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FTSE maintains pandemic high but travel stocks lag

·40 min read
Passengers after arriving at Edinburgh airport  - Andrew Milligan /PA
Passengers after arriving at Edinburgh airport - Andrew Milligan /PA

Oil majors tracked rising crude prices on Monday to push to the top of the FTSE 100, helping markets to reach a fresh pandemic high.

Royal Dutch Shell ended as the best performer on the benchmark, adding 34p to £13.93, followed closely by BP, which gained 6.1p to 330.4p. On the FTSE 250, Tullow Oil led the risers as it added 5.2p to reach 64.8p, its highest level since December 2019. It came as oil prices bounced amid an improved outlook for worldwide fuel demand, with Brent crude reaching $73.64 per barrel – the highest level since April 2019.

Reports that Shell is considering the sale of shale assets in Texas, which could offer proceeds of $10bn (£7bn), also acted as a tailwind.

“Oil’s resilience in the face of warming US-Iran relations suggests that the supply dynamic continues to play second-fiddle to the expectation that demand will keep building into the second half of the year,” said Chris Beauchamp, chief market analyst at IG.

“Growth forecasts have remained stable, and traffic levels continue their recovery to, or in some cases above, pre-Covid levels.” The gains helped to offset any concerns about delays to the further easing of UK pandemic restrictions, allowing equities to push to a fresh pandemic high. London’s top flight closed 12.6 points higher at 7,146.7, while the domestically focused FTSE 250 rose 10.4 points to 22,744.5.

After breaking above the 7,000 mark in mid-April, the FTSE 100 has oscillated in a narrow range on worries that a resurgence in coronavirus cases might delay the reopening.

The biggest losers were dominated by travel, leisure and hospitality stocks, which took a beating as the Government confirmed plans to hold off the fourth stage of its roadmap out of lockdown for another month. Traders were concerned about a lack of extended financial support despite the delay.

Airlines predictably fell through the day with British Airways’s owner IAG ending as the biggest drag among blue-chips, losing 8.4p to 194.7p – its lowest level in almost a month. Mid-cap easyJet fell to its lowest level since early April, down 25.8p to 932.6p.

Among other blue-chips in the red, engine maker Rolls-Royce shed 4.6p to 107.4p, Primark-parent Associated British Foods lost 65p to £22.92, hotel and restaurant firm Whitbread dropped 60p to £32.55, and InterContinental Hotel Group fell 82p to £50.38.

Elsewhere, outsourcing firm Mitie trailed on the FTSE 250 as its announcement last Thursday that it swung to a pre-tax loss in the past year continued to weigh on the stock. It lost 1.8p to 74.2p.

Meanwhile spirits firm Distil lifted in value after it reported a 48pc increase in revenues for the past year, helping to drive profit growth. Shares rose by 0.15p to 2.4p at the end of the session.

05:17 PM

Wrapping up

That is all from us today - here are some of our top stories:

Thank you for following along and have a great evening.

Keep up with Boris' fresh announcements on lockdown easing via our politics live blog here.

05:07 PM

JP Morgan revenues to be less than expected: Dimon

Jamie Dimon, the boss of JP Morgan, has signaled a 38pc decline in trading revenue from a year ago - a larger drop that previously expected - to just above $6bn (£4.3bn) in the second quarter. Analysts estimated $6.5bn, according to Bloomberg data.

It comes after a year of pandemic-induced market volatility and trading boom.

Mr Dimon also pared back the forecast for the largest US bank's net interest income, predicting $52.5bn this year, down from a previous estimate of $55bn for 2021.

04:55 PM

Goldman to offer trading in crypto Ether

Crypto
Crypto

Goldman Sachs plans to offer options and futures trading in Ether, the cryptocurrency coin that fuels the Ethereum network, in the coming months, according to head of digital assets Mathew McDermott told Bloomberg.

It marks the latest step in the Wall Street giant’s crypto ambitions after Goldman restarted a trading desk this year to help clients deal in publicly traded futures tied to Bitcoin.

Investment banks are stepping up to offer Bitcoin services to big clients, despite warnings from regulators about the risks posed by crypto's extreme volatility and role in money laundering.

“We’ve actually seen a lot of interest from clients who are eager to trade as they find these levels as a slightly more palatable entry point,” Mr McDermott said to Bloomberg. “We see it as a cleansing exercise to reduce some of the leverage and the excess in the system, especially from a retail perspective.”

Goldman tapped Mr McDermott, 47, to head its digital currency efforts last year. Under his watch, the business has grown to 17 people from four.

04:42 PM

Unilever buys skincare brand Paula's Choice

British multinational Unilever has acquired upmarket, digital-led skincare brand Paula’s Choice from private equity firm TA Associates, for an undisclosed sum. The deal is expected to close in the third quarter of this year.

Founded by Paula Begoun in 1995, the brand centres itself on making skincare simple and accessible.

Vasiliki Petrou, executive vice-president and head of Prestige - the premium division of Unilever's personal care arm - said: “Paula’s Choice is a true pioneer in the digital space for beauty and has created a mission-based brand rooted in truth and transparency. We can’t wait to introduce the brand and its iconic products to an even bigger audience.”

Founder Ms Begoun said: “With Unilever we can build on our work and vision spanning 26 years of creating brilliant products, and by giving people the self-confidence that comes from knowing they are taking the best care of their skin possible.”

04:34 PM

£1m project to produce lithium in Cornwall

Prospectors looking for lithium in Cornwall have won taxpayer backing to explore producing the battery metal alongside china clay.

My colleague Rachel Millard reports:

Private company Cornish Lithium is the lead partner in a project which has won £1m from Innovate UK, the government arm to promote innovation.

Cornish Lithium will work with Imerys Minerals, a china clay producer, and HSSMI, a manufacturing consultancy, to evaluate whether lithium could be produced alongside current production of china clay and out of waste from previous production.

There is a global rush to develop more lithium supplies as the metal is a key ingredient in electric car batteries.

Steve Double, Conservative MP for St Austell and Newquay, said it was a "huge opportunity" for Cornwall.

He added: "Seeing our kaolin [china clay] industry opening up to the new and emerging lithium extraction business will create new hi-tech and well-paid jobs, and drive economic growth for Cornwall for our and future generations."

04:04 PM

FTSE ends the day higher

UK shares ended higher today, boosted by gains in heavyweight energy stocks, while investors waited for the government's decision on whether it would delay England's June 21 reopening due to surging coronavirus cases.

The blue-chip index rose as much as 0.7pc to 7,187, touching its highest level since February 2020 before falling back slightly to end the day 0.2pc up.

The index was boosted by oil majors BP and Royal Dutch Shell, which gained 1.9pc and 2.7pc respectively, tracking crude prices.

The domestically focused mid-cap FTSE 250 index advanced a more modest 0.1pc, with travel and leisure stocks among the top decliners.

Prime Minister Boris Johnson is expected to announce a delay to the planned lifting of restrictions at 6pm.

03:49 PM

JD Sports chairman defends £4.3m bonus, despite accepting government support

 Shoppers queue outside JD sports as non-essential shops open for the first time since the start of lockdown on June 22 - Matthew Horwood /Getty Images Europe 
Shoppers queue outside JD sports as non-essential shops open for the first time since the start of lockdown on June 22 - Matthew Horwood /Getty Images Europe

The chairman of JD sports has said that shareholders "may well" vote against the £4.3m bonus he is expecting, following the company's use of Government support to furlough its staff.

Peter Cowgill defended the payout, saying he had only received one long-term incentive payout in eight years.

Speaking to BBC Radio 4's the World at One he said that shareholders could decide to vote against the bonus, something that advisory group Glass Lewis recommended in a recent report.

"They may well do that, but I'm just saying why would you when the company has progressed?" Mr Cowgill said.

He shot back at comparisons to non-essential retailers such as Primark, who have paid back the money they claimed to keep staff on furlough, adding JD sports was under pressure online.

JD Sports employees took around £86m in furlough payments around the world, £61m of which was in the UK.

Mr Cowgill said: "The furlough payments, the furlough receipts were used for exactly what they were prescribed for."

He added: "We used it to retain employment, we didn't make redundancies."

03:29 PM

Stobart Air owner eyes £120m lifeline from Southend Airport sale

The owners of Stobart Air are in talks to secure £120m of emergency funding after being left on the hook for aircraft lease payments worth tens of millions of pounds, reports Oliver Gill.

He writes:

Esken, the London-listed conglomerate formally known as Stobart Group, is closing in on a deal to sell a 30pc interest in Southend Airport to buyout fund Carlyle.

Stobart Air called in liquidators over the weekend after a sale to an Isle of Man bitcoin entrepreneur fell through.

The insolvency leaves Esken liable to pay expensive aircraft leases under parent company guarantees.

Read the full story here.

03:18 PM

Astra Zeneca shares dip as vaccine competition intensifies

London listed vaccine maker Astra Zeneca slipped after US biotech company Novavax revealed its coronavirus shots were 90pc effective at preventing symptoms.

The shot’s efficacy was better than markets were expecting amid the spread of new virus variants, raising the spectre of new competition.

Astrazeca shares dipped 0.28pc lower following the news and on Wall Street, other vaccine makers registered more dramatic drops. Moderna slid as much as 9.5pc, Pfizer fell 1.6pc and the drugmaker’s German partner BioNTech SE dropped 6.1pc.

However Novavax itself wasn’t immune from the downdraft it created, with the stock reversing a 9.5pc gain on Monday to fall about 1pc.

Novavax now has “a viable alternative to mRNA vaccines,” like Pfizer and BioNTech or Moderna’s shots, an analyst at Jefferies said.

03:10 PM

Rolls-Royce boss under fire for saying workforce is 'a bit too old'

Warren East, CEO of British engine maker Rolls-Royce - ADRIAN DENNIS /AFP
Warren East, CEO of British engine maker Rolls-Royce - ADRIAN DENNIS /AFP

The chief executive of Rolls-Royce has come under fire for remarking that its workforce is “frankly a bit too old”.

My colleague Matthew Field reports:

Speaking at a technology conference in London, Warren East said one of the challenges he faced when he joined the jet engine maker was its older workforce.

His comments were in response to a question about inspiring young engineers at the company and ensuring it had an “exciting” atmosphere.

However, the remarks sparked a furious backlash with critics calling his comments "disgraceful" and "immoral".

Read the full story here.

02:44 PM

Competition watchdog wins refunds for Norton customers

Antivirus customers will be given the right to a refund if their subscriptions are automatically renewed after an investigation by the competition watchdog, reports Matthew Field.

The Competition and Markets Authority (CMA) had threatened to take US firm Norton to court over an alleged failure to provide information for its investigation into the antivirus sector.

The regulator said it would withdraw its High Court claim having received assurances from Norton that it would change its subscription practices.

Norton will have to offer refunds to current and future customers who have their subscriptions to its anti-virus packages renewed, backdated to 2020.

The CMA had criticised antivirus software providers for automatically renewing payments and increasing their prices for customers who may no longer want or need their product.

Undertakings by Norton will mean customers can claim refunds for the remaining months of their contract, while Norton will agree to alert customers who have stopped using their product on how to disable automatic renewals.

Andrea Coscelli, chief executive of the CMA, said: “The changes Norton has committed to, following our action, will make it easier for customers to get their money back if their contract renews when they don’t want it to.”

Mr Coscelli said he was pleased the deal meant the regulator would not have to take Norton to court, but added: “Firms should be in no doubt that we are ready to take this action in the future, if they fail to provide the information we need to pursue our investigations.”

Norton was contacted for comment.

02:36 PM

Expert reaction: Hospitality and leisure stocks drop

Alishya Bruce wearing a mask while working in The Relish Bar, Doncaster - Danny Lawson /PA
Alishya Bruce wearing a mask while working in The Relish Bar, Doncaster - Danny Lawson /PA

Danni Hewson, AJ Bell financial analyst, comments on how the expected four week delay to the UK's June 21 reopening date is affecting the markets:

It’s just four weeks, but for some businesses it will be four weeks too many especially as there are no guarantees 19 July will really bring an end to restrictions. There are many reasons to delay, but delay will bring hardship for some, ruined plans for others and the end of the line for a few. My first five jobs were in the hospitality sector, it’s peaks and troughs made it ideal to amass some cash in long student holidays, but the most important peak for much of the industry is now, so losing the next four weeks is particularly cruel.

Both the FTSE 100 and 250 tell the tale. Whitbread, The Restaurant Group and Wetherspoons have all tumbled. With big soirees and June wedding parties seemingly off the cards Primark’s owner Associated British Foods finds itself among the fallers as does the Intercontinental Hotels Group. And with current lockdown measures at home standing still, investors seem to have given up on the likelihood of foreign travel opening up in the short term knocking back Wizz Air, EasyJet, IAG and Rolls Royce Holdings.

There are already calls for changes to the furlough scheme to be delayed and the scheme itself to be extended into next year, plus a continuation of business rate relief. But even if extra help is given there will be those who will miss out as so many sectors will be indirectly affected by the changes. Make no mistake, even for some businesses that have reopened, recovery feels a bit like a carrot being dangled on a stick that keeps being pulled just out of reach.

02:27 PM

Law firms offer fertility benefits to staff

Law firms Clifford Chance and Cooley are the latest companies to offer staff egg freezing and IVF treatments amid an increased focus on parenthood in the UK, reports Lucy Burton.

California-based Cooley has said staff can claim up to £45,000 for eligible fertility treatment while 'magic circle' law firm Clifford Chance is covering treatments worth up to £15,000.

Michael Bates, Clifford Chance's UK managing partner, said that since the firm had begun offering staff advice on menopause and parenthood through the app Peppy earlier this year there had been "significant interest" in fertility-related questions which triggered the firm to reassess its policies. The benefits already exist in the US.

The move, first reported by the Financial Times, comes as fertility rates plunge as a result of the pandemic. Earlier this year the head of Britain’s fertility watchdog warned that women who feel the pandemic has robbed them of their chance to have children are being exploited by IVF clinics charging “eye-watering” prices.

Companies in the UK are also focusing increasingly on parenthood and childcare support as they race to narrow the pay gap between men and women and retain more senior female staff.

Last week John Lewis became first UK retailer to launch six months’ equal parenthood paid leave to employees and two weeks’ paid leave for staff who have experienced the loss of a pregnancy, while Monzo last month told staff they can take up to 10 days off following a miscarriage.

Wall Street firms such as Goldman Sachs began offering UK staff fertility treatments years ago, with Goldman doing so shortly after the US banking giant became the first company in the UK to offer to ship working mothers’ breast milk home if they work overseas.

02:12 PM

FTSE 100 inches back up

The FTSE 100 has picked up slightly since the knock it took from falling travel stocks as most signs point to a delayed reopening.

It is now up 0.27pc at 7,153.01 points, still off today's high of 7,188.26. BA owner IAG and Rolls-Royce are still smarting from investor expectations that the Government will push back the June 21 reopening: IAG has fallen 2.62pc and Rolls is 3.16pc lower. Hotel chain owner IHG is also 1.21pc lower.

Analysts said traders will largely brush off the delayed reopening outside certain stocks such as travel, as they eye the aforementioned Fed meeting on Wednesday. Traders are still optimistic due to strong vaccine rollouts and the continued stimulus among the world's central banks.

Still, the FTSE severely lags behind the US rally in stocks that started in April last year.

01:56 PM

Wall Street slips as S&P 500 moves away from record high

The S&P 500 was close to a record high at the US open - Seth Wenig /AP
The S&P 500 was close to a record high at the US open - Seth Wenig /AP

US markets slipped as they began trading today as investors eyed a Federal Reserve announcement due later this week on the pace of emergency stimulus bond purchases.

The S&P 500 opened near an all-time high as investors looked towards the meeting on Wednesday when it is expected to keep monetary policy loose, despite signs of rising inflation. But the index dipped 0.02pc at the open, while the Dow fell back 0.28pc. The tech-heavy Nasdaq bucked the trend to rise 0.33pc.

Meanwhile, the bond markets rally ran out of steam ahead of the crunch Fed meeting. The Treasury 10-year yield rose to 1.47pc on expectations that that the Fed will reaffirm the pace of bond purchases this week.

"The Fed is largely expected to maintain its current level of monetary assistance and is again expected to reiterate its view that the current inflationary spike is a passing phase," noted Richard Hunter, head of markets at Interactive Investor.

"Even so, there have more recently been suggestions that discussions on tapering relief are likely to be nearing the top of the agenda, even if this does not lead to imminent action."

01:42 PM

Investor backs 'math-like' Bitcoin

Paul Tudor Jones, chief executive officer of Tudor Investment Corp, and his wife Sonia Jones - Amanda Gordon 
Paul Tudor Jones, chief executive officer of Tudor Investment Corp, and his wife Sonia Jones - Amanda Gordon

Here's a chart showing that rise: as you can see, Bitcoin remains a way off its level from even just a month ago, let alone its all-time high of $63,000 back in April.

Bloomberg reports that after Elon Musk helped the currency back on its feet over the weekend, it jumped higher after renowned wealth manager Paul Tudor Jones reiterated his support.

He said alternative assets such as crypto, as well as safe havens such as gold, have benefited from a muddled attitude to policymaking from the Federal Reserve.

"You wonder why Bitcoin has a $2 trillion market cap and gold is at $1,865 an ounce. And the reason is that you have this dichotomy and policy that again questions the institution's credibility," he told Squawk Box.

"I like Bitcoin, Bitcoin is math and math has been around for thousands of years. Two plus two is gonna equal four and it will for the next 2,000 years. I like the idea of investing in something that is reliable, consistent, honest and 100pc certain."

01:24 PM

Bitcoin hits $40,000

Bitcoin has broken the key $40,000 barrier, trading at its highest level since May 27 after Tesla CEO Elon Musk pledged to resume his support once miners could demonstrate 50pc clean energy use.

Musk has exerted a huge amount of influence over Bitcoin's price for months, since Tesla announced a $1.5bn bitcoin purchase in February and said it would take the cryptocurrency in payment.

He later said the electric car maker would not accept bitcoin due to concerns over how mining the currency requires high energy use and contributes to climate change.

But the coin was boosted on Sunday, when Musk said he would resurrect his support if the coin could become more sustainable.

"When there's confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions," he said.

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01:17 PM

Ex-GCHQ worker's cybersecurity training start-up raises $75m

A cybersecurity training start-up run by a former GCHQ employee has raised $75m (£53m) in funding as companies race to protect themselves following a wave of high-profle hacking attacks, reports James Cook.

He writes:

Bristol-headquartered Immersive Labs secured the cash injection from US investors Insight Partners, Menlo Ventures and Citi Ventures along with existing backing Goldman Sachs Asset Management.

The business now plans to grow from 220 employees to a team of more than 600 people within two years.

Immersive Labs creates interactive training experiences, known as “labs,” which companies can buy access to in order to teach junior employees or senior executives how to stay safe online.

Read this full story here.

01:03 PM

Airline stocks respond to reopening uncertainty

12:45 PM

EU launches $1 trillion debt plan that will ‘transform’ Europe

President of the European Central Bank Christine Lagarde - CARLOS COSTA /AFP
President of the European Central Bank Christine Lagarde - CARLOS COSTA /AFP

The European Union is testing investors’ appetite to fund nearly $1 trillion of debt over five years as it seeks to finance its recovery from the coronavirus pandemic.

Bloomberg has more details:

The bloc opened books on debut 10-year bonds as part of its NextGenerationEU (NGEU) program, which will finance grants and loans to member states. European Central Bank President Christine Lagarde said in an interview published Monday the NGEU stimulus will “transform the future of Europe.”

EU debt tied to its separate and smaller SURE program has underperformed as investors brace for a wave of supply in the coming months, with the bloc looking to raise €100bn ($121bn) in long-term bonds this year alone. The 10-year SURE bonds are trading near their widest spread to equivalent German debt since their issuance in October.

“A decent new issue premium on top of cheapened levels versus swaps and French bonds of late should ensure that NGEU gets off to a successful start,” said Commerzbank strategists including Rainer Guntermann in a note Monday. “The transaction size is skewed to the upside with possibly more than 10 billion euros given the EU’s heavy workload until year-end.”

The EU will conduct three syndicated NGEU bond sales before the August summer break, it said in an investor call last week. The NGEU green bond framework will be published by September after which sales can begin, with almost a third of the plan’s roughly 800 billion euros to be in green debt.

12:35 PM

Pound unmoved by expected delay to UK reopening

The pound is mostly unmoved by today's news that Prime Minster Boris Johnson is expected to announce a delay of four weeks to his February roadmap, under which his government signalled that all social restrictions to control the spread of the disease would be lifted "no earlier" than June 21.

Against the dollar, the currency hovered just below recent highs, at around $1.4118.

ING analysts said this was because a delay to the easing of restrictions was expected and investors were more focused on economic data.

"We do not think this does too much damage to GBP, which instead will be focused on fresh macro updates on jobs and retail sales - both expected to be GBP supportive," they wrote.

Bank of England Governor Andrew Bailey is due to speak at an event later on Monday, with investors watching for any signals on the direction of monetary policy and his views on inflation.

12:10 PM

Travel stocks weigh on FTSE

The FTSE 100 is falling back from highs reached earlier in the day, as travel stocks losses increase following reports the UK economy's reopening date is due to be pushed back by up to four weeks.

The index is now trading at around 7,144 points as British Airways owner IAG and Rolls Royce both drop more than 3.5pc.

The FTSE 250 also saw its gains limited as stocks that will be effected by on-going restrictions weighed on the index.

Pub-owner JD Wetherspoons was down 1.79pc, while airlines EasyJet and Wizz Air both dropped more than 2pc.

11:58 AM

Ministers to guarantee broadcasters get prominent slots on smart TVs with new law

The world's biggest technology manufacturers will be forced to offer prime spots on smart TVs to British broadcasters to help secure the future of public service programming, reports Ben Woods.

Ministers will reportedly clear time in the legislative schedule next year to bring in new rules guaranteeing prominence on streaming devices for the BBC, ITV, Channel 4 and Channel 5.

The laws will draw on recommendations to safeguard the future of public service media from the media regulator Ofcom that will be published next month, according to the Financial Times.

Such a move would help broadcasters avoid costly agreements with the tech platforms when trying to secure the best positions for their catch-up services on streaming devices.

Some streaming devices demand nearly a third of the broadcaster's advertising sales in exchange for a place on their digital menus alongside Netflix and Disney+.

Broadcasters fear without support from government the cost of these agreements will weaken their fight against deep-pocketed streaming services by eating into their programme budgets.

Traditional TV regulations hand BBC and ITV top spots on TV channel guides in exchange for making news and uniquely British programmes for smaller audiences.

The current 2003 Communications Act, however, does stretch to cover the world of streaming.

A push to update the law has faced push back from streaming operators, with Roku claiming prominence has "little or no relevance in the streaming world"

11:48 AM

Lordstown's two top execs resign following cash flow revelations

The electric Endurance pick-up truck on display at Lordstown Motors Corporation, in Lordstown, Ohio - Tony Dejak /AP
The electric Endurance pick-up truck on display at Lordstown Motors Corporation, in Lordstown, Ohio - Tony Dejak /AP

Electric-vehicle maker Lordstown Motors has announced the sudden departure of its two top executives, following the company's warning last week that it might not have enough cash to fund the development of its first truck.

The startup said in a statement today that Chief Executive Officer Steve Burns and Chief Financial Officer Julio Rodriguez have resigned from the company, effective immediately.

Last week, the company warned it might not be able to survive the next 12 months if it couldn't raise more capital.

In March, the startup disclosed a Securities and Exchange Commission probe of its operations after a short seller said its technology was flawed and that pre-orders for its truck were nonbinding.

In a separate statement, Lordstown said a board investigation concluded the company had made inaccurate statements about vehicle pre-orders. The board concluded other allegations made by short seller Hindenburg Research in March were “false and misleading” in many aspects.

My colleague Io Dodds wrote about Lordstown's cash problems last week.

11:36 AM

Eurozone factory production rises 0.8pc as Europe recovers from recession

Eurozone industrial production rose 0.8pc in April, twice as fast as economists expected.

The rise was spurred by a more than doubling of durable consumer goods output- a category which includes fridges, televisions, electronics, cars and home furnishings - compared to April 2020.

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11:29 AM

US stock futures rise

US stock futures inched higher today, suggesting the S&P 500 could reach a new record after it ended last week at an all time high.

Focus is expected to shift to the Federal Reserve's meeting early this week, when the central bank is expected to maintain its accommodative stance on monetary policy.

S&P 500 futures were were up 0.2pc, while futures for the tech-heavy Nasdaq 100 lifted 0.3pc and Dow e-minis were up 0.04pc.

11:13 AM

FTSE 100 boosted to pandemic high by oil majors

At just after midday, the FTSE 100 remains up 0.3pc boosted by oil majors Royal Dutch Shell (up 2.3pc) and BP (up 1.39pc) which are reacting to the oil price rally.

Today the blue-chips have peaked at a new pandemic high, however the index still has a way to go before it returns to its pre-pandemic level of around 7,400 points.

10:55 AM

Tom Stevenson: Inflation doves are taking a huge risk with global economy

The Federal Reserve allowed US inflation to get out of control 50 years ago - and it could be making the same mistake once again, says Tom Stevenson in his new column.

He writes:

As humans we are hard-wired to be anxious when things are not what we expect. There’s a good reason for that. It protects us from danger, but it also means we are prone to over-react to information that is less important than it appears.

Investors and journalists alike tend to give more weight to the unusual than the significant. Last week’s inflation data may be the latest example. Or they may not.

I don’t know any better than anyone else whether inflation will turn out to be a genuine problem, but I do know that it’s just about the most important question for us to be asking today.

If you are predisposed to worry that governments and central banks are cooking up an inflationary storm, there is plenty to feed your fears at the moment. Both the 9pc rise in Chinese factory gate prices and America’s 5pc hike in consumer prices were the highest since the financial crisis.

Read the rest of Tom's column here.

10:36 AM

More staff return to the workplace

The proportion of the UK workforce exclusively working from their office or place of work has risen to 50pc, the highest level since October 2020, according to the ONS.

Workers living in London were most likely to report working from home in the previous seven days. Those aged 30 to 49 years were most likely to report working from home, with almost half (45pc) saying they did so compared with around one-third of those aged 16 to 29 years (34pc) and 50 to 69 years (32pc).

10:19 AM

Renting now cheaper than mortgage payments, says Hamptons

Renting is now cheaper than making monthly mortgage payments, according to real estate agent Hamptons.

A monthly average of £1,054 spent on rent is now cheaper than the average £1,125 a first-time buyer spends on mortgage repayments, the analysis found - the first time since December 2014 that renting has been cheaper than buying.

In London, renting is £251 cheaper, while that number drops to £108 cheaper in the South West and £35 cheaper in the West Midlands. In four areas - the North East, North West, Yorkshire and Humber, and Scotland - it remains cheaper to buy.

The particularly big price difference in London has been created by the three national lockdowns, which have pushed more city dwellers to move to suburbs and rural areas in search of more space. As a result, urban landlords have been pushed to offer cheaper rents to avoid empty homes.

“Falling rents in the capital have made renting cheaper relative to buying by a bigger margin than anywhere else. And with rents still falling, the differential looks set to continue growing,” says Aneisha Beveridge, head of research at Hamptons.

09:56 AM

Hospitality salaries rise 18pc

Staff are enjoying significantly higher salaries as Brexit, the pandemic and the furlough scheme cut competition for jobs - in an early sign that leaving the EU is benefiting lower-skilled workers in the UK, reports Rachel Millard.

She writes:

Data from recruitment firm Reed, first reported by The Sunday Times, has found that average salaries this year have risen by 18pc across hospitality and catering, 10pc in retail and 4pc overall.

It follows widespread reports that bosses in retail and hospitality, in particular, have been struggling to fill jobs as they reopen following coronavirus lockdowns, with some forced to cut opening hours because they cannot find the staff.

According to Reed, the average salary in hospitality is now £26,888 compared to £22,701 last year and £23,425 in 2019. The average salary in retail is now £29,310, it said, compared to £26,758 last year and £23,425 in 2019.

Read Rachel's full story here.

09:50 AM

Ted Baker losses rise by almost a third to £107m

Pedestrians walk past a Ted Baker clothing store in London - TOLGA AKMEN /AFP
Pedestrians walk past a Ted Baker clothing store in London - TOLGA AKMEN /AFP

Ted Baker revenues plummeted 44pc in the year to 30 January, as the pandemic hit formal wear sales and amplified problems the brand was wrestling with before the virus outbreak.

The fashion brand's pre tax losses rose 29pc to £107.7m, with the company saying formal styles and occasionwear were particularly affected by lockdowns.

Chief executive Rachel Osborne said: "While the impact of Covid-19 is clear in our results and has amplified some of the legacy issues impacting the business, Ted Baker has responded proactively and is in a much stronger place than it was a year ago."

Investors were however focused on the company's efforts to turn the brand around by investing in ecommerce and bolstering its sustainability credentials.

The company's shares were up 3.8pc after it reported ecommerce sales rose 22pc to £144.9m and it had increase its use of sustainable cotton to 69pc.

09:32 AM

Vodafone chooses new 5G suppliers

Vodafone has moved closer to cutting ties with Chinese technology giant Huawei by choosing new suppliers to power its next-generation 5G network, reports Ben Woods.

The mobile operator has revealed the suppliers that will curb its reliance on "high risk" vendors after Boris Johnson followed the US by blacklisting Huawei over spying fears.

Vodafone has chosen Dell Technologies, NEC, Samsung, Wind River, Capgemini Engineering and Keysight Technologies to underpin its network based on Open Ran technology.

European telecoms operators have thrown their weight behind open radio access networks, a technology standard that increases network diversity by allowing a wider range of suppliers.

A taskforce headed by Lord Livington, the former BT boss, has recommended to ministers that smaller suppliers should make up a quarter of the equipment used in 5G networks once Huawei is removed.

It comes as the UK telecoms industry is poised to spend up to £2bn ripping out Huawei kit by 2027.

09:20 AM

FTSE 100 yet to recover pandemic losses

The FTSE 100 is currently at its highest level since February 2020 but the index is yet to return to its pre-Covid peak of around 7,400 points.

Other major stock markets are beginning to recover their Covid crash losses and rally beyond their pre-pandemic heights, including the S&P in the US and the Nikkei 225 in Japan.

European shares also notched up another record today, with the pan-European STOXX 600 up 0.3pc and Germany's DAX reaching an all-time high.

09:01 AM

Vast majority want hybrid future of work, says ONS

The vast majority of adults already working from home said they wanted a "hybrid" approach of both home and office working in future, according to an ONS survey.

Around 85pc of home-workers said they expected flexibility about where they worked in the future, with women more likely than men to report homeworking gave them more time to complete work and fewer distractions, while men were more likely to report better wellbeing.

Younger workers however were less likely to report an overall positive view of homeworking than older workers, the ONS found. Fewer respondents aged between 16 and 29 reported "improved work-life balance" or "completing work in a shorter time" than those aged over 30.

Businesses were still undecided about the future role of the office, with 32pc stating they were not sure what proportion of the workforce will be working from their usual place of work.

08:39 AM

BMW joins £48m bid to back used car website taking on Cazoo

BMW and top venture capital fund Index Ventures have invested £48m into a British used car sales start-up that is taking on Cazoo and WeBuyAnyCar, reports my colleague James Cook.

He writes:

London-headquartered Motorway is now considering international expansion for its service, which lets people sell their cars to used car dealers online, with a particular eye on the US market.

The latest investment round was led by Index Ventures, which previously backed start-ups including Deliveroo and Revolut.

Other investors include BMW i Ventures and Unbound, the venture capital fund run by Shravin Bharti Mittal, son of Indian billionaire Sunil Mittal.

Read James' full story here.

08:34 AM

More on Serco's share surge

Serco staff working on behalf of NHS Test and Trace operate a coronavirus testing centre in Stone, England - Christopher Furlong /Getty Images Europe 
Serco staff working on behalf of NHS Test and Trace operate a coronavirus testing centre in Stone, England - Christopher Furlong /Getty Images Europe

Outsourcer Serco's shares were surging 4pc this morning, after the company raised its profit outlook by £15m because it expects its coronavirus testing and tracing contracts to remain in demand for longer than previously anticipated.

Serco runs large parts of the NHS Test and trace service, including a quarter of testing sites and half the “tier 3” contact tracers, who are mainly tasked with phoning the contacts of people who have tested positive.

Following reports of surging infections linked to the Delta variant, the company said it expected 2021 profits to come in at around £200m. A full update on trading will be given on 30 June.

08:12 AM

FTSE risers and fallers

BT group was leading gains on the FTSE an hour after the index opened (up 2.24pc), with the stock continuing its last week surge after French telecoms company Altice announced it had taken a 12pc stake.

However travel stocks were predictably falling as Britain braced for delay in the economy's reopening today, British Airways owner IAG was trailing the index (down 2.12pc), while Rolls Royce was close behind (down 1.95pc).

On the FTSE 250, Tullow Oil pushed higher (up 4pc) as the price of oil rallied.

Outsourcer Serco was also up 3.5pc after it raised its 2021 profit outlook by £15m to about £200m because it expects stronger demand for its Covid-19 services, such as testing and tracing contracts, in the year's second half than previously anticipated.

Mitie, however, was trailing the mid-caps for losses as its announcement last Thursday that it swung to a pretax loss in the past year continued to weigh on the stock.

07:57 AM

More on Bitcoin's recovery

07:52 AM

Memestocks prove just as volatile in Europe

Denmark’s first meme stock Orphazyme suffered a selloff this morning, with shares in the tiny biotechnology firm plunging as much as 37pc when the market opened in Copenhagen.

The meme-stock frenzy arrived in Denmark towards the end of last week and now one of the Nordic region’s main retail brokerages warning clients of the potential risks ahead.

“The extreme trading and media focus will force the company and its management into overtime,” Per Hansen, an investment economist at brokerage Nordnet AB, said in a client note on Monday.

“That will create extra work and take the focus away” from running the business. What’s more, “a corporate valuation that’s not financially viable or sustainable won’t, in the long run, be able to alter a negative development” in the underlying business.

The tiny biotech firm, which has yet to produce a viable treatment or turn a profit, saw its American depositary share price soar almost 1,400pc at one point last week.

Orphazyme had a market value of over $450m after trading ended on Friday. Last month, it was worth around $200m.

Orphazyme said on Friday that it’s “not aware of any material change in its clinical development programs, financial condition or results of operations that would explain such price volatility or trading volume.” It also warned investors against being sucked into the irrational price swings.

07:39 AM

Oil rallies to multi-year highs

A driver empties his tanker truck of crude oil at Marathon Oil to be refined into gas on May 20, 2021 in Salt Lake City, Utah - George Frey /Getty Images North America 
A driver empties his tanker truck of crude oil at Marathon Oil to be refined into gas on May 20, 2021 in Salt Lake City, Utah - George Frey /Getty Images North America

Oil prices are at multi-year highs this morning, on an improved outlook for worldwide fuel demand.

Brent crude futures inched up to $73.46 per barrel, their highest since April 2019. US crude futures added 0.5pc to $71.32 per barrel, their highest since October 2018.

07:27 AM

FTSE rises to 16-month high

London's FTSE 100 index is on the ascent this morning, touching its highest level since February 2020 as investors seem unperturbed by reports Prime Minister Boris Johnson is likely to delay the economy's reopening by four weeks.

Boosted by gains in heavyweight financials and energy stocks, the blue-chip index is up 0.7pc. Royal Dutch Shell is leading for gains, up 1.5pc as the stock tracks higher crude prices.

07:12 AM

FTSE opens higher

The FTSE 100 has jumped 0.7pc on opening, currently trading at 7,184 points.

The FTSE 250 is also up a healthy 0.5pc at 22,844 points.

07:08 AM

What to expect from UK markets this week:

Michael Hewson, Chief Market Analyst at CMC Markets UK, lays out the events investors will be watching:

In the UK it's also set to be another big week for UK economic data, with the latest unemployment, inflation and retail sales numbers for April and May set to show a continued improvement in the direction of travel for the UK economic rebound.

Today we are also set to find out that next week's scheduled relaxation of restrictions on the UK economy is expected to be put back by up to four weeks, over concerns about the rising levels of infection in the Delta or Indian variant.

As a consequence, we might see a little bit of softness in the pound, along with possible further weakness in the likes of hospitality and travel stocks, which had already started to slide at the end of last week over those very concerns.

Prime Minister Boris Johnson is expected to lay out the reasons for the delay, though he could allow some relaxations to take place albeit at a slower pace than originally envisaged.

06:34 AM

Musk reopens door for Bitcoin payments for Tesla

SpaceX founder and Tesla CEO Elon Musk looks on as he visits the construction site of Tesla's gigafactory in Gruenheide, near Berlin, Germany - Reuters /MICHELE TANTUSSI 
SpaceX founder and Tesla CEO Elon Musk looks on as he visits the construction site of Tesla's gigafactory in Gruenheide, near Berlin, Germany - Reuters /MICHELE TANTUSSI

Bitcoin has gyrated to Musk's views for months since Tesla announced a $1.5bn Bitcoin purchase in February and said it would take the cryptocurrency in payment. He later said the electric car maker would not accept Bitcoin due to concerns over how mining the currency requires high energy use and contributes to climate change.

"When there's confirmation of reasonable (~50pc) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions," Musk said on Twitter on Sunday.

Bitcoin rallied more than 9pc after that message, breaking above its 20-day moving average, and it climbed a tiny bit further in Asia to hit $39,838.92.

"The market had been going through another round of correction over the weekend ... until Elon Musk's tweet of accepting BTC again for Tesla purchases changed sentiment," said Bobby Ong, co-founder of crypto analytics website CoinGecko.

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06:27 AM

Bitcoin rallies (again)

Good morning. Bitcoin hit a two-week peak just shy of $40,000 on Monday, after another weekend reacting to tweets from Tesla boss Elon Musk, who fended off criticism over his market influence and said Tesla sold bitcoin but may resume transactions using it.

The FTSE 100 is expected to open slightly higher.

5 things to start your day

1) BBC hit with Ofcom complaint from GB News after 'shutting out' broadcaster Lawyers for the company have alerted media regulator Ofcom, the Competition and Markets Authority (CMA) and Oliver Dowden, the Culture Secretary, about a row over its access to political footage.

2) Ministers weigh up hospitality rescue over billions in unpaid rent Officials are considering proposals to ring-fencing historic debt built up by pubs and restaurants during Covid-19.

3) Qualcomm ready to invest in Arm if $40bn Nvidia sales collapses Cristiano Amon, Qualcomm’s incoming chief executive, told The Telegraph it would be prepared to buy a stake in Arm alongside a consortium of industry players.

4) BMW joins £48m bid to back used car website taking on Cazoo London-headquartered Motorway is now considering international expansion for its service, which lets people sell their cars to used car dealers online, with a particular eye on the US market.

5) WhatsApp boss: We would challenge encryption crackdown Will Cathcart told The Telegraph that the service would be prepared to challenge any demand that it break the systems that make it impossible for security services to read messages between criminals.

What happened overnight

Global shares held firm near record highs on Monday while US bond yields flirted with three-month lows as investors expect the Federal Reserve to stick to its dovish mantra later this week.

Japan's Nikkei rose 0.35pc while MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1pc. Activity was limited with the region's largest markets - China, Hong Kong and Australia - closed for a holiday.

Globally, equity markets were basking in the prospects of a broadening economic recovery from the coronavirus pandemic and anticipation of continuity in dovish monetary policy from the US Federal Reserve.

The MSCI all-country world equity index, the US S&P 500 and the pan-regional STOXX Europe 600 index all closed at record highs on Friday.

Coming up today

  • Corporate: Ted Baker, Augmentum Fintech (full year), Crest Nicholson (interim), Saga, SThree (trading statement)

  • Economics: Industrial production (EU, Japan)