The GDP boost has raised the chancellor’s prospects for staying in post, whoever wins the Labour leadership battle

• Business live – latest updates

• UK economy records surprise 0.3% growth despite Iran war

The message from Rachel Reeves is clear. After Britain’s economy defied the predictions for a slump in March, despite the fallout from the Iran war, why put things at risk with a roll of the dice in domestic politics?

Responding to bumper growth of 0.3% in March – much stronger than City economists’ forecasts for a 0.2% contraction – the chancellor said the figures showed she had the right economic plan, in a comment laced with subtext.

Trump says China’s president also pledged ‘strongly’ not to send weapons to Iran, after two-hour meeting between the leaders

• Trump in Beijing – latest updates

• Five key issues for Xi-Trump summit

China’s president, Xi Jinping, has warned of “clashes and even conflicts” with the US over Taiwan after meeting Donald Trump in Beijing.

Xi’s remarks, published by China’s foreign ministry after his two-hour meeting with Trump on Thursday morning, said Taiwan was “the most important issue in China-US relations”.

Impact of disruption from Iran war may be felt into 2027 even if strait of Hormuz reopens, says aviation body boss

Increases in air fares for travellers in Europe are “inevitable” over the peak summer period because of the high cost of jet fuel, according to the head of the international aviation body.

While some airlines faced with weak demand have reduced their European fares recently, Willie Walsh, the former British Airways boss who leads the International Air Transport Association, said there was no way carriers could absorb the extra costs in the long run.

US president expresses impatience at speed of EU’s implementation and warns of ‘much higher’ tariffs

• US trade court rules against Trump’s 10% global tariffs

• Business live – latest updates

Donald Trump has walked back from his threat to tear up part of the US trade deal with the EU by hiking tariffs on car imports.

The US president has given the EU until 4 July to implement its side of the deal, reducing tariffs to zero on most American imports, warning that the bloc would face “much higher” tariffs if it did not do so.

US president says war will end if Tehran agrees to deal, but that ‘bombing starts’ again if it does not

Oil prices fell and stock markets rose as Donald Trump said the war with Iran would end and the strait of Hormuz would be “open to all” if Tehran struck a deal with Washington.

The US president posted on social media: “Assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption, the already legendary Epic Fury will be at an end, and the highly effective Blockade will allow the Hormuz Strait to be OPEN TO ALL, including Iran.”

US president says tariff on vehicles imported from EU will rise to 25% and accuses bloc of non-compliance

Donald Trump has said he is tearing up part of the tariff deal he struck with EU leaders at his golf course in Scotland last summer, criticising Brussels for taking so long to ratify the deal.

Blindsiding Brussels late on Friday, a public holiday in much of Europe, he announced that he would be increasing tariffs on cars and lorries imported into the US from the EU from 15% to 25% from next week.

ECB keeps interest rates on hold as growth stumbles and price rises gather pace, up from 2.6% in March and 1.9% in February

• Business live – latest updates

• Air France-KLM cuts forecasts amid $2.4bn fuel bill rise

Inflation across the eurozone soared to 3% this month as the Iran war drove up energy prices and growth stumbled.

Consumer prices rose by 3% in the year to April across the single currency bloc, data from the statistics body Eurostat showed on Thursday morning, up from 2.6% in March and 1.9% in February.

Markets spooked as US president appears willing to keep up naval blockade and Iran keeps strait of Hormuz all but shut

The global oil price hit $126 a barrel on Thursday, its highest level since 2022, after Donald Trump said the US blockade of Iranian ports could last for months and peace talks remained stalled.

After surging more than 13% in 24 hours, the price of Brent crude futures reached its highest price since the war began on 28 February. Not since Russia’s 2022 invasion of Ukraine has Brent topped $120, with the price then peaking at $139.