Jenrick: Britain is broken
Speaking at the annual conference of the British Chambers of Commerce, Robert Jenrick said Britain was not ungovernable, but had been badly governed.
“And not just for two years, but for two decades, the Reform UK Treasury spokesperson said.
“The never ending psychodrama of our politics are downstream from the much more profound problems that we face.
“Britain is broken and so is the economy.”
He said a country where millions of people were “on the scrap heap of welfare” and “bright young people were priced out and jobless” are unlikely to have stable politics.
Jenrick spelled out how £40bn of extra spending could be generated by £20bn of cuts to welfare and ending subsidies that promote net zero.
He said British businesses that rely on foreign workers would be able to hire from the ranks of people who were previously claiming disability benefits, and for this they would be rewarded with tax cuts.
“We are going to take those savings and invest some of them in police, and defence, but the bulk will go towards making the economy work again by cutting taxes.
‘We will cut employers national insurance for British workers to help businesses employ British workers over migrant workers. And if they take on extra work and work overtime, they will pay no tax.
“And raise the VAT threshold to £150,000 for self employed workers, so government stay out of their way. And for pubs and restaurants, we will not only halve VAT, but also slash the duty on beer and the reates they are paying on their premises, allowing these businesses to create good jubs, underpinned by good and abundant energy.”
He said British businesses had become “hooked on foreign workers” and needed to end their dependency.
On Farage’s £5m donation, he said:
“Not a single person has raised the issue with me on the doorstep.
“But let me answer the question head on. If you ask about influence, there is no donor influencing Reform’s agenda. If you are saying Reform should have a policy on crypto, we should do, it is a significant growth opportunity. We London to prosper and this is one of the areas of growth.
“Nigel was given this gift before he was a member of parliament and it is the case that some people in politics face a very severe security threat, and it is write he should be able to protect himself.
Closing summary
Time to wrap up…
Ryanair has changed its family seating policy, after Britain’s competition watchdog launched an investigation into the airline’s charges for parents to sit with their children.
Europe’s largest airline said that as of Thursday, adults would be offered “free of charge” seats next to their children after they have checked in for their flight – but at the rear of the plane. All children on the booking will be allocated seats alongside them for no fee.
Ryanair said it was a “minor policy tweak”, two weeks after it angrily described the Competition and Markets Authority (CMA) investigation as “bogus”.
The US Dow Jones Industrial Average, and the European Stoxx 600 index, have both hit record highs today.
Investors are relieved that the oil price fell back to its levels before the Iran war began, helped by an increase in ship traffic through the strait of Hormuz.
However, reports that Tehran is working on methods to charge for access to the waterway have given oil a nudge higher.
A key measure of US inflation has hit a three-year high.
Chancellor Rachel Reeves has insisted she is proud of her record at the Treasury, despite reports that the likely next PM, Andy Burnham, may replace her.
During a speech at the global annual conference of the British Chambers of Commerce (BCC) on Thursday, Reeves said it was clear that Burnham would keep her fiscal rules, which she described as “a good thing”
She added:
“I know that whoever is prime minister and chancellor in the future will inherit a stronger economy than the one I inherited two years ago.”
FTSE 100 closes at highest since April
Britain’s blue-chip stock index has ended the day at a two-month closing high.
The FTSE 100 share index has closed for the day up 0.65%, or 68 points, at 10,529 points.
Private equity and infrastructure investment company 3i (+11.5%) led the risers after reporting that its European non-food discount retailer Action was growing its sales and on track for profit growth this quarter.
Housebuilders also rallied, on hopes that the falling oil price would lead to lower borrowing costs.
Oil rising as Iran 'plans Hormuz tolls'
The oil price is on the rise again, following a report that Iran is pushing to make billions of dollars from tolls for access to the strait of Hormuz.
The Wall Street Journal are reporting that Tehran is positioning itself to manage the global oil artery it severed at the start of the war.
The WSJ says:
The Islamic Republic estimates that charging for security, safety and environmental services in the strait would bring in $40 billion a year in revenue for states involved, according to officials familiar with the matter. The idea, if implemented, would bring Tehran cash flow and control that it didn’t command before the war.
The regime is looking to models around the world, including the Dardanelles, the officials said, where Turkey charges ships a tax known as the gold franc for passage to and from the Aegean Sea through the international waterway.
To get buy-in, Tehran is pitching the idea to the wider Middle East and as far afield as Beijing, according to Iranian officials. It wants its Persian Gulf neighbors to be part of the agreement and share the revenue, they said.
That might irk Donald Trump, who has previously warned that tolls on ships sailing in the Strait of Hormuz would be a red line issue for the US in negotiations with Iran.
Brent crude, which fell as low as $72.06 a barrel. earlier today (below its level at the start of the war) has now risen to $74.63 a barrel.
The RAC are hoping that the recent drop in the oil price should lead to lower fuel prices for motorists.
However, prices aren’t expected to hit pre-Iran war levels soon.
RAC head of policy Simon Williams says:
“On the back of the lowest oil price since before the Iran war started, drivers should see the average price of petrol fall below 150p in the next week or so. If this happens, unleaded will be at its lowest price since 26 March.
“Diesel, having dropped below 170p today for the first time since 22 March as shown in the Government’s Fuel Finder data, ought to go back under 160p. We urge retailers to pass on the savings they’re benefitting on the wholesale market to drivers straightaway.
“Before the war began we had an oil price of $70 which translated to an average petrol price of 132p and 141p for diesel.”
JP Morgan's Jamie Dimon promotes two potential successors
The race to succeed Jamie Dimon at the head of JP Morgan has taken a twist.
Dimon has elevated two senior executives at the bank, Doug Petno and Troy Rohrbaugh, to become co-presidents of JPMorgan Chase, while a leading female succession candidate is leaving the company.
They were previously co-CEOs of the Commercial & Investment Bank (CIB); now, Petno will become sole CEO of the CIB, and Rohrbaugh will become CEO of Consumer and Community Banking (“CCB”).
Dimon says:
“The changes announced today mark an important step in our Board’s thoughtful process around succession planning and development of our top leaders.
We are fortunate to have in place an exceptional group of senior leaders, not only at our Operating Committee level but across our organization, and I’ve never been more excited about the future of JPMorganChase.”
CCB, which is JP Morgan’s consumer division, had been run by Marianne Lake, who JP Morgan says “has decided to retire from the company after more than 25 years of outstanding service”
Dimon explains:
“Marianne Lake has served our company with distinction for more than 25 years as head of CCB, Chief Financial Officer, a member of the Operating Committee and other key roles. She has been an outstanding partner and friend and has dedicated her career to championing our people and customers, building world-class businesses and delivering results, always with unquestioned integrity. We will miss her and wish her all the best in the future.”
Updated
Stoxx 600 hits record
European markets are also rallying, pushing the pan-European Stoxx 600 index to a new intraday record high.
The Stoxx 600 is up just over 1% today to 641.74 points.
The Dow hits a record high
The Dow Jones Industrial Average has just a record high, despite the drag from Apple’s falling share price.
The DJIA is up 1.5% or around 800 points to 52,649 points this morning in New York.
Construction equipment maker Caterpillar is the top riser, up 5.5%, followed by conglomerate Honeywell International (+3.8%), as the fall in the oil price in recent days cheers investors.
Shares in Apple have fallen in early trading on Wall Street, after it announced price hikes due to the rising price of chips.
The tech giant is lifting the price of Macs and iPads, passing on the cost jump in memory chips and storage to consumers.
Reuters has the details:
The company is increasing prices of the MacBook Neo, MacBook Pro, MacBook Air, iPad Air and iPad Pro, according to changes posted to its online retail store. The starting price of the MacBook Neo, its latest laptop, is rising to $699 from $599, while the MacBook Air is increasing to $1,299 from $1,099.
The entry-level 14-inch MacBook Pro is moving to $1,999 from $1,699, while the 11-inch iPad Pro is increasing to $1,199 from $999. The iPad Air, a mid-tier tablet, is now priced at $749, up from $599.
Apple’s shares have dropped almost 5%.
The governor of the Bank of England has welcomed the easing tensions in the Middle East that have pulled down oil price to pre-Iran war levels.
Speaking to The Shetland Times, on a trip to the Scottish islands, Andrew Bailey said:
“There were comments from the US that it would be over any day soon - they were going on for a month almost.
But it does look like a truce has broken out. And what’s interesting is that, particularly this week, there’s quite a sharp fall in energy prices.”
UK urged to speed up closer relations with EU
Back at the BCC’s annual conference in London, Nick Thomas-Symonds, minister for European relations, has said the government was working hard to forge closer relations with the EU.
However, Thomas-Symonds, who is a close ally of Keir Starmer, was told by US manufacturer 3M that speed was needed to prevent jobs being put at risk in the UK.
Becky Wirth, head of government relations at 3M UK, said the firm had three manufacturing sites in the UK, among them a factory making safety masks in the north east, which would be badly affected by the failure to secure a closer agreement with the EU Commission.
She said it was “a real shame” the UK-EU summit had been delayed, explaining:
“It’s understandable but it comes at a time when we really need to move things along faster”.
Much of the production from the factory in the north east is exported to the EU, so the “made in EU” concept will be a blow, she said.
The EU is stockpiling masks for a future pandemic but 3M products made in the UK are excluded, she said.
“We are big supporters of both sides working together so the UK can become a trusted partner.”
“There are lots of opportunities for the UK and EU to work more closely together.
The deal that’s done with the EU will have a real impact on us and on jobs and economic progress in the north east.”
Madelaine Tuininga, the EU Commission’s head of trade and sustainable development. said the EC had been “engaging in an accelerating way in securing trade agreements with other countries.”
She said there was extremely close cooperation between the UK and the 27 member trading bloc, especially on security issues.
But high level cooperation appears to mask a disconnect at the company level.
“There are limitations on either side,” she said.
CMA: Ryanair investigation is ongoing
The CMA has noted Ryanair’s changes to its seating policy, but isn’t abandoning its investigation.
A CMA spokesperson said:
“Ryanair claims its seating policy now complies with the law, and we’ll test that thoroughly.
“If true, it’s a win for families – who will no longer have to pay to sit with their children – and it shows the impact our new powers are having.
“But it doesn’t change the fact families have been paying for ‘mandatory family seats’. Our investigation remains ongoing.”
Here’s Heather Long, chief economist at Navy Federal Credit Union, on the rise in US PCE inflation to a three-year high:
“Inflation is at a 3-year high due to the war in Iran and it’s painful for middle-class and moderate-income Americans. People are spending more on gas, along with healthcare and utilities. New Fed Chair Kevin Warsh has made his commitment clear to bring inflation down. The key will be how much relief happens by September.
Fed's preferred inflation measure hits three-year high
A key measure of US inflation has hit its highest level since April 2023, as US consumers are hit by a cost of living squeeze.
The PCE price index increased by 4.1% year-on-year in May, up from 3.8% in April.
Nic Puckrin, a former Goldman Sachs analyst, explains why this could encourage the Federal Reserve to lift US interest rates:
“The Fed’s preferred inflation gauge is flashing red. At 4.1%, it’s the hottest reading in over two years. That’s an uncomfortable number for anyone with a mortgage or credit card balance, because it reduces the chances the newly hawkish Fed will backtrack from its intentions to raise rates this year rather than cut them.
There is one reason not to panic, though. Today’s figure doesn’t yet capture the recent fall in oil prices, which was a big driver of inflation coming back. If next month’s reading drops sharply, the pressure to lift rates could ease as quickly as it built. New Fed chair Kevin Warsh is also looking at faster, real-time ways of tracking inflation, some of which suggest prices may be cooling more than the official figures show.
For households, the message for now is to plan as though borrowing is about to get more expensive. But it’s worth watching next month’s inflation data closely, because the picture could still change fast.”
US growth revised up
Just in: the US economy grew faster than previously thought in the first quarter of this year.
US growth in Q1 2016 has been revised up to an annual rate of 2.1%, up from the previous estimate of 1.6%.
That means quarter-on-quarter growth of just over 0.5%, below the UK’s 0.6% growth but ahead of the eurozone where GDP shrank by 0.2%.
The US Bureau of Economic Analysis says the upgrade “primarily reflects a downward revision to imports, which are a subtraction in the calculation of GDP, that was partly offset by a downward revision to consumer spending.”
UK energy debts hit record levels
UK energy debts have grown to record levels, as households struggle to pay their bills as the Iran war drives up costs.
New data from regulator Ofgem show that the average debt level for a customers in arrears with their electricity bill rose to £1,876 in the first quarter of the year, and to £1,623 for gas.
Gillian Cooper, Director of Energy at Citizens Advice, says this is “extremely worrying”, but not surprising.
At Citizens Advice, we’ve seen a staggering 70% increase in the number of households we support with energy debt since 2021. Soaring debt is hurting vulnerable households and ultimately driving up the costs of everyone’s bills.
“The government needs to act to make sure these record levels don’t continue to spiral. It should support Ofgem to finally introduce the long-delayed Debt Relief Scheme to help millions in need of support.
“And, while it may seem a long way away during a heatwave, the Government must ensure its ready to help people with targeted support this winter. That will bring relief to the 9.4 million households worried about paying their bills when the cold and wet weather returns.”
National Energy Action policy analyst James Mabey says customers should be offered more debt relief, explaining:
‘This debt has built up because bills have gone beyond what many low-income households can afford, and its effects are not limited to those already in arrears. Allowing debt to persist builds additional costs into future price caps, while also increasing the risk of more harmful responses such as households having prepayment meters forcibly installed. It also risks excluding low-income households from the benefits of wider market reform, including the opportunities linked to smarter tariffs and home upgrades.’
‘The right response is to scale debt relief. As our new paper, Clearing the Decks, sets out, that means enabling and expanding Ofgem’s Debt Relief Scheme with additional funding so more of this debt can be cleared, reducing harm and lowering costs across bills.’
Ryanair CEO, Michael O’Leary, is scathing about the CMA’s criticism of the airline’s family seating policy.
He claims families may lose out under today’s changes, saying:
Instead of promoting competitiveness and lower fares for consumers, the CMA is on a mission to force Ryanair to adopt the less transparent and less consumer-friendly family seating policy applied by most other airlines – just because it’s the industry standard.
We will reluctantly adjust to this industry standard as we don’t want to waste time explaining to misguided regulators how badly they misunderstand what is in the best interest of UK and Europe’s consumers. Under our revised family seating policy, families may have to wait until after they have checked in to find out their seat allocation and are more likely to be seated at the rear of the cabin but at least the CMA will be able to claim they have done something for consumers, but sadly most consumers won’t notice.”
Ryanair: It's a minor policy tweak
Ryanair has also insisted that its long-standing family seating policy “fully complies with all relevant laws and regulations” – even as it changes it following criticism from the CMA.
Here’s the statement from Ryanair, explaining how it will now allow adults to sit with their children without charging a fee (and will probably stick them at the back of the plane).
Ryanair, Europe’s largest airline, today confirmed that its long-standing family seating policy fully complies with all relevant laws and regulations. Ryanair does not charge any fee for children to sit beside their parent or accompanying adult. Like all adults who select a reserved seat, adults travelling with children pay one reserved seat fee, but can select reserved seats beside them for up to 4 children on the same booking free of charge. This means that parents travelling with children pay for only one (adult) reserved seat – at a discounted rate – but pay nothing for the 4 other reserved seats for the children travelling with them. This policy has given families certainty of seat allocation at the time of booking, which families have valued as much as they have valued Ryanair’s lowest fares.
For bookings from today (25 June), adults travelling with children, who do not wish to select or pay for a reserved seat, will be advised of their (free of charge) seat allocation after they have checked in for their flight, as is the case with most other airlines in Europe. Families opting for this random allocation of seats beside each other are likely to be seated towards the rear of the aircraft cabin, as front rows tend to be reserved and sell out first. Families who prefer to choose their seats at the time of booking and secure premium front rows will be allowed to do so by paying a seat reservation fee, in line with the policy applied by most other European airlines.
This minor policy tweak will align Ryanair’s family seating policy with that of most other EU airlines, which responds to the desire of Europe’s regulators to stifle innovation and progress. The tweak will be revenue-neutral for Ryanair while families will continue saving €billions every year by choosing to travel on Europe’s lowest fare airline.
Haldane: Pension funds should help UK economy to grow
Former Bank of England chief economist Andy Haldane told the BCC conference today that radical measures were needed to provide start-ups companies with the capital they need to grow.
He said there was a gulf between the needs of companies and the capital available, even though the international financial system is awash with money looking to find a home.
He said:
“Unfettered free markets have not worked. That is a lesson of the last 30 years.”
He said ministers had recognised the need to intervene to fill a void in funding for small and medium-sized businesses (SMEs).
The new National Wealth Fund was making an impact, but it is modest, added Haldane, who is understood to be providing advice to Andy Burnham.
And so the government should adopt radical reforms of the tax system because there are trillions of pounds available for investment.
The British pension system is an obvious place to look, but is “the only one in the world that does not have a home bias”, Haldane points out.
He wants to create a home bias without the state needing to take control of pension schemes. A fiscal-free solution that influences pension schemes to take a closer look at UK firms.
Haldane explained:
“Is there a third way, something that shifts the balance of incentives towards British businesses, while leaving those choices [of exactly what to invest in] in the hands of asset managers and there owners.
As luck would have it we do. It’s our taxation system, which the perfect vehicle.
As Haldane puts it:
“The government extends more than £50bn in pension tax relief and more than £10bn in tax relief for ISAs.”
These reliefs are made without any rules forcing investors to channel funds into UK companies, Haldane points out.
He said an obligation attached to pension tax relief would not be “about constrained choices, this is about having a home bias.”
He said surveys showed households would like their savings to be invested in UK firms.
He characterised British business and British capital owners as “true thoroughbreds” that need to be brought together.
There were no details from Haldane about how to develop new tax rules, which will be complex if they follow the pattern of pension rule changes over recent decades.
No doubt that will be left to the Treasury and HMRC to work out.
If Haldane is the advisor to Andy Burnham that some say he is, then this radical thinking could become a centre piece of the new government.
However, the City has already lobbied vociferously against it, presenting their own surveys showing UK investors are not interested in a patriotic law because they want to get the highest return from wherever in the world they can find it.
Ryanair to allow parents flying with young children to avoid seat fee, after CMA criticism
The UK’s competition watchdog appears to have scored a victory against Ryanair, over the airline’s policy of charging parents to sit with their children on flights.
Ryanair has announced a “minor policy tweak” means “free parent seats” will be available in the rear of its aircraft for future bookings.
The move comes two weeks after the Competition and Markets Authority (CMA) announced it was investigating the £8 mandatory fee Ryanair charges a parent to sit with their children.
The CMA said the Irish carrier’s terms and conditions require at least one parent to sit with their children, including those with disabilities, and bills them about £8 a flight to book a seat. Its investigation would examine whether this was a breach of consumer law, if passengers weren’t being shown the total price of their flight upfront.
Ryanair had previously criticised the “bogus investigation”, saying it looked forward to disproving the CMA’s “false” claims”.
The airline said that “like all adults who select a reserved seat, adults travelling with children pay one reserved seat fee, but can select reserved seats beside them for up to four children on the same booking FREE OF CHARGE”.
Updated
Online card and gift seller Moonpig said its customers continued to trade up to bigger cards and add gifts despite a squeeze on household budgets from higher energy and food bills.
Its most popular personalised Father’s Day card involved super-imposing the paterfamilias on a full English breakfast with almost 5m people choosing to upload family photographs to add to various cards on the site for the event.
Father’s Day gifts included 37 tonnes of chocolate – equivalent to six African elephants – and 164,000 pints of beer at peak.
Catherine Faiers, the new chief executive of the London-based technology firm, said there was “real reassurance” about the UK consumer, despite inflation driven by the conflict in the Middle East, as when “things really matter in people’s lives” they were choosing to spend more.
The group’s revenue from gifts linked to cards rose 6.5%, including new ranges from Next and Boots, and shoppes also opted for more premium services such as fast-track delivery. However, revenue from standalone gifts and experiences fell, partly as Moonpig took a lower cut from new partners providing experiences.
Faiers said trading had been more volatile during the hot weather and football, but “we haven’t seen fundamental softness.”
Sales for the group rose 6.5% to £373m and underlying pre-tax profits increased by a better than expected 13% to £76.5m in the year to 30 April.
Updated
The strong performance on Asia-Pacific markets overnight hasn’t really been matched in Europe.
The pan-European Stoxx 600 is up by 0.64% so far today, as investors welcome drop in the oil price and signs that Middle East oil flows are moving towards more normal levels.
Strong financial results from chip firm Micron overnight have also lifted the mood, reports Raffi Boyadjian, lead market analyst at Trading Point:
Equities are rebounding on Thursday, lifted in part by the ongoing slide in oil prices, but crucially, concerns about AI valuations were allayed, at least for now, by stellar earnings from rising AI star, Micron Technology.
Having already skyrocketed by 700% over the past year, Micron’s stock surged by more than 15% in after-hours trading yesterday after the chipmaker reported much better-than-expected quarterly results. Micron beat both its revenue and earnings per share estimates, but investors were mostly impressed by its forecasts for the current quarter, when it expects revenue to hit $50 billion versus estimates of $43.6 billion.
The boom in AI has fuelled demand for memory chips, leading to shortages that may last well into next year, pointing to more gains for chipmakers.
Back at the British Chambers of Commerce annual conference, BCC chief Shevaun Havilland, has told Labour: “Back business and we will deliver growth.
But she warned:
“Extra taxes would be the road to ruin”.
The UK government will halve the amount of tariff-free steel imports allowed in an attempt to counter a global oversupply of cheap Chinese metal and bolster its beleaguered local industry.
New “safeguards” will be introduced on 1 July and will coincide with similar new limits being introduced by the EU for the same purposes.
At the same time tariffs on steel imports above the duty-free quotas will be doubled to 50% of the product’s value.
The quotas replace existing pre-Brexit rules that set import levels across the EU. The UK had retained the rules after leaving the bloc.
Under the new rules, the existing quota of tariff-free steel allowed into the UK will be reduced by 51%, less than the 60% reduction proposed in March. That means only 3.2m tonnes can be imported duty-free into Britain in future.
UK bicycle market recovering, reports Halfords
Halfords has increased its hopes for profits this year after warm spring weather spurred strong sales of bicycles, camping gear and air-conditioning kit for vehicles.
Henry Birch, the chief executive of the retailer and garage operator said it was lifting profit expectations by 7% to £49m after “a strong performance across all parts of the business” in April, May and June as the “early hot weather helped”.
He said tweaks to prices and improvements in Halfords’ website and retail operations as well as a recovering bicycle market had also lifted sales, adding:
“This is not just a result of the hot weather, it is a strong performance week after week.”
The upgrade to expectations came after Halfords returned to the black with a better than expected profit before tax of £43.6m in the year to 3 April after a loss of £30m a year before. Sales rose 4.8% to £1.8bn.
The company said that it had “not yet seen any changes to customer behaviour from the recent conflict in the Middle East, but we remain sensitive to its potential impact on consumer sentiment and spending power and would expect any impact to take effect from the second half of 2026.”
UK retail downturn deepened in June
UK retail sales fell below average levels in June, with retailers blaming low consumer confidence and rising cost pressures.
The CBI’s latest healthcheck on the sector has found that retail sales volumes were judged to be below seasonal norms in June, with retailers predicting disappointing sales volumes for the time of year in July.
Martin Sartorius, lead economist at the CBI, says:
“Retailers reported a gloomy start to the summer, with sales disappointing relative to seasonal norms to the greatest extent in over two years amid depressed consumer sentiment and rising cost pressures. A sharp fall in year-on-year retail sales was mirrored across the broader distribution sector, with wholesalers and motor traders seeing firm sales declines.
“Businesses need clarity and stability at a time when confidence remains fragile. As government transitions to a new Prime Minister, the focus must remain on creating the conditions for growth by tackling the cost of doing business. For retailers and wholesalers, this includes delivering meaningful business rates reform, ensuring the Employment Rights Act avoids diminishing labour market flexibility, and taking further steps to address uncompetitive energy costs.”
Short-term UK mortgage rates have dipped a little today, as the drop in the oil price helped to push down borrowing costs.
Moneyfacts reports:
The average 2-year fixed residential mortgage rate today is 5.55%. This is down from 5.56% the previous working day.
The average 5-year fixed residential mortgage rate today is 5.54%. This is unchanged from the previous working day.
Castlelake have told the City that they note easyJet’s announcement this morning, adding:
Castlelake welcomes the easyJet Board’s constructive engagement and the nine-day extension to the “Put-up or Shut-up” deadline to no later than 5.00 pm (London time) on Sunday, 5 July 2026 in accordance with Rule 2.6(c) of the [UK takeover] Code.
57 ships sailed through Hormuz since June 23 under UN evacuation scheme
Some 57 ships carrying an estimated 1,100 seafarers have transited the strait of Hormuz since June 23 under a United Nations evacuation plan launched this week, data from the U.N.’s shipping agency showed today, Reuters reports.
These are the first numbers to be released by the UN’s International Maritime Organization for the initiative, which will enable hundreds of ships with some 11,000 seafarers to leave the strait.
According to current IMO data, 12 ships sailed through during the morning of June 25, 32 during June 24 and 13 during June 23.
EasyJet opens talks with Castlelake after rejecting £4.9bn takeover offer
Over in the City, shares in easyJet have jumped by 8% after agreeing to open its books to US investment firm Castlelake.
EasyJet has rejected a fourth takeover offer from Castlelake worth £4.9bn, but also agreed to provide access to limited commercial information in the hope of receiving a higher bid.
The airline said:
“The board believes that giving Castlelake access to limited commercial information, as Castlelake sought in the letter which contained the fourth proposal, might produce a more attractive proposal that better reflects the value of easyJet and its prospects and the interests of shareholders thereto.”
It added:
“The board continues to be concerned about the ownership structure and deliverability of any offer from Castlelake, and the time it will take.”
EasyJet’s shares are up 8% at 582.80p, which lifts its value to around £4.42bn.
Goldman Sachs: Brexit's economic cost was worse than we thought
Like many recent chancellors (and there’ve been a few!), Rachel Reeves’s tenure at the Treasury has been overshadowed by the economic cost of the UK leaving the European Union.
Ten years after that fateful referendum, Goldman Sachs has revised its estimate for lost growth a little higher. It’s updated “Doppelgänger” analysis suggests real UK GDP is around 6% below its counterfactual path, more than the previous 5% estimate two years ago.
Goldman economists James Moberly and Sven Jari Stehn say their estimates show that Brexit has materially weighed on Britain’s economic performance relative to other advanced economies, taking it from a growth profile closer to the US to one closer to the Euro area.
They write:
Analysis of the channels through which Brexit could have affected output also points to a significant drag.
Goods trade volumes have underperformed by 10-15% since the referendum. Services trade has held up better, but recent studies nonetheless find a meaningful Brexit-related hit. Lower trade intensity has likely reduced productivity, lowering GDP by 2-4%. Business investment has also been weak since 2016—with business surveys suggesting this is partly due to Brexit—likely lowering output by 2%.
The impact on labour supply through migration has been more mixed, with lower EU immigration but higher non-EU inflows. That said, shifting migration patterns have probably contributed to labour shortages in some sectors.
However, such estimates aren’t universally accepted. My colleague Larry Elliott wrote this week:
The Office for Budget Responsibility has estimated that the economy will be 4% smaller in the 15 years after the referendum than it would have been had the UK remained in the single market – but this finding should be treated with some scepticism.
As Jeremy Hunt, who campaigned for remain, told the BBC last week, for the economy to be 4% bigger today it would have had to have grown as fast as the US – something the former chancellor finds implausible.
Reeves: My work is beginning to bear fruit
Rachel Reeves is then left briefly speechless, after being asked what advice she might give to anyone in the future taking on the role as chancellor.
The chancellor then replies:
I’m not sure if anyone wants my advice.
But Reeves then rallies, insisting again that she is ‘really proud’ of her achievements as chancellor.
She tells the BCC’s annual conference:
My advice would be you’ve got a brilliant set of officials at the Treasury who will back to you if you’re clear about what you want to do.
I’ve been very clear about what I wanted to achieve as chancellor. I wanted to restore stability to the economy. I wanted to boost investment, both public and private, into the economy. And I wanted to change how the economy works, with a regulatory burden that is fairer and more efficient, with a planning system that actually allows things to get built in our country.
I’m really proud of my record, and I hope that whoever is Chancellor, in the future, whenever that future may be, sticks to what I’m doing because it is beginning to bear fruit. And we are seeing that investment return to the economy, that growth to come to the economy and crucially, that stability, so that businesses can plan and invest in.
Q: How would you like the history books to remember you?
Reeves reminds the BCC that in her first speech as chancellor, she said her time in office would be a success if ordinary children from working class backgrounds had more opportunities than when I became chancellor, and if women and girls felt that there should be no ceiling on their ambition.
She concludes:
It’ll be up to others to judge whether I’ve achieved my goals. But I’m very proud of what I’ve done and believe I have [hit those goals].
Updated
The recent local council elections, and those in Scotland and Wales, shows that Labour needs to do more to to connect to the country, to tell a better story of what we’ve done in government, and set out a vision for the future, Rachel Reeves concedes.
Conceding that she might be moving on from the Treasury soon, Reeves says:
That is what Andy [Burnham] will be able to provide as our next Prime Minister. He is a great communicator. He’s got a great track record in delivering in Manchester, and I have no doubt that he will bring that to the position of prime minister.
And and I look forward to working with him in whatever capacity.
Reeves: Middle East conflict will hit growth this year
Rachel Reeves then warns that British Chambers of Commerce’s annual conference that the UK will slow this year, after a robust start.
The chancellor reminds the BCC that the economy grew by 0.6% in the first quarter of this year.
If that continued through the year, we’d have 2.4% growth, which Reeves says would be an exemplary level of growth for a G7 economy.
But, she warns, the Middle East crisis means growth through the rest of 2026 will be slowed.
Reeves says:
Are we going to maintain that? No, because of the conflict in the Middle East.
It’s not a conflict that we started. It’s not a conflict we entered.
I think I’ve been pretty clear on and off the record about my views of that, conflict.
It has implications here and at home, which is why I set that target of the fastest growing economy in the G7 as a relative target, because all countries are exposed to shocks.
[Reeves has certainly been clear; she shook up the IMF’s spring meeting in April that Donald Trump’s war on Iran was a “mistake”]
And a reminder: The economy did shrink slightly in April, by 0.1%.
Updated
Q: Some people are backing Andy Burnham because they think he’ll rip up your fiscal rules…
Reeves replies that Burnham has been “really explicit” that he backs those fiscal rules [they dictate that day to day spending is funded through tax receipts, and that debt falls as a share of the economy].
Reeves: I'm proud of my record
Sophy Ridge focuses on Rachel Reeves’s future:
Q: Do you feel you have unfinished business as Chancellor?
Reeves tells the BCC’s conference that she ‘s “really proud” of her record on inflation, on interest rates, on economic growth, on rising real wages, and on borrowing (she says government borrowing is now below 5% of GDP, at 4.2%)
Reeves adds that her changes to the fiscal rules have allowed investment in the Sizewell C new nuclear power station, in small modular nuclear reactors in Anglesey, carbon capture and storage in Merseyside and in Teesside.
She also cites transport expansion – at Heathrow and Gatwick, in Northern Powerhouse Rail, the TransPennine route upgrade, andthe Oxford Cambridge Growth Corridor.
Another achievement: lifting more than half a million children out of poverty in this Parliament.
Reeves repeats that she is proud of her record, but adds that there is more to do.
So yes, there is more to do, but all of that has to be anchored around that stability, that high return to the economy.
She also cites “unfinished business on fiscal devolution”.
Q: Do you want to stay on as chancellor?
Reeves says that’s a choice for Andy Burnham; she’s not going to pre-empt those decisions about his top team.
Reeves: Tight grip on public finances would continue under Burnham
Chancellor Rachel Reeves is speaking at the British Chambers of Commerce (BCC) conference in London now, hours after telling the BBC that she is backing Andy Burnham to be the next prime minister.
Sky News’s Sophy Ridge begins by asking Reeves if she is taking businesses’ need for stability seriously.
Reeves, who concedes it’s been a slightly busier week than normal, says she’s proud of her record at the Treasury – citing six cuts in interest rates in the last two years, the fall in inflation in April, and that the UK had the fastest growing economy in the first quarter of this year.
The chancellor adds that it’s a good thing that Andy Burnham has been “really clear” that he is committed to the fiscal rules she introduced.
Reeves says:
Businesses here can be confident that that stability, that rigour to policymaking, that tight grip on the public finances, which is essential for getting inflation and interest rates down, will be continued.
Reuters: Iraq has considered leaving Opec in push for higher quota
Could Iraq be poised to follow the United Arab Emirates out of Opec?
Reuters is reporting that Iraqi officials had considered leaving the Opec oil cartel, but are currently planning to remain a member and seek a higher quota under Opec rules.
They report:
Iraq will be compelled to consider all available options if its OPEC quota is not significantly increased, a senior Iraqi oil ministry official told Reuters on Thursday.
Iraq is enduring a critical financial crisis on the back of the Iran war and a significant increase in its OPEC quota is a must and should be treated with utmost seriousness, the source told Reuters.
Two months ago, the UAE rocked Opec by quitting the group after 60 years of membership, amid the biggest supply crisis in history.
Opec members agree fixed production limits, to control the oil price; they control about 80% of the world’s proven oil reserves but produce only 40% of global crude to help keep market prices at a level that can support the petrostate economies.
Chart: the rise and fall of Brent crude
Oil has been on quite a journey this year.
On 27 February, just before the Iran war started, Brent crude closed at $72.48 a barrel. It surged once the conflict began – hitting $119/barrel several times in March, and then peaking at $126.41 at the end of April.
But it then fell through May and June – as hopes of a peace deal rose.
Updated
Stocks surge in Japan and South Korea
Asia-Pacific stock markets have jumped today, amid relief that the oil price has fallen to its pre-Iran war levels.
Japan’s Nikkei has surged by 4.6%, while South Korea’s KOSPI is up over 6%.
Jim Reid, market strategist at Deutsche Bank, says:
Markets are in a buoyant mood this morning, with Brent crude oil prices finally back at their pre-conflict levels.
It comes as flows through the strait of Hormuz have continued to ramp up, with the number of vessels getting through at its highest since the conflict started. And more broadly, the oil price decline has eased fears about a stagflationary shock and aggressive rate hikes to deal with any inflation.
Traders are also relieved that chip giant Micron reported a surge in quarterly profits last night, easing fears that the AI boom might falter.
Updated
Chancellor Rachel Reeves, who is widely predicted to be replaced if Andy Burnham becomes prime minister, is due to speak at the BCC’s conference today.
Several other senior political figures are also due to speak…. as is Andy Haldane, the former Bank of England chief economist who has reportedly been advising Andy Burnham.
Here’s the latest agenda:
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9.00am Chancellor the Rt Hon Rachel Reeves MP
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9.25am BCC Director General, Shevaun Haviland, CBE
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10.00am BCC President, Andy Haldane, CBE
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11.00am Shadow Chancellor, The Rt Hon Sir Mel Stride MP
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12.10pm Leader of the Liberal Democrats, The Rt Hon Sir Ed Davey MP
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3.40pm Reform Treasury Spokesperson, The Rt Hon Robert Jenrick MP
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4.30pm Green Party Leader, Zack Polanski AM
Businesses urge next PM to ease burden on firms to drive growth
UK firms have been through a torrid decade – first the Brexit vote, then Covid-19, and then the twin energy shocks from the Ukraine and Iranian wars.
And with a new prime minister soon to take office, business leaders are hoping they will resist the temptation to pile costs on business.
Shevaun Haviland, Director General of the British Chambers of Commerce (BCC) will warn today that the next PM – likely to be Andy Burnham - should try to lift business confidence to achieve higher growth, not stifle it.
Haviland will tell the BCC’s Global Annual Conference today that a lack of confidence is hurting the economy, explaining:
“Weak confidence reduces appetite for risk, which reduces investment, which hampers growth, which knocks confidence further.
“And this circular crisis of confidence is now shackling ambition. Blocking the actions needed to invest, innovate and trade.
“And whoever sits in No10, or the Treasury, needs to understand that.
“Businesses can only deliver growth, if the environment they operate in gives them the confidence to act. And that is where political leadership can make all the difference.”
Updated
Introduction: Oil price back below pre-Iran war levels
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Fears that the world could soon face an over-supply of oil have pushed crude prices below their levels before the Iran war.
The price of a barrel of Brent crude has fallen as low as $72.24 today, slightly lower than the day before the Iran war began.
Oil prices have been sliding since the US and Iran finally began peace talks, bolstering hopes of a lasting agreement to end the conflict and encouraging more oil tankers to pass through the strait of Hormuz.
According to CNN last night, MarineTraffic data shows vessel traffic in the strait of Hormuz doubled over the previous 24 hours to its highest level since late February.
News that vessels are now transiting the strait of Hormuz with their satellite signals switched on helped push down the oil price, reports Ipek Ozkardeskaya, senior analyst at Swissquote, adding:
A combination of strategic inventory releases, a collapse in demand from top buyer China and a substantial number of tankers quietly leaving the Persian Gulf “dark” had contributed to a small oversupply in some key markets, according to traders interviewed by Bloomberg.
The agenda
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9am BST onwards: British Chambers of Commerce global annual conference
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9am BST: ECB’s Bulletin
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1.30pm BST: US PCE inflation index for May
Updated
