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Midterm alarm bells: Democrats face steep favorability deficit despite election gains

Politics 4 Mins Read

A new national poll is the latest to indicate that Democrats are facing major problems with their party’s image as they try to win back congressional majorities from the Republicans in this year’s midterm elections.

Just 28% of Americans questioned in a CNN poll view the Democratic Party positively, with 56% seeing Democrats in an unfavorable light.

The poll, the most recent over the past year to indicate the Democratic Party brand hitting historic lows, comes with just over six months to go until the midterms, when they hope to escape the political wilderness.

The GOP, which is working to defend its fragile House and slim Senate majorities in the 2026 ballot box showdowns amid President Donald Trump’s underwater approval ratings and a rough political climate that doesn’t favor the party in power, doesn’t fare much better in the poll, which was conducted March 26-30.

WHAT OUR LATEST FOX NEWS NATIONAL POLL SAYS 

Thirty-two percent of Americans said they viewed the Republican Party positively, with 55% seeing the GOP in a negative light.

An average of the most recent national polls that asked how respondents viewed the two major political parties show the Republicans’ favorability 15 points in negative territory but the Democrats 20 points underwater.

Helping to sink the Democratic Party’s underwater ratings are Democrats themselves.

A healthy percentage of Democrats feel that their leaders in Congress aren’t fighting back more vocally against Trump and his unprecedented second-term agenda. That’s fueling a less favorable view of the Democratic Party among Democrats compared to a noticeably more favorable view of the GOP among Republicans.

That’s a departure from 2006 and 2018, the most recent midterms, when the Democrats rode blue waves to win back the House when Republicans controlled the White House. In those years, Democrats led by double digits in net favorability.

Democrats were ecstatic two weeks ago after flipping a Republican-controlled legislative seat in a right-leaning, Palm Beach, Florida-anchored district that includes Mar-a-Lago, Trump’s home turf. The same day, Democrats also flipped a state Senate seat in Florida in a separate special election. The Democrats’ Sunshine State victories were their latest wins or overperformances in a slew of special elections from coast to coast since Trump returned to power in the White House 14 months ago.

DNC CHAIR KEN MARTIN BOASTS ‘WIN AFTER WIN,’ SHRUGS OFF MASSIVE TRUMP, REPUBLICAN MONEY LEAD

Democrats also scored larger than expected victories in last November’s gubernatorial elections in blue-leaning Virginia and New Jersey.

Partially fueling the Democrats’ ballot box performances is their laser focus on affordability amid persistent inflation. And the victories are further energizing Democrats as they work to win back control of Congress in the midterms.

“From now until November, Democrats are all gas and no brakes as we compete across every corner of Florida and the nation,” Democratic National Committee Chair Ken Martin said after the Florida special elections.

But along with their brand issues, also troubling for Democrats ahead of the midterms is their standing in the generic ballot, the closely watched polling indicator that asks respondents whether they’d back the Democrat or Republican in their congressional district without offering specific candidate names.

Democrats are up over the Republicans by five points in the CNN poll, and an average of all the most recent national surveys to ask the generic ballot question gives the Democrats an edge over the GOP of just under six points. That margin for the Democrats is smaller than at the same point in the 2018 and 2006 cycles, when they won back the House.

National polls also indicate that when it comes to how both parties are handling the key issues that matter to voters, Democrats don’t enjoy any overwhelming advantage.

The most recent Fox News national poll, which was conducted March 20–23, indicated Democrats with a slight three-point margin over Republicans on which party has a clear plan to bring down prices and make things more affordable. The vast majority of voters questioned in the Fox News poll gave a big thumbs down to both parties.

Veteran political scientist Wayne Lesperance, the president of New England College, told Fox News Digital that Democrats “have no room to coast.”

“Voters remain unimpressed with their brand and for far too many voters the party continues to be defined by Biden and Harris. Democrats are expected to win big in November. But, there is a great deal of work to rehabilitate their brand with voters for 2026 and 2028,” Lesperance said.

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Why does Trump not want US businesses to claim tariff refunds?

Investing 6 Mins Read

A year ago, Donald Trump called it Liberation Day.

Today, 330,000 American businesses are filing to get their money back, and the President is on television telling them not to.

The refund portal opened on April 20, 2026. By that point, the Supreme Court had already ruled 6-3 that Trump’s signature trade policy was unconstitutional.

What followed is one of the stranger episodes in modern American economic history: a government simultaneously required by court order to refund $166 billion, and a president publicly lobbying companies to leave that money on the table.

How this started and who actually paid?

On April 2, 2025, “Liberation Day,” Trump announced sweeping country-by-country levies under the International Emergency Economic Powers Act, plus a 10% global baseline on virtually all imports.

The stated logic was that foreign countries would bear the cost.

The data demolished that claim almost immediately.

The New York Federal Reserve tracked the burden through the year. From January through August 2025, US importers absorbed 94% of tariff costs.

By November, foreign exporters had adjusted slightly, but US firms and consumers were still on the hook for 86%.

The National Bureau of Economic Research put the total domestic burden at 94%, the Kiel Institute said 96% and AlixPartners, which works directly with corporate supply chains, found that 80-85% of all tariff costs were absorbed domestically, either by companies swallowing the hit, passing it to customers, or some combination of both.

The Tax Foundation estimates the 2025 tariffs amounted to a $1,000 average tax increase per US household.

Yale’s Budget Lab put the GDP growth drag at 0.5 percentage points for the year.

Jerome Powell stated in March 2026 that tariffs were adding between half and three-quarters of a percentage point to inflation.

The largest US tax increase as a share of GDP since 1993, and the burden fell almost entirely on American businesses and the people who shop at them.

The corporate damage, by name and number

The automotive sector took the sharpest blow.

Tariffs on imported vehicles and parts have cost the industry $35.4 billion since their implementation, according to financial filings analysis.

GM, Ford, and Stellantis alone absorbed a combined $6 billion in 2025.

Toyota projected a $9.5 billion impact on its US operations for the fiscal year.

Retail was next. Gap estimated the tariff hit at $100-150 million.

Levi Strauss paid enough in duties on denim and apparel imports that its CFO publicly confirmed an expected $80 million refund.

McCormick warned investors that tariffs could cost $70 million in a single fiscal year because black pepper, cinnamon, and vanilla come from exactly the countries Washington decided to target.

Many firms delayed the consumer impact by selling through pre-tariff inventory, pricing goods based on what they paid before Liberation Day rather than what imports cost after.

That buffer ran out by year-end.

By late 2025, the Council on Foreign Relations found Americans were bearing tariff costs at rates as high as 100% for many consumer durable goods.

The SC ruling and the $166 billion question

On February 20, 2026, the Supreme Court ruled 6-3 that IEEPA does not authorise the president to impose tariffs.

The majority opinion was that the power to impose tariffs is a branch of the taxing power, and that belongs to Congress under Article I of the Constitution.

Every tariff imposed under IEEPA, including the Liberation Day levies and all country-specific reciprocal duties, was declared invalid from the moment it was first collected.

Penn Wharton projects total refunds could reach $175 billion.

CBP estimates $166 billion across 53 million shipments from more than 330,000 importers.

The refund portal, called CAPE, went live on April 20 and processes claims electronically within 60-90 days of acceptance.

Although the portal opened just days ago, as of April 14, only 56,497 importers had completed the bank registration required to receive payment, meaning the majority of eligible companies hadn’t even taken the first step toward collecting money legally owed to them.

“I’ll remember them”

A day after the portal opened, Trump appeared on CNBC’s Squawk Box.

He was asked about Apple and Amazon, two of the most prominent companies that had not filed.

He called it “brilliant” if they chose not to. “I’ll remember them,” he said.

Apple is in active negotiations about US manufacturing commitments and cannot afford to antagonise Washington. Amazon runs one of the largest cloud infrastructure businesses serving the federal government.

For both, filing a legally valid refund claim carries real political cost.

The President was explicitly asking corporations to voluntarily forfeit money a 6-3 Supreme Court said the government illegally collected.

A Citi analysis from April 10 quantifies what is at stake by company.

Walmart is owed an estimated $10.2 billion, Target $2.2 billion, Nike $1 billion, Kohl’s $550 million, Gap $400 million, and Macy’s $320 million.

The shippers, FedEx, UPS, and DHL, all filed on Day 1 and pledged to pass refunds back to customers.

Costco had been fighting since November 2025, filing a federal lawsuit before the Supreme Court even ruled, and has committed to returning money through lower prices.

These companies calculated that the legal and reputational cost of not filing outweighed the political risk.

What this means for investors?

Most companies that reported earnings recently left refund income entirely out of their forward guidance, and that is the right call for now.

The administration has signalled it will contest refunds aggressively.

Trump pivoted to Section 122 of the Trade Act of 1974, the same day the Court ruled, attempting to reconstruct tariff authority through a different legal mechanism, and that is already being challenged in court.

Section 232 tariffs on steel, aluminium, autos, copper, and lumber remain fully intact and are not part of this refund process at all, so the automotive industry’s cost structure has not changed.

The refund, if and when it flows, represents a one-time balance sheet event for retailers. That means potential cash for buybacks, debt repayment, or price reductions.

Investors pricing in refund windfalls before the legal picture settles are getting ahead of themselves.

A trade policy that cost the domestic industry tens of billions, added nearly a percentage point to inflation, and was struck down by the Supreme Court still permanently altered the supply chain landscape.

Companies rerouted sourcing, built new supplier relationships, and restructured procurement. Some of that rewiring is irreversible regardless of what happens in court.

The full cost of Liberation Day will never appear in any refund figure.

The post Why does Trump not want US businesses to claim tariff refunds? appeared first on Invezz

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US jobless claims rise to 214,000 as labour market remains broadly stable

Business 3 Mins Read

The number of Americans filing for unemployment benefits rose modestly last week, suggesting the labour market remains broadly stable even as geopolitical tensions and rising costs pose emerging risks to economic momentum.

Data released by the US Department of Labor showed initial claims for state unemployment benefits increased by 6,000 to a seasonally adjusted 214,000 for the week ended April 18.

The figure came in slightly above economists’ expectations of 210,000, according to a Reuters poll.

Labour market holds steady for now

Despite the uptick, claims remain at relatively low levels, indicating that layoffs are still limited.

There are no clear signs yet that the ongoing conflict involving Iran has triggered widespread job cuts, even as it disrupts global trade routes and pushes up commodity prices.

The Strait of Hormuz, a key shipping corridor, has been effectively shut since late February, contributing to higher costs for oil, fertilizers, petrochemicals and aluminium.

Economists caution that a prolonged disruption could eventually filter through to hiring and business investment decisions.

So far, however, the labour market appears anchored by what analysts describe as a “low hire-low fire” dynamic, where employers are reluctant to both expand and reduce headcount significantly.

Hiring momentum shows signs of cooling

Continuing claims, which reflect the number of people receiving benefits after their initial week, rose by 12,000 to 1.821 million in the week ended April 11.

This measure is often seen as a proxy for hiring conditions, with increases suggesting it is taking longer for unemployed workers to find new jobs.

While continuing claims remain below last year’s peaks, part of the decline could be attributed to workers exhausting their benefits, which are typically capped at 26 weeks in most states.

The data also does not fully capture younger workers or those with limited employment histories, who are facing a more challenging job market.

Recent data from the New York Federal Reserve reinforces this trend, showing that the expected likelihood of switching employers has fallen to its lowest level in around five years.

Economic uncertainty clouds outlook

The claims figures coincide with the period used to compile the government’s monthly employment report.

Payrolls rose by 178,000 jobs in March, following a decline of 133,000 in February, highlighting the uneven nature of job growth. Employment has contracted in six of the past 15 months.

Broader policy and geopolitical developments continue to shape the outlook.

President Donald Trump recently extended a ceasefire with Iran indefinitely, though tensions remain elevated, with a US Navy blockade of Iranian ports still in place.

Economists warn that higher energy prices and trade disruptions linked to the conflict could weigh on business confidence and hiring in the months ahead, even as the labour market for now remains relatively resilient.

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White House alleges China stole AI at industrial scale: report

Business 3 Mins Read

The White House has accused Chinese entities of conducting “industrial-scale” theft of intellectual property from American artificial intelligence labs, marking a fresh escalation in tensions between the world’s two largest economies over control of next-generation technology.

In a memo seen by the Financial Times, Michael Kratsios, director of the White House Office of Science and Technology Policy, said the US government had evidence that foreign actors—primarily based in China—were systematically extracting value from leading American AI systems.

“The US government has information indicating that foreign entities, principally based in China, are engaged in deliberate, industrial-scale campaigns to distil US frontier AI systems,” Kratsios wrote.

The issue comes into sharper focus ahead of a planned meeting between US President Donald Trump and Chinese President Xi Jinping in Beijing, where technology competition is expected to be a key topic.

Distillation concerns take centre stage

At the heart of the dispute is “distillation,” a technique used to train smaller AI models based on the outputs of larger, more advanced systems.

While widely accepted as a legitimate method within the industry, US officials argue that its misuse at scale is enabling foreign competitors to replicate American innovation at significantly lower cost.

The debate intensified following allegations that DeepSeek used distillation techniques to develop a powerful AI model more cheaply.

US firms, including Anthropic and OpenAI, have raised similar concerns in recent months.

Kratsios acknowledged that distillation plays a role in improving efficiency but warned against abuse. He said such practices, when used to undermine US research and development, were “unacceptable”.

He added that while models created through “surreptitious, unauthorised distillation campaigns” may not fully match original systems, they still offer a cost advantage that could accelerate foreign competition.

Security risks and policy response

US officials and industry leaders argue that the issue extends beyond commercial competition into national security.

There are growing concerns that distilled models may lack safeguards embedded in original systems—protections designed to prevent misuse in areas such as bioweapons development or cyber attacks.

According to Chris McGuire, Chinese firms are leveraging distillation to offset infrastructure limitations. “Chinese AI firms are relying on distillation attacks to offset deficits in AI computing power and illicitly reproduce the core capabilities of US models,” he said.

The White House has signalled a more coordinated response, including sharing intelligence with US AI companies about attempts by foreign actors to conduct “unauthorised, industrial-scale distillation” and helping firms strengthen defences.

Kratsios also noted that Chinese campaigns were “leveraging tens of thousands of proxy accounts to evade detection and using jailbreaking techniques to expose proprietary information”.

Legislative push and rising tensions

The policy response is already taking shape in Washington. The House Foreign Affairs Committee has passed a series of bills aimed at limiting China’s ability to catch up in the AI race.

One proposal would require the administration to consider placing companies involved in such practices on the US “entity list,” effectively restricting their access to American technology.

In parallel, policymakers are weighing broader measures, including tighter export controls on advanced chips and potential sanctions on entities linked to distillation activities.

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Graham eyes ‘down payment’ on Trump-backed SAVE Act without Democratic support

Politics 4 Mins Read

A top Senate Republican is eyeing a way to put a “down payment” on Trump-backed voter ID legislation through a party-line bill later in the year.

The Senate has been debating the Safeguarding American Voter Eligibility (SAVE) America Act for almost a month. But without Democratic votes to break the filibuster, the legislation has no chance of passing.

Sen. Lindsey Graham, R-S.C., wants to put portions of the voter ID and citizenship verification legislation into a budget reconciliation package, which requires only Republican votes to pass.

GOP SENATOR’S GAMBIT EXPOSES FALSE DEM CLAIMS ABOUT SUPPORTING VOTER ID

“Reconciliation has limits, but we’re going to make a down payment on the SAVE Act in reconciliation in the fall,” Graham said Monday on a South Carolina radio show, “Straight Talk with Bill Frady.” 

Graham, who chairs the Senate Budget Committee, is in charge of designing the framework for the reconciliation process in the upper chamber. He plans to meet with the White House Friday to “get this thing moving.”

Reconciliation does not allow for straight policy, meaning any provisions included in the package must have a budgetary or spending impact to survive Senate rules. If they don’t, they are stripped out.

Graham says he has a solution.

THUNE ACCUSES CRITICS OF ‘CREATING FALSE EXPECTATIONS’ AMID BACKLASH OVER STALLED SAVE AMERICA ACT

“Voter integrity laws — I’m going to create grant programs, but they’ll have conditions on them,” Graham said. “To get a grant, you’ve got to make sure you purge your rolls of illegal immigrants. There are a lot of blue states out there that don’t do that, and we’ll try to get as much of a voter ID system as I can.”

President Donald Trump and conservatives have demanded that the Senate launch a talking filibuster — or eliminate the filibuster entirely — to pass the SAVE America Act. But Senate Majority Leader John Thune, R-S.D., and other Republicans have made clear the option does not have enough support.

The current floor debate, which is paused while lawmakers are away from Washington, D.C., for the Easter break, is designed to force Senate Democrats to argue against voter ID — a policy that polls show is popular with voters across party lines.

SENATE PASSES BILL TO FUND MOST OF DHS AFTER HOUSE GOP CAVES

Senate Minority Leader Chuck Schumer, D-N.Y., argued late last month that Democrats’ objection to the SAVE America Act is “not to a photo ID when you show up to vote,” despite blocking a standalone voter ID provision pushed by Sen. Jon Husted, R-Ohio.

“Our objection is it’s a voter suppression bill, 20 million, maybe more people, when they show up to vote will be told you’re off the rolls,” Schumer said. “That’s the problem with the bill.“

While Graham’s provision could pass muster under Senate rules, it would likely come in a second reconciliation package in the fall, as midterm elections take center stage. Whether it would take effect by November is unclear. He’s eying provisions that would tackle fraud in the package, too.

Before that, Graham and Republicans are eyeing front-loading funding for Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP) in a reconciliation bill that Trump wants on his desk no later than June 1.

Senate Republicans are largely aligned behind the idea, arguing that Democrats have refused to fund immigration enforcement without stringent reforms — reforms Republicans say they have offered and Democrats have rejected.

Still, House Republicans are not entirely on board, and their resistance could further prolong the longest government shutdown in history.

They are frustrated with the current Senate Department of Homeland SecuritySenate Department of Homeland Security (DHS) funding bill, which carves out ICE and portions of CBP funding. They are demanding the upper chamber make real progress on a reconciliation bill before voting for the compromise plan.

“What I’m going to do is draft a reconciliation bill and load up ICE and Border Patrol funding without a single Democratic vote — give them all they need for three to 10 years, whatever I can fit in,” Graham said. “We’re going to fund the Border Patrol, and we’re going to fund ICE with Republican votes only.”

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KPMG cuts US audit partners by 10% in push to boost productivity

Investing 3 Mins Read

KPMG is cutting around 10% of its US audit partners, marking a significant step in efforts to improve productivity after years of unsuccessful attempts to encourage voluntary retirements.

The move was disclosed during a meeting on Wednesday, where attendees were told the size of the audit partnership had become misaligned with the firm’s business needs, according to people familiar with the matter.

The reduction is expected to affect several dozen partners, although KPMG did not disclose an exact figure.

The decision comes as the firm seeks to streamline operations under new leadership, following the appointment of Tim Walsh as chief executive of the US business nine months ago.

Walsh, a long-time veteran of KPMG’s audit division, has since introduced changes to leadership within the audit and assurance practice.

Partnership size under scrutiny

The cuts reflect broader concerns about the scale of KPMG’s audit partnership relative to both its business volume and its competitors.

The firm’s audit unit has been viewed as larger than those of rival Big Four firms, including Deloitte, EY, and PwC.

KPMG’s most recent transparency report shows it has around 1,400 partners and managing directors in its audit and assurance division, though the firm does not break out the number of partners specifically.

Despite the reductions, KPMG emphasised that its audit partner base remains strong and positioned for future growth.

“This action is connected to a multiyear strategy to align the size, shape, and skills of our team to the power of our audit platform to best serve our clients and protect the capital markets,” KPMG said.

“Our audit partner complement remains robust, and we are in a better position to welcome more people into our partnership over time.”

Voluntary exits fall short

The decision to proceed with cuts follows years of efforts to reduce partner numbers through voluntary retirement programmes.

Financial Times reported, citing people familiar with the situation, that those initiatives consistently failed to attract the level of participation needed to achieve the firm’s restructuring goals. 

As a result, the firm has opted for a more direct approach to recalibrate its workforce.

Social media forums used by KPMG employees indicated that members of the audit and assurance partnership were informed of the cuts during the Wednesday meeting, with affected individuals notified the same day.

Partners leaving the firm will receive compensation and support as part of their exit.

Partners who are leaving will receive financial packages and placement support, “reflecting the value they have delivered for KPMG and our clients”, the firm said. 

KPMG remains the smallest of the Big Four accounting firms, but has modestly expanded its presence in the US audit market.

The firm audited 9.8% of US-listed companies in 2025, up from 9.2% the previous year, according to Audit Analytics.

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Evening digest: Tech companies layoffs, oil surge rattle markets

Business 4 Mins Read

Global markets navigated a mix of corporate restructuring, macroeconomic signals, and geopolitical tensions on Thursday, with Meta Platforms announcing fresh layoffs, Microsoft launching a large-scale buyout programme, KPMG cutting audit partners, US jobless claims edging higher, cryptocurrencies pulling back, and oil prices surging amid Strait of Hormuz tensions.

Meta, Microsoft, KPMG slash workforce amid AI push

Major corporations continued to recalibrate their workforce strategies as investment in artificial intelligence accelerates.

Meta Platforms said it plans to cut about 10% of its workforce, or roughly 8,000 employees, with layoffs scheduled for May 20.

The company will also leave around 6,000 open roles unfilled as it seeks to streamline operations and offset rising AI-related costs.

“We’re doing this as part of our continued effort to run the company more efficiently and to allow us to offset the other investments we’re making,” said Chief People Officer Janelle Gale.

The company has also encouraged employees to integrate AI tools into workflows, including coding and internal operations.

Meanwhile, Microsoft is offering voluntary retirement buyouts to around 7% of its US workforce, or approximately 8,750 employees. The programme applies to staff whose age and years of service total 70 or more.

“Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support,” wrote Amy Coleman.

The move comes as Microsoft ramps up spending on AI infrastructure, including data centres and cloud capabilities.

Separately, KPMG is cutting about 10% of its US audit partners after voluntary retirement programmes failed to achieve desired results. The firm said the move is part of a broader restructuring effort.

“This action is connected to a multiyear strategy to align the size, shape, and skills of our team to the power of our audit platform to best serve our clients and protect the capital markets,” KPMG said.

US jobless claims edge higher but labour market steady

US labour market data pointed to stability despite emerging risks.

Initial jobless claims rose by 6,000 to 214,000 for the week ended April 18, slightly above expectations. Despite the increase, layoffs remain limited, suggesting a relatively resilient labour market.

Continuing claims climbed to 1.821 million, indicating that unemployed workers may be taking longer to find jobs. Analysts describe the current environment as a “low hire-low fire” dynamic, with employers cautious on both hiring and layoffs.

The data comes against a backdrop of geopolitical uncertainty, including tensions involving Iran, which have disrupted trade routes and increased input costs.

However, there are no clear signs yet that these pressures have translated into widespread job losses.

Bitcoin slips as crypto market shows mixed signals

Cryptocurrency markets weakened on Thursday, with Bitcoin falling below the $80,000 level after briefly reaching its highest point since January.

Bitcoin declined about 1.3% to trade near $77,800, while Ethereum dropped to around $2,320. Other major tokens also saw losses, reflecting broader risk-off sentiment.

Derivatives data showed futures open interest easing slightly from recent highs, while negative funding rates indicate bearish positioning among leveraged traders.

Analysts described the current rally as a “most hated” advance, suggesting potential upside if short positions unwind.

Market participation remains uneven, with capital flowing out of several altcoins even as bitcoin attempts to break higher.

Oil prices surge as Strait of Hormuz tensions escalate

Crude oil prices jumped sharply as geopolitical tensions intensified in the Strait of Hormuz.

Brent crude rose more than 3% to settle at $105.07 per barrel, while West Texas Intermediate climbed to $95.85.

The surge follows reports of tanker seizures and escalating military rhetoric between the US and Iran.

Shipping activity through the strait has declined significantly, raising concerns about global supply disruptions.

President Donald Trump said the US has “total control” over the sea lane, while Iran continues to demand permission for vessels to pass.

Oil prices also rose on Thursday following a report from Israeli broadcaster N12 that Iran’s chief negotiator, Mohammad Bagher Ghalibaf, had resigned amid alleged interference from the country’s Revolutionary Guard.

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UK retail sector shows resilience, but Iran war clouds demand outlook

Business 3 Mins Read

British retail sales rose by 0.7% in March, offering a stronger-than-expected performance for the sector.

The data marks one of the first official indicators of how the retail industry is responding after the start of the Iran war, which has pushed up fuel prices and raised concerns about broader inflation and economic slowdown.

Economists had largely anticipated a more modest rise of 0.1% in sales volumes for the month.

The sharper increase suggests that consumer spending remained relatively resilient despite mounting geopolitical tensions and rising cost pressures.

The figures provide a snapshot of consumer activity at a time when households are facing higher fuel costs, which could eventually filter into wider inflation.

While the immediate data points to strength, analysts remain cautious about the sustainability of this trend in the coming months.

Consumer sentiment weakens sharply

Despite the stronger retail sales data, broader consumer confidence indicators paint a more cautious picture.

Britain’s longest-running consumer sentiment index, published by market research firm GfK, fell to its lowest level since October 2023 in March.

The index also recorded its largest month-on-month drop in a year, highlighting growing unease among consumers.

This decline suggests that while spending held up in March, households may be becoming increasingly wary about future economic conditions.

The weakening sentiment reflects concerns around rising living costs, particularly fuel prices, and the potential economic fallout from the Iran war.

Such factors could weigh on discretionary spending in the near term.

Retailers flag uncertainty over demand outlook

Major British retailers have echoed these concerns, warning that uncertainty linked to the Iran war is clouding their outlook.

Companies across the sector have indicated that the evolving geopolitical situation could negatively impact consumer demand and profitability.

Food retailers, including Tesco and Sainsbury’s, have stated that they have not yet observed significant changes in consumer behaviour.

Spending patterns in essential categories such as groceries have remained relatively stable so far.

However, the picture appears less consistent in other segments.

Clothing retailer Primark noted that while trading in March was encouraging, performance in April has been softer.

This suggests that consumer caution may already be starting to emerge as external pressures intensify.

Outlook remains uncertain amid geopolitical pressures

The divergence between strong retail sales and weakening sentiment highlights the fragile state of the UK consumer environment.

Rising fuel costs triggered by the Iran war are expected to contribute to higher inflation, which could eventually dampen spending.

Retailers and analysts alike are closely monitoring whether the resilience seen in March can be sustained.

Uncertainty remains a key theme, with businesses preparing for potential shifts in consumer behaviour as economic pressures build.

While the latest data offers some reassurance, the broader outlook for the retail sector remains clouded.

The coming months will be critical in determining whether the sector can maintain momentum or whether geopolitical and inflationary pressures will begin to weigh more heavily on demand. 

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U.S. oil has its biggest one-day price increase in six years, driving the cost of gas even higher

Business 1 Min Read

Oil prices surged Thursday, threatening to further drive up the price of gas as hopes for a near-term resolution to the Iran war faded following President Donald Trump’s address to the nation.

Stocks were volatile, with major indexes plunging early in the day before moving higher at the close on shifting headlines about the war in the Middle East.

U.S. indexes recovered their early losses on news that Iran’s deputy foreign minister said his country would outline a “new navigation regime” in the Strait of Hormuz after the war ended, injecting fresh optimism into markets over the future of the key waterway.

At the closing bell at 4 p.m. ET, the S&P 500 closed up 0.11%, the Nasdaq Composite ended higher by 0.18%, and the Dow Jones Industrial Average fell 61 points. The Russell 2000 index, which tracks smaller companies, rose 0.7%.

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Trump’s apocalyptic Iran warning raises stakes for sweeping US strike threat

Politics 7 Mins Read

President Donald Trump warned that “a whole civilization will die tonight” as a deadline looms for Iran to agree to U.S. demands, escalating his rhetoric even as last-minute negotiations continue through intermediaries to avert sweeping military strikes.

Trump has set a Tuesday night deadline for Iran to accept terms that include reopening the Strait of Hormuz, a critical global oil artery, as U.S. officials — including Vice President JD Vance — continue back-channel talks through intermediaries such as Pakistan. 

But significant gaps remain, and the president’s latest comments raise the risk the U.S. may move forward with strikes targeting Iranian infrastructure, including power and transportation systems and beyond. 

TRUMP REVEALS IRAN MADE ‘SIGNIFICANT PROPOSAL’ AFTER ULTIMATUM, BUT ‘NOT GOOD ENOUGH’

Trump’s latest remarks mark a sharp escalation from earlier warnings focused on infrastructure. He also suggested Iran had undergone “complete and total regime change, where different, smarter, and less radicalized minds prevail.”

Mojtaba Khamenei was named Iran’s supreme leader after U.S. strikes killed his father, Ali Khamenei, though his current status and control remain unclear amid conflicting reports. 

And Iran has threatened to take action if Trump follows through on his threats. 

“Iran will not stand idle in the face of such egregious war crimes,” said Amir-Saeid Iravani, Iran’s permanent representative to the United Nations. “It will exercise without hesitation its inherent right of self-defense, and will take immediate and proportionate reciprocal measures.”

Diplomatic efforts to avert a wider conflict are ongoing but increasingly strained, with mediators including Pakistan, Egypt and Turkey working to broker a ceasefire and reopen the Strait of Hormuz before broader talks can begin.

“We are absolutely in touch with” Iran, a senior U.S. official told Fox News. “Absolutely. (The talks) have been positive. If we get lucky, we will have something by the end of the day.”

Iran repeatedly has rejected a temporary truce in favor of a permanent end to the war, while U.S. officials have dismissed Tehran’s proposals as insufficient, leaving key differences unresolved as the deadline approaches.

Trump underscored the threat in a profanity-laced Truth Social post Sunday, declaring that “Tuesday will be Power Plant Day, and Bridge Day” in Iran and warning that the country’s infrastructure would be destroyed if it did not reopen the Strait of Hormuz. He told Iran to “open the F—in’ Strait… or you’ll be living in Hell.”

As the deadline nears, the conflict already is intensifying on the ground. Airstrikes hit parts of Iran’s capital city of Tehran Tuesday, while Iranian officials urged civilians to form human chains around power plants in an effort to deter potential U.S. attacks on critical infrastructure, Iranian state media reported. 

Overnight, the U.S. struck dozens of military sites on Kharg Island — including bunkers, radar stations and ammunition storage facilities — a senior U.S. official told Fox News. The island is Iran’s primary oil export hub, making it one of the regime’s most critical economic assets. 

By targeting military sites while avoiding energy infrastructure, the strikes suggest the U.S. is applying pressure while holding Iran’s oil lifeline at risk as a potential next step if the deadline passes without a deal.

Israel also has signaled a potential expansion of the target set to include Iran’s rail network, warning civilians to avoid trains ahead of possible strikes. Rail lines play a critical role in moving military forces and equipment, particularly in and out of Tehran, and disrupting them could significantly limit Iran’s ability to reposition assets and sustain operations.

While Trump has centered his deadline on reopening the Strait of Hormuz, the negotiations have expanded into a broader dispute over ending the war, including Iran’s nuclear and missile programs, sanctions relief and security guarantees — issues that remain unresolved as both sides clash over what concessions must come first.

Trump’s “civilization” remarks have raised new questions about whether the potential U.S. target set could extend beyond bridges and power plants to include additional infrastructure or systems tied to the Iranian regime’s ability to maintain power.

IRAN’S TALLEST BRIDGE COLLAPSES AFTER REPORTED US AIRSTRIKES, IRAN THREATENS AMERICAN ALLIES IN RETALIATION

Trump has warned that “every bridge in Iran will be decimated” and that power plants could be left “burning, exploding and never to be used again” if Tehran fails to meet his demands, underscoring the scale of potential infrastructure strikes.

Trump also has repeatedly extended similar deadlines in recent weeks, delaying threatened strikes as negotiations continued before issuing new ultimatums. The pattern has raised questions about whether the latest deadline will hold — or serve as another pressure tactic in the final hours of talks.

Iran’s blockade of the Strait of Hormuz — through which roughly a fifth of the world’s oil passes in peacetime — already has sent shock waves through global markets, raising pressure on the administration to reach a resolution while increasing the stakes of any potential military escalation.

Military options now on the table

Trump’s rhetoric has fueled questions about how far a potential U.S. strike campaign could extend beyond the infrastructure targets he has publicly identified. 

Military analysts say options range from continued infrastructure strikes aimed at crippling Iran’s ability to function to a broader campaign targeting the regime’s core power centers.

The White House rapid response team shot down a post on X which quoted Vance and suggested it implied “Trump might use nuclear weapons.” 

“Literally nothing @VP said here ‘implies’ this, you absolute buffoons.”

“The Iranian regime has until 8PM Eastern Time to meet the moment and make a deal with the United States. Only the President knows where things stand and what he will do,” press secretary Karoline Leavitt said in a statement. 

A U.S. operation could focus on disabling Iran’s electrical grid, transportation networks and energy facilities — a strategy designed to create nationwide disruption and pressure leadership. Such strikes could trigger cascading effects across communications, water systems and industrial production and would impact the civilian population.

Other options could involve further targeting of leadership, facilities tied to the Islamic Revolutionary Guard Corps, including command-and-control nodes, weapons production sites, and economic assets that fund the regime’s operations. 

Gregg Roman, executive director of the Middle East Forum, said the president’s language suggests a focus on dismantling the regime’s underlying power structures rather than targeting Iran as a nation.

“I really think that what he’s talking about are the fundamental roots and the anchors of the Islamic Republic, not of the country of Iran,” Roman said.

“Everything that the United States would target in a hypothetical attack on power plants, bridges, other key points of infrastructure would really have to focus on those that are connected to the ability of the generals who are currently in charge of this regime and their ability to maintain power,” he added.

Roman said Trump’s reference to “civilization” likely reflects the 47-year rule of the Islamic Republic rather than Iranian society as a whole.

“I don’t think he’s speaking about Persian civilization. I think he’s speaking about the 47 years that the Islamic Republic has ruled as a polity.”

Iranian officials have called on civilians to help protect key infrastructure. Earlier, Iranian official Alireza Rahimi issued a video message calling on “all young people, athletes, artists, students and university students and their professors” to form human chains around power plants.

Iranian President Masoud Pezeshkian said Tuesday that Iranians are willing to give their lives in defense of Iran. 

“More than 14 million brave Iranians have so far declared their readiness to sacrifice their lives to defend Iran. I have also sacrificed my life for Iran, I am, and I will continue to do so,” he wrote on X.

Fox News’ Bill Hemmer, Jennifer Griffin and Louis Casiano contributed to this report. 

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