Pound hits one-month high after Reeves speech
The pound hit its highest level in nearly a month after Rachel Reeves set out plans to increase house building, unblock infrastructure projects and attract private investment as part of a new “national mission” to drive economic growth.
Sterling was up 0.2pc against the dollar at $1.284, its highest since June 12, after the Chancellor said that previous governments had been unwilling to make the “difficult decisions to deliver growth”.
Ms Reeves added: “I will not hesitate.”
The Chancellor said she will reinstate mandatory housing targets “so the answer cannot always be no” and announced an immediate end to the “absurd” ban on new onshore wind developments in England.
The pound was also up 0.2pc against the euro, which is worth 84.4p, its lowest level since June 14, after the French elections left Europe’s second largest economy on course for a hung parliament.
Anna Leach, chief economist at the Institute of Directors, said: “The Chancellor is right to focus on the need to deliver stability and growth for the long-term.
“It is great to hear priority being given to addressing the UK’s sclerotic planning system, and the delivery of renewable energy, and we look forward to further details on the National Wealth Fund.”
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the pound had jumped as “traders assessed her policies and the potential boost they could bring to UK economic growth”.
Read the latest updates below.
06:05 PM BST
Signing off...
Thanks for joining us today.
Chris Price will be back in the morning to cover the latest from the markets.
06:01 PM BST
Regulator orders inspection of 2,600 Boeing 737s over oxygen mask problem
America’s Federal Aviation Administration (FAA) said today that it is requiring inspections of 2,600 Boeing 737 airplanes because passenger oxygen masks could fail during an emergency.
The FAA said it was requiring the inspections of 737 Max and NG airplanes after multiple reports of passenger service unit oxygen generators shifting out of position, an issue that could result in an inability to provide supplemental oxygen to passengers during a depressurisation.
Boeing issued a bulletin to airlines calling for visual inspections on June 17, the FAA said.
Airlines must conduct a general visual inspection and, if needed, replace oxygen generators with new or serviceable oxygen generators, strap thermal pads and reposition impacted oxygen generators, the agency said.
Boeing told The Telegraph:
In June 2024, Boeing shared detailed instructions for operators to update a subset of the restraining straps on 737 oxygen generators.
A new adhesive introduced on the straps in August 2019 has been found, under certain circumstances, to have allowed units to shift up to three quarters of an inch. We have gone back to the original adhesive for all new deliveries to ensure the generators remain firmly in place, as intended.
05:43 PM BST
‘Markets might not be so laid back’ once Labour’s plans revealed, warns broker
Traders enjoyed some modest mid-day gains in the Footsie after Rachel Reeves vowed to free up planning restrictions to help hit Labour’s target of building 300,000 houses per year. However, these were cancelled out by the close of trading.
Dan Coatsworth, investment analyst at AJ Bell, said:
UK markets took Rachel Reeves’ first speech as the new chancellor in their stride, with little change to the FTSE 100.
Markets have been very calm since Labour got in, which is what the party would hope to see given the chaos that ensued two years ago when Liz Truss got the keys to Number 10.
Labour’s narrative continues to point to a stronger backdrop for housebuilders and it’s no wonder the likes of Taylor Wimpey and Persimmon continue to enjoy share price appreciation.
Missing from Reeves’ speech were the finer details which will have to come at some point.
When that happens, markets might not be so laid back if it looks like Labour’s plans to boost the economy aren’t as easy to achieve as the headlines imply.
05:40 PM BST
Eli Lilly buys IBS drug developer
The American drug giant behind the “miracle” weight-loss drug Zepbound is buying a company developing a treatment for inflammatory bowel disease (IBS).
Eli Lilly is bying Morphic for $3.2bn (￡2.5bn) in cash.
Shares in Morphic jumped 75pc, while Eli Lilly shares are up 0.5pc.
05:18 PM BST
Wall Street wavers ahead of bank earnings and Powell testimony this week
Stocks are wavering in afternoon trading on Wall Street today, hovering around the record highs they set last week.
The S&P 500 was mostly unchanged. The Nasdaq rose 0.2pc, and the Dow Jones Industrial Average gave up an early gain and is down 0.2pc.
Sentiment on Wall Street will be influenced by the results from JPMorgan, Citigroup and Wells Fargo that come out on Friday. The latest updates for banks could give investors a clearer picture on how consumers are handling increased debt and whether banks are worried about payments and potential bad debt.
Jerome Powell, chairman of the Federal Reserve, is expected to address Congress tomorrow and Wednesday. The central bank has kept its benchmark interest rate at its highest level in more than two decades in an effort to tame inflation.
The Fed’s goal is to cool inflation back to 2pc without slowing economic growth too much. Inflation is still squeezing consumers, but it has fallen significantly from its peak two years ago. Economic growth has slowed this year, but it remains relatively strong amid a solid jobs market and consumer spending.
The central bank will get more updates on inflation at the consumer level on Thursday. Wall Street expects the latest government report to show inflation easing to 3.1pc in June from 3.3pc in May.
Inflation is seemingly stuck at around 3pc by most measures. That has prompted more caution from the Fed and dampened expectations for the number of anticipated rate cuts this year. Most experts are expecting one rate cut from the Fed this year, but not until September. The Fed holds its next policy meeting later this month.
05:14 PM BST
European stocks drop after French election
European stocks fell on Monday as investors digested the results of the French elections.
The Left emerged as the biggest group in France’s new National Assembly, unexpectedly beating out a resurgent hard-Right in a vote called by President Emmanuel Macron three years ahead of schedule.
The outcome, in which no bloc has an outright majority, has plunged the country into political uncertainty unprecedented in its recent history.
European shares rebounded from initial losses amid relief that the hard-Right National Rally (RN) of Marine Le Pen had not won a majority, but Paris, Frankfurt and London closed slightly in the red.
Ahead of the vote, investors had voiced concern about costly spending pledges by the hard-Right.
Kathleen Brooks, head of research at XTB, said the Left’s pledges not to push forward with macroeconomic reforms could exacerbate concerns:
This is weighing on sentiment for now, however any downside could be limited as the horse trading around who will govern and how the government will be formed could take months.
05:07 PM BST
Owner of Fiat and Alfa Romeo cuts production in Italy
European car giant Stellantis cut production in Italy by 36pc in the first half of the year, amid months of clashes between Italian ministers and the the company over its plans to use cheaper factories outside of the country.
Bloomberg reported that Adolfo Urso, the Italian industry minister, said: “Incentives for the next few years will be directed differently, largely to support production investments in our country’s automotive sector,” should Stellantis’s production in Italy not increase.
Stellantis owns brands including Britain’s Vauxhall along with Italy’s Fiat and Alfa Romeo.
It April, it announced that it was changing the name of its Alfa Romeo Milano sports utility vehicle after it was criticised for building it in Poland. Stellantis renamed it as the Junior.
The change came after Adolfo Urso, Italy’s industry minister, said: “A car called Milano cannot be produced in Poland. This is forbidden by Italian law… This law stipulates that you cannot give indications that mislead consumers. So a car called Milano must be produced in Italy.”
At the time, Alfa Romeo’s boss, Jean-Philippe Imparato, said: “We decided to change the name, even though we know that we are not required to do so, because we want to preserve the positive emotion that our products have always generated and avoid any type of controversy.”
The Telegraph has approached Stellantis for comment.
04:53 PM BST
FTSE 100 closes in the red
The FTSE 100 closed down after shedding gains made this morning. The blue-chip index was down 0.1pc. Insurer Beazley was the biggest riser, up 3.6pc, followed by retailer B&M, up 2.9pc. The biggest faller was Endeavour Mining, down 2.9pc, followed by City firm Shroders, down 2pc.
Meanwhile, the FTSE 250 closed up a whisper, 0.06pc. The top riser was Hiscox, up 13.4pc, followed by Ocado, up 5.4pc. The biggest faller was Ithaca Energy, down 5.3pc, followed by WAG Payments, down 4.7pc.
04:43 PM BST
China’s Tesla-rival BYD signs deal for electric car plant in Turkey
China’s electric vehicle giant BYD has signed a billion-dollar agreement with Turkey to open a plant in the country in a move that would help it dodge new EU tariffs.
According to the Turkish industry and technology ministry, BYD will open a production facility with an annual capacity of 150,000 vehicles as well as a research and development centre.
The plant will provide direct employment for 5,000 people.
The news comes days after the European Union slapped additional provisional tariffs of up to 38pc on Chinese electric vehicles (EVs) following an investigation that concluded state subsidies meant they were unfairly undermining European rivals.
Turkish-made cars enjoy beneficial access to the EU under a customs union that dates to 1995 and the Marmara region around Istanbul has become one of the leading centres of the world’s automobile industry.
Major carmakers including Fiat and Renault opened plants there at the beginning of the 1970s, with others like Ford, Toyota and Hyundai following, taking advantage of Turkey’s position at the crossroads between Europe, Asia and the Middle East.
04:33 PM BST
American shares face 10pc market correction, claims Morgan Stanley
A stock market correction is likely coming to America this year, the chief investment officer of Morgan Stanley has warned.
Mike Wilson told Bloomberg Television:
I think the chance of a 10pc correction is highly likely sometime between now and the [US presidential] election.
He added that the third quarter is “going to be choppy”, saying that the “likelihood of upside from now until year end is very low, much lower than normal,” with the ods of stock prices end the year higher than they are now at 20pc-25pc.
04:28 PM BST
Paris airport workers call strike ahead of Olympics
Unions representing workers at Aeroports de Paris are planning to strike on July 17, they said on Monday, days before the start of the 2024 Olympics, to increase pressure on management to meet demands over pay and work conditions.
The unions are demanding a bonus for all airport staff and additional resources during the busy Olympics period. The Games begin in Paris on July 26.
The Aeroports de Paris group runs the French capital’s Orly and Roissy Charles de Gaulle airports.
04:25 PM BST
French bond yields hit two-week low after election
French government bond yields have continued to fall today and are at their lowest level in two weeks.
This followed Sunday’s election resulted in a hung parliament with a surprisingly strong showing by the Left, allaying fears of a far right victory.
The yield on France’s benchmark 10-year bond fell to its lowest since June 26 at 3.125pc.
German 10-year debt also fell today to 2.543pc.
Jussi Hiljanen, head of rates strategy at lender SEB, said yields had been trending lower in recent days on the back of weak US economic data, which has bolstered hopes that the Federal Reserve will cut interest rates this year.
Peter Schaffrik, global macro strategist at RBC Capital Markets, said:
The Left-wing alliance is not seen as business friendly and should command less faith in prudent budget management.
However, the lack of a clear majority in the Assembly should blunt any spending plans for the time being and act as a cushion for spread widening.
04:17 PM BST
Barclays’ attempt to quash key car finance ‘mis-selling’ ruling is wrong, says watchdog
Britain’s financial complaints watchdog is battling Barclays’ bid to quash a key ruling at the heart of the motor finance “mis-selling” scandal. Michael Bow reports:
The Financial Ombudsman Service, which rules on customer complaints, is trying to block Barclays’ application for a judicial review of its findings.
The dispute revolves around a January decision from the ombudsman, which found that the bank’s car loan division had unfairly paid commission to a credit broker.
Its ruling revolved around the treatment of a single customer, known as Miss L, who was not made aware that her loan agreement with Barclays involved ￡1,600 in commission.
Findings of the case sent shockwaves around the industry, as the Financial Conduct Authority (FCA) launched a wholesale review into whether customers had been unfairly treated when securing loans from second-hand car dealerships.
This led to other lenders, such as Lloyds Bank and Close Brothers, taking a financial hit.
However, Barclays has sought to push back against the ombudsman by mounting a legal challenge.
04:11 PM BST
Wall Street edges up
Stocks are edging higher on Wall Street, adding to the record highs they set last week.
The S&P 500 is up 0.1pc. The Nasdaq has risen 0.2pc and the Dow Jones Industrial Average of 30 leading US companies is up 0.4pc.
04:10 PM BST
Labour likely to drop ‘Tell Sid’ sale of NatWest shares, says City firm
The new Government is likely to ditch the planned retail sale of NatWest shares, a leading City firm has suggested.
Gary Greenwood, a banking analyst at Shore Capital, told Bloomberg:
I would say it is now unlikely that we will see a retail offer in the form previously being mooted ...
The shares are being sold down at a reasonable pace, so there may not need to be an alternative. I also wonder whether Rachel Reeves will want to be seen to be continuing with what was essentially a Conservative programme.
The Conservatives had been planning to follow in the footsteps of the 1980s ‘Tell Sid’ campaign, named after the advertising campaign used to sell British Gas shares to the general public.
04:00 PM BST
Early gains slip away in London and on the Continent
Early gains this morning on the Footsie and key European stock markets have been falling away. Chris Beauchamp, chief market analyst at online trading platform IG, said:
While it began the week in a good mood, the FTSE 100, along with other European markets, has seen its gains slip away.
While the lack of a clear immediate winner from France’s elections provided a short boost this morning, that optimism has been hard to sustain.
France’s budget problems still need to be solved, and Sunday’s result doesn’t provide much hope that a resolution can be found quickly.
03:57 PM BST
Taiwanese chip giant briefly hits $1bn valuation
Chip-making juggernaut Taiwan Semiconductor Manufacturing Company (TSMC briefly surpassed $1 trillion (￡779bn) in market capitalisation on Monday as the AI frenzy continues to power tech stocks.
TSMC controls more than half the world’s output of chips and supplies them for everything from Apple’s iPhones to Nvidia’s cutting-edge artificial intelligence hardware.
The company hit the threshold briefly after the opening bell in New York, but slipped lower in later trading.
TSMC’s share price has increased this year by more than 85pc.
TSMC dominates the global chip industry, and the bulk of its fabrication plants are based in Taiwan, a self-ruled island that is claimed by neighboring China.
The hot demand for TSMC shares comes despite rising tensions with China.
TSMC’s current market capitalisation this afternoon is around $980bn.
03:51 PM BST
Euro rebounds as France faces hung parliament
The euro touched the highest level for three weeks against the dollar today, recovering overnight losses as France’s election pointed to a hung parliament.
The dollar, meanwhile, crept downward, after US payrolls data on Friday boosted bets that the Federal Reserve will soon start cutting interest rates.
Emmanuel Macron, the French president, today asked his prime minister to stay in the role for now, pending what will be difficult negotiations to form a new government after a surprise Left-wing surge in elections that delivered a hung parliament.
Brad Bechtel, global head of foreign exchange at Jefferies in New York, said:
If anything, it probably leads to a little bit of instability in terms of the government structure there now.
So far, however, he noted the market reaction to the election result has been “relatively subdued”.
The euro is up 0.09pc at $1.08.
03:36 PM BST
Reeves has ‘seriousness of purpose’ - but should go further, say free-marketeers
Rachel Reeves’ speech today has received warm words from the free-market Right.
Maxwell Marlow, director of research at the Adam Smith Institute, welcomed Rachel Reeves’ plans on housing and onshore wind, saying that she had a “seriousness of purpose”. But he added:
There are ways she should go further. A new task-force and 300 extra planning officers will reduce the backlog and speed up the approvals process, but this could be accelerated further if all planning applications are automatically approved after six weeks ...
Overall, this indicates a seriousness of purpose in fixing one of the greatest drags on Britain’s prosperity. But ultimately these plans must be based on results rather than intentions.
The Adam Smith Institute’s patrons include two Tory heavyweights: former chancellor Nadhim Zahawi and former justice secretary Sir Brandon Lewis.
Meanwhile, Matthew Lesh of the Institute of Economic Affairs, said:
Rachel Reeves is right to emphasise the importance of growth in tackling Britain’s challenges. Everything from funding public services to a higher quality of life is possible with more growth.
Undoubtedly, the most exciting part of the agenda is the government’s immediate plans to reform the planning system, including restoring housing targets, cutting red tape for major projects and ending the de facto ban on the on-shore wind. The emphasis on using powers to promote growth could unlock major opportunities. But this must be the floor, not the ceiling, of the government’s ambitions.
03:31 PM BST
Biden’s odds of Democratic nomination rise as he doubles down on running
Joe Biden’s odds of securing the Democratic nomination in the race for the US presidential race are creeping up again.
The President said he was confident voters still back him despite concerns over his age, and urged any rivals to challenge him at the upcoming Democratic Party convention.
He told MSNBC’s “Morning Joe” television program that he had held several rallies after a disastrous debate performance to “make sure I was right that the average voter out there still wanted Joe Biden, and I’m confident they do”.
Traders have consequently ramped up betting on him staying in the race for the White House.
I am heading off now, and I will leave you in the hands of Alex Singleton for the rest of the day.
Odds are shifting quickly following Biden's announcement this morning, in which he doubled down on his commitment to run.
Biden is now back up to 50% for the Democratic nomination & Harris is now down to 36% after being roughly tied to start the morning.
Despite the turmoil… pic.twitter.com/Sk1xIuT2GF— Parker Ross (@Econ_Parker) July 8, 2024
03:18 PM BST
Oil slips as Hurrican Beryl hits the US
Oil fell after touching a two-month high last week as Hurricane Beryl hit the US.
Brent dipped 0.5pc to nearly $86 a barrel, even as the storm arrived in Texas, risking oil and gas production in the state.
Oil touched the highest level since late-April last week amid expectations for higher demand and lower stockpiles over the summer months.
Still, the rally has faced some resistance from signs of weakness in China.
Harry Tchilinguirian, group head of research at Onyx Capital Group, said:
A much-anticipated move of Brent past $90 is going to be contingent on weather risk and a confirmation of a strong seasonal uplift in gasoline demand.
If either does not materialize, the market is more likely to consolidate rather than race higher.
02:55 PM BST
Hiscox shares surge as rivals line up takeover bids
Insurance company Hiscox has jumped to the top of the FTSE 250 after it reportedly attracted takeover interest.
The Lloyd’s of London insurer gained as much as 14.7pc - adding ￡440m to its market valuation - as Japan’s Sampo and Italy’s Generali lined up bids, according to Insurance Insider.
02:40 PM BST
Wall Street rises ahead of inflation data
The main US stock indexes rose at the opening bell, with the Nasdaq and the S&P 500 notching fresh intraday record highs.
The Dow Jones Industrial Average gained 233 points, or 0.6pc as investors looked ahead to a week packed with inflation readings and the start of the corporate earnings season.
The S&P 500 was up 10.25 points, or 0.2pc, and the tech-heavy Nasdaq Composiute gained 7.25 points, or less than 0.1pc.
02:24 PM BST
Marston’s exits brewing after 190 years
One of Britain’s best-known brewers will no longer make its own beer after selling its manufacturing sites to Carlsberg for ￡206m.
Our reporters Daniel Woolfson and Eir Nols?e have the latest:
Marston’s, which has been brewing beer for 190 years, said today that it had agreed to offload its brewery business as part of a push to focus entirely on pubs.
Money received from the Danish drinks giant will be used to help Marston’s pay down its debts, which have recently been racking up millions of pounds in interest.
Founded in Burton upon Trent in 1834 by John Marston, the company is best-known for its range of ales, such as Hobgoblin and Pedigree. However, in recent years it has moved increasingly into craft beers.
The deal makes Marston’s the latest in a string of traditional brewers to give up on making beer in recent years.
02:01 PM BST
Superdrug reveals healthy loyalty card deals as it opens more stores
High street health and beauty chain Superdrug has notched up a surge in annual profits after opening a raft of stores and as loyalty card deals helped boost sales.
In its latest set of accounts, the group posted a 43pc surge in pre-tax profits to ￡111.6m for the year to December 30, 2023, as sales jumped by 11.8pc.
It saw retail sales grow by 12.5pc after opening another 14 sites over the year, focusing on retail parks, as well as larger shops such as in Manchester’s Trafford Centre, Brent Cross Shopping Centre in London and Braehead in Glasgow.
The chain also gave 45 stores a revamp over the year, including new shop fronts, layouts and upgraded store wifi.
Superdrug said strong demand for own-brand products helped drive the strong performance, with customers flocking to snap up its Optimum Collagen Night Cream, which sold out twice, while the chain’s Studio London cosmetic range also proved a hit with shoppers.
The group said it cut prices of some of its ranges to help shoppers amid the cost-of-living crisis, such as its Solait sun protection products, while also rolling out extra loyalty card price reductions to its Health & Beautycard members.
It saw loyalty card membership jump to 18.1 million at the end of last year, with more than 60pc of total sales now made through members.
01:44 PM BST
Maersk warns of shipping delays as storms batter South African coast
Maersk has warned that storms lashing the South African cost are expected to cause shipping delays.
The South African Weather Service has forecast snow in some areas of the country, with damaging coastal winds and waves threatening infrastructure.
The number of ships travelling around the Cape of Good Hope at the southern tip of Africa has increased as crews avoid using the Red Sea, where vessels are still coming under attack from Houthi rebels backed by Iran.
Maersk said the conditions “will impact vessel movement and operations” along the South African coastline over the next few days, especially between Cape Town and Port Elizabeth.
It said: “Vessels are expected to seek shelter/alter their course to avoid the impacted areas, please expect delays over the next few days.”
01:22 PM BST
Pound strengthens after Reeves speech
The pound has hit its highest level in nearly a month after Rachel Reeves announced the return of house building targets and cleared the path for onshore wind developments.
Sterling was up 0.2pc against the dollar at $1.284, its highest since June 12, after the Chancellor said that previous governments had been unwilling to make the “difficult decisions to deliver growth”.
Ms Reeves added: “I will not hesitate.”
The Chancellor said she will reinstate mandatory housing targets “so the answer cannot always be no” and announced an immediate end to the “absurd” ban on new onshore wind developments in England.
The pound was also up 0.2pc against the euro, which is worth 84.4p, its lowest level since June 14, after the French elections left Europe’s second largest economy on course for a hung parliament.
Anna Leach, chief economist at the Institute of Directors, said: “The Chancellor is right to focus on the need to deliver stability and growth for the long-term.
“It is great to hear priority being given to addressing the UK’s sclerotic planning system, and the delivery of renewable energy, and we look forward to further details on the National Wealth Fund.”
Tara Irwin, ESG analyst at Hargreaves Lansdown, said: “This initiative promises fruitful returns for investors investing in renewable energy companies and funds as the market expands.”
01:06 PM BST
Wall Street muted ahead of inflation figures
US stock indexes futures were subdued as investors prepared for a busy week that will see the release of inflation figures and testimony from Federal Reserve chairman Jerome Powell.
Expectations for interest rate cuts as early as September received a further boost after Friday’s nonfarm payrolls report showed US job growth slowed in June, the latest data to point to weakness in the jobs market.
|Traders now see a 70pc chance of a quarter of a percentage point cut at the Fed’s September meeting, up from 60pc a week ago, while expecting an overall cut of about half a percentage point for the year, according to CME FedWatch data.
On the data front, Thursday’s release of June’s consumer price index data will be closely watched for more indications on whether price pressures are easing.
The S&P 500 and the Nasdaq continued to rally on Friday, closing at all-time highs as megacap tech stocks such as Meta and Microsoft touched record highs.
Meanwhile, major banks including Citigroup, JPMorgan Chase and Wells Fargo kick off the second-quarter corporate earnings season on July 12.
In premarket trading, the Dow Jones Industrial Average was up 0.1pc, while the S&P 500 and Nasdaq 100 were flat.
12:53 PM BST
Reeves paves way for tax rises as she orders review of public finances
Rachel Reeves ordered a review by Treasury officials that could pave the way for autumn tax rises as she warned that Britain is facing the worst public finances since the Second World War.
Our economics reporter Melissa Lawford has the latest:
The Chancellor has asked civil servants to compile a dossier on the current state of play over the coming weeks, and will present her analysis to MPs before the summer recess.
It is likely to trigger fears that Labour is laying the groundwork for up to ￡15bn of tax rises in its first Budget, going far beyond anything proposed in the party’s manifesto.
However, Ms Reeves appeared to rule out a raid on banks’ reserves of the kind suggested by former prime minister Gordon Brown.
Read what she said in her first speech as Chancellor.
12:20 PM BST
Bank of England policymaker pours cold water on hopes of summer rate cut
One of the Bank of England’s policymakers has poured cold water on the prospect of an interest rate cut this summer in a disappointing blow for the new Labour government.
Jonathan Haskel at King’s College London said he would “rather hold rates” steady at 5.25pc, which is their highest level in 16 years.
In a speech at the Economic Statistics Centre of Excellence, he will say he is still concerned that Britain’s jobs market “continues to be tight,” which would create the environment for wages increases and potentially fuel inflation.
It comes despite inflation falling back to the Bank of England’s 2pc target in May.
Mr Haskell said: “I would rather hold rates until there is more certainty that underlying inflationary pressures have subsided sustainably.”
He added: “The labour market continues to be tight, and I worry it is still impaired.”
12:01 PM BST
Gas prices inch up as hurricane hits US
Wholesale gas prices have edged higher amid concerns that a hurricane hitting the US could hit supplies.
Dutch front-month futures, the European pricing benchmark, jumped as much as 2.1pc as Hurricane Beryl swept into Texas after battering Mexico.
Although Europe’s storage sites remain relatively full, unplanned outages at major plants and spikes in demand from high temperatures around the world have pushed up prices by 20pc since European traders began stockpiling in April.
The UK’s equivalent gas contract has risen as much as 2.4pc today.
11:48 AM BST
Reeves plans will mean ‘large housing estate built every day before next election’
Rachel Reeves plans to build 1.5m homes by the end of this parliament effectively mean Britain faces “having a large housing estate built every day before the next general election,” according to estate agents.
Nathan Emerson, chief executive of Propertymark, the industry body that represents agents, said:
It is encouraging to see that the new UK Government is committed to reforming the planning system and delivering thousands of new affordable homes each year.
Propertymark is keen to see a diverse mix of housing delivered that keeps pace with real-world demand.
Fine details about reform to the National Policy Planning Framework must be mapped out and open to full stakeholder scrutiny.
It’s crucial there is transparency on how they intend to meet their ambitious target of building 1.5 million new homes by the end of its term in government, which in reality would mean having a large housing estate built every day before the next general election.
Whilst we support more homes being constructed, there needs to be careful consideration on background infrastructure to ensure we are making the best use of available land, ideally prioritising a brownfield-first approach.
11:34 AM BST
Pound rises as French parliament on track for gridlock
The pound is trading close to a three-week high against the euro as Sunday’s election in France looked likely to result in a hung parliament.
Sterling was up 0.1pc against the euro, which is worth 84.5p, near its lowest since June 14.
It comes amid the risk of political gridlock in the eurozone’s second-largest economy, after France’s hard-Left alliance took the most seats in parliament but pushed the hard-Right National Rally into third place.
Meanwhile, the pound was up 0.1pc against the dollar at $1.282 as Chancellor Rachel Reeves pledged to take the “difficult decisions” to drive economic growth, as she restored mandatory housing targets for local councils.
Sterling remains the best-performing major currency against dollar this year, even as money markets are attaching a roughly 67pc chance of an interest rate cut in August.
ING strategist Francesco Pesole said: “We doubt that fiscal prospects will have an impact on the pound just yet, while developments in French politics, US macro and Bank of England rate expectations will remain the largest sterling drivers.”
11:20 AM BST
Discount Dragon owner buys surplus beauty product seller Boop
Online retailer Huddled has taken control of surplus beauty product seller Boop Beauty.
London-listed Huddled, which owns Discount Dragon, said it has bought a 75pc controlling stake in Boop.
The circular economy retailer told shareholders it will pay an undisclosed “modest sum”, with a commitment to inject further capital for growth.
Boop is an online, direct-to-consumer retailer which specialises in the sale of surplus beauty and cosmetic products.
The business was founded by former L’Oreal in-house lawyer Yasmine Amr and delivered 558 orders in the second quarter of 2024 with limited capital at its disposal.
Boop Beauty’s online store has been taken offline to be integrated into Huddled Group, with a relaunch due in early September.
Martin Higginson, chief executive officer of Huddled, said: “We are thrilled to be working with Yasmine. The Boop business concept is fantastic and sits perfectly with the Huddled circular economy strategy.”
11:11 AM BST
Budget date will be set out by July recess, says Chancellor
Rachel Reeves said she will set out a date for the next budget before the summer recess and pledged to ramp up in house building to help people downsize if they want to.
The Telegraph’s economics editor Szu Ping Chan prompted a laugh from the audience and the Chancellor when she asked if Ms Reeves was planning for an autumn statement closer to September or November.
The Chancellor was also asked how she was going to encourage older homeowners to move to downsize. She said:
We are going to build homes so that if people want to downsize they can choose to live in a different home.
At the moment, the big problem is there is not enough supply of housing and so there is not enough choice for people whether those are people trying to get on the housing ladder or, as you rightly say, people who are wanting to downsize to a bungalow to perhaps live nearer to their children and grandchildren.
We are going to build the homes to give people that choice again whatever stage of life they are at.
I am going to do things properly when it comes to a budget. I will ask the Office for Budget Responsibility to produce the forecast and we will go through the proper process and the time it takes to do that and I will produce a budget in the autumn but we will set out a date for that Budget before summer recess.
11:01 AM BST
Britain is a safe place to invest, insists Reeves
Chancellor Rachel Reeves has said “Britain is a place to do business” as she said Labour will not use their large majority to renege on their tax promises.
She said:
Over the weekend, I made clear to Treasury officials that the manifesto commitments that we were elected on will be kept safe and they will be delivered on. That includes robust fiscal rules and it includes our commitments to no increases in national insurance and the basic higher or additional rates of income tax or VAT.
Now I know that there are some who will argue that the time for caution has passed. Who hold that the platform on which we were elected, the platform that the British people voted for last week, can now be simply forgotten. That we can toss aside those fiscal rules or renege on our tax pledges as a large majority in Parliament means we have the licence to roll back on the principles of sound money and economic responsibility.
I know that many of you aren’t used to hearing this after recent years, but I believe that the promises that a party is elected on should be delivered on in Government and we will do so.
To investors and businesses who spent 14 years doubting whether Britain is a safe place to invest. Then let me tell you, after 14 years, Britain has a stable Government. A Government that respects business, wants to partner with business and is open for business. In an uncertain world, Britain is a place to do business.
10:54 AM BST
Reeves: We will look at pensions system to drive growth
Chancellor Rachel Reeves has said she will look at the pensions system as a way of driving growth in British businesses.
She said she will set out her new policy intentions for critical infrastructure in the coming months.
10:45 AM BST
Reeves urged to bring in tax breaks for businesses
Rachel Reeves has vowed to take the “difficult decisions” in her maiden speech as Britain’s first female Chancellor.
As she begins her address, Simon Massey, managing partner at accountancy Menzies, said:
We know the business community at large has felt let down by a lack of certainty and meaningful Government policy that supports growth and investment. Courting industry on the rubber-chicken circuit was the easy part.
If the Chancellor and indeed the Government mean business, their priorities need to be taking a grown-up approach to international trade and introducing new grants and tax breaks for businesses to drive investment. We also trust they will honour their pledge not to increase taxes for the majority of employers.
Now is the time for this Labour government to implement policies that are transparent, consistent and conducive to innovation. With an economic plan so reliant on growth, much hinges on them getting this right.
10:28 AM BST
Rachel Reeves to give first major speech as Chancellor - watch live
Rachel Reeves is poised to deliver her first speech as Chancellor as she unveils Labour’s plan to boost economic growth.
In her first major speech, Ms Reeves will vow to take “difficult decisions” because there is “no time to waste” with boosting growth.
Labour will “fix the foundations” of the British economy, she will say, arguing that 14 years of Tory rule had cost ￡140 billion in lost growth.
You can follow the speech and reaction in our politics live blog, and watch it below:
10:13 AM BST
Fortnite tech supplier under fire over ￡2.2bn takeover
A top UK investor said they are opposed to an “opportunistic” ￡2.2bn swoop on Fortnite and Call of Duty supplier Keywords Studios.
Our reporter Michael Bow has the details:
Octopus Investments, Keywords; second largest shareholder, said a takeover by Swedish fund EQT was in “no way reflective” of the future prospects for the business.
Keywords agreed a ￡24.50 per share deal with EQT last week after several weeks of negotiations.
Octopus senior fund manager Chris McVey said: “We are extremely disappointed that the board has recommended the 2,450p cash offer which we consider to be opportunistic and in no way reflective of the true value that has been created, nor of the prospects for significant future growth.”
Octopus said Keywords would be better off remaining in public hands and had more potential to grow on the stock market.
Mr McVey added that Keywords had used public markets “very effectively” to grow the business, raising money on several occasions to build a “global leader” in outsourced video game development and testing.
Keywords has ballooned in size from ￡50m to over ￡2bn and now supplies some of the world’s top video game producers such as Activision Blizzard, Electronic Arts, Konami, Microsoft and Netflix.
Keywords and EQT declined to comment.
09:58 AM BST
Paramount agrees ￡22bn merger with Skydance
Hollywood giant Paramount Global has agreed a $28bn (￡21.8bn) merger with Skydance Media in a deal that brings together two of the world’s biggest film studios.
The deal will see Paramount’s non-executive chairwoman Shari Redstone sell her family’s controlling stake in the group, ending their involvement in the company founded by her grandfather in 1936.
Paramount is one of Hollywood’s oldest film studios, having produced cinema classics such as The Godfather, Titanic and Raiders Of The Lost Ark, as well as the Mission: Impossible series.
The group also owns television networks CBS, Comedy Central, Nickelodeon and MTV.
Skydance Media is an independent film studio launched by billionaire David Ellison in 2010 and is backed by US private equity groups including RedBird.
Skydance has produced blockbusters including Top Gun: Maverick, Star Trek Into Darkness, and Jack Reacher: Never Go Back.
Ms Redstone said: “Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king.
“Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment.”
09:47 AM BST
European shares gain as investors adjust to French election surprise
European shares are now gaining as investors moved past the initial shock from the French election results.
The Cac 40 in Paris was 0.8pc higher, while the Dax in Frankfurt gained 0.7pc. The FTSE 100 was up 0.2pc despite France facing a hung parliament with a leftist alliance unexpectedly taking the top spot.
Michael Field, European market strategist at Morningstar, said: “The election of a left-wing alliance would usually not be something for markets to celebrate but given the inherent fears investors had around a right-wing government, this announcement will very likely be a welcome one.”
Michał Jóźwiak, market analyst at Ebury, added: “The most negative scenarios for the markets, i.e. an absolute majority of either the left (NFP) or the right (RN) side of the political spectrum, which risked triggering fiscal turbulence, were dashed, but uncertainty remains.”
Shares of BNP Paribas, France’s largest bank, were up 0.6pc while SocGen rose by 1.6pc.
09:38 AM BST
Eurozone investor morale falls amid French election uncertainty
Investor morale in the eurozone broke has fallen for the first time in nine months, a survey showed, describing the results as a “bitter setback”.
Sentix’s index for the eurozone fell to -7.3 points for July from 0.3 in June, putting the barometer firmly back in the red and ending an eight-month streak of improvements.
The index on expectations also saw a drop, falling to 1.5 in July from 10 in June, a move that Sentix said was “likely to worry forecasters”.
“The recent recovery of the European economy has come to an abrupt end,” Sentix said.
The survey said that investors were concerned about French elections, upcoming German state elections and uncertainty over the US presidential election later this year.
Germany’s economy also saw a fall in morale in July, with the index on the current situation declining to -32.3 from -26.3 in June. The drop follows three consecutive months of gains.
The poll of 1,140 investors was conducted between July 4-6, Sentix said.
09:12 AM BST
Macron under pressure to cancel retirement age changes after election shock
Emmanuel Macron is coming under pressure to cancel his controversial pension reforms after the shock French election result gave the hard-Left the most seats in parliament.
The euro dropped after Marine Le Pen endured a shock defeat at the hands of the hard-Left and the French president’s centrists on Sunday night as French voters turned out in force to keep her party from power.
In disappointing results for the National Rally (RN) leader, the New Popular Front, an uneasy alliance of centre-Left, green and far-Left parties, claimed the most seats in the snap parliamentary election, winning 182 in the 577-seat Assembly.
However, economists have warned the result means Mr Macron’s pension reforms are dead, while France will also struggle to meet the EU’s fiscal rules on spending.
The French president controversially passed a law last year which raised the retirement age from 62 to 64, prompting waves of strikes and protests across the country.
Holger Schmieding, chief economist at Berenberg Bank, said it would also mean France’s government borrowing costs move higher than Spain’s as a “less favourable reputation among global investors will likely reduce trend growth and raise inflation in France”.
He said: “Although French voters did not grant a majority to either the RN or the spendthrift left, the election result is still negative for France in two important respects: First, it spells the end of Macron’s pro-growth reforms.
“Instead, the centrists will almost certainly have to accept some reform reversals (eg a potential softening of Macron’s crucial pension reform) and possibly progressive tax hikes demanded by the left in order to pass a budget.
“Second, it threatens to exacerbate France’s fiscal problems. After a deficit of 5.5pc of GDP last year and a similar shortfall this year in the absence of any corrective action, France will struggle to pass a 2025 budget that complies with EU fiscal rules.”
08:52 AM BST
FTSE recovers from French turmoil
UK stocks have recovered despite the turmoil caused by the French elections.
The blue-chip FTSE 100 was flat, having earlier fallen as much as 0.4pc, while the mid-cap FTSE 250 was up 0.1pc after dropping as much as 0.3pc.
The midcap index had hit a more than two-year high on Friday amid optimism that Labour election’s win will boost the economy.
Precious and industrial metal miners fell as much as 1.1pc and 1.3pc, respectively, tracking lower prices of gold and copper amid lacklustre physical consumption in China.
Energy shares fell as much as 1.1pc after a dip in oil prices as the prospect of a Gaza ceasefire deal eased geopolitical tensions.
On the radar this week are crucial consumer prices index figures in the US and UK GDP data, which could shed some more light on the timing of interest rate cuts.
In corporate news, Britvic jumped as much as 5.3pc after the soft drinks maker said it has agreed to be taken over by Carlsberg for a sweetened bid of ￡3.3bn. The Danish brewer’s stock rose as much as 4.1pc.
Ocado topped the FTSE 250 with a 5.9pc gain after the online supermarket boosted its partnership with Japan’s Aeon with plans to build a third robotic warehouse.
08:31 AM BST
French stock market takes worst hit in Europe
France’s stock market is performing the worst among European peers amid the uncertainty created in the country’s elections, which could lead to a hung parliament.
The Cac 40 was last down 0.4pc in Paris. The FTSE 100 was down 0.2pc, while the Ibex in Spain was down 0.3pc and the FTSE MIB in Italy had fallen 0.1pc. The Dax in Germany was up 0.1pc.
Commentators are trying to do the maths on how a French government could be formed - and there are lots of options:
???? Coalition arithmetic:
- a grand coalition would have a majority without the far left (NFP ex LFI + Ensemble + LR)
- a coalition without the conservatives LR wouldn't
- crucially, the far left and far right together don't have a blocking majority pic.twitter.com/RYoNarhiE3— Frederik Ducrozet (@fwred) July 8, 2024
08:17 AM BST
Paris stock exchange falls after election shock
Europe’s stock markets slid in opening deals after snap French elections in which a hung parliament appeared the likeliest outcome.
In the eurozone, the Paris Cac 40 benchmark stocks index sank 0.4pc and Frankfurt’s DAX shed 0.1pc, while London’s FTSE 100 index was last down 0.1pc in value.
08:16 AM BST
Ocado jumps as it announces third robotic warehouse in Japan
Online supermarket Ocado has revealed plans to build its third robotic warehouse in Japan as part of its tie-up with Aeon in the country.
The FTSE listed group - which first struck a partnership deal with Japanese retail company Aeon in 2019 - said the new site in Kuki-Miyashiro will go live in 2027.
It comes after Aeon’s first robotic warehouse opened in the Kanto region of Japan a year ago, powered by Ocado’s technology, with a second due to launch in Hachioji in 2026.
The pair plan to open further robotic warehouses across the country as Aeon expands its online grocery delivery offering.
Tim Steiner, chief executive of Ocado Group, hailed the latest announcement as an “exciting moment for Aeon and Ocado’s relationship as we deepen our already strong partnership”.
He added: “Ocado is helping Aeon Next to provide a seamless online grocery experience to customers across Tokyo.
“We can’t wait to bring this service to even more customers in the years to come.”
Ocado shares rose 5.4pc in early trading.
08:06 AM BST
UK markets fall after French election shock
The FTSE 100 began the week lower as results in the French election created uncertainty for markets.
The UK’s blue-chip index was down 0.3pc at 8,179.59 while the midcap FTSE 250 fell 0.2pc to 20,735.87.
Meanwhile, in Copenhagen, Danish brewer Carlsberg jumped 4pc after it announced its ￡3.3bn takeover of London-listed Britvic.
Britvic shares have gained 5.3pc.
08:01 AM BST
Economic growth is Labour’s ‘first and most important mission,’ says minister
Stimulating “strength and growth” in the economy is Labour’s “first and most important mission”, Treasury minister Darren Jones has said.
Mr Jones is touring broadcast studios as Rachel Reeves prepares to give a speech in which she will reinstate compulsory house-building targets as part of an overhaul of Britain’s planning rules.
Mr Jones told Sky News:
This isn’t just one speech on day one of the Labour Government, this is our first and most important mission, it underpins all of our delivery priorities.
And there’s going to be a consistent drive right from those of us in the centre of Government all the way through the country, in what we hope is now a national mission, to be able to find great jobs, get to work, improve pay, make profits, invest and build across the country, and get the UK back to where it needs to be.
When pressed about raising taxes not specifically mentioned in the party’s manifesto Mr Jones said:
We were very clear that the burden of tax on the British people is too high and we want that to come down.
But of course the route to sustainable public finances is to get growth back into the economy, which is why the Chancellor’s first intervention today isn’t to say ‘look how awful is everything and what a mess the Conservatives left’, even though they did leave a historic mess.
Referencing a note left by the last Labour government for the incoming Conservative government that there was “no money left” he added: “Well there was no note in my drawer at all, so maybe they can’t afford the note paper to write a note on, who knows.”
07:55 AM BST
French bonds slump as hard-Left take most seats in parliament
French government bond yields have slumped after Sunday’s election put the eurozone’s second-largest economy on track for a hung parliament.
The yield on France’s benchmark 10-year bond - known as an OAT - briefly traded at their lowest premium to German debt in almost a month.
However the yield - the return a government promises to pay buyers of its debt - was last up three basis points on the day at 3.24pc, having gradually retreated from a high of 3.37pc last week.
German 10-year debt yields were flat at 2.54pc, leaving the gap with French yields, which reflects the premium investors demand to hold French debt rather than Bunds, about three basis points wider on the day at 71.15 bps.
That spread briefly hit a session low of 63.7 basis points, the smallest since June 13.
Commerzbank rates strategist Rainer Guntermann said a hung parliament in France raises the risk of political gridlock and, as such, the early rally in French bond prices may not last.
He said: “The OAT risk premium is likely to persist and cross-country spreads will remain in motion.”
French spreads blew out to as much as 85 basis points two weeks ago, the most since 2012, as investors fretted about the prospect of either a hard-Right or hard-Left bloc gaining a majority in the French elections and what that might mean for spending.
Elsewhere, Italian 10-year yields rose 2.2 basis points​ to 3.96pc, leaving the gap between them and Bunds about one basis point narrower at 140 bps.
07:50 AM BST
Carlsberg buys brewing business from Marston’s for ￡206m
In a separate deal today, Carlsberg has also agreed to take control of its UK brewing joint venture with Marston’s.
Marston’s confirmed it will receive ￡206m from the Danish brewer to sell its 40pc stake in the venture, dubbed the Carlsberg Marston’s Brewing Company.
It makes brands including Hobgoblin and Pedigree.
Marston’s chief executive Justin Platt said:
Today’s announcement represents a significant milestone for Marston’s as we realise our stake in CMBC.
In my first six months with the business, it has become very clear to me that our core capability and key opportunity to unlock value for shareholders is in driving a focused and successful pub business.
This deal further strengthens our balance sheet, significantly reducing our debt by over ￡200m.
In addition, CMBC remain valued strategic partners and we continue to benefit from our ongoing long-term brand distribution agreement with them. Crucially, it allows us to become a pure play hospitality business and focus on what we do best - namely, giving our guests amazing pub experiences.
I look forward to delivering on the opportunities a focused pub business will provide to ensure we maximise value for our shareholders.
07:35 AM BST
Carlsberg swoops on Britvic after Pepsi clears the path to tie-up
The takeover of Britvic by Carlsberg will support the Danish brewer’s “very successful bottling business” in the Nordic region, it said, amid a consolidation in the sector.
The tie-up was effectively given the approval of Pepsi last month when the soft drinks company agreed to waive its right to derail any acquisition of Britvic which might threaten its bottling contract with the Hertfordshire-based business.
Carlsberg said it “has enjoyed a strong commercial partnership with PepsiCo for over 25 years” and has exclusive bottling agreements with the company in Norway, Sweden, Switzerland, Laos and Cambodia.
Including debts, Carlsberg’s takeover deal values Britvic at around ￡4.1bn, the companies said.
Ian Durant, non-executive chairman of Britvic, said:
The proposed transaction creates an enlarged international group that is well-placed to capture the growth opportunities in multiple drinks sectors.
Crucially, to remain competitive at a time when the market is being shaped by the trend of increasing consolidation among bottling partners, Carlsberg’s agreement with PepsiCo provides the combined group with a strong platform for continued success.
The board of directors believe that the strategic merits of this offer are compelling, and the offer also provides shareholders with the opportunity to receive the certainty of cash consideration that reflects the current strength and medium-term prospects of the Britvic business.
It also recognises the challenges of achieving an appropriate future rating and valuation for Britvic versus its historical range of trading multiples, alongside less certain long-term alignment with regard to its PepsiCo bottling business. Therefore, the board is unanimously recommending the offer to our shareholders.
07:23 AM BST
Robinsons squash maker Britvic accepts ￡3.3bn takeover by Carlsberg
Britvic, the maker of Robinsons squash, has accepted a ￡3.3bn takeover offer from Carlsberg in the latest swoop on a London-listed company.
The British drinks giant confirmed it has accepted a deal worth ￡13.15 per share, which represents a 36pc premium on its closing price before it rejected an initial bid by the Danish brewer.
The previous bid valued Britivc at ￡12.50 per share, or ￡3.1bn.
07:22 AM BST
Euro falls as French hard-Left demand power
The euro dropped after the shock French election result gave the hard-Left the most seats in parliament.
Marine Le Pen endured a shock defeat at the hands of the hard-Left and Emmanuel Macron on Sunday night after French voters turned out in force to keep her party from power.
In disappointing results for the National Rally (RN) leader, the New Popular Front, an uneasy alliance of centre-Left, green and far-Left parties, claimed the most seats in the snap parliamentary election, winning 182 in the 577-seat Assembly.
The result meant the euro fell 0.1pc against the pound to be worth 84.5p and slumped as much as 0.4pc against the dollar as Europe’s largest economy faces the prospect of a hung parliament.
Marine Le Pen’s hard-Right National Rally was beaten into second place by Emmanuel Macron’s centrists despite leading in the first round.
Jean-Luc Melenchon, the hard-Left leader of the New Popular Front said he wanted his party to govern.
He said: “The will of the people must be strictly respected ... the president must invite the New Popular Front to govern.”
07:06 AM BST
Good morning
Thanks for joining me. We begin with a look at France, where the legislative elections handed a shock victory to the hard-Left, but also put the country on course for a hung parliament.
The euro fell amid the uncertainty, as Marine Le Pen’s National Rally dropped into third place despite winning the first round of voting.
5 things to start your day
1) British Airways risks compensation bill for delayed passengers in ￡100m legal case | If the case is successful it could pave the way for vast payouts across the industry
2) Climate campaigners bombard courts with action against oil execs | Further wave of action is expected as lawyers pioneer new legal concepts such as ‘ecocide’
3) Apple unfairly sacked analyst who took secret photos of female colleague | Tech giant is forced to pay Christoph Sieberer following Employment Tribunal case
4) ‘Rockefellers of Uganda’ and General Electric to build mini-nukes in Britain | UK’s ‘gold standard for a nuclear deployment’ lies behind group’s decision to invest
5) John Lewis cuts number of affordable flats planned for housing scheme | Councillors say the retailer is ignoring local needs in a bid to achieve ‘maximum profit’
What happened overnight
Asian stocks mostly fell after the French election result and despite US stocks rising to more records on Friday.
In Tokyo, the Nikkei 225 index was up 0.2pc to 40,999.80 despite official data showing the real wages fell 1.4pc year on year in May, a decline for the 26th straight month as the weakening yen and higher commodity costs pushed up the cost of imports. While the nominal wages rose 1.9pc.
Hong Kong’s Hang Seng index declined 1.3pc to 17,571.31 and the Shanghai Composite index was down 0.6pc to 2,933.44.
Australia’s S&P/ASX 200 sank 0.4pc to 7,790.80 while South Korea’s Kospi edged less than 0.1pc lower to 2,861.92.
On Friday, the S&P 500 climbed 0.5pc to 5,567.19, setting an all-time high for a third straight day following Thursday’s pause in trading for the Fourth of July holiday.
The index has already set 34 records and climbed close to 17pc this year, which is only a little more than halfway done.