deficit with Canada that prompted Trump to threaten a 35% tariff on some Canadian goods:The UK economy’s “Awful April” has been followed by “Maudlin May”, says Michael Browne, global investment strategist at Franklin Templeton Institute.

Following the 0.1% drop in GDP in May, Browne says:The UK’s latest GDP figures are lower than expected.After an awful April, we now have maudlin May with a second negative figure.If we take a step back and look at the annualised numbers, there has been a sharp fall in growth of the critical service sector.It’s no surprise to see the retail numbers fall but they are joined by a weak finance sector, and whilst IT is doing its best to hold up the economy, it will struggle as there are precious few signs of growth in other sectors, such as construction, food, hotels, or entertainment.

The message to the [Bank of England’s] MPC is that there is little or no growth in the economy and the catalyst for growth will come from falling interest rates,However, UK rates are falling slowly due to the MPC’s belief that the stimulus from cuts can happen quickly despite the signs saying otherwise,The mood in the financial markets is souring, as investors ponder Donald Trump’s escalating trade war,Trump’s announcement of a 35% tariff on Canadian imports has caused some jitters among traders,Earlier in the week, the talk was that the markets were shrugging off the trade war.

Today, though, the UK’s FTSE 100 share index is now down 0.6% or 55 points, at 8920 points, away from its early morning record high.Germany’s DAX and France’s CAC are now down 1%, on expectations that the EU might receive a letter from Trump soon.Wall Street is expected to drop 0.6% at the open.

Raffi Boyadjian, lead market analyst at Trading Point, says:As the week draws to a close, trade tensions continue to escalate, with President Trump being in an uncompromising mood amid the race to secure crucial trade deals ahead of the new deadline of August 1.Despite the frequent citing of progress with major economies such as the European Union, India and Japan, it doesn’t appear that the stumbling blocks are close to being overcome.Negotiations with Canada, which has its own deadline of July 21, are also not proceeding as Trump would have probably liked, putting the country next in the firing line, following the surprise decision earlier in the week to slap Brazil with 50% tariffs.Newly elected Canadian prime minister, Mark Carney, had been hoping to avoid another standoff with Washington, but that’s not going to be possible now after Trump’s latest announcement.The UK economy has been choppy over the last year, as this chart shows:The National Trust redundancy news will cause “huge worry among staff”, says the Prospect union.

Steve Thomas, Deputy General Secretary of Prospect, says:“At a time when Prospect members at the National Trust are hard at work welcoming the public to Britain’s historic venues over the busy summer months, this news will cause huge uncertainty and worry for staff.“We understand the cost pressures the Trust is facing but management decisions, as well as external factors, have contributed to the financial situation and once again it is our members who will have to pay the price.“Our members are custodians of the country’s cultural, historic and natural heritage - cuts of this scale risk losing institutional knowledge and skills which are vital to that mission.“Prospect will be working with NT to try to minimise the negative impact of these cuts on both workers and on the operation of the trust.”The National Trust is to cut at least 550 jobs in a cost-cutting drive that aims to save £26m after changes made in the chancellor Rachel Reeves’s debut budget pushed up labour costs, my colleague Sarah Butler has learned