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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

UK mortgage rates stabilise for first time since May; Rising interest rates knock £2.1tn off household wealth – as it happened

GDP Interest Rates United Kingdom China Resolution Resolution Foundation Britain Bank of England Rightmove
The Canary Wharf business district in London.
The Canary Wharf business district in London. Photograph: Bloomberg/Getty Images

Afternoon summary

Time for a recap:

UK fixed mortgage rates have stabilised today, after many weeks of steady rises. Both two-year and five-year mortgage rates were unchanged today, for the first time since late May.

Surging interest rates have driven the biggest fall in British households’ aggregate wealth in the postwar era, according to a report which shows aggregate wealth of British households has dropped by £2.1tn in cash terms.

But, the Resolution Foundation also reported that younger people could be net winners from higher rates, as it will lower house prices and make it easier to build up a pension.

Russia has formally withdrawn from the deal to export Ukrainian grain across the Black Sea, sparking criticism from the White House. Wheat prices jumped, amid concens that tens of millions of tonnes of food exports could be threatened.

Rishi Sunak has admitted that inflation is not falling as quickly as he would like…

…while US Treasury secretary Janet Yellen has said she does not expect the US to fall into recession.

Here are the rest of today’s main stories:

The White House is urging Russia to reverse its decision to end the Black Sea grain deal (see earlier post), warning it will damage food security.

Sunak says inflation not falling as rapidly as he would like

Prime Minister Rishi Sunak has acknowledged that inflation is not coming down as quickly as he would like.

Sunak, who has pledged to halve inflation by the end of the year, said in an interview with LBC that the process of slowing price rises was “taking longer than any of us would like”.

June’s CPI report, due in Wednesday, is expected to show inflation slowed to 8.2% this year from 8.7% in April and May.

Sunak told LBC that inflation was “proving more persistent”, but that he was determined to bring it down, saying:

“That’s what is eating into people’s pay packets, it’s what’s eroding their savings, it’s what’s putting up interest rates and putting pressure on mortgages.

“So, the best way to help people with the cost of living … is to bring down inflation.

“So, the first of my priorities is to halve inflation. Is that taking longer than any of us would like? Yes, it is.

“Am I the right person to tackle it? Yes, because I identified it as a problem before anybody else.

“I think people trust me when it comes to managing the economy, and they trust me to be honest with them because, you know what, bringing inflation down does mean you have got to make some difficult decisions sometimes because they are the right long-term ones for the country.

New York Fed's Empire State factory gauge dips but stays positive

In the US, a closely watched business index has shown that factory activity slowed in New York State this month.

The Empire State Manufacturing index has fallen by six points to 1.1 in July, with companies reporting a small increase in new orders and shipments expanded.

Delivery times shortened and inventories continued to decline, and employment levels edged higher.

But, planned increases in capital spending remained weak – a sign that companies are cautious about the outlook.

Looking ahead, optimism remains muted although firms expect conditions to improve.

Economists had expected a larger fall in the index this month, to around 4.3.

Yellen does not see US recession looming

US Treasury secretary Janet Yellen says that Chinese policymakers are concerned about “sluggish growth”.

Speaking to Bloomberg TV, Yellen said that China’s consumers have been more focused on rebuilding their savings, leading to slower than expected growth (as we saw this morning).

Yellen points out that youth unempoyment in China is quite high.

But the US is on a “good path”, she insists, and doesn’t expect a recession.

Updated

Rupert Thompson, chief economist at Kingswood, reckons the financial markets could be wrong to predict UK interest rates will rise over 6% by earlly next year.

Thompson writes:

One UK asset which has benefited from the ramping up of the expected peak for UK rates is the pound.

That said, its gains last week were down to dollar weakness and any further strength from here should be primarily down to a further decline in the US currency which continues to look overvalued. Famous last words but market expectations of UK rates peaking at over 6% do look somewhat overblown.

Sterling hit a 15-month high against the US dollar last week, over $1.31.

Chairman appointed to handle sale of The Telegraph

With a UK election due within 18 months, pressure is building to find a buyer for the Daily Telegraph.

Lloyds Banking Group, which seized control of the title last month, has now called on Mike McTighe, the veteran technology executive who chairs BT’s network arm Openreach, to spearhead the sale of The Telegraph.

McTighe has been appointed chairman of Press Acquisitions Limited, the parent company of the Telegraph and also of May Corporation Limited, which owns The Spectator magazine.

He will oversee a sales process at each of the parent companies, an indication they could be bought by different buyers.

According to the Telegraph, McTighe has been asked to find a buyer who will not trigger concerns about media plurality, or “adversely affect the accurate presentation of news or the free expression of opinion.”

Investment bankers to run the auctions could be appointed within a fortnight.

Such concerns could prompt a lengthy reviews by regulators, leaving Lloyds in the awkward position of owning The Telegraph in an election year.

The Telegraph adds that senior Conservatives have warned that the sale must be conducted quickly and transparently, (presumably so the paper is free to express its traditional support for the party at the next election).

Nigeria’s annual inflation rate has climbed to a new 18-year high of 22.79% in the year through June, up from 22.4% the previous month.

The rise came after President Bola Tinubu scrapped a fuel subsidy at the end of May, due to pressures on the public finances.

The rise in inflation was also fueled by a 25.3% increase in food prices, up from 24.8% a month earlier.

Inport costs jumped after Nigeria abandoned currency peg in June and allowed the naira to trade freely, prompting the biggest single-day fall in its history.

Over in China, the head of the state planning commission has held a meeting with officials from private companies, hours after second-quarter growth missed expectations.

Zheng Shanjie, chairman of China’s National Development and Reform Commission (NDRC), met officials from companies from sectors including iron and steel smelting, electronic devices and modern logistics.

It’s Beijing’s latest attempt to improve business confidence, so they can support China’s post-pandemic recovery.

A statement from the planner said:

“NDRC will strive to optimise the environment for the development of the private economy, and form a synergy for the promotion of the private economy’s development and expansion.”

Microsoft to face EU probe over competition concerns, says FT

Microsoft is facing its first formal EU antitrust investigation in 15 years next week, the Financial Times reports.

The EC will probe claims that the US tech giant is unfairly tying its video conferencing app Teams with its popular Office software.

The investigation could lead to formal charges as early as the autumn.

The FT adds:

The commission’s decision to open an investigation signals Brussels’ determination to clamp down on practices by large tech companies that could stifle competition. Apple, Google and Meta are all facing probes for alleged anti-competitive behaviour.

Back in 2008, the EU today imposed a record €899m fine on Microsoft for charging “unreasonable” prices to rivals for access to its dominant software.

Updated

Workers at a second Amazon warehouse in the UK have voted overwhelmingly for strike action.

The GMB union has annouced that 86% of workers at Amazon’s Rugeley site in Staffordshire have voted to hold strike action.

More than 100 workers at the West Midlands site are now set to walk out, GMB says.

Stuart Richards, GMB senior organiser, says:

“The is a game changing moment in the campaign to force Amazon to treat its workers like human beings.

“They’ve thrown everything at stopping this, but workers at Amazon Rugeley have organised and delivered a clear message that they demand fair pay and union rights.

“We’ve seen one of the world wealthiest companies, offering UK workers a pay rise of pennies and work conditions fit only for the history books.

“It’s staggering that Amazon are still trousering millions from the British taxpayer whilst treating UK workers with disdain.

“As GMB members in Rugeley plan for the picket line, it’s time for politicians and decision makers to finally confront the facts.

“If Amazon workers are being forced to the breadline by low pay, then why should the public purse be open to the Amazon.”

This follows a series of strikes at Amazon’s Coventry warehouse, where the GMB has accused the e-commerce giant of drafting in more than 1,000 extra workers to skew a decision on union recognition at the site.

Wheat prices jump as Russia pulls out of Black Sea grain deal

In the commodity markets, the wheat prices is rising sharply after the Kremlin announced that Russia has effectively suspended its participation in the Black Sea grain export deal.

The Chicago Board of Trade’s most active wheat contract rose over 4% at one point, before settling 3.4% higher at $6.84 a bushel.

The agreement guaranteeing Ukraine’s safe shipping of grain exports was due to expire today, having been brokered by the UN and Turkey last July.

Russia had been saying for months that conditions for its extension had not been fulfilled, and today Kremlin spokesman Dmitry Peskov said":

“In fact, the Black Sea agreements ceased to be valid today.

Unfortunately, the part of these Black Sea agreements concerning Russia has not been implemented so far, so its effect is terminated.”

Our Russia-Ukraine liveblog has all the details:

Mick Whelan, ASLEF’s general secretary, has blamed the train companies, and the government, for the new weeklong overtime ban just announced.

Whelan says:

‘We don’t want to take this action. We don’t want people to be inconvenienced. But the blame lies with the train companies, and the government which stands behind them, which refuse to sit down and talk to us and have not made a fair and sensible pay offer to train drivers who have not had one for four years – since 2019 – while prices have soared in that time by more than 12%.

‘The proposal they made on Wednesday 26 April – of 4% with a further rise dependent, in a naked land grab, on drivers giving up terms & conditions for which we have fought, and negotiated, for years – was not designed to be accepted.

‘We have not heard a word from the employers since then – not a meeting, not a phone call, not a text message, nor an email – for the last twelve weeks, and we haven’t sat down with the government since Friday 6 January. That shows how little the companies and the government care about passengers and staff. They appear content to let this drift on and on.

‘In contrast, we want a resolution. A fair resolution. That’s why we are taking this action, to try to bring things to a head. Then I can concentrate on my day job working with others in the industry to rebuild Britain’s railways for passengers, for business, and for this country.’

Train drivers to launch another week-long ban on overtime

Newsflash: Train drivers are to launch another week-long ban on overtime from July 31 in the long-running pay dispute, the Aslef union has announced.

The move threatens to cause disruption to train services at the height of the summer holidays.

The news comes as train drivers also start an overtime ban today, which will run until next weekend.

Aslef says:

The ban – which is the latest move in our long-running national pay dispute – will seriously disrupt services as none of the train companies employs enough drivers to deliver the services they have promised passengers, and the government, they will run.

That’s why they are dependent on rest day working, as it is called in the railway industry, which of course is voluntary, and, by agreement, and properly for the purposes of training, and which leaves them vulnerable to this sort of industrial action.

The ban will affect Avanti West Coast; Chiltern Railways; Cross Country; East Midlands Railway; Greater Anglia; Great Western Railway; GTR Great Northern Thameslink; Island Line; LNER; Northern Trains; Southeastern; Southern/Gatwick Express; South Western Railway main line; TransPennine Express; and West Midlands Trains.

Train drivers have also held overtime bans from Monday 15 to Saturday 20 May; and from Monday 3 to Saturday 8 July.

UK economy expected to fall behind euro area next year

Britain’s economic growth will fall further behind the euro area next year, a new poll shows.

UK gross domestic product is expected to grow by 0.6% in 2024, a monthly survey of economists by Bloomberg showed.

That’s down from a previous forecast of 0.9%, and below the 1% gain anticipated in the euro area.

UK inflation is expected to remain stubbornly high too, creating a bleak backdrop for Rishi Sunak ahead of the next general election.

This year, the UK could only grow by 0.2%, the report suggests.

Bloomberg says:

While the UK struggles to build any momentum, the euro area is expected to grow by 0.5% this year and 1% next, as strong rebounds from France, Italy and Spain — and Germany in 2024 — help boost the bloc’s performance, according to the Bloomberg survey.

Inflation expectations for the UK were also revised up more than for any other major European economy. Economists expect Sunak will hit his target of halving inflation by the end of the year, but they are now predicting that rate for the fourth quarter will be 4.8%, up from 4.6% previously.

Updated

Oil drops as China's growth misses forecasts

Back in the financial markets, the oil price has weakened following the release of weaker-than-expected Chinese GDP figures this morning.

Brent crude has dropped by 1.6% to $78.55 per barrel this morning, which wipes out much of last week’s gains.

Today’s Chinese economic data – showing GDP expanded by 6.3% year-on-year, missing forecasts of over 7% growth – has dented the markets’ view on future oil demand.

Ricardo Evangelista, senior analyst at ActivTrades, explains:

China is the world’s top oil importer, and its GDP figures missed the consensus by a full percentage point, posing a big question on the pace of the recovery in the world’s second-largest economy and hitting oil prices as expectations for future demand were downgraded.

Here’s the key finding from the Resolution Foundation’s report showing that rising interest rates have wiped out £2.1tn of household wealth (details here).

Short-term buy-to-let residential mortgage rates have also stabilised, although longer-term deals cost a little more than last Friday.

Moneyfacts says:

  • The average 2-year buy-to-let residential mortgage rate today is 6.93%. This is the same average rate as the previous working day.

  • The average 5-year buy-to-let residential mortgage rate today is 6.75%. This is up from an average rate of 6.74% on the previous working day.

There are currently 2,397 buy-to-let mortgage products available, the same as on Friday.

Although mortgage rates stabilised today, savings rates have continued to rise.

That could please critics of the banking sector, such as MPs on parliament’s Treasury Committee, who have accused the banks of “blatant profiteering” by offer paltry rates to savers.

Moneyfacts reports that:

  • The average 1-year fixed savings rate today is 5.10%. This is up from an average rate of 5.05% on the previous working day.

  • The average easy access savings rate today is 2.61%. This is up from an average rate of 2.60% on the previous working day.

  • The average 1-year fixed Cash ISA rate today is 4.78%. This is up from an average rate of 4.70% on the previous working day.

  • The average easy access ISA rate today is 2.72%. This is up from an average rate of 2.71% on the previous working day.

The number of residential mortgage products on the market has dipped this morning, Moneyfacts reports, to 4,246 today from 4,312 on Friday.

UK mortgage rates stabilise after weeks of costly rises

Newsflash: UK fixed-rate mortgage costs have stabilised today, having risen steadily in recent weeks.

Financial data provider Moneyfacts reports that the average 2-year fixed residential mortgage rate today is 6.78%, matching the rate recorded on Friday.

The average 5-year fixed residential mortgage rate has also remained flat at 6.30%.

This is the first time in almost two months that the average fixed mortgage rates haven’t gone up, Moneyfacts tell us.

The last time the average rate didn’t go up between two working days was on the 24th and 25th May – when the average two-year mortage was 5.34% while five-year fixed rates cost 5.01% on average.

The rates on both two and five-year fixed-rate mortgages have been rising pretty steadily since the end of May, when concerns over future interest rate rises began to grow.

In recent days, though, market expectations for rate rises have eased. The money markets currently predict Bank of England base rate could peak around 6.25% early next year, down from an earlier forecast of 6.5%.

But rising interest rates have already cooled the market, with Rightmove reporting a small drop in asking prices last month.

Updated

UK sofa retailer DFS has told shareholders this morning that the furniture market has been “significantly worse than expected” this year, but it has grown its market share to a record level.

DFS reports that consumer demand was hit by “the macroeconomic environment”, with volumes across the market falling by between 15% and 20% in the last year (to 25 June).

But DFS expects to slightly grow its profits this year, reporting that its trading has been in line with expectations – leading to a record market share of 38%.

It told shareholders:

We currently expect market volumes to decline by mid-single digits for the full year, however, the economic outlook remains uncertain.

Updated

Corporate optimism dips as CFO fret about rising interest rates

Inflationary pressure and rising rate expectations are weighing on optimism in Britain’s boardrooms.

Deloitte’s latest survey of chief financial officers (CFO) has found that tight monetary policy is seen as the top threat to business, outweighing the concerns around geopolitics and energy prices

CFOs are focusing on cost reduction and controlling their cash reserves, as the cost of credit hits a 14-year high.

And with recruitment challenges easing, many bosses are expecting a slowdown in wage growth.

Ian Stewart, chief economist at Deloitte, said:

“The burst of business optimism seen in the spring has faded under the weight of inflation and rising interest rates. Corporates have responded with an increasing focus on cost reduction and cash control.

Businesses have negotiated a series of major challenges in the last four years, including the UK’s departure from the EU, the pandemic and supply shortages. The legacy of those earlier shocks, in the form of inflation and high interest rates, is now the central challenge.”

Deloitte also found that the majority of CFOs expect employees to spend more time in the office in future.

UK wealth: the key charts

Here are two interesting charts from Resolution’s new report into the impact of higher interest rates on UK household wealth

A chart. showing UK household wealth
A chart. showing UK household wealth Photograph: Resolution Foundation
A chart showing changes in UK asset prices
A chart showing changes in UK asset prices Photograph: Resolution Foundation

And here are the key points from the report:

  • Household saving has whipsawed over the past three years. The adjusted saving ratio peaked during the pandemic at 24.4 per cent – the highest on record. Saving has declined since but remains above its pre-pandemic level
    .

  • Saving behaviour has direct implications for household wealth holdings, but the fluctuations in interest rates have had a more profound impact: the pandemic saw interest rates hit record lows and asset prices boom which pushed the value of wealth to a peak of 840 per cent of GDP in early 2021.

  • The cost of living crisis, coupled with the monetary policy response, has put an end to the trend of rising wealth. Our estimates suggest that the wealth-to-GDP ratio fell to around 650 per cent by early 2023. This is by far the biggest fall on record as a proportion of GDP, wiping out £2.1 trillion of household net worth in cash terms.

  • A higher-rates world and an ultra-low rates world represent starkly different societies to live in. If the rise in long-term interest rates persists, would could see household wealth settling at around 550 per cent of GDP, a level last seen in 2007. But, if downward pressure on long-term interest rates resumes, this could see wealth settling at around ten-times GDP.

  • The future path of long-term interest rates matters hugely in the context of intergenerational inequality. Higher rates of return make it significantly easier to save for retirement. Pre-pandemic, a 40-year-old with median earnings needed to save approximately 16 per cent of their gross income (just over £5,000 a year) to reach a retirement target replacement rate of two-thirds of gross earnings. However, with current rates of return, the required contribution rate for the same goal is much lower at 9 per cent (£3,000 per year).

  • A higher-rates world would also improve housing affordability, helping young, would-be homeowners. Based on current interest rates, the house-price-to-earnings ratio could fall to around 5.6 – the lowest level seen since 2000. But if ultra-low rates return, there would be further upward pressure on house prices, with our modelling suggesting that they could reach 11 times earnings.

European stock market open lower after China's GDP

Europe’s stock markets have begin the new week in the red, after China’s economy slowed in the last quarter.

In London, the FTSE 100 index of blue-chip shares is down 31 points or 0.4% at 7403 points.

Mining giant Anglo American (-2.5%) is leading the fallers, with copper producer Antofagasta (-2.2%) and Glencore (-2%) also weakening.

Germany’s DAX has lost 0.6%, as traders digest the news that China’s quarterly growth rate has slowed to 0.8% from 2.2%.

Naeem Aslam, chief investment officer at Zaye Capital Markets, explains:

Market sentiment is pretty much negative among traders and investors due to the Chinese economic data, which missed the forecast and raised concerns that the second-biggest economy in the world is suffering from a crisis.

Basically, going into Monday, traders and investors were highly focused on China’s GDP data, and they were hoping that the country’s economic data would print a decent reading if not a strong one.

Asking prices for UK homes slip as Bank of England's rates rises bite

Rising interest rates are continuing to hit the housing market.

Asking prices for residential homes in Britain fell by 0.2% in July, new data from Rightmove shows, knoking £950 off the average price tag.

Rightmove reports that buyer demand remains resilient, around 3% higher than 2019. But sales of larger homes are lagging the wider market, as potential buyers wait to see what direction mortgage rates head in the coming months.

Victoria Scholar, head of investment at interactive investor, tells us:

The UK’s sluggish economic growth backdrop, rampant inflation and the Bank of England’s monetary tightening path are weighing on the housing market as mortgages become increasingly costly and consumer budgets get squeezed.

Smaller homes are more shielded from the headwinds as first-time buyers try to make the most of the weaker property market where they can despite the rising cost of debt. However, many homeowners are holding off from listing their properties amid the uncertainty, limiting the supply of flats and houses up for sale. But stemming an even steeper slide in the property market is a chronic undersupply of housing in the UK, exacerbated by the rise in build cost inflation, which disincentivises the housebuilders.

The combination of limited supplies and rising mortgage rates have prompted more potential would-be buyers to head to the lettings market instead, sending the cost of renting sharply higher.”

Resolution Foundation’s report also shows how higher rates of return make it significantly easier to save for retirement.

They explain:

In the pre-pandemic world of low interest rates, a 40-year-old on median earnings had to save around 16% of their gross income, or just over £5,000 a year, in order to achieve a target replacement rate of two-thirds of gross earnings in retirement.

But at today’s rates of return, the required contribution rate to achieve that goal is much lower, at 9%, or £3,000 per year, freeing up around £2,000 per year during working age.

Although many people are still not saving enough for retirement, the scale of the required increase would be much smaller if rates remain high, they add.

Updated

Interest rate rises drive biggest postwar fall in UK household wealth

Rising interest rates have caused household wealth across Britain to fall by £2.1 trillion, the biggest drop since the second world war, a new report from Resolution Foundation has found.

However, there are also winners from the rise in borrowing costs – mainly among young people, who may find it easier to save for a retirement or buy a house.

New analysis published by Resolution shows how rising interest rates have caused household wealth across Britain to fall by £2.1 trillion over the past year.

Much of the loss of wealth was due to falling bond prices, which have cut the value of pension assets.

A chart showing changes in defined benefit pension valuations

Resolution estimates that total household wealth has fallen to 650% of national income in early 2023 – in the biggest fall as a share of GDP since World War II.

The report outlines that “a defining change to Britain and its economy took place over the past four decades”: household wealth grew from around three-times GDP in the mid 1980s, to seven-times GDP on the eve of the pandemic.

Much of this was due to ‘passive gains’ – the increase in asset prices that has fuelled intergenerational inequaliy.

But that trend is now in reverse, with the Bank of England having hiked interest rates over a dozen times since the end of 2021 to fight inflation. This has hit the value of bonds, lowering guaranteed income streams such as defined benefit pensions, and weakening house prices.

A chart showing changes in UK household wealth

Resolution says:

Our analysis suggests that, from early 2021, these passive changes reduced the household-wealth-to-GDP ratio by 185 percentage points, to around 650 per cent, by early 2023, based on a snapshot of asset prices and interest rates in March. This is by far the biggest fall on record as a proportion of GDP, wiping out £2.1 trillion of household net worth in cash terms.

We can expect further falls in wealth as asset prices continue to adjust to higher interest rates, although the scale of those falls is highly uncertain.

Indeed, if interest rates remain high, wealth could fall to around 550% of GDP.

And higher borrowing costs would have two key long-term effects – lowering house prices and making it easier to achieve a decent standard of living in retirement by raising rates of return on pension savings.

Resolution estimates that higher interest rates could reduce the house-price-to-earnings ratio from its 2022 peak of 8.9 to 5.6, a level not seen since the turn of the century. Were this adjustment to happen over five years, it would mean house price falls of around 25% in cash terms.

Ian Mulheirn, research associate at the Resolution Foundation, says governments should try to shield household from wild swings in interest rates.

Mulheirn says:

“Over the past four decades wealth has soared across Britain, even when wages and incomes have stagnated. But rapid interest-rate rises have ended this boom and brought about the biggest fall in wealth since the war, of £2.1 trillion.

“Those with significant mortgages will be hit by these major changes. But there are winners too from a shift to a world of higher rates and lower wealth. Higher returns will make it far easier for younger people to save for a pension that delivers a decent standard of living in retirement, while lower house prices will make it easier for younger generations to get on the property ladder and others looking to trade up.

“The future path of interest rates is very uncertain. The current surge could be a blip, or herald a new era for the UK. Either way, policy makers should focus more on whether and how to insulate households from wild swings in their fortunes from these forces well beyond their control.”

Updated

China growth disappoints

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

China’s economy has grown more slowly than expected in the second quarter, driven by a slowdown in consumer spending and the ongoing problems in its property sector.

New GDP data released this morning shows that China’s GDP grew by 6.3% year-on-year in the second quarter of 2023, missing forecast of 7.3% growth.

On a quarterly basis, GDP grew by just 0.8% in April-June, a slowdown on the 2.2% expansion recorded in the first quarter.

Retail sales growth has stumbled too, growing by just 3.1% per year, down from 12.7% in Q1 2023, while fixed asset investment growth slowed to 3.8% from 4%.

China’s property sector remains firmly in a downtrend too; property investment slumped 20.6% in June year-on-year after a 21.5% drop in May, according to Reuters calculations.

The slowdown will add to calls for Beijing to do more to support the recovery, as Ipek Ozkardeskaya, senior analyst at Swissquote Bank explains:

In one hand, weak growth means that the government and the People’s Bank of China (PBoC) will step up efforts to further ease the financial conditions and pave the way for a quicker recovery.

On the other hand, supportive policies put in place so far have had little impact. The Chinese property downturn, risk of disinflation, and falling exports have been difficult to reverse.

Also coming up today

China’s slowdown could be under discussion at Gujarat, India, where G20 finance ministers and central bankers are gathering for a summit.

UK supermarket bosses are set for showdown talks with the government next week over the cost of fuel at the pumps.

Energy Secretary Grant Shapps is expected to meet bosses from Asda, Tesco, Morrisons, Sainsbury’s and other major fuel retailers on Monday, and tell them to end any attempts to overcharge at the pumps.

The meeting comes after an investigation found that drivers paid an extra 6p per litre for fuel last year after supermarkets increased their profit margins.

The agenda

  • 11am BST: Ireland’s trade balance for May

  • 1.30pm BST: New York Empire State Manufacturing Index

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