Photograph: Ink Drop/Alamy
Closing post
Time to wrap up…
Donald Trump has threatened tariffs of between 10% and 12.5% on 60 trading partners including the UK, the EU and Australia over alleged forced labour failures, in the latest attempt to revive his signature trade policy.
The EU immediately hit back, saying it expected the US to respect the tariff deal it entered into last July and arguing that stealth tariffs breached the spirit of that agreement.
If the Middle East conflict drags on into next year it would hit global growth hard, driving some economies into recession and causing energy shortages, according to forecasts from the Organisation for Economic Co-operation and Development.
In its latest Economic Outlook, the Paris-based club of industrialised countries lays out a “prolonged disruption” scenario, in which there is no agreement between the US and Iran until 2027.
Ovo Energy has agreed to pay more than £10m after the energy regulator for Great Britain, Ofgem, found a lack of monitoring of vulnerable customers with prepayment meters (PPMs) could have exposed them to a “clear risk of harm”.
Ofgem found that Ovo did not adequately monitor its PPM customers, including those on the priority services register, leading to breaches of the watchdog’s rules designed to protect customers in vulnerable situations.
British taxpayers will provide £1.3bn in funding to help Hollywood studio giant Universal build its first theme park in Europe.
Comcast, the US media company that owns NBC Universal and Sky, had been considering a number of countries in which to build its first European theme park.
Online publishers and news organisations are now able to block their content from appearing in Google’s AI summaries in UK search results, the British competition watchdog has announced.
The Competition and Markets Authority (CMA) said the new requirement would “put publishers, like news organisations, in a stronger position to negotiate content deals with Google”.
US stock market opens lower
The US stock market has slipped at the open, with the blue chip S&P 500 index down 0.4%. The Dow Jones Industrial Average is also down 0.4% and the tech heavy Nasdaq is broadly flat.
UK government to pay £1.3bn to help fund Universal Studios theme park in Bedfordshire
British taxpayers will provide £1.3bn in funding to help Hollywood studio giant Universal build its first theme park in Europe.
Comcast, the US media company that owns NBC Universal and Sky, had been considering a number of countries in which to build its first European theme park.
However, a deal to build the attraction on the site of former Kempston Hardwick brickworks near Bedford was agreed after a significant offer of government financial support.
A package initially revealed last June included almost £500m of public investment in rail and road infrastructure, including a station development at Wixams, while talks over the scale of the overall government assistance continued.
Read the full story here:
Consumer confidence rises fastest in May since 2021, poll finds
Consumer confidence rose by the most in May since 2021, a poll by YouGov and the Centre for Economics and Business Research (Cebr) found.
Its index rose by 2.6 points this May to 104.9, the biggest increase in five years. Any score higher than 100 suggests positive sentiment.
The more optimistic mood was driven by an improvement in people’s perception of the health of their household finances, YouGov said. Their perceptions of house prices also improved last month, with their outlook on the market rising from 128.6 to 130.5.
Pushpin Singh, managing economist at Cebr, said:
May’s increase in the index is a welcome sign following two consecutive months of relatively stark falls. Notably, the improvement in perceptions of household finances comes amidst a lower-than-expected inflation reading for April, though the fact that both household finances measures remain in negative territory continues to underscore the underlying headwinds affecting the UK economy.
Not everything was positive: workers were less confident about their job security, with the score slipping from 91 in April to 90.8 in May. However, the forward looking measure rose from 115.6 to 118.7.
Reeves optimistic on a "science supercluster" across Oxford and Cambridge
Rachel Reeves struck an optimistic note about the prospects for the UK creating a “science supercluster” across Oxford and Cambridge, as she announced new government backing for the scheme.
At a conference about the OxCam corridor, as she calls it, in Westminster, the chancellor said:
The talent is extraordinary, and the ambition in this room is extraordinary. If we get this right, working together, this corridor will not just compete globally, it will lead globally. We can do that together.”
She made several specific announcements, including Homes England buying a former airfield East of Cambridge to create new houses; and government funding for a new exit at Bletchley station, on the East-West rail line connecting the university cities and a string of towns in between.
Reeves also confirmed that a powerful development corporation would be created covering Greater Cambridge, to drive through development, calling it, “a delivery vehicle with the powers, the governance, and the mandate to unlock strategic sites and to accelerate growth,” and adding, “Cambridge has been waiting for this. The time for waiting is now over.”
Reeves said the government wanted to help innovative businesses “start, scale and stay” in the UK, and she would say more in the coming weeks about that.
She also highlighted a string of existing government policies, including streamlined compulsory purchase powers for local authorities to speed up building on blocked development sites. She said:
We want to work with landowners where we can, but when people are holding our country back, this government is not afraid to use those powers to ensure that our growth happens, and we will make sure that authorities that want to use these powers have the guidance that they need to do so.
No mention was made of the potential for Reeves to be swept out of a job in the coming weeks and months, if Andy Burnham wins the Makerfield byelection and takes on Keir Starmer in a leadership contest. Her supporters are arguing that she should be allowed to stay in post to reassure financial markets.
Social media is awash with complaints from Lloyds customers who are unable to access their account to make either personal or business payments.
An error page on the Lloyds app reads:
Sorry, we’re having a few technical problems. Logging in again may fix the issue, but if this doesn’t help, please try again later.
There are more than 2,000 reports of issues with the online banking service at Lloyds on the tacker Downdetector – of these, 65% are about the app, 14% about login and 13% about online banking.
Lloyds replied to a customer on X who could not log into the app:
Sorry about this. Some customers are having issues with accessing our Mobile App right now. Bear with us as we fix this.
Updated
There are reports that the online service for Scottish Widows – the pension provider also part of the Lloyds group – is down. Problems also started at around 11am, according to Downdetector.
Lloyds, Halifax and Bank of Scotland customers hit by app outage
Lloyds Banking Group has apologised to its customers after reports of an outage of its online banking services and apps.
The group has 26 million customers across Lloyds Bank, Halifax and Bank of Scotland. Users started reporting problems at around 11am, according to the online tracker Downdetector.
In a statement on X, Lloyds Bank said:
We’re aware some customers are having issues with our app and online banking. We’re really sorry about this. We’re working hard to fix it and will let you know as soon as we’re back to normal.
It is not the first time this year there have been problems with online banking at Lloyds. In March, the group personal data of nearly 500,000 customers in an IT glitch that left people’s payments, account details and national insurance numbers visible to other users.
Updated
It is around midday now, and the UK’s blue chip FTSE 100 is still down a bit by 0.3%. The worst performer today is the asset manager ICG, with its shares down by about 5%. The distribution and outsourcing company Bunzl is the best, with its shares up by 3.8%.
The FTSE 100 will announce its next reshuffle today, based on yesterday’s closing prices – the London Stock Exchange has hinted that the housebuilder Berkeley, property portal Rightmove and packaging company Mondi are likely to lose their places, while IT reseller Computacenter, the asset manager Aberdeen and financial services firm Investec are expected to join the index.
Updated
Trump administration threatens extra 10% tariffs on 60 countries including UK
Donald Trump has threatened tariffs of between 10% and 12.5% on 60 countries including the UK, EU and Australia over alleged forced labour failures, in the latest attempt to revive his signature trade policy.
The allegations around forced labour enable Trump to skirt previous court-imposed limits on his protectionist agenda.
The US trade representative, Jamieson Greer, said:
The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field. We will no longer tolerate this disparity.”
The European Commission has said the EU “fully shares” US concerns about forced labour but “considers tariffs imposed on these grounds to be unjustified”.
Read the full story by Lisa O’Carroll here:
Currys appoints Fredrik Tønnesen as new CEO
The retailer Currys has appointed Fredrik Tønnesen as its new chief executive, starting from 3 August.
The FTSE 250 company has promoted Tønnesen, who is currently head of its large Nordic business, to replace Alex Baldock, who announced in March that he would step down after eight years in the top job. Reports suggest he is expected to become the boss of Boots, as the pharmacy chain prepares for a potential stock market listing in London.
Tønnesen joined Currys 20 years ago as a sale assistant on the shop floor. He said in a statement:
I’m incredibly proud to be leading Currys, a company that I joined 20 years ago on the shop floor and know extremely well. This is a great business comprising thousands of capable and committed colleagues, and it is hugely exciting to take on its leadership at a time of such strong momentum.
My job, with the full support of the leadership team and all my colleagues, is to keep this momentum going and find every way to accelerate it. I can’t wait to get started.”
Chair Ian Dyson said:
I am delighted to welcome Fredrik as our next group chief executive. He has huge experience inside the business and has led an extremely impressive operating performance improvement over the last three years. He understands our customers, our colleagues and our culture from the inside, and brings the right combination of clarity, energy and leadership to take Currys forward, building on the strong foundations that Alex and the team have put in place.”
More data from S&P Global shows that euro zone private sector activity shrank at the fastest pace in 18 months in May, weighed down by weaker demand for goods and services.
Its composite PMI, which includes both manufacturing and services data, dropped to 48.5 in May from April’s 48.8, its lowest reading since November 2024. The headline services PMI rose slightly to 47.7 from 47.6.
Chris Williamson, chief busisness economist at S&P Global, said:
With business activity in the euro zone falling for a second successive month in May, it is looking increasingly likely that the economy will slip into contraction in the second quarter. The PMI data are indicating a 0.2% quarterly GDP decline barring any significant change in June.
UK services companies report first drop in activity in over a year
Companies in the UK’s services sector have reported a drop in business activity for the first time in more than a year, as pressure around the Iran war weighed on the industry.
The S&P Global purchasing managers’ index (PMI), which surveys hundreds of companies across the UK each month, said activity among firms working in the services sector fell to 49.3 in May, compared with April’s 52.7 –and the first fall in output since April 2025.
The services sector, which ranges from hospitality and retail to finance and IT, accounts for about 80% of the UK economy, meaning its performance has a significant effect on GDP growth.
Tim Moore, economics director at S&P Global Market Intelligence, said:
Subdued business and consumer demand, across both domestic and overseas markets, was cited as holding back performance.
Many service sector companies noted that the Middle East conflict had an adverse impact on sales pipelines and general business prospects. Those in the hospitality and transportation sectors typically commented on squeezed discretionary spending and pressure from sharply rising input costs, while professional services firms reported a setback from rising risk aversion among clients. Business investment spending on technology services remained a bright spot for parts of the service economy, however.
A rapid acceleration in input cost pressures has been the major challenge for service providers so far this year, driven by higher fuel prices and transportation bills. The overall rate of input price inflation did ease slightly in comparison to April, but it was still higher than at any other time since the energy crisis in 2022.
Worries about a prolonged spike in inflationary pressures, combined with elevated geopolitical tensions and subdued demand, continued to weigh on business activity expectations in May. The degree of optimism eased for the third time in four months, to its lowest since the US tariffs-related slump in April 2025.”
Matt Swannell, chief economic adviser at the Item Club, predicts the economy will continue to lose momentum and flirt with recession in the second half of the year. He said:
Rising energy bills and a deteriorating jobs market will squeeze households’ spending power further. Meanwhile tighter financial conditions, elevated costs, and prolonged uncertainty will lead businesses to postpone or cancel some investment plans.
…Firms are now facing much higher energy bills, but they also continue to experience heightened labour costs. Illustrating the trade-off currently facing the Monetary Policy Committee, companies are managing rising costs by both reducing headcount and pushing up consumer prices. We expect Bank Rate to be left unchanged for the rest of this year as it manages this dilemma, although risks are skewed towards tighter policy.
Updated
Oil prices rise after clashes between US and Iran
Oil pries are rising again this morning – Brent crude, the international benchmark, is up by about 2% to $98.8 a barrel after further clashes between the US and Iran last night.
Kathleen Brooks, of the broker XTB, says:
It is unclear if talks to end the war and reopen the strait [of Hormuz] are ongoing, but the latest developments suggest that investors may have been too quick to price in the impact from last week’s promised memorandum of understanding between Iran and the US.
As we enter the start of the fourth month of the conflict, there are clear signs that the energy price spike is becoming embedded in the global economy.
Jim Reid, of Deutsche Bank, notes that there is “increasing pessimism that a US-Iran deal to reopen the strait of Hormuz is imminent”.
New clashes took place overnight as US forces conducted strikes against Qeshm Island while Iran fired missiles and drones towards Kuwait and Bahrain, with the [Islamic Revolutionary Guard Corps] saying it targeted the US 5th Fleet headquarters in Bahrain. Meanwhile, further Israel-Lebanon talks are expected today, according to the US.
Prior to that, we saw little sign yesterday of concrete steps towards an imminent deal. For instance, Iran’s Mehr reported that ‘The final text from Iran is still under discussion in Tehran and no response has been sent yet’. Then later on, US secretary of state Marco Rubio said that when it comes to a deal ‘it could happen today, it could happen tomorrow, it could happen next week’.
OECD predicts spate of recessions globally if Iran conflict drags into 2027
Elsewhere this morning, the Organisation for Economic Co-operation and Development has warned that if the Middle East conflict drags on into next year it will hit global growth hard, driving some economies into recession and causing energy shortages.
In its latest Economic Outlook, the Paris-based club of industrialised countries lays out a “prolonged disruption” scenario, in which there is no agreement between the US and Iran until 2027.
It forecasts such a scenario would reduce global GDP growth to 2.1% this year, from 3.4% in 2025, “pushing some economies into or close to recession” – with emerging economies hit hardest.
Read the full story here by Heather Stewart:
While the mood across the FTSE is overall a bit glum this morning, there’s one clear standout – shares in B&M European Value Retail have jumped 16%, even after the retailer reported that its pre-tax profit dropped 38% to £284m.
However, investors had been expecting a fall, and therefore are focused more on how well the company’s turnaround plan is going.
Susannah Streeter, of the broker Wealth Club, says:
UK like-for-like sales returned to marginal growth in the fourth quarter and management said its “Back to B&M Basics” programme is delivering early progress. There are hopes that B&M has reached the nadir of poor performance and that its product line revamps and tighter cost controls, alongside its locations in popular retail parks will mean there will be more progress ahead.
European stock markets open lower
European stock markets have opened mostly in the red this morning – the UK’s blue chip FTSE 100 index is down 0.5%. The German Dax is down 0.8% and the French Cac 40 is down 0.43%.
The Stoxx Europe 600, which tracks the biggest listed companies on the continent, is down 0.4%.
Ovo agrees to £11.4m settlement with Ofgem over prepayment meters
Ovo Energy has agreed to pay mre than £10m after the energy reulator found that vulnerable customers were left at a “risk of harm” due to the supplier’s inadequate monitoring of households on prepayment meters.
Ovo has agreed to a settlement including a £7m payment to Ofgem’s voluntary redress fund and a £3.4m package of credit and debt relief for some of its most vulnerable customers, which the regulator said was in lieu of compensation.
Cathryn Scott, director of market oversight and enforcement for Ofgem, said:
It is clear that OVO fell short in its support of vulnerable PPM customers, and it’s right that they’ve taken action to improve their processes. As a result of our investigation, vulnerable customers will receive debt write-off or credit payments alongside a payment into our voluntary redress fund.
Prepayment meters are a positive choice for many customers, helping them stay in control of their energy use and reporting high levels of satisfaction – but it’s not suitable for everyone and strong monitoring must be in place to protect vulnerable consumers.
This investigation forms part of Ofgem’s wider work to raise standards across the energy market and strengthen consumer protections, challenging suppliers to do more to identify and support customers in difficulty.
Anyone worried about paying their bill should contact their supplier as early as possible to access the support available and discuss the options that suit their circumstances.”
In January, the regulator also ordered Ovo to pay a £2.7m penalty after it found it had failed to pass on government support payments for winter energy bills to thousands of vulnerable customers during the energy cost crisis.
Martin McCluskey, minister for energy consumers, said:
Everyone has the right to be treated fairly – and it is clear Ovo Energy fell well short of its responsibilities.
On the back of the recent settlement with British Gas related to forced pre-payment meter installations, I am glad to see Ofgem standing up for consumers – they must now make sure those affected get the compensation they deserve.
Our reforms to strengthen the energy regulator will mean it can crack down on energy company failings and make it a true consumer champion.”
Updated
A one-person household could need up to half a million pounds for a “moderate” lifestyle in retirement, industry calculations suggest.
Here’s an illustrative table from Pensions UK, which gives a guide to the level of annual private income or pension savings that are needed to meet each retirement living standard. It is based on turning a defined contribution pension into an annuity – a retirement product which exchange a cash lump sum for guaranteed income until death.
It is important to remember too that these figures assume that the retiree will receive the full state pension, and has no rent or mortgage costs. The calculations are also based on current UK tax thresholds, and annuity assumptions of around £5,000 – £7,500 per £100,000 of pension savings.
Three quarters of workers not saving enough for 'moderate' pension income, industry warns
Elsewhere this morning, the pensions industry has warned that about 75% of workers are not saving enough for a “moderate” income in retirement, with many people facing a “cliff edge drop” when they stop work.
Industry body Pensions UK has said only 23% of the working population are on tack for a moderate lifestyle, which would require an income of £32,700 for a one-person household and £45,500 for two people.
A “minimum” retirement lifestyle costs £13,900 a year for a one-person household and £22,500 for two people, while a “comfortable” lifestyle costs £45,400 and £62,700 respectively.
The figures reflect everyday costs such as food, essential household bills and transport, as well as social activities and hobbies. 82% of people are expected to meet the minimum level.
However, all three levels assume receipt of the full state pension and no rent or mortgage costs.
Zoe Alexander, executive director of policy and advocacy at Pensions UK, said:
The latest update to the retirement living standards underlines a clear reality for many people – today’s saving levels will not be enough for the retirement they expect.
Without action, too many risk facing a cliff edge drop in income when they stop work.”
Ms Alexander added: “We also encourage people to speak to their employer and see whether the organisation is prepared to support them to save above the minimum, such as higher rates of matching pension contributions.”
Updated
Google will start testing new search changes on 'subset' of UK website owners today
Google has said it will immediately start testing new changes that will allow a “subset of website owners” in the UK to manage how their links and content appear in generative AI search features.
Mrinalini Loew, general manager at Google Search Ecosystem, wrote in a blog post today:
We’re also actively listening to feedback from publishers and creators, and engaging with regulators like the UK’s Competition and Markets Authority to ensure website owners have the right tools as user preferences evolve. Today, we’re beginning to test a new control that lets website owners manage how their links and content appear in generative AI Search features.
A new tool will allow website owners to decide if they want their site to appear in and help “ground responses” in Google’s AI search features such as AI overviews and AI mode.
The control will not be used as a ranking signal for search results outside the generative AI Search features, Loew said.
We’re also starting to roll out new insights for website owners in Search Console about the appearance of their pages in generative AI Search features. These insights include impressions metrics and information about which pages appear in AI responses and in what countries. We’re continuing to work with website owners to understand what insights will be most helpful to inform their strategies, and we’ll introduce additional metrics over time.
We are beginning to roll these features out to a subset of website owners in the UK, allowing for thorough testing before rolling them out to website owners globally. As AI opens up new opportunities for discovery, we’ll keep improving our experiences to help people explore the web, and keep building tools for websites to better engage their audiences
Updated
Google has nine months to implement changes to its search, regulator says
Google has nine months to implement all the required changes to its search services, the competition regulator has said.
However, the CMA has said it expects “important parts of the controls to become available to publishers well before that deadline”.
The regulator has also asked Google to submit and publish compliance reports, explaining changes it has made and how it has complied. These are due every six months for the first year, after which the CMA will then review the frequency of reporting.
Google is not the only big tech company under the CMA’s sights – the regulator has launched strategic market status investigations into Apple and Microsoft, too.
The rules announced today come after the CMA decided last year to designate Google with strategic market status in general search services, a term that means the company has such market power that it requires a special regulatory regime.
The watchdog has the power under new digital laws to order changes to how Google operates in those areas.
It will be a welcome change for many news media organisations and web publishers, who are hoping that it could increase their leverage to get paid if their content is used in Google’s AI mode.
Cardell has also said this morning that Google’s compliance would be actively monitored and that the regulator will be “announcing further action in relation to Google’s search business in the coming weeks”.
Introduction: Google must give UK publishers choice to block AI search summaries, says competition watchdog
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The UK’s competition watchdog has announced that web publishers and news organisations will now be able to opt out of AI overviews of Google search results.
The Competition and Markets Authority (CMA) has said its new rules will put “publishers, like news organisations, in a stronger position to negotiate content deals with Google”.
The intervention comes after complaints by media organisations that they have experienced a drop in click-through traffic to their websites – and therefore their revenue – since Google started posting AI summaries at the top of search results.
CMA chief executive Sarah Cardell said in a statement:
With features like AI Overviews rapidly reshaping online search, it is crucial that content publishers, including news organisations, have appropriate bargaining power over how their content is used. At the same time, these measures will help tens of millions of UK search users better understand and trust the information presented to them.
It’s also important that any action we take in this space can move with the times. Google has recently announced changes to its search business and the requirements we’ve introduced today are designed to respond to what Google is doing now and in the future. We’ll also continue to use the unique flexibility of the UK regime to monitor and address future concerns as they arise and we will be announcing further action in relation to Google’s search business in the coming weeks.
Under the new rules, Google will also now have to make sure that publisher content is “properly attributed”, using clear links in AI search results.
It will also have to allow publishers to opt out of allowing their content to be used for the “fine-tuning of AI models” which will provide “publishers with confidence that they will have control over the full range of AI use-cases of their content”, the CMA said.
The agenda
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9am BST: Eurozone services PMI
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9.30am BST: UK services PMI
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3pm BST: US services PMI
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Today: St Petersburg International Economic Forum
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Today: FTSE reshuffle to be announced after market close
