01/04/2026

BIZ & FINANCE WEDNESDAY | APR 1, 2026

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China factory activity expands at quickest pace in a year

UK economy limped into end of 2025: Official data

LONDON: Britain’s economy barely expanded at the end of 2025, official data confirmed yesterday, adding to the challenge for the government to keep growth on track this year with the Iran war likely to push up inflation and hit demand. Gross domestic product increased by 0.1% in the October to-December period, the Office for National Statistics (ONS) said. Economists polled by Reuters had forecast the reading for gross domestic product in the fourth quarter would be unrevised. The ONS said Britain’s economy in the fourth quarter grew 1.0% from a year earlier – unchanged from an initial estimate – while on a per capita basis, output was 0.1% lower than the year before. Growth in the third quarter was also confirmed at 0.1%. “Such a weak economic backdrop makes it more likely that the inevitable jump in CPI inflation in the coming months won’t morph into a long-lasting rise that requires the Bank of England (BoE) to raise interest rates,” Paul Dales, chief UK economist at Capital Economics, said. Investors are betting on two, or possibly three, quarter-point rate hikes by the BoE before the end of this year. But most economists polled by Reuters think the central bank will not increase borrowing costs, given the weakness in the economy. Last week the Organisation for Economic Cooperation and Development cut its forecast for British economic growth this year to 0.7% from a previous forecast of 1.2%, the biggest downgrade of any major economy. That would represent a halving of the pace of growth seen over 2025, which the ONS revised up to 1.4% from a previous estimate of 1.3%. Prime Minister Keir Starmer and finance minister Rachel Reeves have promised voters that they will speed up the economy, a challenge that looks even bigger against the backdrop of the conflict in the Middle East. Most of the growth in the last three months of 2025 came from the public sector. Business investment fell. However, there were some signs in yesterday’s data that offered analysts some grounds for confidence about the outlook, with households putting more money aside and raising the savings ratio by 0.8 percentage points to 9.9%. – Reuters

increased market activity. There was an acceleration in the production activities of manu facturing enterprises and a marked improvement in market demand, Huo said. China’s non-manufacturing PMI – a gauge of activity across services and construction – was 50.1 in March, an improvement from February’s slump of 49.5. The data has underscored some resilience in China’s economy despite the uncertainty that the raging Middle East war has brought about, after US-Israeli strikes on Iran triggered Tehran’s retaliation that sharply restricted access to the Strait of Hormuz. The waterway is a critical shipping route for energy resources, and the situation has caused global oil prices to soar, triggering fears for the world economy. The outlook for the second quarter is unclear, and the market is “increasingly worried” about the risk of global growth slowdown and supply chain disruption, Zhiwei Zhang, president and chief eco nomist at Pinpoint Asset Manage ment, wrote in a note. “While China has ample energy reserves to mitigate the term of trade shock, a global growth slowdown would dampen China’s exports,” Zhang said. China’s trade surged by a fifth in the first two months of the year, official data showed earlier this month, significantly outpacing forecasts despite a plunge in shipments to the United States. – AFP

o Official March manufacturing PMI at 50.4, up from February’s 49.0 BEIJING: China’s factory activity expanded in March at its quickest pace in a year, official data showed yesterday, ending a two-month slump as production picked up after the annual Spring Festival holiday. The world’s second-largest investment in recent years that has weighed on its vast manufacturing sector. Despite this, the manufacturing purchasing managers’ index – a key measure of industrial health – rose to 50.4 in March, according to the National Bureau of Statistics (NBS). That figure was up from 49.0 in February and 49.3 in January, and beat a forecast of 50.1 in a Bloomberg survey of economists. It is the highest since March 2025 when the PMI was 50.5. NBS statistician Huo Lihui attributed March’s expansion to the “resumption of work and pro-duction after the Spring Festival”, which led to economy has been struggling with a slowdown in domestic demand and

Employees at work on a production line manufacturing camera lenses for cellphones at a factory in Lianyungang, China. The March manufacturing data has underscored some resilience in China’s economy despite the uncertainty that the raging Middle East war has brought about. – REUTERSPIC

Japan brands yen falls ‘speculative’ as Iran war sparks sell-off TOKYO: Japan yesterday labelled recent yen falls as speculative for the first time since the Middle East war began, shifting its focus back to currency short-sellers as policymakers braced for a triple market sell-off driven by fresh inflationary concerns. While data showed core inflation in Japan’s capital slowed in March, analysts expect surging oil prices from the Iran war and higher import costs from the weak yen to pile pressure on the Bank of Japan to raise interest rates as soon as April. heightening in the currency market,” as well as in the oil futures market, Katayama told parliament. It was the first time she explicitly mentioned yen moves as speculative since the one-month-old Middle East conflict triggered renewed declines in the currency. The remark compared with those until Monday that speculative traders in the oil futures markets could be affecting yen moves. and too rapid, pointing to G7 and G20 agreements that disorderly, excessive foreign exchange moves that deviate from fundamentals were harmful to growth. Tsuyoshi Ueno, an economist at NLI Research Institute, cast doubt on whether recent yen falls were out of sync with fundamentals, as the declines were driven largely by investor demand for the safe-haven dollar. Hormuz, a chokepoint for about a fifth of global oil and gas flows, driving up crude oil prices and demand for the safe-haven dollar. Soaring oil prices from the Middle East conflict add to inflationary pressures from the weak yen, which has been a political headache for policymakers by pushing up import costs. Economy minister Minoru Kiuchi told reporters yesterday the government was closely watching not just the currency but also the bond market for any“excessive moves”in yields.

“It’s part of escalated verbal intervention,” he said of Katayama’s latest comments. “If the yen slides below 162 fairly quickly, 165 would be the next threshold. That’s when we could see large fluctuations and prompt Japan to intervene,” he said. Markets have been rattled after the Iran war effectively shut the Strait of

After briefly rising after Katayama’s remarks, the yen stood around 159.93 per dollar yesterday, remaining a whisker away from the 160 level seen as authorities’ line in the sand for intervention. Japanese authorities have justified past yen interventions by describing the currency’s moves as speculative

The spectre of a triple selling in Japanese assets complicates the Bank of Japan’s decision on whether to hike rates soon to combat inflationary pressure, or tread cautiously to avoid hurting a fragile economy. – Reuters

As the yen lingered near the key 160-per-dollar mark, Finance Minister Satsuki Katayama yesterday repeated Tokyo’s readiness to respond “on all fronts” against volatile moves. “We’re seeing speculative moves

Big Tech’s US$635b AI spending faces energy shock test: S&P Global TOKYO: Massive investments in artificial intelligence (AI) that underpinned record runs in equities face a major hurdle as the Middle East crisis clouds prospects for growth and energy costs, said Melissa Otto, head of research at S&P Global Visible Alpha. US$635 billion (RM2.56 trillion) on data centres, chips, and other AI infrastructure in 2026, S&P Global has said. That figure was up from US$383 billion the prior year and just US$80 billion in 2019. in the first and second quarters, bringing a “really meaningful correction in all equity markets”, Otto said. “I think if the capex numbers get pulled back, if in fact energy prices are not reflected in earnings, that could be a catalyst,” she added in an interview in Tokyo on Monday. 2025, with bright hopes for the trend to run further, but it has lost steam since the conflict. At the same time, energy costs are becoming a constraint.

executives warned supply risks are not fully reflected in prices, Otto said, raising concerns about further increases with ripple effects for the global economy. “We’re seeing this big question around global growth,” Otto added. “Because if you have energy prices jumping 30%, that’s going to hurt consumers, that’s going to hurt companies.” – Reuters

Data centres require vast amounts of electricity, making the AI dependent on power prices and infrastructure capacity. At the CERAWeek energy conference in Houston last week, oil

Although tech companies have yet to signal cutbacks in those capital investments, persistently high oil prices could force spending revisions

Before the Iran war broke out, tech giants Microsoft, Amazon, Alphabet and Meta planned to spend about

Euphoria over AI had carried global stock indexes beyond the highs of