The Co-op will stop sourcing carrots from Israel and a number of other products from other “countries of concern” such as Russia.
The supermarket chain said it would stop sourcing produce, where possible, from countries where there are “internationally recognised community-wide human rights abuses and violations of international law”. The 17 countries on its list include Israel, Iran, Russia and North Korea.
The decision to include Israel among the list of countries was criticised by Dame Priti Patel, the shadow foreign secretary.
“This is a totally unacceptable move from the Co-op. The supermarket chain should be focused on delivering goods for their customers, not playing student union politics with international affairs,” she told the Telegraph. “They should apologise and immediately revoke this crass decision.”
Read the full story here.
Gold price flat as safe-haven demand fades
Gold is trading flat this morning at $3,327.65 an ounce as demand for safe-haven assets softened in line with the easing of tensions in the Middle East and investor focus turned to forthcoming economic data from the United States.
However, Giovanni Staunovo, an analyst at UBS, cautioned that uncertainty about the future of Iran’s nuclear programme was “likely to keep investors still preferring to hold some gold”.
Jerome Powell, chairman of the US Federal Reserve, is to testify before a Senate committee today. Yesterday, in testimony to Congress, he said higher tariffs could result in higher inflation this summer.
Market focus will also be on first-quarter GDP data tomorrow, which will offer insights into the pace of economic growth in the US. On Friday, attention turns to the personal consumption expenditures report, the Fed’s preferred inflation gauge.
• Irwin Stelzer: Trump’s tariffs make it harder for Fed to cut interest rates
We’ll raise defence spending to 5% of GDP, says Darren Jones
President Trump at the Nato summit in the Hague today, flanked by Mark Rutte, the alliance’s secretary-general, and Sir Keir Starmer
YVES HERMAN/REUTERS
The government will lay out its plans to pay for a defence target of 5 per cent of GDP after the next election, the chief secretary to the Treasury has said.
Speaking to MPs, Darren Jones said that plans for the UK’s new target, to reach 3 per cent of GDP, would be laid out in 2027, and the larger 5 per cent target would be funded after the next election.
Jones said that the plan to raise defence spending to 2.6 per cent in the next two years was “fully funded” through cuts to overseas aid. The funding to pay for the 3 per cent target by the end of the decade will be made in the next spending review in 2027, he told the Treasury select committee. The 3 per cent target will require additional spending of about £17 billion, according to calculations from Capital Economics.
• Follow the latest developments from the Nato summit in the Hague
Saudi Arabia’s oil export revenues slide
Saudi Aramco’s Ras Tanura oil refinery
AHMED JADALLAH/REUTERS
Saudi Arabia’s revenues from oil exports fell to their lowest level in almost four years in April as crude prices fell.
Proceeds from the sale of crude oil and refined products slid to $16.5 billion, according to data from the country’s main statistics body. That was down about 21 per cent year on year and 7 per cent on the previous month.
Crude prices fell in April, with the benchmark Brent dropping more than 15 per cent that month to a four-year low after President Trump set out global trade tariffs. Brent has partly recovered since and is now trading at about $68 a barrel as traders weigh up potential supply threats from geopolitical tensions.
Opec, the group of oil producing countries led by Saudi Arabia, are scheduled to meet next on July 6 to decide on production levels for August.
FedEx shares drop on caution over trading
FedEx shares have fallen nearly 6 per cent in pre-market trading today after the logistics giant — regarded as a bellwether for the global economy — expressed caution about the year ahead.
The company, which is facing volatile global demand due to pressures from US tariffs, has forecast that profits in the present quarter will be below market expectations.
“The global demand environment remains volatile,” Raj Subramaniam, the chief executive, said during a webcast.
The company did not provide full-year earnings and revenue forecasts, and pointed to uncertainties surrounding US trade policies, especially regarding China. FedEx has more exposure to China than its rival UPS. It has been hit by the end of duty-free status for shipments valued at less than $800 from retailers such as Temu and Shein which source goods from China.
Fewer jobs for graduates as labour market cools
Job openings for graduates have slumped to their lowest level since 2018, in the latest sign of a slowing labour market (Mehreen Khan, economics editor, writes).
Data from Indeed, a hiring platform, said the number of graduate roles was down 12 per cent on the previous year, a seven-year low and leading to a broader loss in vacancies across the economy.
There are growing signs of cooling in the UK’s jobs market, with official data pointing to falling employment growth, a decline in vacancies, and slowing wage growth. The UK’s total job openings are still stuck below pre-pandemic levels — the only developed economy where postings have not recovered, Indeed said.
Overall postings were down 5 per cent in the second quarter compared with the start of the year and are 21 per cent below February 2020, before the onset of the pandemic.
• Jobs market is flashing a warning sign to Rachel Reeves
Food sales growth slows at Marks and Spencer
Marks & Spencer’s food business saw sales growth slow to 9.1 per cent year on year in the 12 weeks to June 14, according to the researcher NielsenIQ. This was down from sales growth of 10.8 per cent in May and 14.7 per cent in April. The retailer has faced disruption from a cyberattack.
• Inside the M&S meltdown: 3am meetings and £40m a week in lost sales
NielsenIQ’s data largely echoed a report from its rival researcher, Kantar, on Tuesday. Tesco sales rose 6.6 per cent over the 12 weeks compared with last year, Sainsbury sales increased 5.8 per cent, and those at Ocado gained 15.6 per cent.
The data was released on the same day that Marks & Spencer launched a dessert sandwich filled with strawberries and cream — it is unlikely to have anything to do with falling food sales and is more likely to be aimed at Wimbledon, which begins on Monday.
Marks’s new strawberry sandwich
PA
The limited edition Red Diamond Strawberry & Creme Sandwich is filled with the fruit and light whipped cream cheese on fluffy sweetened bread, the retailer said. It claimed it was inspired by Japanese “sweet sandos” or fruit sandwiches.
What the analysts make of this ‘new era of defence’
Robert Lea, our industrial editor, comments on Babcock’s upbeat results:
“The punters love the narrative from Babcock of ‘a new era’ for defence stocks, and the military contractor’s upgrade of profit forecasts through to the end of the decade has sent the analysts scrambling to upgrade earnings estimates and share price targets.
“Apart from the obvious — soaring earnings, rising dividends, share buybacks, global rearmament — Jefferies for one is lauding a management that has de-levered the debt mountain and de-risked the pension liabilities.
“Peel Hunt admits its target price of 828p looks a little out of date, especially as the stock passed through that threshold back in May. It all seems a long time since Boatman Capital was accusing previous Babcock management of burying bad news and misleading investors.”
Babcock International shares have jumped more than 13 per cent in early trading after upbeat results.
Miners are also up on improved sentiment about the global economy, and airline stocks continue to benefit from the ceasefire.
The advertising company WPP is the biggest faller after reports about the use of WhatsApp by the industry.
• WhatsApp will start featuring ads. Here’s what it means for you
Defensive stocks such as utilities slid as investors turned to riskier stocks. There are 66 risers and 34 fallers in the index.
Tesla sales fall again in Europe
An SAIC Motor MG5 on display in Shangai. Chinese cars are becoming more popular in Europe — to the detriment of Tesla
ZHE JI/GETTY IMAGES
Tesla’s European sales have fallen for a fifth month in a row as customers switch to cheaper Chinese electric vehicles and as anger over the politics of the carmaker’s billionaire chief executive, Elon Musk, weighs on sentiment.
Tesla sold 8,729 vehicles across the European Union last month, down from 14,682 in May last year, data from the ACEA, the European car manufacturers’ association, showed. Its market share has now dropped to 0.9 per cent from 1.6 per cent in the same month last year.
Registrations of cars from the Chinese state-owned SAIC Motor rose to 18,716 from 13,562 last year, with its market share rising to 2 per cent from 1.5 per cent.
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The FTSE 100 has opened up nine points at 8,768.57 as the fragile ceasefire between Israel and Iran holds.
The pound is trading above $1.36 against the dollar, which has also strengthened.
Oil is trading up $1.09 at $67.26 a barrel as concerns about a possible supply shock faded. The gold price was up 0.2 per cent at $3,330.75 an ounce.
Tritax Big Box to buy Warehouse Reit
Tritax Big Box Reit, which owns more than £6 billion of depots and delivery hubs across the UK, has struck a deal to buy a listed rival, Warehouse Reit, in an all-share deal that values the group at £485.2 million.
The deal trumps a £470 million, 109p-a-share offer from the US private equity firm Blackstone, which Warehouse Reit recommended on June 4 but has now withdrawn.
Investors in Warehouse Reit will receive 0.4236 of new Tritax Big Box shares and 47.2p in cash. The deal values Warehouse shares at 111p.
Halfords loss after goodwill impairment
The retailer and repair shop, which sells bicycles, leisure equipment and car parts, has reported a £30 million loss in the year to the end of March.
The company said the loss was mostly down to a “goodwill impairment driven by the impact on discount rates of an increase in UK gilt yields over the last 12 months as applied to revised forecasts which incorporate changes to national insurance and minimum wage rates through the forecast period”.
However, underlying pre-tax profits of £38.4 million beat market expectations. Like-for-like sales rose 2.5 per cent year on year, with motoring now representing about 80 per cent of sales.
Read the full story here.
Babcock announces £200m share buyback
The Type 31 frigate HMS Venturer is rolled out from Babcock’s Rosyth site in Fife
JEFF J MITCHELL/GETTY IMAGES
The FTSE 100 defence group has announced plans to buy back £200 million of its own shares alongside full-year results.
Pre-tax profits at Babcock International rose 51 per cent to £329.1 million in the 12 months to the end of March, up from £216.7 million the year before. Revenue over the period rose to £4.83 billion, up from £4.39 billion. It also upgraded its medium-term guidance.
Shares in Babcock have risen 105 per cent since the start of the year, on the back of the government’s commitment to raise defence spending.
Analysts at Jefferies said the results reflect the company’s “entry into a new era of defence”.
Read the full story here.
Oil price looks to have found a floor
The streets of Tehran yesterday
FATEMEH BAHRAMI/GETTY IMAGES
Oil prices was trading around recent lows on Wednesday as investors assessed the stability of a ceasefire between Iran and Israel.
Benchmark Brent crude futures rose $1, or 1.5 per cent, to $67.14 a barrel, but traders said it looked to have found a floor.
JP Morgan analysts in a client note: “Global energy prices are moderating following the Israel-Iran ceasefire. The base case for our oil strategists remains anchored by fundamentals, which indicate sufficient global oil supply.”
The global stock market rally appears to have faded for now. The FTSE 100 is forecast to rise 1.5 points at the open. Asian markets were higher after gains on Wall Street.
The dollar and gold strengthened.
