Closing post: Trump says tariffs on chips coming in next two weeks
Time to wrap up…
Donald Trump will announce tariffs on imports of semiconductors and steel in the coming weeks, he told reporters aboard Air Force One while travelling to Alaska for his meeting with Vladimir Putin.
The US president said:
I’ll be setting tariffs next week and the week after on steel and on, I would say, chips…I’m going to have a rate that is going to be lower at the beginning - that gives them a chance to come in and build - and very high after a certain period of time.
Shares in Intel jumped by as much as 8.9% in early trading on Friday, also boosted by a report that the Trump administration is considering taking a stake in the chipmaker.
Meanwhile in the UK, the FTSE 100 briefly surpassed its intraday high this morning, although it is now trading down 0.3% at 9,150.90 points.
The owner of Kingsmill also agreed to buy its rival bakery business Hovis today, in a deal that could make the biggest bread brand in the country if it gets the green light from regulators.
Elsewhere Shein, the online fast-fashion retailer founded in China, increased sales in the UK by about a third to more than £2bn last year, overtaking the British rival Boohoo and closing in on Asos.
It is a slow open for Wall Street, with the blue chip S&P 500 index slipping by 0.1% in early trading. It hit an all-time high earlier this week.
The Dow Jones Industrial Average, another key US stock index, also hit an all-time intraday high, briefly surpassing its previous peak of 45,073.63 points. It was helped by a big jump in UnitedHealth Group shares, which are up by more than 9%, after it emerged that Warren Buffett’s Berkshire Hathaway has invested in the insurer. The Dow is now at 45,076.20 points.
US tariffs on chips and steel coming in the next two weeks, Trump tells reporters
Donald Trump will announce tariffs on imports of semiconductors and steel in the coming weeks, he told reporters aboard Air Force One while travelling to Alaska for his meeting with Vladimir Putin.
The US president said:
I’ll be setting tariffs next week and the week after on steel and on, I would say, chips…I’m going to have a rate that is going to be lower at the beginning - that gives them a chance to come in and build - and very high after a certain period of time.
Last week the president threatened a 100% tariff on imported semiconductors and chips, which could favour US-based companies such as Intel.
Shares in Intel jumped by as much as 8.9% in early trading on Friday, also boosted by a report that the Trump administration is considering taking a stake in the chipmaker.
Updated
US retail sales up 0.5% in July
US retail sales rose in July, up 0.5%, slowing from a 0.9% gain in June, official data shows.
Retail spending was helped by strong demand for cars, as well as promotional campaigns from Walmart and Amazon’s extended Prime Day.
Excluding cars, sales in the period were up by just 0.3%, according to the US Commerce Department’s Census Bureau.
US July Retail Sales: American households expand outlays to take advantage of Amazone prime days as back to school season kicks off. Topline increases 0.5% & control group 0.5%.
— Joseph Brusuelas (@joebrusuelas) August 15, 2025
Because noise is the norm in this highly revised time series a smoothed three-month look is a better… pic.twitter.com/93ViKK1kFS
Traders are starting to trim back their bets that the US central bank, the Federal Reserve, will cut interest rates next month. The probability of a quarter-point reduction has fallen from 94% to about 89%, per Reuters.
Definitely maybe an Oasis impact on UK inflation
It is the biggest reunion in British music in decades, with fans expected to splash out more than £1bn on the Oasis comeback. But for economists it presents a difficult question: how do you factor the Gallagher brothers into the UK’s inflation figures?
The Office for National Statistics will not be including Oasis ticket prices in their basket of goods for inflation, according to Morgan Stanley, as it “excludes big-name bands with highly distinctive and unique abilities to charge diverse prices.”
But fans flocking to hotels and driving up prices could have a big impact on the inflation reading for July, analysts believe. Analysts at Deutsche Bank expect the headline consumer price index rate rate for July will be 3.8% year on year, while Morgan Stanley has forecast a rate of 3.7%.
It is not the first time that superstar tours have moved the dial on crucial economic data. In June 2023, economists blamed Beyoncé’s concert in Stockholm for unexpectedly high Swedish inflation.
The ONS is scheduled to report the inflation figure for July on Wednesday 20 August.
The FTSE 100 has pulled back from its intraday high, and is up now by just 0.1% to 9,186.59.
The FTSE 250 mid-cap index is performing better, up 0.4%. Its best performer is Bytes Technology Group, which announced a £25m share buyback programme this morning. Shares in the IT reseller are up 7%.
Updated
Shein’s UK sales leap by a third to more than £2bn
Shein, the online fast-fashion retailer founded in China, increased sales in the UK by almost a third to more than £2bn last year, overtaking the British rival Boohoo and closing in on Asos.
The company, which had been considering a £50bn float on the London Stock Exchange but is now expected to list in Hong Kong, said profits rose 56% to £38.2m last year on which it paid £9.6m corporation tax, according to accounts filed at Companies House this week.
Shein, which mainly sells fashion but has also moved into other products including toys and beauty, said it had benefited from the opening of two new offices in King’s Cross and Manchester, the launch of a pop-up shop in Liverpool and a Christmas bus tour across 12 cities in the UK.
Oil prices edge lower ahead of Trump-Putin summit
Oil prices are edging lower this morning ahead of a meeting between US President Donald Trump and Russian leader Vladimir Putin later today in Alaska.
Brent crude futures fell by as much as 0.8% to $66.34 a barrel this morning, while US West Texas Intermediate crude futures fell by as much as 0.9% to $63.39.
Giovanni Staunovo, commodity analyst at UBS, told Reuters:
The market is watching out for whether there is a ceasefire or not. An expectation of a ceasefire translates into more Russian production…The question is will there be escalation or de-escalation?”
A potential deal could significantly lower geopolitical risk in the oil market. Analysts at the investment bank Citigroup said this month that a deal to end the war in Ukraine could push Brent crude to the low $60s range by the end of the year.
Recent weak economic data from China has also hurt the outlook for fuel demand.
Intel shares jump on reports of possible US government investment
Shares in Intel have jumped 7.4% after it was reported that the Trump administration is considering taking a stake in the struggling US chipmaker.
The potential investment, which would be paid for by the US government, would be used to develop Intel’s factory hub in Ohio, according to Bloomberg. It would also help shore up the chipmaker’s finances at a time when Intel has been slashing jobs as part of a wider cost-cutting drive.
Talks over the potential investment stem from a meeting that took place between Donald Trump, and the Intel chief executive, Lip-Bu Tan, this week, days after Trump called for Tan to resign, accusing him of having ties to the Chinese Communist party. Bloomberg suggested Tan was likely to stay in charge of the chipmaker.
Updated
Elsewhere in Europe, estimates suggest that economic growth in Switzerland slowed sharply in the second quarter.
Switzerland has estimated that its economy grew by just 0.1% quarter-on-quarter in the three months ended in June, down from 0.8% in the prior period.
It comes as Trump hits Switzerland with one of the highest tariff rates in the world, at 39%.
Melanie Debono, a senior economist at Pantheon Macroeconomics, said “luck is running out for the Swiss economy”.
We think the Swiss economy will enter a short, shallow recession in H2 as the rise in US trade tariffs (to a whopping 39% for most goods) hits exports, while trade uncertainty more widely hurts investment.
We currently expect GDP to fall by 0.3% quarter-to-quarter in both Q3 and Q4. Barring any revisions, this would mean that GDP in Switzerland will have risen by 1.3% this year, a touch more than the 1.0% recorded in 2024.
Swiss companies, whose exports to the US account for about one-sixth of their total foreign sales, face one of the steepest US tariffs in the world – only Laos, Myanmar and Syria had higher figures, at 40-41%.
FTSE 100 hits new intraday record high
The blue chip FTSE 100 index has hit another record this morning, rising by as much as 0.4% to 9,222.07, its highest point since the end of July.
It has pared back some of these gains, now up by around 0.1% 9,188.67, although it is still trading ahead of the high it set at the close yesterday of 9,177.24.
Axel Rudolph, senior technical analyst at the broker IG, says:
The FTSE 100 has joined the global push to fresh record highs, buoyed by improved risk appetite, supportive global trends and strong corporate earnings.
With investors drawing confidence from a friendlier interest rate outlook and resilient corporate earnings, the UK benchmark has finally broken through its previous ceiling. With a stellar over 11% rise since the start of the year, it is outperforming peers such as the S&P 500 and Nikkei 225. The move underlines how global market momentum can lift all boats, even in the face of lingering domestic economic concerns.”
London’s listed miners are leading the charge this morning, with Antofagasta, Glencore and Anglo American the top three risers across the index, up by 3.4%, 2.7% and 2.7% respectively.
Meanwhile the Stoxx Europe 600 index rose by 0.3%, led by the Danish cable group NKT, whose shares are up by around 8% this morning.
The Danish jewellery business Pandora is the worst performer, with its shares slumping 13% after it missed earning expectations for its second quarter.
Updated
Kingsmill owner and Hovis toast takeover deal
The owner of Kingsmill has agreed to buy its rival bakery business Hovis, in a deal that could make the biggest bread brand in the country if it gets the green light from regulators.
Associated British Foods, a FTSE 100 company which also owns the retailer Primark, has agreed to buy Hovis from the private equity firm Endless.
The deal between the second and third biggest bread brands in the country is expected to draw attention from the Competition and Markets Authority.
Both companies have struggled recently against Warburtons, the biggest brand in the sector. Revenue at Hovis dropped almost 9% to £447m in the year to 28 September 2024, with pre-tax losses widening to £4.7m, compared with a loss of £3.6m the year prior. That included £530,000 in one-off costs, largely related to restructuring.
ABF’s bakery division, Allied Bakeries (which includes Kingsmill, Allinson’s and Sunblest) made an annual loss about £30m despite sales of about £400m last year, according to analysts at the broker Panmure Liberum.
ABF said the deal will combine the production and distribution activities of Allied Bakeries and Hovis, which would create cost savings and efficiencies, so it would turn into a “profitable UK bread business that is sustainable over the long term”.
George Weston, ABF’s chief executive, said:
This transaction will create a UK bakeries business that is both profitable and sustainable over the long term. Supporting the Hovis and Kingsmill brands with well-invested and efficient operations will also enable innovation and growth. This solution will create value for shareholders, provide greater choice for consumers and increase efficiencies for customers.
Updated
Introduction: Chinese economy slows as Trump tariffs bite
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
New data suggest the Chinese economy slowed in July, as Donald Trump’s trade war began to bite at the second biggest economy in the world.
Figures coming out of Beijing last night showed that Chinese industrial production rose at the slowest rate since November and expanded by 5.7% compared with the same point last year, worse than an expected 6%.
Meanwhile Chinese retail sales grew by 3.7% year-on-year in July, its slowest pace so far this year and down from 4.8% the previous month.
Yuhan Zhang, principal economist at The Conference Board’s China Center, said:
Firms may be running on existing capacity rather than building new plants…The July industrial value-add breakdown tells a more nuanced story than the weak fixed asset investment headline.
He pointed to China’s automobile manufacturing, railway, shipbuilding, aerospace and other transport equipment industries as “outliers (that) indicate policy-driven, high-tech and strategic sectors are still attracting substantial capital.”
The Chinese CSI 300 stock index rose 0.8% after the release of the economic data, as it fed speculation that Beijing could introduce fresh stimulus in the market.
Meanwhile in the UK, the FTSE 100 blue chip share index is set to end the week at a new record high. It is poised to rise by 0.5% when the market opens at 8:00AM, led by gains in the finance and defence sectors.
The defence sector has been one of the best performers in London’s stock market, thanks to a wave of rearmament across much of Europe in the wake of the war in Ukraine.
All eyes will be on Alaska later today, when Vladimir Putin is set to meet Donald Trump. The US president has said he believes the Russian leader is ready to make a deal on the Ukraine war.
The agenda
8.00pm BST: Donald Trump and Vladimir Putin meet in Alaska
