Closing post
Time to wrap up…
The UK government borrowed less than expected in June, in a boost for Andy Burnham as he set out plans to cut VAT on household electricity bills and promised a new direction for the British economy.
The Office for National Statistics (ONS) said public sector net borrowing – the difference between government spending and income – was £16bn last month, £7.9bn less than in June 2025.
Employers cut the number of job vacancies in June, according to official figures that highlight the UK’s “fragile” economic outlook amid the conflict in the Middle East.
Job vacancies fell to 712,000 – almost half the level in 2022 – as employers put off hiring new staff in the three months to May, the Office for National Statistics said.
Separate figures showed unemployment remained at the same level in May as in April, at 4.9%, showing the tough task ahead for Andy Burnham as he seeks to inject renewed vigour into the economy.
Shares in defence companies rose sharply after Andy Burnham appointed John Healey as chancellor, prompting hope among investors of increased spending on suppliers to the military.
Defence stocks were among the biggest risers on the FTSE 100 on Tuesday morning after the former defence secretary was announced as chancellor after markets closed on Monday. Babcock International rose by as much as 7%, BAE Systems was up 3% and Rolls-Royce increased nearly 2% on the FTSE 100.
The group of investors pursuing a rescue bid for Thames Water have offered the government a “golden share” in a last-ditch attempt to persuade Andy Burnham not to nationalise Britain’s biggest water company.
London & Valley Water (L&VW), a consortium of 100 institutional investors that hold £17bn of the company’s £21bn debt, said it recognised the new prime minister wanted greater public control and to strengthen the accountability of the water company.
The creditors said on Tuesday they were working on a revised rescue package for Thames, including the “golden share”, which would give the government a veto over important decisions and hostile takeovers.
Key events
US stocks have opened higher today, with the blue chip S&P 500 up 0.5%. The tech-heavy Nasdaq is up 1.5%, led by chip and memory stocks such as Sandisk (up 9.5%), Micron Technology (up 8.7%) and Western Digital Corp (up 8.3%).
Oil price rises almost 2% as US and Iran exchange fire
Brent crude, the international benchmark for oil prices, is now up by almost 2% to $90.92 a barrel amid a fresh wave of attacks in the Middle East.
Last night the US bombed targets in southern Iran, just hours after President Donald Trump said Iran would pay “many times over” after multiple US service members were killed in action over the weekend.
Iran meanwhile has attacked US sites in Bahrain, Kuwait and Jordan.
There have also been reports of a tanker in the strait of Hormuz being hit by an unknown projectile, forcing its crew to abandon ship and board a lifeboat.
And further pressure on the oil price is coming from a Houthi threat to impose a naval blockade on Saudi Arabia, introducing yet another threat to the movement of global oil supplies.
Novo Nordisk sues Eli Lilly over weight-loss drug ad
A new battle has emerged between the two titans of weight loss drugs: Novo Nordisk has accused Eli Lilly of “deliberately false” claims about its weight loss products in an ad campaign.
The Danish drugmaker filed a lawsuit against its rival in a US federal court today, accusing Lilly of false advertising in claiming its weight-loss medicines outperform Novo’s products.
Novo alleges Lilly compared the highest approved doses of its medicines with lower doses of Novo’s Wegovy and Ozempic drugs, and also excluded newer, higher-dose versions that Novo says deliver greater weight loss.
Lilly produces rival products such as the obesity drug Zepbound and diabetes treatment Mounjaro.
Novo wrote in its complaint:
The ads are maliciously and deceptively false because Lilly knowingly cites outdated clinical trials that compare the highest doses of the Lilly medicines to lower doses of Novo Nordisk’s medicines.
Shares of Eli Lilly are down 0.5% in pre-market trading, while Copenhagen-listed Novo Nordisk is down 1.8%.
US stock market poised to rise
The US stock market is poised to rise when it opens later this afternoon, with semiconductors stocks expected to continue their recovery from a sell-off last week.
Futures for the blue chip S&P 500 index are up 0.35%, while the tech heavy Nasdaq is poised for a 1.21% rise. Futures for the Dow are up 0.18%.
Mitie’s takeover is the 11th deal so far this year in the UK with a price tag of at least £1bn, according to analysis by the broker AJ Bell.
2026 is now on track to be a record year for the highest number of deals worth at least £1bn since the Covid pandemic.
Investment director Russ Mould says:
…As a result of this flurry of fresh deals, the total value of live or completed bids for UK-listed companies could come to £69.3bn if they all complete as planned.
That sum equates to 2.4% of the total combined stock market capitalisation of the FTSE All-Share and the AIM All-Share indices. It is also the highest figure for the UK market post-Covid.
Meanwhile the average premium offered relative to the undisturbed share price by the bidders, for the 22 deals where the terms are public, comes to a meaty 43%.
That figure also suggests there is still value to be had in UK equities, even as the FTSE 100, FTSE 250 and FTSE All-Share benchmarks all trade within a whisker of their all-time highs, if predators feel they can pay such a premium and still achieve a return on investment over time which more than compensates them for the risks involved.
Oil back above $90 a barrel as Houthis threaten attack on Saudi Arabian ports
Oil prices are rising today, as the Yemeni Houthi movement continues to threaten an attack on Saudi Arabian ports.
Brent crude, the international benchmark for oil prices, is up by 1% to $90.21 a barrel today, after reports that the Iran-backed Houthis have emailed multiple shipping companies with warnings about loading or discharging cargo at Saudi ports.
The International Energy Agency has said it is closely monitoring the situation in oil markets.
Executive director Fatih Birol said in a statement:
The escalation in hostilities affecting the strait of Hormuz and energy infrastructure in the region increases security of supply concerns and uncertainty over the market outlook. Threats to the Bab el-Mandeb Strait, which has become increasingly important as a route to bypass the Strait of Hormuz, exacerbate these concerns further.
For the moment, crude oil markets continue to benefit from several cushioning factors.
These include significant supplies from Gulf producers – notably through major efforts by Saudi Arabia and the United Arab Emirates – that are continuing to reach global markets via alternative routes to the strait of Hormuz, as well as volumes still managing to pass through it. We estimate that Gulf exports are below their late-June highs but are still considerably higher than the levels seen between early March and mid-June.
He added that oil producers such as the US, Brazil, Venezuela and Kazakhstan have increased their exports. The IEA has also released 290m barrels of oil from its emergency stock since its announcement in March to make 400m available.
There is no room for complacency on oil security amid the escalation in hostilities and a continued drawdown of available commercial inventories. Refinery activity and product supplies have not picked up as much as crude deliveries, meaning that markets for refined oil products, including diesel and gasoline, are considerably tighter than those for crude.
In natural gas markets, increased LNG flows from other markets, led by the United States and also Canada, have offset around 70% of the lost supply via the strait of Hormuz, but further delays in resuming Gulf exports risk keeping markets tighter for longer. This will be felt by all LNG importers, including Europe as it looks to refill its gas storage for next winter.
The IEA continues to maintain that a resolution to the ongoing conflict that includes a full and unconditional reopening of the strait of Hormuz will be essential to avoid a further deterioration in global energy security.
London Stock Exchange plans to launch 24-hour trading
Elsewhere this morning, the London Stock Exchange has announced plans to launch 24-hour trading.
The LSE will open a new venue outside of the main market that will allow investors to trade “near” continuously from Monday to Friday.
The new “LSE 24” will operate from 5pm until 7.50am in London and is expected to be ready for client testing by the end of 2026, the company said this morning.
Julia Hoggett, chief executive of the LSE, said:
The launch of LSE 24 marks an important step in the evolution of our markets, providing clients with greater flexibility beyond traditional trading hours and supporting more digital, connected global markets.
By integrating with LSEG’s digital markets infrastructure, LSE 24 will help support deeper liquidity, greater efficiency and broader participation in our markets, reinforcing London’s position as a leading global financial centre.”
It comes as London’s stock market struggles to attract new listings, and several companies – such as the outsourcer Mitie today – are preparing to leave the market after agreeing to takeover deals.
Several major exchanges are looking for ways to stay competitive, attract more investors and increase their liquidity – the New York Stock Exchange, Nasdaq and Cboe have all proposed extending their trading hours to 23/5, which means they would be closed for just one hour a day, plus weekends.
VAT cut on electricity helpful but ‘very modest’, campaigners say
More reaction on Andy Burnham’s decision to cut VAT on household electricity bills – Caitlin Boswell, deputy director at the campaign group Tax Justice UK, suggests the policy is welcome but that the government needs to go further:
Millions of people around the country worry about how they can afford their bills and the basics, so it’s a good sign that the new prime minister is acting on this right away, even if the support is very modest. We’d urge Burnham and his government to announce changes that would truly rewire the economy and make the tax system fairer, so the super-rich pay their fair share of tax.
This can tackle three things at once; making the basics more affordable, acting on extreme wealth inequality, and investing in all regions to grow prosperity, create jobs and help build pride in the places we live.
Adam Scorer, chief executive of the fuel poverty charity National Energy Action, adds that the new policy is not as helpful for households who rely on gas.
Heat and power are essential services that should be exempt from VAT. Of course, this decision is on electricity alone. It will help everyone, but will be less useful for the huge majority of low-income households who heat their homes with gas and cannot afford the upfront cost of shifting to solar, batteries and heat pumps. It is not a trivial distinction.
I hope this is the first of a series of policy decisions on energy debt, levies, social tariffs and supporting fuel poor households towards cheaper, low carbon heating systems. If so, we may see an approach to energy policy that tackles both the immediate pressure on household energy bills and a progressive shift to a low-carbon future.’
Pub chains are also reporting that the World Cup has provided a boost to business this summer – Marston’s told investors this morning that like-for-like sales on England match days rose by 22% and up 170% for its Grandstand pubs. However, it also said that overall its year to date like-for-like sales were down by 1.6%.
Fuller, Smith & Turner hinted that the World Cup and sunny weather also helped sales, which rose by 5.1% in the first 16 weeks of its financial year.
