Trump tariff threats risk triggering ‘spiral of escalation’ in world economy, says IMF
Donald Trump’s tariff threats over Greenland risk triggering a “spiral of escalation” that would damage the world economy and lead to a sharp sell-off in financial markets, the International Monetary Fund (IMF) has said,In an update as Trump threatened to impose tariffs on Nato allies opposed to his ambition to take over the Arctic territory from Denmark, the Washington-based fund said a renewed eruption in trade tensions was among the biggest risks to global growth in 2026,Pierre-Olivier Gourinchas, the IMF’s chief economist, said a “spiral of escalation” between the US and Europe would have a “material impact” that would inflict pain on households on both sides of the Atlantic,“We all know there are no winners in a trade war and that’s the thing to remember,” he said,Speaking at the launch of the Washington-based fund’s updated world economic outlook (WEO) report, Gourinchas called for both sides to find an “amicable solution” to the current situation.
“If we were to enter a phase in which there were escalation, and tit-for-tat policies, that would certainly have an even more adverse effect on the economy,” he said.The intervention comes as world leaders prepare to gather in Davos, Switzerland, for the annual World Economic Forum meeting – widely seen as a critical moment to salvage international cooperation.The IMF managing director, Kristalina Georgieva, is expected to hold meetings in Davos amid international efforts to dial down tensions with Washington.In an update of its WEO report published in October, the IMF said the powerful headwinds from global trade tensions in 2025 had been offset by surging investment in technology – including artificial intelligence – in the US and Europe.It said global growth was projected to remain resilient at 3.
3% in 2026 and 3.2% in 2027: rates similar to an estimated 3.3% growth rate in 2025 after surging investment in AI helped the world economy offset the impact from trade tensions.However, the IMF forecasts were finalised in December, before an explosion in geopolitical tensions at the start of 2026, notably the US seizure of Venezuela’s president, Nicolás Maduro, the eruption of protests in Iran and Trump’s threats to seize Greenland.The IMF said its forecasts were based on a fall in US tariff rates in 2026 and 2027, after a year in which the world economy managed to avoid the worst of the fallout from Washington’s trade war – helped by AI investment.
Gourinchas said the shock of a tit-for-tat trade war could lead to a “repricing” by financial markets.Global markets have reached record highs amid a massive influx of cash into the US technology sector.A trade war could lead investors to “look at the situation and have to reassess what the value of financial markets is,” he said.“This volatility is bad for business decisions; it’s bad for investment, it’s bad for consumption, it leads to uncertainty,” Gourinchas added.Reflecting the technology boom and limited impact on US consumers from the president’s trade wars so far, the IMF issued a sharp upgrade for US growth to 2.
4% this year, up from its prediction in October for growth of 2.1%.It suggested there were also signs that “technology-related investment had contributed to activity” in Spain and the UK, although not at the same scale as in the US.The fund left its forecasts for the UK unchanged for 2026 and 2027, predicting growth of 1.3% this year and 1.
5% the year after,However, it also issued a modest upgrade for its prediction for 2025, up by a percentage point to 1,4%,The UK’s growth projection for next year puts it behind only the US and Canada of its G7 counterparts,Rachel Reeves, the chancellor, said the forecasts showed 2026 was “the year the country turns a corner”.
“The IMF has upgraded our growth for the third time in a row since April 2025, putting us on course to be the fastest growing European G7 economy this year and next,” she said,However, rising geopolitical tensions and a full-blown trade war would blow the IMF forecasts off course,“Going forward this is a major risk, this is something that could materially impact growth if we have higher levels of tariffs; if we have higher levels of geopolitical tension,That is something we are monitoring carefully,” Gourinchas said,
He called himself an ‘untouchable hacker god’. But who was behind the biggest crime Finland has ever known?
Tiina Parikka was half-naked when she read the email. It was a Saturday in late October 2020, and Parikka had spent the morning sorting out plans for distance learning after a Covid outbreak at the school where she was headteacher. She had taken a sauna at her flat in Vantaa, just outside Finland’s capital, Helsinki, and when she came into her bedroom to get dressed, she idly checked her phone. There was a message that began with Parikka’s name and her social security number – the unique code used to identify Finnish people when they access healthcare, education and banking. “I knew then that this is not a game,” she says
China blocks Nvidia H200 AI chips that US government cleared for export – report
Suppliers of parts for Nvidia’s H200 have paused production after Chinese customs officials blocked shipments of the newly approved artificial intelligence processors from entering China, according to a report.Reuters could not immediately verify the report, which appeared in the Financial Times citing two people with knowledge of the matter. Nvidia did not immediately respond to a Reuters request for comment made outside regular business hours.Nvidia had expected more than one million orders from Chinese clients, the report said, adding that its suppliers had been operating around the clock to prepare for shipping as early as March.Chinese customs authorities this week told customs agents that Nvidia’s H200 chips were not permitted to enter the country, Reuters reported
ChatGPT to start showing ads in the US
ChatGPT will start including advertisements beside answers for US users as OpenAI seeks a new revenue stream.The ads will be tested first in ChatGPT for US users only, the company announced on Friday, after increasing speculation that the San Francisco firm would turn to a potential cashflow model on top of its current subscriptions.The ads will start in the coming weeks and will be included above or below, rather than within, answers. Mock-ups circulated by the company show the ads in a tinted box. They will be served to adult users “when there’s a relevant sponsored product or service based on your current conversation”, according to OpenAI’s announcement
Amazon workers at Coventry warehouse tested for tuberculosis after outbreak
Amazon is testing workers at its Coventry warehouse for tuberculosis after an outbreak of the lung disease.A handful of workers from the site were found to have contagious tuberculosis (TB) last year, prompting the UK Health Security Agency (UKHSA) to begin running a screening programme in September.Amazon said 10 people at the site, which employs about 2,000 people according to the GMB union, had since tested positive for the non-contagious, or latent, variety of TB late last year.Some people have TB in their body but do not get ill or have any symptoms – this is known as latent TB. This variant cannot be spread to others, but it can turn into active, contagious TB in the future if it is not treated
Partly AI-generated folk-pop hit barred from Sweden’s official charts
A hit song has been excluded from Sweden’s official chart after it emerged the “artist” behind it was an AI creation.I Know, You’re Not Mine – or Jag Vet, Du Är Inte Min in Swedish – by a singer called Jacub has been a streaming success in Sweden, topping the Spotify rankings.However, the Swedish music trade body has excluded the song from the official chart after learning it was AI-generated.“Jacub’s track has been excluded from Sweden’s official chart, Sverigetopplistan, which is compiled by IFPI Sweden. While the song appears on Spotify’s own charts, it does not qualify for inclusion on the official chart under the current rules,” said an IFPI Sweden spokesperson
Prominent PR firm accused of commissioning favourable changes to Wikipedia pages
A high-profile PR company founded by Keir Starmer’s communications chief has been accused of commissioning changes to Wikipedia pages to make them more favourable towards clients.Portland Communications, founded by Tim Allan, has been linked to the so-called black hat edits, sometimes referred to as “Wikilaundering”. Several changes were made to Wikipedia pages by a network of editors, allegedly controlled by a contractor working on Portland’s behalf.According to an investigation by the Bureau of Investigative Journalism (TBIJ), Portland outsourced Wikipedia editing relating to some of its high-profile clients, including the state of Qatar.TBIJ said it had evidence of alleged Wikipedia edits made on behalf of Portland between 2016 and 2024
ScottishPower named worst energy supplier for customer service
Rachel Reeves pulls out of London Stock Exchange event after new Trump tariff threat
Out of sight: spectacular HS2 tunnels offer glimmer of hope for stalling project
China’s economy hit growth target last year despite Trump trade war and property crisis
Woolworths online delivery platforms tested: which is cheapest and how do they compare with in-store shopping?
World stock markets brace for turbulence after Trump’s latest tariff shock