Pound heads for longest run of losses since 2020
The pound is on track for its longest losing run since early in the Covid-19 pandemic, as City traders dial down their forecast for UK interest rate rises.
Sterling is down a quarter of a cent today at $1.281, its lowest level in a fortnight.
This is its seventh daily drop in a row, as traders digest this morning’s warning that UK private sector growth is weakening this month.
That’s the worst run since March 2020, when the pound fell for eight consecutive sessions.
The selloff reflects growing expectations that UK interest rates will not rise as fast as previously feared, as the economy slows and inflation drops.
The pound had surged to a 15-month high of around $1.314 on 13th July, after rising by six days in a row (the best run of 2023), but the mood has turned against the pound since.
Key events
Here’s our news story on the pound’s weakness:
UK cinemas are celebrating their biggest weekend since 2019 as the dual offerings of Barbie and Oppenheimer lured punters in.
Greta Gerwig’s film about the Mattel doll, played by Margot Robbie, having an existential crisis and Christopher Nolan’s epic about the “father” of the atomic bomb, generated almost £30m at the UK box office, according to the UK Cinema Association.
Cinema chain Vue said a fifth of its customers had purchased tickets to see both films in a double bill dubbed by social media as Barbenheimer.
More than 2,000 of Vue’s Barbie screenings were sold out, according to the company.
US economic expansion losing momentum
Newsflash: The US economic recocery is losing momentum this month as service sector growth slows, the latest survey of purchasing managers at American companies shows.
S&P Global’s flash US PMI Composite Output has dropped to 52.0 in July, down from 53.2 in June, and nearer to the 50-point mark showing stagnation.
This is the slowest growth in five months, with output growth at services companies slowing and manufacturers reporting broadly unchanged levels of production this month.
Total new order growth slowed this month, while export demand conditions for manufacturers worsened.
Business optimism about the year-ahead outlook fell to its lowest level so far this year.
The economic picture is darkening, says Chris Williamson, chief business economist at S&P Global Market Intelligence, adding:
“July is seeing an unwelcome combination of slower economic growth, weaker job creation, gloomier business confidence and sticky inflation.
The overall rate of output growth, measured across manufacturing and services, is consistent with GDP expanding at an annualized quarterly rate of approximately 1.5% at the start of the third quarter. That’s down from a 2% pace signalled by the survey in the second quarter.
However, growth is being entirely driven by the service sector, and in particular rising spend from international clients, which is helping offset a becalmed manufacturing sector and increasingly subdued demand from US households and businesses.
The US stock market has begun the new week with some small gains.
The Dow Jones industrial average has gained 92 points, or 0.25%, to 35,320, extending its recent strong run, while the broader S&P 500 is up 0.4%.
Holiday operator TUI says it has “extended its support” for holidaymakers caught up in the willdfires on the island of Rhodes.
TUI says that early this morning, six of its additional planes flew its customers and other holidaymakers from Germany and the UK back home.
The TUI planes brought holidaymakers safely back to Hanover, Frankfurt and Stuttgart and in the UK to London-Gatwick, Birmingham and Manchester. In addition, another TUI flight will take Danish guests back to Billund, the company adds:
11) In addition, another TUI flight will take Danish guests back to Billund.
Further operations have already been implemented and are planned, we are informing our guests on site and organising all necessary steps.
— TUI Group (@TUIGroup) July 24, 2023
12) On Sunday, TUI Group had around 39,000 guests on the island, 7,800 of whom were affected by the situation.
They have been moved to other locations on the island and are staying in hotels or in accommodation designated by the local authorities.— TUI Group (@TUIGroup) July 24, 2023
America’s economic growth has also weakened, mirroring the slowdown we’ve seen in the UK and the eurozone already today.
U.S. economic growth edged down slightly month-on-month in June, as production activity weakened, data from the Federal Reserve Bank of Chicago shows.
The Chicago Fed National Activity Index decreased to -0.32 in June from -0.28 in May, suggesting that U.S. economic activity grew below its average historical trend last month.
Measures of production, consumption and sales all fell, while there was a small increase in employment levels.
More Gatwick strikes suspended as DHL workers win 15% pay rise
More Gatwick strikes have been suspended, the Unite union, has just announced, easing the threat of holiday disruption this summer.
Workers employed by DHL have accepted a 15% pay rise and an ‘uplift in skills pay, meaning hourly rates will rise by between 15% and 31%. Plus, workers will get an extra shift premium of £1.25 per hour for work between midnght and 4.59am.
As a results, DHL staff will no longer strike from Friday 28 July to Tuesday 1 August, and also from Friday 4 August to Tuesday 8 August.
⚠️ UK’S UNITE: MORE GATWICK STRIKES SUSPENDED AS DHL WORKERS SECURE 15% RISE
— PiQ (@PriapusIQ) July 24, 2023
Unite general secretary Sharon Graham said:
“This is an excellent result secured by the steadfast position of our DHL members.
Once again, workers are gaining real material benefits from Unite’s absolute focus on improving jobs, pay and conditions.”
Almost 1,000 staff who work on roles at Gatwick including baggage handling and check-in desks at four companies, including DHL, voted to hold those eight days of strike action earlier this month.
But the strikes could yet be called off, with ASC and Menzies workers currently balloting on improved offers.
If the ASC workers reject the pay offer, they will go ahead with strike action scheduled between 28 July and 1 August as well as strikes between 4 August and 8 August, Unite says.
Strikes by Menzies workers between 28 July and 1 August have been suspended, however if the offer is rejected, strikes between 4 August and 8 August will go ahead.
Talks with GGS are “progressing in a positive direction”, Unite adds, meaning that strike action by GGS workers scheduled between 28 July and 1 August has been suspended to allow negotiations to continue.
However, strike action between 4 August and 8 August is still scheduled to go ahead if a satisfactory outcome is not reached in time.
Full story: Elon Musk reveals the new Twitter logo X
Dan Milmo
The “X” logo has long been an obsession of Elon Musk’s and is his name for an “everything app” that he has pledged to launch at some point – with Twitter the likely vehicle, our global technology editor Dan Milmo writes.
Shortly before buying Twitter in October, Musk described the social media platform as “an accelerant to creating X, the everything app”.
After taking over Twitter in October last year, Musk folded the company into an entity called X Corp, whose parent is X Holdings Corp. This month, the Tesla CEO announced he was forming a new artificial intelligence company called xAI.
The crowd-sourced logo had been posted by Twitter user Sawyer Merritt, co-founder of a sustainable clothing business, who tweeted that the font had been used for a discontinued podcast, although it also bears similarity with a font used by Indian dance music artist Kxlider.
The old blue bird has vanished from the top of the Twitter home page, replaced by the new “minimalist art deco” X.
There are concerns that Elon Musk is throwing away 15 years of brand recognition, by rebranding Twitter as X.
Mike Proulx, Forrester VP research director, explains:
“By changing Twitter’s app name, Elon Musk will have singlehandedly wiped out over fifteen years of a brand name that has secured its place in our cultural lexicon. This is an extremely risky move because with ‘X,’ Musk is essentially starting over while its competition is afoot.”
The good news for Musk is that #TwitterX is trending in the UK this morning.
Less encouragingly, I’ve also seen #RIPTwitter popping up in the trends list too.
