Key events
Lisa O’Carroll
Before I go, our senior international trade correspondent Lisa O’Carroll reports:
Relations between Chinese car manufacturer BYD and Viktor Orbán have come under renewed attention after one of the former Hungarian prime minister’s closest allies joined the auto company.
The surprise move was immediately questioned by the new Hungarian prime minister Péter Magyar who said voters may now be able to see “whose interests” Orbán’s interests serviced.
Péter Szijjártó announced he was quitting Hungarian politics to join BYD in an “external affairs” or public relations capacity.
The move comes just months after allegations of potential violations of European labour laws were levelled against BYD’s new plant in Szeged, its first in Europe, by an NGO who had interviewed Chinese migrant workers there.
Announcing the move Szijjártó wrote on Facebook:
BYD represents one of the greatest automotive success stories of the past twenty years and is the world’s leading manufacturer of new energy vehicles.
As of today, I am continuing my work as the executive responsible for the group’s external relations and the development of new business lines.
Magyar, also on Facebook, said:
It may become obvious to Fidesz voters in retrospect whose interests the former foreign minister of the failed Orbán government represented in connection with the trillion-dollar battery and automotive industry investments.
Szijjártó’s move ends a 24 year parliamentary career having entered the national assembly in 2002 going on to become Orbán’s personal spokeman in 2010 and becoming foreign minister in 2012.
Earlier this year, Ukraine called for an investigation into Szijjártó relationship with Moscow after secret recordings of calls with his Russian counterpart Sergei Lavrov in which he said he was “always at your disposal”.
Before his landslide victory in the Hungarian general election, Magyar threatened to publish the details of the contact Orbán had made with BYD.
Closing summary
Wall Street stocks rose after the cooling in producer price inflation, which came a day after softer than expected consumer price data.
The Dow Jones and the Nasdaq rose about 0.5%, and he S&P 500 is up 0.4%.
Some European stock markets have also turned positive. The FTSE 100 index in London is up just 3 points at 10,532 while the CAC in Paris edged 0.25% higher. The German, Italian and Spanish markets are still down, though.
Crude oil prices have given up earlier gains and Brent crude is now little changed on the day at $84.79 a barrel.
Our main stories today:
Thank you for reading. We’ll be back tomorrow. Take care!– JK
Some flights diverted from Gatwick Airport after plane blocks runway
A number of flights were diverted from Gatwick Airport after a plane temporarily blocked one of its runways.
Emergency services were there to meet the British Airways plane as a precautionary measure when it landed, following reports of a “technical fault” with the aircraft, the BBC and others reported.
One of the diverted planes, an already-delayed EasyJet flight from Rome to Gatwick, had to land at Stansted airport instead, and subsequently became stuck there because it was unable to find fuel.
Passengers were left on that plane for over two hours in the middle of the night before disembarking.
The BA plane, which temporarily blocked the runway at Gatwick Airport, reportedly experienced a landing gear issue. BA said the plane landed safely and passengers disembarked normally.
A London Gatwick spokesperson said:
Earlier this morning, the runway was closed for a short period due to a technical issue with an aircraft.
As a result, a small number of flights were diverted, with the majority later returning to London Gatwick. As always, safety and security is our number one priority.
There were a number of delays to arrivals and departures from Gatwick Airport on Wednesday, although it was not clear if these were connected to the earlier runway closure.
Bank of Canada leaves interest rates unchanged
The Bank of Canada has left its benchmark overnight rate unchanged as widely expected, and said growth would strengthen in the second half of the year as inflation pressures ease.
The decision is the sixth no-change decision in a row, after an aggressive easing cycle last year that brought the rate down to 2.25% in October. The central bank said in a statement:
Canada’s economy is showing signs of improvement. Growth is picking up and inflation is projected to ease gradually from its recent spike.
The bank nudged up its growth forecasts for 2027 and 2028, but cut its 2026 projection to 0.7% from 1.2% in April, reflecting a weaker start to the year.
It raised its 2026 inflation forecast to 2.5% from 2.3% in April, but said inflation should remain near the midpoint of its 1%-3% target range over the next two years.
The bank also predicted the economy will grow by 2.5% on an annualised basis in the second quarter after stagnating in the first quarter amid disruption caused by the Middle East war and uncertainty over US trade policy.
Governor Tiff Macklem said:
The data we have received since April have increased our confidence that the economy is indeed working its way through this period of global upheaval,” in prepared opening remarks to the press.
US factory gate inflation eases in June, but analysts warn relief might be short-lived
Factory gate inflation in the US eased in June as energy costs fell on hopes of a peace deal with Iran, according to government figures, although this week attacks resumed on both sides.
The producer price index (PPI) dropped by 0.3% month-on-month, the first monthly drop since last August, said the US Labor Department.
Compared with a year ago, producer prices were up 5.5% last month, down from May’s 6% rate.
PPI excluding food and energy, the core measure, rose by just 0.2% month on month and the previously reported 0.4% gain in May was revised down to just 0.1%.
The cost of goods fell at the fastest rate since mid-2022. Energy prices in particular tumbled by 6.4%, driven by a sharp drop in oil prices following the ceasefire between the US and Iran announced on 17 June.
The cost of gasoline, diesel fuel, jet fuel and other products declined.
But analysts warned that relief might be short-lived.
Stephen Brown, chief North America economist at Capital Economics, said:
Much like CPI, the June PPI data surprised to the downside.
The breakdown was largely as expected, with much of the softness coming from items that had previously risen sharply amid higher petroleum prices. As well as steep declines in natural gas, gasoline and diesel prices, industrial chemical prices also dropped back.
There were, however, ongoing gains in other products related to the AI build out, with electronic computers & computing equipment prices jumping by 2.5% month on month and prices in some metals and machinery categories also showing firm increases.
Several big housebuilders have seen their shares rise today, on the back of Barratt Redrow’s results and its £400m share buyback.
There could also be another Help to Buy programme under Andy Burnham, analysts say.
Dan Coatsworth, head of markets at AJ Bell, told me:
The housebuilders are almost certainly up today off the back of Barratt’s results. Expectations have been very low for the sector this year, and I don’t think many people thought Barratt would do so well with home completions.
Build cost inflation guidance could have been a lot worse, so the market will be relieved that inflation issues are haunting the company. The buyback news is interesting as I imagine investors across the space might see Barratt’s move as a precursor for other housebuilders to do the same, where possible.
With regards to speculation around Help to Buy, politicians have long used property market incentives to appeal to the public and no-one would be surprised if Andy Burnham does the same. The shape and size of any incentive is unknown, but it’s feels like a safe bet to suggest one will appear.
UK housing secretary: government considering state-owned housebuilder
UK’s housing secretary Steve Reed has confirmed that the government is considering the creation of a state-owned housebuilder, telling MPs the move could support construction during market downturns.
The proposal was leaked to The Guardian last month, and Reed confirmed the thrust of the story yesterday at a hearing of the parliamentary housing, communities and local government committee.
He told MPs that a publicly owned housebuilder could maintain activity during housing-market troughs, helping contractors retain skills, investment and delivery capacity.
We are exploring, at early stages, the opportunity of establishing a state housebuilder.
A state housebuilder might help us get through some of the troughs and keep the sector moving.
So, the private sector, the market sector on which the sector heavily relies, would be in a better state once we come through those dips.
The housing crisis continues as the industry falls far short of building the 1.5m homes over five years targeted by the Labour government.
Bank of England governor would have put off Farage meeting had £5m gift been under investigation
Kalyeena Makortoff
Exclusive: The Bank of England governor has said he would have put off a meeting with Nigel Farage last autumn had the Reform UK leader’s £5m gift from a crypto billionaire been under investigation at the time, reports our banking correspondent Kalyeena Makortoff.
Andrew Bailey said he did not regret meeting Farage to discuss the Bank’s plans for cryptocurrency regulation last September, months before the controversial donation from the Thailand-based investor Christopher Harborne was revealed by the Guardian in April.
However, Bailey said he would have considered delaying the meeting had the central bank known what it knows today: that a parliamentary inquiry would be launched over the undisclosed gift from Farage’s wealthy benefactor, who has made a large part of his estimated £18bn fortune from crypto.
In an interview with the Guardian, Bailey said:
Whether I would have then said: ‘Well, I think we’d better wait until the investigation is done before we have the meeting’ – I think that would be a judgment we would have taken at the time.
It would have been a material fact, certainly, in our judgment.
Bailey, who also serves as head of the international watchdog the Financial Stability Board, has previously assured that he is “able to spot” and resist lobbying and did not bow to Farage.
Farage has said he used the meeting in September to demand the Bank of England drop plans for a state-issued rival to a stablecoin issued by Tether. Harborne, who has provided two-thirds of Reform UK’s funding, appears to make as much as £1bn a year from his shareholding in Tether.
Stablecoins are cryptocurrencies whose value is typically pegged to an asset or a currency such as the US dollar and tend to be used as an intermediary between state currency and crypto transactions.
People in the UK: have you used prediction markets to bet on the World Cup or other events?
We’d like to find out more about how people in the UK are using prediction markets and what has attracted them to these platforms.
Prediction markets allow people to buy and sell contracts based on the outcome of future events, such as sporting tournaments, elections and financial markets. They have become increasingly popular in recent years, particularly in the US.
We’d like to hear confidentially from people in the UK who have used prediction markets, whether to trade on the World Cup, elections, financial events or something else.
What attracted you to prediction markets? How did you first hear about them? How do you think they compare with traditional betting or investing? We are also interested in the practicalities. How easy was it to access a prediction market from the UK? Did you encounter any difficulties or concerns? If you’ve traded on the World Cup, we’d like to hear how your experience compared with other ways of placing a bet.
Britain’s biggest housebuilder Barratt Redrow announced a £400m return to shareholders today via a £386m share buyback and £14m dividend, as reported earlier. Phoenix Asset Management had been publicly campaigning for a change in the allocation of capital.
A Barratt shareholder for more than two decades, Phoenix publicly called on the board to pursue a more aggressive share buyback programme on 29 June. A number of other investors then got in touch with the investment firm to voice their support for the proposal, and it also talked to the Barratt board.
Today, Phoenix welcomed the buyback and the switch from dividends to repurchases.
Gary Channon, chief investment officer and founder of Phoneix said:
The board’s decision to return capital through buybacks, while the shares trade so far below their worth, is a step forward for shareholders. Every share bought back creates lasting value for those who remain. We remain of the view that the quantum should be based upon cash generation and not constrained by accounting earnings. We look forward to continuing to engage with the board.
The Barratt share price is the second-biggest riser on the FTSE 100 index this morning, up 2.7%% at 285.6p, but has lost a quarter of its value over the past year.
Government bond yields ease but UK 10-year yield remains near 5%
As reported earlier, government bond yields have eased since the surprise cooling in US inflation on Tuesday, which led to interest rate hike expectations being scaled back.
The yield, or interest rate, on the 10-year UK bond, known as gilt, shot up above 5% on Tuesday, and is now at 4.976%, up 2 basis points on the day. However, it remains high, indicating higher borrowing costs for Andy Burnham’s incoming government.
