Business live: Thursday June 19 — as it happened

The chancellor has defended Labour as the party of business after her tax-raising budget, particularly the employers' national insurance rise, which increased business costs and hit relations with leaders.
Rachel Reeves told The Times CEO Summit: 'When I was here last year, I said the number one job for an incoming Labour government would be to return stability to the economy after the turbulence we've had really for the previous decade, and I think that we have achieved that. It's not easy … because if we're going to return stability to the economy, you have to make sure the sums add up and that meant a number of difficult decisions on tax and on spending.'
Asked whether she could rule out further tax rises at the autumn budget, she said: 'I don't think that it would be responsible to try to write another four years' worth of budgets before we have even got to the end of the first year of this.'
She added: 'The world is changing. We can see that all around us … but we made these commitments around taxes on working people, and we also made a commitment around corporation tax in our manifesto … we plan to stick to those commitments.'
Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager.
Rachel Reeves called for a de-escalation of rising tensions and confrontations in the Middle East as she said that the Treasury was monitoring the potential impact on the UK, particularly from rising oil prices.
'At all the times we're monitoring situations around the world and the impact that they may have,' the chancellor told The Times CEO summit. 'I wouldn't say that we are overly concerned about the movements we've seen today [in the oil price]. Obviously, the concern would be that Strait of Hormuz is closed or at least that the trade is disrupted, which would have an impact on oil, but also on wider movements of goods, as we've seen in the past.'
The chancellor Rachel Reeves is speaking at the CEO Summit. Dominic O'Connell, a presenter of Times Radio and a columnist for The Times, tweets:
Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager.
Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager.
Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager.
Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager.
Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager.
The FTSE 100, which was trading down 19 points in the approach to interest rate decision at midday, is now down 28 points.
The rise in the pound against the dollar eased a little to $1.3433.
Brent crude has risen above $77 a barrel and gold is higher on safe-haven buying, up 0.12 per cent to $3,373.25.
Miners continue to lead the fallers on the FTSE 100. The aircraft parts maker Melrose remained the biggest riser and BP and Shell continued to be buoyed by higher oil prices.
The monetary policy committee (MPC) said it expected the economy to grow by 0.25 per cent in the second quarter of the year, up slightly from its previous forecast published in May, despite a 0.3 per cent economic contraction in April.
The revision comes after gross domestic product rose by 0.7 per cent in the first three months of the year, exceeding expectations.
The three MPC members that voted for a quarter-point cut — Alan Taylor and Swati Dhingra, external panellists, and Dave Ramsden, a deputy governor — said the jobs market had loosened materially.
The six that voted to hold, including Andrew Bailey, the Bank's governor, were concerned about near-term inflation staying above 3 per cent. Some conceded, however, that higher unemployment caused by sluggish consumer spending would constrain economic growth, signalling that rates could fall more quickly in response to a slowing economy.
The Bank of England has voted to keep interest rates unchanged at 4.25 per cent amid uncertainty about the inflationary fallout from the Israel-Iran conflict. The decision was expected.
The nine-member monetary policy committee (MPC) voted by a majority of 6–3 to keep the rate unchanged. Three members wanted a quarter-point cut to 4 per cent.
Inflation would remain at about 3.5 per cent for the rest of the year, the MPC said, rising to a peak of 3.7 per cent in September. The Bank's target is 2 per cent.
Although the central bank had already warned of elevated inflation for the rest of the year previously, higher oil prices caused by the Israel-Iran conflict risk fuelling a larger-than-expected rise in the cost of living.
Andrew Bailey, governor of the Bank of England, said that the world was highly unpredictable amid worsening geopolitical tensions and uncertainty over President Trump's final tariff policies. A 90-day pause to Trump's 'reciprocal tariffs' is due to end next month.
The FTSE 100 was trading down 19 points in the approach to the interest rate decision at midday after having fallen 32 points at the start of trading.
The pound has strengthened against the dollar to $1.3436.
Brent crude was trading at about $77 barrel on concerns about supply due to the continuing Iran-Israel conflict.
Safe-haven buying of gold has lifted the price a little to $3,376.80.
In the blue chip index, miners continue to lead the fallers. Financial and leisure stocks were also lower. The aircraft parts maker Melrose was the biggest riser, but BP and Shell were also buoyed by higher oil prices.
Schools need to do a better job of preparing young people for work in this new world of artificial intelligence, Alison Brittain believes.
Speaking at The Times CEO Summit, Brittain, chairwoman of the Premier League and Dunelm, said: 'We always think of 15 to 24-year-olds — and there are 7.5 million of them in the UK — as digital natives but research shows that 25 per cent of young people think they are leaving school with no digital skills.'
She added that the UK education system was 'not able to keep pace' with technological advances. '[Schools] are not producing people who are ready to go into workplaces and the new world,' she said.
Artificial intelligence is going to change everything, Dame Carolyn McCall, chief executive of ITV, told The Times CEO Summit.
'Where it's really transformative [for ITV] is in production,' she said. 'We're already using it for dubbing and subtitling. It's definitely very enabling.'
She believes, however, that technology will not be able to replace humans' creativity.
'Everyone is terrified of not doing enough with artificial intelligence. It's going to change everything but we believe the creativity of human beings is front and centre.'
The Norwegian central bank has delivered a surprise quarter-point cut in interest rate to 4.25 per cent, its first reduction of borrowing costs in five years.
'Inflation has declined since the monetary policy meeting in March and the inflation outlook for the coming year indicates lower inflation than previously expected,' Ida Wolden Bache, governor of Norges Bank, said.
The currency and Norwegian government bond yields fell. The dollar was up more that 1 per cent against the Norwegian crown. Government bond yields fell after the decision by as much as 10 basis points to 3.95 per cent, the lowest since May.
Oeystein Doerum, chief economist at the Confederation of Norwegian Enterprises, said: 'Not only did the cut come earlier than expected, the interest rate path has also been lowered in the short term.'
The boss of Aviva ruled out embarking on overseas acquisitions once she has completed the FTSE 100 insurer's pending £3.7 billion integration of the UK-focused Direct Line.
Dame Amanda Blanc has run Aviva since 2020 and spent her first years selling a string of its non-core businesses abroad to focus the group on its core markets of the UK, Ireland and Canada.
She told The Times CEO Summit that 'CEOs start to lose the plot' when they try to pursue a strategy that did not work in the past.
It is ultimately for savers in defined contribution schemes to decide whether they want to invest more in UK private assets, the boss of the insurance and savings giant Aviva has warned the government.
Ministers are trying to push pension providers such as Aviva to funnel more retirement money into British assets but Dame Amanda Blanc, the Aviva chief, said that politicians often confused defined benefit and defined contribution (DC) schemes.
When it came to workplace DC funds, where it is down to members to oversee their savings, it is not for providers of the funds to interfere, she suggested.
'We're not the decision-makers,' she told The Times CEO Summit. 'It's their pension, not ours.'
Saul Klein, the executive chairman of Phoenix Court, home to a number of venture capital funds, outlined some of the problems with the government's targets of directing pension fund investments into private markets.
'The problem is that there are only two people who are investing at scale in the UK economy. One is the Treasury through the British Business Bank … and the other is M&G. Everything else is putting out press releases,' Klein said.
Lionel Assant, global co-chief investment officer at Blackstone, said he was positive about the business environment in the UK and that it was by far the firm's largest market in Europe, with investments worth more than $100 billion.
He said investors would benefit from the UK's 'pro-growth government' and that businesses would not necessarily find a similar attitude from politicians and regulators in other European countries.
He pointed out, however, that there was a reason that UK-listed stocks continued to trade at a discount to their US peers and that assets were priced fairly, adding: 'The market is not wrong most of the time … The market pays for growth.'
Tara Davies, co-head of Emea and of European infrastructure at KKR, has addressed the firm's decision to step away from a £4 billion investment in Thames Water, Helen Cahill writes.
She said the American investment firm spent 'an inordinate amount of time' preparing a bid for the water utility and prepared a 270-page turnaround plan for the company.
Yet, she told The Times CEO Summit, it encountered an 'exceptionally complex' situation with the bid, as it worked through the considerations of a wide range of stakeholders, including the government, lenders and the water regulator.
She said KKR had to consider whether the bid would be in the best interests of fund investors and decided against moving ahead.
The Iranians 'in their death throes' are at risk of giving an 'enormous shock' to markets, 'the scale of which we haven't seen since the 1970s', Sir Niall Ferguson told The Times CEO summit.
He said the market was complacent and underestimating the risk of an economic shock that could take the price of oil above $100 for more than a day.
He said: 'I think the markets are complacent about this, because there have been so many Middle Eastern crises in our lifetimes that produced only a blip in the oil price.
'But remember: when an authoritarian regime is on its last legs, when it's the end game, they tend not to go quietly.'
He predicted that the most clear-cut way the Iranian regime and its allies could hurt the US was by blocking the Strait of Hormuz.
President Trump is likely to have 'already taken the decision to hit' Iran's Fordo nuclear facility, according to Sir Niall Ferguson, the Milbank family senior fellow at the Hoover Institution, Stanford University, and a senior faculty fellow of the Belfer Center for Science and International Affairs at Harvard.
Ferguson told The Times CEO Summit: 'My Israeli sources and some of my sources in Washington think it happens tonight.'
The Swiss National Bank has cut its interest rate by a quarter-point to zero in response to falling inflation, a stronger Swiss franc and economic uncertainty caused by America's trade policy.Markets had expected the move. It was the central bank's sixth rate cut since March 2024.
The recruitment company's shares dropped more than 14 per cent this morning after it warned that profits would be lower than expected. Tom Howard comments on Hays' warning: 'The recruitment market has been tough for two years now: the longest downturn anyone in the industry can recall.
'After the initial post-lockdown boom in hiring as the world reopened, many companies have become more cautious with the world stuck in a state of almost permanent uncertainty, be that because of sticky inflation and higher interest rates or wars in Ukraine and the Middle East. President Trump's flip-flopping on tariffs has not helped either.
'On the other side, white-collar workers, many of whom moved jobs and got big pay rises a few years ago, are happy to stay put. They worry that if they move and the economic outlook does deteriorate, they could be the last in and first out.
'The industry has repeatedly had to push back its expectation of when the hiring market might start to pick up. Hays' latest profit warning suggests the recovery is still a while away yet.'
The FTSE 100 has opened 32 points, or 0.37 per cent, down at 8,811.03, after President Trump approved a plan to attack Iran, pending a final order. The more UK-focused FTSE 250 dropped 149 points, or 0.7 per cent, to 21,140.27.
The biggest fallers in early trading are miners, airlines and financial stocks. Oil stocks are among the biggest risers and defence shares are higher.
What a difference an hour makes. Earlier this morning, futures were pointing to the FTSE 100 opening 10 points higher. Now they are pointing to the index opening 30 points lower.
Investors are wary about the conflict in the Middle East and the Bank of England's interest rate decision at noon.
The pound is weaker against the dollar at $1.3402, down 0.12 per cent.
Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager.
Morrisons will deliver its second-quarter trading update later this morning, Isabella Fish, Retail Editor, writes. The UK's fifth-largest grocer, owned since 2021 by the American private equity firm Clayton, Dubilier & Rice, reported like-for-like sales growth of 2.1 per cent in the three months to January 26, having risen 4.9 per cent in the previous quarter.
The grocer blamed the sharp slowdown in sales in the first quarter on a ransomware attack in November at Blue Yonder, its supply chain management software provider, which affected product availability and forced it to cut prices on some items.
Morrisons can ill afford any further setbacks as it undergoes a turnaround under Rami Baitiéh, its chief executive, who joined in 2023.
Hays: The FTSE250 recruiter has warned that it expects to pre-exceptional operating profit to be about £45 million for the year to the end of June. Analysts had forecast profits of £56.4 million.
'Activity levels during our fourth quarter have reduced sequentially driven primarily by broad-based weakness in permanent markets globally, reflecting low levels of client and candidate confidence as a result of macroeconomic uncertainty. Temporary and contracting activity continues to be more resilient,' the company said.
Vodafone: The FTSE 100 telecoms company has appointed Pilar López as chief financial officer. The Microsoft executive will join in October 2025. Vodafone announced in May that Luka Mucic, the current finance chief, was leaving to lead Germany's largest landlord.
Revolution Beauty: Mike Ashley's Frasers Group has abandoned its bid to take over the struggling cosmetics business, which has put itself up for sale. Frasers had said this month that it was considering a bid for Revolution.
The Bank of England is expected to keep interest rates unchanged at 4.25 per cent to give it time to see if the economy and inflation continue to weaken amid a possible inflation shock from the Israel-Iran conflict.
Inflation cooled slightly in May to 3.4 per cent after a jump in April because price growth in the services sector, closely watched by the monetary policy committee (MPC), had dropped sharply. Wage growth has slowed, however, the job market is weaker and the economy shrank in April.
Economists expect the nine-member MPC to vote 7-2 to hold borrowing costs when the decision is released at noon. Beyond today's meeting, investors think the Bank could lower rates one or two more times across the remaining four gatherings that will take place before the end of the year.
The FTSE 100 is forecast to open 10 points higher, with investors wary over the possible entry of the United States into the Israel-Iran conflict.
President Trump kept the world guessing about whether America would join Israel's bombardment of Iranian nuclear sites, saying at the White House yesterday: 'I may do it. I may not do it.'
The Wall Street Journal said Trump had told senior aides he approved attack plans on Iran but was holding off on giving the final order to see if Tehran would abandon its nuclear programme. Overnight, Israel's military said it was carrying out new strikes on Tehran and Iranian missiles hit a hospital in southern Israel.
In Japan the Nikkei sank 0.8 per cent, the Hang Seng in Hong Kong lost 1.7 per cent and Taiwan's Taiex declined 1.6 per cent. The oil price rose 0.5 per cent to £77 a barrel and the gold price and the dollar strengthened.
Wall Street is closed today for a holiday.
How can the UK become a more attractive place for international investors? How can we encourage UK savers to invest more in the economy? What can the Labour administration do to attract the capital it needs for its ambitious plans?
Those questions will be top of the agenda this morning when UK business leaders, investors and senior politicians gather for The Times CEO Summit.
Executives from KKR and Blackstone, two of the UK's biggest foreign investors, and a senior government minister will discuss investment in the country.
The skills we need in an era of AI and hybrid working will be discussed on a panel that includes Alison Brittain, chair of the Premier League, Kenton Jarvis, chief executive of easyJet, and Dame Carolyn McCall of ITV.
Richard Fletcher, Business Editor, will talk to Amanda Blanc, chief executive of Aviva, about her turnaround of the insurer and her plans following the £3.7 billion acquisition of rival Direct Line.
You can follow the summit on this blog, @TimesBusiness on Twitter or the hashtag #TimesCEOSummit.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Daily Mail​

20 minutes ago

• Daily Mail​

BREAKING NEWS Australian Defence Force deployed to Middle East to help evacuate stranded Aussies

Australian Defence Force personal have been deployed to the Middle East to evacuate Aussies stranded in Iran and Israel. 'ADF personnel and aircraft are being deployed to the Middle East as part of the operation – to help Australians but not for combat,' Penny Wong confirmed on Friday.

The Herald Scotland

23 minutes ago

• The Herald Scotland

Barrhead Travel story in Glasgow surely offers some lessons

And it was somewhat astonishing to hear the price of a week's holiday in Majorca in 1979 was £50. However, what really hit home as the story of the first 50 years was told was the astute and entrepreneurial decision-making of Barrhead Travel's founder, the late Bill Munro, at various key stages of the development of the business. These included, from Barrhead Travel's earliest days, opening when others were closed, something that was a driver of the establishment of the business in the first place, and Mr Munro's embracing of the internet when it brought major change to the sector. In many ways, it appears Mr Munro built the business by making the right decisions and doing relatively simple things very well indeed. That might sound straightforward enough. However, that is from the position of reflecting on the story of Barrhead Travel from where it is now, having observed the various key stages. What is clear is that Mr Munro had tremendous vision, assessing trends in the sector and reacting shrewdly and at times boldly. The wisdom of the decisions and strategy that paved the way for the creation of what is now a major UK-wide travel agent, from a single shop in Barrhead on the outskirts of Glasgow in 1975, might seem apparent enough with hindsight. However, Mr Munro did not have the benefit of hindsight as he navigated huge changes in the industry. He did just fine without it, achieving a degree of success that is remarkable. Other major events in Barrhead Travel's history - highlighted by president Jacqueline Dobson at last Thursday's dinner – include the responses of the business to the collapse of major package holiday and airline company Thomas Cook and to the coronavirus pandemic. Barrhead Travel has also undergone a change of ownership. It was sold to US-based Travel Leaders Group in 2018, and was by that time one of the UK's biggest travel agents. Barrhead Travel celebrated its 50th birthday at a dinner at Glasgow's Old Fruitmarket last week. (Image: Barrhead Travel) Travel Leaders Group is part of Internova Travel Group, which has its head office in New York. Mr Munro died aged 80 in October 2024. A Barrhead Travel spokesman said then: 'It's been almost 50 years since Bill Munro founded Barrhead Travel. His bold vision fundamentally changed the landscape for high street travel agents across the country. He made a tremendous contribution to the overall travel industry as well as becoming an influential figure within the Scottish business community.' This legacy was plain at Barrhead Travel's 50th birthday dinner, which was attended by the founder's daughter, Sharon Munro, who stepped down as president of the business at the end of 2018. Another legacy which was evident was a focus on people within Barrhead Travel, which employs more than 560 people. Read more While the many opportunities given to young people by the business over years and decades through its apprenticeship approach were highlighted, what was also to the fore was the long service of staff throughout the business, including across the executive team. Far too often in the business world these days, the importance of such experience is overlooked, to the ultimate cost of companies which take such a lamentable view. Ms Dobson highlighted the length of service of many of Barrhead Travel's employees. She said: 'I started my career as an apprentice, and many of my colleagues did too.' Jacqueline Dobson has been with Barrhead Travel for 25 years. (Image: Barrhead Travel) Ms Dobson highlighted the fact that she had been with the business for 25 years. And she emphasised she was 'certainly not alone' in having been with Barrhead Travel for that length of time or longer. The business characterises its own journey as follows: 'Since it was founded in 1975, Barrhead Travel has expanded from a traditional 'bucket and spade' travel agent to a multi-faceted travel group offering bespoke holidays and cruises to all corners of the globe.' And it highlights the fact that 'in addition to its retail network which spans over 90 locations across the UK, the group has a number of specialist divisions including touring and adventure, cruise and USA'. The business has indeed come a long way, and its current US-based owner has backed the continuing expansion of Barrhead Travel. What was notable, however, was Ms Dobson's emphasis last week on how the 'heart of the business' is the same as it was 50 years ago. She said: 'While so much has changed, the heart of the business remains the same. We're here to solve problems, support our people, and ultimately deliver unforgettable holidays. 'Our resilience over the decades has only strengthened our belief in what we do. It's our people, our customers, and our communities that have shaped this journey. Celebrating 50 years is not just about looking back, it's about looking forward with confidence, staying true to our roots while continuing to evolve.' Ms Dobson declared that, as Barrhead Travel looks ahead, 'there are no signs of slowing down, with plans for continued investment and expansion on the high street as well as launching new technology'. She highlighted the fact that 'the business has had a record-breaking year, with January 2025 being the most successful month in its 50-year history'. And Ms Dobson emphasised: 'It believes its founding principles, customer service, innovation, and community are as relevant today as they were in 1975.' It is good to see the founding principles of Mr Munro 50 years ago continue to deliver growth and success for what is such a well-known Scottish business. There seemed to be a genuine warmth in the room last week from the various travel industry partners with which Barrhead Travel works. And Ms Dobson's emphasis of the degree to which the business values its people also came across passionately, in stark contrast to the kind of buzzword bingo you hear on this front from some corporates. Many might have doubted when the internet began to revolutionise travel that businesses like Barrhead Travel would continue to thrive but, while many but certainly not all of its competitors have found the journey more difficult and at times impossible, the operation founded by Mr Munro back in 1975 has gone from strength to strength. Hopefully, Barrhead Travel will continue to prosper and prove resilient through the ups and downs of future decades, and it will have the continued backing of its owner to build on the success achieved over the last 50 years.

Finextra

28 minutes ago

• Finextra

UK launches Smart Data Group to bring benefits of open banking to more sectors

The UK is looking to build on the success of open banking through the launch of a government-backed, industry-led Smart Data Group designed to unlock £28 billion in economic value across a variety of sectors. 0 Last week, the Data (Use and Access) Bill passed in parliament, paving the way for the expansion of the open banking model, giving consumers the power to share their data more widely across new use cases in energy, finance, telecoms and retail. By enabling Brits to explicitly consent to secure, standardised sharing of personal data with providers, the aim is to ensure these users can get tailored services, seamless switching, and better deals. Chaired by former Minister for Smart Data, Paul Scully, The Smart Data Group has been tasked with making this a reality, uniting policymakers and industry experts. Open banking veterans Richard Newman and Clare Ambrosino will be in operational charge of the group, with advisory board members including Jonathan Ashworth, Lord Iain McNicol, Lord Martin Callanan, and Sir Robbie Gibb, underscoring strong cross-party support. Business and Trade Minister Justin Madders says: 'Smart Data has the power to transform the way we do business and has potential to supercharge start-ups across the country. 'This new group will play an important role in unlocking that potential, and our modern Industrial Strategy will be a driving force to boost our priority sectors and drive economic growth right across the nation.'