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From Trump tariffs to AI: the big economic questions facing governments in 2025
- The UK is not showing signs of recovery with businesses bracing themselves for April’s £25bn increase in employer national insurance contributions (NICs) which has fuelled a furious backlash against Labour Party.
- The Economic growth for 2025 is forecasted to slow at a rate of 1.3% resulting in strong real wage growth.
- Experts at Glasgow University argue that the “hallucinations” which large language models produce such as AI could have doubtful returns.
- Nobel prize-winning economist believes the economic impact of AI on productivity and jobs will be much lower than AI champions claim.
- German and French economies are currently being faced with political crises as the EU, including Germany and France, faces a gloomy economic outlook in 2025.
- Investment increase and much closer policy coordination across the EU could determine future crises.
- President Donald Trump is setting stiff tariffs on goods from Mexico, Canada and other countries and it remains unclear whether this will result in a prolonged trade war.
- Policymakers must be ready to adapt to the climate emergency by allowing central banks to tolerate higher inflation rates when it is caused by climate-driven shocks instead of clobbering growth with rate rises.
- Acknowledging the cost of human lives and livelihood, policymakers acknowledge the need for drastic positive economic policies to prevent catastrophe.
- It is uncertain whether policymakers will wake up to the climate emergency in 2025, resulting in the economic costs of the climate emergency rising.
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