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Pound surges as summer rate cut hopes vanish

The value of the pound has risen at its fastest pace in six months after traders pushed back their bets on the timing of interest rate cuts
The value of the pound has risen at its fastest pace in six months after traders pushed back their bets on the timing of interest rate cuts - TOLGA AKMEN/EPA-EFE/Shutterstock

The pound is on track for its best month since November as hopes of a summer interest rate cut dwindle.

Sterling is up 1.8pc against the dollar so far this month to trade at more than $1.27, which would be its best performance this year.

The pound, which is up against most major currencies, has been lifted by expectations that interest rates could be cut as late as December.

Traders have drastically reduced bets that the Bank of England could begin cutting interest rates over the summer after inflation figures came in higher than expected in April.

Before the inflation data, which showed prices rose at a rate of 2.3pc in April, a first cut had been given a 50pc chance of happening in June and was priced in by August at the latest.

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Read the latest updates below.


06:04 PM BST

Signing off...

Thanks for joining us today. We’ll be back on Tuesday to cover the latest from the markets, after the bank holiday. In the meantime, I’ll leave you with the news that Kabosu, a Japanese dog who became an internet sensation, has died at 18.

Kabosu became recognisable as the face of Dogecoin, an alternative cryptocurrency that began as a satirical critique of the 2013 crypto frenzy.

But the token jumped in value after Tesla boss Elon Musk, a proponent of cryptocurrencies, began tweeting about it in 2020. Since then the billionaire has repeatedly promoted the coin.

Dogecoin added as much as $4bn (£3.1bn) to its market value last year when the billionaire, who bought social media site Twitter in 2022, briefly replaced Twitter’s blue bird logo with an image of Kabosu. Musk subsequently renamed Twitter as X.

With a market capitalisation of around $23.6bn, Dogecoin is now the ninth biggest cryptocurrency, according to data site Coingecko.com.

“The impact this one dog has made across the world is immeasurable,” Dogecoin posted on social media site X on Friday.


05:58 PM BST

Thames Water lender races to offload £500m of loans amid election uncertainty

A major lender to Thames Water has launched a fire sale of up to £600m of debt as the looming general election throws fresh uncertainty on the future of Britain’s biggest water supplier. Ben Marlow reports:

The unnamed creditor is preparing to sell hundreds of millions of pounds of existing Thames Water loans as financial institutions around the globe scramble to reduce their exposure to the stricken company after it was left on the brink of collapse.

Rishi Sunak’s decision to call a snap general election has added to doubts about the prospects of a business that oversees critical services to more than a quarter of the country’s homes. Around 15 million people in London and the surrounding counties are reliant on Thames for drinking water.

On Friday, the water industry regulator announced it was delaying a series of key decisions on the business plans of suppliers including Thames Water until after the general election.

Thames Water has asked for permission to raise bills by up to 44pc – or 59pc if inflation is taken into account – from next year to shore up its finances and invest in its ageing Victorian pipes and sewers. The move would result in average customer bills jumping to £749 a year.

Read the full story...


04:58 PM BST

FTSE 100 closes down

The FTSE 100 fell 0.2pc today. The biggest riser in the index was Ocado, up 6.2pc, followed by Marks & Spencer, up 2.3pc. The biggest faller was National Grid, down 11.5pc, followed by components supplier RS Group, down 2.6pc.

However, the FTSE 250 closed up 0.7pc. The top riser was mining company Ferrexpo, up 5.8pc, followed by engineering business John Wood, up 5.2pc. Essentra, a components supplier, was the biggest faller, down 4.9pc, followed by AJ Bell, down 4.6pc.


04:45 PM BST

TotalEnergies boss rejects activist demands with case for new oil fields

The boss of TotalEnergies told shareholders Friday the energy giant needed to develop new oil fields to meet global demand, as the French company’s AGM was picketed by climate activists.

Patrick Pouyanne warned that higher oil prices prompted by insufficient fossil fuel output “would quickly become unbearable for the populations in emerging countries, but also in our developed countries”.

Demand for oil was growing in line with the global population, he said.

But Mr Pouyanne also promised that TotalEnergies would pursue its “balanced strategy” of developing both fossil fuel and low-carbon energy production.

TotalEnergies had provided proof that it was possible “to be a profitable, or even the most profitable, company while pursuing a transformation” towards cleaner energy, he said.

Climate activists had gathered hours before the general meeting opened, with Greenpeace members unfurling a “Wanted” banner depicting Pouyanne and calling him “the leader of France’s most polluting company”.

Climate activists say TotalEnergies is contributing to global warming, to the destruction of biodiversity and to violations of human rights through its gas and oil activities.

Activists display a banner bearing the portrait of TotalEnergies boss Patrick Pouyanne on a building in Paris
Activists display a banner bearing the portrait of TotalEnergies boss Patrick Pouyanne on a building in Paris - Stephane de Sakutin/AFP via Getty

04:37 PM BST

Bank fraud checks will wreak havoc on property market, lawyers warn

House purchases could be severely disrupted by new rules designed to protect against fraud, experts have warned. Money reporter Madeleine Ross has the details:

In an effort to detect “Authorised Push Payment” (APP) fraud, banks will be able to stop payments that they have flagged as suspicious for up to four days under incoming rule changes.

Currently, “authorised” payments – ones that have been approved by the customer – can only be held for 24 hours while banks investigate.

When the rules change, banks will still have to tell consumers that their payment has been delayed by the end of the next business day. The rules were expected to be put before the House of Commons this summer, but will not be voted on ahead of the general election.

Lawyers have warned the added red tape could cause chaos for home movers. Gareth Richards, deputy chair of the Society of Licensed Conveyancers (SLC), said that the complex nature of property transactions could see buyers subjected to severe penalties under the terms of legally binding contracts.

Read the full story...


04:18 PM BST

Probability increasing of first eurozone interest rate cut in 13 days, says Bundesbank chief

The president of the Bundesbank said today that an interest rate cut is becoming more likely.

Joachim Nagel, who is an ECB governing council member, told Bloomberg Television:

Over the past couple of months, inflation rates came down, so what I expect for the next months is coming down further ... So what I see is the probability is increasing that in 13 days we will see the first rate cut in the eurozone.

But he said that people should not assume at a June cut would mean there would automatically be one in July. He said:

There is not a kind of autopilot when there is maybe the first rate cut that there is a consequence, let me say, more rate cuts coming ...

If there’s a rate cut in June, we have to wait, and I believe we have to wait till maybe September.

I think July - it’s too early to speculate.

Joachim Nagel, president of the Bundesbank, 2016
Joachim Nagel, president of the Bundesbank, 2016 - Thomas Lohnes/Getty Images

03:44 PM BST

US stock markets rise despite worries about interest rates

European and Asian stock markets have fallen today following Wall Street losses on Thursday as better-than-expected US data compounded worries that the US Federal Reserve will hold off on cutting interest rates this year.

US stocks opened higher this afternoon.

Fawad Razaqzada, analyst at City Index, said that traders “were happy to book a profit” on tech stocks on Thursday, with many “likely to have taken Friday off” ahead of Monday’s Memorial Day holiday. The technology sector was boosted by strong results at US tech giant Nividia, which propelled the company’s shared more than 10pc in early trading yesterday.

European and US indexes have rallied to new records in recent days thanks to solid first quarter earnings by companies and their positive outlook despite the fact it is looking increasingly unlikely the Fed will begin cutting interest rates this year.

Joshua Mahony, an analyst at Scope Markets, said:

With earnings season largely behind us, we will now see markets following the economic data more closely, and unfortunately we look set for a protracted period of high rates if recent inflation data is anything to go by.

Other data showing the US economy is coping with high interest rates, thus reducing any pressure on the Fed to cut them, has also been denting confidence in a quick reduction in borrowing costs.

Today it was US durable goods orders for April, which rose 0.4 percent month-on-month excluding the volatile transportation sector.

That followed data yesterday showing that services sector showed activity rose at its fastest pace in a year, while the factory sector also beat forecasts.

The data indicates the world’s top economy remained resilient, quelling the excitement sparked by last week’s news that the consumer price index slowed in April after three months of topping forecasts.


03:32 PM BST

Handing over

At this point, I will wish you well as you head towards the bank holiday weekend and leave you in the hands of Alex Singleton.

A quick look at the markets before a sign off shows the FTSE 100 is down 0.2pc, while the domestically-focused FTSE 250 is now up 0.5pc.

Wall Street has swung higher but European stocks fell as investors fret over data suggesting the US Federal Reserve could keep interest rates higher for longer.

The pound is up 0.2pc on the dollar today to $1.273, leaving it up 1.8pc so far this month.

Brent crude oil is now up 0.6pc today towards $82 a barrel.


03:23 PM BST

Watch: Oil protesters hosed down by security guards

Security guards resorted to spraying climate activists with a hose as shareholder meetings of TotalEnergies and one of its major investors descended into chaos.

Our reporter James Warrington has the details:

Greenpeace activists climbed a building close to TotalEnergies’ Paris headquarters on Friday and unveiled a large picture of chief executive Patrick Pouyanne under the heading “Wanted”.

Others stormed the offices of asset manager Amundi in the French capital to protest its investment in the oil and gas giant.

Videos posted on social media show activists inside the Amundi offices, which had been splattered with red paint. Many were wearing white hazmat suits.

See how security guards responded.


03:12 PM BST

US inflation expectations edge higher

Consumers expect inflation to rise at a slightly quicker pace over the next year compared to their outlook last month, according to a closely-watched survey.

The latest data from the University of Michigan shows consumers think there will be 3.3pc of inflation over the next year, compared to 3.2pc expected in April.


03:00 PM BST

Biden borrowing at ‘unsustainable levels,’ warns Fed official

The Biden administration is borrowing at “unsustainable” levels, a Federal Reserve governor has warned, risking higher interest rates.

Christopher Waller warned that any change in the demand for Treasury bonds could have an impact borrowing costs.

Speaking at the Reykjavik Economic Conference in Iceland, he said the US “is on an unsustainable fiscal path”.

He warned that there would be “upward pressure” on interest rates “if the growth in the supply of US Treasuries begins to outstrip demand,” as it would mean “lower prices and higher yields”.

It comes after President Joe Biden cancelled more than 160,000 student loans, bringing the total amount of debt forgiveness under his administration to $167bn (£131.3bn).

Federal Reserve Governor Christopher Waller has issued a warning about the US debt market
Federal Reserve Governor Christopher Waller has issued a warning about the US debt market - REUTERS/Ann Saphir

02:36 PM BST

Wall Street opens higher despite inflation fears

The main US stock indexes opened higher despite signs of persistent inflation that rekindled caution.

The Dow Jones Industrial Average rose 23.97 points, or 0.1pc, at the open to 39,089.23.

The S&P 500 opened higher by 13.61 points, or 0.3pc, at 5,281.45, while the Nasdaq Composite gained 50.76 points, or 0.3pc, to 16,786.79 at the opening bell.


02:16 PM BST

Safety warnings from Boeing staff jump sixfold since mid-air blowout

The number of safety concerns raised by Boeing staff increased six fold in the wake of the mid-air blowout on an Alaska Airlines flight.

The planemaker said in its annual safety report that submissions had increased dramatically in the two months following the incident on January 5.

It comes as almost $9bn (£7.1bn) was wiped off the value of Boeing after it warned it will burn through cash this year and grapple with further delays to deliveries of its new plane.

Brian West, chief financial officer, said he expected cash flow to be negative during 2024, largely owing to delayed deliveries of the 737 Max model as Boeing slows production after a door plug blew out of an Alaska Airlines jet in January.

Boeing jet production slowed significantly after more checks were introduced following the Alaska Airlines blowout in January
Boeing jet production slowed significantly after more checks were introduced following the Alaska Airlines blowout in January - NTSB/AFP via Getty Images

02:01 PM BST

Car maker to cut hundreds of jobs as electric vehicle demand wanes

US luxury car maker Lucid will cut about 400 jobs in the coming months amid waning demand for electric vehicles.

The reduction of about 6pc of its global workforce will cost between $21m and $25m (£16.5m and £19.7m).

The job cuts come as the wider electric car industry rides out a slowdown in sales.

Tesla announced last month it would cut 10pc of its workforce, while smaller rival Rivian has announced several rounds of layoffs.

Car manufacturers are expected to fall short of the government’s target for electric vehicle (EV) sales this year, with approximately 19.8pc of the new car market predicted to be battery-electric, according to the Society of Motor Manufacturers and Traders (SMMT).

European industry figures earlier this week showed that Tesla’s sales in the UK and Europe had fallen by 8pc in the first four months of the year.


01:47 PM BST

Pound rises as interest rate cuts not expected until after election

The pound is on track for its best month since November as the timing of interest rate cuts has been pushed back until after the election.

Sterling is up 1.6pc against the dollar so far this month, which would be its best performance this year.

The pound, which is up against most major currencies, has been lifted by expectations that interest rates could be cut as late as November.

Traders drastically reduced bets that the Bank of England could begin cutting interest rates as early as June after inflation figures came in higher than expected in April.


01:33 PM BST

Co-op Bank taken over by Coventry Building Society as mutuals fight back

The Co-operative Bank is set to return to mutual status after more than a decade following a £780m takeover by the Coventry Building Society.

Our reporter Michael Bow has the details:

The two sides said a takeover deal for the 150-year old lender was agreed after unveiling a blueprint for the merger last month.

Co-op’s two-and-a-half million customers will transition to becoming mutual members over the next few years.

The deal marks a sudden revival for the mutuals industry, which fell out of favour in the late 1990s.

Under plans unveiled in January, the Labour Party is aiming to double the size of Britain’s mutual sector to drive more “community-oriented” lenders instead of banks.

Read how the Coventry tie-up will create a so-called “super mutual”.


01:19 PM BST

Federal Reserve will not cut interest rates until September, says Goldman Sachs

The US Federal Reserve will begin cutting interest rates in September, Goldman Sachs has said, pushing back its previous prediction.

The Wall Street titan had expected borrowing costs in the US to be reduced in July but its outlook has been altered by strong economic data.

Economist Jan Hatzius said: “Earlier this week, we noted that comments from Fed officials suggested that a July cut would likely require not just better inflation numbers but also meaningful signs of softness in the activity or labour market data.”

Goldman Sachs had been one of the last banks on Wall Street betting the Fed would start lowering interest rates in July.

Earlier this week, Nomura Securities also pushed its prediction from July to September, saying “the threshold for rate cuts appears to have risen”.

Wall Street bank Goldman Sachs said it does not expect rate cuts in the US until September
Wall Street bank Goldman Sachs said it does not expect rate cuts in the US until September - REUTERS/Brendan McDermid

01:04 PM BST

Thames Water shareholders to wait longer for price review

Thames Water shareholders will have to wait longer to see if their plans to increase bills by 45pc will be approved by regulators.

Ofwat has delayed its review of the prices that will be sought by water companies until after the general election.

The regulator will not reveal its determinations until July 11, pushing it back from June 12.


12:08 PM BST

Media investment rules sparked by Telegraph bid in limbo after snap election call

Ministers have rushed through tough new laws on foreign investment in the media without exceptions that proprietors including Rupert Murdoch had sought, leaving the industry in limbo.

Our reporter James Warrington has the details:

The Government has introduced new laws capping investment in a UK newspaper or news magazine by a foreign state at 5pc, in a move designed to block an Abu Dhabi-backed takeover bid for The Telegraph.

But ministers have failed to push through secondary legislation that will outline exceptions to the rules before Parliament is dissolved on Friday ahead of the election.

A consultation on the changes will now run until July 9, casting uncertainty over the timetable for an onward sale of The Telegraph.

Read why the legislation has left media owners including Mr Murdoch and Daily Mail owner Lord Rothermere concerned.


11:50 AM BST

Eurozone interest rates on track to be cut in June, says German policymaker

The European Central Bank is on track to cut interest rates from their record highs at its next meeting, the head of the Bundesbank has said.

Interest rates in the single currency bloc have stood at 4pc since September last year but traders are betting there is a 91pc chance that this will be reduced in June as inflation in the bloc stands at 2.2pc.

Bundesbank president Joachim Nagel appeared optimistic of a cut as he spoke on the sidelines of the meeting of G7 finance ministers and central bank chiefs in Stresa, Italy.

He said: “If the situation stays as it is now and the projections don’t say something completely different — but I don’t assume that — then the probability increases that we will see the first interest-rate step.”

He added that even if rates are cut “it’s important to me that this decision is made in such a way that no autopilot can be derived from it.”

Bundesbank president Joachim Nagel has indicated eurozone interest rates will be cut in June
Bundesbank president Joachim Nagel has indicated eurozone interest rates will be cut in June - Alex Kraus/Bloomberg

11:25 AM BST

Wall Street rises despite US inflation worries

US stocks are on track to rise at the opening bell despite data showing signs of persistent inflation.

After riding high on Nvidia’s blowout revenue forecast, Wall Street’s main indexes turned lower on Thursday after strong economic data meant traders reduced bets of interest rate cuts this year.

The blue-chip Dow logged its biggest one-day drop since March 2023 on Thursday while the benchmark S&P 500 recorded its worst session in over three weeks. Both the indexes were set for weekly losses after four straight weeks of gains.

Investor focus today will be on more economic data, including durable goods for April and the University of Michigan’s final consumer sentiment, along with remarks from Fed Board Governor Christopher Waller.

In premarket trading, the Dow Jones Industrial Average was up 0.2pc, the S&P 500 was up 0.3pc and the Nasdaq 100 had gained 0.2pc.


10:59 AM BST

GSK wins US case over Zantac drug

Pharmaceutical giant GSK has won a potentially expensive personal injury case in the US over its heartburn medicine Zantac.

Angela Valadez, an 89-year-old woman living in the state of Illinois, claimed that prolonged use of Zantac caused her to develop colon cancer.

But a jury on Thursday determined that the medication was not responsible, and the judge rejected her request for $640m (£503m) in damages.

The decision is the latest in a long-running saga surrounding Zantac, which is the brand name for the drug ranitidine.

The product reduces the amount of acid the stomach makes, and was used to treat indigestion, heartburn and acid reflux.

Zantac was a best-seller in both the UK and US after its approval in the early 1980s but in 2019 a laboratory in Connecticut reported that it had found “extremely high levels” of NDMA when it heated ranitidine.

NDMA is a substance found in cigarettes and processed foods, and is thought to increase the risk of developing cancer.

The drug was discontinued in the UK and the US as a precaution the next year.

GSK has won a personal injury case over its Zantac drug
GSK has won a personal injury case over its Zantac drug - REUTERS/Brendan McDermid

10:42 AM BST

Oil prices fall as Opec pushes back meeting

Oil prices have fallen after Opec+ cartel of oil producing nations pushed back the date of its next meeting, where it is due to discuss supply cuts.

Brent crude, the international benchmark, was down 0.6pc to below $81 - its weakest since February - while US-produced West Texas Intermediate fell towards $76.

Brent reached a 2024 peak of $91.17 early last month.

It comes as the Opec+ group pushed back its output policy meeting by a day to June 2 and will convene online, rather than in Vienna.

Opec+ oil producers are making voluntary output cuts totalling about 2.2m barrels per day (bpd) for the first half of 2024, led by Saudi Arabia rolling over an earlier voluntary cut.

It comes against a backdrop of rising output from the United States and other non-member producers, while worries over demand have remained in focus as major economies grapple with high interest rates.

Sources from countries that have made voluntary supply cuts told Reuters this month that an extension was likely.


10:20 AM BST

Google AI makes string of errors after relying on joke websites

Google’s artificial intelligence-powered search results have claimed that Barack Obama is a Muslim and told people to eat rocks, in the latest high-profile case of the company’s AI systems misfiring.

Our technology editor James Titcomb has the details:

Users of the search engine’s new “AI overviews” have shared multiple examples of the new feature displaying incorrect or potentially dangerous examples, days into its launch.

In one case, the AI claimed that Mr Obama was America’s only Muslim president. In others it told people to put glue on pizza if cheese does not stick to the base and said it was healthy to eat one rock a day.

The AI overview feature uses data from existing websites to inform its answers, but in many cases Google appears to be relying on joke websites or misinterpreting reliable sources.

Read how the cases are the latest AI mishap for Google.

Google AI repeated false claim that former US president Barack Obama was a Muslim
Google AI repeated false claim that former US president Barack Obama was a Muslim - REUTERS/Evelyn Hockstein

10:05 AM BST

Starmer: Publicly-owned energy company will bring down bills ‘for good’

Sir Keir Starmer has said his proposed GB Energy - a new, publicly-owned clean energy company - would bring down energy bills “for good”.

He said a Labour government would also make sure renewables jobs stay in the UK.

Ahead of a campaign event in Glasgow later, he told Sky News:

(GB Energy) is going to be a publicly owned energy enterprise owned by the taxpayer making money for the taxpayer.

But crucially, investing in clean British power, which means that energy prices don’t come down just for a while, but come down for good.

And we have, finally, security so that Putin can’t put his boot on our throats.

The Labour leader continued: “The wind farms that were put up on the hills just a few miles from here were all towed in from other countries.

“We didn’t get the jobs that went with them. I’m determined to turn that around.”


09:47 AM BST

Pictured: ‘Wanted’ poster of TotalEnergies boss unfurled by climate activists

Five Greenpeace activists have climbed up a building near TotalEnergies’ Paris headquarters and unfurled a banner criticising the oil giant’s climate change strategy as it holds is annual shareholder meeting.

The climate group opposes Total’s continued exploration of oil and gas, despite a “climate emergency”, a Greenpeace spokesman said.

The banner included a large photo of Total chief executive and chairman Patrick Pouyanne under a ‘Wanted’ heading.

Barriers had already been erected around the entrances of Total’s offices in Paris’ La Defense district on Thursday evening, with employees told to work from home on Friday.

Total shareholders are due to vote later on whether to approve the progress Total has made on its sustainability and climate goals for 2030.

Activists and climate-focused investors have ramped up pressure on the world’s leading oil and gas companies in recent years, frequently derailing shareholder meetings.

Earlier this week climate activists disrupted Shell’s annual shareholder meeting, chanting: “Shell kills.”

Greenpeace activists unfurled a banner on a building near TotalEnergies' headquarters as it holds its annual general meeting
Greenpeace activists unfurled a banner on a building near TotalEnergies' headquarters as it holds its annual general meeting - REUTERS/Stephanie Lecocq

09:32 AM BST

Pound flat as retail sales disappoint

The pound was steady after data showed wet weather hit consumer spending far more than expected in April.

Sterling was last flat against the dollar at $1.27, having traded as high as $1.276 after Wednesday’s data showed inflation eased to 2.3pc in April, above forecasts if a drop to 2.1pc.

Sterling has been strengthened after traders reduced bets on of a June rate cut by the Bank of England to below 10pc, from around 50pc before Wednesday’s inflation data.

Today, the Office for National Statistics said retail sales volumes dropped by 2.3pc in April after a 0.2pc fall in March, which was far worse than a predicted fall of 0.5pc.

The pound was little changed against the euro, which is worth 85p.


09:12 AM BST

Starmer: We do not have to raise taxes if Labour win

Sir Keir Starmer did not accept claims he would have to raise taxes, make spending cuts or change Labour’s fiscal rules if his party wins power.

The Labour leader said he did not agree with the findings of the Institute for Fiscal Studies, telling BBC Radio 4’s Today programme:

I do think that we can go for growth.

I think if you have got a comprehensive plan for growth that is thought through and have the detailed discussions with partners for growth we can do it.

He claimed previous governments had gone “round and round in circles” with short-term solutions. Sir Keir added:

If we just do sticking plasters and tax rises, spending cuts, these are levers which in the end aren’t taking our country forward, they are fiddling.

I want to take our country forward and the only way to do that is to have a comprehensive plan for growth that is in the sense of a driving sense of purpose for government that we stick to.


08:52 AM BST

Gas prices on track for weekly gain of 10pc

Gas prices are on track for their largest weekly gain in a month amid concerns about supplies from Norway and Russia.

Dutch front-month futures, the benchmark contract on the continent, has risen as much as 1.3pc and was on track for an increase of more than 10pc this week.

The UK equivalent was up more than 13pc on the week.

It comes after an unplanned outage at a major plant in Norway, which is the largest supplier to Europe.

Meanwhile, Austrian supplier OMV has warned of a risk to flows from Russia after a court ruling this week banning payments to Kremlin-backed producer Gazprom.

It comes as prices are also rising in Asia as a heatwave increases demand for air conditioning, pushing up global competition for liquified natural gas.


08:35 AM BST

FTSE 100 tumbles after poor retail sales

UK stocks fell nearly 1pc in early trading as investors were unnerved by weak retail sales and robust US economic data that fuelled worries that interest rates will stay high for longer.

The blue-chip FTSE 100 index dipped as much as 0.9pc and was poised for a fourth consecutive session in the red, which is its longest losing streak in more than three months. The index was set to log a second consecutive week of declines.

The mid-cap FTSE 250 dropped 0.4pc and was also on track for a fourth straight day of losses.

It comes as retail sales in the UK fell by 2.3pc - much more than the 0.5pc expected.

Meanwhile, robust economic data from the US showed business activity in May accelerated to the highest level in over two years.

Investors took some profits following a near 8pc climb in London stocks over the past five weeks.

Among stocks, AJ Bell fell 4.5pc to the bottom of the FTSE 250 after the investment platform’s founder sold 7.5m shares in the company.

National Grid slumped 10.3pc to the bottom of the FTSE 100 after a nearly 11pc drop on Thursday when it announced plans to sell more shares.

Intertek Group was up 2.9pc to lead the FTSE 100 after the product testing firm reconfirmed its forecast for 2024.


08:16 AM BST

Retailers need to target consumers of all budgets, say analysts

After the sharp fall in retail sales last month, Oliver Vernon-Harcourt, head of retail at Deloitte, said:

April’s retail sales were more disappointing than expected, once again being dampened by wet weather, deterring shoppers from the high street and impacting the sale of seasonal items.

Though consumer confidence continues to rise, many remain apprehensive and are not yet loosening their purse strings, especially on non-essential items and goods such as clothing and footwear.

Consumers are focused on value, with the likes of own-label food remaining resilient.

Overall, this is a clear sign that, despite inflation easing, retailers’ road to recovery will require them to continue to invest into product ranges that target consumers of all budgets.


08:06 AM BST

FTSE 100 slumps amid falling retail sales

The FTSE 100 dropped as trading began after figures showing retail sales fell much more than expected last month.

The UK’s blue chip stock index was down 0.8pc to 8,272.84 while the midcap FTSE 250 fell 0.3pc to 20,579.35.

Retail sales fell by 2.3pc between March and April amid poor weather, which was far more than the 0.5pc drop predicted by analysts.


07:55 AM BST

Abrdn boss quits after backlash over name

The boss of Abrdn will step down after four years in charge in which he dropped the vowels from the company’s name in a controversial rebrand.

Stephen Bird will leave after a turbulent period during which the asset manager was ejected from the premier FTSE 100 index after its shares plunged, launching plans this year to axe £150m in costs.

A statement to shareholders said: “Following the significant strategic repositioning of the company, the board and group CEO, Stephen Bird, have together agreed that it is the right time for Stephen to hand over the reins to the team he has assembled over the last four years to drive the business forward.”

The asset manager’s chief financial officer Jason Windsor will become interim chief executive, with Mr Bird stepping down at the end of June.

Under Mr Bird’s tenure, Abrdn was forced to defend its decision to drop most of the vowels from its name following claims that the brand makeover has made it a victim of “corporate bullying”.

Critics have joked that the company developed a case of “irritable vowel syndrome” and have referred to Stephen Bird, the company’s chief executive, as Stphn Brd.

Chairman Sir Douglas Flint said:

On behalf of the board, I want to thank Stephen for everything he has achieved at abrdn over the last four years.

He joined us as the pandemic took hold and, despite the restrictions this imposed, spearheaded a fundamental reshaping of the company, leading from the front to create a company that can be competitive in a fast-evolving sector.

Stephen Bird will step down as chief executive of Abrdn
Stephen Bird will step down as chief executive of Abrdn - Hollie Adams/Bloomberg

07:41 AM BST

Consumer spending to recover this year, economists insist

Retail sales fell by more than expected during a washout April, official figures show, but economists think the outlook for the sector is “bright”.

Sales volumes fell by 2.3pc last month, far more than the 0.5pc decline that had been predicted by analysts.

However, separate data showed consumer confidence has continued its “upward momentum” despite the cost-of-living crisis remaining a daily reality for households.

GfK’s long-running consumer confidence index rose by two points in May to minus 17.

Ashley Webb, UK economist at Capital Economics, said that “as inflation falls further this year, rising real household disposable income should boost retail activity throughout the rest of 2024”. He added:

Looking ahead, the improvement in the GfK measure of consumer confidence from -19 in April to a two-and-a-half year high of -17 in May points to a 3pc month on month rebound in sales volumes in May.

That’s getting close to the level of -15 that historically gives the government a chance of re-election. But it’s not all about the economy.

In any case, the prospect of interest rates starting to be cut this summer and the boost to real household disposable income from falling inflation implies confidence will climb further and the recovery in consumer spending will continue throughout this year.


07:27 AM BST

North Sea engineering group rejects third £1.5bn takeover bid

A North Sea engineering group has rejected a fresh £1.5bn bid from a Dubai-based rival, as low valuations on the London Stock Exchange prompt a wave of foreign takeover attempts.

John Wood Group has rejected a third offer of 220p per share from Sidara, up from previous offers of 212p and 205p earlier this month.

It said the new bid “continued to significantly undervalue the group and its prospects”.

The Aberdeen-based company is a global player in oil, gas, renewable energy and in the production of minerals such as lithium, which are seen as critical for reaching net zero. It employs around 35,000 people in 60 countries.

Shares are still up 10pc since the first takeover offer was first disclosed on May 8.

North Sea engineering group Wood has rejected a third takeover bid
North Sea engineering group Wood has rejected a third takeover bid - REUTERS/Nora Buli

07:19 AM BST

Falling bills offer small comfort to struggling households, say Citizens Advice

As the latest Ofgem price cap indicated household bills will fall by 7pc from July, Citizens Advice chief executive Dame Clare Moriarty said:

Today’s news will give small comfort to households still facing cost-of-living pressures.

The fall in the energy price cap reduces bills slightly, but our data tells us millions have fallen into the red or are unable to cover their essential costs every month.

People cannot rely on lower energy prices alone to escape the financial issues they’ve been experiencing.

That’s why we need better targeted energy bill support for those really struggling to keep the lights on or cook a hot meal.


07:14 AM BST

Retail sales fall in blow for Sunak

Retail sales fell in Britain last month, official figures show, in a blow to the Prime Minister as he argues the economy has “turned a corner”.

Sales volumes fell across most sectors, according to the Office for National Statistics, following a decline by 0.2pc in March.

Clothing retailers, sports equipment, games and toys stores, and furniture stores were particularly hit by poor weather, which reduced footfall.


07:10 AM BST

Energy bills to drop by 7pc from July

Household energy bills will be 7pc lower on average from July compared to the previous three months in England, Scotland and Wales, after Ofgem announced its latest price cap.

The price cap “assumes” a standing charge - the flat amount all households pay to have energy delivered to their homes - of £334 for a dual fuel customer and £369 for those who pay by standard credit, unchanged from the last price cap.


07:06 AM BST

Energy bills to drop by £122 a year as Tories vow more support for households

Household energy bills will fall by £122 a year as Rishi Sunak pledges to make it easier for customers to get the best deal in his election campaign.

The Ofgem price cap will fall from £1,690 per year to £1,568 from July 1, leaving energy bills at their lowest level since before Vladimir Putin’s invasion of Ukraine triggered an energy shock for European economies.

The price cap had been set at £1,216 a year over the winter of 2021 to 2022, before the war sent energy costs rocketing, with the Government forced to intervene to limit bills to £2,500 a year during the peak of the fuel crisis.

It comes as the Prime Minister seeks to put falling energy bills at the centre of the election campaign.

The Tories will vow to make price comparison websites easier to use and consider telling the regulator Ofgem to publish league tables showing how long energy firms take to respond to customer complaints.


07:02 AM BST

Good morning

Thanks for joining me. We begin the day with the announcement of an impending fall in energy bills.

The Ofgem price cap will fall by £122 to £1,568 from July 1, meaning the average household electricity and gas bills will be at their lowest level since Russia’s invasion of Ukraine.

5 things to start your day

1) Life is messy, says Lynch as he fights Autonomy fraud charges | The technology tycoon could face up to 25 years in prison if found guilty

2) Western countries are gearing up for war for the first time in decades | QinetiQ boss Steve Wadey says testing and training equipment is in particularly high demand

3) Economic growth slows as Britain heads towards election | Dampening services sector activity expected to end economic ‘sweet spot’ in coming months

4) Porn and gaming blamed for surge in jobless young men | Technology fuelling ‘very worrying’ rise in mental health conditions, warns Mel Stride

5) Ben Marlow: Paula Vennells’ hollow apology epitomises a rotten culture of cover-ups | The public sector’s problem is that everyone is assumed to be acting with the best of intentions – even when they’re not

What happened overnight

Asian stocks fell as strong US economic data bolstered the prospect of interest rates staying higher for longer and the Federal Reserve taking its time in cutting rates.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1pc and was on course for a 1.5pc weekly decline, snapping its four-week winning streak. Japan’s Nikkei fell 1pc.

In America, the S&P 500 slid 0.7pc to 5,267.84, while the Dow Jones Industrial Average of 30 leading US companies finished down 1.5pc at 39,065.26. Meanwhile, the tech-rich Nasdaq Composite Index declined 0.4pc to 16,736.03.

US Treasury yields turned higher after data suggested American business activity has picked up and the labor market remains tight, supporting the Fed’s “higher for longer” interest rate narrative. The benchmark 10-year Treasury bonds reached a yield of 4.4787pc, from 4.434pc late on Wednesday.

Tokyo stocks opened lower on Friday, the benchmark Nikkei 225 index tumbling 1.50pc to 38,518.54 in early trade, while the broader Topix index slipped 1.28pc to 2,719.49.

The dollar fetched 156.95 yen, little changed from 156.93 yen in New York on Thursday.