The FTSE 100 plunged to a one-year low as it opened on Monday, as markets plummet across the world amid increasing fears of a global recession
Monday’s rout extends a two-day sell-off that has wiped trillions of dollars from global share prices after Donald Trump announced sweeping tariffs last week.
The US president said overnight on Monday that he did not want global markets to fall, but also that he was not concerned about the major sell-off, adding: “Sometimes you have to take medicine to fix something.”
The impact of the tariffs prompted major banks to hike the probability of a global recession. JP Morgan raised its odds for a US and global recession to 60 per cent up from 40 per cent before the tariff rollout.
The UK’s FTSE 100 index plunged more than 5 per cent within the first 10 minutes of trading on Monday.The panicked mood was felt across Europe, with Germany’s Dax index recording a drop of about 6.5 per cent.
Asian markets also tumbled, Hong Kong’s Hang Seng index closed more than 13 per cent in morning trade.
FTSE 100 plunges to one-year low
France aiming to negotiate tariffs off the table
France has said its EU allies should aim to negotiate the new US tariffs off the table entirely.
“We are against any trade war. We prefer cooperation to confrontation,” France’s trade minister Laurent Saint-Martin said on Monday.
“Our end goal remains the same, to negotiate back to where things were. And if that’s not possible, of course the EU must react, firmly and proportionally.”
The EU was slapped with a 20 per cent tariff on US imports of its goods as Donald Trump unveiled his “Liberation Day” measures last week.
UK considers shutting hundreds of public bodies to streamline government
Britain is looking at ways to tighten its belt as the fallout of Trump’s tariffs dampen the economic forecast.
The government said it could close hundreds of arms-length government agencies, as it looks to reform the state to cut costs and improve productivity in what it called “a new era of global instability”.
Britain has hundreds of quangos, or quasi-autonomous non-governmental organizations.
These are taxpayer-funded but not controlled by ministers, and include public bodies such as the Health and Safety Executive, Network Rail and the Migration Advisory Committee.
“Every quango across government will be reviewed, with a view to close, merge or bring functions back into (government) departments if its continued existence cannot be justified,” the government said in a statement on Monday.
Starmer and Trump did not speak over weekend
The prime minister’s official spokesman said he did not have any update on calls with the US president from over the weekend.
No 10 instead pointed to calls Sir Keir had held instead with leaders including those from Canada, Germany, France and the European Commission in recent days.
Asked if Sir Keir was trying to persuade Canada and the EU not to retaliate over the US tariffs, the spokesman said it is “up to every country to respond in the way they see fit”.
The last few days have not “fundamentally changed the calculation” when it comes to the Government’s ambitions on an EU reset and a close trading relationship with the bloc, he added.
Trump hails tariffs in new social media post
As the US wakes up to news of global market chaos in response to Donald Trump’s tariff measures, the US president has doubled down on his decision.
Posting to Truth Social, Trump wrote on Monday morning: “Oil prices are down, interest rates are down (the slow moving Fed should cut rates!), food prices are down, there is NO INFLATION, and the long time abused USA is bringing in Billions of Dollars a week from the abusing countries on Tariffs that are already in place.”
He added: “They’ve made enough, for decades, taking advantage of the Good OL’ USA! Our past “leaders” are to blame for allowing this, and so much else, to happen to our Country. MAKE AMERICA GREAT AGAIN!”
Sterling hits one-month low as investors flee to safe-havens
The pound weakened against the dollar and the euro on Monday, as uncertainty grows around the possibility of a recession.
Sterling fell to a new one-month low of $1.2825 on Monday. On Friday, it dropped roughly 1.5% – its biggest single-day drop since March 2023.
Against the euro, the pound softened to 85.38 pence.
It also weakened against traditional safe-haven currencies such as the Japanese yen and the Swiss franc.
Hong Kong to implement measures to help companies amid trade war
Hong Kong’s government has announced a plan to bolster support for small and medium sized companies to survive the fallout Donald Trump’s tariff plans.
Financial Secretary Paul Chan said that Hong Kong would unavoidably be affected by the tariffs in the short term, after its stocks experienced their biggest drop since 1997 on Monday.
Retaliatory tariffs ‘counter productive’ – Farage
Nigel Farage has said any retaliatory tariffs would be “absolutely counter productive in every way”.
The UK government has launched a consultation with British businesses as it considers whether to respond to the 10 per cent tariff on US imports of British goods.
Speaking to reporters in Doncaster, the Reform UK leader said: “I still think that this big tariff threat globally … It’ll look different in three months time. He’ll use it as a big negotiating tool. I think we’re better positioned to come out of this with a deal than almost any other country.
“So, short term it’s painful, but what it does do, it expose the fact that not being in the European Union does have advantages and ones that we ought to use.”
Fears of global recession grow
Fears of a global recession as a result of Donald Trump’s tariff measures are growing.
Major banks such as JP Morgan raised its odds for a US and global recession to 60 per cent in 2025 – up from 40 per cent before the tariff rollout.
Goldman Sachs also raised the odds of a US recession to 45 per cent in the next 12 months.
JP Morgan CEO cautions shareholders after tariff chaos
The CEO of JP Morgan Chase has warned investors of “considerable turbulence” as markets plummet after Donald Trump’s tariff measures.
Jamie Dimon cautioned shareholders in his annual letter that the impact of the tariffs could slow growth, spur inflation and potentially lead to lasting negative consequences.
“The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and ‘trade wars,’ ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility,” Dimon wrote.
“We are likely to see inflationary outcomes … Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”