Donald Trump could announce a breakthrough on trade negotaitions with the UK "as early as today", reports have suggested. US Fox journalist Charles Gasparino said the US President's aides have told him to expect an announcement over tariffs with Japan, Vietnam and "possibly" the UK.

Mr Trump and the UK have been in negotations for weeks over an economic prosperity deal which could soften the blow of the US tariffs blitz. Ministers hope an agreement with Washington can be reached to soften the blow of the 10% “baseline” tariff hitting UK goods, as well as the 25% import tax on cars and separate ones for steel and aluminium.

UK stocks fell sharply again on Wednesday morning as Mr Trump’s worldwide tariffs came into effect.

The import taxes announced by the US President last week, including a new 104% rate on some Chinese imports, took effect from midnight Washington time – just after 5am in the UK.

In London, the FTSE 100 fell 2.34% shortly after opening, wiping out most of the gains made on Tuesday, following another drop in some Asian stock markets overnight.

Amid the ongoing market turmoil and uncertainty about global trading relations, Chancellor Rachel Reeves has said the UK is “accelerating trade deals with the rest of the world” as she prepares to meet her Indian counterpart.

Ms Reeves will meet Nirmala Sitharaman alongside Trade Secretary Jonathan Reynolds later on Wednesday for talks aimed at securing a deal with India.

The UK has been through more than a dozen rounds of talks since 2022 over a potential agreement with India, which is forecast to become the world’s third largest economy.

Key sticking points were said to include visa rules for Indian students and professionals, as well as access for British service firms.