Pound nears one-year high; Japan’s SoftBank buys UK chipmaker Graphcore – business live

The Post Office chief executive, Nick Read, said he would temporarily step back from the role so that he can give his “entire attention” to the next stage of the Horizon inquiry.

Read wrote in a note to staff that he and the board agreed he should step back over the summer to prepare for the next phase of the inquiry, which will look at current practices at the Post Office, and begins in September.

Deputy chief executive Owen Woodley will take charge of day-to-day activities for the next seven weeks until the end of August, Read said.
The note, sent yesterday, said:

It is vitally important that we demonstrate the changes we have made and give confidence to the inquiry and the country at large that ‘nothing like this could happen again’.

Following a discussion with Nigel [Railton, incoming chair] and the board, we have agreed that I should give my entire attention to the task of preparing the business for Phase 7.

More than 700 subpostmasters were wrongly prosecuted by the Post Office and handed criminal convictions between 1999 and 2015 because the Japanese firm Fujitsu’s faulty Horizon IT system made it look as though money was missing at their branches.

Read succeeded former boss Paula Vennells, who this year forfeited her CBE following public anger over her handling of the Horizon crisis. She testified to the inquiry over three days in May, in a sometimes tearful set of evidence sessions about her conduct.

In February, the business and trade committee of MPs expressed a lack of confidence in Read’s leadership, accusing him of giving misleading evidence.

He has also denied a claim made by former chair of the Post Office Henry Staunton that he had threatened to resign unless he got paid more.

He was “exonerated of all misconduct allegations” following a report into his behaviour earlier this year. The external report, which the Post Office has not released, was said by Staunton to contain allegations about Read’s “conduct and lack of his management of the many governance and compliance issues”.

The Post Office said at the time that the review cleared him of any misconduct claims, and that he had the full backing of the board to continue to lead the business.

A number of big US banks have kicked off the earnings season.

JPMorgan Chase posted a 25% rise in second-quarter profit, lifted by rising investment banking fees and an accounting gain of $8bn from a share exchange deal.

The largest US bank made a profit of $18.15bn in the three months to 30 June, compared with $14.5bn a year earlier. It benefited from a plan to exchange some of its shares in Visa, the world’s biggest payment network.

Wall Street banks have benefited from an increase in companies raising capital in the debt and equity markets, and an uptick in fee income from advising on M&A deals.

However, chief executive Jamie Dimon cautioned:

While market valuations and credit spreads seem to reflect a rather benign economic outlook, we continue to be vigilant about potential tail risks.

These tail risks are the same ones that we have mentioned before. The geopolitical situation remains complex and potentially the most dangerous since World War II — though its outcome and effect on the global economy remain unknown.

Next, there has been some progress bringing inflation down, but there are still multiple inflationary forces in front of us: large fiscal deficits, infrastructure needs, restructuring of trade and remilitarization of the world. Therefore, inflation and interest rates may stay higher than the market expects. And finally, we still do not know the full effects of quantitative tightening on this scale.

The bank’s shares dipped by 0.6% in trading before the opening bell.

Wells Fargo fared less well, reporting lower quarterly profits because of higher deposit costs amid intense competition for customers’ money, sending its shares down by more than 5% in pre-market trading.

The bank’s net income fell to $4.91bn between April and June, from $4.94bn a year earlier.

Net interest income, the difference between what a bank earns on loans and pays out for deposits, slid by 9% to $11.9bn, which was worse than expected. Average deposit costs jumped to 1.84% from 0.71%.

Here’s our full story on the China trade figures:

China posted a record $99bn (£76.4bn) trade surplus last month amid signs of importers bringing forward orders to beat higher tariffs on goods from the world’s second biggest economy.

The latest official figures from Beijing showed exports growing at their fastest rate in 15 months, while the weakness of China’s domestic economy resulted in falling imports.

The size of China’s trade surplus was far bigger than the $85bn expected by the financial markets and comes at a time of heightened concern in developed countries about Chinese exports.

Higher US tariffs on Chinese-made electric vehicles and other hi-tech products come into force on 1 August, while higher EU import duties on Chinese electric vehicles came into force earlier this month.

Unilever intends to cut as many as 3,200 jobs – a third of all office roles in Europe – by the end of next year as part of a major global restructure announced in March.

The FTSE 100 company, which makes well-known consumer products such as Marmite and Dove soap, has come under pressure from shareholders including activist investor Nelson Peltz. It told senior executives about the planned cuts on Wednesday, according to details of a company-wide call shared with the Financial Times.

The job cuts are part of Unilever’s “productivity programme” announced in March that includes up to 7,500 job losses globally. The company employs between 10,000 and 11,000 office-based staff in Europe.

Constantina Tribou, a chief human resources officer, said during the video call, according to the FT:

The expected net impact in roles in Europe between now and the end of 2025 is in the range of 3,000 to 3,200 roles.

In March, the company also announced that it would spin off its ice-cream division as part of an overhaul aimed at saving about €800m (£672m) over the next three years.

At the time, Hein Schumacher, who was appointed as chief executive in January 2023, and took over from Alan Jope last spring, said there would be some job cuts at Unilever’s head office in London, and some at business units in other countries.

The pound has risen by 0.4% against the dollar today, hitting a high of $1.2962 and closing in on the $1.30 level.

Sterling last traded at $1.30 more than two years ago. Investors are attracted to the UK currency following Labour’s landslide victory a week ago, amid political instability in France, where Sunday’s elections resulted in a hung parliament.

The pound has also been lifted by strong UK GDP data yesterday combined with a surprise monthly fall in US consumer prices and a lower-than-expected annual inflation rate of 3%. This led to investors pilling on bets of a September interest rate cut from the US Federal Reserve, and dragged the dollar down against major currencies.

Oil prices are rising, with Brent crude up by 0.55% to $85.88 a barrel, on expectations that Fed rate cuts would stimulate demand for crude in the United States, the world’s biggest oil consumer.

European shares have extended their rally, on the back of growing expectations that the Fed will start cutting interest rates soon. The FTSE 100 index in London is 25 points, or 0.3%, ahead at 8,249 while the German Dax has gained 0.37%, the French CAC has climbed 0.66% and Italy’s FTSE MiB rose 0.56%.

Preparations for Sunday’s Euro 2024 final are reaching fever pitch with retailers, pubs and airlines scrambling to meet England fans’ demand for everything from beer and burgers to replica shirts and flights.

Since England’s 2-1 win against the Netherlands on Wednesday, supporters with deep pockets have been scouring the web for flights to Berlin or nearby cities and trying to secure a ticket for the final, the latter said to be changing hands for £2,500.

At home, with the weather gods promising some overdue sunshine, high street retailers including Tesco and Marks & Spencer expect food and drink sales to rocket between now and Sunday as hosts stock up for barbecues and viewing parties.

Fans who prefer a pub atmosphere have rushed to book seats at venues showing the game. In the moments after Ollie Watkins scored the winner on Wednesday evening, the number of reservations processed by the bookings website DesignMyNight soared to 16 a second, compared with the normal rate of 1.4.

Don’t call it work from home any more, just call it work. According to new data, what once seemed like a pandemic necessity has become the new norm for many Americans.

Every year, the Bureau of Labor Statistics (BLS) releases the results of its American time use survey, which asks Americans how much time they spend doing various activities, from work to leisure.

The most recent survey results, released at the end of June, show that the same percentage of employed people who did at least some remote work in 2023 is the same percentage as those who did remote work in 2022.

In other words, it’s the first stabilization in the data since before the pandemic, when only a small percentage of workers did remote work, and a sign that remote work is here to stay.

Major supermarkets and business owners across the country are giving staff members a lie-in on Monday to recover from the drama of watching England play Spain in the final of the Euros.

The game starts at 8pm and could last until 11pm if it goes to penalties. In preparation, some companies are offering workers early finishes if they are due to be on shift on the evening of the game, while others are telling employees they can come in late on Monday.

The supermarket chain Lidl, a sponsor of the tournament, said it would open all its stores in England an hour later on Monday so workers could enjoy some post-match celebrations.

Ryan McDonnell, the chief executive of Lidl in Great Britain, said:

We know how much this game means to England fans and we want to ensure that our colleagues have the chance to celebrate such a significant moment in English football history.

Housing has been in the news a lot this week.

Labour will miss its target of delivering 1.5m new homes this parliament without an emergency cash injection into the affordable housing sector, providers have warned.

Housing associations and councils have written to deputy prime minister, Angela Rayner, saying her promise to deliver “the biggest boost to affordable housing in a generation” will be impossible unless there are urgent interventions to fix the financial pressures providers face.

The warning comes as new figures, shared exclusively with the Guardian, show that housing associations, the biggest developers of social housing, started just 32,705 homes in 2023-24. This is down 30% on the 2022-23 figures.

The letter – signed by the National Housing Federation, which represents 600 housing associations, and the Local Government Association – said that capped income, crippling cuts and soaring costs had decimated providers’ budgets, reducing the amount of homes they could build.

Here is our full story on SoftBank’s acquisition of Graphcore:

Graphcore, a British chipmaker once seen as a potential competitor to Nvidia, has been bought by Japan’s SoftBank in a deal that secures the company’s future.

The Bristol-based startup’s products are focused on artificial intelligence and it has been acquired by the powerful Japanese tech investor for an undisclosed sum. Last year, Graphcore warned that there was a “material uncertainty” over its survival and that it needed fresh funding by May 2024.

Peter Kyle, the secretary of state for science, innovation and technology, alluded to Graphcore’s problems as he backed the deal, saying it was a “welcome end to the uncertainty that has faced Graphcore and its employees”.

Graphcore is the latest UK tech company to be bought by SoftBank, which acquired the Cambridge-based chip designer Arm for £24bn in 2016.

The warning is to “wait for the snap, crackle and pop” as three glowing electrodes are dropped into an electric arc furnace in Cardiff. What follows sounds like thunder and lightning. It is a human-induced storm in a massive, ceramic-lined cup, holding 140 tonnes of rapidly melting steel.

The plant, owned by Spain’s Celsa, melts scrap steel using high-voltage electrical currents that generate the 1,600C needed to turn the metal to liquid. The glowing steel is then ready to be cast, twisted and crushed into the rods used to reinforce concrete.

The plant’s million tonnes of annual output have been used in projects ranging from buildings such as the Wembley Stadium and Shard, to infrastructure projects including the Elizabeth tube line and Hinkley Point nuclear power station.

The electric arc furnace is a sign of the future for the rest of the UK industry.

Tata Steel, based in Port Talbot, and British Steel, at Scunthorpe, are each planning to switch from polluting blast furnaces to the much greener electric technology. The plans will cut emissions, but also involve thousands of jobs losses, including 2,800 in south Wales.

Pushing for investment

The new Labour government has promised to renegotiate a £500m subsidy, agreed under the Conservatives, for Indian-owned Tata Steel to make the switch and so cut out nearly 2% of the UK’s carbon emissions.

Tata tapped the last iron from one blast furnace hours after voters gave Labour a landslide victory at the general election this month, and plans to close its second furnace in September.

However, the UK’s newly installed business secretary, Jonathan Reynolds, has offered more money in the hope of saving jobs. Labour has pledged another £2.5bn investment in the UK steel industry. A large chunk is expected to go to Tata Steel on top of the £500m already agreed.

Labour has summoned the bosses of some of the worst-performing train operators, including Avanti West Coast and TransPennine, for meetings next week as it seeks to rapidly reform the railways and reset industrial relations.

The transport secretary, Louise Haigh, will bring in Network Rail route directors to attend all talks with the train companies, signalling the move towards an integrated railway.

After Haigh vowed to “move fast and fix things”, legislation to kickstart Great British Railways is expected to be announced in the king’s speech next week, and officials are beginning work to set up the new structure before the summer parliamentary recess.

Haigh has already met rail union leaders at the Department for Transport as the new government looks to facilitate an end to the long-running rail dispute. Haigh said her meetings with Mick Whelan and Mick Lynch, the general secretaries of Aslef and the RMT respectively, were a departure from “the days of antagonism and gimmicks” and the start of “an era of grownup industrial relations”.