In This Article:
British holidaymakers face potential summer holiday travel chaos after pilots at EasyJet rejected a pay deal worth as much as £200,000 to move a step closer to strike action.
Pilots turned down the offer in a ballot that ended on Friday, with management now set to return to talks with officials from the British Airline Pilots’ Association (Balpa).
According to terms of the rejected pay offer, EasyJet captains of ten years’ standing, currently earning almost £164,00 a year, would have seen their salaries jump to £190,000 in October and almost to £200,000 by next April.
EasyJet pilots voted in favour of possible industrial action when consulted on an earlier pay proposal, though Balpa said it does not currently plan to hold a strike ballot over the latest offer. EasyJet confirmed that pay talks will resume and said it is not expecting any disruption.
However, the prospect that talks could yet fail would raise the prospect of potential strike action.
Walkouts in coming months would create chaos for passengers and put a dent in what EasyJet has predicted will be a bumper summer, with bookings expected to surpass the pre-Covid total for the first time and set a record for the peak July-September quarter.
The company’s package holiday division had already sold 70pc of its available programme by the middle of last month.
Read the latest updates below.
06:23 PM BST
Signing off
Thanks for joining us today. Chris Price will be back in the morning with all the latest business news ahead of the London markets opening.
06:23 PM BST
Treasury offers HMRC more cash to fix helpline
The Treasury is to pay £51m in extra funding to HMRC so it can answer more phone calls after a backlash over plans to close its self-assessment helpline for half the year.
Nigel Huddleston, Financial Secretary to the Treasury, said on Monday: “Many tasks can quickly and easily be completed online or via the HMRC app, but today’s funding means that everyone can rest assured there will be someone at the end of the phone, ready to speak.”
The decision was made after HMRC was forced to cancel plans to close its self-assessment phone lines between April and September each year and offer a digital service only.
HMRC previously said it receives millions of calls for tasks that can be done easily online.
05:27 PM BST
European shares close flat as investors await economic data
The Europe-wide Stoxx 600 closed flat today, not far away from record high levels. Carmakers represented the biggest-rising sector, recovering from a four-day losing streak, while defence stocks were the worst hit with a 1.2pc loss.
The benchmark index hit a record high on Friday, logging its biggest weekly gain since late January, of 3pc, underpinned by strong corporate earnings.
The Stoxx 600 regained its momentum midway into May, after geopolitical tensions and monetary policy uncertainties saw it wilt in April.
All eyes will be on the US producer and consumer prices inflation results, due on Tuesday and Wednesday, which will further set the tone for the Federal Reserve’s anticipated rate cuts this year.
In Europe, the euro zone’s final inflation and flash first-quarter GDP in the latter half of the week will be scrutinized to gauge the interest rate path for the European Central Bank, which has indicated a June cut, flagged uncertainties around policy outlook beyond that and stressed its independence from the Fed.
Analysts at ING Research said:
Even though many ECB speakers have stressed independence from the Fed, history tells us that divergences over the last 25 years were in hindsight seen as missteps.
05:19 PM BST
Footsie dip could represent profit-taking after record streak, says analyst
The FTSE 100 dipped today, hurt by losses in aerospace and defence stocks, while investors awaited more data and comments from Bank of England (BoE) officials on the state of the economy.
The blue-chip FTSE 100 fell 0.2pc after hitting record highs in 11 out of last 13 sessions as the BoE took a dovish stance.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said:
The FTSE 100 has taken a bit of a breather from its record rally opening flat and [lost] some ground as the session has progressed.
Aerospace and defence stocks slipped 1.8pc, logging their worst day in more than two weeks, and leading declines on the index. The sector was pulled down by BAE Systems with a 3.2pc decline after Bank of America downgraded the stock to “neutral” from “buy”.
04:57 PM BST
Footsie closes down
The FTSE 100 closed down 0.2pc after share prices dropped from around 11:30am onwards. The biggest riser was 3i, up 2.4pc, followed by Unilever, up 0.6pc. The biggest faller was BAE Systems, down 3.2pc, followed by information supplier Relx, down 1.4pc.
Meanwhile, the FTSE 250 dipped 0.4pc. The biggest riser was What Hi-Fi publisher Future, up 3.9pc, followed by investment trust Apax Global Alpha, up 2.9pc. The biggest faller was mining company Ferrexpo, down 4.7pc, followed by Oxford Instruments, down 3.7pc.
04:25 PM BST
Economists predict drop to US inflation in this week’s data
Global stock indexes have risen today, with investors awaiting this week’s US inflation data, which is expected to be key for the outlook for US interest rates.
While the US consumer prices report will likely take centre stage, US producer price data is also due this week, along with updated data on European inflation that should reinforce expectations for a June rate cut from the European Central Bank.
This week brings comments from a host of Federal Reserve speakers, including Fed Chair Jerome Powell.
Investors have been focused on inflation as they weigh how soon the US central bank is likely to cut rates.
Economists polled by Reuters expect the closely watched core CPI inflation in the US to rise by 0.3pc in the month, down from 0.4pc in March, for an annual gain of 3.6pc, down from 3.8pc.
Investors need to “get some level of comfort that inflation is not going back up, and potentially going down, to give the Fed cover for at least one or maybe two cuts before the end of the year,” said Thomas Hayes, chairman at Great Hill Capital.
04:16 PM BST
Roaring Kitty is back and so, it seems, are meme stocks
The man at the center of the pandemic “meme stock” craze returned to the social media platform X for the first time in three years and has sent prices of some of those stocks surging.
Keith Gill, better known as “Roaring Kitty”, posted an image on Sunday of a man sitting forward in his chair, a meme used by gamers when things are getting serious.
He followed that tweet with a YouTube video from years before saying: “That’s all for now cuz I’m out of breath. FYI here’s a quick 4min video I put together to summarize the $GME bull case.”
GameStop was a video game retailer that in 2021 was struggling as consumers switched rapidly from discs to digital downloads. Mr Gill and those who agreed with him changed the trajectory of a company that appeared to headed for bankruptcy.
At Monday’s opening bell, it appeared that Mr Gill had revived that interest as shares of GameStop doubled, its biggest intraday jump since the meme craze in 2021. Other meme stocks including the theater chain AMC were jolted higher as well in extremely volatile trading.
Trading in GameStop was repeatedly halted today due to volatility.
Mr Gill became a cause célèbre in 2021 after his posts on the Reddit subcategory Wallstreetbets ignited a battle between thousands of smaller retail investors and large hedge funds that were betting heavily against the survival of GameStop, shorting its stock.
The small guys won, at least for a while, driving shares of GameStop up more than 1,000pc in 2021, and other meme stocks as well. The struggling movie theater chain AMC jumped 2,300pc in the same year.
03:58 PM BST
Javier Milei’s Argentina wins IMF agreement after policies drive stronger economy
Staff of the International Monetary Fund (IMF) and Argentine authorities have reached an agreement on the eighth review of the country’s $44 billion extended fund facility arrangement, the Washington-based lender said on Monday.
The IMF said the decision followed better-than-expected first-quarter performance in Argentina.
Argentine President Javier Milei took office in December vowing to tackle triple-digit inflation, contracting economic activity and reserves in the red. He rolled out a sweeping fiscal reform, tightening the federal government’s belt.
Milei’s plan “has resulted in faster-than-anticipated progress in restoring macroeconomic stability and bringing the [IMF] programme firmly back on track,” the body said.
Authorities agreed that Argentina would continue to work to reach fiscal balance without net central bank financing, the IMF said. Meanwhile, foreign-exchange policy will become more flexible as conditions allow, among other tweaks to the agreement.
The terms must now be approved by the IMF executive board, which is expected to discuss the subject in coming weeks, it added.
03:50 PM BST
Biden administration says targetted protection against China could avoid major retaliation
Janet Yellen, the US Treasury Secretary, said this afternoon that any US action against Chinese “overcapacity” should be targeted and not broad-based.
She said:
President Biden believes that anything we do should be targeted to our concerns and not broad-based and hopefully we will not see a significant Chinese response. But that’s always a possibility ...
Ms Yellen’s comments come as US President Joe Biden is expected to announce new China tariffs this week on some sectors where China is believed to be selling into the US at artifically low prices.
03:33 PM BST
Walgreens ‘contacting buyers for Boots’
Wallgreens is reaching out to potential buyers for Boots as it seeks an exit from the UK, it has been reported.
The US owner of the 174-year-old UK company is understood to have been be looking at options for Boots since last year.
It abandoned a sale of the company two years ago but was weighing up a £7bn UK listing for the retailer in December.
The pharmacy and wellness giant is working with advisers and seeking early-stage discussions with potential bidders for the £7bn chain, according to Bloomberg News.
With that, I will hand you over to my colleague Alex Singleton, who will keep the live updates coming for the rest of the day.
03:21 PM BST
Keep US rates ‘restrictive’ until there is real progress on inflation, says Fed official
The US Federal Reserve should keep interest rates at their current “restrictive” levels until it sees real progress in the fight to lower inflation, a senior official at the central bank has said.
Fed vice chair Philip Jefferson told an event in Cleveland, Ohio:
In light of the attenuation in progress in terms of getting inflation down to our target, it is appropriate that we maintain the policy rates in restrictive territory, which it is right now.
The Fed has increased interest rates to a 23-year high as it looks to bring inflation down to its long-term target of 2pc.
After making significant progress last year, Fed policymakers have hit a speed bump since the start of the year, with inflation coming in too hot in the first three months of 2024.
Futures traders currently assign a probability of close to 65pc that the Fed will start lowering interest rates by mid-September, according to data from CME Group.
03:12 PM BST
GameStop shares double in value as memestock craze returns
The apparent return of the memestock craze meant GameStop shares were temporarily halted after surging by 110pc.
Shares appear to have rocketed higher after a tweet on Sunday by “Roaring Kitty,” one of the figureheads of the movement which drove the price of several unloved stocks higher.
Kathleen Brooks, research director at XTB, said:
Monday’s move in Game Stop rounds off a good month for the company, its stock price has surged more than 60pc in the past month, fueled mostly by demand from retail traders.
Here is the tweet from Roaring Kitty that got everything moving:
02:59 PM BST
Anglo American criticises ‘highly unattractive’ takeover bid
UK-listed miner Anglo American has raised doubts about the possibility of a takeover deal by rival BHP after it said the latest £34bn offer posed “significant execution risks”.
Anglo American said it had rejected a second bid which it believes “continues to significantly undervalue” the company.
It said the latest offer, pitched at £27.53 per share, up from £25.08 per share, “is highly unattractive for Anglo American’s shareholders, given the uncertainty and complexity inherent, and significant execution risks”.
Australian mining giant BHP said it plans to split off Anglo’s platinum and iron ore subsidiaries in South Africa, with shares split between the British company’s shareholders.
Anglo said this “creates significant uncertainty as to the delivered value as part of the proposal,” adding that these demergers would require additional approvals which are not addressed by BHP.
It added: “The board is confident in Anglo American’s standalone future prospects.”
Last month, South Africa’s minerals resources minister said he was against the takeover of Anglo by rival BHP Billiton, because the country’s experience with the company was “not positive”.
02:43 PM BST
GameStop shares surge at open
GameStop shares have made their biggest gain in three years after the architect of the memestock craze returned to social media.
Shares in the retailer jumped 53pc as trading began in Wall Street, its largest move higher since March 2021.
It comes after Keith Gill, better known as “Roaring Kitty,” posted a video on YouTube outlining his case for buying its shares.
He was at the centre of the pandemic meme stock craze dramatised in the film Dumb Money last year.
02:35 PM BST
Wall Street opens higher ahead of inflation figures
US stock indexes opened higher to close in on record peaks as investors await key inflation figures this week to gauge the likelihood of interest rate cuts in 2024.
The Dow Jones Industrial Average rose 78.4 points, or 0.2pc, at the open to 39,591.28.
The S&P 500 rose 10.4 points, or 0.2pc, at the open to 5,233.08​, while the Nasdaq Composite rose 59.4 points, or 0.4pc, to 16,400.307 at the opening bell.
02:20 PM BST
Memestock shares surge as ringleader returns to social media
The man at the centre of the pandemic meme stock craze returned to the social platform X for the first time in three years and sent prices of some of those stocks surging.
Keith Gill, better known as “Roaring Kitty,” posted an image on Sunday of a man sitting forward in his chair, a meme used by gamers when things are getting serious.
He followed that tweet with a YouTube video from years before saying, “That’s all for now cuz I’m out of breath. FYI here’s a quick 4min video I put together to summarize the $GME bull case.”
The intervention by Mr Gill sent Gamestop shares surging by 40pc in premarket trading.
GameStop was a video game retailer that in 2021 was struggling as consumers switched rapidly from discs to digital downloads.
Then Mr Gill became a cause célèbre in 2021 after his posts on the Reddit subcategory Wallstreetbets ignited a Wall Street battle between thousands of smaller retail investors and large hedge funds that were betting heavily against the survival of GameStop, shorting its stock.
The small guys won, at least for a while, driving shares of GameStop up more than 1,000pc in 2021, and other meme stocks as well. The struggling movie theater chain AMC jumped 2,300pc in the same year.
The story of Roaring Kitty and the meme stock craze was turned into a movie last year called “Dumb Money.”
02:11 PM BST
FTSE 100 slips from record high
The FTSE 100 has fallen from its record closing highs at the end of last week amid a sharp fall for defence stocks.
The UK’s blue chip index has fallen 0.3pc as BAE Systems was downgraded by Bank of America.
The defence giant has dropped as much as 3.8pc.
Meanwhile, drugmaker AstraZeneca, one of the largest companies on the index, was last down 0.8pc.
01:41 PM BST
Squarespace to go private in £5.5bn deal
Software company Squarespace is being taken private in an approximately $6.9bn (£5.5bn) all-cash deal with private equity firm Permira.
Squarespace shareholders will receive $44 per share for each share they own. The company, which helps entrepreneurs build brands and businesses online, went public in a direct listing two years ago at $50 per share.
A special committee of the Squarespace board of directors unanimously approved and recommended the deal, which was then unanimously approved by the board.
Anthony Casalena will remain as Squarespace chief executive and chairman.
Casalena and long-term investors General Atlantic and Accel, which make up about 90pc of the Squarespace’s voting shares, have agreed to vote in favour of the transaction.
The deal is expected to close by the fourth quarter. Shares of the New York-based company rose 13pc in premarket trading.
01:22 PM BST
Mining giant Anglo American rejects new £34bn takeover bid
Anglo American has rejected a fresh takeover bid from rival commodities giant BHP that valued the London-listed miner at £24bn
Anglo’s shares dropped by 2pc after BHP said a second all-share offer worth £27.53 per share was turned down.
It had already rejected a £31.1bn offer, which South Africa’s minerals resources minister had said he opposed because the country’s experience with BHP was “not positive”.
BHP said in a statement that it was “disappointed that the Anglo American Board has chosen not to engage” with the improved terms.
It added that it “continues to believe that a combination of the two businesses would deliver significant value for all shareholders”.
01:13 PM BST
Pilots reject £75,000 pay rise
According to terms of the rejected pay offer, EasyJet captains of ten years’ standing, currently earning almost £164,00 a year, would have seen their salaries jump to £190,000 in October and almost to £200,000 by next April, writes Christopher Jasper.
Senior first officers would have been awarded a £20,000 raise, taking their pay to almost £113,000, and first officers would have received more than £75,000.
EasyJet said it was disappointed with the outcome of the pilot ballot on the proposals and said backing for the deal “narrowly fell short” of the 50pc required.
A spokesman said: “We remain in constructive dialogue with Balpa and no strike action is planned.”
Balpa said it is also engaged in pay talks with Virgin Atlantic Airways. The union last year threatened strikes at the Heathrow-based long-haul airline over concerns about pilot fatigue, before rostering arrangements were adjusted and the issue resolved.
12:58 PM BST
Treasury sells more shares in NatWest
The Government has sold another chunk of its stake in NatWest, continuing the process of bringing the high street bank into private ownership.
A notice today confirmed that the Government’s shareholding in the bank has fallen by about one percentage point to 26.95pc.
NatWest received several multibillion-pound bailouts during the financial crisis in 2008 and 2009, leaving the Government with an 84pc stake in what was then known as Royal Bank of Scotland.
But the Treasury has been selling down its stake in the lender, which also owns Coutts.
The process has accelerated of late, and Chancellor Jeremy Hunt reaffirmed the Government’s plan to sell all of its interest in the bank by 2025 or 2026 in the spring budget.
It will also include a public share sale this summer as part of an attempt to create a “new generation of retail investors”.
So far, the blocks of shares have been sold to institutional investors, but the summer plans would be the first time its NatWest stock is on sale to individuals.
12:38 PM BST
Pound edges higher ahead of jobs figures
The pound has edged upwards ahead of employment figures this week which could indicate how close the Bank of England is to cutting interest rates.
Sterling was up 0.1pc against the dollar to $1.254, with US inflation figures on Wednesday expected to indicate how quickly the Federal Reserve can begin cutting rates.
Traders are currently pricing in just shy of two quarter of a point interest rate cuts from the Fed by the end of 2024, starting as late as November.
By contrast, the Bank of England is expected to cut rates twice by the end of the year, starting by August.
Against the euro, the pound was flat at €1.16.
12:13 PM BST
House building hit by wet weather and higher interest rates
The number of new homes being registered fell by a fifth over the past year amid poor weather conditions, skills shortages and higher interest rates, according to an industry body.
Some 21,967 new homes were registered to be built in the first quarter of 2024, down by 20pc compared with the first quarter of 2023, the National House Building Council (NHBC) said.
However, the figure was an increase compared with the fourth quarter of 2023, when 19,084 new home registrations were recorded.
The NHBC said that despite the fall in new homes being registered to be built, there were some tentative signs of growth.
Some 8,320 new homes were registered to be built in March - which was a higher figure than the totals for January (6,557) and February (7,090).
Steve Wood, chief executive at the NHBC, said:
Our (quarter one) 2024 figures reflect prevailing market conditions. Rises in the Bank of England’s base rate have driven mortgage rates higher, leading to a drop in new home purchases and a slowdown in house price growth.
12:00 PM BST
Fears of summer EasyJet strikes as pilots reject pay deal
Pilots at EasyJet have moved closer to potential strike action after rejecting a pay deal that would have pushed top salaries close to £200,000.
Our transport industry editor Chris Jasper has the latest:
The offer was turned down in a ballot that ended on Friday, with management now set to return to talks with officials from the British Airline Pilots’ Association.
11:57 AM BST
Pictured: Macron chips in at McCain factory
Emmanuel Macron donned his overalls as he visited a McCain fries factory ahead of a summit aimed at encouraging investment in France.
The French president kicked off the day of meetings with foreign business leaders at the Chateau de Versailles, called “Choose France”.
He was spotted on a tour of McCain’s potato processing plant in Matougues.
11:31 AM BST
Wall Street poised to rise ahead of inflation figures
US stocks are on track to edge higher at the opening bell as investors await key inflation figures this week.
On Friday, the S&P 500 and Nasdaq Composite registered their third week of gains in a row for the first time since January, while the Dow posted its biggest weekly gain since mid-December.
The indexes were also trading near their peaks, boosted by stronger-than-expected company results and signs of a cooling US jobs market, which raised hopes for interest rate cuts.
Keenly awaited inflation data on Wednesday is expected to show that inflation slipped to 3.4pc in April from 3.5pc in March.
Ronald Temple, chief market strategist at Lazard, said:
In premarket trading, the S&P 500 was up 0.1pc, the Nasdaq 100 had gained 0.2pc and the Dow Jones Industrial Average was up 0.1pc.
11:14 AM BST
Oil edges up as China announces £110bn of bond sales
Oil prices have steadied after China announced a 1 trillion yuan (£110bn) bond sale aimed a stimulating growth in the world’s largest economy.
Brent crude, the international benchmark, rose 0.1pc towards $83 a barrel, while US-produced West Texas Intermediate was up 0.2pc above $78.
It erased an early loss as traders weighed up whether the Opec+ cartel will agree to extend its supply cuts.
Iraqi oil minister Hayyan Abdul Ghani said at the weekend that Baghdad had cut production enough and would not agree to more. He later said any decision was a matter for Opec.
Meanwhile, China will begin a flurry of bond sales this year to try, according to its Ministry of Finance, which could stimulate its economy and demand for oil.
10:52 AM BST
Asda to build 1,500 homes in London
Asda will move into the housebuilding sector after it announced plans for a 1,500-home redevelopment of a ten-acre site in north west London.
Britain’s third-largest grocer, which is owned by the Issa brother and private equity giant TDR Capital, will tie-up with developer Barratt to transform the brownfield site, which is currently home to its Park Royal supermarket.
About 1,500 homes are planned for the site, with would create a new town-centre alongside a new 60,000 square foot superstore and 400 parking spaces.
The redevelopment will include 500 affordable homes, with a large number of the apartments on a landscaped podium above the new Asda.
Ian Lawrence, head of mixed-use developments at Asda, said:
Asda’s venture into mixed-use property re-development marks a significant milestone for the business.
Craig Carson, managing director of Barratt West London, added: This transaction is a sign that there is still land to be unlocked in the capital and reflects one of the markets largest land transactions since 2019.”
10:39 AM BST
AstraZeneca among investors as Macron aims to boost French credentials
UK-listed drugs giant AstraZeneca is among the companies to announce investments across the channel during a summit launched by Emmanuel Macron.
The annual Choose France event is expected to result in €15bn (£12.9bn) worth of foreign investments, up from €13bn last year.
The summit is aimed at burnishing Paris’ reputation as a leading European business centre as France - the eurozone’s second-biggest economy - faces headwinds over its budget deficit and tepid first-quarter economic growth.
Microsoft said it would invest €4bn in France, with its president Brad Smith jetting into its Paris headquarters for an appearance alongside Mr Macron.
Over the weekend, the French government said Amazon would announce a €1.2bn investment at the event.
Pfizer and AstraZeneca also announced investments worth a total of nearly £800m.
10:24 AM BST
Nadhim Zahawi made Very Group chairman after standing down as MP
Nadhim Zahawi has been named as chairman of Very Group just days after stepping down as an MP.
Our retail editor Hannah Boland has the details:
The retail group, which owns the Very and Littlewood brands, said it has appointed Mr Zahawi as non-executive chairman and board member.
Read why Mr Zahawi’s arrival at Very Group is likely to spark a hunt for fresh investment in the Liverpool-based retailer.
10:08 AM BST
Phoenix Group slumps as finance boss steps down
Savings and retirement business Phoenix Group has slumped after announcing its chief financial officer will step down later this year.
Rakesh Thakrar joined the company in 2001 and was described as “central” to the acquisition that contributed to it becoming the UK’s largest long-term savings and retirement business.
Phoenix will begin a formal process to find his successor and have hired former Aberdeen finance boss Stephanie Bruce as interim chief financial officer.
Shares in the company were down 2.1pc in morning trading, near the bottom of the FTSE 100.
09:50 AM BST
Private equity giant 3i invests in French IT outsourcer
One of Britain’s biggest listed private equity funds has agreed to invest about €116m (£99.8m) in a French IT managed services provider.
3i Group said that Saint-Cloud-based Constellation has demonstrated consistent double-digit organic growth amid the increased outsourcing of infrastructure and application management by IT departments.
Current minority investor Cap Horn Finance is rolling over its stake and will continue to be a shareholder.
Marc Ohayon, co-head of private equity at 3i France, said:
We have known Constellation for a long time and have been following its progress.
09:29 AM BST
Mission Group rejects takeover bid by Brave Bison
Digital marketing company Mission Group has rejected a takeover approach from rival Brave Bison, which owns the Social Chain agency founded by Dragons’ Den star Steven Bartlett.
Brave Bison - which last year bought Social Chain - tabled a possible all-stock offer worth around 29p a share, valuing fellow Aim-listed rival Mission Group at about £27m.
But Mission said its board unanimously rebuffed the approach, which it said was “opportunistic and significantly undervalues the group and its prospects”.
Brave Bison, which is backed by billionaire Lord Michael Ashcroft, said it was in talks with Mission’s board and major shareholders to garner support for a deal.
Brave Bison said a tie-up between the pair would create one of the UK’s largest independent digital marketing agencies on Aim, a combined group with sales of around £120m and underlying earnings of about £14m.
09:09 AM BST
Gas prices fall as warm weather hits demand
Gas prices have fallen as warmer weather sweeps across Europe.
Dutch front-month futures, the benchmark contract for the continent, slumped as much as 2pc to extend losses suffered on Friday.
It comes as Europe’s gas supplies remain 64pc full, which is a record for the time of year.
Meanwhile, a slower economic recovery is also limiting demand.
The UK equivalent contract was down as much as 2.2pc.
08:54 AM BST
FTSE 100 edges higher as record rally loses steam
The FTSE 100 inched up from its record highs set last week as investors turned their focus to more corporate updates.
The blue-chip FTSE 100 edged 0.1pc higher after hitting record highs in 11 out of the previous 13 sessions as the Bank of England signalled interest rate cuts are on the way, while a weaker pound supported the overall rally.
The mid-cap FTSE 250 was also up 0.1pc.
Focus this week will shift to labour market data due on Tuesday, as well as speeches by the Bank of England’s chief economist Huw Pill and external member of the monetary policy panel Megan Greene.
Aerospace and defence companies fell 1.4pc, while precious metal miners slid as much as 1.1pc as gold prices inched down.
Diploma was last up 7.3pc to the top of the FTSE 100 as the technical products and services provider gave an upbeat forecast.
On the flip side, Rio Tinto was among the bottom performers on the benchmark index, falling 1.2pc after the miner said an autonomous train had derailed at its Western Australian iron ore operations overnight.
08:35 AM BST
Tourism tax ‘curtailing UK’s global connectivity’
Heathrow Airport has accused the Government of “curtailing the UK’s global connectivity” with measures like the tourism tax.
Europe’s busiest airport criticised measures such as introducing a £10 fee for some transiting passengers and the refusal to resume tax-free shopping for international visitors.
The Government launched the electronic travel authorisation (ETA) scheme in November 2023 for people entering or transiting through the UK without legal residence or a visa.
ETAs, which cost £10, are currently only required for nationals of Qatar, Bahrain, Kuwait, Oman, the United Arab Emirates, Saudi Arabia and Jordan.
The programme is scheduled to be extended to include the European Union, the European Economic Area and Swiss nationals in early 2025, and the rest of the world this autumn.
Meanwhile the Government has also refused calls to reverse the 2020 decision to end tax-free shopping for inbound visitors.
Heathrow said in a statement: “Current Government policy is curtailing the UK’s global connectivity.”
Heathrow published figures showing 6.7m passengers travelled through the airport in April, a 4.8pc rise on the total of 6.4m during the same month last year.
08:27 AM BST
Diploma surges after takeovers boost revenues
Distribution group Diploma surged to the top of the FTSE 100 after takeovers of US companies helped it report double digit revenue growth.
The group of companies, which distributes and manufactures building components and special seals, rose as much as 11pc in early trading.
For the six months to the end of March, it reported revenue of £638.3m, up 10pc, and adjusted operating profit hit £125.4m, up 14pc on the same period a year earlier.
The company acquired US-based Peerless Aerospace Fastener for £236m during the period, which it said would extend its strength in aerospace specialty fasteners.
It also bought UK-based Plastic and Rubber Group for £38m.
08:06 AM BST
UK markets subdued at the open
Stock markets lacked direction as trading began in London ahead of a day with little new economic data.
The FTSE 100 was flat at 8,433.13 after coasting to a fresh record close on Friday.
The midcap FTSE 250 was also little changed at 20,653.36.
07:58 AM BST
SoftBank profits rise amid AI boom
SoftBank made a quarterly profit of 231.1bn yen (£1.2bn) as the Japanese tech conglomerate benefitted from a boom in valuations spurred by the excitement surrounding artificial intelligence.
The Tokyo-based company reported a second straight quarter of profitability in a result which was well ahead of analyst estimates, compared to a loss of 57.6bn yen (£295m) in the first three months of last year.
The group’s tech-heavy Vision-Funds reported a loss of 96.7bn yen, missing estimates for a profit of 185.1bn yen.
However, the dollar’s renewed strength against the Japanese yen bodes well for SoftBank, whose assets are mostly valued in the US currency.
07:46 AM BST
Student housing developer Unite sells six sites for £184m
Student accommodation developer Unite Students has sold a chunk of its estate for £184m to fellow property investor PGIM Real Estate.
The six sites, across Birmingham, Cardiff, Leicester, Liverpool, Nottingham and Sheffield, include 2,948 beds, and are on average 18 years old.
Unite said it was making the sales to become closer aligned with “high and mid-ranked universities which have the strongest outlook for student demand”.
Bristol-based Unite is Britain’s biggest student-focused property company, housing roughly 70,000 students every academic year across 23 university cities and towns.
PGIM Real Estate is the property investment arm of the US life insurance giant Prudential.
07:41 AM BST
Rio Tinto freight train derails
UK-listed miner Rio Tinto said an autonomous train had derailed at its Western Australian iron ore operations overnight and that it was investigating the incident.
No-one was hurt in the incident, in which the train collided with a set of stationary wagons loaded with iron ore, according to statements from Rio Tinto and Australia’s rail safety watchdog.
“Rio Tinto confirms a rail incident occurred about 80kms (50 miles) from Karratha shortly after midnight on Monday,” a spokesman told Reuters via email.
The news was first reported by Australia’s ABC.
07:26 AM BST
Emirates profits take off in post-pandemic boom
The long-haul carrier Emirates secured record profits of $4.7bn (£3.8bn) in 2023 as the airline fully took flight after the turbulent years of the pandemic disrupted its operations.
Emirates, owned by Dubai’s government, announced revenues of $33bn (£26.3bn), compared to $29.3bn (£23.4bn) the year before. Profit the year prior had been $2.9bn.
The airline carried 51.9m passengers in its 2023 financial year, as compared to 43.6m the year prior.
Chairman and chief executive Sheikh Ahmed bin Saeed Al Maktoum said:
Throughout the year, we saw high demand for air transport and travel related services around the world, and because we were able to move quickly to deliver what customers want, we achieved tremendous results.
The Emirates’ results track with those for its base, Dubai International Airport.
The world’s busiest airport for international travelers had 86.9m passengers last year, surpassing numbers for 2019 just before the coronavirus pandemic grounded global aviation. The airport had 89.1m passengers in 2018 — its busiest-ever year before the pandemic.
07:20 AM BST
China to launch bond sale in bid to boost economy
China will start selling an initial batch of long-dated bonds this week, the Ministry of Finance announced, as Beijing looks to increase support for the world’s second-largest economy.
The central government will begin issuing some 30-year bonds on Friday as part of a planned sale of more than £110bn of debt, according to a notice posted to the ministry’s website.
Other bonds with tenors of 20 years and 50 years will go on sale on May 24 and June 14 respectively.
The Ministry of Finance did not specify the number of bonds that will be issued.
A volatile property market and high unemployment - particularly among youth - are among the top issues dragging down China’s economy.
Leaders have set a target of around 5pc for this year’s growth, a figure seen as ambitious by many economists.
07:01 AM BST
Good morning
Thanks for joining us. Wages have grown at a faster pace over the past 12 months than at any time over the previous 16 years despite the productivity crisis plaguing Britain’s workforce, research shows.
After accounting for inflation, real earnings increased by about 2pc in the year to February, meaning workers’ pay packets stretch further than they did 12 months earlier, according to the Resolution Foundation.
It brings an end to a decade and a half in which wages barely grew faster than prices and at times, including the cost of living crisis, fell sharply behind living costs.
However, the think tank warned that if wages rose without extra output, additional costs imposed on businesses could threaten to push up inflation, which in turn could force interest rates to remain higher for longer.
Productivity has fallen over the past year, dropping by 0.6pc by the final quarter of 2023.
Gregory Thwaites, economist at the Resolution Foundation, said: “This means that what British workers can buy with their wages is rising just as the amount they produce in their jobs is actually shrinking.
“The positive side to this wage growth is that it has protected household incomes, but it may worry the Bank of England because real wages are rising faster than productivity per worker.”
Officials at the Bank of England, led by Governor Andrew Bailey, want evidence that inflation is back under control before cutting interest rates from their 16-year high of 5.25pc.
A key worry for the rate-setting Monetary Policy Committee is the strength of wage growth, with many workers switching jobs in order to get a pay rise.
However, there have been signs that this is starting to level off. The CIPD’s latest Labour Market Outlook report, showed on Monday that more workers were staying put in positions for greater job security rather than seeking out better-paid roles. It found 55pc of employers were expecting to maintain their staffing levels amid falling turnover levels in their workforce.
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What happened overnight
Asian shares eked out a 15-month high in a week where inflation figures could make or break hopes for earlier US rate cuts.
Meanwhile, Chinese activity data will test optimism about a sustained recovery in the world’s second largest economy.
Beijing has already reported a welcome pickup in inflation to an annual 0.3pc in April, helping to soothe worries about a slide into prolonged deflation. Forecasts favour further gains in April retail sales and industrial output due on Friday.
Chinese authorities are also set to sell 1 trillion yuan (£110bn) in longer-dated bonds to help fund stimulus spending at home.
The improved sentiment has helped lift Chinese blue chips to a seven-month high. The index was 0.1pc softer overnight with some sectors pressured by reports the White House was about to release details of new tariffs on Chinese goods.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1pc, after rallying for three weeks straight.
Japan’s Nikkei slipped 0.3pc, still saddled with speculation further losses for the yen could lead the Bank of Japan to raise rates in the next few months.