More than £6bn was wiped off the value of European carmakers on Wednesday amid fears they will be forced to pay more for steel.

The European Commission on Tuesday proposed a 50pc duty on steel, above a quota, in a bid to help EU producers of the metal.

But the European Automobile Manufacturers’ Association (ACEA) said the plans could burden carmakers with higher costs.

Sigrid de Vries, its director general, said: “We do not contest the need for some level of protection for a commodity industry like steel but we feel that the parameters as proposed by the Commission go too far in ring-fencing the European market.

“We need to find a better balance between the needs of European producers and users of steel in this measure.”

Although European car manufacturers source around 90pc of their steel purchases from EU producers, they are “most concerned about the inflationary impact” of what the EU calls “strong and permanent protection”.

Shares in all the major European listed carmakers fell, with BMW’s fall of 8.5pc also affected by a profit warning. It noted continued weakness in China as trade tensions cloud its prospects.

The stock market falls came as European carmakers stepped up their calls for the EU to relax its 2035 ban on combustion-engine sales by allowing cars that run on alternative fuels.

In a submission to the European Commission, the ACEA said Brussels’ current emission-reduction targets were “based on outdated premises and optimistic assumptions”, and “no longer realistic to achieve”.

The commission last month promised to fast-track a review of its plans to end combustion-engine vehicle sales, following pressure from the embattled auto sector. A proposal is expected for December.

The EU currently requires carmakers to progressively cut carbon emissions produced by new vehicles sold in the 27-country bloc, until new combustion-engine sales are completely phased out by 2035 – under the threat of steep fines.

06:10pm

Thanks for joining us here on a day gold and silver hit new records.

European stock markets rose, including Britain’s FTSE 100, which closed up 0.7pc.

In New York, the S&P 500 is up 0.5pc, the Nasdaq is up 0.6pc and the Dow Jones is up 0.3pc.

That’s all for today but you can continue reading our latest stories and analysis on the economy and business here.

05:44pm

Gold could hit $5,000 by the end of the year, a precious metals consultancy has claimed.

Matthew Piggott, director of gold and silver at Metals Focus, said: “Gold’s strength reflects an extremely positive macroeconomic and geopolitical background for safe-haven assets, plus concerns over other traditional safe havens.

“With these factors persisting into 2026, we fail to see any catalyst for gold to meaningfully retrace at present. Therefore we expect gold to continue to push up throughout the year to attempt a challenge of $5,000/oz.”

05:32pm

Silver rose 4pc today, hitting a record high of $49.55 as it tracked gold’s record-breaking rally.

Adam Turnquist, chief technical strategist for LPL Financial, said that “the degree of overbought conditions” meant that “silver could also be another option in the space as it continues to gain relative strength over gold”.

05:09pm

Britain’s benchmark FTSE 100 closed at a record high on Wednesday, buoyed by gains in heavyweight financial stocks. Meanwhile, gold miners rallied as bullion prices surged to historic levels.

The blue-chip FTSE 100 gained 0.7pc to 9,548.87, while the mid-cap FTSE 250 closed up 0.2pc.

An index of bank stocks rose 1.9pc. Lloyds Banking Group gained 3.7pc after London’s financial services regulator proposed a lower-than-feared redress package over motor finance misselling.

The sentiment propped up other lenders, with Barclays adding 1.1pc. HSBC also rose 1.5pc after Morgan Stanley raised its price target on the stock. Merchant bank Close Brothers surged 5.4pc.

Precious metal miners outperformed peers after gold prices soared past $4,000 per ounce.

Endeavour Mining and Fresnillo rose 2.7pc and 3pc, respectively, placing the miners among the FTSE 100’s top performers.

Industrial metal miners added 1.7pc, tracking gains in copper prices.

Real estate stocks, meanwhile, were the biggest drag among sectors, falling 1.9pc.

05:06pm

Gold is trading over $4,000 an ounce today as investors flocked to the safe haven metal on worries over the US government shutdown, France’s political crisis and other global economic uncertainties.

Gold, considered a safe investment in times of uncertainty, reached an historic high above $4,051 an ounce. Silver also rose close to a record high.

“Gold is continuing to glitter, and it is a gift that keeps on giving,” said Fawad Razaqzada, market analyst at City Index.

“Markets hate uncertainty, and right now, it’s in no short supply – although stocks haven’t exactly sold off,” he added.

“Instead, it is gold that continues to benefit from haven flows while stock markets continue to find buyers on the dips too.”

It comes a quarter of a century after Gordon Brown, as chancellor, sold off nearly half of Britain’s gold reserves at an average price of $275 per ounce.

04:37pm

European shares inched higher today, although gains were kept in check by losses in carmaker stocks following worries about steel tariffs and a profit warning by BMW.

The pan-European Stoxx 600 rose 0.9pc, with green ink across the major stock markets. The FTSE 100 gained 0.7pc, France’s Cac 40 rose 1.2pc, and Germany’s Dax added 1pc in preliminary closing prices.

Banks were the among the biggest risers, with British lender Lloyds, France’s Societe Generale and Italy’s BPER Banca leading gains.

04:00pm

Recent economic data indicates some softening in the US economy, the head of the International Monetary Fund has said.

Kristalina Georgieva, speaking at an event hosted by the Milken Institute, said it was critical for the US to work on cutting its large federal deficit.

At a time of great economic uncertainty, she said countries everywhere needed both the agility of the private sector, and good government data and strong institutions to ensure a level playing field.

03:57pm

The eurozone will be stuck in slow growth over the next two years, leading economists have said, and claims of an acceleration in 2027 are over-optimistic.

Capital Economics said: “We expect euro-zone GDP growth to remain fairly slow in the coming years. Germany’s fiscal stimulus should provide a temporary and fairly modest boost, but we don’t think that it will do much to raise growth prospects elsewhere.

“Meanwhile, we forecast inflation to undershoot the 2pc target as energy prices fall and wage growth slows further. This will prompt the ECB to cut interest rates next year, taking the deposit rate down from 2pc currently to 1.5pc.”

The economists added: “Looking ahead, we think that GDP growth will pick up a bit in the coming quarters,
but we do not expect the acceleration that many anticipate in 2027.”

They are predicting growth of around 1pc in 2027, lower than the European Central Bank’s 1.3pc projection.

03:41pm

Yesterday’s sell-off of US tech stocks – especially Oracle – was “a blip”, a leading broker has said.

Kathleen Brooks, research director at XTB, said: “European stock markets are a sea of green on Wednesday. Stocks are rising ... bond yields are falling, and the dollar has backed away from recent highs.

“The tech giants that wobbled on Tuesday also look set to rise on Wednesday, which suggests that fears about the end of the AI trade have been overdone.

“Oracle, who said that margins in its cloud computing business would be smaller than expected and saw its stock price fall on Tuesday, is rising in the pre-market on Wednesday. This suggests that yesterday’s sell off in the tech sector was a blip, and for now, the AI trade has not been compromised by Oracle’s admission about its profit margins.”

Currently, on Wall Street, the tech-heavy Nasdaq is up 0.7pc, the S&P 500 is up 0.4pc and the Dow Jones is up 0.2pc.

03:40pm

The global economy is holding up better than expected despite tariff shocks, the IMF has said.

However, Kristalina Georgieva, the managing director of the IMF warned that “uncertainty is the new normal and it is here to stay.”

Speaking ahead of the IMF’s annual meeting in Washington DC next week, she said: “All signs point to a world economy that has generally withstood acute strains from multiple shocks.”

Ms Georgieva warned against complacency and said that the openness of the global economy had “taken a big hit”.

03:05pm

Stocks on Wall Street were largely higher on Wednesday as investor sentiment remained strong despite the ongoing shutdown of the US Federal government.

The the S&P 500 added 0.3pc to climb to 6,735.42 and the tech-heavy Nasdaq Composite Index added 0.7pc to 22,939.94.

On the flip side, the Dow Jones was mostly flat at 46,616.97 by mid-morning in New York.

Among individual stocks, Nvidia gained 1.8pc as the chipmaker was boosted by comments from chief executive Jensen Huang.

Mr Huang told CNBC’s Squawk Box: “I think we’re at the beginning of a new build out, beginning of a new industrial revolution.”

02:31pm

The German economy is forecast to grow 0.2pc this year, according to revised estimates from the German government.

The lacklustre economic performance expected in 2025 comes as Chancellor Friedrich Merz’s coalition, which took office in May, attempts to spur growth in Germany.

Forecasts show that the German economy is likely to pick up next year, with growth of 1.3pc in 2026 as the government provides billions in fiscal stimulus to boost business and household sentiment.

Katherina Reiche, the economy minister, said that while a large portion of growth will come from a rise in government spending, it will only be effective “if investments are implemented quickly”.

01:57pm

Jensen Huang, the chief executive of Nvidia, said demand for computing has risen “substantially” as AI models continue developing.

Speaking on CNBC’s Squawk Box Mr Huang said: “This year, particularly the last six months, demand of computing has gone up substantially.”

He added: “I think we’re at the beginning of a new build out, beginning of a new industrial revolution.”

In September, Nvidia announced it would invest up to $100 billion in OpenAI and supply it with data centre chips. OpenAI is planning to build 10 gigawatts of data centres using chips manufactured by Nvidia.

Mr Huang said his company’s partnership with Open AI marks the first time the chipmaker will sell directly to the AI company.

He said: “Our partnership with them is quite unique in the sense that this is the first time that we’re going to sell directly to them.”

Mr Huang added: “The OpenAI partnership is in addition to what we’re already doing with them on the cloud... We’re the only company in the world today that really focusses on building the entire AI infrastructure.”

There have been a wave of deals between chip makers and AI companies this year.

Earlier this week AMD, the semiconductor manufacturer, said it will supply its chips to OpenAI as part of an agreement to partner on building AI infrastructure. OpenAI will also get the option to buy up to a 10pc stake in AMD.

Mr Huang said the deal between AMD and OpenAI was “clever” but added that he was surprised the chipmaker had given away a 10pc stake in its company.

01:29pm

The Bank of England has warned that a bubble in artifical intelligence (AI) stocks threatens to spark a major market correction, posing a “material” danger to Britain’s economy.

A collapse in over-valued US tech stocks that bears echos of the dotcom bubble risks triggering a global shock, Threadneedle Street said in its starkest warning on AI to date.

The Financial Stability Committee (FPC), its panel of policymakers tasked with identifying what could spark the next financial crisis, said: “On a number of measures, equity market valuations appear stretched – particularly for technology companies focused on artificial intelligence.”

12:59pm

The FTSE 100 continued to make gains at lunchtime on Wednesday as miners and banks pushed the blue-chip higher. The FTSE 100 added 0.9pc to 9,563.90 as it approached 1pm.

The index was boosted by banking stocks as Lloyds added 2.7pc, Natwest climbed 2.2pc and Standard Chartered rose 2pc.

Miners were also among the best performers on the FTSE 100, as Antofagasta added 3.7pc and Fresnillo gained 2pc.

The FTSE 250 gained 0.2pc to climb to 22,048.36. The wealth manager Quilter was the biggest riser on the mid-cap index at lunchtime, adding 4.4pc.

12:37pm

Kemi Badenoch pledged that the Conservatives will cut the UK’s deficit if the party won the next general election.

In a speech at the Conservatives annual party conference in Manchester Ms Badenoch said: “We have to get the deficit down — and we must also show how every tax cut or spending increase is paid for.”

“Every pound we save will be put to work,” she added.

Ms Badenoch said that if elected a Conservative administration would use half of all savings to reduce the UK’s deficit and the other half would be directed towards spending or tax cuts.

The Conservatives focus on reducing the UK’s deficit comes as the country’s ratio of government debt to GDP stands at around 100pc.

12:10pm

Gold has hit a record price of $4,000 (£2982.70) per troy ounce, as investors look to “safe haven” assets as interest rates fall and uncertainty remains over the dollar.

The precious metal has risen by around 54pc since President Donald Trump returned to office in January, and market analysts are now speculating whether it could reach $5,000 by Christmas this year. This would mean a full year return of more than 50pc.

On Wednesday gold prices breached $4,000 for the first time, as investors shun the dollar amid concerns about the US economy and the independence of US monetary policy as the Trump administration attacks the Federal Reserve.

11:43am

The eurozone’s economy is slowly picking up and on track for “a gradual recovery” said ECB council member Madis Muller.

Mr Muller, who is also the chief of the Estonian central bank, said: “We see the incomes of Europeans gradually growing. The purchasing power is increasing.

“That supports also consumption, domestic demand and sort of a gradual recovery even if we are likely to have difficulties when it comes to exports contributing much to growth in the next couple of years.”

Speaking at a conference in Tallinn, Mr Muller also warned the bloc was vulnerable to geopolitical risks.

“But of course there are vulnerabilities and risks always underneath and when you ask what those are mostly about, then I think it mostly has to do with geopolitics in Europe, also the increasing debt levels in many European countries.”

11:14am

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German industrial production has plunged to 2005 levels, as slumping demand, the Donald Trump’s tariffs and the car giants’ struggles with Chinese competition and electric cars effectively wipe out 20 years’ worth of growth.

Output in August was down by 4.3pc compared with July and by 3.9pc from August of 2024, according to figures from the Federal Statistical Agency.

Monthly production from Europe’s industrial heartland has now dropped by almost 15pc since the eve of the pandemic, and by 18pc since its all-time high in 2017.

It represents a fresh blow to the prospects of a recovery in the eurozone’s largest economy, threatening the hopes of Friedrich Merz, the Chancellor, to revitalise the nation and to position Germany as an industrial and military powerhouse for the modern age.

Car production collapsed by 18.5pc on the month, amid summer shutdowns, but large falls were also recorded in the production of machinery, pharmaceuticals and computer, electronic and optical products.

Mateusz Urban at Oxford Economics said the scale of the crunch in industrial production means the economy as a whole is likely to shrink in the third quarter.

“Worryingly, the near-term outlook does not leave much hope for a sustained recovery,” he said. “New factory orders shrinking consistently since May and core orders falling sharply in August point to persistently weak demand for German goods amid drags from US tariffs and Chinese competition.”

10:47am

Gold is being pushed higher amid a surge in demand from around the world.

India’s physically backed gold exchange-traded funds (ETFs) saw their largest monthly inflow in September, pushing assets under management to a record $10bn (£7.5bn).

Higher inflows into ETFs will lift gold imports to the world’s second-biggest consumer and are set to support global prices that hit records this week.

Traditionally dominated by jewellery, coins, and bars, India is now witnessing a shift, with urban investors increasingly turning to gold ETFs as prices rally to record highs.

In September, gold ETFs recorded inflows of $902m or 7.3 tonnes to take total holdings to a record 77.3 tonnes, data from the World Gold Council (WGC) showed.

10:31am

The cost of government borrowing has fallen slightly following the turmoil caused by the sudden resignation of France’s prime minister.

Bond yields – a benchmark for the cost of servicing national debt – jumped sharply after Sébastien Lecornu said he was quitting after just 27 days amid doubts over his ability to get parliament to agree to spending cuts.

However, the yield French bonds has declined nearly five basis points today to 3.52pc amid hopes for talks between Mr Lecornu and various political parties.

He said today that a deal could potentially be reached on the country’s budget by the end of the year, making the risk of a snap election more remote.

The yield on 10-year UK gilts was down nearly one basis point to 4.71pc.

10:08am

Investors are looking for a safe place to put their money as stock markets hit record highs, analysts have warned.

Gold has surpassed $4,000 for the first time as the FTSE 100 hits new intraday record highs.

The S&P 500 in the US closed lower for the first time in eight sessions on Tuesday after a string of fresh all-time peaks.

Steve Clayton of Hargreaves Lansdown said the “meteoric” rise in gold was partially due to the US shutdown and France’s political turmoil.

He said: “France is increasingly looking like a warning sign that the spending needs of the nation’s social democracy are outpacing its ability to write cheques.

“Either way, despite stock markets hitting new highs around the world in recent weeks, it looks like some investors are looking for a safe haven and chasing gold ever higher for now.”

09:46am

Silver is within a touching of its own record high as demand for precious metals surges.

Spot silver was up to $48.79 per ounce, nearing the peak of $49.79 hit in 2011. Before that, it’s previous peak was hit in 1980.

David Adams, an analyst at Morgan Stanley, said the weakening US dollar had made commodities cheaper for foreign buyers.

He said precious metals were also increasingly attractive as “rising inflation can support demand for real assets”.

09:24am

European shares rose as investors brushed off worries about France’s political turmoil.

Banks and energy stocks lead early gains, pushing the pan-European Stoxx 600 was up 0.5pc.

The Cac 40 was up 0.8pc in France, where President Emmanuel Macron is under mounting pressure to either resign or call a snap parliamentary election after the collapse of another government.

In Frankfurt, the Dax was up 0.4pc.

08:55am

The US remains the world’s largest gold holder with 8,133 tonnes, now valued at $1.04 trillion (£776bn).

It is the first time any nation’s reserves have surpassed the one trillion US dollar threshold.

Ewa Manthey, commodities strategist at ING, said: “Gold has staged a historic rally, doubling in less than two years, spurred by central bank buying as it diversifies away from the US dollar, President Donald Trump’s aggressive trade policy and conflicts in the Middle East and Ukraine.”

She added: “Markets are pricing in a quarter-point (US rate) cut this month, which would further benefit gold, as it doesn’t pay interest.

“Policy uncertainty and growing bets on Federal Reserve easing are keeping safe-haven demand strong.”

08:26am

Gold has surged as investors widely expect the US Federal Reserve to keep cutting interest rates this month.

The Fed reduced borrowing costs for the first time this year in September and money markets indicate there is an 82pc chance of two more cuts at the last two meetings of 2025.

Tai Wong, an independent metals trader, told Reuters: “There’s so much faith in this trade right now that the market will look for the next big round number which is 5,000 with the Fed likely to continue to lower rates.

“There will be some bumps in the road like a lasting truce in the Mideast or Ukraine but the fundamental drivers of the trade, massive and growing debt, reserve diversification, and a weaker dollar are unlikely to change in the medium term.”

08:09am

The FTSE 100 climbed at the start of trading as rising gold prices boosted miners.

The UK’s flagship stock index climbed 0.3pc to 9,511.26 while the mid-cap FTSE 250 rose 0.1pc to 22,014.99.

Precious metal miner Fresnillo jumped by 2.5pc while Endeavour Mining gained 2.8pc.

08:06am

Gold has surged amid concerns about the sustainability of the debt burdens of major European economies – with the latest push partly fuelled by the turmoil in France.

The political crisis in Europe’s largest economy shows little sign of abating as its outgoing prime minister Sébastien Lecornu tries to hold talks with opposition parties to secure support for the country’s budget.

Acting French finance minister Roland Lescure said any plans to modify France’s pension reforms – whose unpopularity is one of the reasons behind the country’s political crisis – would be very costly for the economy.

“Modifying the pension reform will cost hundreds of millions in 2026, and billions in 2027,” he told France Inter radio.

Elisabeth Borne, a former prime minister and the country’s current caretaker education minister, told Le Parisien newspaper on Tuesday that she was open to suspending the pension overhaul which she herself steered through Parliament in 2023.

Many on France’s left have called for it to be repealed, though the Socialist Party has suggested they would be open to a suspension.

“We are evaluating various scenarios,” said Mr Lescure, when asked if the French finance ministry was examining any changes to the pension system.

The 2023 pension reform gradually raises the retirement age in France to 64 from 62. The government says it is key to helping cut France’s debts and improve the overall economy, but many trade unions remain opposed to it.

07:49am

Analysts have warned investors to tread carefully despite gold’s “unbelievable” rally.

Bullion jumped 12pc in September alone, taking silver, platinum and palladium higher as well. Spot prices surpassed $4,000 for the first time overnight.

Gold is traditionally considered a safe haven in times of turmoil. This year, Donald Trump upended global trade with his tariff campaign.

Meanwhile, governments in Britain, France and elsewhere have shown an inability to rein in public spending, raising concerns about the sustainability of their mounting debt piles.

Dan Smith, managing director of Commodity Market Analytics, said: “The rally is unbelievable, telling us that something bad is happening and that we should be nervous.”

BNP Paribas analyst David Wilson added: “But right now, everything that is a traditional gold driver is happening.

“If you’re an investor, where do you put your money?

“If you’re worried about the outlook for the US economy and US debt, do you want to buy that traditional safe-haven, which was the US Treasuries? No, the yields on longer-dated treasuries have shown that investors are reluctant.”

07:33am

Thanks for joining me. Gold prices surged past $4,000 for the first time amid concerns that “runaway” government spending could push up inflation.

Bullion spot prices rose 1pc to $4,021.22 per ounce overnight, taking its gains for the year beyond 50pc.

Gold is seen as a store of value during times of instability. Its latest push higher comes after the latest collapse of France’s government, raising concerns about its mounting debt burden.

Meanwhile, Japan is poised to appoint a new prime minister who is expected to ramp up spending in a bid to boost its economy.

Michael Brown, an analyst at Pepperstone, said the case for gold to rise further “remains a solid one amid runaway fiscal spending, the risk of inflation expectations un-anchoring, and amid continued physical demand from reserve allocators seeking to diversify”.

Central banks around the world have also fuelled gold’s rally this year, as well as investors turning to gold-focused exchange-traded funds and a weaker dollar.

Chris Weston of Pepperstone added: “Funds and global reserve managers want a hedge against fiscal recklessness, currency debasement, and unpredictable government policy, and gold sits squarely at the heart of that movement.”

Thierry Wizman of Macquarie Group said gold’s rally could also been seen as a collective “hedge” against the prospective failure of the American AI-driven tech boom.

He said: “A collapse of that optimistic ‘vision’ might trigger an inflationary resolution for the world’s sovereign debt overhang, rather than a productivity-based resolution.” Here is what you need to know.

IMF: Western governments must raise pension ages | The global watchdog singles out Britain as it urges nations to tighten public spending

Pensioners now hold half of Britain’s wealth | Rising house prices drive gains among over-60s, Resolution Foundation says

Billionaire Revolut founder abandons Britain for UAE | Nikolay Storonsky joins growing exodus of wealthy entrepreneurs in blow to Rachel Reeves

Hungover workers skiving off ‘are a drag on the economy’ | Left-leaning think tank urges Government to raise alcohol taxes ahead of Reeves’s Budget

James Titcomb and Tim Wallace: An AI crash could spell disaster for Rachel Reeves | Growing fears of an unsustainable tech bubble could jeopardise the Chancellor’s investment dreams

Shares were mostly lower in Asia after US stocks sank to their first loss in eight days, losing momentum after the price of gold topped $4,000 per ounce for the first time.

The price of gold was up $25.40 at $4,029.60 an ounce. The Japanese yen fell sharply against the dollar on expectations that Sanae Takaichi, the conservative lawmaker likely to become the next prime minister, will push to keep interest rates low.

The dollar rose to 152.53 yen from 151.90 yen, while the euro slipped to $1.1621 from $1.1659.

Tokyo’s benchmark Nikkei 225 edged 0.1pc higher to 48,002.18.

Ms Takaichi, who the ruling Liberal Democrats chose as their leader last weekend, is expected to increase spending and to advocate for easier credit, possibly slowing efforts by the Bank of Japan to raise its key interest rate. It has remained near zero for years, even as inflation has exceeded its target of about 2pc, outpacing wage increases.

Elsewhere in Asia, Hong Kong’s Hang Seng dropped 0.9pc to 26,719.68 and the S&P/ASX 200 edged 0.1pc lower to 8,945.10.

Markets in mainland China and South Korea were closed for holidays.

In Taiwan, the Taiex lost 1pc.

On Wall Street, the Dow Jones Industrial Average fell 0.2pc, to 46,602.98, the S&P 500 fell 0.4pc, to 6,714.59, and the Nasdaq Composite fell 0.7pc, to 22,788.36.

In the bond market, the yield on benchmark 10-year US Treasury notes fell to 4.131pc from 4.161pc late on Monday.

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