Economists warning of deeper damage to growth later in the year

The UK economy lost steam in April, according to official figures, as the energy price shock stemming from the Iran war weighed heavily on businesses and consumers alike.

The Office for National Statistics reported that GDP fell by 0.1 per cent in April.

The services sector shrank by 0.2 per cent, while manufacturing output recorded no growth whatsoever. Construction, however, staged a modest recovery, posting growth of 0.1 per cent.

Across a three-month period, growth came in at 0.7 per cent, building on the momentum established during the first quarter of the year.

“Services were again the driver [over three months] with a particular strength in computer programming, marketing and wholesale companies across the three months, while construction showed some further signs of recovery after a weak winter,” said Liz McKeown, director of economic statistics at the ONS, as reported by City AM.

Reeves said: “Before the conflict in the Middle East, growth was higher than expected and inflation was falling. This is not a war we wanted or joined, but one that will have an impact at home.”

The figures illustrate how the early disruption to international trade along the Strait of Hormuz, following the outbreak of the Iran war in March, has already begun to affect UK households and businesses.

Economists have warned that the UK economy faces a more significant blow yet, as the knock-on effects of trade disruption are expected to feed through into the data later this year. Inflation is also anticipated to climb as the conflict with Iran continues, fuelling concerns that interest rates may need to rise.

The Bank of England is due to convene again next year to reassess the risk of inflation accelerating over the coming months.

Tensions have flared once more in recent days, dashing hopes of a peace agreement between the parties involved, with Iran launching missiles towards Israel and the US striking Iran’s vital infrastructure.

Fergus Jimenez-England from the National Institute of Economic and Social Research said he anticipated a slowdown in the UK economy to “intensify as higher energy costs feed through the economy, with the impact likely to be felt most acutely in the third quarter as the energy price cap rises”.

KPMG chief economist Yael Selfin said: “In contrast to 2022, subdued domestic demand is limiting firms’ ability to pass these higher costs on to consumers, which is likely to squeeze profit margins.

“This could lead firms to scale back investment plans, particularly against the backdrop of higher borrowing costs and geopolitical uncertainty.”

Global economy heading for weakest growth since pandemic.

The world economy is also on course to slow to its weakest growth rate since the pandemic, driven by the energy price shock that has pushed oil prices beyond $90 per barrel.

The World Bank said on Thursday that global growth was projected to reach 2.5 per cent, down from the 2.9 per cent figure for 2025. World Bank president Ajay Banga warned that developing nations outside of China and India would bear the heaviest burden, stating they will have “collectively experienced nearly a decade of no progress on narrowing their per capita income gap with advanced economies”.

The UN body also cautioned that economies across Europe, Central Asia and the Middle East would expand at a slower pace than those in sub-Saharan Africa and Latin America.

The sluggish growth figures across the UK and beyond are likely to ring alarm bells for Treasury officials, who are already locked in a battle with other government departments over stretched budgets.

Growth in the first quarter of the year was estimated at 0.6 per cent, though some of those gains are expected to be eroded by ongoing global conflicts.

On Thursday, John Healey quit the government, citing Sir Keir Starmer and Rachel Reeves’ failure to allocate sufficient funding to defence as his reason for stepping down.

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NEW YORK — Bitcoin traded modestly lower on Friday, slipping 0.12% to $63,491.51 as investors exercised caution amid broader market movements and ongoing developments in cryptocurrency regulation and institutional adoption.

The world’s largest cryptocurrency by market capitalization has been trading in a relatively narrow range in recent sessions, reflecting balanced sentiment between long-term optimism around blockchain technology and near-term pressures from macroeconomic factors. The minor decline came as global equity markets showed mixed performance and traders assessed the implications of major corporate events, including SpaceX’s landmark initial public offering.

Market Performance and Technical Outlook

Bitcoin’s price action has been characterized by consolidation following stronger moves earlier in the year. Support levels around $60,000 have held firm, while resistance near $65,000 remains a key technical hurdle. Trading volume has been moderate, suggesting neither strong bullish conviction nor aggressive selling pressure.

The cryptocurrency continues to correlate with technology stocks and risk assets, responding to shifts in interest rate expectations and investor appetite for growth-oriented investments. Friday’s modest dip aligns with a broader cautious tone across digital assets, though many analysts view current levels as attractive for long-term accumulation.

Factors Influencing Price Action

Several elements are shaping Bitcoin’s trajectory. Institutional adoption has accelerated, with major companies and investment vehicles increasing exposure to cryptocurrency. Spot Bitcoin exchange-traded funds have seen steady inflows, providing a more regulated pathway for traditional investors to participate in the asset class.

Regulatory developments remain a key focus. Global authorities continue refining frameworks for digital assets, with some jurisdictions advancing clearer guidelines while others maintain stricter oversight. These evolving rules create both opportunities and uncertainties for market participants.

Macroeconomic conditions also play a significant role. Persistent inflation concerns, central bank policies and geopolitical tensions influence risk appetite across financial markets. Bitcoin’s performance as a potential inflation hedge or store of value is frequently debated, with its decentralized nature appealing to investors seeking alternatives to traditional currencies.

Broader Crypto Market Context

The wider cryptocurrency market has mirrored Bitcoin’s movements, with major altcoins showing limited volatility. Ethereum, the second-largest digital asset, has maintained relative stability, supported by ongoing developments in its ecosystem and layer-2 scaling solutions.

Total cryptocurrency market capitalization remains substantial, reflecting growing mainstream integration even as the sector experiences periodic corrections. Decentralized finance applications, non-fungible tokens and blockchain infrastructure projects continue expanding, driving underlying utility beyond pure speculation.

SpaceX’s high-profile IPO has drawn attention to the intersection of technology innovation and capital markets, potentially benefiting sentiment toward blockchain-related ventures. Elon Musk’s companies have historically influenced crypto narratives, though direct impact on Bitcoin prices varies.

Institutional and Retail Dynamics

Institutional participation has matured significantly, with hedge funds, corporations and asset managers allocating portions of portfolios to Bitcoin. This professional involvement has brought greater liquidity and legitimacy while also introducing more sophisticated risk management strategies.

Retail interest remains robust, fueled by accessible trading platforms and educational resources. However, individual investors have shown increased selectivity, focusing on projects with clear use cases rather than speculative fervor seen in previous cycles.

Analyst Perspectives

Market observers note Bitcoin’s resilience amid fluctuating external conditions. Many view the current price range as a period of accumulation ahead of potential catalysts such as further regulatory clarity or technological upgrades. Long-term forecasts often cite Bitcoin’s fixed supply schedule and growing global adoption as supportive factors.

Short-term traders monitor technical indicators and news flow for directional cues. Volatility remains a defining characteristic of cryptocurrency markets, requiring disciplined approaches to position sizing and risk management.

Challenges and Risks

Despite progress, the sector faces ongoing challenges. Security incidents, though reduced, highlight the importance of robust infrastructure. Environmental concerns around energy consumption for proof-of-work mining have prompted shifts toward more sustainable practices and alternative consensus mechanisms.

Geopolitical risks and potential regulatory shifts can trigger sharp price movements. Investors must navigate these uncertainties while evaluating Bitcoin’s role within diversified portfolios.

Longer-Term Outlook

Bitcoin’s journey from niche digital asset to a recognized store of value has been remarkable. As infrastructure improves and adoption expands across industries, many expect continued maturation. Integration with traditional finance, advancements in scalability and potential nation-state involvement could shape its future trajectory.

The halving cycles, which reduce new supply issuance, remain an important structural feature. Historical patterns suggest these events can influence market dynamics, though past performance does not guarantee future results.

Investment Considerations

For those participating in cryptocurrency markets, thorough research and risk awareness are essential. Bitcoin’s volatility demands careful portfolio allocation and long-term perspective. Diversification across asset classes helps manage exposure to any single market segment.

Regulatory compliance and security best practices should guide investment decisions. Investors are encouraged to use reputable platforms and maintain awareness of evolving rules in their jurisdictions.

Conclusion

Bitcoin’s slight decline to $63,491.51 reflects measured market sentiment as participants balance enthusiasm for technological progress with caution around external factors. The asset’s performance continues to be closely watched as a bellwether for the broader cryptocurrency space.

As the digital asset ecosystem evolves, Bitcoin remains at the forefront of innovation and debate. Friday’s trading activity adds another data point in its ongoing story, one characterized by resilience, volatility and growing mainstream relevance. Market participants will continue monitoring developments for signals of shifting trends in this dynamic sector.

The coming weeks and months may bring additional clarity as regulatory frameworks advance and corporate adoption deepens. For now, Bitcoin trades near current levels with investors weighing its potential against inherent risks in the evolving landscape of digital finance.

GUADALAJARA, Mexico — South Korea strengthened its position in Group A with a 2-1 comeback victory over Czech Republic in its opening match of the 2026 FIFA World Cup, boosting its probability of advancing to the round of 32 to 93% according to statistical analysis by The Athletic.

The result puts South Korea level on points with co-host Mexico after the latter’s 2-0 win over South Africa. Myung-Bo Hong’s team overcame an early second-half deficit through goals from In-Beom Hwang and substitute Hyeon-Gyu Oh, showcasing resilience and technical quality in a competitive group opener at Estadio Jalisco.

Match Summary and Key Moments

Czech Republic took the lead in the 59th minute when Ladislav Krejci headed home a long throw-in from Vladimir Coufal. South Korea responded swiftly, with Hwang cutting inside from Kang-In Lee’s pass and clipping a precise finish inside the near post to equalize just eight minutes later.

The winning goal came in the 80th minute as Oh converted Hwang’s low cross from close range. A potential equalizer from Tomas Soucek was correctly disallowed for offside, and goalkeeper Seung-Gyu Kim made a crucial late save to preserve the victory.

The win rewarded South Korea’s superior possession and attacking intent. The team controlled the majority of the ball and created multiple opportunities, particularly through Son Heung-Min, who was denied on several occasions before the comeback materialized.

Advancement Probability and Group Dynamics

The Athletic’s analysis highlighted South Korea’s strong position in the expanded 48-team tournament. With 12 groups of four teams, the top two from each group advance automatically, along with the eight best third-placed sides, creating more pathways to the knockout stages.

Even in the scenario of a loss to Mexico on June 18, South Korea would retain an 86% chance of advancing with a win against South Africa in the final group match. A victory over Mexico would virtually guarantee progression. In the worst-case scenario of two remaining losses, the model still gives South Korea a 55% chance due to the favorable head-to-head result against Czech Republic and the expanded format.

The head-to-head advantage is significant under the tournament’s tiebreaker rules, which prioritize results between tied teams before overall goal difference.

Team Performance and Tactical Strengths

South Korea demonstrated a high level of technical quality and mental fortitude. Central midfielder Hwang and attacking contributors like Lee were instrumental in the comeback. Coach Hong praised the squad’s character. The performance suggests the team can compete effectively against stronger opponents in Group A.

Veteran Son remains a focal point, though support from younger and midfield talents provides balance. The depth of the roster allows for effective substitutions, as seen with Oh’s decisive impact.

Group A Outlook

Mexico currently leads the group after its solid opening win. South Korea’s result sets up an intriguing clash with the co-hosts, while Czech Republic and South Africa will battle to stay alive. The expanded format rewards consistent performances and gives teams more margin for error compared to previous World Cups.

South Korea’s path appears promising, but execution in the remaining matches will be decisive. A strong showing against Mexico could secure top spot, while a competitive effort would still leave advancement highly likely.

Broader Tournament Context

The 2026 World Cup’s 48-team structure has already produced competitive and entertaining matches in the early stages. South Korea’s victory exemplifies the quality across many squads and the opportunities available in the new format.

As one of Asia’s traditional powerhouses, South Korea carries expectations to progress beyond the group stage. The team’s recent form and tactical setup under Hong position it well for a deep run, potentially reaching the knockout stages for the first time since 2010 or better.

Fan and National Reaction

The result has generated widespread celebration in South Korea, with fans praising the team’s fighting spirit and individual contributions. The national team’s performances on the global stage continue to inspire pride and unity at home.

International observers have noted South Korea’s technical improvement and potential as a dark horse in Group A. The match against Mexico will be a key test of ambitions, with both sides capable of strong showings.

Looking Ahead for South Korea

The Socceroos-equivalent focus now shifts to preparation for the Mexico encounter. Maintaining fitness, tactical discipline and confidence will be essential. The team’s ability to perform away from home against quality opposition will be scrutinized.

Regardless of the outcome against Mexico, a positive result against South Africa would likely secure advancement. The squad’s depth and experience provide a solid foundation for the challenges ahead.

The 2026 World Cup continues to unfold with compelling storylines across all groups. South Korea’s strong start has positioned it favorably, offering fans and players alike reason for optimism as the tournament progresses toward the knockout stages.

As more matches are played, the expanded field is proving its value by delivering competitive balance and opportunities for traditional powers and emerging sides alike. South Korea’s 2-1 victory over Czech Republic stands as an early highlight, boosting confidence and statistical prospects heading into the critical middle phase of the group stage.

The road to the round of 32 and beyond remains demanding, but the Taegeuk Warriors have taken a significant step forward with their opening performance. National attention now turns to the Mexico clash, where another strong showing could solidify South Korea’s place among the tournament’s standout teams.

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The number of innovative firms in Wales has fallen sharply

The real test of whether an economy is becoming more productive is not found in political speeches but in the behaviour of businesses. Are they investing in new products? Are they new products, adopting technologies and finding new ways to compete?

That is why the latest UK Innovation Survey matters so much, as it tells us something important and uncomfortable namely, that Wales is not only below the UK average in innovation activity but has fallen further behind over the last three survey periods.

In 2018-20, 43.5% of Welsh businesses were classified as innovation-active, compared with a UK average of 44.9%. By 2022-24, that had changed dramatically and whilst the proportion of innovation-active businesses had fallen to 34% in the UK, in Wales, it had crashed to just 27.7%.

For an economy that has long struggled with productivity, that should be a serious concern because innovation is one of the routes through which businesses become more productive. It is not just about laboratories, patents or university spinouts, although those have their place.

It is also about new ways of working, better technology, improved systems, stronger management, new services and more efficient processes. If fewer Welsh firms are doing these things, then closing the productivity gap becomes even more difficult.

The comparison with the rest of the UK is also uncomfortable and in the latest survey period, England had an innovation-active rate of 34.8%. Northern Ireland was at 30.3%. Scotland was at 29.4%. Wales was last, at 27.7%.

Nor is Wales simply behind London and South East England; it is below every English region and therefore the worst-performing part of the UK. That should challenge any explanation normally out forward by those in power that Wales is only being held back by the exceptional strength of the south-east of England, and the latest figures suggest something broader and more worrying.

The survey also shows that several core innovation activities have weakened across the UK, and the proportion of businesses investing in computer software, computer hardware and internal research and development as part of innovation activity fell from 2018-20 to 2022-24.

These are not marginal business activities as software, hardware and R&D are among the practical foundations of modern productivity, and they are the ways firms improve what they do and how they do it. If these activities are weakening nationally, and Welsh firms are less likely to be innovation active in the first place, the challenge for Wales becomes even greater.

The survey also reminds us that larger firms are more likely to innovate. In 2022-24, some 47% of large UK businesses were innovation active, compared with 34% of SMEs. That matters because Wales has a business base heavily shaped by small and medium-sized enterprises and fewer large private-sector headquarters than stronger-performing regions.

This is not a criticism of Welsh SMEs, as many are ambitious, creative and resilient, but smaller firms often have less time, less capital, fewer specialist staff and less management capacity to invest in innovation. The owner-manager, dealing with cash flow, recruitment, customers, regulation and day-to-day delivery, may recognise that technology adoption or process improvement is necessary but still struggles to make it happen.

The barriers identified in the survey underline this point and among broader innovators, 21.6% identified the cost of finance as a barrier, 20.3% cited the availability of finance, and 19.6% said the direct cost of innovation was too high.

So the issue is not simply whether firms have ideas, it is whether they have the money to act on them and, as I have pointed out so many times, questions need to be asked as to why the Welsh Government own funding body, the Development Bank of Wales, has not specifically addressed this critical issue.

The technology findings are equally important as broader innovators are far more likely than non-broader innovators to use artificial intelligence, CRM (customer relationship management) systems, ERP (enterprise resource planning) software, project management tools and other management technologies.

This matters because productivity – which is now the touchstone for this new Plaid Cymru Government – is often lost not in dramatic failures, but in ordinary inefficiencies, including poor customer management, slow invoicing, poor workflow and inconsistent project delivery.

This means that for many Welsh firms, the biggest productivity gains may come not from a breakthrough invention but from better use of everyday technology. And yet such changes have not been the focus of the activities of Business Wales which is allegedly there to support Welsh businesses.

The export data tells a similar story and in 2024, 28.3% of broader innovators exported, compared with only 9.2% of non-broader innovators. Among SMEs, 27.6% of broader innovators exported, compared with 8.9 per cent of non-broader innovators. Innovation and exporting are therefore closely connected and firms that innovate are more likely to sell beyond their immediate markets, and firms that export are often pushed to become more competitive.

For Wales, this is crucial as a small economy cannot build prosperity by selling mainly to itself and needs more firms competing in wider markets but that requires stronger products, better systems, improved quality, sharper branding, more efficient processes and greater confidence.

Therefore, latest UK Innovation Survey should be seen as more than a statistical report, but as a warning that Wales has a productivity problem, and it is getting worse

Six years ago, Wales was close to the UK average, but it is now clearly behind and has not only fallen faster than the UK, but it is behind every UK nation and every English region. It has fewer innovation-active firms at a time when technology adoption, new products, better processes and stronger exports should be at the heart of economic renewal.

There is no easy route from a low-innovation economy to a high-productivity one, but if Wales wants higher wages, stronger firms and a more resilient economy, these findings cannot be ignored. Innovation cannot remain a specialist policy interest or a slogan attached to political manifestos, but must become central to how Wales thinks about business growth, productivity and the future of the economy

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More than 17,000 coffee makers were recalled over a burn hazard that can cause serious injury, according to federal regulators.

About 17,600 Kidisle-branded hot and iced coffee machines were affected by the recall, according to the U.S. Consumer Product Safety Commission.

“The recalled coffeemakers(sic) can become clogged, causing hot liquid or steam to build up and be released unexpectedly during use, posing a risk of serious injury from burn hazard,” the commission said on Thursday.

FORD ISSUES RECALL FOR MORE THAN 548,000 VEHICLES OVER ISSUE WITH CENTER CONSOLE

About 17,600 Kidisle-branded hot and iced coffee machines were affected by the recall. (U.S. Consumer Product Safety Commission)

At least 107 reports have been made regarding the coffee makers releasing hot liquid or steam unexpectedly, causing at least 27 reported injuries, including first and second-degree burns that required medical treatment.

The item is designed in black, white and gray colors, measures about 11 inches high and 6 inches wide and has a 50-ounce detachable water tank. It can brew six to 14 ounces of cupped or ground coffee.

At least 107 reports have been made regarding the coffee makers releasing hot liquid or steam unexpectedly, causing at least 27 reported injuries. (iStock / iStock)

The coffee makers were sold online at Amazon, Walmart and eBay from June 2024 through April of this year for about $49.

The machines affected by the recall have model “KC101B” printed on a sticker on the underside while the brand name is listed on the product order receipt.

KIA RECALLS 6K VEHICLES DUE TO POSSIBLE SEAT BELT DEFECT THAT COULD RAISE INJURY RISK

The coffee makers were sold online at Amazon, Walmart and eBay from June 2024 through April of this year for about $49. (REUTERS/Eduardo Munoz / Reuters)

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Consumers are urged to stop using the coffee makers immediately and contact Kidisle for a full refund.