Closing post
Time to wrap up for the day (and the week! 🎉).
The UK’s grocery industry watchdog has launched an investigation into Amazon over allegations that the retail and technology company is failing to pay its suppliers on time.
The Groceries Code Adjudicator (GCA) said it had “reasonable grounds” to suspect that Amazon had breached a part of the groceries supply code of practice, which mandates that there should not be delays in payments made to suppliers.
The investigation into Amazon comes almost a year after the GCA told the online retailer it needed to take “swift and comprehensive action” to improve its compliance with industry rules designed to protect suppliers.
The GCA is responsible for regulating the relationships between the UK’s 14 largest grocery retailers – including the biggest supermarkets Tesco and Sainsbury’s – and their direct suppliers.
Amazon has promised to co-operate fully with the investigation. A spokesman for the firm added:
“We have already made significant improvements to our grocery supplier experience, including to payment practices, with supplier contacts on this reducing falling year-on-year.
In other news….
Economists have warned that Rachel Reeves may need to raise taxes by more than £20bn in the autumn budget after figures showed the government’s spending deficit reached £17.7bn in May, the second highest on record for the month.
British retail sales volumes have recorded their sharpest drop since December 2023, as demand fell after shoppers splurged on food, summer clothes and home improvements the month before.
Retail sales fell across all sectors in May 2025. This was the largest monthly fall since December 2023.
— Office for National Statistics (ONS) (@ONS) June 20, 2025
Retail sales volumes have fallen 2.7% in May 2025, following a rise of 1.3% in April 2025 (revised up from 1.2%).
Read more ➡️ https://t.co/0spSOuwdhv pic.twitter.com/us5TVl1cfl
Developing countries need a fresh round of debt relief, to prevent money urgently needed for health and education being diverted to creditors, according to a major new report commissioned by the late Pope Francis.
The chief executive of Royal Mail has left after just over a year, weeks after the delivery company’s owner was sold for £3.6bn to a Czech billionaire.
Emma Gilthorpe resigns as chief executive of Royal Mail
The chief executive of Royal Mail has left after just over a year, weeks after the delivery company’s owner was sold for £3.6bn to a Czech billionaire, my colleague Alex Lawson reports.
Emma Gilthorpe, who joined from Heathrow airport in May 2024, left the company on Thursday, and will be replaced on an interim basis by the chief operating officer, Alistair Cochrane, with immediate effect, the Guardian has learned.
Daniel Křetínský completed a deal to buy International Distribution Services (IDS), the owner of the 509-year-old Royal Mail, in April.
A group of existing IDS non-executive directors, including the chair, Keith Williams, resigned earlier this month. However, the company had made no mention of Gilthorpe’s future after the deal.
Wall Street lifted by Trump's two-week window for Iran decision
The US stock market has opened higher, as investors welcome US President Donald Trump’s plan to decide whether or not the US gets directly involved in the Iran-Israel conflict within the next two weeks.
The Dow Jones Industrial Average rose 119.4 points, or 0.28%, at the open to 42,291.09. The S&P 500 gained 0.3%, while the tech-focused Nasdaq Composite gained almost 0.5%.
Kathleen Brooks, research director at XTB, says traders are pricing out the worst case scenario for geopolitics.
News that President Trump would delay any decision on joining Israel’s attacks against Iran has boosted the market mood at the end of this week.
The risk is that Trump changes his mind. However, like reciprocal tariffs, Trump sets movable deadlines. While the oil price is likely to maintain some geopolitical premium, Brent crude could move back below $75 per barrel, after touching $79 per barrel on Thursday, as fears of a major escalation in the conflict ease.
Updated
Technical problems hit Co-op Bank
Customers of Co-op Bank were cut off from online banking for up to seven hours today as a result of technical problems.
The bank’s internet banking was down from 5am, prompting complaints from users online.
A message from the bank said there was an “unplanned outage” and apologised to customers. “Please rest assured we’re working around the clock to resolve this as quickly as possible,” it said.
A spokesperson for the bank said the problem had persisted until 11am on the desktop site and midday on the mobile app.
The outage was blamed on an internal technical problem.
“For a few hours this morning, we experienced a technical issue that temporarily impacted our app and online services,” a spokesperson said, adding:
“Payments were not affected - debit and credit cards continued to work as normal in ATMs, online, and in-store. All services have now been fully restored. We’re sorry for any inconvenience this may have caused.”
Melinda French Gates, the philanthropist and former wife of Microsoft founder Bill Gates, has criticised the tech billionaires who now support president Donald Trump, having criticised him duing his first term.
In an interview with Bloomberg, French Gates also argues history will not look favorably on the rollback of diversity and inclusion initiatives. She says:
“People who used to say one thing have absolutely shifted.
“A democracy is made up by our beliefs and our investments and our values, and we, of all times right now, should be living those values out, not pivoting to what some comms person tells us is the right thing to do.”
Several companies, such as Facebook-owner Meta, have bowed to Donald Trump’s anti-diversity drive and abandoned their diversity goals since he won re-election.
Updated
Back in the UK, luxury goods maker Mulberry has announced plans to raise £20m to fund its growth strategy.
Mulberry, which fought off a takeover approach from Frasers Group last year, is aiming to grow annual revenues to £200m and lift its profits margin to 15%.
It says its majority shareholder, Challice, would be willing to underwrite the fundraising in full if required. But, the company believes its prospects are stronger if its other major shareholder, Frasers, takes part too….
Mulberry has also reported that it expects to make a loss of £23m in the last financial year (the results are being audited now), on revenues of around £120m.
Over in the US, factory activity in the Philadelphia region remained weak.
The latest Manufacturing Business Outlook Survey, produced by the Federal Reserve Bank of Philadelphia, shows that general activity in the sector fell again this month.
The new orders index fell but remained positive, and the shipments index improved, turning positive, but manufacturers also cut jobs at the fastest rate since May 2020.
June Philadelphia Fed Manufacturing Index at -4 vs. -1.5 est. & -4 prior … new orders down to +2.3 vs. +7.4 prior; workweek down to -1.6 vs. +2 prior; shipments up to +8.3 vs. -13 prior … notable decline in employment, down to -9.8 vs. +16.5 prior pic.twitter.com/lXIMQBjGJ5
— Liz Ann Sonders (@LizAnnSonders) June 20, 2025
Back in the world of economics, JPMorgan has slashed its forecasts for Israel’s growth, due to the conflict with Iran.
JP Morgan has also revised up its projections for Israel’s budget deficit.
Reuters has the details:
The U.S. investment bank’s economists said they now expected Israel’s GDP to grow 2.0% this year down from 3.2% previously, while the budget deficit is likely to be 6.2% versus a previous estimate of around 5%.
It added the war would lift inflation too and force the central bank to delay the start of an interest rate cutting cycle until November compared to a prior expectation of September.
JPMORGAN SLASHES ISRAEL 2025 GDP FORECAST TO 2.0% FROM 3.2% PREVIOUSLY, LIFTS BUDGET DEFICIT FORECAST TO 6.2% FROM AROUND 5%
— PiQ (@PiQSuite) June 20, 2025
WAR SHOCK WILL ADD TO ISRAEL INFLATION AND DELAY CENTRAL BANK INTEREST RATE CUTTING CYCLE, FIRST CUT NOW EXPECTED IN NOVEMBER VS SEPTEMBER, SAYS JPMORGAN
Amazon has pledged to co-operate with the investigation, while insisting it does comply with the UK’s grocery code.
An Amazon spokesman says:
“Amazon takes the Groceries Supply Code of Practice incredibly seriously and we will co-operate fully with the adjudicator as he carries out his investigation.
“While we are disappointed with this decision, we welcome the opportunity to further demonstrate our ongoing compliance with this particular section of the code.
“We have already made significant improvements to our grocery supplier experience, including to payment practices, with supplier contacts on this reducing falling year-on-year.
Updated
Amazon are now being investigated by the UK Groceries code adjudicator.
— Steve Dresser (@dresserman) June 20, 2025
Centering on deductions and delays in payments to suppliers.
Suppliers who want to contribute to the investigation into Amazon can complete the GCA’s confidential questionnaire.
Alternatively, they could email the regulator, at enquiries@GroceriesCode.gov.uk
Or, they can write to:
Groceries Code Adjudicator
7th Floor, The Cabot
25 Cabot Square
Canary Wharf
London
E14 4QZ
The Groceries Code Adjudicator launched its investigation into Amazon after suppliers warned that the retail giant was failing to stick to the Code.
A survey conducted in 2024 found that supplies had raised more issues with Amazon than with other retailers:
Amazon was also bottom of the table when it came to suppliers’ assessment of compliance with the Code:
UK grocery watchdog probes Amazon over alleged supplier payment delays
Britain’s grocery regulator has launched an investigation into whether Amazon is failing to pay its suppliers on time.
The Groceries Code Adjudicator (GCA) says it has “reasonable ground” to suspect Amazon has breached paragraph 5 of the Groceries Supply Code of Practice, which mandates prompt payment to suppliers.
Last summer, the GCA told Amazon to take “swift and comprehensive action” to show it was complying with the Code.
The regulator is now calling for evidence from suppliers, and hopes they will share their experiences of supplying Amazon.
The Adjudicator Mark White says:
Delays in payment can significantly harm suppliers. The alleged delays could expose Amazon suppliers to excessive risk and unexpected costs, potentially affecting their ability to invest and innovate.
I decided to launch this targeted investigation based on the range of evidence I have seen from multiple sources. It will allow me to determine whether Amazon has breached paragraph 5 of the Groceries Code and the root cause of any breach.
I encourage all direct suppliers and other stakeholders to respond to my call for evidence and provide information about your experiences with Amazon. All responses will be completely confidential.
Updated
Personal insolvencies also rise
There’s also an increase in the number of people entering insolvency.
Last month, 10,014 individuals entered insolvency in England and Wales. That’s 5% higher than in May 2024.
The individual insolvencies consisted of 648 bankruptcies, 3,783 debt relief orders (DROs) and 5,583 individual voluntary arrangements (IVAs).
Updated
Insolvencies jump across England and Wales
The number of companies collapsing across England and Wales jumped last month, in a sign of the economic pressures hitting firms.
There were 2,238 company insolvences in England and Wales during the month, which is 8% higher than in April and 15% more than in May 2024.
The incresae was driven by a rise in Creditors’ Voluntary Liquidations (CVL), the process where the directors of an insolvent company decide to close it down.
In total there were 1,734 CVLs in May, plus 354 compulsory liquidations, 136 administrations and 14 company voluntary arrangements (CVAs), new data from the Insolvency Service shows.
Overall, so far this year, monthly company insolvency numbers are slightly higher than in 2024 and at a similar level to 2023, which saw a 30-year high annual number of insolvencies.
David Hudson, restructuring advisory partner at advisory firm FRP, says:
“This latest rise in corporate insolvencies reflects the harsh reality many businesses face: fragile demand is not keeping pace with rising costs. Even the increasingly-likely prospect of rate cuts in August won’t do much to fix this – insolvency levels will remain elevated for the foreseeable future.
“Sectors like hospitality are having a particularly challenging time in this environment, in no small part due to the impact on labour costs of April’s National Insurance and minimum wage increases. These businesses are now approaching what are some of their peak months and will be hoping for strong trading to bolster their resilience. If this doesn’t materialise, then they could be facing a short road ahead.
“What’s also particularly concerning in the data is the quiet, but steady, increase in the number of administrations. These usually involve the very largest businesses and so could prompt a significant knock-on impact in terms of jobs and supply chains if they continue to rise. It’s also an early signal that financial distress is deepening – not just among smaller businesses, but at the top end of the market too.”
BOE’s Bailey questions if digital pound is needed
Over in Kyiv, the governor of the Bank of England has questioned whether the UK needs a digital pound for consumers.
Andrew Bailey told a conference at the National Bank of Ukraine that he is not yet convinced that there is a need to create new forms of money – such as Central Bank Retail Digital Currency.
Bailey explained:
After all, money – in the form of central bank reserves – has been digital in form for many years. I think we mean, how do we get the benefits of new digital technologies in the area of payments – where money is a medium of exchange?
For instance, how do we get the benefits of smart contracts in payments, and the benefits of using digital technology to fight fraud? I start with the presumption that there should be benefit here – it seems like a failure of imagination if we think otherwise.
The Bank has been investigating whether it should launch a new digital pound, dubbed “Britcoin”, which would be stored in digital wallets and interchangeable with cash and bank deposits.
Bailey argues that commercial banks “need to step up” to the challenge of digital money provision.
He says:
If there are real benefits to digital technology in payments, we should want to see them in commercial bank money. The buzzword here is tokenised deposits – a bit of a mouthful, but really it is the application of digital technology to the form of money that we have today. The challenge is to apply this to both domestic and cross-border and cross-border currency payments.
To be clear, I am not against stablecoins, but they do have to meet the test of singleness of money. I am not against Central Bank Retail Digital Currency, but I question why it is needed if innovation proceeds as I think it should.
(Tokenized deposits are digital tokens issued by regulated banks that represent claims on bank deposits. which allow bank account balances to be represented on a blockchain).
Markets rise as Trump sets two-week window to decide on Iran attack
European stock markets are rallying in early trading, after Donald Trump opened a two-week window for a diplomatic solution to the conflict between Israel and Iran.
Last night’s news that Trump will decide in the next two weeks whether the U.S. will get involved in the Israel-Iran war has created some relief in the markets.
Germany’s DAX share index is up almost 1%, and France’s CAC is 0.75% higher.
In London, the FTSE 100 index has gained 44 points or 0.5%, with airline shares higher but oil companies falling.
The price of Brent crude oil has dropped by 2.3% to $77 per barrel, as worries of US involvement in Middle East ease.
Neil Wilson, UK investor strategist at Saxo Markets, says some of the “geopolitical risk premia affecting global markets heading into the weekend” has diminished, adding:
European ministers are due to meet Iran’s foreign minister in Geneva today to hash something out. Oil retreated along with gold and stocks rose a touch early on Friday as hopes for some kind of de-escalation permeated markets.
Updated
RSM: higher taxes looking likely
Thomas Pugh, economist at audit, tax and consulting firm RSM UK also predicts tax rises in the autumn budget.
Having analysed today’s public finances, Pugh explains:
“Public sector net borrowing was £17.7bn in May, £0.7bn higher than in May last year and £0.6bn more than the OBR forecast. The good news is that cumulative borrowing for the first two months of the fiscal year is £2.9bn lower than the OBR forecast in March, which will give the chancellor something to cheer.
“On the details, government spending came in at £99bn, slightly below the OBR forecast due to a smaller increase in debt payments. Tax receipts were £82.5bn, also slightly below forecast, but there were signs the increase in employment taxes is feeding through into higher receipts as national insurance receipts exceeded the forecast. Crucially, the current budget deficit, which is now what matters for the fiscal rules, came in £0.2bn below the OBR forecast.
Tighter fiscal policy could encourage the Bank of England to lower interest rates, after leaving borrowing costs unchanged yesterday Pugh adds:
“Looking ahead to the budget in the autumn, the under performance of the economy and higher borrowing costs mean the chancellor may already have lost the £9.9bn of fiscal headroom that she clawed back in March. Throw in the tough outlook for many government departments announced in the spending review and u-turns on welfare spending and the chancellor will probably have to announce some top-up tax increases after the summer.
“We are pencilling in tax increases of £10-£20bn. The good news is that with interest rates likely to be around 4% at the time of the budget there is plenty of scope for the Bank of England to cut rates to offset the impact of any fiscal consolidation on the economy.”
Autumn tax rises 'increasingly likely'
Despite UK government borrowing slightly undershooting forecasts so far this financial year, tax rises in the autumn are likely.
That’s the view of City consultancy Capital Economics, who told clients this morning:
Despite the overshoot in May, public borrowing was £2.9bn below the OBR’s forecast in the first two months of the fiscal year. That said, the OBR may still revise up its borrowing forecasts from March in the Autumn Budget.
That and already-tight spending plans mean tax hikes later this year appear increasingly likely.
Last week, ther was a flurry of predictions of tax rises after chancellor Rachel Reeves outlines the government’s spending plans for the next few years.
Capital Economics predict the OBR could revise up its debt interest payments and borrowing forecasts in the Autumn Budget, given recent increases in borrowing costs, while the cooling in the labour market means income tax receipts are unlikely to keep exceeding expectations.
They add:
We doubt it will get much better for the Chancellor anytime soon, as her £9.9bn buffer against her fiscal mandate may be wiped out at the Autumn Budget.
The u-turns on benefit and welfare spending, downward revisions to the OBR’s productivity forecasts and higher borrowing costs may mean to maintain her current £9.9bn buffer, Reeves has to raise £13-23bn later this year. And with the gilt market sensitive to significant increases in borrowing, all this means tax rises are looking increasingly likely.
Retail analyst Nick Bubb isn’t convinced by today’s retail sales figures, showing a 5% drop in food sales volumes last month.
He explains:
Well, it’s a brave man (or woman) who believes ONS Retail Sales figures...but their Food sales figures for May look much too gloomy, given that the BRC-KPMG survey said that Food sales were up 3.6% in May...
UK government borrowing below official forecasts...
We’re now two months into the financial year, and UK government borrowing is slightly lower than the fiscal watchog had forecast.
According to the Office for National Statistics, the UK has borrowed £37.7bn in April and May. That’s £1.6bn more than in the same period in 2024, but £2.9bn less than the £40.7bn forecast by the Office for Budget Responsibility (OBR).
Today’s public finances report shows that the UK spent £7.6bn paying the interest on government debt in May.
That’s the second-highest May interest payable since monthly records began in 1997, but actually £700m lower than a year ago.
That fall is thanks to the drop in inflation year-on-year, which lowered the cost of servicing index-linked bonds.
Updated
UK retail sales record biggest monthly drop since 2023
Ouch. British retail sales volumes dropped at their fastest rate since December 2023 last month, the Office for National Statistics reports.
The latest retail sales report shows that volumes fell by 2.7% month-on-month in May, and were 1.3% lower than a year ago. That’s a worrying sign that consumer demand may have weakened last month.
The decline was, apparently, driven by a drop in food store sales volumes, after a strong rise in April.
Food store sales volumes fell back in May, following strong sales in April. Feedback suggested reduced purchases for alcohol and tobacco with customers choosing to make cutbacks.
— Office for National Statistics (ONS) (@ONS) June 20, 2025
Clothing and household goods stores reported slow trading due to reduced footfall. pic.twitter.com/g5aIdbNOrN
ONS senior statistician Hannah Finselbach says:
“Retail sales fell sharply in May with their largest monthly fall since the end of 2023.
“This was mainly due to a dismal month for food retailers, especially supermarkets, following strong sales in April. Feedback suggested reduced purchases for alcohol and tobacco with customers choosing to make cutbacks.
“The falls were consistent across all sectors with clothing and household goods stores reporting slow trading due to reduced footfall. There was also decreased demand for DIY items as consumers took advantage of the good weather over the previous few months.
“Looking at the wider picture, retail sales are still up across the latest three-months as a whole.”
Introduction: UK government borrowing hits second-highest level for a May
Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.
New data on government borrowing, and retail sales, are giving us a new insight into the state of the British economy today.
On the fiscal side, UK government borrowing hit its second-highest level for any May last month, as spending continued to outstrip tax receipts.
The UK borrowed £17.7bn in May to balance the books, £0.7bn more than in May 2024, the Office for National Statistics has reported. That’s only exceeded by May 2020, when the Covid-19 pandemic was gripping the country.
ONS deputy director for public sector finances Rob Doody explains:
“Last month saw the public sector borrow £0.7 billion more than at the same time last year, with only 2020, affected as it was by COVID-19, seeing higher May borrowing in the time since monthly records began.
“While receipts were up, thanks partly to higher income tax revenue and National Insurance contributions, spending was up more, affected by increased running costs and inflation-linked uplifts to many benefits.”
Public sector net borrowing excluding public sector banks was £17.7 billion in May 2025. This was £0.7 billion more than in May 2024 and the second-highest May borrowing since monthly records began in 1993.
— Office for National Statistics (ONS) (@ONS) June 20, 2025
➡️ https://t.co/I4cI5aiUZ4 pic.twitter.com/LxKyTrmoh6
The report shows that central government tax receipts increased by £3.5bn to £61.7bn in May, swelled by higher income from tax – including £1.9bn more on income tax, £800m in Value Added Tax, and £600m in corporation tax.
The recent increase in employers’ national insurance rates helped to lift compulsory social contributions by £1.8bn to £15.1bn.
But, central government spending rose by £4.1bn, including:
A £2.8bn rise in central government departmental spending on goods and services, as pay rises and inflation increased running costs
A £2bn rise in net social benefits paid by central government to £27.1 billion, largely caused by inflation-linked increases in many benefits and earnings-linked increases to state pension payments
May’s borrowing leaves the UK’s net debt-to-GDP ratio at the end of May 2025 at 96.4%, 0.5 percentage points more than a year ago, and around the highest level since the 1960s.
The agenda
7am BST: UK retail sales report for May
7am BST: UK public finances report for May
9am BST: European Central Bank economic bulletin
1.30pm BST: Philadelphia Fed manufacturing index
3pm BST: EU consumer confidence report
Updated
