The FTSE 100 enjoyed a meteoric day on Thursday, rising close to a full one per cent to continue a year of extraordinary gains so far. London’s benchmark index was boosted by the likes of BT Group rising around 10 per cent, as optimism continued in the markets off the back of the UK agreeing a £6bn trade deal with India. Friday saw it fall a little but it remains well above 9,100 points.
Elsewhere, NS&I lifted the interest rate on their fixed one-year bonds and the European Central Bank opted to pause their march of interest rate cuts - particularly notable as the EU and US approach an agreement on a trade deal of their own which should see a 15 per cent tariff applied to imports from the European bloc, though not including steel.
After Lloyds announced an increased interim dividend on Thursday on the back of rising profits, Friday morning was the turn of NatWest to present their latest financial report - with a big boost to shareholders included.
Follow The Independent’s live coverage of the latest stock market and business news here:
Business news updates - Friday 25 July
- NatWest announce higher profits and £1.5bn shareholder return through buyback and dividends
- FTSE 100 opens lower after new record high
- Retail sales rebound in June
- Gold and bitcoin both lower
- Analysts expect European Central Bank to halt interest rate cuts at 2%
Business news updates - Friday 25 July
16:41 , Karl MatchettThat’s it for us today and indeed for the week - we’ll be back as usual on Monday from 7am.
Here’s a wrap of the day’s main lines...have a good weekend and see you next time.
- How to boost your pension pot now if you have no savings at all
- Wetherspoons’ sales are booming – and it has one beer to thank
- M&S ad banned for featuring ‘unhealthily thin’ model
- How much you need in your pension to retire — and four things to help you reach that amount
Business news updates - Friday 25 July
06:58 , Karl MatchettGood morning and welcome back to another day of live money and business coverage on The Independent.
Today we’ve got plenty on the way from the stock markets, mortgage news, companies reporting their latest finances and more - and how it all affects you as a consumer, shareholder or worker.
Business news updates - Friday 25 July
07:06 , Karl MatchettYesterday in the FTSE 100, BT Group was one of three companies rising around 10 per cent to push the index as a whole towards a 0.9 per cent rise.
A new record closing level means a new record opening today.
Leading the firms in the news this morning will be NatWest Group, currently reporting their latest financial offering.
This will be their first since the government fully exited its shareholder position, following the bail-out of the bank during the financial crisis.
Three-quarters of small businesses will raise prices
07:14 , Karl MatchettA new survey among small and medium-sized businesses (SMEs) has found that a huge majority expect to be raising prices over the next year, with optimism split on whether they will survive or thrive amid challenging economic conditions.
Business owners have been hit this year by raised National Insurance Contributions and a higher minimum wage, while a new pensions review could ultimately see them have to contribute more in the future as well.
Meanwhile inflation from raw materials and higher energy costs have meant that their own prices have been on the increase, contributing to overall UK inflation levels. In addition, tariff uncertainty impacted those exporting to the US in the earlier part of the year before a trade deal was agreed.
Three-quarters of small businesses to raise prices - yet half see profits shrink
River Island facing closure within weeks unless creditor deal agreed
07:29 , Karl MatchettHigh street firm River Island has approached creditors over a deal to save themselves from closure within weeks.
Reports yesterday suggested they could be out of cash by the end of August if stakeholders including those who rent shops to them didn’t agree to vast cuts.
River Island need to save £10m within a matter of weeks and an estimated £50m by the end of the year to plug a funding gap.
Dozens of stores will close if the deal is agreed to, with others seeing rents cut by up to 75 per cent in some cases and leased rent-free in others.
European Central Bank pauses interest rates cut
07:45 , Karl MatchettWhile the Bank of England grapples with high inflation and stuttering interest rate cuts, the European Central Bank have gone from 4 per cent to 2 per cent in a year, with inflation also around 2 per cent.
Yesterday they opted to pause interest rate cuts, particularly with an EU-US trade deal close.
The right call? It might end up being the final call, according to one analyst.
“As effectively telegraphed by Lagarde, the ECB paused the easing cycle in July,” said Mark Wall, chief European economist at Deutsche Bank.
“The question is, will this be a short pause or a long pause? And could this be a pause that sees 2% policy rates eventually become the terminal rate in this easing cycle? Uncertainty remains high and the ECB rightly wants to keep its options open.
“But if trade uncertainty fades, the combination of a resilient economy and significant fiscal easing will eventually translate into upside risks to inflation. Markets are not far away from switching focus from the last cut to the first hike.”
What’s hiding in your pension?
08:00 , Karl MatchettIf you have a workplace pension, your money is most likely in a default fund: a ready-made mix of investments designed for the average saver.
These funds aim for long-term growth by spreading risk across global markets, typically including equities (like shares in companies), bonds, property, and cash. On paper, it’s a sensible, low-effort option.
But dig deeper, and you may find your pension is funding sectors you’d rather avoid, such as fossil fuels, weapons, tobacco, and controversial mining firms.
A recent government report reveals 90 per cent of employees stick with their default fund.
That’s not necessarily because it’s the right fit, but because switching feels complex or isn’t front-of-mind.
Here’s what to do if that’s you.
What’s hiding in your pension? How to find out where your money is and take control
NatWest profit jump sees shareholders get double boost
08:45 , Karl MatchettNatWest Group have this morning reported first half profits of more than £3.5bn, higher than expected, in their first financial report since the government sold the last of its holding from the financial crisis bailout.
The group announced returns to shareholders of more than £1.5bn, with a £750m share buyback announced as well as a 58 per cent increase to the interim dividend.
Shares are up close to 1.5 per cent this morning.
FTSE 100 drops after yesterday's surge
08:57 , Karl MatchettNatWest might be in the green, but they are one of just 22 companies with a positive return so far this morning in the FTSE 100.
Most are down a percent or two - probably more to do with some profit taking than anything dramatic in most cases, after a recent surge culminated in yesterday’s climb of almost one per cent for the index.
JD Sports is the biggest faller, down 1.96 per cent; Centrica has climbed highest, 1.74 per cent up this morning.
EU-US deal will not include reduction on steel tariff
09:48 , Karl MatchettEuropean steelmakers are not set to benefit from the EU-US trade deal, with the 15 per cent base tariff not covering the industry.
Steel imports from Europe are subject to 50 per cent tariffs which the industry in Europe has said will wipe it out, with cheaper Chinese products and high energy bills.
British steel is at 25 per cent and will be reduced to zero under the terms of the UK-US deal - though that is dependent on solving talks related to the origins of some materials.
Retail sales rebound 0.9 per cent in June
09:59 , Karl MatchettJune’s heatwave helped retail sales to bounce back last month as the record hot weather boosted sales of food and drink, according to official figures.
The Office for National Statistics (ONS) said the total volume of retail sales rose by 0.9% in June, having fallen by a downwardly revised 2.8% in May.
The ONS said demand jumped for non-alcoholic and alcoholic drinks in the searing temperatures, while motor fuel sales also leapt by the biggest amount for over a year as Britons “ventured out”.
But the retail sales rebound was not as pronounced as the 1.1% jump pencilled in by most economists and means that overall, retail sales volumes rose by 0.2% quarter-on quarter in the three months to the end of June.
This is down from 1.3% quarterly growth at the start of the year.
Hannah Finselbach, senior statistician at the ONS, said: “Following a poor May, it was an improved month for retail sales with growth across all main sectors.
“The warm weather in June helped to brighten sales, with supermarket retailers reporting stronger trading and an increase in drink purchases.
“It was also a good month for fuel sales as consumers ventured out and about in the sunshine.
“Looking at broader trends, retail sales are up slightly across the latest quarter, but are down when compared with pre-pandemic levels.”
PA
Wizz Air CEO hits out at 'anti-executive pay sentiment'
10:54 , Karl MatchettThe chief executive of Wizz Air, Jozsef Varadi, received a pay packet of £3.3m last year. This year, 28 per cent of shareholders voted against his salary and he says there’s an anti-CEO agenda in this nation.
“There is a kind of an anti-executive pay sentiment in the UK, whether we like it or not,” he said.
“Some people take a different view on social paradigms. But we cannot ignore the fact that executive pay is a matter of retention, and you have to retain your talents in the company.
“As far as I’m concerned we have a very fair and equitable system for addressing performance and realities, and the need to retain top talents.”
Julia Hoggett, the chief executive of the London Stock Exchange, previously said Britain was being held back by reluctance to offer high pay to CEOs and that a “constructive discussion” was needed on the matter.
Volkswagen say Trump tariffs will cost it 1.3bn euros
11:07 , Karl MatchettEuropean carmaker VW says tariffs imposed by Donald Trump have cost it 1.3bn euros in the first half of this year - about £1.1bn.
While the company said it was “on the right track” overall, it added that going forward, tariffs would continue to hamper sales and it would have to cut costs to account for that.
Net profit fell more than 38 per cent from the same period last year as lower-margin EV sales and restructuring costs also impacted the bottom line.
Shares of the company on the Frankfurt Xetra exchange were up 3.3 per cent this morning.
FTSE 100 down 0.2 per cent - but setting new highs each week. Why?
11:30 , Karl MatchettIt might be a little down today, just 0.24 per cent, but the FTSE 100 is up more than 11 per cent for this year as a whole, outperforming the French index and the two main US indices, the S&P 500 and the Nasdaq.
So why has the FTSE 100 been on a tear this year?
Dan Coatsworth, investment analyst at AJ Bell, says it’s down to a few reasons including the type of companies, the dividends paid out and the political landscape.
“It’s been a wonderful time to invest in UK shares. The FTSE 100 recently went through the 9,000 level for the first time and has hit a new record high on multiple occasions this year,” he said.
“Year-to-date, investors would have made a 14.3% total return including dividends from a FTSE 100 tracker fund, excluding charges. That’s an attractive return and we’re only a little over halfway through the year.
“The FTSE 100 is full of the type of stocks that appeal to investors when there is uncertainty in the world. Investors seek companies with defensive qualities and the UK market has them in spades.”
Carrefour sells Italian supermarkets for 1bn euro
11:58 , Karl MatchettFrench supermarket giant Carrefour are selling off their Italian stores to NewPrinces Spa, for around one billion euro (£870m).
It accounts for around 1,000 shops and workers have declared a strike due to Carrefour Italia not having responded over workers’ futures.
Local media reported the Italian stores were loss-making to the tune of €180m annually.
Bitcoin and gold both sink as safe haven rush recedes
12:23 , Karl MatchettThe traditional and the (theoretical) digital safe havens have both retraced again today with investors seemingly piling into more risk-on assets.
Gold is down 0.84 per cent over the past day, now to $3,345 - almost $100 down from recent highs.
Bitcoin is meanwhile 1.8 per cent down, at $116,500. It hit highs of over $123,000 within the past two weeks so this is a slight pullback.
Business secretary says no prospect of wealth tax: 'Get serious'
12:40 , Karl MatchettBusiness secretary Jonathan Reynolds has rejected the prospect of a wealth tax, saying colleagues and the population need to “get serious” about real solutions.
Speaking to GB News, Mr Reynolds said: “This Labour Government has increased taxes on wealth as opposed to income – the taxes on private jets, private schools, changes through inheritance tax, capital gains tax.
“But the idea there’s a magic wealth tax, some sort of levy ... that doesn’t exist anywhere in the world.
“Switzerland has a levy, but they don’t have capital gains or inheritance tax. There’s no kind of magic ... We’re not going to do anything daft like that.
“And I say to people: ‘Be serious about this.’ The idea you can just levy everyone ... What if your wealth was not in your bank account, what if it was in fine wine or art? How would we tax that? This is why this doesn’t exist.
“There’s a lot of populism out about this, and I’m frustrated. I see colleagues sometimes say this in Parliament and I say: ‘Come on, get serious.’”
ECB interest rate cuts are over, say analysts
13:00 , Karl MatchettMajor banks and analysts are predicting that interest rate cuts in the EU are finished for now - with one suggesting the next change will be to put rates back up late next year.
“We think the (interest rate cutting) cycle is over, and the next move is a hike, in Q4 2026,” BNP said in a note yesterday.
HSBC and Goldman Sachs have also said no further cuts are expected, after this week’s pause left rates at 2 per cent.
Rates have been cut eight times in the past year.
“We are in this wait-and-watch situation,” European Central Bank president Christine Lagarde said this week, as the EU seek to seal a trade deal with the US.
The Bank of England interest rate should be cut next month, but only to 4 per cent.
NatWest results: 'A strong base for the bank's secret weapon'
13:19 , Karl MatchettSome more reaction to the earlier NatWest Group results, which followed Lloyds yesterday in returning extra cash to investors in the interim dividend after stronger than anticipated results.
“The overarching story here is a positive one. Borrowers are looking strong, loans and deposits are growing, and costs are under control,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“That’s providing a strong base for the bank’s secret weapon, the structural hedge, to sit on top of. The hedge is expected to bring home an additional £1 billion of income this year alone, as 0% products are being reinvested at yields of around 3.7%. This is a multi-year tailwind that’s helping underpin a positive outlook for NatWest.”
That means good news for investors for the future, as well as from the £1.5bn payout via dividends and buybacks:
“As far as investors are concerned, NatWest is in a sweet spot. The government shackles have gone, the group has prodigious amounts of cash and acquisitions to boost growth further seem likely,” said Richard Hunter, Head of Markets at interactive investor.
“It would be a false comparison to reflect on the previously heady share price levels of almost £64 in 2007, when a bloated and overstretched Royal Bank of Scotland very nearly met its end. This NatWest is an entirely different and more focused beast and the scope for progress is increasingly apparent.”
Starbucks CEO made 6,666 times more than average worker
13:40 , Karl MatchettThe chief executive of Starbucks, Brian Niccol, made 6,666 times more than the average worker at the firm during 2024, a report shows.
Pay inequality between CEOs and employees has been a growing theme and continues to rise, particularly with president Trump’s reconciliation bill with tax cuts for the wealthy.
S&P 500 firms saw CEO pay rise 7 per cent last year, said one union organisation.
“The median Starbucks worker would have had to start working for Starbucks in 4643 BC (during the Stone Age!) just to earn what Starbucks’ CEO earned in 2024 alone,” the report stated from AFL-CIO said.
Niccol earned $97.8m (£72.7m) in 2024.
Self-employed workers face key tax date next week - and it’s costly to miss
14:00 , Karl MatchettIf you work for yourself, you’re likely to be familiar with that formidable phrase “payment on account”.
This is a payment you make to HMRC twice a year, by the end of January and the end of July, towards your next tax bill.
Although there are 4.4m self-employed people in the UK, about 12m people file a self-assessment tax return each year.
However, you’ll only need to make a payment on account if your self-assessment tax bill is more than £1,000 and less than 80 per cent of your tax was collected at source (such as PAYE).
Full details here from Money writer James Hetherington:
Self-employed workers face key tax date next week - and it’s costly to miss
IMF warn Rachel Reeves could breach fiscal rules
14:49 , Karl MatchettRachel Reeves has been warned to give herself more headroom to avoid potentially breaching the government’s fiscal rules by the International Monetary Fund.
The IMF said Labour’s agenda looking for growth faced “significant challenges” but could reduce pressure on themselves by having a bigger gap than the £9.9bn the chancellor created in the spring statement.
“In an uncertain global environment and with limited fiscal headroom, fiscal rules could easily be breached if growth disappoints or interest rate shocks materialise,” read the report.
“The first best [option] would be to maintain more headroom under the rules, so that small changes in the outlook do not compromise assessments of rule compliance.”
Consumer confidence weakens among Britons amid tax rise fears
15:11 , Karl MatchettConsumer confidence weakened slightly in July amid concerns from shoppers that they could face potential future tax rises, according to new figures.
GfK’s long-running Consumer Confidence Index dropped one point to remain in firmly negative territory at -19 points.
Researchers suggested the figures showed that consumers are currently “sensing stormy conditions ahead” amid wider uncertainty in the economy.
The drop was shallower than expected by economists, who had predicted a reading of -20 for the month.
The research found that its measure from consumers’ view of the general economic situation for the country over the past year dropped one point to -44.
Lifetime ISA vs personal pension: Which is better for higher retirement income?
15:33 , Karl MatchettIf you don’t qualify for an employer pension, or you’re looking for a way to supplement yours, both a Lifetime ISA and a personal pension, such as a SIPP (a self-invested personal pension), can be effective retirement planning tools.
They have a lot in common: they’re both tax-efficient, they hold a similar range of investments - Lifetime ISAs are a little more restricted - and most compellingly, contributions to either are topped up by 25 per cent, albeit in different ways.
At first glance, it may seem that you could pay the same amount into one or the other and they would deliver an equal income in retirement. This isn’t the case.
Becky Wilding investigates which might suit you better:
Lifetime ISA vs personal pension: Which is better for higher retirement income?
Shell set to report lower earnings after ‘tepid’ update to investors
15:48 , Karl MatchettShell is expected to report lower profits for recent months as the energy giant continues to battle oil price volatility and strives to return cash to its shareholders.
The FTSE 100-listed company is predicted to report adjusted earnings of 3.74 billion US dollars (£2.78 billion) for the second quarter, when it publishes its latest figures on Thursday.
This would be down sharply on the 6.29 billion dollars (£4.68 billion) made the same time last year.
It would mean the company generates earnings of 9.3 billion dollars (£6.9 billion) for the first half of 2025.
More from PA:
Shell set to report lower earnings after ‘tepid’ update to investors
Bitcoin continues fall in price - 3% down for the day
16:19 , Karl MatchettBitcoin has continued to suffer steep losses in value today, now down 3.2 per cent over the past 24 hours.
It brings the value to around $115,450, around $8,000 lower than the highs of last week.
Gold and crude oil have also dropped in price today but to a lesser extent.
