Britain’s biggest union demands a four-day week
- Oops!Something went wrong.Please try again later.
One of Labour’s biggest backers has called on the next government to enshrine the right to a four-day work week “for all” after members backed the idea.
Unison, which represents public service workers including NHS staff and police, said delegates voted through a motion to “demand the next government takes action to ensure more employers adopt this new way of working”.
“Trade unions fought for an eight-hour day in the 19th century and a two-day weekend in the 20th. In the 21st, it is time to take the next step and win a four-day week with fair pay for all,” it added.
The motion will put pressure on Labour to consider legislating for a four-day week if, as polls suggest, it wins power in the election. Unison has donated over £8m to Labour since 2019 and is one of its biggest financial backers.
Unison’s calls for a four-day week are likely to cause alarm in some quarters. The union, which has more than 1.3m members, represents workers in many crucial public service jobs, including the NHS, police services, schools and local government.
Julian Jessop, an economics fellow at the Institute of Economic Affairs, has said: “There are some services where a four-day working week is not a realistic option.
“Doctors are already struggling to provide enough GP appointments – how can they see 25pc more patients in a day?”
Unison represents staff at South Cambridgeshire District Council, the first British council to introduce a four-day week with no loss of pay. The government has been monitoring the authority since the policy was introduced last year amid concerns it is failing taxpayers.
Christina McAnea, Unison’s general secretary, said the shift to a shorter working week was “inevitable” because of the rise in artificial intelligence, which is expected to reduce workloads. A spokesman did not comment on whether Unison staff would be moving to a shorter week.
Ms McAnea said: “What’s needed is a rethink on how workplaces are organised, as well as progressive policies that future-proof people’s livelihoods and protect their wellbeing.
“The pandemic proved that people could do their jobs from home and still be efficient. A four-day working week is the next big step.”
The Public and Commercial Services (PCS) union, the biggest union representing public sector workers, has also asked for a “significant shortening” of hours with no change to salaries.
Over 3,000 people working for 61 businesses tested out a shorter week with no loss of pay in 2022 as part of a nationwide pilot scheme aimed at transforming working life in Britain.
Researchers concluded that businesses on the trial generated 1.4pc more revenue at the end of the six-month pilot than they did at the start, while sick days dropped by 65pc. Only three businesses opted to scrap the scheme at the end of the pilot.
The boss of British challenger bank Atom this year said he has no regrets about switching to a four-day week, claiming that his business has improved on every metric since making the change.
Campaigners last year called on MPs to enshrine the right to a four-day week in law after hailing the results of the UK pilot as a “major breakthrough”.
Other countries have also been testing out the idea. Emmanuel Macron last month had to postpone a labour summit to discuss the idea because too many participants were on holiday.
A poll of 1,000 adults commissioned by the 4 Day Week Campaign found broad support for a four-day working week. 67pc of Tory voters supported the idea, 69pc of Labour voters and 74pc of Liberal Democrat voters.
A growing number of companies have been weighing up this way of working in recent months to attract more staff, with the billionaire Issa brothers trialling a four-day week at Asda earlier this year in an effort to stamp out a revolt among disgruntled store managers.
Read the latest updates below.
06:19 PM BST
Signing off...
Thanks for joining us this week on the Markets blog. We’ll be back fresh and early on Monday morning but I’ll leave you with a report from Michael Bow that a landmark North Sea oil project could be at risk:
The future of a key UK oilfield has been thrown into doubt after Angela Rayner refused to commit to backing a landmark project near the Shetland Islands.
Asked on Friday whether Labour would approve Rosebank, one of Britain’s largest untapped oil fields, Labour’s deputy leader refused to commit to the project.
It comes just a day after the future of the development was thrown into doubt following a Supreme Court ruling that emissions from burning fossil fuels must be considered when approving new drilling sites.
The landmark decision increases the odds that Rosebank will need a new assessment under a Labour government, should the party take power on July 5.
06:01 PM BST
Labour adviser sounds alarm on Keir Starmer’s City tax raid
Labour risks destroying a key investment pipeline helping to grow the UK’s next generation of $1bn businesses if it launches a tax raid on the City, one of its advisers has warned. Our economics editor Szu Ping Chan reports:
Anne Glover, chief executive of Amadeus Capital Partners, a venture capitalist firm that has invested in 190 mostly British businesses, said Sir Keir Starmer’s proposed crackdown on private equity would “change the economics [of investments] dramatically” and lead to an exodus of cash and talent in the sector.
Venture capitalists hope to back growth businesses, taking big risks to fund small companies with prospects of becoming much larger concerns.
Typically the goal is to find potential “unicorns”, which are companies with a valuation of at least $1bn.
While Ms Glover, who was one of 10 advisers Labour consulted as part of its review of financial services, said the party “absolutely” understood the importance of supporting entrepreneurs, she told the Telegraph that proposals to change the treatment of so-called carried interest would cost the Exchequer money instead of bringing it in.
05:54 PM BST
Four members of Britain’s richest family jailed for exploiting servants
Four members of Britain’s richest family have been handed prison sentences for exploiting their servants after they spent more on their pet dog than one of their employees, writes James Warrington.
A Swiss criminal court found Prakash Hinduja and his wife, son and daughter-in-law guilty of exploiting workers and providing unauthorised employment, but rejected more serious charges of human trafficking.
The defendants were sentenced to between four and four-and-a-half years in prison each. Lawyers said they would appeal.
05:44 PM BST
IPhone owners in EU to miss out AI features this year
Apple users in the EU are to miss out on the iPhone’s new artificial intelligence features this year as a result of red tape in the bloc.
The FT reported that the company was concerned about new European competition rules, which had created “uncertainties”.
The iPhone maker said:
Due to the regulatory uncertainties brought about by the Digital Markets Act, we do not believe that we will be able to roll out three of these [new] features - iPhone Mirroring, SharePlay Screen Sharing enhancements, and Apple Intelligence - to our EU users this year.
05:37 PM BST
Labour mulls British jobs for Britons rule
Labour is considering introducing rules to prioritise British jobs for British workers as part of its efforts to reduce net migration if it wins the General Election on July 4. Charles Hymas reports:
Party sources have told The Telegraph that it will “keep under review” the introduction of a requirement for companies to actively seek to recruit workers in the UK before being allowed to bring in foreign staff for skilled work.
The rules would require companies to advertise jobs to UK workers for 28 days before they can go overseas to fill the posts. If they fail to demonstrate that they have tried to recruit in the UK, they can be barred from being able to hire workers from abroad.
The requirement to try to recruit British workers was in force until 2019 when Boris Johnson scrapped the regulations as part of a shake-up of the points system for skilled workers.
The then prime minister’s changes – which also included scrapping caps on skilled workers – have been widely blamed for contributing to a surge in migrant workers which helped push net migration to a record high of 745,000 in 2022.
Stephen Kinnock, the shadow immigration minister, has made clear that he favours a rethink of the Johnson government’s decision to ditch what is known as the Resident Labour Market Test (RLMT).
05:29 PM BST
European shares drop after tech firms and banks drag it down
European shares closed lower on Friday, pressured by falls in technology and bank stocks, while Danish brewer Carlsberg Group was the day’s worst performer after British soft drinks maker Britvic rejected its revised takeover proposal.
The Europe-wide Stoxx 600 ended 0.7pc lower, with the technology sub-index losing around 1.3pc and euro zone banks sliding 1.7pc.
Carlsberg dropped 9.3pc after Britvic rejected its £3.1bn takeover bid, saying that the proposal “significantly undervalued” the group and its prospects. Britvic jumped 7.7pc.
Still, the European benchmark recorded a weekly gain of 0.8pc as the market focused on Swiss and British central bank decisions in the week, recovering from last week’s drop after French President Emmanuel Macron called a snap parliamentary election.
Axel Rudolph, senior market analyst at IG Group, said:
We are gingerly recovering, but the volatility will remain with regard to the French elections going forward until the first date of the election.
05:07 PM BST
FTSE 100 snaps five-week losing streak as inflation back to Bank of England’s target
London stocks closed the week on a positive note after domestic inflation fell to the Bank of England’s 2pc target earlier this week, raising bets of an interest rate cut in August, but a hot reading of the retail sales tempered some of that optimism.
The FTSE 100 was down 0.4pc on the day, while it logged a 1pc advance for the week and snapped a five-week losing streak.
British retail sales rose by 2.9oc in May, rebounding sharply from a revised 1.8pc decline in April. An economists’ poll had forecast sales volumes would increase by 1.5pc.
Meanwhile, British businesses are expanding at the slowest pace since the economy was in recession last year, as some companies put big decisions on hold until after July 4’s election.
Investor sentiment in Britain is gradually brightening after comments from the Bank of England on Thursday brought an August rate cut into play and inflation returned to its 2pc target for the first time in nearly three years in May.
Markets are currently pricing in a 47pc chance of a rate cut in August.
05:04 PM BST
Tech rally loses steam, leaving Wall Street adrift
The tech rally that has driven Wall Street to record highs appeared out of steam at during much of trading so far this afternoon.
Shares in AI processor manufacturer Nvidia, largely responsible for driving the equity rally, has spent this afternoon in negative territory after having tumbled 3.5pc on Thursday as profit-taking set in.
Patrick O’Hare, a market analyst at Briefing.com, said:
Nvidia’s reversal had a lot to do with the Nasdaq breaking a seven-session win streak.
It basically took the wind out of the market and became a cue for profit-taking activity in other momentum-fuelled stocks.
The tech-heavy Nasdaq Composite index, the blue-chip Dow and the S&P 500 were all marginally lower in trading.
The Nasdaq floundered in red territory before rising to a 0.3pc. The S&P has mostly been negative this afternooon, while the Down Jones is currently down 0.1pc.
04:53 PM BST
Footsie closes down
The FTSE 100 closed down 0.4pc today. The top riser was pensions company Phoenix, up 4.2pc, followed by United Utilities, up 1.6pc. The biggest faller was mining group Antofagasta, down 4.1pc, followed by medical products business ConvaTec, down 2.6pc.
Meanwhile, the mid-cap FTSE 250 fell 0.3pc. The top riser was soft drinks company Britvic, up 7.8pc, followed by investment firm Foresight Group, up 5pc. The biggest faller was Dr Martens, down 5.2pc, followed by Wizz Air, down 5pc.
04:49 PM BST
New Hargreaves Lansdown owners should ban working from home, says founder
Hargreaves Lansdown’s proposed new owners should consider scrapping working from home as part of an overhaul to sharpen the company’s focus, the group’s billionaire co-founder has said. Michael Bow reports:
Peter Hargreaves, who co-founded the business with Stephen Lansdown, said he hoped the FTSE 100 firm’s new private equity owners would encourage more people back to the office in a bid to boost efficiency at the group.
Abu Dhabi, CVC Capital and Nordic Capital are on the cusp of buying the group for £5.4bn after the board, led by Alison Platt, signalled backing for the 1140p per share approach.
Like many companies, Hargreaves Lansdown maintains flexible working patterns for its 2,000 staff to attract a wide pool of talent.
But Mr Hargreaves said this was a poor fit for a consumer facing business and senior staff needed to be closer to its Bristol headquarters. Hargreaves’ former chairwoman, Deanna Oppenheimer, split her time between Seattle and London.
“There’s a lot of working-from-home, and the help desk doesn’t work (if you are) working from home,” he said.
“If you are asked a question when you’re working from home and you don’t know the answer, you’ve got to go and find out but if you’re sitting next to (someone) who knows the answer…it’s so much more efficient.
“I hope (they get rid of working from home). You just can’t run a business like that. It’s just madness.”
04:43 PM BST
Aer Lingus cuts 124 flights amid industrial action
Up to 40,000 passengers are expected to be contacted by Aer Lingus in the coming days about flights cancelled due to pilots’ industrial action next week.
An indefinite work-to-rule by Aer Lingus pilots will begin from next Wednesday, which means they will not engage in overtime or out-of-hours duties.
The move has been branded as “insidious” by the company, which is cancelling 124 of flights over a five-day period.
Donal Moriarty, chief corporate affairs officer at Aer Lingus, said this form of industrial action “gets worse day by day” and there is a risk further cancellations will be needed.
He told RTE Radio: “What will happen over the next couple of days is that impacted passengers will be contacted and advised of cancellations if it affects them and then given their options in terms of refund, re-accommodation or voucher.”
Pilots, represented by the Irish Air Line Pilots’ Association (Ialpa), are seeking a pay increase of 24pc, which they say equates to inflation since the last pay rise in 2019.
Ialpa president Mark Tighe said the work-to-rule will see pilots working to the letter of their contracts.
04:31 PM BST
Apple unfairly sacked ‘Genius’ over Covid joke at Chinese colleague
Apple unfairly sacked a “Genius” repair worker after he made a Covid joke to a Chinese colleague, an employment tribunal has ruled. Matthew Field reports:
Timothy Jeffries was sacked in February last year after he said to a departing teammate: “See you in nine months ... as long as you lot don’t release another deadly disease on the world”.
The colleague, Ran Liu, was Chinese and the joke was taken as a reference to the origins of Covid-19 in the city of Wuhan.
However, an employment tribunal has now ruled that Apple was wrong to dismiss Mr Jeffries.
The sacked worker successfully argued that what Apple referred to as racial “banter” was common at the London shop where he worked and the iPhone-maker was wrong to claim there was a zero tolerance policy in place.
Judge Graham Hodgsen found there were “significant deficiencies” in Apple’s investigation into the incident and said the tech giant failed to properly enforce its bullying and harassment rules.
Mr Jeffries, who worked at Apple’s shop in White City, west London, was friends with Ms Liu and she did not complain about the incident.
04:15 PM BST
Mortgage costs would soar under Reform, ex-Bank of England official claims
Mortgage bills would soar if Reform won the election or if its policies were adopted by the new Government, a former member of the Monetary Policy Committee has claimed.
Martin Weale told Bloomberg:
The market would demand a moron premium and mortgages would likely go up again. This would be an event similar to the Liz Truss event.
Mr Weale is well-known for predicting that Liz Truss’s mini-budget would “end in tears”.
03:37 PM BST
Britain’s biggest union wants four-day working week
Trade unionists are urging the Government to cut the working week to four days, with the boss of Unison claiming that artificial intelligence will make this inevitable.
A motion, passed at Unison’s national conference in Brighton today, said:
The fight for decent working hours has always been at the heart of union campaigning.
Trade unions fought for an eight-hour day in the 19th century and a two-day weekend in the 20th. In the 21st, it is time to take the next step and win a four-day week with fair pay for all.
Christina McAnea, Unison General Secretary, said:
The rise of artificial intelligence could make a 4-day week inevitable. What’s needed is a rethink on how workplaces are organised, as well as progressive policies that future-proof people’s livelihoods and protect their wellbeing.
The pandemic proved that people could do their jobs from home and still be efficient. A 4-day working week is the next big step.
03:22 PM BST
Taylor Swift fans welcomed to London with Eras-inspired Tube map
Taylor Swift’s Eras tour was welcomed by a sparkling London Tube map redesigned in the singer’s honour on Friday, as the British capital eyes a claimed £300m pound windfall.
Swift is due to perform eight shows at London’s Wembley stadium, with the first today, attracting nearly 700,000 fans in total, the mayor’s office said in a statement.
Swift’s billion-dollar tour has helped local economies since its US start last year, although economists are generally sceptical that concert tours or big sporting events give more than a small boost to a country’s economy.
Transport for London published a special version of its distinctive London Underground map to mark the occasion.
“Taylor’s Version” of the map, a nod to her decision re-record some of her work after losing control of the master recordings, replaced names of train stops with her song titles, with “Westminster” renamed “Gorgeous” and “Piccadilly Circus” becoming “Wildest Dreams”.
Mr Khan’s office said Swift’s concerts would generate £300, for London’s economy - an estimate based on average tourist spending, and one which assumed almost none of the concert-goers were from the capital.
02:53 PM BST
US business activity growth accelerated to its fastest for 26 months in June
The American economy is showing greater strength this month, even though inflationary pressures are receeding, according to much-watched purchasing managers index data produced by S&P Global.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said:
The early PMI data signal the fastest economic expansion for over two years in June, hinting at an encouragingly robust end to the second quarter while at the same time inflation pressures have cooled.
The PMI is running at a level broadly consistent with the economy growing at an annualised rate of just under 2.5pc.
The upturn is broad-based, as rising demand continues to filter through the economy. Although led by the service sector, reflecting strong domestic spending, the expansion is being supported by an ongoing recovery in manufacturing, which so far this year is enjoying its best growth spell for two years ...
Selling price inflation has meanwhile cooled again after ticking higher in May, down to one of the lowest levels seen over the past four years. Historical comparisons indicate that the latest decline brings the survey’s price gauge into line with the Fed’s 2pc inflation target.
02:45 PM BST
American stocks drop ahead of new economic data
The three main stock market indexes slipped at the open this afternoon, with the markets waiting for S&P Global’s US purchasing manager index data, viewed as real-time snapshots of business confidence and economic activity.
The S&P 500 and Nasdaq Composite both dropped around 0.2pc, while the Dow Jones Industrial Average of 30 leading US companies dropped 0.1pc.
Economists polled by Reuters expect this month’s indexes to produce readings above the level of 50, which show activity is expanding, but a slight drop since last month.
Markets are currently clinging to a narrative that the economy and inflation will decelerate just enough for the Fed to ease financial conditions gradually.
But that ignores risks such as the lagged effects of tight monetary policy causing a hard slowdown, or further economic growth keeping rates high for longer, said Russell Investments global head of investment strategy Andrew Pease.
02:37 PM BST
Tata Steel workers in Britain to begin indefinite strike next month
Around 1,500 Tata Steel workers in Britain will begin an indefinite strike from July 8 over the company’s plans to close two blast furnaces and cut up to 2,800 jobs, the trade union Unite said on Friday.
The strike action, described by Unite as the first strikes by British steel workers in 40 years, will take place at Tata’s Port Talbot and Llanwern sites in Wales.
The closures were announced in January as part of the Indian company’s plan to turn around its loss-making UK business by switching to lower carbon electric arc furnaces, a proposal backed by £500m of government money.
Sharon Graham, Unite General Secretary, said:
Tata’s workers are not just fighting for their jobs - they are fighting for the future of their communities and the future of steel in Wales.
A Tata Steel spokesman said:
We are extremely disappointed by Unite’s unilateral decision to call strike action.
Our existing steelmaking assets are near the end of their life, are operationally unstable and causing unsustainable losses of £1m a day. This is why preparations to close the blast furnaces and associated plants in Port Talbot are unchanged.
However, if the safety and stability of our operations are put at risk by this action, we will be forced to accelerate those closure plans.
After extensive negotiations with our unions we substantially improved our support offering for affected employees – the most generous package in our history. Rather than taking strike action, we would have expected Unite to put our improved offer to its members, as previously accepted by all unions, including Unite.
Tata Steel employs more than 8,000 people in the UK. The company said in January about about 2,500 jobs of the total being cut were likely to go over the next 18 months.
02:26 PM BST
US stocks could be about to ‘cool off a bit’, warns analyst
Wall Street’s bumper gains since the final leg of 2023 have been primarily driven by the likes of Nvidia and a handful of other heavily weighted stocks linked to artificial intelligence. Analysts, however, have flagged whether the strong increase in their valuations is sustainable.
Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, said:
The largest companies in the S&P 500 are excellent, very profitable and growing quickly ... but they are getting a little bit expensive.
We wouldn’t be surprised if the market takes a breather and cools off a bit in the short term.
Investors are also assessing a string of weakening economic data and commentary from US Federal Reserve officials that interest rates could remain higher for longer if there is no consistent improvement in inflation numbers.
02:21 PM BST
French Left-wing alliance pledges to offset spending surge with tax
France’s newly formed New Popular Front will progressively lift annual public spending to €150bn (£127bn) more than now, but will offset the increase with tax increases, alliance officials said on Friday.
The Left-wing alliance of parties has said that, if elected in a snap two-round parliamentary election on June 30 and July 7, its first measures would include reversing president Emmanuel Macron’s pension reforms and scrapping a 2023 rise in the retirement age to 64 from 62.
It also aims to raise public sector wages 10pc immediately and to boost housing subsidies by 10pc, while making school lunches, supplies and transport free.
The extra spending this year would be offset by a tax on companies’ super-profits generating €15bn. Restoring a wealth tax on the rich was expected to also yield €15bn.
A second raft of measures next year would include a wave of teacher and healthcare hires and spending on building renovations and renewable energy.
“In the year of 2025, public spending could reach 100 billion euros,” senior alliance member Eric Coquerel told reporters, adding that tax increases would cover the increase and rise to €150bn in 2026-2027 to offset further spending increases.
Paris is already under pressure to reduce its public sector budget deficit after the European Commission, the European Union’s executive body, recommended on Wednesday that France face disciplinary steps for running a public sector budget deficit in excess of an EU limit of 3pc of economic output.
02:14 PM BST
Kremlin says US decision to ban Kaspersky software infringes on competitors
The Kremlin has said that a US decision to ban Kaspersky’s antivirus software was a typical move by Washington to damage a company that competes with American ones.
Kaspersky Lab is a company that is “very competitive” in international markets, Peskov said, responding to the US move which was based on an assessment that Kaspersky’s software could cause security risks.
The Biden administration yesterday announced plans to bar the sale of antivirus software made by Kaspersky Lab in the US, with Commerce Secretary Gina Raimondo saying that Russia’s influence over the company poses a significant security risk.
The software’s privileged access to a computer’s systems could allow it to steal sensitive information from American computers or install malware and withhold critical updates, enhancing the threat, a source said, noting that Kaspersky’s customers include critical infrastructure providers and state and local governments.
Kaspersky told Reuters that it believed the US decision was based on “the present geopolitical climate and theoretical concerns, rather than on a comprehensive evaluation of the integrity of Kaspersky’s products and services.”
Kaspersky added that its activities did not threaten US national security.
01:54 PM BST
EU to open membership talks with Ukraine
The European Union has formally agreed to open negotiations with Ukraine and Moldova about membership of the trade bloc.
EU member states cleared the final hurdle today, meaning formal accession discussions can begin on June 25 in Luxembourg.
It is a first step in a process expected to take years, but will nevertheless be seen as symbolically important.
Ukraine officially applied to join the EU less than a week after Russia invaded in February 2022.
01:46 PM BST
Macron’s approval rating falls to historic low ahead of elections
Emmanuel Macron’s approval rating has fallen to a historic low, with just over a week before voting starts in France’s snap parliamentary elections.
The percentage of survey respondents who think the French president is doing a good job fell six points to 26pc, according to BVA Xsight.
At the same time, 74pc had a negative view of the president.
According to French broadcaster RTL, his popularity has never been this low.
It comes as his party is languishing in third place behind Marine Le Pen’s right-leaning National Rally and the left-wing New Popular Front, ahead of parliamentary elections on June 30 and July 7.
This morning, economic activity data showed businesses in France were holding back investment due to uncertainty surrounding the snap poll.
01:27 PM BST
StanChart to set up crypto desk
Standard Chartered is setting up a trading desk for Bitcoin and Ether, making it one of the first global banks to enter spot cryptocurrency trading.
Bloomberg has the story:
The new crypto desk is close to starting operations and will be part of the bank’s FX trading unit, two people said, asking not to be named discussing private information. It will be run from London, according to one person.
Banks including Goldman Sachs Group Inc. have been trading cryptocurrency derivatives for years, but strict regulations have kept them from dealing directly in the underlying assets. The Basel Committee on Banking Supervision has proposed that banks must apply a 1,250pc risk weighting to any unhedged crypto exposure, making it difficult to generate profits.
“We have been working closely with our regulators to support demand from our institutional clients to trade Bitcoin and Ethereum, in line with our strategy to support clients across the wider digital asset ecosystem, from access and custody to tokenization and interoperability,” the bank said in an emailed statement.
A Standard Chartered spokesperson declined to comment further.
01:23 PM BST
EU signs off on €3bn hydrogen pipeline project
The European Commission has signed off on €3bn (£2.5bn) of support for a system of hydrogen pipelines in Germany known as the Hydrogen Core Network (HCN).
Berlin is poised to give financial guarantees to allow companies that build and run the €20bn network to obtain loans that will cover their initial losses as they ramp up construction from 2025.
The country’s coalition backed the scheme in April and extended the construction deadline by five years to 2037, also offering protection for investors in case of bankruptcy, according to Reuters.
Many countries are looking to hydrogen, which can be generated from wind and solar power for a more storable form of green energy, to help them reach net-zero greenhouse gas emissions.
Hydrogen is widely viewed as the only practicable carbon-free energy source for many processes in heavy industry, including the steel, chemicals, refining, glass and ceramics sectors.
11:45 AM BST
Alexa, how much is this going to cost?
Amazon is considering charging customers a monthly fee of $5 for a premium version of its Alexa voice assistant, it has been claimed.
The American tech giant is considering a revamp of the loss-making service which could include introducing different tiers, according to Reuters.
That could include a charge of $5 per month for access to a “superior version” that insiders at the company are said to have dubbed “Remarkable Alexa”.
The service, delivered via the Echo line of smart speakers, was a pet project of Amazon founder Jeff Bezos and allows users to ask questions such as “what’s the weather like?”
However, under current chief executive Andy Jassy the teams working on Alexa have been trimmed back.
11:25 AM BST
Octopus Energy ‘on track’ to repay £3bn to UK government following Bulb rescue
Octopus Energy is on course to repay the UK Government £3bn related to its rescue of collapsed supplier Bulb by September, the company has confirmed.
Bulb was placed into special administration in November 2021 and bought out by Octopus in October the following year, in a deal that saw the Government provide Octopus with billions of pounds of state support.
However, the company on Friday said it was on course to repay everything it owed, leaving the taxpayer with just £6m of costs related to the Bulb saga - largely related to its administration while in public hands.
Greg Jackson, chief executive of Octopus, says:
This outcome is a great result for taxpayers. Octopus worked hard in the darkest depths of the energy crisis to create a fair deal, meaning that although Bulb went bust with billions of liabilities, it has cost the government almost nothing.
It comes after the company fought off a legal challenge to its takeover of Bulb, when rivals including British Gas claimed Octopus had been given a sweetheart deal.
10:33 AM BST
US defence giant Lockheed Martin sanctioned over Taiwan sales
Lockheed Martin and top executives at the American defence company have been hit with Chinese sanctions over US arms sales to Taiwan.
According to China’s foreign ministry, Beijing is freezing movable, immovable and other kinds of property of Lockheed Martin’s senior executives including its chairman James Donald Taiclet and will bar them from entering the country.
It has previously targeted Lockheed over deals with Taiwan, which China’s communist government regards as a rogue province that must reunify with the mainland.
Among the pieces of kit the island nation has bought are the C-130 Hercules military transport aircraft, pictured.
10:19 AM BST
China warns EU electric car tariffs risk trade war
China’s commerce ministry has warned the European Union that its actions “may trigger a trade war” after Brussels threatened to hit the country’s electric car makers with tariffs.
In a statement on Friday, a ministry spokesman accused Brussels of ratcheting up trade tensions and claimed: “Responsibility lies entirely with the EU side.”
Earlier this month, the European Commission announced it was hitting Chinese electric vehicle (EV) manufacturers with extra duties of up to 38pc after concluding that they had benefitted from massive subsidies at home.
The move has prompted Chinese businesses to urge Beijing to hit back with tariffs on imported European cars, a move that could particularly hurt German companies.
Robert Habeck, the German vice chancellor and economy minister (pictured above), is about to visit China but has insisted he cannot mediate between Brussels and Beijing.
“There is no chance of the conflict being resolved in China,” he told journalists. “I can’t negotiate for the EU.”
10:01 AM BST
UK stocks ‘steady’ amid sobering public finance numbers
Following this morning’s retail and public finance figures, the UK’s FTSE 100 is looking a bit lacklustre today.
The blue chip stock index is 0.3pc in the red, while the FTSE 250 index of mid-sized companies is 0.2pc down.
Russ Mould, investment director at AJ Bell, says:
The FTSE 100 was steady in early trading after buoyant UK retail sales but more sobering news about the state of the public finances.
The last time net debt represented the same proportion of GDP revealed today was when the Beatles had yet to enjoy a number one single, TV was in black and white and the country was still paying off debts accumulated during the Second World War.
It shows the difficult task facing whoever occupies Number 10 after next month’s election.
09:49 AM BST
Russian oil refineries targeted in drone attack
At least two Russian oil refineries were attacked overnight by a swam of drones, in one of the largest strikes yet since the outbreak of the Ukraine war.
Some 70 drones were intercepted or destroyed over Crimea and the Black Sea and 43 over the Krasnodar region, the Russian Defense Ministry said on Telegram, according to Bloomberg.
Moscow did not say how many took part in the attack overall.
The Afipsky and Ilsky refineries in the Krasnodar region, were among those damaged, it was reported.
It comes just days after a separate Ukrainian drone strike on an oil reservoir in Azov district of the Rostov-on-Don region (pictured).
The price of crude oil is currently hovering at around $81 per barrel, having ticked up by around 3pc this week.
09:41 AM BST
German manufacturing “hits a wall”
Economic activity rose in Germany this month but growth has slowed to “only a marginal pace” amid a big drop in manufacturing output.
The purchasing managers’ index (PMI) published by S&P Global this morning warns that German output has hit a two-month low.
In particular, manufacturing output contracted and growth in services slowed, with new orders “plummeting”.
Dr Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said:
What a sharp dip at the end of the second quarter.
After showing some promising signs of bouncing back, the manufacturing sector hit a wall and started moving in the opposite direction in June.
The production slump is pretty sobering, but what’s even more concerning is that new orders are plummeting at a much faster rate. Last month’s numbers were already troubling, but June’s figures paint an even grimmer picture.
08:50 AM BST
French economy ‘stalling’ amid Macron’s election turmoil
The French economy is “stalling” as uncertainty caused by a snap election paralyses business investment, new data suggests.
Activity in both services and manufacturing has fallen this month, in a blow to the euro-area’s second biggest economy, according to the latest purchasing managers’ index (PMI) published by S&P Global.
Norman Liebke, an economist at Hamburg Commercial Bank, said businesses were pointing to the snap election called by French president Emmanuel Macron as one reason for the slowdown.
He said: “The uncertainty of the upcoming elections has French businesses stalling and fearing tougher times.”
This was seen in new orders in services, he added, which fell for the first time in three months, while predictions for future output also became weaker.
The PMI index, with any number above 50 suggesting growth and below indicating contraction, came in at 48.8 in June, down from 49.3 in May and the lowest figure for three months.
Meanwhile, the number for manufacturing output fell from 46.9 to 45.3 - a five-month low.
President Macron stunned France earlier this month when he announced snap parliamentary elections for June 30 and July 7, following a strong performance by right-leaning parties in EU elections.
08:25 AM BST
Britvic rejects takeover bids from Carlsberg
Britvic has revealed it rejected two takeover proposals from Danish brewing giant Carlsberg.
The soft drinks maker behind Robinsons squash and J2O said it received proposals from Carlsberg for the business on June 6 and June 11.
The first bid valued to the company at 1,200p per share and was rejected.
Just under a week later, a second from Carlsberg offered 1,250 per share - valuing the company at about £3.1bn.
Britvic said the board concluded the approach “significantly undervalues Britvic and its current and future prospects” and rejected the move days later.
08:18 AM BST
European solar power boom ‘eating itself’
Europe has clocked a record number of hours of negative power prices this year due to a mismatch between demand and supply as solar power generation soars.
Wholesale power markets in most of Europe’s key economies turned out zero or negative prices for a record number of hours in the first five months of this year at times of low demand.
Reuters has the report:
That means operators have to more frequently pay to offload power, or otherwise stop generating.
“One could certainly say that, at this point, success is consuming its own offspring,” Markus Hagel, energy policy expert at German utility Trianel, told Reuters.
Strong hydro and nuclear power generation has played some part in the oversupply, but Europe has also seen a massive expansion of solar power.
08:12 AM BST
Inheritance tax take rises to £1.4bn - in just two months
Inheritance tax receipts for the first two months of the financial year have jumped £200m higher, amid fears Labour could hike the duty even higher if it wins power.
Income from the tax totalled £1.4bn in April and May, according to analysis of HM Revenue & Customs figures by Wealth Club.
Upon death, inheritance tax is charged at 40pc on the value of the estate above the tax-free threshold of £325,000.
There are fears Sir Keir Starmer’s Labour could raise the duty further, after a dossier drawn up by some of the party’s MPs called for it to go up. (Labour has insisted this is “nothing to do with” its official plans.)
The rising take from inheritance tax continues a long-running trend, after £7.5bn was raised in 2023/24.
Nicholas Hyett, investment manager at Wealth Club, said:
Inheritance tax is a hot topic this election. Labour are targeting non-doms who shelter their money abroad and the Conservatives have accused Labour of harbouring secret plans to go further – with inheritance tax notably absent from the list of taxes in the Labour manifesto that will not be increased.
Meanwhile Reform have promised generous inheritance tax cuts as it looks to win over voters.
The reality is that inheritance tax would likely rise under either of the two main parties. Freezes on thresholds over the last few years, partnered with decades of house price rises have brought more and more estates into the tax band. Attempts to increase taxes on wealthy non-doms may be politically popular, but most of the tab will still be picked up by families who would not consider themselves particularly rich.
07:51 AM BST
‘Tide could finally be turning for retailers’
Retail sales jumped 2.9pc in May as shoppers returned to the high street with a vengeance after a depressed wet April, reports Tim Wallace, our Deputy Economics Editor.
Clothes sales particularly drove the monthly improvement, with sales up 5.4pc.
Compared with May of last year, sales rose 1.3pc, the Office for National Statistics said, marking the strongest annual increase since early 2022.
Oliver Vernon-Harcourt, head of retail at Deloitte, said: “The tide could be finally turning for retailers, with more consumers releasing their purse strings and spending on discretionary items such as clothing and furniture.”
“The summer of sport has kicked off, and with warmer days upon us, the retail sector will be hoping to see spending momentum continue,” he said.
“Consumers are feeling more confident about their disposable income, but the next step for retail recovery will be seeing this translate into sustained levels of spending.”
Tom Youldon, a partner at consulting firm McKinsey, says there will now be hopes the bounceback continues and shoppers don’t switch “from saving to splurging”:
As we head into warmer months, retailers will be hopeful that falling inflation and rising wages will act as a further boost to GfK’s measure of consumer confidence.
And that a combination of drier, sunnier weather, big sporting events like UEFA Euro 2024 and summer holiday purchases encourage greater spending at the tills.
07:43 AM BST
Government borrowed £15bn in May, figures show
Rishi Sunak’s Government borrowed another £15bn in May, as a rise in tax receipts was not enough to cover the surge in the benefits bill, reports Tim Wallace, our Deputy Economics Editor.
The monthly budget deficit was up by £0.8bn compared with May of last year, according to the Office for National Statistics.
It takes the national debt to £2.7 trillion, or an estimated 99.8pc of GDP.
Taxes brought in £76.8bn for central government, up by £1bn on the year, despite the two cuts to the headline rate of employees’ national insurance. Income tax, VAT and corporation tax all raked in more cash for the Exchequer.
But central government spending increased by £2.8bn to £91.6bn for the month.
Although support for energy bills was down, there was also a £2.2bn increase in spending on benefits, which the ONS said was largely caused by the spring increase in line with inflation.
The Government also spent £8bn on debt interest.
The next Government faces tough choices on taxes and spending as the finances are already close to the borrowing targets set by the Chancellor.
07:40 AM BST
‘Retail sales a relief, but picture isn’t rosy’
Commenting on the retail sales numbers, Lisa Hooker, a consumer markets expert at consulting giant PwC, says:
After April’s rainfall put a dampener on the previous month’s results, there will have been relief that retail sales recovered somewhat in May.
However, in line with other industry reports, the picture is less rosy compared with May 2023. With an extra trading day in 2024 compared to 2023, when there was an additional Bank Holiday for the King’s Coronation - and the first full month benefit of higher National Living Wage and lower National Insurance - we would have expected a larger improvement in sales volumes.
With improving weather and the start of a summer of sport in June, retailers will be hoping that May’s recovery sustains during the coming months, and finally sees year-on-year growth turn into positive territory.
Hooker points out that grocery sales actually volumes declined by -1.2pc after inflation is taken into account, with non-food sales growing by just 1.5pc.
Rainfall in May - despite a record average temperature, according to the Met Office - may also have driven more shoppers online, she says.
07:32 AM BST
Sales in shops rose across the board
A little more detail on this morning’s retail sales numbers.
They are up across the board, according to the Office for National Statistics.
Non-store retailing (mostly online shops, plus stalls and markets) saw the biggest increase, with sales rising 5.9pc in May, compared to the same month a year earlier.
That was followed by a 5.4pc increase for textile, clothing and footwear stores, 3.5pc for household good stores, 3pc for other non-food stores, 2.8pc for fuel sales, 1.7pc for department stores and 1.2pc for food stores.
Within online, textile and clothing sales was the best performer with a rise of 9.8pc.
Sales figures for April were also revised by the ONS, from a previously-reported 2.3pc fall to a 1.8pc fall.
On May’s figures, the ONS said: “Sales volumes rose across most sectors, with clothing retailers and furniture stores rebounding following poor weather in April.”
07:21 AM BST
Good morning
Retail sales in the UK have risen at their fastest pace since January as hotter weather and bank holidays tempted shoppers out to the high street.
The number of goods sold online and in shops rose 2.9pc in May, according to the Office for National Statistics.
That was better than most economists expected, beating the 1.8pc rise they predicted on average.
It comes after separate figures showed consumer confidence is also rising and inflation is falling back to normal levels.
Experts said the surge in retail sales was partly a result of the two bank holidays in May.
5 things to start your day
1) Households brace for £600 council tax rises and service cuts – whoever wins election | Increasing rates by the maximum allowed will be insufficient, think tank warns
2) Sir Jim Ratcliffe attacks Labour plans days after backing Starmer | Party’s energy policy will tax North Sea ‘out of existence’, says Manchester United co-owner
3) How the City was strangled by red tape | Labour vows to slash costs for financial sector after overzealous regulation dilutes rewards for entrepreneurs
4) North Sea oil drilling threatened by landmark Supreme Court ruling | Emissions from fossil fuels must now be considered when approving new projects
5) Black market for weight-loss drugs risks ‘tragedy’ | Pharmacists warn that unregulated access and lax online checks encourage dangerous misuse
What happened overnight
US markets opened again yesterday after a public holiday on Wednesday. The Dow rose 0.8pc to close at 39,134.96, the S&P 500 lost 0.3pc, closing at 5,473.22, while the Nasdaq Composite lost 0.8pc to close at 17,721.59.
The yield on benchmark 10-year US Treasury bonds climbed to 4.25pc from 4.22pc late on Tuesday.
In Asia on Thursday morning, equity benchmarks ticked higher in Japan and Australia, while Korean shares fell. A 1pc drop in the Golden Dragon index of US-listed Chinese companies weighed on sentiment.
US stock futures were steady in early Asian trading. The S&P 500 briefly topped 5,500 on Thursday before losing traction, while the high-flying tech group powering the bull run came under pressure. The Nasdaq 100 slipped after a seven-day advance with Nvidia and Apple leading losses in megacaps.
The yen held steady in early Friday trading after its longest losing streak since March put traders on alert for potential intervention. a
Japan’s top currency official Masato Kanda said that there’s no change in his stance to take appropriate measures if there are excessive currency moves.
