Yahoo Finance Ferrari to offer €7,000 subscription fee to replace electric car batteries
Ferrari is to charge customers a €7,000 (£5,900) annual subscription fee in exchange for free battery replacements amid fears of burnout in its supercars.
The luxury car maker will reportedly offer an extended warranty service for its next generation of electric and hybrid vehicles in a bid to allay concerns about ageing battery packs.
The subscription will entitle drivers of supercars such as the €418,000 plug-in hybrid SF90 Stradale to a replacement battery after eight years, while defects will also be covered.
A second battery pack replacement is also covered after 16 years, Bloomberg reported.
The move underscores efforts by Ferrari chief executive Benedetto Vigna to find new sources of revenue for the Italian car manufacturer.
Other luxury brands charge similar fees to wealthy customers to service their high-end vehicles. Aston Martin’s $3m Valkyrie attracts a fee of nearly $450,000 over three years.
Read the latest updates below.
06:11 PM BST
Signing off...
Thanks for joining us today. Chris Price will be back in the morning before the London markets open, but I’ll leave you with news that Amazon has hit a $2 trillion valuation for the very first time after shares jumped 3.6pc today.
The move comes amid a broad rally for technology shares, with investors excited about the potential of artificial intelligence.
05:59 PM BST
Former Selfridges co-owner’s mansion raided by police in corruption inquiry
Austrian police have raided the home of former Selfridges co-owner Rene Benko as part of a fraud inquiry into the collapse of his property empire. Michael Bow reports:
As part of the investigation, investigators seized a range of assets from Mr Benko’s mansion in Innsbruck, including a Porsche sportscar.
It comes as Mr Benko faces allegations of embezzlement, fraud and fraudulent bankruptcy.
The claims emerged following the collapse of Signa last year, which filed for the largest bankruptcy in the country’s history.
Plunging property prices and high interest rates put the squeeze on Signa’s highly indebted property portfolio, prompting a debt crunch and subsequent collapse of the company.
05:56 PM BST
Crude rebounds despite rising stocks of oil
The price of crude oil has fluctuated this afternoon after figures from the US Energy Information Administration indicated that inventories rose contrary to an estimate from an industry group.
A Bloomberg survey of analyst had suggested that stocks were likely to go down.
The price of crude is currently up about 0.18pc, having been in negative territory for part of the afternoon.
05:42 PM BST
Amazon cloud giant AWS wants public sector to embrace AI
Amazon’s AWS, the world’s biggest cloud computing outfit, is making a major push to entice the public sector to join the artificial intelligence revolution, as the generative AI race with Microsoft and Google heats up.
AWS and the other cloud giants say that the technology, made famous by ChatGPT, can have a huge impact on improving public services, including in health, security and charity work.
But getting governments and nonprofits to sign on will be a bigger ask than persuading private companies - and AWS on Wednesday opened a $50m (£40m), two-year initiative for potential public customers to test out ideas.
The scramble for public sector adoption of generative AI comes as Microsoft’s cloud business as well as Google Cloud are trying to bite into AWS’s leadership of the market.
05:39 PM BST
Volkswagen stock slips as investors mull the cost and implications of its Rivian joint venture
Volkswagen shares fell 2pc on Wednesday as investors worried about the cost and uncertainties of a joint venture with US electric-vehicle maker Rivian aimed at beefing up the biggest European automaker’s position in EVs.
Rivian investors cheered the shot in the arm, pushing up the stock of the money-losing company as much as 37pc/
The tie-up is the latest shift by Volkswagen from a go-it-alone strategy to bringing in expertise via partnerships in key areas for electrification, from batteries to EV platforms to software.
It also underscores the struggle of traditional automakers to build battery-powered vehicles and advanced software even as EV startups grapple with a slowdown in demand amid high interest rates and dwindling cash.
But it adds to questions about the future of Volkswagen’s own software subsidiary, Cariad, which has experienced years of delays and losses. Questions also remain about whether the two companies will be able to align culture and strategies.
“Cariad should and will disappear. The reality is it’s going to become irrelevant and die a natural death,” said Jefferies analyst Philippe Houchois, adding that no other legacy carmaker had managed to build a competitive software offering alone.
Still, Houchois welcomed the change in strategy signalled by the deal. “The old VW would have kept throwing money at the problem - the new VW with [chief executive Oliver] Blume is more pragmatic and humble, looking for help elsewhere.”
05:36 PM BST
British banker handed record £9.5m payday by Japanese lender
A British banker has pocketed a record $12m (£9m) payout from lender Nomura – three times more than that of his Japanese boss. Michael Bow reports:
Veteran banker Christopher Willcox scooped the highest-ever payday for an executive working for the Japanese finance giant after the lender swung back to profit.
Mr Willcox runs the company’s wholesale bank from New York, making him responsible for mergers and acquisitions (M&A), trading and underwriting activities, all of which typically reap the largest rewards in the world of banking.
He was paid $12m for the year ending March 2024, up from $5.5m the year prior, according to a new Nomura filing.
Mr Willcox’s payout may raise eyebrows internally, given that it is significantly higher than that of Kentaro Okuda, the Nomura chief executive, who received 506m yen last year (£2.5m).
05:11 PM BST
Traders may ‘attempt to test the resolve of the Japanese authorities’, says analust, as yen hits 38-year low
The yen, weakened by the Japanese government’s easy monetary policy, hit a 38-year low against the dollar today, sparking speculation about a new intervention by authorities.
The yen slid as far as 160.75 to the greenback.
There is no indication that authorities have intervened to support the yen, market analyst David Morrison at Trade Nation said.
“This being the case, it’s possible that traders work to push the yen lower in a renewed attempt to test the resolve of the Japanese authorities,” he said.
The Asian country’s top currency official has said authorities were ready to act 24 hours a day if the unit fell too far, but some investors suspect that the new trigger may be 165 yen to the dollar.
Billions were pumped in to support the yen after it hit a 34-year low of 160.17 in late April, but with limited effect.
Kathleen Brooks, research director at XTB, said:
If the Japanese finance ministry sees FX [foreign exchange] intervention as a waste of money, then they may let the yen continue to weaken, and leave it up to the BOJ [Bank of Japan] at the end of July to boost the yen with monetary policy tightening.
Traders are also poring over any comments from the Bank of Japan, which many say has been too cautious in moving away from its ultra-loose monetary policy. It is tipped to hike interest rates next month.
05:06 PM BST
Footsie closes down as global markets fall
The FTSE 100 dropped 0.3pc today. The top riser was medical products business ConvaTech, up 1.7pc, followed by M&S, up 1.5pc. The biggest faller was British Airways owner IAG, down 2.6pc, followed by Smurfit Kappa, down 2.2pc.
Meanwhile, the FTSE 250 rose 0.3pc. The top riser was magazine publisher Future, up 8.3pc, followed by cruise ship operator Carnival, up 4.9pc. The biggest faller was recruitment business Pagegroup, down 5.1pc, followed by Trustpilot, down 5pc.
05:02 PM BST
Vegan McDonald’s burger flops in San Francisco and Dallas
A vegan McDonald’s burger flopped in two major US cities - despite being sold throughout the UK.
A test in San Francisco and Dallas “was not successful in either market,” the president of McDonald’s USA, Joe Erlinger, told the Wall Street Journal‘s Global Food Forum in Chicago.
US customers are not looking for “plant-based proteins from McDonald’s,” he said, in comments reported by Bloomberg.
The McPlant vegan burger was launched nationally in the UK in 2022, with advertising staring the comedian Jack Whitehall and his family.
04:45 PM BST
Euro zone yields edge up before inflation data, caution over France
Euro zone government bond yields rose today as investors awaited inflation data from the United States and some members of the bloc due on Friday, and the first round of a French legislative election over the weekend.
The French debt risk premium remained within striking distance of its seven-year high, hit almost two weeks ago on fears of a budgetary crisis at the heart of Europe.
A new French government led by Marine Le Pen’s far-right National Rally (RN) would end the decades-long practice of running high budget deficits and stick to the European Union’s fiscal rules, the party’s financial pointman told Reuters.
The German 10-year bond yield, the benchmark for the euro area, rose 0.04 percentage points to 2.449pc.
The gap between French and German 10-year yields - a gauge of risk premium investors demand to hold French government bonds – was at 0.73 percentage points. It hit its highest level since February 2017 on the day after president Emanuel Macron called a snap election.
“If National Rally wins a relative majority, we likely see tightening in French government bond (yield spreads),” said Gordon Shannon, partner and portfolio manager at TwentyFour Asset Management, arguing that Le Pen has made the right noises about working with Macron’s government “so the market won’t jump straight to pricing in a fiscal crisis”.
04:35 PM BST
Japan ‘seriously concerned’ about yen’s fall
The dollar hit a fresh 38-year high against the Japanese yen on Wednesday, with investor speculation high that Japanese authorities could intervene to strengthen the currency, while global stock indexes were mostly lower.
Japan’s top currency diplomat, Masato Kanda, said Japanese authorities were “seriously concerned and on high alert” about the yen’s rapid decline.
In April, a fall to 160.245 per dollar was enough to prompt Tokyo to spend roughly 9.8 trillion yen to support the yen.
The latest slide follows the Bank of Japan’s (BOJ) decision this month to hold off on reducing bond-buying stimulus until its July meeting.
The dollar was last up 0.6pc at 160.62 yen.
04:31 PM BST
Private equity giant interested in buying out City PR firm
A private equity company has proposed buying a majority stake in a financial PR giant controlled by FTSE 100 marketing group WPP.
The FT has reported that KKR approached WPP - the group that was built by Sir Martin Sorrell - about buying WPP’s 55pc stake in FGS Global.
In the UK, FGS Global was formerly known as Finsbury, founded by Roland Rudd.
KKR already has a minority stake in FGS Global as a result of an investment announced in April 2023.
KKR declined to comment. WPP has been approached.
04:06 PM BST
Ratings agency Fitch downgrades Maldives and warns of default
International credit rating agency Fitch downgraded the Maldives today and warned that South Asia’s tourist paradise could be headed for a sovereign default on its foreign loans.
The downgrade came six weeks after the IMF warned the Maldives against a looming “debt distress”, as the small but strategically placed luxury tourist destination looks set to borrow more from its main creditor China.
Fitch bumped the archipelago down one spot to ‘CCC+’ from ‘B-’ on its ratings metrics, reflecting risks associated with dwindling foreign currency reserves that dropped to $492m (£390m) in May, the agency said.
It said the government’s debt servicing obligations, amounting to $409m this year, would add to severe stress.
Since winning office last year, President Mohamed Muizzu has reoriented the archipelagic state - known for its upmarket beach resorts and celebrity vacationers - away from traditional benefactor India and towards China.
In April, his party won parliamentary elections in a landslide after promising to build thousands of apartments, reclaim more land for urban development and upgrade airports, all with Chinese funding.
The country could leverage its “geopolitical strategic importance and the expectation of future policy actions by the new government” to raise funding, the ratings agency said.
03:56 PM BST
Stocks in retreat across major indexes
Share prices are falling in most of the major indexes across Britain, Europe and America today, with the FTSE 100 down 0.3pc. Chris Beauchamp, chief market analyst at online trading platform IG, said:
Tech stocks continue to cling on to small gains this afternoon but the broader tone is firmly negative.
Monday’s session had shown the signs of rotation that so many investors had been hoping for, transferring leadership from unstoppable tech names to unloved sectors, but this has fizzled out rapidly.
Higher inflation in Australia has not helped matters, and raises the uncomfortable prospect that major bugbear of the past two years is set to make an unwelcome return, leading to rate hikes featuring in central bank policy once again
All eyes are now firmly on Friday’s PCE [personal consumption expenditures] data in the US, at least until Sunday’s French elections.
03:48 PM BST
Scholz confirms EU top jobs deal with von der Leyen as Commission chief
Olaf Scholz, the German chancellor, confirmed today that the European Parliament’s three main centrist groups would back Ursula von der Leyen for a second term as European Commission president, in a deal Italy’s prime minister said ignored voters’ wishes.
In a speech to the German parliament assessing the fallout from this month’s European elections, Mr Scholz said the groups had also agreed Portugal’s ex-premier Antonio Costa should be chair of meetings of EU national leaders and Estonian prime minister Kaja Kallas should be the bloc’s new foreign policy chief.
The three groups combined have a majority in the European Parliament, Mr Scholz noted, adding he hoped that EU leaders meeting on Thursday would quickly sign off on the arrangement.
“We cannot afford to drag our feet in these difficult times,” he said, adding that the European Parliament vote had shown how multiple crises, from the coronavirus pandemic to Russia’s invasion of Ukraine and the war in the Middle East, had shattered trust in the European Union and national governments.
Populist parties, which performed strongly in the elections, are exploiting citizens’ concerns for their own ends, he said.
Earlier on Wednesday, Italy’s prime minister Giorgia Meloni criticised the plan to share out the top EU jobs among the three main groups, saying they ignored the success of right-wing parties in the EP elections.
03:44 PM BST
US new home sales come in below expectations in May
Sales of new US homes were weaker than traders expected last month, according to US government data published today.
There were 619,000 new single-family home sales made in the 12 months to May, the Commerce Department said in a statement.
This was 11.3 percent below April’s revised figure of 698,000, and also less than market expectations of 650,000 sales, according to data from Briefing.com.
The current subdued sales figures also extend to existing home sales, which came in at an annual rate of 4.11m last month, according to recent data from the National Association of Realtors.
Home sales have been affected by the Federal Reserve’s decision to hike its key short-term lending rate to a 23-year high as it looks to tackle elevated inflation, which has helped push other lending rates higher and indirectly affected mortgage rates as well.
The popular 30-year fixed-rate mortgage sits at just under 6.9pc, according to the government-sponsored firm Freddie Mac, which buys and guarantees existing mortgages.
The average sales price of homes sold in May fell to $417,400, the Commerce Department said.
03:34 PM BST
Legal & General dumps shares over climate concerns
One of the world’s largest asset managers has said it is divesting from mining giant Glencore and TK Maxx owner TJX over environmental concerns.
Legal & General Investment Management (LGIM) said it has engaged with a record 2,800 companies on climate and assessed more than 5,000 companies across 20 “climate critical” sectors this year.
It published the results of these efforts today under its annual Climate Impact Pledge (CIP), which aims to drive companies to play their part in achieving the Paris Agreement goal to limit warming to 1.5C above pre-industrial levels.
LGIM said this year’s findings point to improvements but firms still need to do more in efforts to mitigate climate change risks.
It identified hundreds of companies for “vote sanctions”, which means the institutional investor could vote against the company’s chair at the annual general meeting (AGM) in protest at failing to meet its expectations on climate.
I am heading off now but Alex Singleton will make sure you are kept up to speed on the latest news here.
03:21 PM BST
Haleon sells nicotine patches and gum business for £500m
Sensodyne and Panadol maker Haleon has agreed to sell its nicotine replacement brands outside of the US for £500m, as part of ongoing efforts to trim down its consumer health portfolio.
The healthcare giant said it was selling its nicotine replacement therapy business to a division of Indian drugmaker Dr Reddy’s Laboratories.
It includes brands Nicotinell, Nicabate, Habitrol and Thrive which are sold as lozenges, patches and gum in different strengths and flavours.
The products, designed for people who want to quit smoking, are sold in 30 markets around the world.
The sale does not incorporate Haleon’s business in America.
Haleon - which was spun off from drug giant GSK in 2022 - said the nicotine replacement therapy business generated net revenues of £217m over 2023.
Selling it will knock about 0.5pc off total revenues and 1pc off profits this year, it estimated. Its shares edged down 0.1pc.
02:59 PM BST
Investment trusts Alliance and Witan to merge in £5bn deal
Two of Britain’s largest investment trusts which have increased dividends for a combined 107 consecutive years are to merge to create a giant financial institution that will likely become a member of the FTSE 100.
Alliance Trust and Witan Investment Trust will combine to become Alliance Witan, creating an entity that will have £5bn of assets under management.
The companies said the deal would help it lower fees and create “greater economies of scale”.
The merger is expected to be completed towards the end of the third quarter or at the start of the fourth quarter of this year, with the combined businesses expecting “eligibility for promotion to FTSE 100 index in due course”.
Bosses said the deal would preserve the “distinguished heritages of both companies” and would also be the largest ever combination of conventional equity investment trusts.
Both companies have much coveted “dividend hero status”, meaning they have raised their dividend every year for 20 years or more.
Prior to the proposed combination, Witan shareholders had enjoyed dividend increases for 50 consecutive years, while Alliance Trust holds the “unsurpassed record” of increasing dividends for 57 years in a row.
02:58 PM BST
Ferrari to charge electric battery subscription fee amid burnout fears for supercars
Ferrari is to charge customers a €7,000 (£5,900) annual subscription fee in exchange for free battery replacements amid fears of burnout in its supercars.
Our reporter James Warrington has the details:
The luxury car maker will reportedly offer an extended warranty service for its next generation of electric and hybrid vehicles in a bid to allay concerns about ageing battery packs.
The subscription will entitle drivers of supercars such as the €418,000 plug-in hybrid SF90 Stradale to a replacement battery after eight years, while defects will also be covered.
A second battery pack replacement is also covered after 16 years, Bloomberg reported.
The move underscores efforts by Ferrari chief executive Benedetto Vigna to find new sources of revenue for the Italian car manufacturer.
Other luxury brands charge similar fees to wealthy customers to service their high-end vehicles. Aston Martin’s $3m Valkyrie attracts a fee of nearly $450,000 over three years.
02:47 PM BST
US markets fall at the open
Wall Street’s main indexes opened lower amid a selloff in bond markets after Fed officials indicated there could be fewer rate cuts this year than expected.
The Dow Jones Industrial Average fell 49.0 points, or 0.1pc, at the open to 39063.15.
The S&P 500 fell 8.6 points, or 0.2pc, at the open to 5460.71, while the Nasdaq Composite dropped 20.4 points, or 0.1pc, to 17697.265 at the opening bell.
02:31 PM BST
Tesla poised to lose status as seller of majority of electric vehicles in US
Tesla could be on the verge of losing its status as the seller of the majority of electric vehicles in the US.
For the last six years, Elon Musk’s car manufacturer has outsold all its EV competitors combined across America.
However, traditional car makers have been closing the cap and Tesla’s sales dropped by 13pc in the first quarter compared to the same period a year earlier.
In the year to May, Tesla sold approximately 618,000 electric cars in the US, compared with about 597,000 fully electric vehicles sold by other manufacturers.
Next week, carmakers will report their second-quarter sales, which will include popular new models from General Motors, Hyundai Motor and Kia.
Tesla has made the top-selling EV in the US since 2015, and has sold more EVs than the rest of the industry combined since the Model 3 gained prominence in 2018.
02:15 PM BST
Swiss National Bank names new chief
Swiss National Bank has named its vice chairman Martin Schlegel as its new chief in a widely expected move.
He will take over as the head of Switzerland’s central bank from chairman Thomas Jordan on October 1 and will become its second youngest boss at the age of 47.
The Swiss National Bank surprised markets this month by cutting interest rates for the second time in as many meetings, lowering its policy rate to 1.25pc.
02:01 PM BST
Czech billionaire dangles staff ownership as he seeks backing for Royal Mail bid
The Czech billionaire hoping to buy Royal Mail has confirmed he is considering offering employees a stake in the business, as his company asked shareholders to back its £3.6bn takeover bid.
Daniel Kretinsky’s EP Group set out its plans for the future of Royal Mail’s owner, International Distribution Services (IDS), in a letter sent to shareholders.
IDS last month agreed to the offer, which will see it taken off the public markets and into the hands of Mr Kretinsky’s company, which already has a 27pc shareholding in the business.
In the offer letter, EP Group said it is “exploring, following completion of the acquisition, potentially offering a form of employee participation model in the business” which could include “profit-sharing” among all members of staff.
Unions representing postal workers have previously called for staff to be given a stake in the company via a shake-up of its structure.
EP Group is asking shareholders, who include current and former staff, to agree to sell their stake for 370p per share. It needs the approval of shareholders holding at least 75pc of IDS shares.
Royal Mail staff own about 5.5pc of the business through a share scheme which was set up when the company was privatised in 2013.
The remaining shares are owned by large institutional investors including UBS, Schroder and BlackRock.
01:44 PM BST
Boeing union demands 40pc pay rise for staff amid 737 Max crisis
Boeing’s biggest union is demanding a record 40pc pay rise for 32,000 staff as it seeks to exploit the 737 Max crisis.
Our travel industry editor Christopher Jasper has the details:
The International Association of Machinists and Aerospace Workers, which represents Boeing machinists in Seattle, is demanding the pay rise as part of a deal to secure work for the next 50 years as the company reels from a string of safety and production scandals.
The union is also seeking a guarantee that a new narrow-body plane will be built in Seattle, forestalling any bid to cut costs by shifting production elsewhere.
Jon Holden, president of the union’s District 751 branch, said: “We have a lot of leverage right now and we are going to use it. We are going to push them further than they ever would think they are going to go on wages and job security.”
Read what else the union is demanding.
01:30 PM BST
Pound falls ahead of US inflation data
The pound has dipped as investors waited for the release of the Federal Reserve’s preferred gauge of inflation this week.
Sterling was last 0.2pc lower at $1.26, around where it has traded for the last two weeks.
The pound was flat against the euro, which is worth 84.4p and near its two-year low set on June 14 after French President Emmanuel Macron’s decision to call a snap parliamentary election rocked Europe’s markets.
US personal consumption expenditure inflation data, due on Friday, will guide Fed policy and could lead to swings in currency markets.
The pound has been one of the best performers this year, down just 0.4pc against the dollar, compared with a 3pc fall for the euro and 13pc drop for the yen.
Britain’s relatively high services and wage inflation means traders expect the Bank of England to cut rates just once or twice this year.
That has kept upward pressure on bond yields, making them attractive to many investors and thereby supporting the pound.
01:11 PM BST
US markets subdued ahead of inflation figures
Wall Street stocks were mixed ahead of crucial inflation data this week.
Futures for the Nasdaq advanced as Nvidia and other chip stocks continued to regain momentum.
However, the Dow Jones Industrial Average edged lower in premarket trading ahead of the personal consumption expenditures (PCE) figures out on Friday, which are the Federal Reserve’s preferred measure of inflation.
AI chip favorite Nvidia climbed 2.1pc premarket, continuing its gain after a three-session sell-off.
Other chip stocks Broadcom, Taiwan Semiconductor Manufacturing and Arm Holdings were up between 0.1pc and 0.9pc, while Micron Technology rose 2.8pc ahead of its quarterly results, due after the closing bell.
In premarket trading, the Dow Jones Industrial Average was down 0.2pc, the S&P 500 was flat and the Nasdaq 100 was up 0.1pc.
01:02 PM BST
Hollywood theme park in Bedford promises £50bn boost to Britain
A new Hollywood theme park near Bedford would deliver a £50bn boost to the economy, Universal has claimed.
Our reporters James Warrington and Daniel Woolfson have the details:
The US film studio has outlined plans for its first theme park in Europe after buying a 480-acre plot of land in Bedfordshire.
New research commissioned by Universal shows the project could deliver an economic contribution of £35.1bn during construction and the first 20 years of operation.
In addition the theme park is expected to generate up to £14.1bn in extra tax returns for the Treasury over the same period.
The parks division of Universal, which is owned by US media giant Comcast, has acquired the site of a former brickworks south of Bedford as it looks to expand its global locations.
Read what Universal’s economic impact analysis said the plans means for the UK.
12:25 PM BST
Whirlpool in a spin as Bosch considers takeover bid
Whirlpool shares have jumped after it was reported that German engineering group Robert Bosch is considering a takeover bid for the US appliances manufacturer.
The washing machine maker’s stock jumped as much as 17pc in premarket trading after Reuters said Bosch has been talking to potential advisers about the possibility of making an offer.
The potential takeover comes as Bosch is looking at acquisitions to grow its unit that manufactures large home appliances.
Buying one of the world’s biggest white-goods manufacturers would significantly beef up its home appliance business at a time when competition with Asian rivals is growing.
Whirlpool has been undergoing a major restructuring in recent years, which has seen it fold its European business into a new company controlled by Turkish rival Arcelik and divest its Middle Eastern and African businesses.
Both companies said they do not comment on “market rumours”.
12:09 PM BST
Yen falls to weakest level since 1986
The value of the Japanese yen has slumped to its lowest level against the dollar in 38 years amid doubts over the pace of further interest rate rises.
The yen has fallen by 0.4pc today to 160.31 to the dollar, raising the risk that the Bank of Japan could intervene to prop up the value of the currency.
Japanese authorities, including finance minister Shunichi Suzuki, have said they are closely watching developments in the currency market.
The latest fall is lower than the levels when officials last intervened in the market in April.
The vast gap between interest rates in Japan, which stand at between 0pc and 0.1pc and the US Federal Reserve, which is between 5.25pc and 5.5pc, is putting pressure on the currency.
It has lost more than 12pc of its value this year alone after the Bank of Japan decided to end its period of negative interest rates, which were designed to stimulate inflation in the economy.
12:01 PM BST
Bond yields rise amid eurozone debt crisis worries
The premium applied to French debt risk has remained within striking distance of its seven-year high amid fears of a budgetary crisis at the heart of Europe.
The gap between French and German 10-year yields - a gauge of risk premium investors demand to hold French government bonds – was at 72 basis points.
It hit its highest level since February 2017 at around 82 basis points the day after president Emanuel Macron called a snap election.
France’s 10-year bond yield - the return governments promise to pay buyers of its debt - has risen more than three basis points today to 3.19pc.
Meanwhile, German 10-year bond yield, the benchmark for the eurozone, rose three basis points (bps) to 2.44pc.
A new French government led by Marine Le Pen’s far-right National Rally (RN) risks ending the practice of sticking to the European Union’s fiscal rules and could lead to an uptick in spending.
Government borrowing costs have edged up as investors await inflation data from the US, France, Italy and Spain on Friday.
The yield on the 10-year UK gilt rose to 4.1pc.
11:39 AM BST
Shoppers spending less on top household appliances, warns Marks Electrical
Cash-strapped shoppers are looking to trade down their household appliances amid the cost-of-living crisis, according to retailer Marks Electrical, in a trend which pushed the company’s profits down by a third last year.
The electrical goods seller, which listed on the London Stock Exchange in 2021, said margins were hit as consumers “remain highly price-conscious”.
Marks Electrical’s adjusted earnings were down 33pc to £5m for the year ending March 31, despite its domestic appliance market share rising to 2.8pc in the period, up from 2.5pc last year.
The falling profit came despite the company, which sells appliances like dishwashers and ovens, achieving record annual turnover, with revenue increasing 17pc to £114m.
Chief executive Mark Smithson said: “Whilst I continue to be personally frustrated about our margin progression during the year, I remain confident in our long-term growth prospects, and continue to be impressed by our ability to deliver market share gains profitably, against a fiercely competitive backdrop, whilst maintaining the highest levels of customer service standards in the industry.”
Shares were up 0.7pc.
11:26 AM BST
Sharp drop in retail sales, says CBI survey
Retail sales have slumped sharply, an industry survey has shown, in a sign the economy is slowing and boosting to hopes for summer interest rate cuts.
The CBI Distributive Trades Survey registered a steep downward trend, dropping from plus 8 to minus 21 in June, with sales reported to be well below average for the time of year.
Retailers expect sales to fall at a slower rate next month, with a reading of minus 9pc.
CBI interim deputy chief economist Alpesh Paleja said:
Last month’s nascent recovery in sales proved to be short-lived, with retailers reporting a faster-than-anticipated decline this month.
Unseasonably cold weather in June may have played a role, but it’s notable that internet retail sales fell sharply in our survey, too.
Consumer fundamentals are improving, with inflation now at the Bank of England’s 2pc target and real incomes rising. But it’s clear that households are still struggling with the legacies of the cost-of-living crisis, with the level of prices still historically high in some areas.
With consumer demand still on shaky ground, an incoming government can help business by ensuring that the UK is the most attractive place to start, grow and run a business. This will require bold action such as delivering a holistic cross-economy solution to the UK’s overly complex business rates system, which is a particular burden for retailers. This would help to alleviate the burden of higher costs.
11:06 AM BST
Investors ‘reasonable’ to expect two more eurozone rate cuts, says official
Money market bets that there will be two more interest rate cuts this year by the European Central Bank (ECB) are “reasonable”, according to a policymaker.
Finnish central bank chief Olli Rehn said that while the Governing Council, of which he is a member, must bring inflation back to 2pc, it should not overy weaken economic activity.
Traders are betting that there could be two more interest rate cuts by the ECB before the end of the year after the central bank lowered borrowing costs for the first time in five years in June from a record 4pc to 3.75pc.
Mr Rehn told Bloomberg:
If you look at market data, it implies that there would be two more rate cuts so that we should end up at 3.25pc by the end of this year and, with the terminal rate somewhere around 2.25pc, 2.5pc.
In my view, they are reasonable expectations.
10:41 AM BST
Oil steady as US stocks rise
In the commodity markets, oil was steady after declining on Tuesday after indications that US crude stocks are rising.
Brent traded up 0.6pc at more than $85 a barrel and West Texas Intermediate was up 0.7pc at over $81.
The American Petroleum Institute reported crude stockpiles rose by about 900,000 barrels last week, Bloomberg reported.
However, holdings at the important Cushing storage hub in Oklahoma fell.
The Energy Information Administration is scheduled to release its data today.
Oil is on track for a monthly advance and analysts are becoming more hopeful about the outlook in the next quarter as demand tightens.
An escalation of geopolitical tensions from Yemen to Russia could also push prices higher.
10:14 AM BST
Passengers find new seats and more luggage space in £117m train refurbishment
Britain’s biggest train fleet refurbishment will give passengers “a much-improved travel experience”, according to Avanti West Coast.
The operator said the 56th and final modernised Pendolino train has returned to service.
The £117m refurbishment project was carried out by manufacturer Alstom at its plant in Widnes, Cheshire.
This has involved the installation of 25,000 new seats, a redesigned shop, additional luggage space and better on-board information screens.
Other changes include upgraded lighting, refurbished toilets and new carpets.
All 35 Pendolinos with 11 carriages have had one first class carriage converted to standard class.
The tilting, electric Pendolinos transformed long-distance rail travel in Britain when they were introduced on the West Coast Main Line by then-operator Virgin Trains in July 2002.
Earlier this month Avanti West Coast began rolling out its new Evero trains, which are replacing diesel-powered Voyagers.
09:59 AM BST
Germans lose confidence in economic recovery after inflation blow
Germans are losing confidence in the prospects of a swift economic recovery in Europe’s largest economy after a shock jump in inflation, according to a closely-watched survey.
Hopes for a rapid economic recovery in the course of this year were dampened in June, according to the survey published by pollsters GfK and the Nuremberg Institute for Market Decisions (NIM).
After four consecutive increases, the economic indicator lost 7.3 points and fell to 2.5 points.
It comes after German inflation increased to 2.4pc in May from 2.2pc in both of the previous two months.
The forward-looking survey also showed German households are spending less and saving more after the shock rise in inflation.
The indicator dipped by 0.8 points to minus 21.8 points compared to a month earlier.
NIM consumer expert Rolf Buerkl said: “The slightly higher inflation rate in Germany in May is clearly causing more uncertainty among consumers again, which is also reflected in the increase in the willingness to save.”
The survey of some 2,000 respondents found that people were more downbeat than a month ago about their income prospects and the economic outlook, and were less likely to splash out on large purchases.
Mr Buerkl added that the German coalition government’s recent bickering over the 2025 budget has contributed to consumers’ reluctance to open their wallets.
09:43 AM BST
Phoenix slumps as it seeks to sell-off SunLife
Phoenix Group has dropped to the bottom of the FTSE 100 after the insurer said it is exploring a sale of its SunLife business.
Shares fell by 1.1pc to be the worst performer on the UK’s flagship stock index as it said that SunLife was “no longer core to the delivery of its vision”.
Phoenix, which wants to become the UK’s leading retirement savings business, said it has received a number of initial expressions of interest, although there can be no certainty a deal will go through.
Thomas Bateman, an analyst at Berenberg, said the move was a “positive step” but Abid Hussain of Liberum said the decision to divest part of its business was “a little odd”.
SunLife provides financial protection products to the over-50s in the UK and reported profit after tax of £16m last year.
09:27 AM BST
Deliveroo likely to face more takeover bids, say analysts
Analysts at Jefferies said the takeover talks between Deliveroo and Doordash “may only be the start” and could open the door to more interest in the London-listed food deliverer.
In a note to clients, they said:
In this instance, the talks have failed.
But such is the strength of the financial, industrial and strategic logic of a Deliveroo takeover, we would not be surprised to see similar such headlines to re-emerge in the short term.
In our view, the key to unlocking a recommended offer from Deliveroo is understanding the sensibilities of the founder CEO, Will Shu.
This may only be the start.
09:17 AM BST
Gas prices rise as heatwave increases demand for air conditioning
Natural gas prices have risen for a third day in a row as the summer season increases power demand for air conditioning.
Dutch front-month futures, Europe’s benchmark contract, rose as much as 1.1pc to more than €35 per megawatt hour.
The contract has gained more than 3pc this week and is up more than 53pc since the end of February.
It comes as a heatwave sweeps across Britain and Europe, with Greece’ s temperatures hitting highs of 40C.
Lower wind generation in recent days has also given gas a bigger role in the power supply.
The UK’s equivalent contract was up as much as 1.4pc to more than 82p per therm.
08:59 AM BST
FTSE 100 rises amid Wall Street rally
UK stocks rose amid an improved mood among investors after a bounce in tech stocks on Wall Street.
The FTSE 100 gained 0.5pc while the domestically-focused midcap FTSE 250 was up 0.4pc.
Asian markets mostly rose overnight after the Nasdaq and S&P 500 both recovered from a recent sell-off thanks to a bounce in AI chip titan Nvidia following three days of heavy selling.
Among individual stocks, Future jumped nearly 10pc to the top of the FTSE 250 after analysts at Jefferies gave the stock a double upgrade to “buy”.
On the FTSE All Share index, Liontrust Asset Management dropped as much as 6.3pc after it revealed more cash was taken from the mutual fund than was invested in it over the last year.
08:34 AM BST
De Beers reveals drop in sales of rough-cut diamonds
De Beers revealed a slump in its sales of rough cut diamonds as its owner Anglo American looks to sell-off the business.
The diamond producer revealed it sold $315m (£248.6m) of rough cut diamonds in its latest cycle, which was down from $383m (£302.3m) in its previous cycle and $456m (£359.9m) in the same period last year.
Anglo American said last month that it is seeking to either sell or spin off its diamond business as part of a strategic overhail.
It had rejected three takeover approaches worth up to £38.6bn from the Australian mining giant BHP, which had sought to divest the De Beers arm.
Over the past year, Anglo American recorded a 31pc drop in underlying earnings before interest, tax, depreciation and amortisation to $10bn (£7.9bn).
The London-listed company blamed the drop in performance on a commodities slump after writing down $2.4bn in its diamond and nickel divisions, including a $1.6bn impairment charge on De Beers.
08:20 AM BST
Deliveroo jumps after US takeover talks
Deliveroo shares jumped after US meal delivery group Doordash reportedly indicated it was interested in a takeover.
The takeaway supplier’s shares jumped 6pc as trading began in London after it emerged the San Francisco-based company made an approach last month which ended after a disagreement over the valuation, according to Reuters.
It becomes the latest London-listed company to become the focus of a potential foreign takeover in a potential blow to the City.
Overseas buyers have been attracted by what are perceived as cheap valuations for UK companies.
Deliveroo’s shares have fallen by 68pc since hitting a high of 395.9p in August 2021 after a slowdown in demand for online food deliveries since the pandemic.
The company works with 180,000 restaurants and retail partners, and operates a network of 140,000 riders.
Amazon is its largest shareholder with a 13.23pc stake.
Deliveroo declined to comment. Doordash has been contacted for comment.
08:03 AM BST
UK markets open higher
The FTSE 100 has opened higher following a rally on Wall Street.
The blue-chip index was up 0.4pc to 8,278.87 while the midcap FTSE 250 gained 0.1pc to 20,391.80.
07:55 AM BST
Southern hands out £65m contract to shore up water supply
Southern Water has handed out a £65m contract to shore up its water supplies and upgrade its treatment sites.
Costain Group revealed it had secured the extension under its joint venture with MWH Treatment.
The work will run until late 2025 and cover its wastewater plants in Testwood near Southampton, and Burham in Kent.
Costain chief executive Alex Vaughan said:
We are pleased to extend our relationship with Southern Water and to bring our strategic expertise to critical upgrades of its infrastructure.
We will ensure Southern Water continues providing clean drinking water to its customers while improving its resilience for the future.
This is important work that will have a transformative impact on the lives of residents and local communities, and builds on Costain’s growing positions with the leading water companies as they continue to improve the quality of our water supply.
07:50 AM BST
Revolution Beauty returns to profit after turbulent years
Cosmetics brand Revolution Beauty has revealed it returned to a yearly profit as the company sets its sights on a makeover under new management following a turbulent two years.
The company reported a pre-tax profit of £11.4m for the year to the end of February, up from a loss of £33.9m the prior year.
Sales edged up by just 2pc year on year to total £191.3m, which it said included the impact of clearing unwanted stock to focus on its core products.
Lauren Brindley, former Walgreens vice president who was appointed Revolution’s chief executive in August, said the past year had been one of “great strategic and financial progress following two challenging years”.
The company was thrown into crisis in 2022 over accounting mishaps, which led to an ongoing dispute with its former boss.
07:40 AM BST
AO World nearly trebles profit as it cuts costs
Online electricals retailer AO World has revealed annual profits almost trebled despite falling sales and said it remains on track to return to revenue growth over the year ahead.
The group reported a 186pc surge in underlying pre-tax profits to £34.3m for the year to March 31.
On a statutory basis, pre-tax profits jumped from £7.6m to £34.3m.
The result came in spite of a 9pc drop in sales to £1.04bn after actions to cut costs and strip out unprofitable sales affected revenues.
But this helped boost its bottom line, with the profit out-turn better than it previously expected.
AO World added that, despite “ongoing macro-economic challenges”, it remains confident of delivering double-digit sales growth in 2024-25 and seeing underlying pre-profits rise to £41m.
07:38 AM BST
Volkswagen to invest $5bn in Tesla electric car rival
Volkswagen will invest up to $5bn (£3.9bn) in US electric car maker Rivian as manufacturers rethink their strategies amid uncertain demand.
The German car manufacturer said it will initially invest $1bn in the electric truck maker as part of a joint venture that will give it access to the start-up’s technology.
It will put another $4bn into the Tesla rival by 2026. Rivian’s shares have jumped 50pc in premarket trading in the US.
It is the second surprise lifeline for the US carmaker in a little over a month after the Biden administration imposed tariffs on China’s electric vehicles, which the White House said were gaining unfair advantage from state subsidies.
It comes as the electric car sector faces challenges from weakening demand and a trade war which has also seen the European Union say it will impose tariffs on Chinese vehicles.
The German automotive industry has been opposed to the EU plan amid fears China could impose counter-tariffs to hurt manufacturers such as BMW and Daimler.
07:12 AM BST
Good morning
Thanks for joining me. Volkswagen will invest $5bn in Tesla rival Rivian in a deal that will give it access to the start-up’s technology.
The joint venture comes amid uncertainty in the electric car market, which is the subject of a trade war between US, EU and China, and lacklustre consumer demand.
5 things to start your day
1) Global wealth tax on ultra-rich ‘would raise up to $250bn a year’ | World’s wealthiest people are not effectively taxed, French economist warns in report for G20
2) Europe’s richest man buys stake in Cartier owner amid takeover speculation | Bernard Arnault sparks fresh rumours of swoop for rival Richemont after taking personal shares
3) Family holidays at risk from Airbus engine parts delays | World’s biggest planemaker forced to cut aircraft numbers after ‘persistent specific supply chain issues’
4) Aston Martin unveils new limited run supercar for ultrarich petrolheads | British brand resists push to scrap combustion engine with launch of £2m petrol-powered car
5) Jeremy Warner: Britain’s paltry savings are in Labour’s crosshairs | British growth will suffer if Starmer targets savers after the election
What happened overnight
Asian stocks stuttered in choppy trading as markets braced for a key US inflation reading later this week.
Meanwhile the yen lurked just shy of 160 per dollar level, keeping traders on alert for another round of intervention by Japanese authorities.
The mood was also dampened on markets as Federal Reserve officials cast doubt on the possibility of imminent intertest rate cuts.
A jump in Australian consumer inflation to a six-month high in May lifted the Australian dollar to its highest in two weeks.
MSCI’s broadest index of Asia-Pacific shares outside Japan struggled for direction and was flat at 566.53, not far from the two-year high of 573.38 it hit last week.
Japan’s Nikkei and Taiwan stocks rose, led by chipmakers, tracking the rally in tech heavy Nasdaq on Tuesday, with Nvidia surging over 6pc, snapping out of a three-session tailspin that had erased about $430bn from its market value.
On Wall Street, the Dow Jones Industrial Average of 30 of the biggest US businesses fell 0.8pc, to 39,112.16, the S&P 500 gained 0.4pc, to 5,469.30, and the Nasdaq Composite gained 1.3pc, to 17,717.65.
In the bond market, Treasury yields held relatively steady. The yield on benchmark 10-year US Treasury bonds remained at 4.23pc, where it was late on Monday.
