Yahoo Finance Coinbase sued by regulators as US squeezes crypto industry
Coinbase, one of the world’s largest cryptocurrency exchanges, has been sued by US regulators a day after the Securities and Exchange Commission (SEC) alleged Binance and its founder had broken trading laws.
The SEC has accused Coinbase of illegally operating without having first registered with the regulator, a legal requirement for companies trading securities in the US.
The regulator’s chairman Gary Gensler said: “Coinbase’s alleged failures deprive investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC.”
Shares in the crypto exchange tumbled more than 16pc in premarket trading after the lawsuit was filed in Manhattan federal court.
The charges come just one day after the world’s largest crypto exchange, Binance, was similarly accused by the SEC of breaking US securities laws.
Binance and its founder Changpeng “CZ” Zhao were accused of orchestrating a “web of deception” as the SEC charged them with misusing investor funds, operating as an unregistered exchange and violating securities regulations.
Responding to a post from Mr Gensler on Twitter announcing the SEC’s case against Binance, Mr Zhao said: “Wonder if he ever reads the comments under his post, from the consumers he is suppose [sic] to protect.”
Mr Zhao added in a separate post addressing the Coinbase lawsuit on Tuesday: “If you have to pick a fight with everyone, maybe you are the one at fault.”
In court filings the SEC claimed Binance’s former chief compliance officer Samuel Lim, who left the company last year, messaged a colleague in December 2018 saying: “We are operating as a fking unlicensed securities exchange in the USA bro”. [sic]
Investors have pulled around $780m (£628m) from Binance in 24 hours following the SEC’s charges, data company Nansen said.
The price of bitcoin has fallen by about 5pc since Monday to trade at around £20,500 on Tuesday afternoon. In April, the cryptocurrency was worth £24,500.
The lawsuit filed by the SEC lists thirteen charges against Binance, including mingling and diverting customer assets to an entity Mr Zhao owned called Sigma Chain.
The charges echo accusations levelled at FTX, once the world’s second largest cryptocurrency exchange, and its founder Sam Bankman-Fried after its collapse last year.
In a social media post, Binance said that it has been cooperating with the SEC’s investigation but said that the regulator “chose to act unilaterally and litigate”.
Paul Grewal, Coinbase’s chief legal officer, said: “The SEC’s reliance on an enforcement-only approach in the absence of clear rules for the digital asset industry is hurting America’s economic competitiveness and companies like Coinbase that have a demonstrated commitment to compliance.”
He added: “The solution is legislation that allows fair rules for the road to be developed transparently and applied equally, not litigation. In the meantime, we’ll continue to operate our business as usual”.
06:56 PM
Signing off
That’s all from me, we’ll be back tomorrow morning with the latest. Until then, senior business reporter James Warrington has explained why Apple’s vision extends far beyond its cumbersome new headset...
06:50 PM
Exporter-heavy FTSE 100 lifted as dollar climbs
The FTSE 100 closed higher on Tuesday as the exporter-heavy index rose against a softer pound.
The FTSE 100 index gained 0.37pc to close at 7,628.10.
However, UK construction and materials firms lost 0.6pc after data showed that residential house building suffered its steepest decline in three years amid weaker demand and higher mortgage rates.
The mid-cap FTSE 250 index rose 0.54pc to close at 19,217.22.
06:23 PM
Sainsbury's boss handed near £5m pay package as shoppers face soaring food costs
The chief executive of Sainsbury’s received a pay package worth nearly £5m last year even as shoppers face spiralling food and drink prices.
Simon Roberts, who has led the UK’s second largest supermarket chain since 2020, was paid £4.95m in compensation for the year to March, the company’s annual report shows.
His total pay package, which last year increased by more than £1.4m, is around 229 times higher than an average Sainsbury’s worker earning £21,635.
The deal includes a base salary of £899,000, plus £17,000 of annual benefits and £67,000 in pensions payments.
Mr Roberts was also handed an annual bonus of £1.7m plus long-term incentives equal to £2.26m.
The bumper package comes despite Sainsbury’s recording a 5pc dip in underlying pre-tax profits to £690m last year amid rising costs.
06:18 PM
Rishi Sunak to meet with Republican speaker tomorrow
Kevin McCarthy, the speaker of the US House of Represenatives, will meet with Prime Minister Rishi Sunak tomorrow afternoon, according to a statement from the Republican’s office.
05:38 PM
Mike Ashley's Frasers increases stake in struggling Asos
Mike Ashley has raised his stake in Asos amid mounting tension between the Frasers owner and a rival billionaire shareholder over the online retailer’s future.
Senior business reporter Daniel Woolfson has the full story:
The retail tycoon has been steadily buying up shares in Asos since October, when his company Frasers disclosed a stake of around 5pc. Mr Ashley’s company, once known as Sports Direct, has now upped its shareholding from 7.4pc to 8.8pc.
It comes as Asos has been scrambling to overhaul its business and restore confidence after sales slowed in the wake of the pandemic.
The online retailer benefited during the lockdowns of 2020 and 2021 as customers shopped from the safety of their homes, sending orders skyrocketing and its share price soaring.
But Asos has bumped back to earth since, as sales slowed once shoppers returned to physical shops, leaving the retailer with an excess of clothing stock.
The company said in May it made a loss of £291m over the six months to February 28, citing a “challenging trading backdrop”. The value of Asos shares has fallen around 77pc over the last year.
Asos has embarked on a turnaround plan under which it will reduce inventory and cut back on discounting with the aim of restoring profits. It has also rowed back on expensive investments in robotic warehouses in the US, which it previously said were becoming too complex and costly.
Through Frasers’ holding, Ashley is Asos’ third biggest shareholder, behind California-based hedge fund Camelot Capital Partners and the Danish retailer Bestseller, its largest shareholder, which is run by billionaire Anders Holch Povlsen.
Last month Asos raised £75m from Bestseller and Camelot Capital Partners. It also refinanced its bank debt with borrowing facilities from specialist lender Bantry Bay Capital, which is backed by the American activist investment fund Elliott Investment Management.
Prior to its latest move, Frasers had offered to invest at Asos’s then-share price for an additional 5pc stake in the company, promising greater cooperation between it and the retailer. This was later spurned by Asos’ board, however.
Mr Ashley no longer sits on the board of Frasers, having handed day-to-day control over to his son-in-law Michael Murray, its chief executive.
However, as a majority shareholder Mr Ashley remains closely involved with the company and its outside investments, and has a history of building stakes in Frasers’ rival retailers.
Last month he launched a boardroom raid at Mulberry, which he owns a 37pc stake in, piling pressure on the luxury handbag seller’s bosses for a seat on its board.
Asos was approached about a potential takeover by Turkish retailer Trendyol in December but talks between the two companies are no longer active, according to the Sunday Times.
05:19 PM
Teck recieves several proposals for coal operation as Glencore takeover bid looms
Teck Resources confirmed that its coal operation has attracted interest from potential buyers, as the Canadian miner fends off Glencore’s takeover bid.
Canada’s largest diversified mining company said that it received “a number of inbound indications of interest” for its steelmaking coal business, although did not provide further details.
The announcement comes after Teck unexpectedly withdrew plans for shareholders to vote on dividing its coal and metals businesses at its annual general meeting in April, amid concerns the proposals would not receive the required support.
It is now under pressure to deliver an improved plan better than Glencore’s unsolicited, multibillion-dollar acquisition bids, which have been repeatedly rejected by Teck’s board.
Chairman Sheila Murray said Teck’s board will “appropriately consider and evaluate any proposal” which can deliver value for shareholders, as well as support a sustainable future for employees, local communities and indigenous peoples.
04:50 PM
British Chambers of Commerce: 'range of voices' needed to represent businesses
The British Chambers of Commerce (BCC) has welcomed the CBI vote of confidence but said that the British business community must be represented by a “diverse range of voices” amid UK economic challenges.
It comes after the BCC launched a rival business lobby group to the CBI called the Business Council on Monday.
Shevaun Haviland, director general of the BCC, said:
We are pleased to see the news that the CBI was successful in passing the vote to ensure its future at its extraordinary general meeting (EGM) this afternoon.
Given the challenges facing the UK economy, it is vital for the business community to have a diverse range of voices representing their concerns and priorities into Government.
With the clock now ticking on the next general election, businesses must be confident that they have strong and effective representation.
We recognise that the CBI still has work remaining in the weeks and months ahead, which will no doubt be challenging.
However, we welcome the passing of the vote today and look forward to working with them again into the future.
04:15 PM
New CBI director-general: 'We will work tirelessly to repay the faith shown in us'
Commenting on the results, Rain Newton-Smith, the new director-general of the CBI, said:
After an incredibly tough period, I’m deeply grateful for the faith shown in us by our members. We’ve made real progress in implementing the top-to-bottom programme of change promised by the board and, while there remains work to do, today’s result represents an important milestone on that journey.
Even an organisation as established as the CBI is only as strong as its members. That support is something we have never taken for granted. We will work tirelessly to repay the faith shown in us and are committed to living the values and changes we have proposed.
Let me be clear, we have listened, we have acted, and we will leave no stone unturned to be the best voice for business inside and out.
We also heard another important message from members. That they want us to bring our breadth and depth of expertise, as well as our unique convening power, to bear on the economic challenges of the day.
04:09 PM
CBI wins vote of confidence
The Confederation of British Industry (CBI) has won support from members at a crucial confidence vote over its future, the business group has announced.
The scandal-hit business lobby group, which has become engulfed in a sexual misconduct scandal in recent months, said 93pc of members expressed confidence in its restructuring plan.
Banking correspondent Simon Foy has the details...
04:02 PM
Half of big companies to cut office desk space as bosses give up on back to work push
Half of large companies plan to cut back on desk space in a sign that many bosses are giving up on attempts to lure staff back to the office.
Business reporter Riya Makwana has the details:
A survey of 350 multinational companies that together employ around 10 million staff globally found that 50pc are planning to reduce their office footprint.
Most are looking to cut between 10pc and 20pc of space.
It comes as many workers continue to resist efforts to force them back in the office full-time.#
The survey, which was conducted by Knight Frank, found that most bosses were now resigned to the fact that employees will work at least some of the week from home for the foreseeable future.
56pc of large businesses have now permanently adopted a “hybrid” working style, where employees spend some days doing their jobs remotely.
Just under a third of businesses are still committed to having people back in the office full-time, Knight Frank found.
The estate agent said that it could lead to a glut of lower-end office space being left empty as companies cut their office needs...
03:33 PM
Handing over
That’s all from me today. As ever, Adam Mawardi will make sure you stay informed from this point.
I leave you with a statement from Coinbase, following the SEC’s lawsuit against the largest crypto exchange in the US:
Coinbase CLO response to SEC suit pic.twitter.com/2iC05RBXJy
— Frank Chaparro (@fintechfrank) June 6, 2023
03:27 PM
PGA Tour and DP World Tour to merge with LIV Golf as bitter rivals call truce
The PGA Tour and DP World Tour is to merge with rival series LIV Golf after striking a deal “to unify the game of golf”, putting an end to their long-running and bitter legal battle.
The three tours will now actively look into avenues that will allow players previously banned from the PGA Tour and DP World Tour to return, which could also now impact the future of the Ryder Cup.
A statement issued on behalf of the three golf tours on Tuesday read:
The PGA Tour, DP World Tour and the Public Investment Fund [PIF] today announced a landmark agreement to unify the game of golf, on a global basis.
“The parties have signed an agreement that combines PIF’s golf-related commercial businesses and rights [including LIV Golf] with the commercial businesses and rights of the PGA Tour and DP World Tour into a new, collectively owned, for-profit entity to ensure that all stakeholders benefit from a model that delivers maximum excitement and competition among the game’s best players.
Read more on this breaking story.
03:22 PM
Poundland owner boosts sales but warns about 'uncertain trading backdrop'
The owner of Poundland has reported higher half-year sales helped by store openings, but warned that tougher recent trading has continued as consumer spending comes under pressure.
Pepco Group, which also owns the Pepco and Dealz brands, reported a 23pc jump in revenues at constant currency to €2.8bn (£2.4bn) in the six months to March 31, with turnover in the UK up 3pc at €896.3m (£771.5m)
Like-for-like sales lifted 11.1pc across the group, up 15.8pc at Pepco and 4.9pc higher for Poundland.
But it said that an “uncertain trading backdrop” had continued into April and May with “signs of lower consumer confidence” and a clampdown on discretionary spending due to sky-high inflation, particularly in Central Europe.
“Evidence of this is being seen through lower frequency of visits and customers making different purchasing decisions,” Pepco said.
Despite this, the group said it was keeping its full-year outlook unchanged as it is looking to speed up shop openings and given expectations for cost pressures to begin abating in the second half.
Results for the first half showed pre-tax profits down 9pc on a constant currency basis to €111m (£95.5m), weighed down by higher costs and investment in its store expansion programme after it opened 166 new stores.
03:01 PM
European gas prices fall
European natural gas prices have fallen amid volatility in prices caused by outages and doubts over the outlook for demand.
Europe has been building up stockpiles — helped by imports of liquefied natural gas — to prepare for a winter season with scant Russian fuel.
Storage levels on the continent are now about 70pc full on average, Gas Infrastructure Europe data show.
That buffer means outages — such as at Norway’s Hammerfest LNG plant last week and at several gas fields — are less of a concern.
Goldman Sachs Group analysts said in a note: “These outages are less of an issue now, as European storage levels are high and gas demand is seasonally at its lowest.”
Dutch front-month futures, Europe’s pricing benchmark, slumped as much as 12pc to below €26 per megawatt hour.
Prices topped €30 earlier today for the first time in two weeks, having jumped 20pc a day earlier.
Volatility is stalking Europe’s gas market as traders weigh the region’s recovery from its energy crisis against forecasts for higher consumption in Asia, a competitor for the fuel.
02:34 PM
Wall Street slumps at the opening bell
US markets fell after the opening bell as Coinbase tumbled 20pc after it was sued by US regulators in a widening crackdown on the digital token industry.
The US Securities and Exchange Commission (SEC) has accused the exchange of illegally operating without having first registered with the regulator.
The Dow Jones Industrial Average slumped 0.2pc to 33,509.92 while the S&P 500 fell 0.2pc to 4,263.91.
The tech-heavy Nasdaq Composite dropped 0.4pc to 13,178.35.
02:25 PM
Bank of England concludes corporate bond sales
The Bank of England has concluded all of its planned sales of corporate bond holdings from its quantitative easing programme.
The stock has been reduced by over 95pc from the initial purchase proceeds of £20bn, the Bank said.
The remaining very short maturity bonds representing £833m of initial purchase proceeds will continue to be held in the portfolio until they mature, the last of these happening by April 5 next year.
Although the Bank plans to hold these bonds to maturity, it will continue to consider participation in any open market tender offers on a case-by-case basis.
02:19 PM
Zhao: 'Maybe you are the one at fault'
Binance founder Changpeng “CZ” Zhao has tweeted following the news the SEC has sued Coinbase a day after it launched proceedings against him and his crypto exchange:
If you have to pick a fight with everyone, maybe you are the one at fault. 🤷♂️
— CZ 🔶 Binance (@cz_binance) June 6, 2023
02:02 PM
Coinbase 'deliberately refused to follow' rules, says SEC
The SEC’s complaint against Coinbase, filed in US District Court for the Southern District of New York, alleges that the crypto exchange has operated as an unregistered broker since at least 2019 by handling cryptocurrency transactions, evading the disclosure requirements meant to protect investors.
The SEC also said Coinbase operated as an unregistered broker through Coinbase Prime, which routes orders to Coinbase’s platform and other platforms, and Coinbase Wallet, which lets investors access liquidity outside Coinbase’s platform.
The SEC sued Coinbase in Manhattan federal court, one day after the regulator sued Binance, the world’s largest cryptocurrency exchange, and its founder Changpeng Zhao.
Gurbir S Grewal, director of the SEC’s division of enforcement, said:
You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: the consequences for the investing public are far too great.
As alleged in our complaint, Coinbase was fully aware of the applicability of the federal securities laws to its business activities, but deliberately refused to follow them.
While Coinbase’s calculated decisions may have allowed it to earn billions, it’s done so at the expense of investors by depriving them of the protections to which they are entitled.
Today’s action seeks to hold Coinbase accountable for its choices.
01:49 PM
Coinbase 'unlawfully offered exchange, broker-dealer, and clearinghouse functions'
Coinbase has been sued after it was alleged the largest crypto exchange in the US broke the rules set by regulators for years.
The Securities and Exchange Commission said in a 101-page complaint that Coinbase evaded regulations by letting users trade numerous crypto tokens that were actually unregistered securities.
Coinbase fell 16pc in premarket trading following the lawsuit, which comes a day after the SEC began proceedings against rival exchange Binance and its founder.
SEC chairman Gary Gensler said:
We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions.
In other parts of our securities markets, these functions are separate.
Coinbase’s alleged failures deprive investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC.
Further, as we allege, Coinbase never registered its staking-as-a-service program as required by the securities laws, again depriving investors of critical disclosure and other protections.
It comes just a day after the SEC sued Binance, the world’s largest cryptocurrency exchange, and its founder Changpeng Zhao.
It accused Binance and its Changpeng Zhao of a “web of deception” amid allegations of misusing investor funds, operating as an unregistered exchange and violating a slew of US securities laws.
Since then investors have pulled around $780m (£628.4m) from crypto exchange within 24 hours, according to data company Nansen.
The price of bitcoin, the world’s largest cryptocurrency, has fallen about 5pc since Monday amid the fallout.
01:27 PM
Bank of England poised to end active sales of QE corporate bonds
The Bank of England could complete active sales of corporate bonds bought as part of its quantitative easing program as early as today.
The Bank is due to auction off a little over £100m of corporate bonds later, taking the outstanding nominal amount to just under £1bn.
The remaining bonds are all short-dated and will mature by April next year, at which point the central bank will no longer hold any corporate debt in its asset purchase facility.
The corporate program was used to stabilise markets in the wake of the Brexit vote and doubled in size during the pandemic to provide support to business as large parts of the economy were shut down.
It formed part of a wider quantitative easing effort that is expected to cost the UK taxpayer at least £100bn, threatening to become a massive drain on the Government’s resources.
The Bank of England still holds about £811bn of gilts, around £80bn of which are being run off or sold each year.
01:11 PM
Takeover activity declines in UK
Takeovers involving UK companies declined over the first three months of the year, amid tough economic conditions and political uncertainty, according to provisional official figures.
Foreign companies spent £12.7bn acquiring UK firms between January and March, £4.1bn less than during the same quarter last year, the Office for National Statistics (ONS) said.
However, it was £6.9bn more than during the previous quarter, between October and December, when the value of merger and acquisition activity dipped.
The appetite among businesses to buy other companies may have been affected by global economic uncertainty and Russia’s war in Ukraine, the ONS suggested.
The slowdown also came as Microsoft’s $68.7bn (£55bn) takeover of gaming company Activision Blizzard was blocked by the UK competition watchdog last month, in a potentially fatal blow to one of the technology industry’s biggest ever deals.
The total combined number of monthly mergers and acquisitions - both UK companies acquiring foreign companies and vice versa - was lower at the start of 2023 compared with last year.
There were 141 transactions in January, 100 in February, and 114 in March, whereas there were more than 150 transactions in each month throughout 2022, the ONS said.
12:58 PM
Informant reward more than doubled in cartel clampdown
The competition watchdog has more than doubled its reward to potential informants who can help it clamp down on illegal cartels.
The Competition and Markets Authority (CMA) has said the reward will increase from £100,000 to £250,000.
Illegal cartels involve businesses agreeing not to compete in order to keep prices higher for customers.
The CMA is running its “cheating or competing” campaign to provide advice for people and businesses to help them spot and report anti-competitive practices.
Michael Grenfell, executive director of enforcement at the CMA, said:
Cartels can cause serious damage to their customers, whether businesses or individual people, weakening price competitiveness - a particular concern at a time of cost-of-living pressures.
The CMA’s job is to stamp out illegal cartels, but because cartels are generally conducted in secret, we need to encourage people to come forward and provide us with the information we need to crack down on cartels and protect people and businesses from the harm they cause.
For these reasons, we are today increasing the maximum financial reward for informants and whistleblowers who provide us with valuable information about cartels so that we can take action.
12:24 PM
Mike Ashley's Frasers increases stake in Asos
Frasers Group, the retail empire majority-owned by Mike Ashley, has increased its stake in struggling online fashion seller Asos.
Frasers raised its holding to 8.8pc from 7.4pc, it was revealed today, having already been the company’s third-largest shareholder.
The stake has grown from around 5pc in October.
Mr Ashley - the former owner of Newcastle United - founded Sports Direct four decades ago and built it into Frasers following his takeover of House of Fraser in 2018.
The billionaire has a track record of taking stakes in failing retailers and growing positions in rivals.
Frasers has purchased stakes in Hugo Boss and luxury handbag maker Mulberry as well as buying Savile Row tailor Gieves & Hawkes, video game retailer Game Digital, apparel brand Jack Wills and online brand Missguided.
12:06 PM
US markets on track to edge downward
Wall Street is expected to slip at the opening bell as investors assess chances of the Federal Reserve holding interest rates at its meeting next week.
The US services sector barely grew in May as new orders slowed, data on Monday showed, clouding the outlook for the Fed’s next move after strong jobs data on Friday.
Investors are now focused on inflation data due next week ahead of the Fed meet. Consumer prices are likely to have cooled slightly on a month-over-month basis in May but core prices are expected to have remained sticky.
US stocks have advanced in recent weeks, with a rally in megacap stocks, a stronger-than-expected earnings season and hopes of a pause in interest rate hikes pushing the benchmark S&P 500 and the tech-heavy Nasdaq to fresh 2023 highs on Friday.
In pre-market trading, the Dow Jones Industrial Average, S&P 500 and Nasdaq 100 were all down 0.1pc.
11:47 AM
Shell to sell UK home retail energy business
Shell has decided to exit its home retail energy businesses in Britain, Germany and the Netherlands due to their poor returns.
Shell launched a strategic review of its European retail businesses in January amid “tough market conditions,” shortly after chief executive Wael Sawan took office.
The company said:
That review has now concluded and as a consequence, we intend to exit those businesses.
A sales process is already underway, with the intent to reach an agreement with a potential buyer in the coming months.
Three of Britain’s largest power providers have expressed interest in acquiring Shell’s UK retail business, Reuters reported last month.
11:20 AM
Ryanair cancels 400 flights amid French strikes
Ryanair has blamed the cancellation of 400 flights today on strikes at French air traffic control, as it called for laws to protect flights which are travelling over countries.
It tweeted that the vast majority of services affected were to or from Ireland, the UK, Germany, Italy and Spain - not ones landing in France.
Last week, it submitted a petition signed by over 1.1m passengers “who are sick and tired of having their holidays destroyed because overflights are being unnecessarily cancelled” during French strikes.
The company said:
While we respect the right of the French ATC unions to strike, it should be French domestic flights that get cancelled, not EU overflights.
France (and all other EU states) should use minimum service laws to protect overflights during air traffic control strikes as they already do in Greece, Italy and Spain.
We are calling on the EU Commission today to take action and protect overflights and stop the scandal of families having their holidays destroyed because their overflights are being unnecessarily cancelled at short notice due to repeated French ATC strikes.
400 Ryanair flights cancelled today due to the latest French ATC strike, the vast majority of which are overflights to/from Ireland, the UK, Germany, Italy and Spain (not France).
— Ryanair Press Team (@RyanairPress) June 6, 2023
11:05 AM
CBI 'determined to learn from this crisis,' says new boss
The CBI’s new director-general has said the business group is “determined to learn from the crisis that has unfolded in our organisation” ahead of a crunch vote today for remaining members.
Rain Newton-Smith told BBC Radio 4’s Today programme:
Even throughout this crisis, the vast majority of the CBI members have stayed with us.
They’ve been very generous with their help, support and advice about the programme of change that we need to do, which is partly about our people and culture and putting that front and centre of the work we do.
Ms Newton-Smith said the CBI has already implemented three-quarters of recommendations following a series of investigations.
I am coming back into this organisation as a female leader because I really believe in the power of having workplaces that are very inclusive and I’ve seen how the CBI has been able to do that in the past, but we clearly have work to do to improve our governance to also think about how we make it easy for people to speak up.
We could have just gone behind closed doors and not shared some of the learnings that we’re making.
So we’re being open about the journey we’re on, and I think that is what establishes trust from business, from government and from policymakers.
10:48 AM
Pound loses momentum as dollar steadies
The pound has slipped 0.2pc against the dollar, trading at around $1.24, as a rebound stalled overnight.
The dollar has steadied after unexpectedly soft US services data on Monday firmed up expectations for a pause at the Federal Reserve’s meeting next week, but clouded the policy outlook for the months ahead.
Sterling has fallen 0.1pc against the euro, which is worth 86p.
Meanwhile, gilts were up slightly, following gains on German bunds after a European Central Bank survey showed consumer expectations for euro-zone inflation decreased “significantly”.
Yields on 10-year UK gilts have slipped three basis points, while two-year bonds have dropped two points.
10:24 AM
Investors 'pull £628m from crypto exchange Binance'
Investors have pulled around $780m (£628.4m) from crypto exchange Binance in the last 24 hours, data company Nansen has said.
The withdrawals come a day after the world’s biggest crypto trading platform and its founder Changpeng Zhao were sued by the US Securities and Exchange Commission.
Binance’s US affiliate exchange registered net outflows of $13m in the same period, Nansen said.
10:10 AM
Oil prices slump despite Saudi Arabia's planned cuts
Oil prices have declined as traders weighed up the outlook for demand after Saudi Arabia’s surprise pledge for extra supply cuts.
International benchmark Brent crude has fallen 2pc toward $75 a barrel, while US-produced West Texas Intermediate slumped 2.2pc below $71 a barrel.
Prices had surged early on Monday following the Saudi announcement after a tense Opec+ meeting, before giving up most of the gains during the session. The kingdom also raised its crude prices to Asia for July.
Saudi Arabia pledged to do “whatever is necessary” to stabilise the market, revealing plans to cut production by a million barrels a day in July as concerns over the demand outlook, especially from China, weighed on prices.
Oil tumbled 11pc last month, in part due to resilient Russian output, despite the Opec+ producer saying earlier this year it would reduce supply.
09:56 AM
HS2 and other public projects 'provide stability' to construction sector
Lloyds Bank’s infrastructure and construction team director Max Jones is optimistic about the UK construction industry, after the latest survey data showed the sector expanded in May. He said:
Contractors are generally optimistic as HS2 and other publicly funded projects provide stability to order books.
The industry has also been buoyed by demand for commercial projects in city centres, with London reaching a 20-year high.
Welcome regulatory changes post-Grenfell mean contractors will be making substantial investments in the coming months to ensure their safety measures meet new requirements.
While inflation has eased for most of the industry from last year’s highs, contractors will be hoping the latest official figures mean prices for materials will continue to fall and provide businesses with confidence to invest in projects.
09:39 AM
Weaker housebuilding fails to dampen construction growth
The construction industry was boosted by the fastest increase in activity in three months in May, even as house building declined at its steepest pace for three years, according to a closely-watched survey.
The S&P Global/CIPS UK Construction Purchasing Managers’ Index picked up slightly to 51.6 in May, up from 51.1 in April and above the neutral 50 mark separating growth from contraction for the fourth successive month.
Commercial building was the best-performing segment but worries about the impact of higher interest rates and subdued market conditions continued to dampen housing activity.
Residential work underperformed the rest of the construction sector by the greatest margin since October 2008.
Tim Moore, economics director at S&P Global Market Intelligence, said:
May data highlighted a mixed picture across the UK construction sector as solid growth rates in commercial and civil engineering activity contrasted with a steeper downturn in house building.
Rising demand among corporate clients and contract awards on infrastructure projects meanwhile underpinned the fastest rise in new orders since April 2022.
09:21 AM
Russian-linked cyber gang claims responsibility for massive data theft
A Russian-speaking ransomware gang has claimed responsibility for the cyber attack in which thousands of British Airways, BBC and Boots employees may have had data stolen.
Cybercrime group Clop said it was behind the theft of information including bank account details and national security numbers.
The attack focused on Zellis, a company used to process payroll payments by a large number of major organisations including the NHS and Jaguar Land Rover. The hack is understood to have affected eight Zellis customers.
Hackers exploited a backdoor in a piece of software used by Zellis called MOVEit, which is used to transfer files.
Progress Software, the maker of MOVEit, first identified the vulnerability last week. It told customers to “take immediate action” and delete any unauthorised user accounts added by hackers.
The Clop gang told BleepingComputer they started exploiting the vulnerability on May 27, during the long US Memorial Day holiday.
The ransomware gang added that they had deleted any data stolen from governments, the military, and children’s hospitals during these attacks.
09:04 AM
China 'asks banks to cut deposit rates'
Chinese authorities have reportedly asked the nation’s biggest banks to lower their deposit rates for at least the second time in less than a year, marking an escalated effort to boost the world’s second-largest economy.
State-owned lenders including Bank of China, Industrial & Commercial Bank of China and Bank of Communications were last week advised to cut rates on a range of products, according to Bloomberg.
This included cutting on-demand deposits by five basis points and three-year and five-year time deposits by at least 10
basis points.
Banks are thought to be assessing the request and may adjust rates as early as this week.
Beijing has rolled out a raft of measures to prop up the economy after a series of crackdowns on multiple industries and
lengthy lockdowns due to its zero-Covid approach.
The authorities are seeking to boost lending to bolster a recovery after recent data showed a slowdown.
08:49 AM
FTSE 100 dragged down by energy stocks
Shares in London were subdued in early trading as markets were dragged down by energy stocks, while investors awaited a crucial inflation data as they assessed the prospect of a global economic slowdown.
The resource-heavy FTSE 100 slipped 0.2pc with energy stocks shedding 0.6pc tracking lower crude oil prices.
Domestically-focused FTSE 250 midcap index was flat.
Markets are focused on the Purchasing Managers Index (PMI) for May, due out within the hour, after British retail sales growth slowed to a seven-month low during the same month.
Car and personal goods stocks were the top gainers, while shares of beverages were the worst hit.
British American Tobacco led gains on the FTSE 100, up 1.1pc, after the company maintained its annual revenue and profit forecasts.
08:43 AM
CBI faces crunch vote on future
Scandal-hit business lobby group the CBI faces a vote crucial on its survival later today with members urged to back reform under new leadership following allegations of sexual harassment by staff.
The future of the Confederation of British Industry is at stake after claims that more than a dozen women were sexually harassed at the organisation and two others had been raped.
Police have launched an investigation following the allegations reported this year by the Guardian, triggering a shake-up at the organisation and an extraordinary vote on its future.
The allegations, described as “absolutely devastating” by new CBI director general Rain Newton-Smith, caused an exodus of member companies - and the launch of a rival body by the British Chambers of Commerce (BCC) on Monday.
Ms Rain-Smith, who has described the situation as a “really deep and painful crisis” for the CBI, will tell delegates she is “confident and determined this will be a turning point for us, the start of a new chapter, for a renewed CBI”.
The resolution at the extraordinary general meeting, which begins at noon, calls on remaining member companies to put their confidence in CBI proposals to reform its “governance, culture, and purpose”.
The result of the vote is expected at around 4pm.
08:22 AM
Crypto miner Argo Blockchain's losses widen
The UK’s only listed cryptocurrency miner has slumped to a first quarter loss even as the value of bitcoin surged and it reduced its operating expenses by 70pc.
Revenues at Argo Blockchain plunged by 41pc to $11.4m (£9.2m) during a volatile time for crypto amid global regulatory crackdowns.
The company mined a total of 491 bitcoin during the quarter, or 5.3 bitcoin per day, during a period when the value of the world’s largest cryptocurrency increased by 40pc.
Mining is the process of creating new bitcoins by solving extremely complicated math problems that verify transactions in the currency. It requires vast levels of computing power and energy costs.
Interim chief executive Seif El-Bakly said:
The Argo team is moving ahead with a focus on financial discipline, operational excellence, and growth and strategic partnerships.
To support these initiatives, we recently strengthened our finance team and appointed Jim MacCallum as chief financial officer.
In terms of financial discipline, we are taking a much more critical view of all operating expenses, and we’ve implemented a robust internal process aimed at reducing non-mining operating expenses.
Compared to 2022, we’ve reduced our expenses by 70pc. We are also evaluating options to strengthen our balance sheet.
08:05 AM
Markets fall at the open
The FTSE 100 has nudged lower as it still reels from poor data on US services growth last month, raising concerns about the state of the world’s largest economy.
The internationally-focused index slipped 0.2pc after the open to 7,595.60 while the midcap FTSE 250 lost 0.1pc to 19,100.88.
07:56 AM
SSE to pay £9.8m fine over excessive payments from National Grid
Energy giant SSE’s power generation arm will pay a £9.8m penalty after breaching its licence, the industry regulator has announced.
Ofgem said a detailed investigation found that SSE Generation secured excessive payments from the National Grid Electricity System Operator during a time of so-called transmission constraint.
Cathryn Scott, director of enforcement and emerging issues at Ofgem, said:
Protecting consumers is a priority for Ofgem, and we will continue to monitor the wholesale energy markets in Great Britain and ensure their integrity on behalf of energy users.
This enforcement action sends another strong signal to all generators that they must put in place controls to ensure that their bid prices are set in a way that ensures that they do not obtain excessive benefits during transmission constraint periods.
If they fail to do so, they will face significant consequences.
07:48 AM
Vapes and e-cigarettes lure customers to British American Tobacco
British American Tobacco has said it gained 900,000 customers smoking new tobacco products like vapes and e-cigarettes in the first financial quarter, amid plans to encourage smokers away from traditional cigarettes.
The tobacco giant said it is on track for tobacco alternatives to hit £5bn in revenue by 2025 and to be profitable by 2024.
It comes as new chief executive Tadeu Marroco said “smokers must have access to better choices”, as he pledged to reduce the health impact of the business.
The group expects organic revenue growth of between 3pc and 5pc in the year ahead, with sales impacted by the sale of its Russian and Belarusian businesses set to close in 2023.
It stuck by its guidance for the full financial year.
07:42 AM
Soaring number of public sector workers on benefits, says GMB
The number of public sector workers on Universal Credit has increased by more than 100,000 over the past few years, new research suggests.
A study by the GMB union found that, between the end of 2019 and the end of 2022, the number of public sector workers in receipt of Universal Credit jumped by 119,000.
The union said its analysis of official figures showed that, in the fourth quarter of 2019, 76,803 public sector workers were in receipt of Universal Credit.
By the fourth quarter of 2022, that number had shot up to 195,772, said the union in a report to be published at its annual conference in Brighton today.
GMB national secretary Rachel Harrison said: “It’s a stain on the honour of our nation so many public sector staff have to rely on working benefits to get by - NHS staff, care workers, school staff, and the council workers who keep our towns and cities alive.”
07:37 AM
The 33 articles Prince Harry claims Mirror newspapers obtained unlawfully
The Duke of Sussex is due to give evidence at the High Court today in his case against the Daily Mirror’s publisher over alleged unlawful information gathering.
On Monday, Harry’s individual case against Mirror Group Newspapers (MGN) got under way.
Barrister David Sherborne claimed the Duke was subjected to unlawful information-gathering activity “right from when he was a young boy at school” into adulthood, adding: “Nothing was sacrosanct or out of bounds.”
Harry is suing the publisher, claiming journalists at its titles - which also include the Sunday Mirror and Sunday People - were linked to methods including phone hacking, so-called “blagging” or gaining information by deception, and use of private investigators for unlawful activities.
MGN is contesting the claims and has either denied or not admitted each of them. The publisher also argues that some of the claimants have brought their legal action too late.
Read on for the 33 articles Prince Harry claims Mirror newspapers obtained unlawfully.
07:30 AM
Bank Holidays fail to boost shop sales
May’s trio of bank holidays failed to get shoppers spending as sales growth slowed to its lowest level in six months, latest figures show.
Total UK retail sales increased by 3.9pc last month, against a decline of 1.1pc in May 2022 and below the three-month average growth of 4.7pc, according to the BRC-KPMG Retail Sales Monitor.
Food sales were up 9.6pc on a year ago, boosted by the Coronation but still not sustained across the month.
Meanwhile, growth in discretionary spending continued to tumble as the high cost of living squeezed households.
The gloom continued for online retailers with just four categories registering positive sales figures and total sales down by 3pc.
There was cause for some optimism, however, as brighter weather at the end of the month led to a much-needed pick-up in summer fashion sales, as well as gardening and DIY products.
British Retail Consortium chief executive Helen Dickinson said: “With consumer confidence still recovering from record depths, and continued tightening of household incomes, we are unlikely to see substantial sales growth in the coming months.”
07:23 AM
Primark owner buys dairy data business
Primark owner Associated British Foods has revealed it will buy a diary data company which helps farmers get maximum milk production from their cows.
AB Foods will pay 215p a share in cash for National Milk Records (NMR), representing an 87pc premium on the company’s closing price on Monday.
The £48m deal, which will take effect during the third quarter of this year, will support its AB Agri business, which supplies a wide range of animal feed, supplements and specialist ingredients in more than 80 countries, employing over 3,000 people internationally.
José Nobre, chief executive of AB Agri, said:
NMR is a high-quality business which is extremely complementary and additive to our dairy strategy and offering to the dairy industry.
We have supported dairy farmers for more than 30 years with nutrition and specialty feed products, and more recently with data and technology platforms which deliver insights that create continuous improvement in agricultural supply chains.
Acquiring NMR is an extension of this strategy and will enable us to service the industry better, offering products that deliver increased value, efficiency and ultimately profitability for dairy farmers.
07:06 AM
Bitcoin plunges as crypto giant accused of 'web of deception'
The price of Bitcoin plunged after the world’s largest cryptocurrency exchange and its founder were accused of a “web of deception” by US regulators.
The largest crypto token lost about 5pc to fall below £21,000 as Binance and its chief executive Changpeng Zhao faced allegations of misusing investor funds, operating as an unregistered exchange and violating a slew of US securities laws.
The lawsuit filed by the SEC lists thirteen charges against the crypto trading platform — including mingling and diverting customer assets to an entity Mr Zhao owned called Sigma Chain.
The charges echo accusations levelled at the second largest cryptocurrency exchange, FTX, and its founder Sam Bankman-Fried after its collapse last year.
SEC chairman Gary Gensler in a written statement that Zhao and Binance “engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.”
He added: “The public should beware of investing any of their hard-earned assets with or on these unlawful platforms.”
In a social media post, Binance said that it has been cooperating with the SEC’s investigation but said that the agency “chose to act unilaterally and litigate.”
The list of digital tokens deemed as unregistered securities by the Securities and Exchange Commission (SEC) now spans over $115bn (£92.4bn) of crypto after the US agency’s lawsuit against Binance.
The regulator in the complaint on Monday cited a dozen coins as assets that fall under its purview.
Such a designation comes with strict investor protection rules and could make the tokens harder to trade if exchanges shy away from listing them for fear of falling foul of the SEC.
Binance’s BNB — which has a market value of $44bn — stablecoin BUSD, Cardano’s ADA, Solana’s SOL, Polygon’s MATIC, Filecoin’s FIL and Algorand’s ALGO were among those mentioned in the lawsuit.
When added to other tokens like XRP separately targeted by the SEC, the agency has now categorised over $115 billion of coins specifically as unregistered securities.
SEC Chair Gary Gensler has long said most tokens are subject to the agency’s investor-protection laws and that trading platforms should register with the regulator.
However, labelling specific tokens represents a tougher approach. US officials have cracked down on digital assets this year following a rout in 2022 and a series of collapses, including the bankruptcy of the FTX exchange.
07:00 AM
Good morning
Bitcoin plunged 3pc to below £21,000 as US regulators filed a lawsuit against the world’s largest cryptocurrency exchange and its founder.
The SEC accused Binance and Changpeng Zhao of misusing investor funds, operating as an unregistered exchange and violating a slew of US securities laws.
SEC chairman Gary Gensler in a written statement that Zhao and Binance “engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law”.
5 things to start your day
1) Russian hackers raid British Airways and BBC in cyber attack | Personal details of staff stolen following payroll provider hack
2) Tim Cook unveils $3,500 Vision Pro headset in Apple’s most significant launch since iPhone | Apple said the Vision Pro, which will cost $3,499 (£2,814), will be “the most advanced personal electronics device ever” when it is released next year
3) Hunt plans biggest shake-up of employee ownership schemes in 23 years | Government aims to make it easier for workers to own shares in companies they work for
4) House selling times soar to pandemic levels as mortgage rates climb | Four-bedroom homes worst hit as buyers opt for smaller properties
5) BCC wins the ear of government in a blow to scandal-hit CBI | Lobbying group faces uncertain future as crucial vote looms
What happened overnight
Asian stock markets rose after Wall Street fell on concern the US economy may be weakening following a report that showed growth in service industries slowing.
The Shanghai Composite Index rose 0.2pc to 3,237.89 and the Hang Seng in Hong Kong advanced 1.1pc to 19,310.53.
The Nikkei 225 in Tokyo gained 0.4pc to 32,350.58 after government data showed Japanese wages rose 1pc over a year earlier in April but growth decelerated from the previous month’s 1.3pc.
The S&P ASX 200 in Sydney shed 0.5pc to 7,181.90. South Korean markets were closed for a holiday.
Wall Street stocks dipped Monday after the Institute for Supply Management’s closely-watched overall gauge of services unexpectedly fell to the lowest level of the year, conflicting with optimistic readings of the US economy.
The Dow Jones Industrial Average dropped 0.6pc to 33,562.86. The broad-based S&P 500 shed 0.2pc to 4,273.79, while the tech-rich Nasdaq Composite Index declined 0.1pc to 13,229.43.
The yield on 10-year Treasuries declined two basis points to 3.67pc amid speculation the Federal Reserve plans to keep interest rates steady in June with the possibility of increasing in later months.
