Good morning. Today we're talking about global growth downgrades, Apple’s production shift and Deliveroo’s takeover offer.

Big Stories

Global growth downgrades

The International Monetary Fund (IMF), a major financial agency of the UN, has significantly downgraded its growth forecast for the UK economy this year, citing "domestic factors" as the primary cause, despite the backdrop of US trade policies. In its latest World Economic Outlook, the IMF now projects the UK economy to grow by just 1.1% in 2025, a sharp decrease from the 1.6% predicted in January. While the IMF highlighted that tariffs and the resulting uncertainty from US trade policies would negatively impact the UK, it emphasised that internal issues are the main drivers behind the reduced growth outlook. These domestic factors include increased government borrowing costs and weaker consumer spending, largely in response to higher UK inflation, which has been partly fuelled by rising energy bills. Globally, the IMF also lowered its GDP growth projections for 2025 to 2.8% from 3.3%, factoring in the impact of US tariffs. This revised global figure represents the slowest growth rate since 2009, excluding the pandemic period. The IMF's report also included a cut to its 2026 global growth forecast and projected higher inflation across many economies, with the UK facing a notable downgrade alongside other major economies. The sharper deterioration expected for the US economy, with its growth forecast slashed from 2.7% to 1.8%, underscores the significant impact of President Trump's trade policies on global economic prospects.

Apple's India iPhone ambition

Apple is reportedly accelerating its shift in iPhone production for the US market from China to India, aiming to complete the pivot by the end of next year. Sources indicate this move is a direct response to escalating trade and tariff tensions between the US and China. The ambitious plan would require Apple to nearly double its current iPhone production in India to meet the annual US demand of over 60m units. While Apple has been gradually increasing its manufacturing footprint in India, with approximately one in five iPhones sold globally now originating there, the majority still come from China. This potential full-scale relocation of US-bound iPhone production underscores Apple's commitment to diversifying its supply chain and mitigating the risks associated with the ongoing trade dispute. The move comes as China announced exemptions on the 125% tariffs for some US goods. Apple's significant investments in China over the years have been crucial to its growth as a global tech leader, making this potential pivot a substantial strategic shift.

DoorDash bids for Deliveroo

UK takeaway app Deliveroo revealed it has received a £2.7bn takeover proposal from its American counterpart DoorDash. Deliveroo's board has indicated it is likely to recommend the offer of 180 pence per share to shareholders, pending agreement on the remaining terms. This potential acquisition comes after Deliveroo's shares have seen a 50% decline since their 2021 IPO, attributed to a post-pandemic stagnation in online food delivery demand and investor focus shifting towards profitability. The deal is anticipated to face minimal regulatory obstacles, as it would grant DoorDash entry into ten new markets, creating a complementary global footprint. DoorDash, the leading food delivery app in the US with 42m monthly active users and $10.7bn in revenue, previously acquired Finnish delivery company Wolt in 2021. London-based Deliveroo, the UK's second-largest player with 7.1m active users and £2.1bn in revenue, recently exited the loss-making Hong Kong market. DoorDash has a deadline of May 23rd to make a firm offer.

Elsewhere...

Cyber setback: Marks & Spencer says it has stopped taking online orders as the company struggles to recover from a cyber attack.

Stepping back: Tesla CEO Elon Musk announced he is cutting back on his US government role following a 70% drop in the electric carmaker’s profits.

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£1.3bn

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