In its latest Fiscal Monitor report, just released at its spring meeting in Washington, the IMF says:<\/p>\n
double quotation markIn 2025, the headline deficit for advanced economies excluding the United States held broadly steady at 2.4% of GDP. The debt-to-GDP ratio for these economies fell only marginally to 95.3%, effectively unchanged from its 2019 level prior to the COVID-19 pandemic.<\/p>\n
The United Kingdom recorded a notable improvement, reducing its deficit to 5.4% of GDP, with the change driven by tax increases, tax threshold freezes, and the expiration of temporary measures for energy support.<\/p>\n
Canada and Japan also posted gains, reflecting spending restraint. These gains were partly offset by the use of some fiscal space by countries with historically strong fiscal positions, such as Korea and The Netherlands.<\/p>\n
The IMF is forecasting that the UK\u2019s annual budget deficit will drop to 3.9% of GDP this year, and continue falling until 2031 when it will be 1.6% of GDP, the second-lowest in the G7 after Canada.<\/p>\n
In contrast, the US will need revenue and expenditure measures over the medium term to control its deficit, given \u201cthe persistence of primary spending and the scale of projected deficits\u201d, the IMF says.<\/p>\n
![\"A](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/04\/1808.jpg\")
Photograph: IMF<\/p>\n
The Fund also warns Rachel Reeves not to stray from her fiscal rules, saying:<\/p>\n
double quotation markIn the United Kingdom, adhering to established spending envelopes while strengthening the efficiency of value-added and property taxes is key to rebuilding buffers.<\/p>\n
Share<\/a><\/p>\n Updated at\u00a009.06 EDT<\/p>\n Key events<\/p>\n Show key events only<\/p>\n Please turn on JavaScript to use this feature<\/p>\n Finance ministers call for swift end to Iran war<\/p>\n A group of 11 finance ministers, including UK chancellor Rachel Reeves, are calling for a swift and lasting negotiated resolution to the conflict in the Middle East.<\/p>\n In a joint statement, finance ministers from the United Kingdom, Australia, Japan, Sweden, the Netherlands, Finland, Spain, Norway, Ireland, Poland and New Zealand warn that the Iran war will continue to weigh on global growth, inflation and financial markets even once it is durably resolved.<\/p>\n The group of finance chiefs are calling on all parties to implement the ceasefire in full, saying:<\/p>\n double quotation markThe past weeks have brought unacceptable loss of life and significant disruption to the global economy and financial markets, and the ceasefire will be crucial to protecting civilian populations and the security of the region.<\/p>\n They also call for a swift and lasting negotiated resolution to the conflict, and a return to free and safe transit through the Strait of Hormuz.<\/p>\n The group also call for an end to protectionist actions in hydrocarbon and other supply chains, adding \u201cWe commit to promoting cooperation and integration to support regional and global stability.\u201d<\/p>\n And they conclude by reaffirming \u201cunwavering support for Ukraine\u201d and pledge to maintain economic pressure on Russia, saying:<\/p>\n double quotation markRussia\u2019s war in Ukraine, now in its fifth year, continues to negatively impact the global economy. Russia must not benefit from this conflict, and as market conditions allow to avoid exacerbating disruptions to supply chains and energy prices, we will continue collaborating on ways to increase pressure. We remain committed to upholding the rules based international system.<\/p>\n Share<\/a>Revealed: How Donald Trump drives up geopolitical risk<\/p>\n Donald Trump has added to geopolitical risk today by threatening to row back on the trade deal the US signed with the UK last year.<\/p>\n Professor Costas Milas, of the Management School at University of Liverpool, has created a graph showing how Trump can inflame geopolitical risk, for months.<\/p>\n Photograph: Professor Costas Milas<\/p>\n Professor Milas explains:<\/p>\n double quotation markPresident Trump keeps on dominating the news with aggressive, contradicting, and often opaque statements. His latest one? That he might reconsider the US-UK trade deal.<\/p>\n There is no doubt, in my mind, that Trump himself is a big source of geopolitical risk. Why? Consider a Google measure of Trump dominating the news<\/a> together with global geopolitical risk acts (from the website of Matteo Iacoviello<\/a>). I collect monthly data from 2015 (first term of Trump as President) and show below how a \u201cshock\u201d to Trump news raises global geopolitical risk acts for as many as nine (9) months.<\/p>\n The impact is statistically significant using a 95% confidence interval. World leaders do take notice!<\/p>\n Share<\/a>IMF: Support on energy or food costs should be ‘targeted and temporary’<\/p>\n The IMF is also warning governments to be careful when providing support to citizens through the cost of living pressures created by the Iran war.<\/p>\n In a blog post to accompany today\u2019s Fiscal Monitor, they say:<\/p>\n double quotation markIf governments decide to help companies and families facing higher energy or food costs, this support should be targeted and temporary, focusing on those most exposed and least able to absorb price increases. Many countries built effective social safety nets during the pandemic; these mechanisms can\u2014and should\u2014be used again.<\/p>\n Countries with \u201cnarrow fiscal space\u201d should avoid financing support measures with additional borrowing, the Fund argues, saying:<\/p>\n double quotation markA better approach is to reallocate spending within the same limits and prioritize crisis-related spending (which could be more politically feasible).<\/p>\n The alternative is to lock in higher debt and higher interest costs, which will eventually force tougher choices\u2014or worse, destabilize government debt markets and worsen conditions today.<\/p>\n Share<\/a><\/p>\n Updated at\u00a009.17 EDT<\/p>\n IMF hails UK’s budget deficit improvement<\/p>\n Newsflash: The International Monetary Fund has applauded the UK\u2019s progress in reducing its budget deficit last year.<\/p>\n A day after slashing the UK\u2019s growth forecasts<\/a>, the IMF cited Britain as an example of an major economy which managed to trim its borrowings, after the UK\u2019s deficit fell from 6.1% of GDP in 2024 to 5.4% in 2025.<\/p>\n In its latest Fiscal Monitor report, just released at its spring meeting in Washington, the IMF says:<\/p>\n double quotation markIn 2025, the headline deficit for advanced economies excluding the United States held broadly steady at 2.4% of GDP. The debt-to-GDP ratio for these economies fell only marginally to 95.3%, effectively unchanged from its 2019 level prior to the COVID-19 pandemic.<\/p>\n The United Kingdom recorded a notable improvement, reducing its deficit to 5.4% of GDP, with the change driven by tax increases, tax threshold freezes, and the expiration of temporary measures for energy support.<\/p>\n Canada and Japan also posted gains, reflecting spending restraint. These gains were partly offset by the use of some fiscal space by countries with historically strong fiscal positions, such as Korea and The Netherlands.<\/p>\n The IMF is forecasting that the UK\u2019s annual budget deficit will drop to 3.9% of GDP this year, and continue falling until 2031 when it will be 1.6% of GDP, the second-lowest in the G7 after Canada.<\/p>\n In contrast, the US will need revenue and expenditure measures over the medium term to control its deficit, given \u201cthe persistence of primary spending and the scale of projected deficits\u201d, the IMF says.<\/p>\n Photograph: IMF<\/p>\n The Fund also warns Rachel Reeves not to stray from her fiscal rules, saying:<\/p>\n double quotation markIn the United Kingdom, adhering to established spending envelopes while strengthening the efficiency of value-added and property taxes is key to rebuilding buffers.<\/p>\n Share<\/a><\/p>\n Updated at\u00a009.06 EDT<\/p>\n IMF: Global debt still on track to hit 100% of GDP by 2029<\/p>\n Newsflash: The International Monetary Fund is warning that the war in the Middle East has added a new source of fiscal pressure to the global economy.<\/p>\n In its latest Fiscal Monitor report, just released, the IMF points out that global public debt dynamics did not improve in any material way in 2025, even before the Iran conflict drove up the oil price.<\/p>\n It says:<\/p>\n double quotation markThe conflict has material global reach, disrupting energy supplies, tightening financial conditions, and forcing governments to choose between shielding their populations from price spikes and preserving fiscal space.<\/p>\n The IMF also warns that the fiscal picture has worsened coompared with a year ago \u2013 when Donald Trump\u2019s trade wars were causing instability.<\/p>\n Global gross government debt rose to nearly 94% of GDP in 2025, and is on track to reach 100% by 2029, for the first time since the aftermath of the second world war (as the IMF also warned last October<\/a>).<\/p>\n The IMF says the the projected increase in global debt largely reflects the increase in debt in the world\u2019s two largest economies, China and the US, explaining:<\/p>\n double quotation markThe United States is running a general government deficit of 7 percent to 8 percent of GDP despite operating near full capacity, with no debt consolidation plan in sight, and its gross debt is projected to reach 142 percent of GDP by 2031.<\/p>\n China\u2019s near-term fiscal expansion, aimed at supporting domestic demand amid deflationary pressures, has widened the country\u2019s overall deficit to nearly 8 percent of GDP, and persistent large deficits are expected to push its debt toward 127 percent of GDP by 2031.<\/p>\n Share<\/a><\/p>\n Updated at\u00a009.16 EDT<\/p>\n Bessent: US will avoid long-term inflation hit from Iran war The US Treasury Secretary Scott Bessent says the economic shock from the Iran war will pass without driving up long-term inflation in the US, my colleague Richard Partington reports from Washington DC.<\/p>\n \u201cThis war will end. I don\u2019t know if it\u2019s 3 days, 3 weeks, 3 months, but we will get on the other side of this,\u201d Bessent said.<\/p>\n double quotation mark\u201cThere\u2019s always a catch-up, there\u2019s pent-up demand.\u201d<\/p>\n Speaking at the CNBC Invest in America conference in Washington on Wednesday, Bessent also said the US Fed was in danger of being caught out by falling inflation.<\/p>\n double quotation mark\u201cI understand why they\u2019re doing it [holding on rates]. It wouldn\u2019t be necessarily my base case. I \u2018d at least be ready to cut and I\u2019d have an open mind that they may need to cut more because they\u2019ve waited longer.\u201d<\/p>\n Share<\/a><\/p>\n Companies in New York state have reported a jump in costs this month, as the Iran war hits the US economy.<\/p>\n The Empire State Manufacturing Survey, just release, shows that \u201cthe pace of input price increases picked up sharply after slowing last month\u201d.<\/p>\n Firms also reported that supply availability worsened this month too; however, they remain optimistic that conditions would improve in the months ahead.<\/p>\n Share<\/a><\/p>\n Most European stock markets are resolutely flat today, as investors try to judge the Iran situation.<\/p>\n Germany\u2019s DAX index has gained just 0.05%, while Italy\u2019s FTSE Mib is up a mere 0.2%, and the UK\u2019s FTSE<\/a> 100 index is now 0.15% higher.<\/p>\n That\u2019s countered by France\u2019s CAC 40, which has slipped by 0.6% \u2013 pulled down by luxury goods firms Kering and Herm\u00e8s following the latter\u2019s results.<\/p>\n Fawad Razaqzada, market analyst at Forex.com, says there have been \u201csome conflicting reports\u201d from the Middle East today, adding:<\/p>\n double quotation markTrump has just come out and said that Iran is about to reach an agreement, confirming earlier reports that two sides had agreed \u2018in principle\u2019 on extending the truce.<\/p>\n Other reports have quoted Iran\u2019s military warning continued US blockade would break the ceasefire, while Iranian foreign ministry spokesperson has said that they do not confirm any details mentioned by western media about the negotiations.<\/p>\n Who do you believe? Well, markets certainly appear to be believing Trump. Though the dollar and oil prices rebounded slightly, markets still seemed to be leaning quite heavily toward a constructive outcome. That said, it still feels a touch premature to be pricing in a smooth resolution.<\/p>\n While I think a degree of caution is still warranted, markets are quite optimistic, judging by the big risk rally we have seen this week. Meanwhile a flurry of central bank speakers will no doubt keep things ticking over today, though it\u2019s likely that any headlines out of the Iran negotiations will remain the dominant driver for FX.<\/p>\n Share<\/a>Herm\u00e8s reports Iran war hitting luxury goods sales<\/p>\n Miatta Mbriwa<\/p>\n Photograph: Lionel Bonaventure\/AFP\/Getty Images<\/p>\n The French luxury group Herm\u00e8s has reported that the Iran war is hitting sales in France, as fewer tourists visit Paris and high-spending shoppers pull back on buying designer products amid growing concerns over the conflict\u2019s toll on the global luxury sector.<\/p>\n Sales of its flagship Birkin and Kelly handbags as well as silk scarves and perfume rose by 6% in currency-adjusted terms, underperforming analysts\u2019 expectations in the first-quarter of 7.1%. Currency fluctuations pulled the company\u2019s revenue down by \u20ac290m (\u00a3250m), prompting a 1% drop in reported sales to \u20ac4.07bn compared to \u20ac4.13bn last year.<\/p>\n Herm\u00e8s has said that sales in France have been \u201caffected by a slowdown in tourist flows\u201d owing to the US-Israeli war with Iran, adding that it is hitting sales in concession stores at airports and in other key markets such as the Middle East. Despite being the fastest-growing region for Herm\u00e8s in 2025, sales in the Middle East dropped by 6% in currency-adjusted terms, to \u20ac160m, compared to \u20ac185m euros in 2025\u2019s first quarter.<\/p>\n The company\u2019s chief financial officer, \u00c9ric du Halgou\u00ebt, cited \u201cthe geopolitical events affecting the region in March,\u201d as playing a significant part in the downturn.<\/p>\n Herm\u00e8s is the latest luxury group to report a slump in sales following the outbreak of the conflict in late February. Major rival in the sector LVMH, the world\u2019s largest luxury group reported its seventh consecutive quarter of declines on Monday, rising just 1%. French luxury goods company Kering also reported an 8% tumble in sales at its key brand Gucci this week.<\/p>\n Executive chair of Herm\u00e8s, Axel Dumas, said: \u201cIn a tense geopolitical environment, Herm\u00e8s maintains its course, true to its long-term strategy\u2026continuing its profitable growth in 2026 with confidence and conviction.\u201d<\/p>\n Shares in Herm\u00e8s are down 8%, having dropped by 14% at the start of trading.<\/p>\n Share<\/a><\/p>\n Updated at\u00a007.30 EDT<\/p>\n Pizza chain Franco Manca shutting stores and cutting jobs Pizza chain Franco Manca is to close 16 of its 70 restaurants via an insolvency process with the likely loss of about 225 jobs.<\/p>\n The company said \u201cexternal cost pressures\u201d including increases in the legal minimum wage, business rates and employers\u2019 national insurance contributions, meant a number of its restaurants were \u201cno longer sustainable.\u201d<\/p>\n The casual dining chain, which is part of Fulham Shore, which also owns The Real Greek chain, is owned by Toridoll, the Japanese operator of Wok to Walk and Marugame Udon, and restaurant sector investment fund Capdesia.<\/p>\n It recently appointed advisory firm Alvarez & Marsal to look at options for the future of the business and is thought to have considered a number of takeover bids before deciding to implement a Company Voluntary Arrangement (CVA)a, an insolvency process under which a company can cut rents and exit leases.<\/p>\n A sale of The Real Greek is still under consideration, according to Propel, the industry newsletter which first reported the CVA.<\/p>\n Marcel Khan, the chief executive of The Fulham Shore which was bought by Toridoll and Capdesia for \u00a393m in 2023, said:<\/p>\n double quotation mark\u201cOver the last two years under our current management, we have been making strong progress against several key performance indicators, with productivity, customer satisfaction, happiness ratings, loyalty and frequency improving significantly.<\/p>\n However, even restaurant businesses that are doing all the right things from a customer and operational perspective are not immune to widely publicised pressures impacting the hospitality industry. This includes significant increases in National Insurance and the national living wage in recent history, as well as a lack of business rates relief for the restaurant sector and disproportionately high VAT in the UK compared with Europe.<\/p>\n As a result of these external cost pressures, we have to make sure that we are putting our business on a sustainable footing for long-term growth and development. This is why we have taken the difficult decision to undertake a CVA for Franco Manca, which will see a minority proportion of our restaurants closing where they are no longer sustainable in this cost environment.<\/p>\n \u201cWe are deeply saddened by the closures of a minority proportion of our restaurants, and will support our affected team members throughout this process in every way that we can.\u201d<\/p>\n Share<\/a>Bank of America posts 17% jump in profits<\/p>\n Bank of America has become the latest Wall Street bank to post a jump in profits after the Iran war created market volatility.<\/p>\n BofA has reported a 17% jump in net income in the first quarter of this year, up to $8.6bn from $7.4bn in January-March 2025.<\/p>\n Revenues rose by 7%, including a 21% jump in investment banking fees, and a 13% rise in sales and trading revenue at the bank\u2019s global markets division.<\/p>\n Chair and CEO Brian Moynihan attributed the jump in earnings to \u201cdisciplined execution\u201d, adding:<\/p>\n double quotation markRevenue growth of 7% year-over-year included net interest income that was better than we expected, up 9%, as well as double-digit growth in sales and trading revenue, investment banking fees and asset management fees.<\/p>\n We remain watchful of evolving risks. However, we saw healthy client activity, including solid consumer spending and stable asset quality, indicating a resilient American economy.<\/p>\n Share<\/a><\/p>\n Fox News are broadcasting an interview with Donald Trump now, in which he is being asked about the Iran<\/a> war and its impact on the US economy.<\/p>\n The US president said the war would slow economic growth, saying: \u201cThere\u2019s going to be a hit.\u201d<\/p>\n But he added that gas prices are \u201ccoming down very soon and very big\u201d, saying he believed they will be \u201cmuch lower\u201d before the midterm elections.<\/p>\n That\u2019s from our Middle East liveblog:<\/p>\n Share<\/a>Sanctioned tanker turns back to strait of Hormuz<\/p>\n A US-sanctioned tanker. which sailed through the strait of Hormuz yesterday has now pulled a u-turn and returned to the Gulf, shipping data shows.<\/p>\n Rich Starry, which had been placed under US sanctions for dealing with Iran, abruptly turned north last night and headed back towards the strait.<\/p>\n This indicates it failed to break through the US blockade on vessels calling at Iranian ports.<\/p>\n Another sanctioned tanker, Elpis, has stopped near the place where Rich Starry turned around\u2026<\/p>\n Photograph: LSEGShare<\/a>Oil rises on report US sending thousands more troops to Mideast<\/p>\n The oil price has pushed higher, following a report that the US is sending \u201cthousands\u201d more troops to the Middle East.<\/p>\n According to the Washington Post, the Pentagon is sending thousands of additional troops to the region. The move is to put pressure Iran into agreeing a deal, but US officials have also said they are considering the possibility of additional strikes or ground operations if the ceasefire does not hold, they say.<\/p>\n The Washington Post reports<\/a>:<\/p>\n double quotation markThe forces moving into the region include about 6,000 troops aboard the aircraft carrier USS George H.W. Bush and several warships escorting it, said current and former officials, who like some others spoke on the condition of anonymity to discuss military movements.<\/p>\n About 4,200 others with the Boxer Amphibious Ready Group and its embarked Marine Corps task force, the 11th Marine Expeditionary Unit, are expected to arrive near the end of the month.<\/p>\n Brent crude is now up 1.2% at around $96 a barrel.<\/p>\n Share<\/a><\/p>\n Updated at\u00a005.37 EDT<\/p>\n Rogoff warns markets are ‘naive’ if they think it’s ‘mission accomplished’ in Iran<\/p>\n The financial markets are being \u2018naive\u2019 if they think the Middle East conflict is resolved, Harvard University professor Kenneth Rogoff has suggested.<\/p>\n Rogoff says it\u2019s \u2018puzzling\u2019 that the markets are taking a \u2018no problem\u2019 approach to the war, with US stocks near record highs amid hopes that US-Iranian peace talks could resume in Islamabad later this week.<\/p>\n Speaking to Bloomberg TV<\/a>, Rogoff says:<\/p>\n double quotation markI think it\u2019s naive to think it\u2019s mission accomplished. I think it\u2019s a temporary respite.<\/p>\n The Iranian regime is still in place, Frankly the US regime is still in place, and I think more things will happen.<\/p>\n But\u2026the markets have just decided it doesn\u2019t matter, everything\u2019s going to be fine. I think it\u2019s a little naive.<\/p>\n Rogoff warns that the war is already a \u201cbig stagflationary shock\u201d, on top of the impact of Donald Trump\u2019s tariffs which is still working its way through the system.<\/p>\n Over the medium term, this pushes interest rates up, not down, he explains.<\/p>\n![\"Richard](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/04\/Richard_Partington,_R.png\")
Richard Partington<\/p>\n![\"Sarah](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/04\/Sarah_Butler_Next_Gen.png\")
Sarah ButlerA Franco Manca Pizza restaurant at Muswell Hill, London. Photograph: Greg Balfour Evans\/Alamy<\/p>\n