I Don’t Want To Talk About It! 06 June 2025
| This blog tends to agree with Firas Al Msaddi, CEO of fäm Properties, who dismissed concerns raised by a late May Fitch Ratings forecast of a 15% residential price correction, emphasising market maturity over weakness, noting that “a slowdown in growth isn’t a correction”. fäm noted that approximately 363k residential units are slated for delivery over the next five years, but only 12k are near completion (80 – 99% progress), with 270k units at early stages (0% – 20%). Completed project deliveries in 2024 dropped 23% from 2023, dispelling fears of oversupply”. This blog is of the opinion that it seems obvious that supply is still well short of demand, and it could be a further two years before some equilibrium comes to play. In the four-year period to 2023, new units handed over averaged 41k a year, with the best 2024 guesstimate of 47k. It will be interesting to see what the figure will be this year, with numbers from 44k to 81k being bandied around. In May, total real estate transactions rose 15.3%, on the month, and 6.5%, compared to May 2024, to 17.48k transactions, with total sales up 39.1% to US$ 14.82 billion. YTD figures show that there were 83.2k transactions – 23% higher on the year – with its value up 43% to US$ 74.88 billion; average price per sq ft was 4% higher at US$ 436. Of that total, off-plan accounted for 60.2% of volume, with the 39.8% balance taken by the secondary market. Apart from on-going demand, two other drivers were mortgage rates becoming more accessible, (and cheaper, with some already at sub-4.0%), and sustained inflows of foreign capital. No surprise to see Jumeirah Village Circle, in the mid-market sector, heading transactional volume, with 1.8k deals at an average price point of US$ 292k, whilst Palm Jumeirah and Downtown Dubai led high-value activity, with average sales exceeding US$ 1.36 million across branded and waterfront stock. |
May growth in Dubai’s real estate market continued to expand, with unprecedented growth, seeing records smashed with US$ 18.56 billion in sales – up 49.9% on the year – as the 18.7k sales transactions was the second highest monthly return, according to fäm Properties. Over the past five years, transactions have increased by 1,257% from 1.4k to 17.6k, whilst the value has surged 2017% from US$ 627 million to US$ 18.56 billion The most expensive sale saw US$ 82 million changing hands for a luxury villa on Palm Jumeirah, whilst an apartment in Jumeirah Residences Asora Bay fetched US$ 45 million. Of the properties sold last month the split showed, those above US$ 1.36 million, (AED 5 million) accounted for 14% of total sales, between US$ 545k – US$ 1.36 million – 30%, between US$ 272k – US$ 545k – 30% and under US$ 272k – 26%.
Last month, Damac claimed the top three places for off plan villas – Damac Islands, Fiji, Bora Bora and Bali – with seventy-two, fifty-two and forty-nine units, and prices per sq ft of US$ 409 for all three; Damac also claimed the top two places for ready villas – Damac Islands Bora Bora and Damac Islands Maldives – followed by Wadi Al Safa 7; sale numbers were forty-nine, forty-six and twenty-seven, with prices per sq ft of US$ 409, US$ 436 and US$ 463. For off plan apartments, the three top sellers were The Mural, Albero and Eden House, The Park E – with sales of seventy-one, forty-five and forty-three, and prices per sq ft of US$ 1k, US$ 681 and US$ 981. In the ready market sector, Golf Promenade 4 – A, Al Madar Siraj Tower and Golf Promenade 4 – B led the pack, with twenty-seven, twenty and sixteen, with prices per sq ft of US$ 272, US$ 327 and US$ 270.
The leading developer was Emaar, whose sales of US$ 92 billion, easily surpassed the next two combined – Damac Properties, (US$ 46 billion) and Nakheel (US$ 35 billion). Meraas, (US$ 18.5 billion), Sobha Group, (US$ 18.5 billion), Binghatti, (US$ 13 billion), Dubai Properties, (US$ 10 billion), and Danube Properties, (US$ 10 billion) made up the top eight.
Announcing that its first Dubai Development, Villa del DIVOS, is nearing full occupancy, Mr Eight Developments confirmed that it had already sold 60% of its second foray into the market, Villa del GAVI. Located on Dubai Islands, the twelve-storey tower, offers a range of two-to-four-bedroom apartments and expansive views of the Gulf. Prices start at US$ 981k, with a flexible 35/65 payment plan, and handover is scheduled for Q4 2027. Interiors feature Italian travertine stone, Fabel Casa kitchens, SMEG appliances and Tom Dixon fixtures with amenities such as two infinity pools, a Technogym fitness centre, and exclusive access to the Mr. Eight Priority Club. Members enjoy shared access to a variety of luxury experiences—including chauffeur-driven Rolls-Royce cars, a private Riva motorboat with a captain, golf carts and à la carte services such as in-residence spa treatments, personal training, childcare and 24/7 maintenance. The developer noted that up to 90% of buyers are from Europe, (mainly Germany, Spain, France, Belgium and the UK), with increasing interest from Japan and China.
Emirates President, Tim Clark, has publicly criticised the two largest global plane makers, Airbus and Boeing, over chronic aerospace supply problems, adding that they should take responsibility for late supplies. The head of the world’s largest international airline noted that both manufacturers are years behind on new plane deliveries, delaying airlines, such as EK, from being able to launch new routes and upgrading to more fuel-efficient aircraft. He added that “I am pretty tired of seeing the handwringing about the supply chain: you (manufacturers) are the supply chain”. The Dubai-based airline has orders for two hundred and five of Boeing’s 777Xs, which have not yet received certification from the US Federal Aviation Administration, but deliveries are set to start in 2026, six years behind schedule. Furthermore, there are reports that Airbus has been warning airlines it faces another three years of delivery delays, in working through a backlog of supply-chain problems.
With a double whammy goal of doubling the size of the economy by 2031, to US$ 816.77 billion, (AED 3 trillion), and increasing total non-oil trade to US$ 1.1 trillion, the Comprehensive Economic Partnership Agreement has become a useful tool in turning UAE dreams into reality. The UAE-Serbia CEPA, the tenth to come into force, is one of twenty-seven in total having been concluded so far with countries spanning the ME, Africa, SE Asia, S America and Europe. This CEPA aims to further boost bilateral non-oil trade, which had already doubled in the four years, post Covid, with projections indicating a marked rise in bilateral trade that will contribute US$ 351 million to UAE GDP by 2031. This growth is anticipated through the elimination and reduction of custom duties for over 96% of tariff lines, thereby enhancing market access, as well as increasing private sector collaboration and promoting investments in priority sectors such as renewable energy, agriculture, logistics, and technology. The UAE is Serbia’s leading trading partner in the GCC, accounting for approximately 55% of its total trade with the region in 2023.
The UAE and Kuwait have signed a comprehensive set of agreements in a bid to deepen bilateral cooperation across various sectors including AI, health, energy, education, defence and diplomacy. In the defence sector, EDGE Group signed a US$ 2.45 billion contract, thought to be the largest ever naval shipbuilding export in the region, for “Falaj 3” class missile boats. Another deal saw IFA Hotels and Resorts sign a US$ 54 million contract with UAE-based Darwish Engineering to execute infrastructure works for the Al Tay Hills residential project in Sharjah. A third agreement saw Kuwait Investment Authority joining the Artificial Intelligence Infrastructure Partnership along with MGX, BlackRock, Global Infrastructure Partners, and Microsoft, to boost AI infrastructure investment. Furthermore, there were other MoUs signed, including health, diplomacy, road/land transport infrastructure, social development, advanced technology, education and energy.
Dubai’s Al Ansari Financial Services has launched its first foray in India, with the opening of a business solutions centre in Hyderabad. The firm already has the highest share of the UAE’s remittance market and has been expanding into other Gulf territories, through a series of acquisitions. The India operations will help with the back-end technological requirements and utilise that country’s pool of talent and IT expertise. Al Ansari commented that “we are reshaping our operations to promote leaner corporate structures and enhance the effectiveness of shared services and global business service units”.
Dubai Aerospace Enterprise has signed a US$ 300 million three-year unsecured term loan with Bank of China (Dubai) Branch, Bank of China Limited, London Branch and Bank of China (Hong Kong) Limited (BOC). Firoz Tarapore, DAE’s chief executive, commented, “this transaction with BOC provides us with additional liquidity to support our ongoing commitment to meeting the needs of our airline customers while maintaining a modern and efficient fleet’.
Another week and another sanction by The Central Bank of the UAE. An unnamed exchange house has been fined US$ 954k for failing to comply with Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations and its amendments. The CBUAE, through its supervisory and regulatory mandates, endeavours to ensure that all exchange houses, their owners, and staff abide by the UAE laws, regulations and standards. These laws are there to maintain transparency and integrity of all financial transactions and to safeguard the UAE financial system.
Almost nine years ago, the federal government liberalised fuel prices so that they could be aligned with market rates until the onset of the pandemic which saw prices frozen by the Fuel Price Committee, in 2020. The controls were removed in March 2021 to reflect the movement of the market once again. The approved fuel prices by the Ministry of Energy are determined every month, according to the average global price of oil, whether up or down, after adding the operating costs of distribution companies. June retail fuel prices remain unchanged across the board. The breakdown of fuel prices for a litre for June is as follows:
Super 98 US$ 0.703 from US$ 0.703 in June down 1.1% YTD US$ 0.711
Special 95 US$ 0.673 from US$ 0.673 in June down 1.1% YTD US$ 0.681
E-plus 91 US$ 0.651 from US$ 0.651 in June down 1.7% YTD US$ 0.662
Diesel US$ 0.687 from US$ 0.687 in June down 5.9% YTD US$ 0.730
The DFM opened the week, on Monday 02 June, six hundred and twenty-seven points higher, (12.9%), on the previous eight weeks, gained fifty-five points (1.0%), to close the shortened trading week on 5,536 points, by Wednesday 04 June 2025; the bourse was closed for the last two days of the week because of the Eid Al Adha holiday. Emaar Properties, US$ 0.05 lower the previous week, gained US$ 0.06, closing on US$ 3.64 by the end of the shortened week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.74 US$ 6.10 US$ 2.25 and US$ 0.41 and closed on US$ 0.75, US$ 6.02, US$ 2.31 and US$ 0.44. On 04 June, trading was at three hundred and eighty-nine million shares, with a value of US$ two hundred and fifty-four million dollars, compared to one million and thirty-one thousand shares, with a value of US$ ninety-nine million dollars, on 04 June 2025.
By Friday, 06 June 2025, Brent, US$ 1.43 lower (2.2%) the previous fortnight, gained US$ 2.63 (4.1%) to close on US$ 66.53. Gold, US$ 174 (5.5%) higher the previous week, gained US$ 33 (1.0%) to end the week’s trading at US$ 3,324 on 06 June.
Last Saturday, Saudi Arabia, Russia and six other key OPEC+ members, known as the ‘Voluntary Eight’, (V8), announced that they will produce an additional 411k bpd starting next month; this is the same target set for the previous two months but more than triple than the group had previously planned. It was only in recent years that the twenty-two-nation bloc had agreed to daily reductions of 2.2 million barrels, with the aim of boosting prices. However, earlier in the year, V8 decided on the gradual output increase and subsequently began to accelerate the pace – the inevitable result is that oil prices have slumped to hovering around the US$ 60 per barrel mark – its lowest level since 2021. It is hard to believe the bloc’s decision that it is justified by “healthy market fundamentals” covering oil reserves and structural demand growth during coming months. Maybe there are external geo-political reasons – perhaps bowing to Donald Trump’s request to keep oil prices low, (to maintain pump prices under US$ 2.0 for the US population), or maybe punishing some of the smaller members for not keeping to their quotas under the cuts first agreed in 2022.
Yesterday, 05 June 2025, silver prices reached US$ 35.90 – a thirteen year high since February 2012 – driven by concerns around the Trump tariffs and further declines in the greenback; futures for July delivery surged more than 4% to above US$ 36 per troy ounce. The silver market, at US$ 2 trillion, is eleven times smaller than that of gold; this evidently makes that market’s volatility up to three times greater than that of gold. YTD, silver and gold prices have risen by 23% and 29%, with the latter’s rise being driven by trade policy uncertainty and continued central bank demand buying. It ended on US$ 33.95 in late Friday trading.
Come Monday, as the dollar nosedived, sterling rose to a three-year high, gaining 0.73% and trading at US$ 1.355, indicating an impressive YTD surge. Meanwhile, the greenback was 0.66% lower on the day and down 9.0% over the past six months. This latest movement came about because of Trump’s return to the offensive in his trade tariff war. On the day, the Chinese administration replied to the US President’s recent post accusing China of “seriously violating” a trade truce which had resulted both parties lowering tariffs by 115% for ninety days. Gold also got into the act, as it climbed to US$ 3,350,
US Q1 sales of hybrid, battery electric, or plug-in hybrid vehicles, accounted for 22% of light duty vehicles – 7% higher on the year. Interestingly, hybrid electric vehicles have continued to gain market share, while battery electric vehicles and plug-in hybrid vehicles have remained relatively flat. Battery electric vehicle sales are more common in the luxury vehicle market, which accounted for 14% of the total light-duty vehicle market – the lowest quarterly share since mid-2020. Electric vehicles accounted for 23% of total Q1 luxury sales – well down on more than 33% posted in the two previous years. However, the Tesla Model 3 was scaled down to non-luxury in late 2024.
As part of its strategy to divest at least US$ 20 billion of its assets, so it can cut its net debt from US$ 27 billion to something like US$ 15 billion, BP has begun circulating initial details of its Castrol lubricants unit to prospective buyers. Interest has been high and include the ‘usual suspects’, including private equity and industry bidders. Such companies include China’s state-owned Citic, India’s Reliance Industries, Saudi Aramco, Brookfield Asset Management, Apollo Global Alliance, Lone Star Funds and Blackburn’s Zuber Issa. It is estimated that BP needs to sell Castrol, at an enterprise value of US$ 12 billion, to improve BP’s free cash flow. However, questions are being asked whether that is too much on the high side, bearing in mind the rise of electric vehicles and the eventual demise of petrol-driven cars; some now think that it may be sold at around the US$ 8.0 billion – US$ 10.0 billion mark.
In order to avoid any further prosecutions relating to the fatal 737 flights in 2017/2018, that killed three hundred and forty-six people, Boeing has apparently agreed to pay US$ 1.1 billion to settle the case. US$ 445 million will be paid to families of crash victims, with the plane maker agreeing to put US$ 455 million towards improving its compliance, safety and quality programmes; it also agreed to pay US$ 487 million, as a criminal penalty, (with 50% of that total already having been paid in 2021). Boeing has previously apologised to family members of some of the victims, posting that “we are deeply sorry for their losses, and remain committed to honouring their loved ones’ memories by pressing forward with the broad and deep changes to our company”. What kind of apology is that?
Late last week, the fact that Ryanair shares were trading at US$ 23.83, for the twenty-eighth consecutive day, spelt good news for its supremo, Michael O’Leary. He is now in line to pick up a US$ 126 million bonus – by way of holding options on ten million shares – after achieving a key performance target; payout will be in July 2028, as long as O’Leary, who has been with Ryanair since 1988, remains with the budget airline. His long-term incentive scheme was first set out in 2019, the year he became group chief executive. Low-cost rival carrier, Wizz Air, has a similar potential pay deal in place for its chief executive József Váradi.
There is no doubt that Monzo Bank has had a spectacular year, ending 31 March 2025. The online financial institution posted an eightfold surge in underlying pre-tax profits to US$ 154 million, along with a 25% hike in customer numbers to twelve million. There were many who considered that the digital bank would be considering an IPO, more so because a 2024 secondary sale of employee shares valuing the group at US$ 6.0 billion. However, chief executive, TS Anil, put an end to any such hope by commenting that “an IPO is not something we’re focused on right now. We’re oriented entirely around scaling the business and taking it to greater heights”. This despite that it had appointed Morgan Stanley as an adviser and had begun to look at developing an in-house investor relations team.
Not good news for Wollaston in Northamptonshire, as Dr Martens posted a massive 96.4% decline in profits to March 2025, with just a US$ 12.0 million profit; underlying profits were 65.0% lower at US$ 46 million. In 1959, Griggs Group bought the patent rights to Dr Martens and since then have made the familiar, yellow-stitched boots at the Wollaston factory. However, the company has been in the doldrums in recent years, with declining revenues exacerbated by the cost-of-living crisis in the UK where revenues had remained lower “due to a challenging market”. Yesterday, the company launched a new strategy which saw its share price trading 24% higher.
Good news for the M&S chief executive after his US$ 9.6 million last pay remuneration, from his previous year’s US$ 6.8 million, and this despite its recent cyber-attack by a group of Russian hackers; it knocked-out online orders, hit contactless payments, and disrupted stocks in stores. The retailer’s remuneration committee said it had considered the “recent cyber incident” when deciding on performance-related pay and concluded that “no adjustments were needed”. The retailer’s remuneration committee said it had considered the “recent cyber incident” when deciding on performance-related pay and concluded that “no adjustments were needed”. It is estimated that M&S will take a financial hit of some US$ 406 million in this year’s accounts, and the committee noted that it “recognised it would need to re-visit the matter” when deciding on next year’s compensation.
Embattled Thames Water, US$ 30.83 billion in debt, is once again on the brink of collapse, as the private equity firm KKR has pulled out of a deal to lead a rescue of the UK’s largest water provider. It was selected as the preferred bidder in March, after offering to take control of the shares of the utility in return for a mooted US$ 5.41 billion cash injection. Even though it said an alternative plan was under discussion, the utility is in desperate need of fresh investment, without which it could go into special administration. Its Chairman, Sir Adrian Montague, said, “whilst today’s news is disappointing, we continue to believe that a sustainable recapitalisation of the company is in the best interests of all stakeholders and continue to work with our creditors and stakeholders to achieve that goal”.
April’s Republic of Korea’s industrial production, retail sales and facilities investment all declined on the month – down 0.8% – having posted modest increases in March. Retail sales, facility investment and industrial output all headed south – by 0.9%, 0.4% and 0.9% – with the latter driven by a monthly 0.9% contraction in the manufacturing sector.
Driven by a decline in manufacturing equipment for flat-panel displays, Japan’s April industrial output fell 0.9% on the month. The seasonally adjusted index of production at factories and mines stood at 101.5 against the 2020 base of 100, following an upwardly revised 0.2% increase in March; an initial 1.1% decline was reported but it was later noted that a sharp increase in output of pharmaceutical products had not been included.
Latest Russian figures showed that its international reserves edged up 1.6%, on the week, to US$ 678.5 billion, on 23 May, mainly “as a result of positive revaluation”. They comprise foreign currency, Special Drawing Rights, a reserve position in the International Monetary Fund and monetary gold. Russia’s international reserves are highly liquid foreign assets, available with the Bank of Russia and the Russian Government.
Indonesia’s Agriculture Minister, Andi Amran Sulaiman, has plans to produce and promote the use of Biodiesel 50, a fuel blend consisting of 50% biofuel – derived primarily from palm oil -and 50% conventional diesel. With the government expecting to utilise 5.3 million tonnes of CPO, (with twenty-six million tonnes exported in 2024), prices are expected to head north because of the 20.4% reduction for B50 production and especially as the country is responsible for 65.9% of global CPO. The minister noted that “a price hike will translate into better welfare for farmers, right? We’ll be happy to see our farmers prosper,” He did assure that shipments to the EU and the US would not be affected, adding that “we only need 2.3 million tons for Europe and 1.7 million tons for the US, so there won’t be any issues with exports”.
In a bid last week, to bring down food prices and help the local refining industry, India halved the basic import tax on crude edible oils – including crude palm oil, crude soy oil and crude sunflower oil – to 10%; this will effectively bring down the total import duty on the three oils to 16.5% from the earlier 27.5%. The import duty on refined palm oil, refined soy oil or refined sunflower oil, remained with a 35.75% import tax, with a 19.25% gap between refined and crude edible oils which will probably result in importers opting for crude edible oils instead of refined oils, thus boosting the local refining industry. 70% of the country’s vegetable oil demand is imported, with soy oil and sunflower oil mainly from Argentina, Brazil, Russia and Ukraine, and palm oil mainly from Indonesia, Malaysia and Thailand.
Q1 saw India’s economy grow 1.2%, on the quarter, to 7.4%, (well above market expectations), but annual 2024-25 growth, with a 31 March fiscal year, is pegged at 6.5% – the slowest in four years, and well down on last year’s 9.2%. Analysts expect growth levels to nudge 0.5% lower to 6.0% this fiscal year, which could delay new private capital spending on projects. These figures indicate that the Reserve Bank of India would probably cut rates, to boost growth, but the RBI surprised the market by lowering India’s interest rates by 0.50%, (and not by the expected 0.25%) to 5.5% – the third monthly cut, following those in February and April, with concerns about slowing growth and falling inflation; the 5.5% repo rate is the lowest it has been in three years. The central bank’s governor, Sanjay Malhorta, explained that the higher-than-expected rate cut was because growth was “lower than our aspirations” and the bank felt it was “imperative to stimulate domestic consumption and investment” amid rising global uncertainties. Despite this, the Indian economy still remains the fastest expanding major economy, at 6.5%, whilst retail prices, at 3.16% are lower than the RBI’s 4.0% target, attributable to falling food prices. Its economy is beset by continuing weak manufacturing/investment, posted by private companies, but offset by strong farm activity, steady public spending and improved rural demand. Data shows private sector expenditure, as part of overall investments in India’s economy, fell to a ten-year low of 33% in the last financial year; net foreign direct investment, at US$ 0.35 billion, also fell to the lowest level in two decades. Despite these problems, Asia’s second largest economy still remains the world’s fastest growing major economy, at a time when the IMF’s latest global forecasts are for 2.3% and 3.0%, this year and next.
For the first four months of 2025, China’s light industry posted rising revenues, (up 4.9% to US$ 1.02 trillion), and profits – 3.8% higher at US$ 58.17 billion – attributable to a series of favourable measures, aimed at expanding and upgrading domestic consumption. Growth was down to boosted consumption, brought by the expanding scope of the consumer products under trade-in programmes. YTD, over thirty-four million consumers participated in the trade-in programme for home appliances, buying a total of fifty-one million units of twelve appliance categories and generating US$ 24.23 billion in sales; the added value of the home appliance industry increased by an annual 8.2%.
The value of China’s April international trade in goods and services came in 6.0% higher to US$ 606.8 billion, split between US$ 326.5 billion for exports and services, and US$ 280.3 billion for imports; this led to a US$ 46.2 billion monthly surplus. Of the total, the export value of goods reached US$ 291.47 billion, and the import value stood at US$ 229.03 billion, resulting in a US$ 62.44 billion surplus. The export value of services reached US$ 34.77 billion, while the import value of services was US$ 50.58 billion, resulting in a deficit of US$ 15.81 billion.
China’s purchasing managers’ index for China’s manufacturing sector rose 0.5 on the month to 49.5, indicating an improvement in the industry’s prosperity level and a stabilisation in economic operations, with 50.0 being the threshold between contraction and expansion. The production index and the sub-indices of new orders went up 0.9 to 50.7 and 0.6 to 49.8, with the former rising above the threshold, representing an acceleration in production activities of manufacturing enterprises. In terms of industries, the production index and new order index of sectors such as agricultural and sideline food processing, dedicated device, and devices for railway, shipbuilding and aerospace are all above 54.0, which indicate that both supply and demand in these industries are growing rapidly. Although still in negative territory, both the import and export indices recovered by 3.7 to 47.1 and 2.8 to 47.5. In terms of the market expectation, the index of production and business activities was up 0.4 to 52.5. It seems that the economy is ticking over nicely.
Australian home building increased by 7.0% in the twelve months to March 2025, figures that the Australian Industry Group consider inadequate to meet the Albanese 1.2 million target of homes by 2029. In the latest quarter to March, Australians expended 7.0% more, at US$ 15.56 billion, on home construction but the value of all construction work done in the March quarter was flat in seasonally adjusted terms. Innes Willox, chief executive of AIG, commented that, “Australia is building a lot more, but not enough is in housing … to achieve the National Housing Accord goals, an immediate 40% uplift in dwelling completion rates is required”. He also noted that the problems facing the home building sector were surging costs, chronic skilled labour shortages and declining productivity. Whether the government is prepared to focus more on planning and housing delivery, and whether it is ready to take a more active role, remains to be seen.
As widely expected, the ECB cut its main interest rate by 0.25% to 2.0% – its eighth rate fall in twelve months and to its lowest level since December 2021. In line with other major economies, it is fighting a battle on two fronts, the threat of deflation and slowing economic growth caused by US tariff policy. It expects price growth to be at 2.0% – 0.3% lower than forecast three months ago in March – and sees its 2026 growth forecast dip 0.1% to 1.1%.
Late last week, Donald Trump announced a doubling of worldwide steel tariffs to 50%, once again spooking the market; he argued that this “will even further secure the steel industry in the United States”. The President subsequently posted that aluminium tariffs would also double to 50% on 04 June 2025. Although China is the world’s largest steel producer and exporter, and ranks third among aluminium suppliers, very little is exported to the US, but it will probably shut most of Chinese steel out of the market. The EU has said it “strongly” regrets Donald Trump’s decision and that the move risks throwing bilateral trade talks into chaos, noting that it “undermines ongoing efforts” to reach a deal, warning about “countermeasures”. There are also concerns about the UK’s zero tariff deal with the US on steel and aluminium which, although agreed, has not yet been signed.
Last month, the vacillating Federal Reserve once again delayed any interest rate changes, leaving it at the 4.25% – 4.50% range, this time posting that it would need more time to evaluate Trump’s tariffs on the country’s inflation and unemployment rates. On Wednesday, when latest labour figures showed that US private sector employment increased by 37k jobs last month – the lowest level since March 2023 – Donald Trump showed his displeasure. On his Truth Social media platform, he came out with “ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!”
With the mega fallout between the world’s two biggest egos taking centre stage, Tesla shares slumped yesterday by 14%, equivalent to US$ 150 billion. With the dispute apparently turning nasty, Donald Trump threatened to cut off government contracts to Musk’s companies, including rocket firm SpaceX, which has contracts worth tens of billions of dollars with the government, with Elon Musk responding with “go ahead, make my day”. The relationship, which initially started with policy disagreements, seems to deteriorate by the hour, and has now descended into personal insults. Heformally left the government at the end of last month, and the breach with Trump was sparked by Musk’s criticism of a Trump-backed spendin bill. Musk opined that it would add too much the government’s debt load. He has also been critical of Trump’s tariffs, which he said on Thursday would cause an economic recession in the second half of the year. The US president also noted that Musk had been unhappy about the elimination of a tax credit for electric vehicles, which has been key to Tesla’s sales in the US. They were also at odds about the decision to withdraw his nomination of Jared Isaacman, a Musk ally, to lead Nasa. The world’s richest man also had another go, calling for Trump to be impeached. Watch this space!
Following his visit to Washington, Keir Starmer returned to tell the UK population that he had negotiated the steel tariff down to zero from 25%, “meaning UK steelmakers can carry on exporting to the US”. He also milked the fact that a 100k quota for UK motor vehicles would have to pay 10% – and not the global 27.5% levied on all other vehicle imports. The only problem was that no deal had actually been signed, meaning that UK steel will now be taxed at 25% and motor vehicles at 27.5%. Furthermore, the UK-US reciprocal deal on beef exports and imports is still a draft. A government spokesman said it will continue to work “at pace” to implement the agreement with a new clock deadline – 09 July; if the deal is not finalised by then, the UK’s steel tariff rate would be hiked to 50%, in line with the rest of the world.
The OECD is the latest global body to advise on the UK economy and has concluded what many people already know – it will continue to be hampered by high interest payments on government debt and with the impact of Trump’s tariffs. It also noted, after cutting its March 2025 forecast growth by 0.1% to 1.3%, that the UK faces specific issues due to its “very thin” buffer in public finances, whilst encouraging the Chancellor to boost tax take and cut spending. It noted the Q1 growth figure of 0.7% but warned that “momentum is weakening” due to “deteriorating” business sentiment. It also added that “the state of the public finances is a significant downside risk to the outlook if the fiscal rules are to be met” and suggested that Reeves should adopt a “balanced approach” of “targeted spending cuts” and tax increases to improve the UK’s public finances. Other revenue targets the Chancellor should consider would be tightening up tax loopholes and looking at English council tax bands which are based on 1991 values. Next week, Rachel Reeves will announce her Spending Review when she will allocate the various government departments’ budgets, knowing that defence has already received extra funds, with the NHS also in line to receive more – all at the expense of other government departments.
Next week, the Chancellor will introduce her spending review that is expected to restore the winter fuel allowance, that was taken away from all pensioners, via her October 2024 budget, in order to save the government just over US$ 2.0 billion. Not surprisingly, to all but a naïve Starmer administration, the move proved politically toxic so much so that prime minister Starmer had to sheepishly announce a U-turn. He later justified his action on the basis that it was the right thing to do but claimed that improved economic data meant it was possible to think again. However, we will have to wait until this week to see which pensioners will be eligible as the prime minister appears not to know. One option doing the rounds is that the government would restore grants of up to US$ 405 (GBP 300), to ten million pensioners, but it would recoup the money from about five million wealthier pensioners, with an income of over US$ 50k, through higher tax bills over the course of the next fiscal year. The chancellor will use her spending review next week to implement a higher means test for winter fuel payments, designed to restore them to the poorest half of pensioners. who have an income above about £37,000 through higher tax bills over the course of the next financial year. However, there are rumours circulating that winter fuel payments may be unable to be processed in time because of the department’s ageing IT systems. Whatever happens will probably result in another nail in the Chancellor’s coffin.
Some bad news for some posh people who thought they were Glastonbury ticket holders, with all the glam accoutrements, and have now realised that they have lost thousands of dollars, with booking agency Yurtel announcing it had ceased trading with immediate effect. Many have been left thousands of pounds out of pocket after the luxury glamping company went bust. (Every year, Glastonbury’s website says the only official source for buying tickets is the firm See Ticket). With the event’s organiser posting “as such we have no records of their bookings and are unable to take any responsibility for the services and the facilities they offer”. There are a few that have forked out more than US$ 22.2k through Yurtel, with hospitality packages starting at US$ 13.5k. Yurtel said it was unable to provide customers with any refunds, advising them to go through a third party to claim back the money once the liquidation process had started, and to exacerbate the situation, it is reported that the failed company had not purchased any tickets for the 25 -29 June festival. Furthermore, several people have also reported that they were unable to pay by credit card, at the time of booking, with the company instead asking for a bank transfer. Even though Yurtel’s founder Mickey Luke said: “I am deeply sorry that you have received this devastating news and am writing to apologise”. Although it seems that both Trump and Musk want to talk about ‘it’, Rod Stewart on the Pyramid Stage on Sunday, 29 June, perhaps he will dedicate a song to someone else – I Don’t Want To Talk About It!
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