Britain’s public finances remain “chronically weak” as Rachel Reeves prepares to raise taxes in the autumn, economists have warned.

Public sector borrowing has climbed to £60bn since April, the Office for National Statistics (ONS) said, which was £6.7bn more than at the same point in the last financial year.

The figure was in line with official forecasts by the Office for Budget Responsibility (OBR). Borrowing in the month of July was better than had been expected by economists at £1.1bn. It was the lowest figure for the month in three years following stronger self-assessed income tax receipts.

However, consultancy Capital Economics said the improvement in July’s borrowing figures was “not as good as it looks”,

UK economist Alex Kerr said: “Ultimately, today’s release does little to brighten the gloomy outlook ahead of the Budget later this year.”

Elliott Jordan-Doak of Pantheon Macroeconomics said the Chancellor will still have to raise taxes in October.

He said: “The big picture remains that the public finances are in chronically weak condition.

“The Chancellor faces surging gilt yields and a likely productivity downgrade from the OBR in the October forecast round.

“The litany of policy U-turns has only compounded the Government’s fiscal woes. We think the Chancellor will need to resort to ‘sin’ and ‘stealth’ tax hikes, duty increases, and a pensions tax raid in order to meet her fiscal rules if she wants to meet her pledge of keeping headline tax rates unchanged.”

Nabil Taleb, an economist at PwC UK, said Ms Reeves “remains under pressure as she tries to balance weak growth with the fiscal rules”.

“Higher debt servicing costs as a share of total revenues will leave the public finances more exposed to future economic shocks,” he warned.

Debt interest payments reached £7.1bn in July, which was £200m more than last year.

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The UK’s government borrowing costs remained the fastest-growing among the world’s major economies today after the latest figures on the public sector’s finances.

The yield on 10-year UK gilts – a benchmark for the cost of servicing the national debt – was up nearly six basis points to 4.73pc.

By contrast French and Italian 10-year bond yields were up around five basis points, with eurozone benchmark Germany up four points to 2.75pc.

It was the same story for Britain’s shorter-term two-year and longer 30-year bond yields amid concerns about Britain’s public finances and whether the Bank of England will cut interest rates again this year.

Rachel Reeves is on course to raise taxes by at least £20bn this autumn as surging borrowing costs and public sector pay make another Budget raid inevitable.

While borrowing in July came in below City forecasts, official data showed that on an annual basis, the deficit targeted by the Chancellor was almost £6bn higher than predicted by her budget watchdog.

The shortfall has partly been driven by weaker income tax receipts and higher government spending on salaries and benefits, following the Chancellor’s humiliating about-turn on welfare reform.

Wall Street’s main indexes opened lower as investors turned cautious ahead of the Federal Reserve’s Jackson Hole Symposium.

Jerome Powell is on Friday due to give a speech at the three-day conference – his last as Fed chairman.

His comments will be closely watched for any signals that US interest rates will be cut next month, following pressure from Donald Trump.

The Dow Jones Industrial Average fell 130.1 points, or 0.3pc, at the open to 44,808.21.

The S&P 500 dropped 14.9 points, or 0.2pc, at the open to 6,380.83​ following a tech-led sell-off in recent days.

The Nasdaq Composite declined 60.3 points, or 0.3pc, to 21,112.52.

Major retailers including Tesco, Sainsbury’s and Boots have urged Rachel Reeves not to raise taxes on their sector in the autumn Budget as it could hit living standards.

Some of the county’s biggest chains have signed a letter to the Chancellor sent by trade body British Retail Consortium (BRC).

It warns that further tax rises on businesses could result in the Government breaking its manifesto pledge to provide “high living standards”.

“Labour’s manifesto made a clear and welcome promise to deliver good jobs and higher living standards but if future policy decisions lead to rising prices and fewer jobs, then those commitments are at risk,” the letter reads.

The UK bosses of Aldi, Lidl, B&Q, Currys, Burger King, Ikea, JD Sports, Boots, John Lewis and Primark were also among the signatories – the number of which the BRC is expecting to grow.

Many businesses have seen their labour costs rise thanks to the rate of employer National Insurance being increased in last year’s Budget.

Some retailers have blamed the tax hike for the decision to raise prices in shops, which they say has allowed them to partly mitigate the impact.

Others have resorted to cutting staff or freezing hiring, while some businesses said they were absorbing the higher costs into their profits.

But in the letter signed by more than 60 chief executives, it says: “As retailers, we have done everything we can to shield our customers from the worst inflationary pressures but as they persist, it is becoming more and more challenging for us to absorb the cost pressures we face.”

The pitch rolling has started. The propagandists have been unleashed. We are being softened-up for the ultimate betrayal, the most obscene of broken promises, the grossest attack on private wealth in living memory.

If you are a homeowner, I have grim news: Rachel Reeves has just declared war on you. You could pay even more tax, so much so that in some cases you may be forced to sell your house to pay the bill – and then to hand over yet more cash just to be allowed to say goodbye to your beloved family home.

Reeves is considering several options, all abhorrent: an annual proportional wealth tax on the value of homes, large enough to replace stamp duty, council tax and more; the imposition of capital gains tax (CGT) on primary residences for the first time ever, albeit just on more expensive ones at first; an “exit tax” as an alternative to CGT, payable on sale; and a revaluation of council tax, with even higher bands, including a mansion tax.

Rachel Reeves faces a £20bn black hole in the public finances when she delivers her Budget later this year, according to a Wall Street bank.

Morgan Stanley said there had been a “likely erosion of the chancellor’s fiscal headroom” because the OBR will be forced to downgrade its productivity and growth projections.

The bank’s chief UK economist Bruna Skarica said expectations of a £20bn gap in the public finances “don’t seem implausible to us”.

Meanwhile, Morgan Stanley said it was maintaining its forecast that the Bank of England would cut interest rates in November despite figures showing stronger than expected inflation and private sector growth.

“While today’s number poses hawkish risks for our call for a November cut, we keep it in our base case,” Ms Skarica said.

“Should there be no signs of softening in underlying inflationary pressures in the August inflation reading, nor growth momentum into the September meeting, we would rethink that forecast.”

High earners could pay more than £7,000 in extra income tax if Rachel Reeves extends the current freeze on payment thresholds until 2030, a wealth manager has warned.

The Chancellor is widely expected to raise taxes in her Budget in the autumn as she looks for ways to fill a black hole in the public finances that some estimates have put as high as £50bn.

One option is freezing the tax-free personal allowance at £12,570 as well as income tax thresholds for basic, higher and additional rates.

This would drag more people into paying more tax as their wages rise. This effect is known as fiscal drag.

Rathbones said that if the freeze runs until April 2030, someone who earned £100,000 in 2022 could pay £7,077 more in tax than if thresholds had kept pace with inflation.

The additional tax burden would be £5,635 for someone who was on £80,000, £4,632 for those who earned £50,000, and £926 for those on £35,000.

Director Ade Babatunde said: “With the Chancellor searching for ways to plug the nation’s financial black hole, the freeze on income tax thresholds could be dragged out further.

“It’s taxation by stealth: the rates stay the same, but a bigger slice of your pay disappears into the taxman’s coffers.

“And it’s not just income tax. Capital gains, dividend and inheritance tax thresholds are also frozen, quietly pulling more people into the net.

“Coupled with inflation – and with talk of a wealth tax – the rising tax burden has fuelled a surge in clients asking if they can do more to reduce their liability ahead of the Budget.”

Just as UK stocks have fallen today, Wall Street indexes have dropped further in the wake of a tech-led sell-off.

Walmart shares were down 2.5pc in premarket trading even as the world’s largest retailer raised its fiscal year sales and profit forecasts, driven by strong demand from shoppers across all income levels.

The company has implemented minimal price hikes compared to competitors and promised to maintain low prices, as well as stocked up on affordable discretionary products to draw in more customers.

Investors are trying to gauge how US tariffs will sales later this year. Oher retailers such as Target and Home Depot painted a mixed picture earlier this week .

Meanwhile, there has been a sharp decline in technology stocks such as Nvidia, AMD, Palantir and Meta in recent days.

Raffi Boyadjian, an analyst at brokerage XM said: “Equities could be more at risk of volatility amid this week’s sell-off in AI-related stocks on the back of renewed doubts about AI valuations.”

In premarket trading, Nvidia, Advanced Micro Devices and Palantir were marginally up, while Meta slipped 0.3pc.

Ahead of the opening bell, the Dow Jones Industrial Average was down 0.4pc, the S&P 500 fell 0.3pc and the Nasdaq 100 declined 0.2pc.

The latest data on Britain’s private sector growth sent “mixed signals” on inflation, an economist has said.

Traders have reduced bets on interest rate cuts after stronger-than-expected inflation figures on Wednesday, following by survey data indicating the UK’s business activity has jumped at its fastest pace in a year this month.

However, Julian Jessop of the Institute of Economic Affairs pointed to input prices and prices charged rising at a slower pace than in April when Rachel Reeves’s tax raid on businesses came into force.

This could mean inflation will ease towards the end of the year, Mr Jessop said, which could open the door to more rate cuts.

Mixed signals on UK inflation from the PMI... ????

Both input prices and prices charged are still rising rapidly, but more slowly than in the spring when payroll costs jumped.

Overall, this is consistent with hopes that headline #inflation will ease towards the end of the year... pic.twitter.com/s1V6OMUGSg

— Julian Jessop (@julianHjessop) August 21, 2025

The cost of UK government borrowing has climbed at the fastest pace among major economies today in a blow to Rachel Reeves after official figures showed the Treasury’s deficit deepened last month.

Gilt yields – a benchmark for the cost of servicing Britain’s national debt – jumped across the piece on bond markets following the latest public sector borrowing data.

Britain’s total current budget deficit – borrowing to fund day-to-day public sector activities – has climbed to £42.8bn since April, which was £5.4bn higher than during the same period in 2024.

This was despite the current budget managing a surplus of £3.3bn in July, which was £1bn better than the OBR forecast earlier this year.

Rising borrowing costs are an issue for the Chancellor as she seeks to balance the nation’s finances. The ONS said the interest payable on central government debt rose to £7.1bn in July.

The yield on 10-year UK gilts has climbed five basis points today to 4.72pc.

David Roberts of Nedgroup Investments said this could also be put down to stronger than expected growth in the private sector in August. This has weakened the case for further cuts to interest rates.

He said: “UK gilts have fallen in price and have lagged international peers – but whether either of those owe their origin to Government failings is debatable.

“What is certain is the economy continues to positively surprise, reducing the chances of further rate cuts and putting upward pressure on gilt yields.”

The FTSE 100 has fallen from its record high on Wednesday as traders bet that interest rate cuts are less likely.

The UK’s blue-chip index has dropped 0.2pc in the wake of stronger-than-expected figures on both private sector growth in August and Treasury borrowing in July.

The FTSE 100 had climbed above 9,300 for the first time a day earlier as defensive stocks were boosted by concerns about US tech stocks. This was despite figures showing inflation rose faster than expected in July.

Fiona Cincotta of City Index said: “The FTSE 100 is steadying after reaching a record high on Wednesday, benefiting from the rotation out of tech, which saw the Nasdaq fall sharply from its record high.

“While the FTSE’s lack of tech stocks meant it has underperformed in recent years, the recent rotation into value has put the wind in the FTSE’s sails. The FTSE has plenty of value plays which are still relatively cheap.”

Sue Noffke of Schroders added: “Consumer staples, such as personal care, tobacco and drinks companies, together with healthcare groups and pharmaceuticals businesses, were buoyant. Some business services groups also rose.

“What these companies have in common is international revenues and earnings – so they are immune from the implications of the hotter UK inflation print seen today, as well as questions over whether that impacts the path of interest rates from the Bank of England or government fiscal policy in the autumn Budget.”

The FTSE 250 was down 0.5pc by late morning trading.

The value of the pound climbed after closely watched survey data showed Britain’s private sector grew at the fastest pace in a year this month.

Sterling gained 0.2pc against the dollar to $1.348 and 0.1pc versus the euro to €1.156 as traders reduced bets on the Bank of England cutting interest rates.

The S&P Global Flash PMI for August showed business activity hit a one-year high this month, as the services industry led a summer rebound.

Money markets indicate there is a 42pc chance of another rate cut in 2025, down from 53pc on Wednesday, when official figures showed inflation rose at the fastest pace in 18 months in July.

Meanwhile, public sector borrowing rose at a slower than expected pace last month in a potential further boost for the economy.

The Bank of England will leave interest rates at 4pc for the rest of the year as the economy remains too strong to justify further cuts, economists have said.

Elliott Jordan-Doak of Pantheon Macroeconomics said the latest PMI data showed the “economy is ticking along at a healthy pace” as private sector activity hit its highest level in a year.

“We think healthy growth and inflation miles above target means the MPC will have to keep rates on hold for the rest of the year,” he said.

Separate data on Wednesday showed that inflation rose faster than expected to 3.8pc in July.

The Bank of England is less likely to cut interest rates later this year in the face of a strengthening economy, experts have warned.

Ashley Webb of Capital Economics said there was an “increase the chances the Bank of England leaves interest rates on hold in November”.

It comes after the closely watched PMI survey for August indicated that Britain’s private sector has grown at its fastest pace in a year.

Money markets indicate the Bank of England’s Monetary Policy Committee (MPC) will keep rates on hold in September, with a 42pc chance of a cut before the end of the year.

“Overall, at the margin today’s data release may give the hawks at the Bank a bit more support,” said Mr Webb.

“We are still forecasting a 25 basis point cut in November to 3.75pc. But November’s decision will be a close call.”

Thomas Pugh, chief economist at RSM UK added: “Overall, a more positive signal on growth combined with stable input and output cost balances is another reason for the MPC to delay further rate cuts.”

Britain’s private sector activity grew at the fastest pace in a year, a closely watched survey showed, in a boost for Rachel Reeves’s hopes that a strong economy can help balance the nation’s books.

The S&P Global Flash UK PMI showed the UK’s dominant services sector drove growth in August, as new business orders expanded at the strongest pace since October.

However, in a warning sign amid Donald Trump’s tariff campaign, input cost inflation edged up to its highest since May.

Bosses blamed the Chancellor’s tax raid on employers for suppliers passing on the cost of higher National Insurance rates.

Chris Williamson, chief business economist at S&P Global, said: “The services sector has led the expansion, but manufacturing also showed further signs of stabilising.

“It’s evident from survey measures of order books, however, that the demand environment remains both uneven and fragile.

“Companies report concerns over the impact of recent government policy changes, as well as unease emanating from broader geopolitical uncertainty. Goods exports are still falling especially sharply.”

Government borrowing costs could fall as Rachel Reeves shows the first signs of tackling the fiscal deficit, an economist has said after the Treasury hit forecasts from the Office for Budget Responsibility (OBR).

Borrowing since April is in line with the OBR’s official forecast following stronger self-assessment income tax receipts and National Insurance contributions.

This has put the fiscal deficit on track to fall from 5.1pc of GDP in 2024-25 to 3.9pc in this financial year, according to private bank Berenberg.

Economist Andrew Wishart said he expects the “tailwinds from strong income tax and VAT receipts will continue to blow”.

He said: “That removes one of the reasons for the OBR to downgrade its forecasts.

“If the OBR avoids downgrading its productivity growth assumption too, the upward revision to the deficit forecast since the spring would just be about £5bn from failing to follow through with spending cuts.

“The fact that the government has taken steps to tackle the fiscal deficit sets it apart from the likes of France and the US.

“Bond investors give the UK little credit for this, with the 10-year government bond yield higher than that of any other developed market and 30-year yields recently hitting a 27-year high of 5.5pc.

“Under the radar, the required fiscal adjustment is beginning to take place. If sustained, that should pare back the risk premium in UK bond prices.”

Rachel Reeves’s tax raid on employers brought in an extra £2.6bn in July, ONS data suggested.

Central government receipts – the amount of money brought in, typically through taxes – was £100.1bn for the month, up £8.8bn against the same month last year.

This came as compulsory social contributions, which include National Insurance (NI) payments, increased by £2.6bn to £16.3bn.

The Chancellor increased the NI rate for employers rose from 13.8pc to 15pc in April following changes in October’s Budget. She also lowered the threshold at which businesses must pay the tax from £9,100 to £5,000.

Meanwhile, the Government also saw a £2.7bn rise in self-assessed income tax receipts to £15.5bn.

Rachel Reeves has been warned that a “mansion tax” risks backfiring and could raise little or even no money.

The Chancellor is reportedly considering charging capital gains tax on the sale of homes worth more than £1.5m, as she scrambles to fill a hole in public finances that economists fear could be as large as £50bn.

However, Andrew Wishart, an economist at Berenberg Bank, said a raid on wealthy homeowners could ultimately fail to raise the money she needs.

He said: “It is going to incentivise people to not sell, to try and hold to the next election, to see if it changes. Therefore, it might not generate any additional revenues at all.”

Rachel Reeves has “shouldn’t get carried away” from the latest borrowing figures, despite an improvement in the public finances during the month of July.

The current budget managed a surplus of £3.3bn in July, the ONS said, which was £1bn better than the OBR forecast earlier this year.

However, Britain’s total current budget deficit – borrowing to fund day-to-day public sector activities – has climbed to £42.8bn since April, which was £5.4bn higher than during the same period in 2024.

Thomas Pugh, an economist at RSM UK, said the July figure, which matters for the chancellor’s fiscal mandate, is “much less positive than the headline numbers suggest”.

“The bigger picture is that public borrowing has been roughly in line with the OBR forecast this year, but U-turns on spending cuts and a likely downgrade to the OBR’s growth forecasts mean the chancellor will probably have to raise around £20bn at the budget in the autumn,” he said.

“The good news is that with interest rates likely to be around 4pc at the time of the budget there is plenty of scope for the Bank of England to cut rates to offset the impact of any fiscal consolidation on the economy.”

Britain’s public finances remain “chronically weak” as Rachel Reeves prepares to raise taxes in the autumn, economists have warned.

The Treasury borrowed £1.1bn in July, which was less than official forecasts, while in the first four months of the financial year borrowing was in line with predictions by the OBR.

Elliott Jordan-Doak of Pantheon Macroeconomics said the Chancellor will still have to raise taxes in October despite borrowing matching official forecasts.

He said: “The big picture remains that the public finances are in chronically weak condition.

“The Chancellor faces surging gilt yields and a likely productivity downgrade from the OBR in the October forecast round.

“The litany of policy U-turns has only compounded the Government’s fiscal woes. We think the Chancellor will need to resort to ‘sin’ and ‘stealth’ tax hikes, duty increases, and a pensions tax raid in order to meet her fiscal rules if she wants to meet her pledge of keeping headline tax rates unchanged.

“We expect the bulk of those tax hikes to be backloaded towards the end of the forecast period, minimising any short-term growth implications.

“But that will buy the Chancellor only precious little time. The public finances are unsustainable in the long-run and delaying action now increases the risks of needing to make sharper adjustments in the future, which would be more disruptive for economic activity.”

Borrowing in the financial year-to-July 2025 was £60.0 billion, £6.7 billion more than in the same four-month period last year but remains in line with the OBR's latest forecast. 5/7 pic.twitter.com/DceQtMrRNv

— Fraser Munro (@Fraser_ONS_PSF) August 21, 2025

Stock markets in London were mixed at the start of trading after the latest figures showed Britain’s public finances remain heavily reliant on borrowing.

The FTSE 100 edged up 0.1pc to 9,297.34 while the domestically focussed FTSE 250 declined by 0.2pc to 21,851.95.

Higher self employment tax receipts could help explain the decline in the number of people on payrolls in Britain, an economist has said.

Staff numbers fell in July to their lowest level since October 2023, the ONS said earlier this month.

Simon French of Panmure Liberum said the latest borrowing figures could offer a clue as to why this has happened.

The ONS said self-assessed income tax receipts hit £15.5bn in July, up £2.7bn on the same month last year.

Slightly better news for the UK public finances as borrowing comes in lower in July than expected at £1.1bn (albeit largely offset by borrowing being revised higher in June!). YTD picture running in line with the OBR forecast, albeit clear deterioration of total borrowing (£158bn… pic.twitter.com/DvHnBDuKwq

— Simon French (@Frencheconomics) August 21, 2025

Rachel Reeves “remains under pressure as she tries to balance weak growth with the fiscal rules”, economists have warned.

Nabil Taleb, economist at PwC UK, acknowledged that tax revenues “rose sharply” in July, coming in £9.2bn higher than the same month last year.

However, he warned: “Higher debt servicing costs as a share of total revenues will leave the public finances more exposed to future economic shocks.”

Debt interest payments reached £7.1bn in July, which was £200m more than last year.

“Although tax receipts rose in July, the Chancellor remains under pressure as she tries to balance weak growth with the fiscal rules she has committed to,” he said.

“As the Chancellor prepares for the Autumn Budget, the challenge will be finding creative sources of revenue while treading carefully around the impact on living standards.”

The improvement in July’s borrowing figures was “not as good as it looks”, economists have warned.

Capital Economics forecast that the Chancellor will still need to raise taxes by £17bn to £27bn at the Budget later this year to balance the nation’s books.

The Treasury borrowed £1.1bn in July, which was lower than the OBR forecast for £2.1bn and economists’s estimates for £2bn.

However, economists pointed to the cumulative current budget deficit, which overshot the OBR’s forecast by £5.7bn and “is what matters for the Chancellor’s fiscal mandate”.

UK economist Alex Kerr said: “Ultimately, today’s release does little to brighten the gloomy outlook ahead of the Budget later this year.

“The Government’s U-turns on spending cuts and potential upward revisions to the OBR’s borrowing forecasts mean the Chancellor may need to raise £17bn to £27bn at the Autumn Budget to maintain the £9.9bn of headroom against her fiscal mandate.

“And given that she is struggling to stick to existing spending plans and we doubt the gilt market will tolerate significant increases in borrowing, most of that will have to be funded by tax rises.”

The Chief Secretary to the Treasury said too much taxpayer money is spend on debt interest payments.

The Government spent £7.1bn in July covering the interest payable on central government debt, which was £200m more than in the same month last year.

Darren Jones said: “We’re investing in our public services, and modernising the state, to improve outcomes and reduce costs in the medium term.

“Far too much taxpayer money is spent on interest payments for the longstanding national debt.

“That’s why we’re driving down government borrowing over the course of the parliament – so working people don’t have to foot the bill and we can invest in better schools, hospitals, and services for working families.”

ONS deputy director for public sector finances Rob Doody said: “Borrowing this July was £2.3bn down on the same month last year, and was the lowest July figure for three years.

“This reflects strong increases in tax and National Insurance receipts.

“However, in the first four months of the financial year as a whole, borrowing was over £6bn higher than in the same period in 2024.”

Borrowing for the first four months of this financial year hit £60bn, which was £6.7bn more than during the same period last year.

However, Government borrowing slowed to a lower-than-expected £1.1bn in July, the ONS said.

Treasury borrowing was £2.3bn less than the same month a year earlier and is the lowest July borrowing figure for three years.

It came after a rise in self-assessed income tax payments helped increase tax receipts for the month.

July borrowing was higher than the £2bn figure predicted by economists.

Public sector net borrowing excluding public sector banks was £1.1 billion in July 2025.

This was £2.3 billion less than in July 2024 and the lowest July borrowing for three years.

Read more ➡ https://t.co/uWyNkUXtNu pic.twitter.com/oG5YRRT3Jj

— Office for National Statistics (ONS) (@ONS) August 21, 2025

Thanks for joining me. The Treasury has ramped up borrowing so far this year as Rachel Reeves prepares to raise taxes to fill a £50bn black hole in the public finances.

Public sector borrowing has climbed to £60bn since April, the Office for National Statistics (ONS) said, which was £6.7bn more than at the same point last year.

The Treasury’s borrowing figure was in line with official forecasts by the Office for Budget Responsibility (OBR), which was set up in 2010 when George Osborne was chancellor to analyse Government management of the public finances.

Borrowing in the month of July was better than had been expected by economists at £1.1bn, which was the lowest figure for the month in three years following stronger self-assessed income tax receipts.

The spending comes as Ms Reeves is widely expected to raise taxes in her Budget in the autumn to balance the nation’s books.

She raised taxes by £40bn at her fiscal event last year but the public purse has come under pressure from rising borrowing costs on debt markets and a failure by the Government to cut public spending. Here is what you need to know.

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Asian shares were mostly higher after a mixed finish on Wall Street, where shares in Nvidia, Palantir and other superstar stocks reduced their earlier steep losses.

Traders will be hoping for clues on the outlook for US monetary policy from a meeting of central bankers that begins later today in Jackson Hole, Wyoming. Federal Reserve chair Jerome Powell is due to speak to the conference on Friday.

In Tokyo, the Nikkei 225 fell 0.6pc to 42,636.74 after a survey showed Japan’s factory activity remained in contraction for the second month in August. The S&P Global flash Japan Manufacturing Purchasing Managers’ Index (PMI) increased to 49.9 in August from 48.9 in July, just below the 50 level that delineates between growth and decline.

Regional manufacturers have been feeling pressure from Trump’s higher tariffs on exports to the United States.

In Chinese markets, Hong Kong’s Hang Seng index edged 0.1pc lower to 25,135.09, while the Shanghai composite index rose 0.4pc to 3,779.52.

South Korea’s Kospi jumped 1pc to 3,161.74, while Australia’s S&P ASX 200 index added 1pc to 9,005.00.

Taiwan’s Taiex climbed 1.2pc, while India’s Sensex added 0.1pc.

US stocks fell on Wednesday, though by the end of the day the drops were not nearly as stark as during early trading.

The S&P 500 closed down 0.26pc, at 6,394.97 while the Nasdaq Composite fell by 0.68pc to 21,170.19.

Tech stocks Palantir, Nvidia and Intel fell by 1.1pc, 0.14pc and 8.86pc respectively.

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