Jeremy Hunt has warned that Britain’s businesses face a creativity crisis unless working from the office once again becomes the “default”
The Chancellor said working remotely brought some benefits but he feared British businesses would struggle to generate new ideas if employees were allowed to work remotely indefinitely.
Speaking at the annual conference of the British Chambers of Commerce in London, Mr Hunt said: “There is nothing like sitting around the table, seeing people face to face, developing team spirit.
“And I worry about the loss of creativity when people are permanently working from home and not having those water cooler moments where they bounce ideas off each other.
“Not every great business idea happens in the structured form of a meeting. So I think that's why, increasingly, businesses are saying they want people back.
“Unless there's a reason, I think we will get to a point where… with the exception of specific categories of workplace - for example, call centres - I think the default will be that you work in the office.”
Elon Musk, the boss of Tesla and owner of Twitter, has also attacked the “laptop classes” for wanting to work from home indefinitely while expecting manual workers to keep clocking in face-to-face.
Mr Hunt said working from home had brought benefits for parents juggling childcare and for disabled people who were less mobile.
He said businesses had to “find their own way through” but predicted remote working would not become the norm for most.
It came as Labour leader Sir Keir Starmer on Wednesday vowed to enshrine the right to work remotely in law, saying it was “very important”.
Some 44pc of staff still work from home either some or all of the time, according to figures published by the Office for National Statistics in February.
Top earners, those educated to degree level or above, and those in professional occupations were most likely to avoid the office..
Many white collar workers, particularly younger ones, are reluctant to return full time. More than three-quarters of Britain’s Gen Z workers and more than 70pc of millennials said they would consider looking for a new job if their employer asked them to go back to the office five days a week, a Deloitte survey found.
Kate Sweeney, partner and head of human capital at Deloitte, said: “Younger workers expect to be able to flex their work to accommodate their personal life.”
Many chief executives are growing increasingly frustrated by the persistence of home working.
Elon Musk, the boss of electric car maker Tesla, claimed working-from-home was morally wrong and accused the “laptop classes” of “living in la la land”.
He told CNBC that home working was unfair on those who cannot decide whether they commute, such as builders, mechanics or delivery drivers.
The billionaire, who is also the boss of rocket company SpaceX, said: "There are some exceptions, but I kind of think that the whole notion of work from home is like the fake Marie Antoinette quote: 'Let them eat cake'.
“Really? You're going to work from home and make everyone who made your car come to the factory?
“Does that seem morally right? That's messed up.”
Workers should “get off the goddamn moral high horse with their work-from-home bull****, because they’re asking everyone else not to work from home while they do,” he added.
Baroness Lane-Fox, the technology entrepreneur who is current president of the BCC, said greater flexibility in work should be welcomed.
She told reporters: “This is something you can offer people, it's something you should keep talking to employees about. Different businesses will make different decisions according to what's right for them.
“But it's exciting, in my opinion, that we've got more flexibility. I don't think government should be regulating where people work - I think that should be the individual's business choice.”
That's it from us. We'll be back tomorrow with the latest.
UBS admits shotgun Credit Suisse rescue could cost it $17bn
UBS has admitted it will face a $17bn (£13.7bn) hit from its shotgun marriage with Credit Suisse, as the lender prepares to complete the rescue of its embattled rival.
Banking correspondent Simon Foy has the details:
The Swiss bank said it is set to take a $13bn blow to the value of the combined group's assets and liabilities as it takes on underperforming parts of Credit Suisse. UBS has also set aside a further $4bn to cover potential legal and regulatory costs.
However, UBS said it expects to offset this by booking a one-off $34.8bn gain from so-called “negative goodwill,” which occurs when a company snaps up assets at a much lower cost than their true value.
In a regulatory filing in the US, the Swiss lender also disclosed that it started evaluating a potential takeover of Credit Suisse last October as the crisis at its fiercest rival deepened.
In February, the company’s strategy committee concluded that a deal was “not desirable”.
In March, UBS agreed to buy Credit Suisse in a cut price £2.6bn deal orchestrated by Swiss authorities to avoid the latter failing and precipitating a wider crisis in the global banking industry.
However, UBS warned that the rushed deal may have affected its ability to “fully evaluate Credit Suisse’s assets and liabilities” prior to the takeover.
Swiss regulators gave the bank just four days to run the rule over Credit Suisse in March before orchestrating the deal.
In the filing, UBS said: “If the circumstances of the due diligence affected UBS' ability to thoroughly consider Credit Suisse’s liabilities and weaknesses, it is possible that UBS Group will have agreed to a rescue that is considerably more difficult and risky than it had contemplated.”
Sergio Ermotti, who led the Swiss lender for nine years until 2020, replaced Ralph Hamers as chief executive of UBS less than two weeks after regulators engineered the emergency takeover.
Immediate challenges for Mr Ermotti, who currently serves as the chairman of insurer Swiss Re, will include laying off thousands of staff, cutting back Credit Suisse's investment bank and reassuring wealthy clients that UBS remains the best place to deposit their cash.
Andreas Venditti, an analyst at Vontobel, said: "The financial information lacks an estimate of restructuring provisions as these will be booked after the transaction closes.”
Analysts at Jefferies have estimated restructuring costs, litigation provisions and the planned winding down of the non-core unit could total $28bn.
Sir Martin Franklin scores London's largest listing of 2023
The latest blank cheque company founded by dealmaker Sir Martin E. Franklin has scores the UK’s biggest listing of 2023.
Admiral Acquisition, co-founded by Sir Martin, raised $550 million in an initial public offering on the London Stock Exchange on Wednesday.
It marks a boost for the City’s capital market following an exodus of companies leaving for New York in recent months.
The special purpose acquisition company will use the cash raised to buy out an established business which wishes to float in London.
If Admiral Acquisition does not complete the acquisition within two years, it will be wound up and its cash will be returned to shareholders.
Sir Martin previously used blank cheque companies to help float Burger King and UK insurer Phoenix Group.
Former LCF chief handed 10 month suspended sentence for buying horse saddle and a hot tub
The former chief executive of failed “mini-bond” provider London Capital & Finance (LCF) has been handed a 10-month suspended sentence for spending thousands on an Italian holiday, a horse saddle and a hot tub.
Michael Thomson, also known as Andy Thomson, was spared prison despite a court finding he had repeatedly breached restrictions imposed on his bank account.
Thomson was the chief executive of LCF when it fell into administration in January 2019, leaving over 11,000 savers with losses totalling more than £237m in one of the biggest scandals in City history.
The Serious Fraud Officer (SFO) froze Thomson’s assets as part of its subsequent investigation into suspected fraud and money laundering at the collapsed savings provider.
It was later discovered that Thomson attempted to hide £95,000 from the UK’s fraud regulator by funnelling money into his wife’s unrestricted bank account.
SFO investigators then found that the former LCF boss had attempted to further conceal the cash and hamper its recovery by splashing thousands of pounds on luxury items.
His purchases included a £5,000 holiday in Italy, a £3,900 horse saddle, £1,170 on a hotel and spa stay in Torquay, and £5,495 on a hot tub.
Further £1,000 sums were spent on a horsebox conversion and a hotel stay, respectively.
Thomson admitted to receiving undeclared funds on two separate occasions while his assets were restrained.
The first breach occurred when Thomson concealed £40,000 from a stamp duty tax rebate in 2020.
The second took place months later when he made a fraudulent insurance claim worth £55,000 for DIY repair work to a barn that was never completed.
Genevieve Reed, the former LCF boss’s lawyer, said that the outbuilding was unexpectedly damaged in a storm and "not something that was planned by Mr Thomson in a bid to extract money".
Catherine Collins, representing the SFO, told Southwark Crown Court: “The reality is that he spent the money obtained through these two sources on himself."
At the court on Wednesday, Thomson was handed a 10-month sentence suspended over two years for contempt of court.
The judge added that court orders should not be "set aside or disregarded" but "respected and observed".
The decision to issue a suspended sentence took into account delays in proceedings, Thomson’s compliance and cooperation with authorities since the breaches and his mental health.
Commenting on the ruling, SFO director Lisa Osofsky said: "Today's result makes clear: company executives are not above the law.
"When they break it, we have the means and the resolve to go after their money, no matter where they hide it."
FTSE 100 closes in the red
London's markets suffered another weak performance as traders faced a quiet session on Wednesday.
A handful of downbeat trading updates, including JD Sports and British Land, pointed the FTSE 100 lower at the close of trading.
The blue-chip index moved 0.36pc or 27.85 points lower to finish at 7,723.23. The mid-cap FTSE 250 index fell 0.30pc to 19,215.45.
Meanwhile, sterling had a broadly flat session despite indications from Bank of England's Andrew Bailey that the central bank could increase interest rates further if there were signs of persistence regarding inflation.
The pound was down 0.02pc to $1.247 US dollars at market close in London.
Swiss parliament to investigate Credit Suisse takeover
Credit Suisse's collapse and its takeover by UBS will be investigated by Switzerland's parliament.
The parliamentary commission (PUK), the office of Switzerland's upper house of parliament, will conduct the probe although its extact focus has yet to be determined.
This will be decided by both houses of Switzerland's legislature during their next sessions, which begin on May 30.
It follows parliamentary support for an inquiry into how Switzerland's government, central bank and financial market acted in the run up to the emergency rescue of Credit Suisse.
The investigative commission will not be able to stop the deal, although will have subpoena powers and would be expected to question managers of both banks as well government officials and have access to government meeting minutes.
The takeover, signed off by a small group of lawmakers, drew widespread public criticism, particularly for bypassing the parliament, which last month denied the deal its stamp of approval.
The action was largely symbolic and the takeover is due to go ahead, with UBS expecting to close it in coming weeks.
The commission's hearings could, however, yield new insights into how the biggest banking rescue since the global financial crisis came about.
JP Morgan has war room ready for US debt default
JP Morgan has created a war room to prepare for the possibility of the US defaulting on its debt, according to chief executive Jamie Dimon.
“Whatever it is, we will be prepared,” Mr Dimon said after meeting with Senate majority leader Chuck Schumer,
Mr Dimon was joined by Citi chief executive Jane Fraser and other executives from major banks to discuss the debt ceiling, as the US government faces running out of cash by early June unless its borrowing limit is increased.
However, the JP Morgan boss said that the US government will “probably” not default, Bloomberg reported.
He said: “The US should not and probably will not default."
Tory government 'not interested' in ending rail strikes, claims union boss
The government response in Wales and Scotland to industrial action is in "stark contrast" to Westminster, according to train drivers' union boss Mick Whelan.
Mr Whelan, Aslef's general secretary, said:
The 15 train companies with which we are in dispute - because they have not offered their drivers, our members, an increase in salary since 2019 - and the Tory government that stands behind them do not appear to be interested in getting a resolution that serves passengers and businesses as well as staff and will help to get Britain's railways back on track.
On TfW we have negotiated a deal which modernises the railway in Wales. The deal offers a significant increase in salary for changes to conditions.
The latest deal with ScotRail is a further increase in salary and improvement in conditions - and the fourth increase since our members at those 15 train operating companies (TOC) represented by the Rail Delivery Group (RDG) and controlled by the Department for Transport (DfT) have had a rise.
This is further proof that Aslef is willing to negotiate in good faith and modernise our railway and further proof that the failure of negotiations with the TOCs in England is the responsibility of Transport Secretary Mark Harper, the DfT, and the RDG. That has been laid bare for all to see.
In contrast Mark Harper and the DfT are preventing the operators they control from putting a proper deal to ASLEF members.
We are still prepared to negotiate in good faith and if the operators and government come to us with a serious proposal we will take it seriously.
— ASLEF (@ASLEFunion) May 17, 2023
Train drivers' union recommends improved pay offer to members in Wales and Scotland
Train drivers in Wales and Scotland have been encouraged to accept improved pay offers made.
Train drivers' union Aslef said on Wednesday that it recommends members accept deals made by ScotRail and Transport for Wales.
Transport for Wales has offered union members an 8.9pc pay bump backdated to April 1, increasing salaries to £63,200.
Under the four-year deal, salaries would rise another 7.9pc to £68,300 in April 2024 and then by 4.1pc to £71,000 in December 2024.
Salaries would further climb in April 2025 in line with inflation.
The offer made by ScotRail, which is owned by the Scottish government, is for 5pc and takes drivers from £55,264 to £58,027.
Aslef general secretary Mick Whelan said the government responses in Wales and Scotland to their pay demands stand in "stark contrast" to Westminster.
Russia extends Black Sea grain deal
Russia has extended a deal allowing Ukraine to export its grain safely across the Black Sea for 60 days.
Maria Zakharova, the spokesman for Russia’s ministry of foreign affairs, said the arrangement had been extended to help countries in need.
However, she added that Russia's overall assessment of the situation "has not changed".
The last-minute agreement announced on Wednesday was reached with less than a day before the deal was supposed to expire.
The United Nations and Turkey brokered the Black Sea deal in July 2022 to address the global food crisis worsened by Moscow's invasion of Ukraine, one of the world's leading grain exporters.
Safe passage was initially granted for 120 days, but has already been extended twice.
Russia previously threatened to cancel the deal unless Western countries removed restrictions on its grain and fertiliser exports.
That's all from me today. I'm handing you over to my colleague Adam Mawardi.
I'll leave you with this little piece of information revealed by the Office for National Statistics earlier today.
— Office for National Statistics (ONS) (@ONS) May 17, 2023
Elon Musk reveals his own punishing schedule as he attacks home working
Elon Musk has claimed working-from-home is morally wrong and accused the "laptop classes" of "living in la la land".
Senior technology reporter Matthew Field has the latest:
The Tesla chief executive said home working was unfair on those who cannot decide whether they commute – such as builders, mechanics or delivery drivers – and revealed that he works seven days a week, taking only two or three days off each year.
Mr Musk said: "I am a big believer that people are more productive when they are in person. There are some exceptions, but I kind of think that the whole notion of work from home is like the fake Marie Antoinette quote: 'Let them eat cake'.
"Really? You're going to work from home and make everyone who made your car come to the factory?
"Does that seem morally right? That's messed up."
Read what the billionaire said that workers should do.
It comes as Gen Z workers are threatening to quit en masse if bosses scrap home working, according to a new survey.
More than three-quarters of Britain's Gen Z workers and more than 70pc of millennials said they would consider looking for a new job if their employer asked them to go back to the office five days a week.
The Deloitte survey highlights the difficulties bosses are facing in getting workers back to their desks more regularly.
It comes after financial companies, including JP Morgan and BlackRock, have rolled back their work from home policies in recent weeks.
Kate Sweeney, partner and head of human capital at Deloitte, said: "We know that the first question recruiters are asked by job applicants is about hybrid working arrangements – and that work patterns are a major influence in their choice of employer.
"Younger workers expect to be able to flex their work to accommodate their personal life.
"Employers who recognise this desire for choice and support this are more likely to attract, retain and motivate the best talent from these two generations."
The survey also found that around half of UK Gen Z and millennial workers said they feel stressed all or most of the time, which is higher than the global average.
Stress levels were even higher among women, LGBT+ respondents, ethnic minorities, and those with disabilities.
A quarter of millennials surveyed said that they answer work emails outside of normal working hours at least five days a week.
Breedon moves onto London Stock Exchange's main market
Construction materials supplier Breedon Group has today been admitted main market of the London Stock Exchange, stepping up from the AIM market.
Valued at £1.2bn on admission, Breedon is the largest company to step up from the junior AIM market to the main market since February las year, when Asos had a market cap of £1.9bn.
Breedon's current market cap means that it is eligible to enter the FTSE 250 at the next reshuffle in June.
In conjunction with its move to the main market, Breedon is also carrying out a share consolidation. For every five shares investors held Breedon, they will receive one "New Breedon" share.
On that last day of trading on AIM, Breedon shares traded at 69p, giving an implied value of 345p for each New Breedon share. In early trading, the shares were at 348p.
Nintendo sells 10m copies of new 'Zelda' in three days
Japanese video game firm Nintendo said it has sold 10 million copies in three days of its latest release, "Legend of Zelda: Tears of the Kingdom".
The company wrote on Twitter that the figures made it "the fastest-selling game in the history of The Legend of Zelda series", which began in 1986.
Elizabeth Holmes must repay Rupert Murdoch $125m after Theranos fraud
Convicted fraudster Elizabeth Holmes and her Theranos co-founder must repay $125m (£100m) to Rupert Murdoch as part of restitution for their crime, a judge has ordered.
Senior technology reporter Gareth Corfield has the latest:
Ms Holmes, 39, and her ex-boyfriend and business partner, Ramesh "Sunny" Balwani, must hand the sum over as part of court-ordered $452m restitution. The money will go to investors who the pair deceived into backing Ms Holmes' tech startup, Theranos.
Mr Murdoch, 92, invested a reported $100m in the company between 2014 and 2015 while its valuation and prominence was soaring.
Other high-profile figures including Henry Kissinger and Bill Clinton also backed Ms Holmes's startup.
The sum Ms Holmes and Mr Balwani have been told to repay Mr Murdoch is the single largest part of the restitution order.
US markets rise amid regional bank bounce
Wall Street markets have jumped at the open after Western Alliance led a bounce among regional banks, while investors awaited more deal talks to avert a potential national debt default.
The Dow Jones Industrial Average and S&P 500 climbed 0.4pc to 33,131.79 and 4,127.86 respectively after the opening bell.
The Nasdaq Composite was up 0.2pc to 12,389.90.
Ripple Labs announces £200m takeover after latest
Crypto company Ripple Labs has agreed to acquire Swiss-based crypto custodian Metaco for $250m (£200.5m) on the same day it also won what is being considered a victory in its long-running battle with US regulators.
Blockchain payments firm Ripple is trying to diversify its revenue stream into custody of digital assets.
Metaco, which signed digital-asset custody partnerships with Citigroup and BNP Paribas last year, will operate as an independent brand and unit led by current chief executive Adrien Treccani.
The deal comes as XRP, the native token of Ripple Labs' blockchain ecosystem, jumped the most in about seven weeks after investors interpreted a court ruling as favourable for the crypto payments company.
The coin rose as much as 8.6pc and was trading at about 46 US cents after the latest development following the Securities and Exchange Commission suing Ripple in 2020, alleging the company failed to register XRP as a security.
A judge denied the agency's motion to seal documents related to a 2018 speech by former SEC official William Hinman, in which he discussed the application of federal securities laws to digital assets.
Minister ducks question on reopening Brexit trade deal amid car jobs threat
A minister would not be drawn into whether the Government will seek to reopen negotiations with the EU on post-Brexit trade arrangements, after warnings from British car makers about the future of the industry.
Business minister Nus Ghani was asked by Labour MP Justin Madders in the Commons whether the Government "plans to make a formal request to reopen negotiations with the EU on the trade and co-operation agreement".
Stellantis – which makes Vauxhall, Peugeot, Citroen and Fiat – warned it may close factories, which it runs in Ellesmere Port and Luton, employing about 2,000 people, over potential EU tariffs next year.
Ms Ghani told the Commons the reopening negotiations would be a matter for the Foreign Office. She added:
I can provide assurances that I and the Business and Trade Secretary (Kemi Badenoch) have raised these issues with our colleagues across Government and had productive conversations with our counterparts in the European Union.
We are aware of the concerns from the UK car makers about the challenges and of course we continue to make strong representation.
Western Alliance helps drive US regional bank rally
Shares of US regional banks rallied in premarket trading after Western Alliance Bancorp said deposits had grown by more than $2bn (£1.6bn) since the end of the quarter, easing worries about the health of US regional lenders.
Shares of Western Alliance were 9.7pc higher ahead of the opening bell in New York.
Regional lending peer PacWest Bancorp gained 9pc and Zions Bancorp was 2.3pc higher, as the SPDR S&P Regional Banking ETF rose 1.5pc.
The sector has been under pressure since March, when a series of firms including Silicon Valley Bank collapsed.
The Dow Jones is expected to move 0.4pc higher at the opening bell, while the S&P 500 is on target to rise 0.3pc.
The tech-heavy Nasdaq 100 is on course to rise 0.2pc.
Biden: Defaulting on US debt 'not an option'
Joe Biden has insisted "America pays its debts" and said the country has "never defaulted on our debt and never will".
He tweeted after he said debt limit talks have entered an encouraging new phase as the President and House Speaker Kevin McCarthy tapped top diplomats to negotiate a deal.
If America were to default on its debt, nearly 8 million Americans could lose their job, retirement accounts would be devastated, and we’d fall into recession.
It’s not an option.
Party differences haven't stopped Congress from avoiding default before — and they shouldn’t now. pic.twitter.com/m9kJ4r2tVC
— President Biden (@POTUS) May 17, 2023
Watches of Switzerland boosted by growing list of buyers
Rolex and Cartier seller Watches of Switzerland has seen its yearly sales jump by one-quarter amid a growing list of buyers undeterred by higher prices for luxury time-pieces.
But it cautioned investors over more challenging conditions in the year ahead.
The company, which says it is the UK's largest authorised watch retailer, boasted "another record year of revenue and profitability".
It saw its revenues grow by one-quarter to £1.5bn in the year to the end of April, driven by a surge in sales in the US of more than 50pc.
Luxury watch revenue jumped by 28pc, which it said was boosted by increases in both the average selling price and the volume of items sold, reflecting the "dynamism" of expensive time-pieces.
It expects to report an adjusted pre-tax profit of between £163m and £167m, up from £130m this time last year.
The watches and jewellery chain also revealed plans to launch new showrooms in St Anne's in Manchester and Old Bond Street in London next year.
Inmarsat revenues surge ahead of multibillion dollar space merger
UK satellite company Inmarsat has recorded a surge in revenues as it inches closer to finalising its $7bn takeover by US rival Viasat.
Senior technology reporter Matthew Field has the latest:
In its three-month results, Inmarsat reported revenues rose 16pc to $403m, while underlying profits were up 32pc to $259m.
Rajeev Suri, Inmarsat chief executive, said Inmarsat's talks with regulators were progressing and he was confident its results would be its "last reported quarter" as an independent company.
The Competition and Markets Authority waved through the multibillion dollar space merger, after investigating concerns the deal would create a dominant player in the market for in-flight connectivity.
Inmarsat had argued that new rivals such as Elon Musk's Starlink satellite network were boosting competition in the sector. However, the European Commission and US authorities are still investigating the takeover.
Savills making fewer sales as property market struggles
Estate agent Savills has joined commercial landlord British Land in disappointing investors today as the property sector continues to face a weaker market.
British Land said that it had significantly written down the value of its property portfolio after rises in interest rates.
Shares in British Land fell 6.6pc following the news.
Meanwhile Savills warned that it was facing market corrections, although told shareholders that these were going "largely as anticipated."
The company said that it was making fewer sales than last year, but that some prime residential markets had performed well, especially London.
Meanwhile the ending of Covid restrictions in China has improved sentiment in the country, but this is yet to really show in the company's revenue, Savills said.
The first half of this year is expected to be "materially impacted by the ongoing recalibration of global investment markets". Its shares have fallen 5.3pc.
Pound slips against the dollar amid US default fears
The pound has fallen against the dollar as investors turn to the safe haven currency amid worries over the world economy.
The dollar has rallied 2pc against a basket of major currencies in the last month.
The dollar index, which on Wednesday was trading around its highest since early April, has gained over 1.5pc in the last week - making this its strongest week-on-week gain since late February.
The pound has fallen 0.3pc today and is headed in the direction of $1.24 as Congress and the US President try to avoid a US default on its debts, which would have a damaging affect on the global economy.
MUFG strategist Lee Hardman said: "A period of risk reduction by global investors could begin to weigh more heavily on high beta currencies such as commodity and emerging market currencies, at least until a deal is reached."
Interest rates would have needed to hit double-digits to stop runaway inflation, says Bailey
Andrew Bailey rejected blame for double-digit inflation, which is more than five times the Bank's target.
Senior economics reporter Eir Nolsøe is watching his speech at the British Chambers of Commerce conference:
Speaking to business leaders in London, he said: "I'd like to push back strongly against one argument you sometimes hear, which is that inflation is high because monetary policy was too loose in the past.
"The headline is that even if we had had the benefit of full hindsight in the run-up to the war in Ukraine, and ample advanced warning – which for the record we did not, no one did – then in order to keep inflation at around 2pc, we would have had to raise Bank Rate well into double digits, sending unemployment much higher than it is today, and we would have had to do so in the middle of the worst pandemic in more than a century.
"Monetary policy can't make the impact on real incomes go away I'm afraid."
Economy looking 'brighter,' insists Bailey
The Governor of the Bank of England has told business leaders that "things are looking a bit brighter than they did a couple of months ago".
Andrew Bailey's comments come as inflation runs at 10.1pc, remaining in double-digits since August, and after the Bank raised its prediction for where price rises will be at the end of the year to around 5pc from 3.9pc.
However, has told bosses at the British Chambers of Commerce's annual conference that Britain's labour market "remains very tight" despite data showing vacancies fell for the 10th months in a row in April.
He said the Bank's Monetary Policy Committee "pays particular attention to indicators of inflation persistence" as it continues to try and bring inflation down to its 2pc target.
These indicators include "labour market tightness and wage growth, and services price inflation".
Oil prices fall amid China demand worries
Oil prices have fallen for a second day as traders weighed the outlook for demand in China and a US industry report pointed to a build-up in stockpiles.
International benchmark Brent crude slipped by 0.1pc below $75 a barrel, as US-produced West Texas Intermediate dropped 0.2pc toward $70 after losing 0.4pc on Tuesday.
Some banks cut forecasts for China's growth this year after weak April data, although the International Energy Agency remains upbeat on the demand prospects in the world's second-largest economy following the end of Covid curbs.
Meanwhile, the industry-funded American Petroleum Institute reported nationwide crude inventories rose by 3.7m barrels last week, as stockpiles built at the key hub at Cushing, Oklahoma, according to Bloomberg.
Crude is down about 12pc this year as China's slower-than-expected recovery, a campaign of aggressive monetary tightening from the Federal Reserve, and more recent concerns over the US debt ceiling weigh on the outlook.
Eurozone inflation inches up
Inflation stood at 7pc across the eurozone in April, up from 6.9pc in March, statistics agency Eurostat has confirmed.
Core inflation, excluding volatile energy and food prices, stood at 5.6pc, down from 5.7pc in March.
— EU_Eurostat (@EU_Eurostat) May 17, 2023
Hunt tells regulators to remember 'wider responsibilities' amid blocked Microsoft deal
The Chancellor said regulators should "understand their wider responsibilities for economic growth" after the UK's Competition and Markets Authority (CMA) blocked the merger between Microsoft and gaming giant Activision Blizzard.
It comes after Microsoft's vice chair and president Brad Smith said the UK regulatory environment compared unfavourably with the EU and warned the "English Channel has never seemed wider".
In response Jeremy Hunt said:
When it comes to Microsoft, there was a merger between two American companies that the US regulator is seeking to block, and the UK regulator took the same view.
I think one of the reasons that companies like Microsoft and Google want to invest in the UK is because we have independent regulators that are not controlled by politicians and therefore they can be confident there will be a level of level playing field.
I would not want to undermine that at all, but I do think it's important all our regulators understand their wider responsibilities for economic growth.
But for our tech sector, it isn't just about being able to get through big deals, competition really matters.
Jeremy Hunt dashes tax cut hopes
Jeremy Hunt said he cannot promise tax cuts before the next election despite Government borrowing coming in £13.2bn below official forecasts.
The Chancellor told the British Chambers of Commerce's annual conference that his "overwhelming priority" is to reduce inflation.
He told bosses gathered in London that "we aren't in a position to know whether we’re going to have any headroom at all" for tax cuts.
He added. "We have to get our taxes down, particularly our business taxes down, but the worst tax of all is inflation."
It comes after Ruth Gregory at Capital Economics said last month that the Government would have "more wiggle room to cut taxes/raise spending ahead of the next general election" after borrowing £13.2bn less than OBR forecasts in the year to March.
Mr Hunt also warned businesses they cannot rely on "unlimited, low skill" migration to plug workforce gaps but conceded that taxes are currently too high.
Asked this morning where he stood in a Cabinet row over immigration, the Chancellor said: "The Brexit decision, whichever side of that you were on, was a decision to change our economic model towards being a high skill, high wage economy and I think that is something everyone instinctively supports.
"It was a decision to move away from being dependent on unlimited, low skill migration."
He said he still wanted businesses to be able to "find the labour they need" and that skills shortage lists for certain sectors such as care homes and construction were designed to allow limited migration to help.
But he said this would have to be "at the margins" and that Britain should move towards a higher employment model such as that of Holland, which could add another two million people to the workforce.
"What we need to do is tap into the incredible potential we have here at home," he said.
His comments come after a Cabinet split over how to bring migration down without damaging the economy.
Suella Braverman, the Home Secretary, on Tuesday had all but one of her immigration reforms blocked by cabinet colleagues.
The Chancellor also said it is for businesses "to find their own way" regarding people working from home or the office but said he is worried about "the lack of creativity" from permanent home-working. He said:
I think it's something for businesses to find their own way through.
There are some very exciting opportunities created by the fact that we've all learned to use Zoom in teams for meetings.
On the other hand, there is nothing like sitting around the table, seeing people face to face developing team spirit - and I worry about the loss of creativity.
When people are permanently working from home and not having those water cooler moments where they bounce ideas off each other.
'Nothing automatic' about reducing inflation, says Hunt
Chancellor Jeremy Hunt has defended his handling of the economy and public finances, saying there was "nothing automatic" about controlling inflation.
At the British Chambers of Commerce conference in central London he said independent forecasters believed the Government was on track to meet Rishi Sunak's targets of halving inflation and growing the economy.
But he said:
There's nothing automatic about bringing down inflation. There's a plan, we are going to stick to it.
The Bank of England has a role through monetary policy and interest rates, we support them 150pc with that.
But we have our role in government, what I do on the fiscal side in terms of tax and spend has an influence and if markets judge that we are not getting our borrowing under control they will punish us with higher interest rates.
Purplebricks sold for £1
Purplebricks has been sold to rival estate agent Strike for £1.
The deal, which will effectively wipe out Purplebricks' shareholders, sent the company's battered stock down another 28pc.
The announcement comes a week after it said it was negotiating a possible deal with Strike, which at the time had said it did not intend to make an offer.
Earlier this month, the company revealed it has £9.1m in the bank and the board no longer expects to return to profit this financial year.
'Business needs a fresh relationship from Government,' says BCC boss
The director general of the British Chambers of Commerce (BCC) has said "business needs a fresh relationship with Government" as it looks ahead to the prospect of a general election next year.
Senior economics reporter Eir Nolsøe is at the organisation's annual global conference:
Shevaun Haviland was at the first major gathering of business leaders and policymakers since scandal engulfed fellow lobby group the Confederation for British Industry.
She said: "With a general election less than 18 months away, we are at a pivotal moment for the voice of British business.
"In the last year alone, we have seen eye-watering energy bills, inflation stubbornly over 10pc, rising interest rates and a cripplingly tight labour market.
"I am under no illusion about just how challenging these times are for anyone in business. They tell me everyday.
"But let me be upfront and frank, business needs a fresh relationship from Government."
Auction Technology Group leads FTSE 250
Online auctioneer Auction Technology Group is leading the way on the FTSE 250 after unveiling half-year results that beat analyst expectations.
Its shares have risen 6.6pc after it revealed revenue grew 17pc to £67.3m in the six months to the end of March.
The company, which calls itself an "aggregator in the large and fragmented auction industry", said adjusted ebitda - a measure of profits - rose 18pc to £31.5m.
Chief executive John-Paul Savant said: "ATG has delivered another robust set of results with solid revenue growth, margin expansion and strong cash generation, against an uncertain macroeconomic environment and exceptional growth in the prior year."
Crypto is 'speculative Wild West,' says senior MP
A Conservative MP and chair of the Treasury Committee has said cryptocurrencies like Bitcoin are a "speculative Wild West" as she ramped up calls for the currency to be regulated like gambling.
Speaking on Sky News, Harriett Baldwin said:
There are obviously some good technologies in Bitcoin and other cryptocurrencies which have the potential for reducing the cost of transactions for businesses and consumers around the world.
But some of these unbacked crypto assets are really just a speculative Wild West and we think it should be regulated, more like gambling.
She said crypto in the UK is unbacked, meaning it does not have any "intrinsic value", and that 80pc of crypto users lose money.
"It's a market that is used by money launderers and criminals," she said.
Ms Baldwin added she would never use cryptocurrencies and would not recommend it to her constituents.
Gas prices hold near two-year low
European natural gas prices steadied near a two-year low as the region faces milder temperatures that are likely to temper gas usage.
Dutch front-month futures, the continent's benchmark, remained near €32 per megawatt-hour, after closing below that threshold for the first time since June 2021 on Tuesday.
Prices have now fallen to less than a tenth of the record set in 2022, helped by above-average storage levels and flows of liquefied natural gas.
While parts of Europe have already faced unusually hot weather this year, the region is set to experience milder
temperatures next week, with Scandinavia on track for above-average warmth.
At the same time, southern Europe is not expected to see any extreme heat, with Helsinki set to be warmer than Madrid at 23C.
A continuation of mild temperatures would help Europe build up gas inventories ahead of the next heating season, after it
already saw support from a mostly mild winter.
Dutch front-month gas, Europe’s benchmark, was last up 0.4pc at €31.95 per megawatt-hour.
Experian leads declines on FTSE 100
The FTSE 100 slipped for a second day as London Stock Exchange Group (LSEG) slid after an investor consortium sold shares in the market operator, while Experian dropped following its lacklustre annual forecast.
Shares of London Stock Exchange Group dropped 4.5pc after US buyout firm Blackstone and Thomson Reuters sold shares of the financial market operator worth around £2.7bn, according to Barclays Bank.
The financial services sector slid 1pc while the broader FTSE 100 shed 0.2pc.
Experian is the worst performer on the blue-chip index, falling 4.9pc after the British credit data firm forecast annual organic revenue to grow between 4pc and 6pc, while analysts were expecting a 5.8pc growth.
British Land fell 4.5pc after the company reported a £1.5bn drop in its property valuations, as high borrowing costs and broader economic worries strained sentiment.
The FTSE 250 slid 0.6pc as caution lingered with investor focus on US negotiations over the raising of debt limit to avoid a catastrophic default.
British Land's £1.5bn write off 'impacted by hybrid work'
After British Land wrote off £1.5bn from its real estate portfolio, Edison Group director of research Neil Shah said:
British Land's results indicate some headwinds faced by the property sector, largely driven by higher interest rates and broader economic concerns.
It's clear that the aggressive interest rate environment and macroeconomic challenges have stifled a tentative recovery from pandemic lows.
The company reported a year-on-year property valuation drop of 12.3pc, resulting in a swing to a loss of £1.04bn from a profit of £965mn in the previous year.
The shift towards hybrid work has also affected the office space sector.
Despite these challenges, the company remains optimistic, citing easing yield pressure and signs of yield compression for retail parks.
Looking forward, British Land anticipates a rental growth of 2pc to 4pc in these and retail park segments over the next year.
Mitchells & Butlers heralds 'early signs' of inflation easing
All Bar One owner Mitchells & Butlers has said it is seeing "early signs" of easing cost pressures as it revealed a pick up in recent sales growth.
The group reported an 8.9pc increase in like-for-like sales over the past six weeks, boosted by Easter trading, up from 8.5pc growth in the half year to April 8.
It said while surging costs remain a challenge, there are "indications that cost inflation headwinds across the supply chain are starting to abate".
Energy prices have already fallen back significantly, while it said cost inflation in other areas, such as food, are set to slow down soon, according to the firm.
But soaring costs and the absence of government support seen a year earlier impacted its bottom line, with interim pre-tax profits dropping to £40m from £57m a year ago.
British Land wipes £1.5bn off its real estate
British Land sees early signs that UK real estate values may be bottoming out after wiping £1.5bn off the value of its portfolio.
Valuations have been hit by rising interest rates, which have pushed up yields on other assets, meaning investors in turn demand higher returns to justify the risk of investing in property.
That has been partially offset by rising rents even against a backdrop of anaemic economic growth.
A series of rapid rates hikes has roiled UK commercial property, causing a sharp drop in deal making while investors wait for prices to adjust to the new environment.
After a quiet first quarter there are signs that investment volumes are now increasing as confidence grows that the interest rate hiking cycle is near its end.
The company marked down the value of its portfolio by 12.3pc to £8.9bn in the year through March. Chief executive Simon Carter said:
Higher interest rates have inevitably had an impact on property market yields and, as a result, the value of our portfolio declined by 12.3pc.
Whilst we remain mindful of ongoing macroeconomic challenges, the upward yield pressure appears to be easing and there are early signs of yield compression for retail parks.
'We need a better Brexit deal,' says Starmer
Sir Keir Starmer said the Brexit deal needed to be improved after the owner of Vauxhall said it will be unable to keep its commitment to make electric vehicles in the UK without changes to the trade agreement with the European Union.
Speaking to BBC Breakfast, the Labour leader said:
Look, we're not going to re-enter the EU. We do need to improve that deal. Of course we want a closer trading relationship, we absolutely do. We want to ensure that Vauxhall and many others not just survive in this country but thrive.
Because there are jobs bound up, there are families watching this morning either employed by Vauxhall or a similar place who are deeply worried about what this means.
So yes we need a better Brexit deal. We will make Brexit work. That doesn't mean reversing the decision and going back into the EU but the deal we've got, it was said to be oven-ready, it wasn't even half-baked.
So of course we've got to repair that along with all the other things we'll have to repair if and when we are privileged to come into government.
Sir Keir said there was "too much by way of barriers", saying they needed to be torn down in any update to the Brexit deal.
He said a future Labour government would look to "make things here in Britain" to ensure a strong domestic supply chain.
UK car industry faces 'existential threat' over Brexit deal
An economics academic has warned there is an "existential threat to the UK car industry".
Professor David Bailey, professor of business economics at the Birmingham Business School, said that increased tariffs and stricter rules in post-Brexit trading agreements will put British manufacturers at a competitive disadvantage.
From next year, 45pc of an electric car's value should originate in the UK or EU to avoid a 10pc export tariff on cars exported to the EU from the UK.
Prof Bailey told BBC Radio 4's Today programme:
I think there is a kind of existential threat to the UK car industry.
The rules in the Brexit agreement don't help the UK car industry either. If they can't meet those rules, they'll face a 10pc tariff on cars made in the UK and exported to the EU and vice versa.
That will put the UK at a competitive disadvantage.
He added: "Car makers have been saying for some time, they can't meet those rules as they tighten up, and they're going to potentially be facing tariffs."
FTSE falls at the open
Markets have moved lower at the open in London amid nervousness over the US debt ceiling talks.
The FTSE 100 and FTSE 250 each dropped by 0.4pc to 7,723.31 and 19,195.53 respectively.
Starmer urges discussion on building on green belt
Councils need to have the final say on whether homes can be built on green belt land, according to Sir Keir Starmer.
Ahead of addressing the British Chambers of Commerce today, the Labour leader told The Times housebuilding was key to achieving "the sort of growth we need in this country".
He said a discussion was needed over allowing building on the green belt if it meets local needs.
He added his party would give local areas the ability to build on the greenbelt where it would not take away from the beauty of the countryside.
He used the example of houses being built on a playing field in Maidstone rather than on a car park, with the reason given that the car park was classified as being in the greenbelt. Speaking to BBC Breakfast, Sir Keir said:
I don't think anybody who cares about our countryside would think that is a good idea.
So what I'm say is that if we give local areas the power to direct where housing is, even when it is on the greenbelt, if it is a car park rather than a playing field, then I think that protecting the car park and building on the playing field was the wrong choice.
We would make those tough choices and say to local areas: not withstanding that it is the greenbelt, if it is a car park or similar land which doesn't effect the beauty of our countryside, which we all want to preserve, then we'll change the planning rules, we'll give you the planning powers to do that.
JD Sports 'conscious of the headwinds' in consumer demand
After JD Sports Fashion's financial results, chairman Andrew Higginson said:
This is a record result for the group and I must pay tribute to the skills, resilience and positive attitude of the colleagues in our businesses who have not let the leadership changes distract from their focus on the consumer and our offer.
JD continues to be the partner of choice for many international brands who see our premium fascias as the natural global home for their latest ranges and freshest new styles.
Whilst we are encouraged by the resilient nature of the consumer demand in the current period to date, we remain conscious of the headwinds that prevail at this time including the general global macro-economic and geopolitical situation.
Energy firms pay £8m over final bill delays
Gas and electricity firms E.On Next, Good Energy and Octopus Energy have paid £8m over compensation failures for delays in producing final bills when customers switch, regulator Ofgem has announced.
The energy watchdog said more than 100,000 households were affected after the three suppliers either missed or delayed compensation payouts that were due when they did not provide a final bill within six weeks, as required when a customer switches to another provider.
Under rules brought in three years ago, customers are entitled to a £30 payment each if a final bill is not produced in six weeks, with a further £30 due if the compensation is not provided within another 10 working days.
Ofgem said the three firms either missed or delayed compensation payments worth £6.3m, with some of the affected households waiting over a year to receive redress.
The suppliers also paid an extra £1.7m to customers or the energy industry voluntary redress scheme (EIVRS), which supports vulnerable consumers.
JD Sports makes record profits after worldwide store openings
Sportswear chain JD Sports Fashion has reported record-high profits and revenues as the retailer steamed ahead with global expansion.
It reported a profit before tax and adjusted items of £991m in the year to the end of January, compared to £947m the prior year, which it said was a record result.
Its revenues jumped to £10.1bn, up from £8.6bn the prior year, as the chain grew its store estate including a new flagship store in Chicago in the US, and 58 net new store openings across Europe such as in Hungary and Greece.
However, including costs such as from JD's previous acquisitions, its pre-tax profit declined by more than £200m to £441m over the year.
JD said it was encouraged by the resilient nature of consumer demand but remains "conscious of the headwinds that prevail" including global economic and political concerns.
Vauxhall owner threatens to close factory unless UK renegotiates Brexit deal
One of the world's largest car manufacturers has urged the Government to renegotiate its Brexit deal with the EU or said it may have to close factories in Britain.
Stellantis - which makes Vauxhall, Peugeot, Citroen and Fiat - said present arrangements with the EU pose a "threat to our export business and the sustainability of our UK manufacturing operations".
In a submission to a Commons inquiry into electric car production, seen by the BBC, the carmaker said its UK investments were under threat as a result of the strict terms of the post-Brexit free trade deal.
These so-called local content rules state that from next year, 45pc of the value of the electric car should originate in the UK or EU to qualify for trade without tariffs, which would be set at 10pc.
It had committed to making electric vehicles at its Ellesmere Port and Luton plants two years ago, which employ about 2,000 workers combined.
However, it warned: "If the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable, operations will close."
A Government spokesman said that Business and Trade Secretary Kemi Badenoch "has raised this with the EU".
Andy Palmer, a former chief operating officer at Nissan, told BBC Radio 4's Today programme that it is "impossible to meet local content rules unless you source your battery within the UK or EU" but the "supply chain at the moment isn’t there" in Britain.
He said the battery alone represents 40pc of the value of an electric car, adding: "We have been sleeping at the wheel when it comes to bringing battery plants to the UK."
He said: "The cost of failure is very clear. It is 800,000 jobs in the UK, which is those jobs associated with the car industry.
"If you can't meet these local content rules, if you don't have a battery capability in the UK, then those car manufacturers will move to mainland Europe."
The maker of Vauxhall, Peugeot, Citroen and Fiat has urged the Government to reopen its Brexit deal with the EU after saying it would be unable to meet new carmaking rules.
Stellantis warned about the impact of so-called local content rules that state from next year, 45pc of the value of the electric car should originate in the UK or EU to qualify for trade without tariffs, which would be set at 10pc.
Andy Palmer, a former chief operating officer at Nissan, told the BBC that if carmakers cannot meet these local content rules in the UK, they will move to mainland Europe, risking the 800,000 jobs in Britain's car industry.
5 things to start your day
1) We have put the world in danger with artificial intelligence, admits ChatGPT creator | OpenAI chief executive pleads for regulation as he raises prospect of ‘significant harm’
2) Blackrock orders staff back to the office as companies ditch home working | World’s biggest money manager requires workers to do four-day week at their desks
3) Is it too late to rescue failing Vodafone? | ‘Bloated’ organisation struggles to find purpose as a jack of all trades and master of none
4) Musk accused of fuelling anti-semitism after claiming Soros ‘hates humanity’ | Tesla chief executive faces criticism after comparing George Soros to Jewish supervillain Magneto
5) Critic of diversity messaging is hired to clean up scandal-hit CBI | New chief people officer is tasked with overseeing ‘zero tolerance’ approach to harassment
What happened overnight
Asian shares were subdued and the dollar hovered around a five-week peak as investors remained risk averse, with the US debt ceiling talks weighing on sentiment.
Japan's Nikkei, however, rose 0.7pc, scaling above 30,000 for the first time since September, 2021.
The index has been on a tear and is up 15pc this year as foreign investors piled in amid reports billionaire investor Warren Buffett was considering more investment in Japanese stocks.
Elsewhere, MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1pc in choppy trading, with Australia's S&P/ASX 200 index down 0.5pc.
The Shanghai Composite Index eased 0.2pc while Hong Kong's Hang Seng Index slid 0.6pc, dragged by China data showing a wobbly post-Covid recovery.
Meanwhile, President Joe Biden and top congressional Republican Kevin McCarthy edged closer to a deal to avoid a looming US debt default Tuesday.
Wall Street stocks tumbled in the final moments of trading following concerns that Washington lawmakers are struggling to find common ground in pivotal negotiations on lifting the US debt ceiling to prevent a historic default.
The Dow Jones Industrial Average fell 1pc to 33,012.14. The broad-based S&P 500 shed 0.6pc to 4,109.90, while the tech-rich Nasdaq Composite Index dipped 0.2pc to 12,343.05.