Closing summary
The high-speed rail network HS2 cannot be delivered on its current schedule and budget and will be delayed beyond 2033, the government has admitted, blaming mismanagement by the previous Conservative administration for schedule and cost overruns.
The transport secretary, Heidi Alexander, told MPs there was “no reasonable way to deliver” on the 2033 target for the first trains to run between London and Birmingham.
“Billions of pounds of taxpayers’ money has been wasted by constant scope changes, ineffective contracts and bad management,” Alexander told the Commons “It’s an appalling mess. But it’s one we will sort out.”
Here’s our timeline on HS2: 16 years of high hopes, bruising reality and burgeoning costs
Inflation in the UK eased slightly to 3.4% last month as a steep fall in air fares and petrol prices was offset by a jump in the cost of food.
May’s decline in the consumer prices index (CPI), down from the official figure of 3.5% for April, complicates the Bank of England’s interest rates decision on Thursday, although policymakers are still almost certain to hold interest rates at 4.25%.
Annual food inflation jumped to 4.4% in May from 3.4% in April, spurred by increases in the cost of sugar, jam and chocolate, which rose at the fastest pace since records began in 2016. Poor harvests affecting major cocoa-producers in Ghana and Ivory Coast sent chocolate prices soaring 17.7%.
Ruth Gregory, the deputy chief UK economist at Capital Economics, said rising food prices would be a concern to the Bank, especially when some staples such as meat were also pushed higher.
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Thank you for reading. We’ll be back tomorrow. Enjoy the sunshine! – JK
The figures come ahead of the Federal Reserve’s meeting and interest rate decision later today, with no change expected, but all eyes will be on Fed chair Jerome Powell when he holds his press conference, for any hints on the direction of interest rates.
On Wall Street, stocks have opened flat to slightly higher. The sixth day of the Israel-Iran conflict is keeping investors on edge.
In Europe, Germany’s Dax has fallen by 0.7% and France’s CAC is down 0.5% while the Italian borsa has lost 0.3% and the FTSE 100 index in London is 9 points ahead at 8,843, up 0.1%.
Oil prices are rising again, with Brent crude up 0.7%% or 55 cents to $76.99 a barrel while US crude is 0.9% higher at $75.5 a barrel, up 68 cents.
European gas prices have risen for a sixth day on fears of disruption to energy flows in the Middle East. European natural gas futures climbed to €40 per megawatt hour, the highest since early April, and are now up 1.7% at €39.9 per MWh.
Traders worry about potential disruptions to vessel traffic through the Strait of Hormuz, a key route for global energy trade.
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