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Bitcoin recovers after crypto selloff abates

·41 min read
An engineer on a ladder inspects racks of application-specific integrated circuit (ASIC) mining devices and power units at the BitCluster cryptocurrency mining farm in Norilsk, Russia - Andrey Rudakov /Bloomberg
An engineer on a ladder inspects racks of application-specific integrated circuit (ASIC) mining devices and power units at the BitCluster cryptocurrency mining farm in Norilsk, Russia - Andrey Rudakov /Bloomberg

Bitcoin crashed by as much as 30pc today after China banned financial services firms from providing cryptocurrency services, dragging down other major cryptocurrencies at the same time.

It has rebounded after approaching $30,000, a level not seen since January, and well below its April high of $65,000. The downturn quickly infected other cryptocurrencies, with Ethereum sinking by over 36pc and Dogecoin tumbling an even greater 41.5pc.

In the UK, mining stocks dragged down blue-chips on a jittery day for London’s markets sparked by weaker commodity prices and worries over inflation.

Commodities dropped after Chinese authorities suggested a curb on price increases, causing investors to flee their holdings in the sector.

Anglo American led the sell-off as the worst performer on the benchmark, with losses of 156p to £31.54. It was followed by fellow miner BHP, which fell by 102.5p to £21.38, and Antofagasta, which lost 55.5p to close at £15.58.

Rio Tinto shed 211p and fell to £60.39, and Glencore dropped 10.8p to 313.8p.

It added to a wider market retreat as inflation concerns continued to infect trader confidence.

Danni Hewson, a financial analyst at AJ Bell, said that a decision by Iceland to hike interest rates will have done nothing to soothe shareholders’ nerves.

She added: “UK inflation figures will have prompted some investors to take a long look at their portfolios.

“Jittery nicely sums up how UK markets have performed today, and all finished firmly in negative territory.” Fresh figures yesterday showed that Inflation more than doubled in April as higher energy bills pushed up the cost of living. Investors were also worried that shortages in supply chains and of workers could threaten the country’s economic recovery.

Oil majors also fell as the price of crude continues to rise. Royal Dutch Shell joined miners in the top 10 worst performers, losing 37.8p to £13.24, while BP dropped 8.5p to 308.4p.

The FTSE 100 lost 84.04 points to close at 6,950.20, with just 17 of its 101 constituents ending in the green. The FTSE 250 shed 98.03 points to 22,234.53.

In more positive news, plumbing group Ferguson was the top FTSE 100 riser as it flew to its highest ever share price of £94.72 – having gained 202p through the day – after lifting its full-year outlook. It came as the company posted a 65pc jump in quarterly profit, while revenue for the three months to March rose by a quarter to $5.9bn (£4.2bn) compared to the same period last year.

Ferguson said demand from America has surged as the country reopens, with revenue in its US business growing 23pc.

Elsewhere, defence business BAE Systems fell 0.6p to 519.8p despite saying it is on target to meet its full-year guidance, with its air, maritime, electronic systems and intelligence and security operations all performing strongly.

Sales are expected to rise by between 5pc and 7pc on the £20.8bn achieved last year, and underlying earnings are forecast to rise by between 6pc to 8pc from the previous level of £2bn.

06:48 PM

Wrapping up

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

Thanks very much for joining and see you again tomorrow.

06:39 PM

UK pushing G7 to impose mandatory reporting of environmental risks

Rishi Sunak is pushing the G7 economies to impose mandatory reporting of environmental risks on their big companies, reported Bloomberg.

Under the proposals, the biggest companies would report annually on their exposure to risks and opportunities presented by climate change. It would follow guidelines set out in 2017 by the Task Force on Climate-Related Financial Disclosures.

While a final communique has yet to be agreed for the June 4-5 meeting, Bloomberg reports that said climate disclosure is a priority being pushed by the UK presidency in the finance track of the G7 talks this year.

The drive comes as the UK seeks to burnish its post-Brexit credentials as a global leader on climate change. Prime Minister Boris Johnson has already announced the most ambitious target to cut greenhouse gases among major developed countries, and its other aims during its G-7 presidency include persuading the other nations to phase out fossil-fuel subsidies.

06:32 PM

Tesla on track for lowest close since November

Tesla might have pared some earlier losses this afternoon in New York, but it is still on track for its lowest close since November. The firm dropped as much as 5.4pc earlier, and is currently down just over 2pc - US markets close in an hour and a half.

In a staggering figure, more than $300bn has been wiped off the electric-vehicle maker’s market capitalisation since late January, back when it was briefly bigger than social media giant Facebook.

06:19 PM

Fed 'cautiously optimistic' about US recovery

Powell
Powell

Federal Reserve officials were cautiously optimistic about the US economic recovery at the central bank’s April meeting, revealed this evening, with some signaling they’d be open to discussing scaling back its massive bond purchases “at some point", reported Bloomberg.

The news agency has details below:

“A number of participants suggested that if the economy continued to make rapid progress toward the Committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases,” according to minutes from the April 27-28 meeting.

“Various participants noted that it would likely be some time until the economy had made substantial further progress toward the Committee’s maximum-employment and price-stability goals".

Officials held interest rates near zero and pledged to continue buying $80bn in Treasuries and $40bn in mortgage-backed securities every month until “substantial further progress” had been made on employment and inflation goals.

The US labour market posted strong gains in March, the most recent month for which Fed officials had data at the April meeting. Policy makers have since noted they’d need to see continued strength to indicate that the economy was on its way to meeting the Fed’s test to scale back bond buying.

05:46 PM

EU wants tech giants to curb earnings from false info

Some breaking, exclusive lines from Reuters, based on a seen EU document:

  • The EU wants Facebook, Google and other tech giants to commit to curbing earnings from adverts based on false information.

  • It wants companies to provide detailed reports on the impact of their measures

  • The bloc wants smaller media services, messaging services and ad exchanges to do the same.

05:29 PM

Bitcoin recovers after crypto selloff abates

Bitcoin has rebounded to around $40,000, erasing two-thirds of its earlier plunge in a crypto selloff. Still, it has erased almost all the gains made after Tesla's announcement in February that it would add the asset to its balance sheet.

China yesterday banned financial and payment institutions from providing cryptocurrency services adding to a selloff since Elon Musk derided Bitcoin mining's environmental cost.

The rebound has helped Coinbase - the US's largest cryptocurrency exchange - pare some of its losses after posting huge declines earlier. It is now down 4.7pc, having fallen as much as 13pc to a record low of $208.

05:08 PM

US stocks continue in the red

US stocks fell at open (see post at 2:52pm) and are continuing to slid today, pulled down by tumbling cryptocurrency-linked shares as well as falling commodity prices over inflation concerns.

At its worst moment Bitcoin dropped about 30pc but pared that decline to less than 10pc.

Energy and raw-material stocks fell the most in the S&P 500 ahead of the release of the minutes from the Fed's last meeting later today. Some key company movements:

  1. Crypto-exposed shares like Coinbase, Marathon Digital and Riot Blockchain each fell more than 5pc after Bitcoin sank to the lowest since January.

  2. Tesla slipped (currently down 2.5pc) after data showed a slowdown in China sales.

  3. Target touched a record high (currently up 5.2pc) after predicting a more profitable year as quarterly sales soared.

Here's how the US markets stand in early afternoon:

  • S&P 500: -0.6pc

  • Dow Jones: -0.7pc

  • Nasdaq: -0.5pc

04:58 PM

Demand for rough diamonds hit by India's Covid wave: De Beers

Diamond
Diamond

Demand for rough diamonds has been hit by the coronavirus wave gripping India where most of the world's stones go to be cut and polished, according to De Beers, reports my colleague Rachel Millard.

The business owned by FTSE 100 miner Anglo-American announced rough diamonds sales of $380m (£268m) for its fourth annual sales cycle.

The cycle was extended beyond its normal week to cope with disruption due to the pandemic and this year ran from May 3 to May 18. Even so, the sales are a significant increase on the $56m sold during cycles 4 and 5 last year in the heart of the pandemic.

Bruce Cleaver, chief executive of De Beers, said: “We continue to see robust demand for diamond jewellery in the key US and China consumer markets.

"However, the scale of the second wave of Covid-19 in India, where the majority of the world’s diamonds are cut and polished, has led to reduced midstream capacity and subsequently lower rough diamond demand.

04:30 PM

JPMorgan in line for $100m+ on deal linked to sale of Saudi Aramco's oil pipelines

JPMorgan is set to earn a whopping $100m+ on a recent trade tied to the sale of a stake in Saudi Aramco’s oil pipelines, according to Bloomberg.

It is poised to book gains on a hedging transaction with US investment firm EIG Global Energy Partners, which agreed last month to invest $12.4bn in the pipelines, the news agency reported. It added that JPMorgan advised Aramco on the deal and was one of two banks that helped it arrange a loan of more than $10bn offered to the buyers.

Given the size of the financing, EIG separately entered into a so-called swap deal with JPMorgan to guard against fluctuations in interest rates. JPMorgan is in line for the huge profit after markets moved in its favour.

JPMorgan was the sole bank on the hedging transaction, rather than a usual group of lenders used to manage buyers' financing risk in a large acquisition.

04:10 PM

Bitcoin volatility should warn against 'buying the dip' - DailyFX

Looping back to the main theme of the day - Bitcoin - Nicholas Cawley from DailyFX gives his view on the fluctuating state of the cryptocurrency market and what this means for investors:

"The cryptocurrency market is under relentless selling pressure at the moment with losses of 20-25pc commonplace across the market.

"The speed of the sell-off suggests that leveraged accounts are being hit badly and the indiscriminate slump across the space also points to a lack of buying intent.

"It maybe that this sell-off is an opportunity to enter or re-enter the market but the current level of volatility in the market should warn people against trying to ‘buy the dip’. Investors should not buy in a falling market and should wait until price action stabilizes before considering hitting the buy button."

04:01 PM

Airbus to close Spanish plant after death of superjumbo

Airbus plans to merge activities at two of its plants in southern Spain, after the end of production of the A380 superjumbo left the factories without enough work for both.

Bloomberg has the details:

The company has held discussions with unions and the Spanish government, a spokeswoman said. The proposed plan will involve closing one site -- which one hasn’t been determined, she said -- and aims to avoid forced layoffs.

The decision comes after workers in Spain held protests over the potential closure of the Puerto Real plant, which assembled the horizontal stabilizers for the double-decker A380.

Airbus, based in Toulouse, France, said in February 2019 that it would end production of the biggest commercial airliner in the skies. A potential 460 positions will go as a result of the decision.

The planemaker plans to avoid forced layoffs, in part by reviving a voluntary severance plan it used last year after announcing 15,000 job cuts.

Airbus will also look at measures like furlough and seek to improve competitiveness at the surviving location. The company has also been holding discussions with unions over plans announced last month to overhaul parts production.

03:36 PM

UK publisher future grows online users by 31pc

Zillah Byng-Thorne, Chief Executive of Future PLC in the company's London HQ - David Rose /Telegraph
Zillah Byng-Thorne, Chief Executive of Future PLC in the company's London HQ - David Rose /Telegraph

UK publisher Future delivered ahead of expectations over the past six months, with a pandemic online engagement boost pushing revenues up 89pc to a record £272.6m .

The company, which owns over 200 brands including Marie Claire, TechRadar, PC Gamer and Wallpaper, grew online users by 31pc to 311 million in the six months ending March 31.

"Looking ahead, we are well positioned to sustain the growth momentum we have built over recent years," said Zillah Byng-Thorne, Future's chief executive, who has transformed Future from a heavily lossmaking company since she taking over the business in 2014.

"Whilst we remain cautious about the wider macroeconomic uncertainties associated with COVID-19, we are confident in the outlook for the Group and expect the full year to be materially ahead of market expectations, underpinned by an exceptional H1 performance."

03:25 PM

Back to Bitcoin: Ark's Wood remains bullish

Star stockpicker, Catherine Wood, founder and CEO of investment management firm Ark Invest, has reiterated her support for Bitcoin on Bloomberg TV today, even as the price drops.

Wood has previously warned that the rise of digital wallets will "gut" traditional banks.

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03:10 PM

Investor rebellion at car dealer Pendragon

Car dealer group Pendragon has suffered an investor revolt at its annual result with 42pc of votes cast going against the company’s remuneration report, Alan Tovey reports.

The owner of the Evans Halshaw and Stratstone dealerships had been braced for a rebellion over boss Bill Berman’s £3m-plus pay and bonus deal after Hedin Group, one of the company’s largest investors, said it would oppose it.

Mr Berman’s reappointment was also subject to a protest vote, with 21pc of the balloting against it. Remuneration committee chairman Mike Wright was also the subject of anger, with 41pc of votes against his reappointment.

Pendragon said it would “continue to consult with shareholders to fully understand their concerns” over the reappointment of Mr Berman and Mr Wright, along with anger at the remuneration report

03:08 PM

Activists halt production at Leicester drone factory

Paint is squirted on the building as activists from Palestine Action close down the Elbit systems drone factory, by climbing onto it's roof in protest at the company's links to the Israeli military - Guy Smallman /Getty Images Europe 
Paint is squirted on the building as activists from Palestine Action close down the Elbit systems drone factory, by climbing onto it's roof in protest at the company's links to the Israeli military - Guy Smallman /Getty Images Europe

Activists have halted production at a Leicester factory involved in building combat drones by climbing onto its roof and spraying the building with red paint.

A group called Palestine Action says it has occupied part of Israeli-owned Elbit Systems subsidiary UAV Tactical Systems in the Meridian Business Park since early this morning.

Protesters claim the drones built at the facility have been used in the on-going conflict between Israel and Hamas.

02:59 PM

Boohoo links bonuses to ethics targets

People walk past the boarded up former Debenhams flag-ship store in Oxford Street - Yui Mok /PA
People walk past the boarded up former Debenhams flag-ship store in Oxford Street - Yui Mok /PA

Boohoo will link its top brass’ bonuses to ethics targets after pressure from shareholders in the aftermath of the controversy around its supply chain in Leicester, reports Laura Onita.

Co-founders Mahmud Kamani and Carol Kane are both in line for £50m, a third each of the total payout, if Boohoo is worth £7.5bn by 2023 - from £4bn currently. The rest would be shared by top executives including chief executive John Lyttle and finance chief Neil Catto.

However, if the retailer fails to implement its so-called Agenda for Change in full, the board has the power to reduce the bonuses.

The firm has promised to publish a comprehensive list of all the factories it works with globally and set up a whistleblowing system as it seeks to draw a line under the Leicester scandal.

Boohoo’s remuneration committee said that comments from investors had been “instrumental in informing the changes that we have made” and it would continue to keep salaries and other incentive schemes under review.

A separate annual bonus scheme has also been linked to improvements in dealing with suppliers, but only 15pc of it will be tied to so-called ESG targets.

02:51 PM

Musk says Telsa is holding its Bitcoin

Billionaire Elon Musk again weighs in on the cryptocurrency market, using emojis on Twitter to say Tesla has "diamond hands" which means the company is planning to hold the Bitcoin the company bought back in February.

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02:35 PM

Cryptocurrency crash: inevitable or temporary?

Social media is split over whether the current cryptocurrency sell off is proof of investor recklessness or whether the current crash echoes previous price dips, which have so far proved temporary.

American economist Nouriel Roubini used the sell off to say institutional investors who had invested "should be fired on the spot if undertaking such a reckless speculative gamble".

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The blockchain industry however were more sanguine. "All of this has happened before, and all of it will happen again," said Samson Mow, chief strategy officer at blockchain company Blockstream.

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02:14 PM

Cryptocurrency exchanges struggle to cope with traffic

Cryptocurrency exchanges are struggling to cope with traffic today as a major sell off of Bitcoin, Ethereum and Dogecoin takes hold.

Coinbase was experiencing a “partial” outage this afternoon on its website and app. The world's biggest exchange, Binance, has also temporarily disabled Ethereum withdrawals due to “network congestion.”

Crypto exchanges regularly suffer outages, leaving investors unable to buy or sell for hours at a time.

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02:04 PM

Coinbase takes a hit

Let's take a closer look at those tech stock drops.

Amazon, Apple and Microsoft each fell more than 1pc. And Coinbase, a cryptocurrency exchange operator that had an IPO last month, has now dropped almost 9pc, leaving it a whopping 56pc off its April debut price of $381 per share.

01:52 PM

Nasdaq slides for third day amid crypto selloff

Nasdaq stocks associated with cryptocurrencies took a hammering at today's open - Chris Hondros /Hulton Archive 
Nasdaq stocks associated with cryptocurrencies took a hammering at today's open - Chris Hondros /Hulton Archive

US tech stocks fell further as US markets opened this afternoon as they were caught up in today's cryptocurrency selloff.

The tech-heavy Nasdaq dived 1.22pc shortly after the opening bell, with Bitcoin advocate-turned-naysayer Elon Musk's Tesla down a whopping 4pc. Crypto-exposed shares including Coinbase Global, Marathon Digital Holdings and Riot Blockchain each tumbled more than 10pc.

“Tactically, it seems a bit overdone as fundamentals have changed modestly,” Mike Bailey, director of research at FBB Capital Partners, said of the crypto rout. “However, this type of volatility is a reminder that the asset class is pure. This type of move could flush out some of the casual crypto investors, since we haven’t seen this type of downward volatility in some time.”

The S&P 500 lost 1.26pc in the first 20 minutes of trading while the Dow Jones sank 1.18pc as inflation fears continued to infect markets after Iceland this morning became the first western Europe country to hike interest rates in response to rising prices.

“Debate on whether inflation rebound is transitory or persistent might not end soon and could keep markets unnerved during summer,” Barclays strategists led by Emmanuel Cau said in a note. “The risk of another taper tantrum is low at this stage,” while economic and earnings growth should favor equities over bonds, they added.

01:29 PM

$500m wiped off Bitcoin value

Bitcoin is now over 50pc off a $65,000 high in April - JUSTIN TALLIS /AFP
Bitcoin is now over 50pc off a $65,000 high in April - JUSTIN TALLIS /AFP

The Bitcoin sell off is gathering steam and infecting other cryptocurrencies with it. Ethereum has lost over a third of its value today and Dogecoin, the meme-based cryptocurrency championed by Elon Musk, crashing by 41.5pc.

Bitcoin tumbled to $33,887 - a 22.4pc fall according to CoinMarketCap and the lowest level since early February - to wipe $500m off its market value by 2.20pm. The plunge followed China saying digital currencies could not be used in markets as they were not real and banned firms from using cryptocurrencies to price their goods or services.

Analysts have warned it could fall as low as $30,000 to leave it at less than half the $65,000 peak it hit only last month.

“From a technical standpoint, the indicators are flashing red,” said Ipek Ozkardeskaya, senior analyst at Swissquote. “The next important support level stands near ... the $30,000 mark. There is a chance that we see a pullback to these levels and even below, at least in the short run.”

Here's how its plunge looked earlier today:

01:03 PM

EU travel for vaccinated holidaymakers receives provisional approval

People vaccinated against Covid-19 could be able to holiday within the EU under rules which have been provisionally approved by member states today in an effort to save Europe's summer season.

The agreement however still needs formal ministerial approval, is only a recommendation and depends on implementation of an EU vaccine passport.

12:45 PM

Stocks tied to crypto follow Bitcoin's fall

Cryptocurrency related stocks are dropping today as Bitcoin, Ethereum and Dogecoin all suffer major losses.

Tesla, a large holder of Bitcoin, fell 3pc in premarket trading while the newly listed crytpo exchange Coinbase slid more than 6pc.

Microstrategy, which also bought a significant amount of Bitcoin for its corporate treasury, dropped 8pc.

12:36 PM

Cryptocurrencies crash after China ban, Musk Tweet

Cryptocurrencies are crashing today, after China yesterday banned financial and payment institutions from providing cryptocurrency services and billionaire Elon Musk derided Bitcoin mining's environmental cost.

Bitcoin is trading below $40,000 and is currently down 14pc in the past 24 hours, taking the coin to a three and a half month low.

The world's biggest cryptocurrency has tumbled 40pc from a record high of $64,895 on April 14. It is also heading for its first monthly decline since November 2018.

Ethereum has also dropped 25pc in the past 24 hours, plunging to $2,643.

12:23 PM

Uniqlo is latest fashion brand linked to Uyghur forced labour

A pedestrian wearing a protective mask and gloves passes in front of a Uniqlo Co. store temporarily closed in the Herald Square area of New York - Demetrius Freeman /Bloomberg
A pedestrian wearing a protective mask and gloves passes in front of a Uniqlo Co. store temporarily closed in the Herald Square area of New York - Demetrius Freeman /Bloomberg

The US customs agency blocked a shipment of Uniqlo shirts in January because the company did not provide enough information to establish the items were not produced in any part by forced labour in China's western region of Xinjiang.

The cotton men’s shirts were stopped at the Port of Los Angeles revealed a Customs and Border Protection document dated May 10 and he agency denied an appeal by Uniqlo to release the garments.

It's estimated that more than one million Uyghurs have been detained in "reeducation camps" in Xinjiang as part of a major crackdown on the Muslim ethnic minority.

In December, it emerged that China was forcing 570,000 Uyghurs and other minorities to pick cotton by hand, according to the US based think-tank Center for Global Policy. China has dismissed these allegations.

“Uniqlo is disappointed by the recent decision from the U.S. Customs and Border Protection agency,” Uniqlo owner Fast Retailing said in a statement today, adding that it had submitted paperwork to the U.S. customs showing its products met all the import requirements.

The company said it “has strong mechanisms in place to identify any potential violations of human and worker rights".

12:07 PM

Oil prices slide, reacting to inflation fears

Brent crude futures fell 1.5pc today to $68 a barrel, as uncertainties over inflation prompt investors to reduce exposure to riskier assets like oil.

“Assessing the global demand picture remains challenging as reopenings and restrictions across the world are probably the most diverse since the start of the pandemic,” Vandana Hari, energy analyst at Vanda Insights told Reuters.

11:57 AM

FTSE 100 continues its descent

The FTSE 100 is down 1.54pc just before 1pm, trading at 6,925 points as inflation fears grip the market following Iceland's unexpected rate hike.

11:45 AM

Great Portland Street backs London's 'buzz' to return

Theater-goers queue outside St Martins theatre in London, Britain - VICKIE FLORES/EPA-EFE/Shutterstock 
Theater-goers queue outside St Martins theatre in London, Britain - VICKIE FLORES/EPA-EFE/Shutterstock

Great Portland Estates, which owns 2.6m sq ft of property in central London, reported a £201.9m loss for the year to 31 March today, compared with a profit of £51.8m a year earlier.

The pandemic has caused chaos within the London landlord's property portfolio, with the FTSE 250 company saying it expects retail challenges to persist as a result of structural change and the time it may take for footfall to recover to pre-Covid levels.

Toby Courtauld, chief executive, said he was betting on London's recovery to boost the company's fortunes: "Although it may take a little time for the full buzz of London to return, we believe it will, driven by this great capital's magnetic appeal as the cultural and commercial heart of the UK, and its unique position as a global city."

He added: With a recovering market, our strong finances, a portfolio full of opportunity and a deeply talented and committed team, we can look to our future with confidence."

11:24 AM

Iceland unexpectedly raises main interest rate

Iceland’s central bank became the first in western Europe to tighten monetary policy since the pandemic by raising interest rates, as officials acted to head off a spike in inflation.

Bloomberg has more details:

The seven-day term deposit rate was lifted by a quarter-point to 1pc - a response to above-target consumer-price gains, rising labour costs and higher housing costs. The increase was the institution’s first in two and a half years.

Iceland’s sudden shift in its policy path is standing out in a region where central banks from Frankfurt to London are still deploying degrees of ultra-loose easing to give recoveries time to take hold.

Before the decision on Wednesday, Norway had attracted most attention as a likely first-mover among its neighbors to tighten, having signaled a rate increase as soon as September. Denmark, which raised in March, did so for technical reasons rather than as a shift to remove stimulus.

“Inflationary pressures appear to be widespread,” Reykjavik-based Sedlabanki said on Wednesday. “This is due to a number of factors, including the depreciation of the krona in 2020 and steep rises in wages and house prices.”

The north Atlantic island has been more exposed to the pandemic than its Nordic peers with its all-important tourism industry suffering a body blow last year. A string of rate cuts then triggered a rally in house prices. Icelandic inflation, which includes real-estate costs, soared to 4.6pc in April, well above the bank’s 2.5pc target.

11:06 AM

Vaccinated JP Morgan staff can remove face masks in office

America's biggest bank JP Morgan has told vaccinated staff that they no longer need to wear masks in the office as Wall Street races to get back to normal life, Lucy Burton writes.

JP Morgan's American workers have been told to enter their vaccination status into an internal database with only those who have been fully vaccinated allowed to drop the use of face coverings, according to a memo seen by Reuters.

The move comes a week after president Joe Biden lifted a rule on indoor mask wearing, a major milestone in the US's battle against coronavirus, which has seen more than half a million Americans die.

The US Centers for Disease Control (CDC) said fully vaccinated people did not need to wear masks in most indoor settings, heralding a step back to normalcy. More than 46pc of America's population has received at least one dose.

JP Morgan and its closest rival Goldman Sachs have been urging people in the US and the UK to get back to work due to successful vaccine rollouts, telling staff in both countries that they must return once restrictions are lifted.

10:58 AM

BAE expects sales to rise

Defence giant BAE Systems is on target to meet its full-year guidance, with its air, maritime, electronic systems and intelligence and security operations all performing strongly, reports Alan Tovey.

Sales are expected to rise by between 5pc and 7pc on the £20.8bn achieved last year, and underlying earnings are forecast to rise by between 6pc to 8pc from the previous level of £2bn.

"Our geographic diversity positions us strongly in the post pandemic cycle where many of the countries we operate in have made plans to increase their spending to counter challenging threat environments," the company said.

BAE said the recent defence review was “positive” for the business, giving “renewed commitments to our major long-term programmes in complex warship, submarine and combat aircraft design and build”.

The FTSE 100 company is currently heading construction of the new “Dreadnought” nuclear missile submarines and Type 26 frigates for the Navy, and working on the development of the next generation of stealth fighters, known as “Tempest.”

Increasing defence spending in the US, one of BAE’s biggest markets, will also support the business, along with greater funding for military equipment in Europe.

10:51 AM

Spanish court suspends hearing of Orcel claim against Santander

Italian banker Andrea Orcel and Banco Santander's chairwoman Ana Patricia Botin attend a trial against Santander over the bank's withdrawal of a CEO job offer to Orcel - JUAN MEDINA /Reuters
Italian banker Andrea Orcel and Banco Santander's chairwoman Ana Patricia Botin attend a trial against Santander over the bank's withdrawal of a CEO job offer to Orcel - JUAN MEDINA /Reuters

A court in Madrid has suspended the hearing in a lawsuit that UniCredit SpA chief executive brought against Banco Santander after he claimed the bank reneged on an offer to hire him as CEO.

Andrea Orcel, who left UBS in 2018 to join Santander, is seeking compensation for a breach of contract after Spain’s No. 1 lender withdrew the offer in a dispute over pay.

The judge adjourned the hearings today because no witnesses were present from UBS Group; executives from the bank were expected to testify as witnesses for Orcel.

He had initially been seeking up to €112m (£96.5m), claiming the Spanish bank upended his career with its last minute decision. However Spanish newspaper Expansion reported Orcel is now seeking 76m (£65.m) to reflect the fact he took on a new role as chief executive officer of UniCredit on April 15.

“It is important that the judge hears the facts, that is why we are here today,” Orcel told reporters outside. “This has always been about integrity and ensuring that the truth was put on record, and I think that we will achieve that today.”

Santander chairman Ana Botin told the court earlier: "Orcel's appointment was never formalised. The contract was never fulfilled."

10:30 AM

Dunelm expects profits to beat City forecast as shoppers turn out in force

Homeware retailer Dunelm said its total sales increased by 59pc on a two year basis against the same period in 2019, despite its stores being shuttered for large periods last year.

The company said sales growth has been "very strong" since the majority of stores re-opened on 12th April. Digital growth had also been "good" for both home delivery and Click & Collect channels.

Dunelm added it was benefiting from a combination of pent up demand, a buoyant homewares market and unseasonably cold spring weather.

However the Board expects demand to persist and is predicting full year profit before tax will be significantly ahead of the latest range of analysts' expectations.

10:17 AM

Is the tide turning on Bitcoin?

Laith Khalaf, Financial Analyst at AJ Bell, comments:

The price of Bitcoin has tumbled by a third over the last month, which highlights the extreme risk inherent in cryptocurrency.

Risk cuts both ways however, and Bitcoin is still trading above where it started the year, so many investors will remain in profit, albeit trimmed back by the recent fall.

Some rough and tumble is to be expected when holding something as volatile as cryptocurrency, but in recent weeks there have been significant developments which undermine Bitcoin’s long term prospects.

The tide has turned on Bitcoin because environmental concerns and regulatory risks have materialised, which have raised doubt over the long term adoption of cryptocurrency by businesses and consumers.

Tesla’s decision to suspend accepting Bitcoin on environmental grounds will give other companies the jitters about facilitating crypto payments, lest they spark an ESG backlash from shareholders. Those companies which already accept Bitcoin will likely be having second thoughts.

My colleague Matthew Field has more on this story here.

10:11 AM

Money round-up

Here's the top stories today from The Telegraph's Money team:

09:44 AM

Demand for Telsas plunges in China

Tesla's headaches in China are growing as data shows growth in the world's largest EV market slowed dramatically last month.

According to data from state-backed China Automotive Information Net, in April just 12,000 China-built Teslas were registered in the country, down sharply from a almost 35,000 registrations in March.

In response, Tesla shares fell 2.3pc in US pre-market trade.

A growing chorus of safety complaints about Elon Musk's cars in China reached a crescendo last month when a woman jumped on top of a Tesla at the Shanghai Auto Show and yelled she almost died when her car's brakes failed. The footage quickly went viral on Chinese social media.

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09:31 AM

EU court backs Ryanair challenge to KLM, TAP state aid

A Ryanair flight from London Stansted lands in Lisbon during the first day of new travel regulations between Great Britain and Portugal  - Horacio Villalobos Corbis /Getty Images Europe
A Ryanair flight from London Stansted lands in Lisbon during the first day of new travel regulations between Great Britain and Portugal - Horacio Villalobos Corbis /Getty Images Europe

Europe's second-highest court has upheld Ryanair's complaint about the billions of euros its rivals KLM and TAP received in state aid.

"The General Court annuls the (European) Commission's decision to approve the Netherlands financial aid for the airline KLM amid the COVID-19 pandemic on the grounds of inadequate reasoning," the Luxembourg-based Court said.

Judges also annulled the EU executive's clearance of state aid for Portuguese carrier TAP, citing "an inadequate statement of reasons" by the Commission.

However the court dismissed Ryanair's challenge to a €10bn (£8.6bn) Spanish fund for virus-hit companies.

09:20 AM

House prices have surged through the pandemic

House prices in the UK grew at their fastest rate in almost 14 years in the year to March fuelled by the extended stamp duty holiday, reports Rachel Mortimer.

The latest figures from the Office for National Statistics showed prices grew at an annual rate of 10.2pc in March, the highest since August 2007. The increase was up from the 9.2pc annual rise seen in February.

It coincides with the extension to the stamp duty holiday until June this year, and tapered until September thereafter, which was announced by the Chancellor at the beginning of March.

The average house price in the UK hit £256,000 in March; £24,000 higher than in the same month in 2020.

The ONS suggested the stamp duty holiday had spurred sellers to demand higher asking prices on the grounds buyers’ overall costs had been reduced.

London's house prices remained the most expensive of any region in the UK in March, at an average of £500,000, but it saw the lowest annual growth at 3.7pc.

08:56 AM

Funding Circle shares surge after interim results

Shares in Funding Circle jumped by more than a tenth after the peer-to-peer lender said it expects its interim results to be “well ahead of expectations”, reports Simon Foy.

The London-listed company, which matches borrowers with retail and institutional investors, said it was boosted by emergency Covid loan schemes in the UK and the US.

It added that its loanbook was stable and performing better than expected so far this year, but the firm still expects some credit stress as economies reopen.

Shares rose 13.8pc to 168.8p, valuing the company at £600m.

Chief executive Samir Desai said: “Following a good start to the year, trading has been stronger than anticipated and we now expect to deliver total income no lower than £120m… well ahead of previous expectations.

“As a result of Covid we are seeing an acceleration in the adoption of online borrowing, which has opened up an enlarged opportunity for Funding Circle.

“Whilst we remain mindful of the uncertain economic environment, we are well-placed to continue helping small businesses in 2021.”

The update came ahead of the lender’s annual meeting on Wednesday. Glass Lewis, an influential shareholder adviser, has urged investors to oust chairman Andrew Learoyd at the AGM due to concerns around poor succession planning and the amount of time he has spent on the board.

08:41 AM

House prices increase more than 10pc

UK average house prices have increased by 10.2pc over the year to March 2021, up from 9.2pc in February 2021, the highest annual growth rate the UK has seen since August 2007.

London is the region with the lowest annual growth (3.7pc) for the fourth consecutive month.

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08:35 AM

Mr Kipling maker Premier Foods reinstates dividend after 13 years

Mr Kipling maker, Premier Foods, has reinstated its dividend for the first time in 13 years after profits surged as the country experimented cooking with new ingredients at home.

The company said profits before tax were up 23.5pc compared to the last financial year, with brands Bisto, Oxo, Ambrosia, Sharwood's Homepride and Paxo performing particularly well.

Chief executive Alex Whitehouse credited healthier product ranges and increased TV advertising for the robust performance.

08:23 AM

Commodity stocks weigh on FTSE

The FTSE 100 is down more than 1.1pc, with commodity stocks weighing down the blue chip index.

Miners lead the losses, with Antofagasta down 3.87pc, Anglo American down 2.85pc and Rio Tinto down 2.34pc.

Oil majors also slid. BP was down 1.47pc and Royal Dutch Shell dropped 1.59pc.

08:13 AM

The ECB outlines more about its plans for a digital euro

Fabio Panetta, Member of the Executive Board of the ECB, has spoken this morning about a digital euro that would be: "Digital, European, instant, for everyone, everywhere."

Speaking at the 14th Payment Forum of Finland's Central Bank in Helsinki today, he said:

Simply put, digitalisation is changing the way we pay. We are increasingly paying online and with cards. The pandemic has further accelerated this trend.

In facing these developments, Europe is not optimally positioned, not least because of the “wait-and-see” attitude that has in some cases prevailed in the past. This has made Europe overly dependent on a few foreign providers for card and online payments, resulting in a high degree of market concentration.

He added:

A digital euro would provide Europeans cost-free access to a safe form of digital money which respects privacy and has legal tender status, ensuring it can be used everywhere.

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07:49 AM

Rising price of crude filtering through to fuel prices

Grant Fitzner, chief economist at the ONS, said today; "As the price of crude oil continues to rise, this has fed through to the cost of motor fuels, which are now at their highest since January 2020."

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07:34 AM

More expert analysis: inflation

Ed Monk, associate director for Personal Investing at Fidelity International said:

The rise confirmed today appears to be driven by both pent-up consumer spending after more than a year of lockdown and the return of more normal pricing for fuels and other household utility costs that were disrupted last year.

It supports the case that the savings many households have been able to make over the past year will be spent, helping a rapid recovery in overall growth.

Inflation rising is a sign that the economy is building steam and there’s a question over how far above target the Bank of England will allow price rises to go.

That, combined with already inflated valuations in parts of the stock market, means investors in shares should expect some volatility in the months ahead.

07:27 AM

UK factory gate prices were also up 3.9pc

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07:24 AM

Houshold utilities, clothing and fuel costs behind inflation surge

07:20 AM

FTSE falls below 7,000 following inflation figures

The FTSE 100 has dropped below the benchmark of 7,000 points on opening, following figures showing inflation more than doubled in April.

At 8.20am, it is now down 0.73pc, trading at 6,983.8 points.

The FTSE 250 is also down 0.28pc, trading at 22,270.

07:09 AM

Expert analysis: inflation rise

Laith Khalaf, financial analyst at AJ Bell, comments:

At current levels, inflation is nothing to fret about, but there is rising concern that the fiscal and monetary response to the pandemic has sown the seeds of an inflationary scare further down the road.

For the moment, the Bank of England is dismissing consumer price increases as a natural bounce back from the depths of the pandemic last spring. But the economic recovery could be a Trojan horse, smuggling inflation into the UK, right under the nose of central bankers.

Much of the inflation of the last year can be explained away by an oil price rising from an exceptionally low $20 a barrel last spring to around $70 today.

This effect will moderate as we start lapping the summer months of 2020, but even if oil prices remain where they are, they will continue to exert upward pressure on the headline rate of inflation number for the remainder of the year.

The UK is still way behind the US, where the latest inflation reading came in at 4.2pc, and CPI inflation is still below the Bank of England’s 2pc target.

The Bank has made it clear that it will tolerate inflation rising modestly above target, without pulling the trigger on interest rate rises. However, if inflation looks like it’s going to get a significant foothold, markets will take matters into their own hands and raise borrowing costs across the economy.

07:05 AM

Inflation leaps as energy prices jump

Inflation more than doubled in April as higher energy bills pushed up the cost of living, reports The Telegraph's economics editor Russell Lynch.

The Consumer Prices Index hit a post-pandemic high of 1.5pc, the Office for National Statistics (ONS) said, from 0.7pc in March.

The rise came after energy regulator Ofgem lifted its price cap on gas and electricity bills to pre-pandemic levels from the beginning of the month. The cap rose by £96 to £1,138 for 11 million default tariff customers.

The hike in the price cap was the biggest factor in the jump in CPI, the ONS said.

Meanwhile the cost of fuels rose at its fastest annual pace since 2017, and clothing prices surged on the high street as non-essential shops reopened. In contrast, fuel and clothing prices fell a year earlier as the country went into lockdown.

Read his full story here.

06:49 AM

Market to open lower

Good morning. The FTSE 100 is tipped to open lower after the UK recorded a big jump in inflation in April.

5 things to start your day

1) British banker moves a step closer to top job at JP Morgan: Marianne Lake has been made co-head of JP Morgan's consumer and community banking unit, alongside rival executive Jennifer Piepszak.

2) Wall Street giant backs FirstGroup board in activist battle: Columbia Threadneedle, which owns 10pc, will support the sale of First Student and First Transit when the deal is put to the vote next week.

3) Green energy drive puts Britain's resilience in doubt: In a world where intermittent renewable energy is set to meet soaring demands, can Britain’s import-heavy energy system cope?

4) Shortage of workers threatens recovery as economy reopens: Vacancies advertised across Britain jumped by 88,000 last month to hit a post-pandemic high of 747,000 ahead of the return of shops and outdoor hospitality on April 12.

5) Fears ITV will lose James Bond in $9bn Amazon swoop on MGM: ITV's deal to broadcast the James Bond franchise may not be renewed if Jeff Bezos' company wins control of the Hollywood studio.

What happened overnight

Asian stocks dipped and cryptocurrencies extended losses on Wednesday as uncertainties over inflation prompted investors to reduce exposure to riskier assets for now.

Also weighing on digital coins was a new Chinese ban on financial institutions providing services related to cryptocurrency transactions.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.3pc, though Hong Kong and South Korea are closed for a holiday.

Mainland China's CSI300 slipped 0.6pc while Japan's Nikkei lost 1.1pc.

Wall Street stocks slid late in the session to end lower on Tuesday, unable to sustain gains made after bumper earnings from Walmart and Home Depot.

The S&P 500 lost 0.85pc, with telecom shares leading the decline, while the Nasdaq Composite dropped 0.56pc.

Coming up today

Corporate: Experian, Premier Foods, Inspecs, Great Portland Estates, Severn Trent, Ninety One (Full year); Marston's, Future, Mitchells & Butlers (Interim); National Express, TI Fluid Systems, BAE Systems, Coats Group (Trading update)

Economics: Consumer, retail, producer price index (UK); consumer price index (EU), inflation (EU)