The Bank of England governor Andrew Bailey believes that interest rates in the UK are still on a “downward path” and has acknowledged that the uncertainty caused by trade tariffs means businesses are even more cautious about spending. In turn, while the overall impact from them is still yet to be seen, Mr Bailey says tightening rates further could be more harmful.
Elsewhere, reports have suggested the London Stock Exchange’s biggest firm, AstraZeneca, could push for a move in its listing to the US, with the chief executive frustrated by the current environment. The pharmaceutical firm has a market capitalisation of around £160bn.
Meanwhile, savers are feeling the heat from more than one angle right now, with cash ISA limits set to be cut, reform coming to Lifetime ISAs and interest rates expected to drop in August.
Follow The Independent’s live coverage of the latest stock market and business news here:
Business news live - Wednesday
- Bank of England reveal tariff impact on interest rate decisions
- Santander agree £2.6bn deal to buy TSB to create third-largest bank
- AstraZeneca boss wants to move shares to US
- Pharmaceutical firm remain in talks with UK government
- Japan facing 35% tariff - even higher than original Liberation Day figure
- Bond sell-off sends yield spiralling on speculation of Rachel Reeves losing job
US stocks rise, FTSE 100 falls
15:43 , Karl MatchettDespite opening largely flat, US stocks have risen after an hour or so trading, while in the UK, the FTSE 100 has fallen in the afternoon.
It’s now down 0.34 per cent for the day, while the FTSE 250 is down 1.35 per cent.
That contrasts to the Euro Stoxx 50 being up 0.65 per cent and most European indices following suit, while the US’ S&P 500 is up 0.24 per cent and the Nasdaq has risen 0.7 per cent so far.
Rachel Reeves set to cut cash ISA allowance in blow to savers — here’s what you need to know
15:19 , Karl MatchettRachel Reeves is set to announce plans to cut the annual allowance for Cash ISAs in a push to encourage people to invest more.
It is expected the chancellor will unveil the measure in her Mansion House speech, which takes place on July 15.
ISAs allow everybody to save or invest up to £20,000 in a tax-free environment, though there are some restrictions on different products in the range – for example, £4,000 a year can go into a Lifetime ISA, which itself is set for reform amid criticism.
Earlier this year, the chancellor was in discussions with City figures over potentially cutting the Cash ISA allowance to the same figure, with the overall aim to get more people investing and earning better returns over the long term, to drive individual wealth higher.
Here’s everything you need to know:
Deutsche Bank forecasts up to £32bn black hole before Rachel Reeves' budget
14:58 , Karl MatchettDeutsche Bank believes the UK government needs to stay within a £20bn limit with another fiscal ‘black hole’ developing - but forecasts Rachel Reeves could be up to £32bn short by the time of the autumn budget.
Increased borrowing costs, loss of income through trade uncertainty, productivity downgrades and welfare reforms could all add £28bn in borrowing.
The government had £9.9bn in headroom from the spring statement.
Beyond that, the bank forecasts an ability to further raise revenue through further fiscal drag, council tax reform and pension tax relief.
Otherwise, breaking a pledge not to raise taxes might be next - employee National Insurance Contributions being most likely as they could raise nearly £20bn.
Gilt sell-off: Why does it matter?
14:32 , Karl MatchettThe rapid selling of gilts, as the government bonds are known, matters because when the price goes down, the yield - what it pays out as interest - goes up.
That means borrowing costs for the government are increased and, as has been a constant theme throughout the year already, the chancellor does not have a lot of head room for any additional expenses.
The sell-off today was the biggest since October 2022 and the mini budget which effectively cost Liz Truss her job as prime minister.
Michelle Lawson, director at Lawson Financial, said: “One things the markets hate is uncertainty. There is more flip-flopping from this government than a beach on a summer's day. The damage they are doing to the economy, public pockets and consumer confidence is a great concern and the markets are reacting as a result.”
Bond sell-off sends borrowing costs up on speculation of Rachel Reeves exit
14:27 , Karl MatchettAfter that PMQs session and Rachel Reeves reaction, traders immediately sold off 10-year government bonds - known as gilts - to send the yield soaring in little more than an hour.
That came after Keir Starmer apparently dodged the question of whether Ms Reeves’ job as chancellor was safe.
A Labour comment later said “The chancellor is going nowhere. She has the prime minister’s full backing.”
That appears to have at least stemmed the tide, with the yield on 10-year bonds dropping back slightly from 4.67 per cent to 4.62 per cent over the past hour.
Reeves battles tears as Starmer declines to back her staying in post
14:01 , Karl MatchettChancellor Rachel Reeves appeared to cry in the Commons as Sir Keir Starmer declined to guarantee she would remain in place until the election.
The Prime Minister faced MPs after being forced to scrap key planks of his welfare reforms, leaving an almost £5 billion black hole in Ms Reeves’ spending plans and fuelling speculation she could be forced to hike taxes.
Tory leader Kemi Badenoch said Ms Reeves looked “absolutely miserable” and challenged the Prime Minister to say whether the Chancellor would keep her job until the next election.
Sir Keir dodged the question about whether Ms Reeves would be in place for the remainder of the Parliament, saying Mrs Badenoch “certainly won’t”.
Reeves battles tears as Starmer declines to back her staying in post
US stocks set to open flat due to tariff caution
13:40 , Karl MatchettPresident Trump has been full of soundbites again recently and most are regarding trade tariffs once more.
The approaching end of his 90-day pause in theory means blanket levels of levies will come into play again for those who have not yet agreed trade deals.
But the president wouldn’t confirm whether or not he’d extend that deadline when asked.
US stocks are set to slightly fall today upon opening, no doubt in part due to that investor uncertainty.
Futures show the Nasdaq 100 down 0.2 per cent, the S&P 500 totally flat and the Dow Jones just about up at 0.1 per cent.
Spectris deal rises to £4.7bn as KKR beat Advent in takeover deal
13:20 , Karl MatchettRecently, news broke of London Stock Exchange-listed precision equipment firm Spectris recommending a takeover bid by Advent International.
That near-£4bn bid saw the Spectris share price rise 15 per cent on the day - but now that offer, from Advent, has been gazumped.
Another private equity firm, KKR, have tabled a £4.7bn offer including debt - a 96 per cent premium price to Spectris’s shares level before the initial bid came in.
Spectris shares are up 4 per cent again today on news of that improved offer, with the firm set to leave the FTSE 250 as a result.
Santander shares rise 3% on TSB deal news
12:58 , Karl MatchettShares in Spanish bank Santander, which is listed on the London Stock Exchange, rose more than 3 per cent this morning.
That follows last night’s confirmation that they are set to buy TSB and make the third-largest bank in the UK.
While the purchase still has to be agreed by shareholders and regulators, The Independent understands Santander feel it will make them more able to drive innovation with product offerings.
Santander shares are up 69 per cent across 2025 so far.
Italy fear €20bn hit from tariffs - and more than 100,000 job losses
12:46 , Karl MatchettItaly have given an estimation of a €20bn (£17bn) loss in exports next year, along with 118,000 job losses, if the US sticks to a blanket 10 per cent tariff on EU products.
“Italy does not just export luxury products - with a demand that isn't very sensitive to prices - but mainly machinery, means of transport, and leather goods,” said Confindustria president Emanuele Orsini to national media.
A 10 per cent tariff would be “unsustainable” for Italy, he said, due to the weakness in the dollar which would contribute to an effective 23.5 per cent price rise in the course of a year.
Bank of England ask public about new banknotes design...perhaps they shouldn't
12:20 , Karl MatchettThe Bank of England are canvassing public opinion on the design of future banknotes.
Themes, famous faces and history are given as examples by the BoE during the consultation but Brits don’t have the best track record of taking these things too seriously.
Ben Perks, managing director at Orchard Financial Advisers, predicted we would then end up with Banky McBankface if history repeats.
“I remember fondly when the National Oceanography Centre asked the public to name a £200m boat, and we went for Boaty McBoatface,” he pointed out.
“It’s nice of the Bank of England to ask, but we never take these things seriously and I look forward to seeing Joey Essex’s face on a fiver in no time.”
Fears over £160bn blow to London’s stock market as AstraZeneca considers listing move to US
12:00 , Karl MatchettThe boss of AstraZeneca, the biggest company on the London Stock Exchange, has discussed shifting the pharmaceutical firm’s stock market listing to the US.
Such a move would be the biggest hit to the stock market yet, following some huge departures such as £10bn financials firm Wise and £40bn mining business Glencore, among others.
The pharmaceutical firm however is far bigger by market capitalisation, currently worth just over £161bn – more than BP, National Grid and Lloyds Bank combined.
The Independent understands the company acknowledges the CEO’s concerns as being longstanding, especially regarding new products, while conversations are ongoing with the UK government over support for the wider pharmaceutical industry, particularly when it comes to supporting the commercial environment to become a global superpower in the sector.
Full report here:
£160bn fear for London’s stock market as UK’s biggest firm considers US move
Trump tariffs latest: Japan threatened with 30-35 per cent levy
11:39 , Karl MatchettDonald Trump’s self-set deadline for trade deals is fast approaching and while the UK has already agreed one, the same cannot be said for many others.
The EU remain in talks having broadly agreed a 10 per cent tariff but seeking exemptions or lowered fees on some industries.
Japan, however, could be set for far higher numbers based on the US president’s latest thoughts.
The Asian nation may have to “pay 30, 35 per cent or whatever the number is that we determine, because we also have a very big trade deficit with Japan,” he said. “We've dealt with Japan. I'm not sure we're going to make a deal. I doubt it.”
Japan’s initial Liberation Day tariff was 24 per cent.
Revealed: Two-thirds of small businesses would now vote Remain after profits hit by Brexit
11:22 , Karl MatchettTwo-thirds of small and medium UK businesses would now vote to remain in the EU after seeing their profits harmed by Brexit, new analysis shows.
A survey of more than 500 importers and exporters found 66 per cent would choose to stay in the bloc, up from 53 per cent who voted that way during the referendum in 2016. The percentage of those who would vote to leave was 29 per cent, down from 32 per cent.
The findings, from research carried out by Critical Research, appear to be a direct response to the fact that costly rising regulations and red tape burdens have harmed the profitability of their businesses.
65 per cent of responders said the increased demands on them to comply with trade regulations have “significantly” affected their overall profits. More than half (56 per cent) said Brexit has directly made their business less-competitive within the context of the global marketplace.
Full report:
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Two-thirds of small businesses would now vote Remain after profits hit by Brexit
Personal finance: Earn up to 4.95 per cent on your money before interest rates fall
11:05 , Karl Matchett...and here are the top savings accounts for you to consider, with interest rates predicted to drop next month.
You can still earn close to 5 per cent on your cash for now though, depending on the type of account you need.
Cash ISA, general easy access savings, fixed-term deals...we’ve got the full roundup here.
Best savings accounts for your cash before expected interest rates cut this summer
Personal finance: Best savings accounts and bank switch cash offers
11:00 , Karl MatchettTime to look at your own money for a moment.
At the start of each month we roundup the best savings accounts and the best offers to switch your main current account bank - some are offering up to £185 to move to them now.
It’s always important to make sure the accounts suit your own needs though, from the perks you’ll use to the fees it might charge.
Here are the best on the market right now:
£185 in cash and free cinema tickets: July’s best offers to switch banks
AstraZeneca: Talks ongoing with UK government
10:31 , Karl MatchettFollowing last night’s reports that AstraZeneca’s chief wanted to pursue a US listing, The Independent understands that the company remains in discussions with the UK government over support for the industry.
That is an ongoing situation unrelated to any stock market listing, but with the wider environment seen to be one of the CEO’s frustrations, it’s a key aspect for progress.
Labour noted life sciences as one of the key pillars in its industrial strategy last week and AstraZeneca is the UK’s biggest public-listed company in the sphere.
The EU, meanwhile, have noted pharmaceuticals as one of the industries they want lower than standard 10 per cent tariffs for in any trade deal with the US.
Key details on Sabadell selling TSB to Santander
10:20 , Karl MatchettRight, back to yesterday’s agreed deal for Santander to buy TSB, with some more details becoming clear.
Sabadell shareholders still have to approve the deal, for a £2.65bn sale, expected to rise to £2.9bn.
That will result in a €0.50 per share extraordinary cash dividend for Sabadell shareholders, with the Spanish firm’s chairman Josep Oliu stating it would be a deal of “significant value”.
A wrinkle is that Sabadell are currently subject to a hostile takeover bid from BBVA - if that were to go through, BBVA would take the dividend as the effective “shareholder” at that time.
Sabadell will also not compete in the UK banking market for two years after the sale of TSB is complete, as part of the agreement.
US banks raise dividends after rules loosened
10:11 , Karl MatchettLooser stress tests on US banks have seen many of the nation’s biggest names announce increased dividend payments and share buybacks.
JPMorgan, Goldman Sachs, Bank of America, Morgan Stanley and others have all confirmed the new arrangements, with the biggest being Goldman’s 33 per cent increase to the dividend.
JPMorgan are beginning a $50bn share buyback programme, with Morgan Stanley authorising $20bn for the same.
The lowered regulations come after over a decade of tight restrictions following the 2008 financial crisis.
FTSE 100 rises after opening
09:17 , Karl MatchettA quick stock markets checkup for the morning, with the FTSE 100 enjoying a small rise, 0.11 per cent up.
Smaller companies are down though, 0.33 per cent for the FTSE 250 and 0.30 per cent on AIM.
In Europe, Germany’s DAX is up 0.3 per cent and France’s CAC 40 is 0.47 per cent up.
Banks and financials are among the risers in the British firms so far, with Standard Chartered leading the way, up 2.83 per cent.
AstraZeneca CEO keen to shift listing to US
08:27 , Karl MatchettMultiple reports emerged yesterday evening that the chief executive of AstraZeneca, the biggest firm on the London Stock Exchange, wants to move the company’s listing to the US.
The loss of the £160bn market cap pharmaceuticals firm would be the biggest hit yet for the LSE - but arguably an even bigger issue for the government, to see a British company redomiciled.
More on that coming shortly.
TSB could be set to depart high street after Santander takeover
08:02 , Karl MatchettSantander has agreed to buy TSB for £2.65bn, rising to a potential £2.9bn, in a deal which will create the UK’s third-largest bank.
The deal still faces approval but is expected to close in early 2026.
That could mean the disappearance of TSB from the high street after Santander revealed plans to “integrate TSB” into the group.
Bank of England reveal tariff influence on interest rate calls
07:25 , Karl MatchettWe may see more of this later on this week as we get closer to tariff deadline day, if that can be a thing.
But Andrew Bailey, governor of the Bank of England, says the uncertainty for businesses over the impact of tariffs mean they are not spending - and keeping interest rates tighter might only exacerbate that.
“We haven’t seen the effects much yet from tariffs and we didn’t expect to by now,” he said - but acknowledged the BoE’s MPC took a “prudent” approach last time out by simply waiting to see and opting against an interest rates cut.
Most analysts expect another 25bps cut in August, taking the base rate to 4.00 per cent.
FTSE 100 biggest gainers from yesterday
07:10 , Karl MatchettThe FTSE 100 rose 0.28 per cent yesterday after an up-and-down (-and-up-again) day.
Within the index, the biggest gainers were:
- Drinks maker Diageo, up 3.75 per cent
- Pub owner Whitbread, up 3.37 per cent
- Footwear store JD Sports, up 2.88 per cent
- Gold miner Endeavour Mining, up 2.87 per cent.
Two of those were in no small part due to the EU insisting on lower tariffs for alcohol exports to the US in a trade deal and a rising price of gold. Whitbread, meanwhile, have a new significant shareholder who took up a 5 per cent position.
Business news live - Wednesday
06:58 , Karl MatchettGood morning all and welcome to the Independent’s live blog coverage for Wednesday.
Today we’ll be following up on the latest ISA reform, with both cash and lifetime versions under review, and detailing the latest stock market news after it was reported AstraZeneca could pursue a listing switch to the US.
Additionally we’ve got exclusive news coming on trade tariffs impacting businesses in the UK.
Lots to cover - let’s get into it.
