Closing summary: Sterling slides as US dollar regains ground
The tale of the pound’s tricky month is of course the other side of dollar strength – something of a turnaround after a period of notable falls in the value of the greenback.
The dollar had declined as investors questioned the attractiveness of US assets under Donald Trump when he was committed to trade wars. Trump has gone ahead with tariffs on most of the US’s imports, but he has not quite followed through with the worst of his threats in recent weeks.
Allied to that, the US Federal Reserve has signalled that it is cautious about cutting interest rates, as it is worried about the inflationary pressure coming from tariffs. That has made the dollar relatively more attractive.
Jonas Goltermann, deputy chief markets economist at Capital Economics, a consultancy, said:
Judging by yesterday’s policy announcement and Chair Powell’s press conference remarks, the FOMC doesn’t look to be in a hurry to change its policy stance. That points to somewhat higher Treasury yields and a flatter yield curve. It also supports our view that the dollar will continue to rebound.
Victoria Scholar, head of investment, interactive investor, an investment platform said:
The first half of the year was characterised by a clear uptrend for cable (GBP/USD) but since the start of July, that trade has reversed course with significant sterling selling and dollar buying. Over the past month, the pound has lost about 3.75% against the US dollar.
In other business news today:
The technical failure that led to hundreds of flights being cancelled or delayed on Wednesday was an “isolated event” with “no evidence of malign activity”, the transport secretary has said, after summoning the head of the UK air traffic control service, Nats, to account for the disruption.
Microsoft has become the second publicly traded company to reach a $4 trillion market value, after it last night published a bumper set of financial results fuelled by the AI boom.
Standard Chartered chief executive Bill Winters said “Shame on them” of rival banks who have dropped their climate commitments amid mounting political pressure.
US Treasury Secretary Scott Bessent has declared that the US and China have made good progress towards agreeing a trade pact.
The Scottish government has granted permission for the world’s biggest offshore wind farm, 38km off the nation’s east coast.
You can continue to follow our live coverage from around the world:
Thank you for reading as ever. Please do join Graeme Wearden tomorrow to round out the business week. JJ
Phillip Inman, the Guardian’s senior economics writer, was at the launch of the UK government’s small business strategy in Swindon this morning, where Keir Starmer and business secretary Jonathan Reynolds said they would bring in legislation to tackle late payments by large firms.
The pledge of new laws giving extra powers to a small business commissioner was welcomed by the Federation of Small Businesses.
FSB boss Tina McKenzie said she was especially pleased by proposed rules that will force companies to publish a payment policy. The new rules would also impose interest charges automatically on those companies that delay payments by more than 45 days.
The event, also attended by transport secretary Heidi Alexander, brought together a range of businesses from Swindon. Starmer said:
We said to them, all the challenges you face, all the inhibitors, this is a plan to deal with them.
Large business lobby groups are expected to push back against rules forcing their audit committees to design a late payment policy that stays within a new 45-day limit. Interest payments on invoices that are left lying around are also likely to upset large businesses.
Big companies are those with 250 employees or more
Updated
Microsoft hits $4 trillion market value
Microsoft has become the second publicly traded company to reach a $4 trillion market value, after it last night published a bumper set of financial results fuelled by the AI boom.
The US technology company’s share price rose by 6% at the start of trading on Thursday, taking it past the $4 trillion mark. Chip company Nvidia was the first to reach the milestone earlier this month.
Microsoft had reported a huge programme of investment in artificial intelligence, plus huge sales in the Azure cloud business (whatever UK regulators might think about that).
Dan Ives, an analyst at Wedbush Securities, an investment bank, who is extremely bullish about the prospects for AI companies, said:
The poster children for the AI revolution are led by Nvidia and Microsoft as both are foundational pieces of building on the biggest tech trend we have seen in our 25 years covering tech stocks on the Street.
Updated
US core inflation rose in June, according to Fed's favourite measure
US core inflation rose in June, according to figures that are closely watched by the Federal Reserve – and that will likely bolster its determination to resist intense pressure from Donald Trump to lower interest rates.
The core personal consumption expenditures (PCE) index rose by 0.3% month-on-month in June, up from 0.2% in May, according to the US Bureau of Economic Analysis.
The core PCE reading was in line with economists’ expectations, but it adds to evidence of inflationary pressure in the US economy. That is exactly the sort of thing that Jerome Powell, the Federal Reserve’s chair, is watching out for.
Powell last night said that Trump’s tariffs will likely result in higher prices. He was announcing an interest rate hold by the Fed, despite Trump’s wishes. Powell said:
Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen.
Updated
Scott Bessent also told CNBC on Thursday that he is pulling together a list of potential candidates to lead the US Federal Reserve and that he expects an announcement by the end of the year.
Bessent insisted:
“We are putting together a very good list of candidates.”
Donald Trump’s eagerness to replace current Fed chair Jerome Powell may have increased since the Fed left interest rates on hold last night.
Powell’s term expires next May.
Update: Trump has lashed out (again) at Powell, posting on Truth Social:
Jerome “Too Late” Powell has done it again!!! He is TOO LATE, and actually, TOO ANGRY, TOO STUPID, & TOO POLITICAL, to have the job of Fed Chair. He is costing our Country TRILLIONS OF DOLLARS, in addition to one of the most incompetent, or corrupt, renovations of a building(s) in the history of construction! Put another way,“Too Late” is a TOTAL LOSER, and our Country is paying the price!
Updated
EU exports of wines and spirits will face a 15% tariff from tomorrow after an exemption failed to be agreed ahead of 1 August, Donald Trump’s deadline for trade deals.
The move is a setback for wine makers in France, Spain and Italy and elsewhere along with the Irish whiskey sector which relies heavily on the US for sales.
European Commission officials said they are continuing to negotiate carve outs for wine and spirits and for steel but talks were ongoing.
Trade spokesperson Olof Gill said":
“The Commission remains determined to achieve and secure the maximum carve outs, including for traditional EU products such as wine and spirits. It is not our expectation that wine and spirits will be included in the first group announced by the US tomorrow, therefore those products will be captured by the 15 per cent ceiling.”
The deal between Washington and Brussels agreed a ceiling of 15% tariff for most EU imports with some exemptions in both directions including aviation and aircraft parts and some non-sensitive agricultural produce such as nuts and petfood.
“EU and US negotiators are as agreed, working to finalise the joint statement, building on the agreement reached. We will communicate more precise timings to you when these are known in the event more time is required to finalise the joint statement beyond August 1,” said Gill.
With negotiations on the detailed list of exemptions ongoing, doubts have been raised that the expected joint statement will not be signed off ahead of tomorrow’s deadline. The EU however expects the US to press ahead with its side of the deal, likely to be through an executive order, given it has already published the headline deal.
He added:
“It is the clear understanding of the European Union that the US will implement the agreed across -the-board tariff ceiling of 15%. It is also our clear understanding that the US will implement the exemptions to the 15% ceiling, as outlined by President von der Leyen last Sunday.”
Gill pointed out that the joint statement is not a legally binding text and more of a “roadmap”.
The car sector is the most immediate beneficiary as it was facing import duties of 27.5%. But pharmaceuticals had been rated at zero tax under a long standing World Trade Organization agreement centred on keep costs of medicines down globally.
'Shame on them': bank boss on rivals ditching climate commitments
Standard Chartered chief executive Bill Winters has condemned rival banks who have dropped their climate commitments amid mounting political pressure.
Winters told journalists on Thursday that many people were jumping on the climate bandwagon when it was “fashionable” but have since retreated:
Shame on them.
It comes weeks after HSBC became the first UK bank to leave the global banking industry’s Net Zero Banking Alliance, in a fresh blow to international climate coordination efforts. HSBC’s decision followed a wave of exits by big US banks in the run-up to Donald Trump’s inauguration in January, with the US president’s second term sparking a climate backlash as he pushed for higher production of oil and gas.
HSBC had been one of the NZBA’s founding members in 2021, with its former chief executive Noel Quinn saying that the time that “Industry-wide collaboration is essential” to monitoring progress” towards net zero carbon-emission targets.
When asked on Thursday what he thought of rivals backtracking on their commitments globally, Winters said:
People that said a lot of stuff, but it was fashionable to say it, who are saying either nothing or the opposite now: shame on them.
Winters said that most of StanChart’s own clients, from across China, India, wider Asia and the Middle East, were: “as focused on their net zero transitions, or their transitions to low carbon economy as they were before. And that obviously is good for business.”
He added:
A lot of these projects just makes sense economically, and many corporations continue, I say most, continue to honour the obligations that they made to their shareholders or other stakeholders early on. Independent of political noise one way or the other.
Treasury Secretary Bessent : ‘we have the makings of a deal’ with China
US Treasury Secretary Scott Bessent has declared that the US and China have made good progress towards agreeing a trade pact.
Speaking to CNBC today, Bessent says:
“I believe that we have the makings of a deal.
There’s still a few technical details to be worked out on the Chinese side between us. I’m confident that it will be done, but it’s not 100% done.”
Bessent did not provide any details on what a final deal with China would look like, adding:
“The Chinese are tough negotiators. We’re tough, too.”
The US and China have until August 12 to come to an agreement. Under their curent truce, the US imposes a 30% tariff on Chinese imports, while Beijing charges a 10% levy on goods from America.
Treasury Secretary Bessent says 'we have the makings of a deal' with China https://t.co/8s6Vf1ZxA2
— CNBC (@CNBC) July 31, 2025
Updated
Pound on track for wost month in nearly two years
July has been a bruising month for the British pound.
Sterling has fallen by 3.6% against the US dollar in the last month, its worst performance since September 2023 when it lost 3.7%.
It’s nearly as bad as the 4% tumble in September 2022, when panic over Liz Truss’s mini-budget send sterling sliding to a brief record low against the dollar.
The US dollar has been rallying through July (after its worth first half to a year since 1973), helped by optimism after Donald Trump secured a few trade deals ahead of tomorrow’s deadline. Economic data has suggested the US economy is holding up well, which led the Federal Reserve to leave interest rates on hold last night.
The Bank of England, in contrast, is expected to cut UK interest rates next week to 4%, from 4.25% at present.
The pound has also lost a little ground against the euro this month, down 0.7% against the single currency to around €1.156.
Analysts at Oxford Economics say they see sterling “trading lower”, telling clients:
Fiscal concerns will remain in the foreground, undermining the ability of relatively elevated rates to sustain the pound.
UK regulators warn over car finance claims management companies
With a legal ruling on the car finance scandal looming, regulators have today fired a sizeable warning shot at claims management companies and law firms over “poor practices” that risk leaving people misled or out of pocket.
This is a boom time for firms offering to help people make a claim for car finance compensation in return for a cut of any proceeds – but the Financial Conduct Authority (FCA) and the Solicitors Regulation Authority (SRA) said they were becoming increasingly concerned about the conduct of some of the firms touting for business.
They have taken action against scores of firms already.
Adverts claiming consumers could be entitled to thousands of pounds in compensation and urging them to act now are all over the internet and people’s social media feeds.
With a major supreme court judgment due tomorrow (Friday) at 4.35pm, and the possibility of a free FCA compensation scheme being introduced, the regulators said they were stepping in to protect consumers and warn firms they must comply with the rules on how motor finance claims should be handled.
This scandal has been rumbling on for some time and involves the alleged large-scale mis-selling of car loans and the payment of secret commissions to car dealers, resulting in millions of new and second-hand vehicle buyers unknowingly paying more for their finance than they should have.
A court of appeal ruling last autumn sent shockwaves through the financial sector as it suggested that anyone with any type of car finance which included commission that was not properly disclosed could potentially be owed redress. It has been said that the scandal could result in a £44bn bill for lenders.
The supreme court will give its verdict tomorrow, and the FCA has said that if, following the judgment, it concludes that consumers have lost out, it is likely it will consult on an industry-wide consumer compensation scheme.
Over the last year the FCA has required 224 motor finance commission promotions to be amended or withdrawn, while the SRA currently has 89 live investigations into 73 law firms, linked to potential breaches of its rules.
The issues identified include:
Some firms are failing to tell clients about free alternatives before signing them up.
Marketing materials that are making bold, and sometimes misleading, claims about the size of potential payouts.
Fee structures that in some cases could strip up to 30% from any redress a consumer receives.
Paul Philip, chief executive of the SRA, said
We are very concerned about some of the practices we are seeing… Where we find cases where firms are not acting in the best interest of their clients, we will investigate and take action.
Canada's Brookfield to buy out British insurer Just Group for £2.4bn
On the FTSE 250 mid-cap index, there is one standout share price mover: insurer Just Group has soared by 68% in Thursday’s trading.
That is because the trillion-dollar Canadian investment group Brookfield has agreed a £2.4bn deal to buy it – yet another example of a North American take-out of a big British-listed company.
Brookfield said it would combine Just Group with its own insurance company, Blumont, to “create a leader in the UK annuity and life insurance space”. The Just brand will remain in place.
Just Directors, who were advised by bankers at Evercore and J.P. Morgan Cazenove, unanimously recommended shareholders accept the offer.
John Hastings-Bass, chair of Just, said:
The Just board is pleased to recommend the acquisition by BWS, which delivers certain value for shareholders at an attractive cash premium. The acquisition reflects the strength of Just’s business and the significant financial and strategic progress the Just management team, led by David Richardson, has delivered in recent years.
The Just board also welcomes BWS’s strategic plans for Just, which it believes will benefit existing and future customers, Just employees and the UK economy through investment in important productive assets.
Microsoft 'reducing competition' for cloud services in UK
Microsoft’s software licences are reducing competition in the UK cloud services market, according to an investigation commissioned by competition authorities.
The investigation by a panel for the UK’s Competition and Markets Authority (CMA) said that the UK should designate Microsoft and Amazon’s cloud services as having strategic market status, which would allow the regulator to impose conditions on their operation in Britain.
A huge range of businesses and the government rely heavily on cloud service providers such as Microsoft’s Azure, Amazon Web Services and Google Cloud to host their website and data storage remotely, rather than having to set up their own data centres.
However, the CMA launched an investigation into the sector in 2023, and the panel found that the UK cloud services market is “not working well”, in part because:
“Microsoft has significant market power in relation to several software products because customers are unable or unwilling to switch away from them and Microsoft has moderate to high market shares in respect of each of them.
Microsoft is able to harm Amazon and Google’s business through limits placed on customers who use its services, the panel said. The inquiry found:
Microsoft’s licensing practices have the effect of reducing competition in cloud services markets by adversely impacting the competitiveness of AWS and Google in the supply of cloud services, particularly in competing for customers that purchase cloud services which use the relevant Microsoft software as an input.
Reuters reported that a Microsoft spokesperson said the report “misses the mark again, ignoring that the cloud market has never been so dynamic and competitive, with record investment, and rapid, AI-driven changes. Its recommendations fail to cover Google, one of the fastest-growing cloud market participants.”
Amazon also said “clear evidence of robust competition” had been disregarded.
But Google said the conclusive finding that restrictive licensing harmed cloud customers and competition was a “watershed moment”. “Swift action from the DMU is essential to ensure British businesses pay a fair price and to unleash choice, innovation and economic growth in the UK,” said Chris Lindsay, Google Cloud’s vice president for customer engineering EMEA.
The UK may be ploughing ahead with offshore wind, but across the Atlantic things have rarely been less auspicious for the industry.
Donald Trump appears to genuinely hate wind farms. And that has already had big negative results for wind projects in the USA.
But never fear, Samuel L Jackson is here. We do not usually repost companies’ advertising campaigns on the business live blog, but this is a notable turn for Sweden’s Vattenfall.
(Language warning: this version is tastefully bleeped out; unbleeped here!)
Updated
Scotland grants permission for world's largest offshore wind farm
The Scottish government has granted permission for the world’s biggest offshore wind farm, 38km off the nation’s east coast.
The Berwick Bank wind farm will aim to provide 4.1 gigawatts of power – enough for more than 7.5m homes – in the outer Firth of Forth off the East Lothian coast.
The decision was welcomed by SSE, the company hoping to develop the wind farm. However, SSE is yet to make the final investment decision, pending the granting of a favourable energy price by the government.
Offshore wind will be crucial in the UK government getting anywhere near energy minister Ed Miliband’s target for a net zero electricity grid by 2030 – although it is thought unlikely by some experts that the target can be met.
The government sets the energy prices that wind farm developers can earn through contracts for difference (CfDs). CfDs top up wind farm earnings when energy prices are too low, and reclaim money when they are too high, in a crucial calculation to determine the viability and profitability of energy projects.
Stephen Wheeler, managing director, SSE Renewables said he wants “the most ambitious CfD scheme yet through the upcoming AR7 auction round”. He said:
The Scottish government’s decision to grant a consent order for Berwick Bank offshore wind farm is hugely welcome. At over 4GW of potential capacity, Berwick Bank can play a pivotal role in meeting the mission of clean power 2030 for the UK and achieving Scotland’s decarbonisation and climate action goals.
Berwick Bank has the potential to rapidly scale-up Scotland’s operational renewable energy capacity and can accelerate the delivery of homegrown, affordable and secure clean energy to UK consumers from Scottish offshore wind, helping meet the UK’s clean power ambition by 2030.
Another aspect of Rolls-Royce’s strong financial results today was the improvement in its power systems business.
Power systems – diesel generators and things like big boat motors – has been relatively unloved of Rolls-Royce’s three main divisions: its commercial jet engines business has boomed since recovering from the coronavirus pandemic, while its defence business has benefited from the huge increase in weapons spending. Meanwhile, power systems was struggling for some time.
From the report this morning by Kalyeena Makortoff and yours truly:
Rolls-Royce’s power systems business had a significant increase in interest from datacentres, which the chief executive, Tufan Erginbilgiç, confirmed was linked to the boom in artificial intelligence.
Orders for datacentres rose by 85% compared with last year. The company expects a 20% increase in datacentre orders every year to 2030, having forecast annual growth of 15-17% as recently as February.
And on top of the three engines all running on full blast, Rolls-Royce also has the prospect of small modular reactors – if it can make them work.
You can read the full report here:
Heidi Alexander, the transport secretary, has added that flights are now resumed across the UK after the computer incident.
She posted on X:
I know that any disruption is frustrating for passengers. Flights are now resumed and I am grateful to airlines who are working hard to get people to where they need to be. I will continue to receive regular updates. Passengers should check with airlines before travelling.
UK minister says 'no evidence of malign activity' behind airport disruption
Transport secretary Heidi Alexander has said there is “no evidence of malign activity” behind the computer issue that caused disruption at UK airports on Wednesday.
Alexander spoke this morning to Martin Rolfe, chief executive of Nats, the company tasked with running UK airspace, about the issue.
She posted on X, the social network:
I have spoken with @NATS CEO Martin Rolfe who provided further detail on yesterday’s technical fault. This was an isolated event and there is no evidence of malign activity.
— Heidi Alexander MP (@Heidi_Labour) July 31, 2025
I have spoken with @NATS CEO Martin Rolfe who provided further detail on yesterday’s technical fault. This was an isolated event and there is no evidence of malign activity.
Yorkshire Water has been fined £865,000 for pumping a million litres of chlorinated water a day into a stream, killing fish during a month of pollution.
The pollution was caused by an incorrect alarm, whose level was set too high to register that chlorinated water was flowing into the water.
The incident happend at Ingbirchworth water treatment works, which provides 90,000 people in Barnsley and South Yorkshire with drinking water, and is fed by Ingbirchworth and Royd Moor reservoirs.
Jacqui Tootill, water industry regulation manager for the Environment Agency in Yorkshire, said:
This pollution was not caused by an unforeseen event or extreme weather. The systems were simply not robust enough and this wouldn’t have happened if proper checks had taken place.
We expect full compliance from water companies and are committed to taking robust enforcement action where we see serious breaches.
We’re pleased Yorkshire Water has now been dealt with by the courts following our investigation.
Back on the UK air traffic disruption, the Guardian’s transport reporter, Gwyn Topham, has some more detail on the meeting between minister Heidi Alexander and Martin Rolfe, the head of the Nats air traffic control company.
It is understood that Alexander will not press Rolfe to consider his position.
Most of the disruption from the brief stoppage came at Heathrow. A total of 84 departures and 71 arrivals were cancelled by 10pm on Wednesday evening, and some inbound flights were diverted to European cities.
You can read the full report here:
The latest market to be disrupted by Donald Trump is that for copper, a metal crucial to pretty much anything that runs on electricity.
Trump had threatened a 50% tariff on copper imports, only to limit it to copper pipes and wiring in an announcement last night. That meant a lot of traders who bought up copper metal in the US are now sitting on stockpiles that that are worth a lot less.
The price of Comex copper electronic commodity futures is down 22% today to its lowest since April.
Steve Clayton, head of equity funds at Hargreaves Lansdown, an investment platform, explains it well:
Copper markets were upended overnight when tariff arrangements were announced that exempted key grades of copper products from import tariffs in the US. Previously, markets had anticipated tariffs of up to 50% would be imposed, prompting a rush to move physical copper into the US ahead of the tariff’s introduction. That in turn had pushed the price of US copper futures sharply higher in recent months compared to similar contracts trading in London. The sudden realisation that there was no need for the market to be so dislocated sent US copper prices tumbling back down toward the London benchmark, leaving US buyers nursing heavy losses.
FTSE 100 hits latest record high of 9,190 points
The FTSE 100 in London has risen by 0.3%, thanks to strong results from the megacap oil company Shell and particularly from Rolls-Royce, the jet engine manufacturer.
That has pushed the FTSE 100 index to a new record high of 9,190 points. It hit its last record high on Monday, before dipping as investors absorbed the implications of the EU-US trade deal.
The recent run of records has come since global stock markets shrugged off Donald Trump’s trade war: Trump Always Chickens Out, or Taco, became the mantra of investors after he retreated from the worst of the tariff threats – even if what he has imposed is still expected to be deeply damaging by most mainstream economists.
Here is some more information on who exactly owns Nats, the company responsible for managing UK airspace – under licence from the Civil Aviation Authority, the regulator.
Nats is a public private partnership between an airline group, which holds 42% of its shares, Nats staff who hold 5%, UK airport operator LHR Airports Limited with 4%, and the UK government which holds 49% (the golden share).
The airline group comprises:
USS, a university pension fund
British Airways PLC
Pension Protection Fund
easyJet Airline Company Limited
Virgin Atlantic Airways Limited
Deutsche Lufthansa AG
TUI Airways
Reuters reported that “at least 16 flights to and from London’s Heathrow Airport were cancelled on Thursday”.
However, a Heathrow spokesperson said that the airport was “back to business as usual” and there were no overhanging issues relating to the computer issue yesterday. Any cancellations are therefore likely to be for other reasons.
Business minister Gareth Thomas was asked whether Nats boss Martin Rolfe will be “fired” over the computer incident that resulted in disruption to UK air traffic on Wednesday.
Even if they wanted to, ministers might find it tricky to force out Rolfe, as Nats is run as a private company – albeit one 49% owned by the UK government.
According to PA, Thomas told Times Radio:
We are summoning – the transport secretary is summoning – in today the chief executive of of Nats to help us get to the bottom of what went wrong yesterday.
Clearly, an incident happened two years ago and measures were taken then.
It looks like those measures weren’t enough but we need to get to the bottom of what exactly happened, and conversations will take place today.
UK transport secretary to meet air traffic control boss after flight disruption
British transport secretary Heidi Alexander will meet the boss of the UK’s airspace controller today to discuss the 20-minute failure of computer systems that led to widespread disruption yesterday.
Martin Rolfe, the chief executive of Nats, formerly the National Air Traffic Service, is under pressure over the issue, the second to cause major disruption over the last two years.
Ryanair’s chief operating officer, Neal McMahon, called for Rolfe to resign yesterday after disruption at airports including London’s Heathrow and Stansted – although the Irish airline has had a vendetta against Nats for years, and calls for the boss’s resignation at every opportunity.
Alexander said that she would meet NATS today to try to “prevent reoccurrence” of the glitches. She posted on the X social network:
Departures at all airports resumed yesterday and @NATS are working closely with airlines and airports to clear the backlog safely and look after passengers. I will be meeting the NATS Chief Executive today to understand what happened and how we can prevent reoccurrence. https://t.co/1SXZscKttN
— Heidi Alexander MP (@Heidi_Labour) July 31, 2025
Departures at all airports resumed yesterday and @NATS are working closely with airlines and airports to clear the backlog safely and look after passengers. I will be meeting the NATS Chief Executive today to understand what happened and how we can prevent reoccurrence.
Updated
Vying with Rolls-Royce at the top of the FTSE 100 is pest control company Rentokil Initial. (It does what it says on the tin…)
The company kept its full-year outlook unchanged, reported half-year revenue growth of 3.1%, and expects annual results in line with market expectations. But that hasn’t stopped its market value soaring by 11% this morning. Investors may have welcomed its strong free cash flow guidance.
Andy Ransom, chief executive of Rentokil Initial, said that… termites helped its earnings.
Rolls-Royce valuation soars to record £90bn as shares gain 10%
Rolls-Royce’s share price has soared by 10.5% in early trading this morning, to a new record high – with the company’s valuation breaking the £90bn mark for the first time.
The jet engine manufacturer was valued at £83bn yesterday evening, so another 10% gain puts its valuation at more than £92bn. Its market value has almost doubled over the course of 2025 – an astonishing run for a company that faced an existential threat during the coronavirus pandemic.
The company’s turnaround has so far been a triumph for chief executive Tufan Erginbilgic, who ruffled feathers on taking over the business in 2023 by saying it was on a “burning platform”.
Since then Erginbilgic has cut costs, and pushed customers to pay more for its products through renegotiating contracts for maintaining jet engines that go on widebody planes such as the Airbus A350 and Boeing’s 787.
The company also received a recent boost from the UK government’s decision to choose it to deliver the first small modular nuclear reactors (SMRs) – factory-produced nuclear power stations that aim to cut costs.
Rolls-Royce said the SMR business – which it hopes could eventually be bigger than the existing revenues – should be “profitable and free cash flow positive by 2030” – ahead of delivery of the first SMRs a couple of years later.
Updated
Next benefits from M&S hack and hot weather
Next has reported bumper sales between May and July, as sunnier UK weather and a disruptive hack at rival M&S sent customers flocking to the clothes and homewares retailer.
Full price sales at Next in the thirteen weeks to 26 July surged by 10.5%, which was £49m ahead of its guidance for the period for a 6.5% rise in takings.
Next said, referring to the devastating cyber-attack that hit retailer M&S:
In the UK, we believe that the over-performance was largely due to better than expected weather and trading disruption at a major competitor.
The hack forced M&S to pause customer orders through its website for almost seven weeks, before resuming them in June, and let to some shortages in stores.
But Next said its own international sales also grew faster than expected, which it chalked up to a digital marketing strategy that “proved more effective than anticipated”.
European stock market indices have risen on Thursday morning. The FTSE 100 dipped in the opening trades in London, but a few minutes later it is up 0.2% – helped by a big 10% gain for Rolls-Royce after its latest profit upgrade.
Here are the opening European snaps, via Reuters:
EUROPE’S STOXX 600 UP 0.15%
GERMANY’S DAX UP 0.32%
FRANCE’S CAC 40 UP 0.1%; SPAIN’S IBEX UP 0.98%
EURO STOXX INDEX UP 0.24%; EURO ZONE BLUE CHIPS UP 0.29%
Shell's $4.3bn profits raise anger; Rolls-Royce adds £400m to earnings forecast
Good morning, and welcome to our live coverage of business, economics and financial markets.
It is a bit of a barrage of company earnings today, led by FTSE 100 oil company Shell.
Shell reported adjusted earnings of $4.3bn (£3.2bn) for the second quarter of 2025, better than the $3.7bn expected by analysts – albeit lower than the $6.3bn it reported the same time a year ago.
Nevertheless, it was the 15th consecutive quarter that the oil company has returned more than $3bn to shareholders via buybacks – with another $3.5bn added today, plus dividends of $2.1bn.
The almost four-year shareholder bonanza was a period that included the aftermath of Russia’s invasion of Ukraine, which sparked a global energy crisis that was damaging to household finances – but hugely profitable for oil companies.
Shell’s profits sparked anger among environmental campaigners, after the company last year rolled back decarbonisation targets.
Robin Wells, director of Fossil Free London, a campaign group that protested outside Shell’s headquarters last night, said:
We are now in a new normal of record-breaking heat, created by corporations like Shell. This will mean devastation and mass loss of human life. Climate scientists have warned us that this new normal will spell the end of human civilization by 2100. It’s time for destruction to stop raising billions in profit.
Rolls-Royce raises profits forecasts by £400m
Rolls-Royce is another company that has delivered huge returns to shareholders with a turnaround plan that has been helped by the recovery of air travel since the coronavirus pandemic.
The jet engine manufacturer said underlying operating profit rose by 50% to £1.7bn for the first half of 2025, with a profit margin of 19.1%.
The manufacturer, whose main operations are in Derby, raised its profit forecast for the year from a range of £2.7bn-£2.9bn to £3.1bn-£3.2bn. It has also been helped by the huge boom in weapons spending since Russia’s invasion of Ukraine; Rolls-Royce makes jet engines for fighter jets.
The agenda
10am BST: Eurozone unemployment rate (June; previous: 6.3%; consensus: 6.3%)
10am BST: Italy inflation rate (July; previous: 1.7%; consensus: 1.5%)
1pm BST: Germany inflation rate (July; previous: 2%; consensus: 1.9%)
1:30pm BST: US core personal consumption expenditures inflation rate (June; previous: 0.2%; consensus: 0.3%)
