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Economy

Updates on the state of the economy, growth, inflation, and employment.

  • Credit" Franki Chamaki / Unsplash

    More Australians switching to home-brand groceries: poll

    Credit" Franki Chamaki / Unsplash

    The surging cost of living is causing Australians to seek bargains and switch to generic brands. New research from Compare the Market shows almost half of shoppers are switching to home brands, which is saving them an average of 41%. It was found that Victoria was the most frugal state, with 53% of shoppers switching to generic brands to save money, which is ahead of the national 49%. Victoria beats South Australia (46%), New South Wales (47%), Queensland (48%) and Western Australia (48%). Compare the Market’s Chris Ford said brand loyalty is declining due to shoppers being stung by high prices. “Families have been doing it tough for long enough and with high prices in almost every aisle at the supermarket, it’s hardly surprising to see so many Australians opting for generic brands over big names,” Ford said. Data shows that Australians spend on average A$213.64 on groceries weekly, which is an 11.5% increase compared to the $191.66 average in January. This adds up to around $1,142.96 for groceries alone for the year. Compare the Market found that Australians switch to generic brands for many essentials. The main categories where people have switched are milk (65%), cleaning products (58%) and bread (57%).

  • Credit: Number 10, OGL 3 / Wikimedia Commons

    UK trade deal 'first of many', as tariffs reduced to 10%

    Credit: Number 10, OGL 3 / Wikimedia Commons

    Officials from the United Kingdom are all smiles after signing a first-of-a-kind trade agreement with the United States, with tariffs reduced on carmakers, steelmakers and farmers. For the U.S., tariffs will become 10% across the board, up from 3.4% before the election and other taxes on a wide range of products from the U.K. market will be dropped. It’s the second landmark trade deal the British have signed in a matter of days, coming on the back of finalising a long-negotiated free trade agreement with India on Wednesday. Find out more: India, UK seal landmark trade deal, unlocking billions Deal outcomes Car export tariffs - reduced from 27.5% to 10% - applied to a quota of 100,000 U.K. cars (almost the total the U.K. exported last year). Steelmaking tariffs - reduced from 25% to zero Ethanol tariffs - reduced to zero Reciprocal market access - U.K. farmers were given a quota of 13,000 metric tonnes, no weakening of U.K. food standards. Other tariffs lowered - Britain agreed to lower tariffs on U.S. imports from 5.1% to 1.8%, while the U.S. will keep an imposed baseline 10% tariff on the U.K. Pharmaceuticals - The deal outlines plans for further talks on pharmaceutical products Aviation - the U.K. can export plan

  • Credit: xb100 / Freepik

    China pours 1tn yuan into rate cuts, fiscal stability

    Credit: xb100 / Freepik

    China has unveiled a raft of financial support measures ahead of key trade talks with the United States this weekend as part of an updated stimulus package designed to stabilise markets and sustain an economic recovery amid tariff pressures. A key policy is the People’s Bank of China (PBOC) cutting the reserve ratio by 0.5% and its monetary policy rate 10 basis points down to 1.4%. PBOC Governor Pan Gongsheng said the move is expected to provide the financial market with roughly 1 trillion yuan (US$138.9 billion) in long-term liquidity. More financial support will be given to sectors including tech innovation, service consumption and elderly care via relending; with relending rates lowered by 0.25% from Wednesday, the central bank said. "The foundation for China's sustained economic recovery needs to be further consolidated, and the country faces an increasing impact from external shocks," the CCP said. Pan said policy decisions will steadily lower overall social financing costs, boost market confidence, and effectively support the stable expansion of the real economy. The China Securities Regulatory Commission (CSRC) will aim to keep capital markets stable and active by helping listed companies affected by tarif

  • Credit: Federalreserve / flickr

    Fed holds interest rates steady, flags rising trade risk

    Credit: Federalreserve / flickr

    The United States Federal Reserve on Wednesday (Thursday AEST) opted to leave its benchmark interest rate unchanged, maintaining a cautious stance amid growing concerns over trade policy impacts. The central bank held the federal funds rate within a target range of 4.25% to 4.5%, stating that while economic activity has continued to expand at a solid pace, uncertainties have increased. Although gross domestic product (GDP) growth moderated slightly in the first quarter following 2.5% growth last year, Powell noted that this was largely due to fluctuations in net exports. “Following growth of 2.5% last year, GDP was reported to have edged down in the first quarter, reflecting swings in net exports that were likely driven by businesses bringing in imports ahead of potential tariffs. This unusual swing complicated GDP measurement last quarter,” Powell noted during a press conference. The labour market remains strong, with a stable unemployment rate and continued solid conditions. Inflation, however, remains somewhat elevated, and policymakers are increasingly wary of the downside risks. “The risks of higher unemployment and higher inflation appear to have risen, and we believe that the current stance of monetary pol

  • Credit: Anthony Rampersad / Unsplash

    A China stimulus could set iron ore off to the races

    Credit: Anthony Rampersad / Unsplash

    With the Chinese economy feeling the brunt of the Trump administration's tariffs as part of the United States-China trade war, Xi Xinping is expected to volley another stimulus package. If directed towards housing, that could be a boon for Australia's iron ore export volumes. China has long been Australia’s top goods export destination, accounting for 6.6% of GDP last year - and over the past decade, iron ore has made up 56.6% of that (~3.4% of total GDP). Yet the slowdown in China’s economic growth could reduce demand for Australian exports - particularly commodities. There may be a workaround. Historically, Australian raw materials were processed into inputs in China for manufacturing goods and sold elsewhere; however nowadays, Australian exports such as iron ore are consumed more in China. Net exports in China peaked at 8.5% of nominal GDP in 2007 but have since declined to 2.1% as of 2023 data - opting to consume domestically rather than move to processed materials.Source: ANZThis suggests, says Angala, that in the near term demand within China is likely to have a far greater impact on Australia’s exports than will the flow-on effect of US tariffs on the latter’s imports of Chinese goods. “Any benefits that Aust

  • Credit: Prime Minister's Office (GODL-India), GODL-India / Wikimedia Commons

    India, UK seal landmark trade deal, unlocking billions

    Credit: Prime Minister's Office (GODL-India), GODL-India / Wikimedia Commons

    India and Britain have finalised a historic free trade agreement, marking the UK’s most significant post-Brexit trade pact and India’s most ambitious deal to date. The agreement, which took over three years to negotiate, is expected to boost bilateral trade by £25.5 billion (A$52.48 billion) annually by 2040. It slashes tariffs on key UK exports, including whisky, cosmetics, medical devices, and automotive parts, while India secures greater access to textiles, marine products, and gems on the British market. Investor confidence in the deal is high, with tariffs on whisky and gin halved from 150% to 75%, eventually dropping to 40% over a decade. Automotive tariffs will fall from over 100% to 10% under a quota system, making British luxury cars more competitive in India’s growing market. The agreement also streamlines business mobility, allowing Indian professionals, including chefs and musicians, to work in the UK under a structured visa framework. The UK government estimates the deal will add £4.8 billion to the British economy annually, while Indian exporters benefit from 99% of their goods facing no import duty in the UK. The pact also includes a double contribution convention, exempting Indian workers in Br

  • Credit: The White House, Public domain / Wikimedia Commons

    Carney meets Trump to forge Canada's US economic reset

    Credit: The White House, Public domain / Wikimedia Commons

    Despite the seismic gulf between the United States and Canada on key issues, the Oval Office meeting between the country’s two leaders was more like the traditional White House peacock dance than the high stakes encounter the market expected. However, while U.S. President Donald Trump was hell bent on framing the meeting as a “very friendly” meeting with America’s northern neighbour, Canada’s newly appointed Prime Minister Mark Carney had a more pressing objective. Given that Carney had come to power on the promise of creating a new bilateral economic and security relationship with its southern neighbour, his visit to Trump was all about reminding Washington that it was rebalancing its relationship with Canada. What has galvanised Canadians' desire to diversify an economy heavily dependent on exports to the U.S. was repeated throw away remarks by the U.S. president that Canada should become the 51st state of America. No visit to the U.S. would have been complete without Carney delivering his blunt salvo to Trump that “Canada is not for sale; it won’t be for sale – ever.” In typical Trump-like retort the U.S. President responded by saying “Never say never, never say never”, and that it would be “a wonderful marriage

  • Credit: The White House / WikimediaCommons

    Trump signs order to boost US drug manufacturing

    Credit: The White House / WikimediaCommons

    United States President Donald Trump signed an executive order to incentivise drug manufacturing in the U.S. The order would incentivise pharmaceutical companies to build more manufacturing sites in the U.S. and direct the U.S. Food and Drug Administration (FDA) to reduce the amount of time it takes to approve a pharmaceutical manufacturing plant. It also states that the FDA should increase fees for foreign manufacturing plants. This is part of Trump’s plans to put America first and force the FDA to prioritise American manufacturing over foreign facilities. “We don’t want to be buying our pharmaceuticals from other countries because if we’re in a war, we’re in a problem, we want to be able to make our own,” Trump said. “As we invest in the future, we will permanently bring our medical supply chains back home. “We will produce our medical supplies, pharmaceuticals, and treatments right here in the United States.” According to FDA Commissioner Mark Makary, the order will allow the FDA to conduct more inspections of new manufacturing sites. The agency will also ramp up inspections of foreign drug facilities, switching from announced to “surprise” visits overseas. “We had this crazy system in the United States

  • Credit: hansaldenhoven / Pixabay

    BRICS' currency could unlink global reliance on US$

    Credit: hansaldenhoven / Pixabay

    Underlying weakness in the US$, amid United States President Trump’s trade tariff mayhem and U.S. efforts to de-escalate global trade, could ignite speculation over the role of the U.S. dollar as the fiat currency underpinning global commodities. In light of underlying volatility, foreign governments are also seeking to recalibrate the international financial system as they reduce their exposure to U.S. bonds. As it currently stands, the international financial system remains dominated by the U.S. dollar, which accounts for about 90% of all currency trading.Reliance on US dollar waningHowever, while virtually all oil trading is traditionally conducted in U.S. dollars, recent signs suggest this is rapidly changing. For example, in 2023 around a fifth of oil trades were reportedly made using non-US dollar currencies. Recent attempts by the Trump administration to dial down its global predominance over financial markets could heighten attempts by the BRICS nations to capitalise on it. Extending well beyond its five initial member states - Brazil, Russia, India, China and South Africa – the ever-expanding BRICS trading bloc recently entered into discussions to establish a new reserve currency backed by a basket of their

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