The UK’s blue chip share index has dropped this morning, as fears over new US tariffs on China hit miners listed on the London stock exchange.

The FTSE 100 has dropped by 39 points, or 0.45%, to 8716 points, wiping out yesterday’s gains.

Natural resource stocks are being hammered, with gold producer Endeavour Mining (-3.2), copper producer Antofagasta (-3%), Anglo American (-2.1%) and Rio Tinto (-2.2%) in the top fallers.

But that’s a smaller fall than we’ve seen in Europe, let alone in China, today. Airline group IAG have jumped 4% after beating City forecasts this morning, while Rolls-Royce are up another 2.7% after blowout results yesterday.

The FTSE 100 might benefit from Keir Starmer’s visit to Washington this week, where Donald Trump said the two sides could end up with “a real trade deal”, avoiding tariffs.

Derren Nathan, head of equity research at Hargreaves Lansdown, says investors will want more details….

Tariffs continue to drive the narrative, and talk of a reprieve for Canada and Mexico has evaporated as next Tuesday’s deadline approaches.

President Trump has also vowed to slap an additional 10% import duty onto Chinese goods, as he leans heavily on the anti-fentanyl narrative to justify the trade restrictions. The only certainty in this saga is uncertainty, so keep a close eye on developments between now and 4 March. Next on the agenda is reciprocal tariffs pencilled in for 2 April with other major US trading partners. The EU, in particular, will be in focus.

An amicable start to talks with UK premier Keir Starmer looks to have set the tone for a potential trade deal with the UK but with no details outlined it has not been enough to boost enthusiasm for London listed shares.

European stock markets have opened in the red, as trade war concerns escalate.

The pan-European Stoxx 600 index fell 0.5% at the start of trading, with Germany’s DAX down 0.6%.

This follows losses on Wall Street last night, where the S&P 500 index lost 1.6%.

Jim Reid, market strategist at Deutsche Bank, says a tech selloff, and trade angst, were responsible:

Markets were in a stressed mood of their own yesterday, with renewed tariff threats from President Trump in addition to a sharp tech sell-off that saw the Magnificent 7 (-3.03%) post its worst day of 2025 so far as Nvidia slumped -8.48% after its earnings the previous evening.

This marked a sixth consecutive decline for the Mag-7, the first time that’s happened since April last year, and it now leaves the index -13.56% beneath its December peak.

Shares have fallen sharply across Asia-Pacific markets after Donald Trump announced that a new 10% tariff will be imposed on Chinese imports next week.

China’s CSI 300 index has fallen almost 2% today, while Hong Kong’s Hang Seng index has slumped by 3.7%.

The selloff spread across the region, with Japan’s Nikkei down 2% and the Kospi 200 index sliding by 3.5%.

Investors are alarmed by president Trump’s plan to hit goods from China with a new 10% tariff on 4 March, and also add 25% tariffs on imports from Canada and Mexico on the same date.

Michael Brown, senior research strategist at Pepperstone, says the “surprise additional US tariffs on China” have hit risk sentiment…. but a last-minute reprieve can’t be totally ruled out.

Brown explains:

It had looked as if a degree of ‘tariff fatigue’ had set in, though clearly participants aren’t prepared to ignore this apparent escalation in Trump’s protectionist stance, with stocks violently and rapidly selling-off as the headlines crossed.

It must be said, though, that this could yet again be a case of Trump ‘crying wolf’, were some kind of concessions to be extracted from Canada or Mexico before next Tuesday.

Sir Dave Ramsden has also warned that uncertainty over trade policy could already be hurting the UK economy.

He tells Stellenbosch University that geopolitical uncertainties have been heightened for several years, adding:

In addition, there is significant uncertainty around the next steps the current US administration will take with regards to tariffs, and the potential actions of other countries in response.

At present we do not have any specific enough information to build into our forecasting models. However, it is clear that uncertainty about global trade policy is already heightened.

He then produces a chart, showing that trade policy uncertainty reached record highs in January 2025:

Ramsden adds:

And this may already be impacting on the global and UK economy via financial markets and via confidence channels.

While Dave Ramsden’s speaking in South Africa, UK lender Nationwide was reporting that house price growth “remains solid in February”.

Nationwide’s latest house price report shows that prices rose by 0.4% this month, up from the 0.1% rise reported in January, and the sixth monthly rise in a row.

But, the annual rate of house price growth dipped to 3.9% for the year to February, compared with 4.1% in January.

Robert Gardner, Nationwide’s chief economist, says:

“Housing market activity has also remained resilient in recent months, despite ongoing affordability challenges. Indeed, the second half of 2024 saw a noticeable pick up in total housing transactions, which were up 14% compared with the same period in 2023.

However, taking 2024 as a whole, transactions were still modestly (6%) lower than the levels prevailing before the pandemic struck in 2019.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

A Bank of England deputy governor is banging the drum for taking a “gradual and careful approach” to interest rate cuts, given the twin threats of inflationary pressures and weak growth.

But, Sir Dave Ramsden isn’t ruling out sharper cuts, if needed, while also flagging a rising risk that inflation could run over target.

Ramsden is speaking right now at the Bureau for Economic Research, at South Africa’s Stellenbosch University, and he reveals he is now “less certain” that the UK labour market will continue to cool, easing inflationary pressures.

Ramsden says:

Because of the evidence of recent months I no longer think that risks to hitting the 2% inflation target sustainably in the medium term are to the downside.

Instead, I think they are two sided, reflecting the potential for more inflationary as well as disinflationary scenarios. I do, though, think the core disinflationary process remains intact.

Ramden notes that UK inflation rose to 3% in January, adding:

UK inflation is expected to rise in the short term to around 3.7% and is then forecast to fall back to close to the 2% target in the second half of the forecast period.

That change of mind follows the latest unemployment report, which showed that UK wage growth accelerated to 6% at the end of last year – three times as fast as the Bank’s 2% inflation target.

Those fast-rising earnings could deter Bank policymakers from cutting interest rates swiftly during 2025 – it has already made one cut, earlier this month, bringing Bank rate down to 4.5%.

With a nod to his audience, Ramsden says:

As a keen mountain climber, I was very pleased when the MPC’s policy of maintaining Bank rate at a level of 5.25 percent from August 2023 to August 2024 became associated with South Africa’s Table Mountain.

The ‘Table Mountain’ phase was when the Bank left interest rates on hold at 5.25%, from summer 2023 to summer 2024, before making three cuts since.

Stretching the mountaineering analogy, Ramsden says:

I know from my own experience that great care needs to be taken on the descent from a mountain; tiredness often sets in, concentration can lapse, obstacles have to be bypassed and at the end of a long day the weather can deteriorate.

A gradual and careful approach is always needed on the way down a mountain to ensure a safe descent and a successful outcome. But that doesn’t always mean the descent has to be slow. There may be circumstances when a slower than expected descent is justified but there will also be times when conditions require that the pace has to quicken.

Ramsden is a relatively dovish member of the Bank’s monetary policy committee. He was one of three policymakers who voted for a rate cut in December (along with Swati Dhingra and Alan Taylor), but they were outvoted by the other six.

Today, Ramsden explains that he was motivated by worries that wages might slow sharply:

My concerns about the risks from this scenario playing out were what led me to vote in the minority for a 25bp cut in Bank rate at our December 2024 meeting.

The agenda

• 7am GMT: Nationwide’s UK house price index for February

• 7am GMT: Bank of England deputy governor Dave Ramsden gives speech on monetary policy at Stellenbosch University

• 7.45am GMT: Final estimate of French GDP for Q4 2024

• 1pm GMT: German inflation report for February

• 1.30pm GMT: US PCE inflation measure for January