Starmer orders economic reset amid Trump tariff mayhem

Keir Starmer is preparing to rethink key elements of the government's economic policy in an emergency response to Donald Trump's tariff blitz, amid growing concern in Downing Street that the US president's trade war could do lasting damage to the UK.

- Toby Helm & Phillip Inman

• PM ready to ditch the 'old assumptions'

• Debate on 'iron-clad' fiscal rules now in play

The prime minister believes, say allies, that "old assumptions should be discarded" in the UK's response, suggesting he and the chancellor, Rachel Reeves, may be preparing to raise taxes again despite having promised not to do so - or even possibly change their "iron-clad" fiscal rules to allow more borrowing and fire up economic growth at home in the event of recession.

Almost $5tn (£4tn) was wiped off the value of global stock markets after Trump launched his tariff offensive last Wednesday on the rest of the world, including a 10% base tariff on imports into the US from the UK.

On Friday, the FTSE 100 closed more than 7% lower than last Monday, after what was its worst week since the height of panic over the Covid pandemic in March 2020.

Underlining the potential impact on UK businesses of a global trade war, Britain's luxury carmaker Jaguar Land Rover (JLR) said yesterday that it would "pause" shipments to the US in April as it considered how to respond. "As we work to address the new trading terms with our business partners, we are taking some shortterm actions, including a shipment pause in April, as we develop our midto longer-term plans," said JLR.