Three decades on from the day it began, it is hard to get your head around the scale of Amazon.
Consider its vast warehouse in Dartford, on the outskirts of London. It has millions of stock items, with hundreds of thousands of them bought every day - and it takes two hours from the moment something is ordered, the company says, for it to be picked, packed and sent on its way.
Now, picture that scene and multiply it by 175. That's the number of "fulfilment centres", as Amazon likes to call them, that it has around the world.
Even if you think you can visualise that never-ending blur of parcels crisscrossing the globe, you need to remember something else: that's just a fraction of what Amazon does.
It is also a major streamer and media company (Amazon Prime Video); a market leader in home camera systems (Ring) and smart speakers (Alexa) and tablets and e-readers (Kindle); it hosts and supports vast swathes of the internet (Amazon Web Services); and much more besides.
"For a long time it has been called 'The Everything Store', but I think, at this point, Amazon is sort of 'The Everything Company'," Bloomberg's Amanda Mull tells me.
"It's so large and so omnipresent and touches so many different parts of life, that after a while, people sort of take Amazon's existence in all kinds of elements of daily life sort of as a given," she says.
Or, as the company itself once joked, pretty much the only way you could get though a day without enriching Amazon in some way was by "living in a cave".
Getty Images
So the story of Amazon, since it was founded by Jeff Bezos in 1994, has been one of explosive growth, and continual reinvention.
But the main question as it enters its fourth decade appears to be: once you are The Everything Company, what do you do next?
Or as Sucharita Kodali, who analyses Amazon for research firm Forrester, puts it: "What the heck is left?"
"Once you're at a half a trillion dollars in revenue, which they already are, how do you continue to grow at double digits year over year?"
One option is to try to tie the threads between existing businesses: the vast amounts of shopping data Amazon has for its Prime members might help it sell adverts on its streaming service, which - like its rivals - is increasingly turning to commercials for revenue.
But that only goes so far - what benefits can Kuiper, its satellite division, bring to Whole Foods, its supermarket chain?
To some extent, says Sucharita Kodali, the answer is to "keep taking swings" at new business ventures, and not worry if they fall flat.
Just this week Amazon killed a business robot line after only nine months - Ms Kodali says that it is just one of a "whole graveyard of bad ideas" the company tried and discarded in order to find the successful ones.
But, she says, Amazon may also have to focus on something else: the increasing attention of regulators, asking difficult questions like what does it do with our data, what environmental impact is it having, and is it simply too big?
All of these issues could prompt intervention "in the same way that we rolled back the monopolies that became behemoths in the early 20th century", Ms Kodali says.
For Juozas Kaziukėnas, founder of e-commerce intelligence firm Marketplace Pulse, its size poses another problem: the places its Western customers live in simply can not take much more stuff.
"Our cities were not built for many more deliveries," he tells the BBC.
That makes emerging economies like India, Mexico and Brazil important. But, Mr Kaziukėnas, suggests, there Amazon does not just need to enter the market but to some extent to make it.
"It's crazy and maybe should not be the case - but that's a conversation for another day," he says.
Getty Images
Amanda Mull points to another priority for Amazon in the years ahead: staving off competition from Chinese rivals like Temu and Shein.
Amazon, she says, has "created the spending habits" of western consumers by acting as a trusted intermediary between them and Chinese manufacturers, and bolting on to that easy returns and lightening fast delivery.
But remove that last element of the deal and you can bring prices down, as the Chinese retailers have done.
"They have said 'well, if you wait a week or 10 days for something that you're just buying on a lark, we can give it to you for almost nothing,'" says Ms Mull - a proposition that is appealing to many people, especially during a cost of living crisis.
Juozas Kaziukėnas is not so sure - suggesting the new retailers will remain "niche", and it will take something much more fundamental to challenge Amazon's position.
"For as long as going shopping involves going to a search bar - Amazon has nailed that," he says.
Thirty years ago a fledging company spotted emerging trends around internet use and realised how it could upend first retail, then much else besides.
Mr Kaziukėnas says for that to happen again will take a similar leap of imagination, perhaps around AI.
"The only threat to Amazon is something that doesn't look like Amazon," he says.
The pound held steady after exit polls showed Keir Starmer’s Labour on track for a landslide election victory, as investors bet that a decisive win would bring stability to Britain after years of political and economic uncertainty.
Since Rishi Sunak called the snap general election in the pouring rain outside Downing Street six weeks ago, financial markets have widely expected Labour to win a crushing victory. Opinion polls have shown the party heading for one of the largest majorities in modern political history.
Anything other than a resounding Labour victory would have been a major shock after predictions among City traders for a night of relative calm on the currency markets, with dealing rooms across the Square Mile focused not on whether the party would win but on the scale of Starmer’s landslide.
Ahead of official results expected in the early hours of Friday morning, the exit poll suggested Labour was on course to win a majority of 170.
Starmer’s expected majority is likely to solidify financial market expectations for a period of stability in British politics after years of turmoil under the Conservatives since the 2016 Brexit vote, when the shock leave outcome triggered a crash in the pound.
After four prime ministers in five years, sterling has recovered from a record low of $1.03 in 2022, when Liz Truss’s mini budget triggered a meltdown in financial markets that required the Bank of England to intervene to prevent pension funds from going bust. The pound had been one of the strongest-performing currencies across major economies in recent weeks in anticipation of the result.
The pound remained steady after the publication of exit polls on Thursday, with sterling trading unchanged on levels earlier in the day at about $1.27.
Labour under Starmer has also shifted to the economic centre ground, aiming to distance the party from the more radical policies of Jeremy Corbyn after the former leader suffered a heavy defeat to Boris Johnson’s Tories in 2019.
Analysts said a Labour majority below triple digits could have drawn a reaction in financial markets. Traders were also focused on whether Nigel Farage’s Reform party might win a sizeable number of seats, as a potential indicator of future political pressures on Starmer over the EU and immigration. The exit poll predicted that Reform would win 13 seats.
Starmer has sought to maintain a cautious approach to economic policy after Labour’s 2019 defeat, when Corbyn promised a far-reaching transformation of the economy, and after Truss’s ill-fated economic experiment.
UK government borrowing costs have remained steady on international markets in the run-up to Thursday’s poll, in contrast with a sharp rise in French bond yields over uncertainty around the outcome of the snap elections called by Emmanuel Macron.
Investors said uncertainty about the outcome of the US presidential election in November had also bolstered appetite for UK assets, and there was talk of the country becoming a relative safe haven for investors in an increasingly volatile world.
Chris Beauchamp, chief market analyst at the online trading platform IG, said: “The exit poll has provoked little volatility in FX markets, as the expected Labour landslide is duly predicted. The stability that would be provided by such a win would mean investors can cross ‘UK political risk’ off their list of worries for the time being. The focus now shifts across the Channel to France, where Sunday night’s election could have bigger ramifications.”
Cineworld is reportedly considering closing a quarter of its UK cinemas as part of a wide-ranging restructure.
The cinema operator, which delisted from the London Stock Exchange last year after its share price collapsed, is drawing up plans to shut as many as 25 cinemas and renegotiate rent agreements at 50 more of its 100 or so UK sites, sources told Sky News.
The chain, which is being advised by the consultants Alix Partners, owns cinemas including the Picturehouse chain and employs thousands of people.
The proposals were expected to be outlined formally to creditors, including landlords, in the coming weeks and the mechanism adopted by the cinema operator was expected to be a restructuring plan rather than a company voluntary arrangement, Sky reported.
Cineworld said: “We continue to review our options but we don’t comment on rumours and speculation.”
The debt-laden chain struggled during the Covid-19 pandemic, which led to enforced closure of its sites for months. It filed for Chapter 11 bankruptcy protection in the US in 2022 and lodged a reorganisation plan with an American bankruptcy court from which it emerged last year. It tried to sell its US, UK and Irish businesses last year, but did not receive any acceptable offers.
Cineworld was founded in 1995. It expanded under the leadership of the Greidinger family and later listed on the London Stock Exchange. Its acquisition of Regal Entertainment created the second largest cinema business in the world by number of screens, and it operates in central and eastern European markets including Poland and Hungary as well as Israel and the US.
The restructuring comes as the sector continues its recovery from the lows of pandemic lockdowns.
Tim Richards, the founder and chief executive of the cinema operator Vue International, told the BBC’s Wake up to Money programme that the industry had been recovering slowly after the pandemic but was hit again last year by the Hollywood writers’ and actors’ strikes, which affected film productions.
The sector was still suffering from the impact of the stoppages, he said: “We are not going to see a return to post-pandemic levels until some time probably 12 months from now.” Vue had gone through a restructuring with shareholders last year and was now “in very very good shape”, he added.
Richards said there were 35% fewer films released in 2022 than in the pre-pandemic era and 20% fewer in 2023. This compared with the period between 2017 and 2019 when there were three consecutive box office world records set, he said.
“The pandemic hit and then we had a pretty slow recovery both in film production and as an industry … and then the strikes hit,” he said. “It could not have been a worse time. We have a supply issue and not a demand problem.”
Cineworld is drawing up plans to axe dozens of British cinemas as part of a radical restructuring that would also include extensive rent cuts.
Sky News has learnt that the company, which until last year was listed on the London Stock Exchange, is considering closing about a quarter of its roughly-100 British multiplexes.
Cineworld also wants to renegotiate rent agreements at a further 50 sites, with the remaining 25 untouched by the restructuring.
Sources said the proposals were expected to be formally outlined to creditors including landlords in the coming weeks.
They added that the insolvency mechanism employed by the cinema operator was expected to be a restructuring plan rather than a company voluntary arrangement (CVA).
In response to an enquiry, a Cineworld spokesperson said: "We continue to review our options but we don't comment on rumours and speculation."
Sky News reported last month that Cineworld was holding initial talks about a sale with prospective buyers, and that it had then switched to a formal restructuring process.
The company is being advised by AlixPartners on the process.
Other cinema operators are expected to step in to take over some of Cineworld's sites if a sufficient number landlords refuse to agree to the proposed terms.
The company trades from more than 100 sites in Britain, including at the Picturehouse chain, and employs thousands of people, although its public relations adviser has refused to confirm either figure.
Cineworld grew under the leadership of the Greidinger family into a global giant of the industry, acquiring chains including Regal in the US in 2018 and the British company of the same name four years earlier.
Its multibillion dollar debt mountain led it into crisis, though, and forced the company into Chapter 11 bankruptcy protection in 2022.
It delisted from the London Stock Exchange last August, having seen its share price collapse amid fears for its survival.
Under the deal struck last year, several billion dollars of debt were exchanged for shares, with a significant sum of new money injected into the company by a group of hedge funds and other investors.
Cineworld also operates in central and Eastern Europe, Israel and the US.
Since it emerged from bankruptcy protection, Cineworld has appointed a new leadership team, installing Eduardo Acuna, who ran Mexican cinema chain Cinepolis's operations in the Americas, as its chief executive.
Eric Foss, a former Pepsi executive, was parachuted in as Cineworld's chairman.
Major summer film releases in Britain include Despicable Me 4, A Quiet Place: Part One, and Alien: Romulus.
Brussels accuses Beijing of lavishing its car-makers with enormous amounts of subsidies that lead to artificially low prices and unfair competition.
The European Commission has confirmed what seemed to be a predetermined conclusion: steep tariffs will be slapped on China-made battery electric vehicles (BEVs) as of 5 July, a momentous decision poised to redefine relations with Beijing and invite retaliatory measures against European producers.
The step, previewed in early June, is the result of a nine-month investigation that found subsidies being pumped across the entire supply chain of BEVs produced in China, both by domestic and foreign companies. Public money was detected everywhere, officials said, from the mining of raw materials needed to churn out batteries to the shipping services employed to bring the finished products to Europe's shores.
The sheer scale of subsidies allows Chinese producers to offer their BEVs at noticeably lower prices than those assembled in the bloc, where energy and labour costs are much higher. The price gap has triggered a rapid surge in imports of China-made BEVs: from a 3.9% market share in 2020 to 25% at the end of 2023, according to the Commission.
This wave of low-cost imports represents a "threat of economic injury" to the EU industry that could lead to devastating losses and put at risk more than 12 million direct and indirect jobs, the executive warns.
Tariffs are therefore necessary to offset the unfair advantage granted by subsidies.
The decision published on Thursday foresees differentiated duties, calculated according to the parent company, annual turnover and suspected amount of subsidies received. They will come on top of the existing 10% rate.
BYD: 17.4%
Geely: 19.9%
SAIC: 37.6%
Other BEV producers in China that cooperated in the investigation but have not been individually sampled, including Tesla and BMW: 20.8%
Other BEV producers in China that did not cooperate: 37.6%
The introduction of the measures will be, for the time being, provisional. Customs authorities will request bank guarantees, rather than cash, from Chinese exporters, meaning end customers might not immediately notice a change in their pocket.
Member states will hold a first vote in two weeks but this will be non-binding and serve to test the political waters. The tariffs will remain in place until a final decision is taken in four months, which countries could block if they mount a qualified majority against the proposal. (15 member states representing 65% of the bloc's population.)
Germany, a world-class car exporter with strong ties to the Chinese market, and Hungary, a growing hub for Chinese investment, are among those likely to oppose.
The German Association of the Automotive Industry (VDA) says "tariffs are not an adequate measure" to strengthen competitiveness" and can potentially unleash a "lose-lose situation." The organisation is particularly concerned about the effects on joint ventures, like the ones Volkswagen and General Motors have with SAIC.
By contrast, France and Italy support the additional levies, which suggests the November vote will be preceded by an all-out political fight.
High stakes, low hopes
In the meantime, Brussels and Beijing will discuss possible solutions that could avert the permanent introduction of tariffs. The talks will be at the political and technical level.
"What the EU wishes for is a solution. It is not the introduction of tariffs. The introduction of tariffs is not an objective per se, it is a means to correct an imbalance and unfair competitive situation to the detriment of producers of electric vehicles in the EU compared to those who are producing in China," a Commission spokesperson said.
"We want this dialogue with our Chinese counterparts."
Hopes for a breakthrough are nevertheless low.
Beijing has contested the investigation in form and substance, calling it a "naked protectionist act" that "artificially constructed and exaggerated the so-called subsidies," and has vowed to "take all necessary measures" to defend domestic companies.
Last month, China's Ministry of Commerce launched an anti-dumping investigation into pork imports coming from the EU, a move widely seen as a prelude to retaliation. Agriculture and aviation are considered the sectors most vulnerable to Beijing's wrath.
On Thursday, a spokesperson from the ministry struck a conciliatory tone: "There is still a four-month window before arbitration, and we hope that the European and Chinese sides will move in the same direction, show sincerity, and push forward with the consultation process as soon as possible."
The China Chamber of Commerce to the EU was more critical, saying it was "deeply disappointed and dissatisfied" with the Commission's decision, which it said was "driven by political factors" and would "harm consumer interests."
The anti-subsidy investigation has been described as one of the most consequential in recent memory and comes at a low point in EU-China relations over a string of disagreements, such as Russia's invasion of Ukraine, tensions in the Taiwan Strait, the repression of the Uyghur minority and disinformation campaigns.
The subsidies injected by the Communist Party have been a perennial source of friction and have been blamed for decimating the bloc's solar industry. These memories are still raw in Brussels and have weighed heavily on Thursday's decision.
"We have not forgotten how China's unfair trade practices affected our solar industry. Many young businesses were pushed out by heavily subsidised Chinese competitors," Ursula von der Leyen said in September while announcing the BEVs probe.
"This is why fairness in the global economy is so important – because it affects lives and livelihoods. Entire industries and communities depend on it. So, we have to be clear-eyed about the risks we face."
This article has been updated with more information.
Germany’s vital factories suffered a sharp drop in orders in May, in a fresh blow to Olaf Scholz and his hopes of a steady economic recovery.
Industrial orders plunged by 1.6pc from April to May, defying expectations of a modest recovery after falling steadily since the start of the year.
Demand from abroad was particularly weak, with export orders down 2.8pc, according to the Federal Statistical Office, undermining the country’s usual strength in selling its products globally.
It leaves orders down 8.6pc compared with May of 2023, with demand at its lowest level since June 2020, in the depths of the first Covid lockdown.
Germany has struggled since the pandemic, with disruption to global supply chains and China’s weak recovery hitting sales of its manufactured goods, and its reliance on cheap Russian gas being exposed as a critical vulnerability with the invasion of Ukraine.
Claus Vistesen at Pantheon Macroeconomics said the industrial orders are “not pretty”.
He said: “These data suggest that the downturn in factory orders remained well entrenched in the second quarter.”
With falling demand for exports, Mr Vistesen said household spending may be the German economy’s saving grace, now inflation has fallen back.
“Strong real disposable income growth is now likely driving a rebound in consumption growth,” he said.
Carmakers have sold more than a million cars in the UK in the first half of the year for the first time since before the coronavirus pandemic as the sector gradually recovers from years of turmoil.
Sales in the first six months of 2024 rose by 6% to just over 1m, compared with 949,000 in the same period last year, according to the Society of Motor Manufacturers and Traders, the UK industry’s lobby group.
The share of electric cars hit 19% in June, its highest this year.
The SMMT suggested that the industry would sell about 2m cars over the year, also for the first time since 2019. Its chief executive, Mike Hawes, said that annual total would be “a bit below par” but that the recovery was a relief for the industry after years of struggles.
However, the growth was “almost entirely business and fleet sales” rather than private buyers, Hawes told BBC Radio 4’s Today programme. “Given that most people buy with some kind of finance, with inflation high and interest rates high, it has made the cost of purchase more expensive.”
Sales to private buyers fell for the ninth consecutive month, and were down 12% in the first half of the year compared with 2023.
Annual car sales peaked in 2016 at a record 2.69m. After that they fell for three years – albeit remaining well above 2m – until they plunged in 2020 as the pandemic forced factories to pause production and prevented people from visiting showrooms for months. That was followed by years of supply-chain turmoil.
Sales picked up to 1.9m in 2023, although that was still the weakest barring the pandemic years since before the global financial crisis of 2008.
The rise of electric vehicles has also been a complicating factor for the industry, which must now sell more zero-emissions cars or else face steep fines. However, European manufacturers have complained that they are struggling to find buyers for their electric cars, which they have priced higher than petrol or diesel equivalents in order to cover the cost of batteries. Vauxhall, Peugeot and Fiat’s owner Stellantis last week threatened to close its UK factories because of the so-called zero emission vehicle (ZEV) mandate.
The market share of pure battery electric new cars remained about the same in the first half of 2024 as last year, at 16.6%, the SMMT said. In the first half of 2023 it was 16.1%.
Hawes said that “we have seen is something of a plateau flattening out” in demand for electric cars.
“When these vehicles were first on the market, there really was high demand for them, because those were the early adopters,” he added. “We need to get that from the early-adopter phase into the mass market. That is never going to be smooth.”
Carmakers had sold 827,000 cars in the first five months of the year, a 7% increase on 2023.
The UK’s construction sector continued to expand in June, although it lost some momentum amid a fresh fall in housebuilding, according to a survey.
A slower rise in new orders was also recorded, in some cases linked to election uncertainty, but the pace of job creation picked up. Meanwhile, the rate of firms’ input cost inflation accelerated from May, but remained muted.
The headline S&P Global UK construction purchasing managers’ index (PMI) fell to 52.2 from 54.7 in May, but remained above the 50 no-change mark that separates expansion from contraction for the fourth month running.
The main driver of growth continued to come from commercial activity, which increased markedly again in June. That said, the rate of expansion softened from May’s two-year high. Civil engineering activity also slowed.
The only area to record a drop in activity was housing, where output fell again following the first increase in 19 months during May.
Andrew Harker, economics director at S&P Global Market Intelligence, said:
Continued growth of the UK construction sector in June meant that the sector has recorded sustained expansion throughout the second quarter of the year. While there were signs of a slowdown in the latest survey period, most notably around housing activity, firms indicated that a slowdown in new order growth was in part related to election uncertainty. We may therefore see trends improve once the election period comes to an end.
Moreover, confidence in the year ahead outlook remained strong and firms increased employment to the largest extent in ten months.
In terms of inflation, there remains little sign of cost pressures picking up to any great extent, encouraging firms to expand purchasing activity. Supply-chain conditions also remained favourable.
The UK new car market has hit the half-year million motors mark for the first time in five years, after new car registrations rose in June by a modest 1.1% to reach 179,263 vehicles, according to new figures published by the Society of Motor Manufacturers and Traders (SMMT).
As a result, 1,006,763 new cars have been sold so far this year, up 6% year-on-year but still down 20.7% on 2019, before the Covid-19 pandemic.
June’s market growth was driven primarily by the fleet sector, where uptake rose by 14.2%, while demand from private buyers fell for the ninth consecutive month, down 15.3%.
Demand for electric vehicles grew “robustly” in June, with plug-in hybrid volumes up by 30% to reach a 9.3% market share, while hybrid electric vehicles rose by 27.2% to take 14.9% of the market.
Both powertrains also outpaced battery electric vehicle growth, which rose by 7.4% and took its highest monthly share this year, accounting for 19% of all new vehicle registrations.
Mike Hawes, the SMMT’s chief executive, said:
The year’s midpoint sees the new car market in its best state since 2021 – but this belies the bigger challenge ahead. The private consumer market continues to shrink against a difficult economic backdrop, but with the right policies in place, the next government can re-energise the market and deliver a faster, fairer zero emission transition.
All parties are agreed on the need to cut carbon and replacing older fossil fuel based technologies with new electrified powertrains is the essential step to achieving that goal.
The artificial hips and knees maker Smith & Nephew is the top riser on the FTSE 100 index this morning, climbing more than 6%, after the Swedish investment firm Cevian Capital, known as an activist investor, disclosed a stake of about 5% in the company.
Barclays shares gained 1.6% after the British bank said it had agreed to sell its German consumer finance business to Germany’s BAWAG Group for a “small premium to net assets” in cash.
As the UK heads to the polls in parliamentary elections that could end 14 years of Conservatives in government and see Labour leader Keir Starmer installed as prime minister, Gervais Williams, head of equities at the London fund manager Premier Miton, has looked at what this may mean for the economy. He told Reuters:
Both parties are quite similar in economic policies. There will be some change, but most of it is continuity when you compare with what’s happening in France or Germany.
The UK is actually an island of economic stability relative to the other elections going on around.
Trading activity is expected to be muted because US markets are closed for Independence Day.
Here is our full story on new car sales in the UK:
Carmakers have sold more than a million cars in the UK in the first half of the year for the first time since before the coronavirus pandemic as the sector gradually recovers from years of turmoil.
Preliminary data from the Society of Motor Manufacturers and Traders, the UK industry’s lobby group, suggested that the industry would sell about 2m cars over the year, also for the first time since 2019.
Mike Hawes, the SMMT’s chief executive, said that 2m sales for the year would be “a bit below par” but that the recovery was a relief for the industry after years of struggles.
However, the growth was “almost entirely business and fleet sales” rather than private buyers, he told BBC Radio 4’s Today programme. “Given that most people buy with some kind of finance, with inflation high and interest rates high, it has made the cost of purchase more expensive.”
More than 20,000 Tesco staff, mainly shopfloor workers in stores and distribution centres, will share in a windfall profit of more than £30m after share savings schemes have matured.
The windfall is created by the strong growth of the Tesco share price, which was £3.06 earlier this week. Those who joined the schemes are able to buy shares at a discounted price of just £1.88 or £1.98 each and either hold on to them, or sell them and make a profit on each share.
A Tesco shopfloor worker who invested the average £68 a month for the last five years stands to pocket around £6,640 from their £4,080 investment, a profit of £2,560, Tesco said.
It’s great news that more than 20,000 colleagues will benefit this year from our share schemes. This is just one of the many benefits available to our colleagues, and the strong performance of the schemes this year is a reflection of their hard work and the brilliant job that they do serving our customers every day.
The FTSE 100 index has opened about 50 points higher at 8,222, a 0.6% gain, as millions across the UK head to the polls. The ballot boxes close at 10pm this evening.
Other major European stock markets are also making further gains, partly on the back of optimism about US rate cuts in recent days, and hopes that a majority for Marine Le Pen’s far right party can be avoid in the second round of elections in France on Sunday.
The German Dax is trading 0.4% higher, while the French CAC rose 0.7% and Italy’s FTSE MiB gained 0.5%. The US markets are closed today for Independence Day.
Derren Nathan, head of equity research at Hargreaves Lansdown, said:
Opinion polls are suggesting one of the biggest landslides the nation has ever seen for Labour, but they have been wrong before.
In a shortened trading session ahead of today’s 4 July celebrations, investors have been digesting weak jobs data in the US. Private payroll growth came in at 150,000 for June, below analyst forecasts. And weekly jobless claims continued their upwards journey for the ninth week in a row. All eyes will now be on tomorrow’s non-farm payroll numbers.
There was also weak data from the US services sector with the US ISM Services PMI falling 5 points sequentially in June to 48.8, way short of the 52.5 consensus expectation. Perhaps no surprise that 10-year Treasury yields lost 8 basis points to 4.355%.
Conversely, the improving outlook for a Fed rate cut helped US equities breach new records, with the tech-based Nasdaq Composite up 0.9% to 18.188.30 and the broader S&P 500 climbing by 0.5% to 5,537.02 last night.
Microchipmaker Nvidia resumed its upwards trajectory, climbing 4.6% after some recent profit taking. And Tesla rose by a further 6.5% following the previous day’s 10.2% gain that was triggered by better than forecast vehicle deliveries. With the shares up over 40% in the last month, expectations are riding high ahead of earnings season.
Brent Crude has given up some of yesterday’s gains, reflecting the weak US economic data, and is trading 0.8% lower. But the global benchmark still sits at close to $87 a barrel, supported by a sharp fall in US oil inventories, and concerns that Hurricane Beryl could disrupt production in the Gulf of Mexico.
Hawes explained that the more common electric vehicles become, the more their price is going to come down, but there are limits – batteries are more expensive than in a traditional petrol or diesel car.
As you develop these vehicles at scale, you can drive down these costs to a certain extent, but the raw materials, in particular, the battery is a lot more expensive. Of an electric vehicle that battery is about 40% of total cost of the car.
The Red Sea disruption has added to cost pressures along with Russia’s war in Ukraine, he said.
A number of our vehicles that are sold in the UK come from Asia. They’re no longer going through the Suez [canal]. They’re going around the Cape. That adds two to three weeks in terms of transit and back again. And obviously that adds cost. So that’s just yet another strain.
How is demand for electric vehicles holding up, SMMT chief Mike Hawes was asked earlier.
He said it was “OK” – adding that it will take time for electric cars to get into the mass market, and that the journey will be bumpy.
It was OK in June, but what we have seen is something of a plateau flattening out. When these vehicles were first on the market, there really was high demand for them, because those were the early adopters. We need to get that from the early adopter phase into the mass market. That is never going to be smooth. So the manufacturers are doing all they can to stimulate that demand with really attractive deals. But given the economic conditions and the fact that these are still vehicles that are more expensive than petrol and diesel cars that preceded them, there is still something of a challenge.
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
It’s general election day in the UK. Voting has now begun and polling stations will be open until 10pm. Polling suggests it could bring an end to 14 years of the Conservative party in government, and lead to Labour opposition leader Keir Starmer being installed in Downing Street as the new prime minister. You can read more on our main election blog here:
New car sales in the UK grew by 5% year on year in June, according to preliminary data from the industry body, the Society of Motor Manufacturers & Traders.
It means that the number of new cars leaving forecourts has exceeded 1m in the first half of the year, the first time since 2019 it has passed that milestone.
Mike Hawes, the SMMT’s chief executive, said on BBC radio 4’s Today programme:
It’s kind of a relief to get there. We know we’re clearly heading for around 2m new car sales this year, which is a bit below par. But obviously things are changing in terms of the number of vehicles potentially being bought. But to get there, given all the difficulties we’ve had over the last five years and indeed beyond that, it’s a real boost for the industry.
It’s almost entirely business and fleet sales. There’s a number of reasons behind that. Obviously the backdrop of the economic conditions isn’t great, and households are on a squeeze. And most people, private buyers, tend to buy through finance with inflation high and interest rates high, it’s made the cost of purchase more expensive.
But the carrot has been for the businesses, the incentives, the company car tax that is there for the fleet and the business buyer, has stimulated demand, especially for electrified vehicles. So that’s what’s really driving the growth.
The market share of pure battery electric new cars remained on a par with last year, at around 16-17%. Final figures for June will be published by the SMMT at 9am.
In Germany, factory orders fell unexpectedly in May, declining by 1.6% on the previous month. Economists had expected a rise of 0.5%.
The minutes of the US Federal Reserve’s June meeting showed that policymakers acknowledged the US economy appeared to be slowing and that “price pressures were diminishing”. But they still opted for a wait-and-see approach before committing to interest rate cuts, according to minutes of the 11-12 June session.
The minutes, which were released last night, noted a weak May reading in the consumer price index as one among “a number of developments in the product and labor markets” that supported a view that inflation was falling.
Wage growth had slowed, some officials noted, while others pointed to price cutting among major retailers and reports from their own business contacts that “pricing power had declined.”
However, policymakers concluded that more time and data was needed before they could decide on a rate cut.
Officials “did not expect that it would be appropriate to lower the target range for the federal funds rate until additional information had emerged to give them greater confidence that inflation was moving sustainably toward” the 2% target, the minutes said.
The Agenda
9am BST: UK SMMT new car sales for June
8.30am BST: Eurozone, France, Germany, Italy construction PMIs for June
9.30am BST: UK S&P Global construction PMI for June
The EU is moving forward with plans to impose customs duty on cheap goods in a shift that could hit imports from online retailers and harm a hoped-for London listing by the fast-fashion seller Shein.
The potential change comes amid growing disquiet among retailers based in mainland Europe, the UK and the US about rising competition from the Chinese-linked marketplaces Shein and Temu, which exploit a loophole that excludes low-value items from import duty.
In the EU, the threshold for the levy is €150 (£127) and in the UK it is £135, enabling retailers such as Shein to ship products directly from overseas to shoppers in those markets without paying any import duty. In the UK, items valued at £39 or less also do not attract import VAT.
Subsidised postage costs in China make it more cost-effective for businesses based there to send cheap goods by air.
A European Commission spokesperson said: “In May last year we put on the table customs reforms for a simple, smarter and safer customs union. What we have proposed now is there is no exemption any more for packages valued at below €150.”
The e-commerce proposal must first be discussed and accepted by the European parliament, which sits again later this month.
Last year, 2.3bn items below the duty-free €150 threshold were imported into the EU, according to a report in the Financial Times that highlighted the potential change.
John Stevenson, an analyst at Peel Hunt, said that the impact of a change in the rules on Shein “would be huge depending on the territory”.
Some countries imposed import duties of up to 30%, he said, and having to pay that would force Shein to either completely change its business model, put up prices or take a hit on profit.
“The whole model is based on not paying duty,” he said. “It would have a massive impact.”
Stevenson was quite sceptical that EU countries would be able to close the loophole in the short term, given the complexity and cost of checking billions of parcels.
However, he said the issue would be high on investors’ list of concerns alongside potential ethical issues in its supply chain if Shein went ahead with launching a London listing, as is expected as early as this autumn.
Shein also faces increased competition from fellow social media-driven retailers including TikTok Shop and Temu, as well as the post-Covid return to the high street by shoppers, which has helped the likes of Primark.
Research from Earnest Analytics found that Shein shoppers in the US allocated 43% of their online discount spending to the brand last month compared with 66% a year ago, just before TikTok transactions began.
Shein’s boss, Donald Tang, who is on a “fact-finding” mission in Europe, has said he is “pro reform” of the import duty threshold. He told Politico: “We want to have fair competition around the world” and said the tax break was “not foundational to our success”.
Shein said in a statement that it was “fully compliant with UK tax policies and pays applicable taxes including corporation tax, VAT and employment taxes”.
“Shein’s success comes from our ability to produce fashionable products for our customers. We keep prices affordable through our on-demand business model and flexible supply chain.
“This reduces inefficiency, takes out wastage of material, and lowers our unsold inventory. We pass this advantage to our customers, and this has driven our growth.”
UK retailers have called on the government to examine the loophole amid rising competition from Shein and Temu.
On Tuesday, Simon Roberts, the boss of Sainsbury’s and Argos, called on a new government to look at unfair taxes including business rates and import duty.
“I want to make sure that the loopholes that are currently in place are closed for some of the businesses that aren’t paying tax in the right way, so it’s a level playing field for everybody,” he said.
Theo Paphitis, the owner of the UK retailers Ryman and Robert Dyas, and the Next boss, Simon Wolfson, have also called on the UK government to review the loophole.
Floppy disks fell out of fashion in the 1990s as more efficient storage solutions were invented
It's taken until 2024, but Japan has finally said goodbye to floppy disks.
Up until last month, people were still asked to submit documents to the government using the outdated storage devices, with more than 1,000 regulations requiring their use.
But these rules have now finally been scrapped, said Digital Minister Taro Kono.
In 2021, Mr Kono had "declared war" on floppy disks. On Wednesday, almost three years later, he announced: "We have won the war on floppy disks!"
Mr Kano has made it his goal to eliminate old technology since he was appointed to the job. He had earlier also said he would "get rid of the fax machine".
Once seen as a tech powerhouse, Japan has in recent years lagged in the global wave of digital transformation because of a deep resistance to change.
For instance, workplaces have continued to favour fax machines over emails - earlier plans to remove these machines from government offices were scrapped because of pushback.
The announcement was widely-discussed on Japanese social media, with one user on X, formerly known as Twitter, calling floppy disks a "symbol of an anachronistic administration".
"The government still uses floppy disks? That's so outdated... I guess they're just full of old people," read another comment on X.
Others comments were more nostalgic. “I wonder if floppy disks will start appearing on auction sites,” one user wrote.
Created in the 1960s, the square-shaped devices fell out of fashion in the 1990s as more efficient storage solutions were invented.
A three-and-a-half inch floppy disk could accommodate up to just 1.44MB of data. More than 22,000 such disks would be needed to replicate a memory stick storing 32GB of information.
Sony, the last manufacturer of the disks, ended its production in 2011.
As part of its belated campaign to digitise its bureaucracy, Japan launched a Digital Agency in September 2021, which Mr Kono leads.
But Japan's efforts to digitise may be easier said than done.
Many Japan businesses still require official documents to be endorsed using carved personal stamps called hanko, despite the government's efforts to phase them out.
People are moving away from those stamps at a "glacial pace", said local newspaper The Japan Times.
And it was not until 2019 that the country's last pager provider closed its service, with the final private subscriber explaining that it was the preferred method of communication for his elderly mother.
Google is pumping out more greenhouse gas than ever before – with its CO2 emissions surging by 48 per cent in the past five years.
This is despite the tech giant's intention to producer net-zero emissions by 2030.
Google's latest environmental report shows that its greenhouse gas emissions were 13 per cent higher in 2023 than 2022 – producing the equivalent of 14.3 million tonnes of CO2.
That is a similar amount of CO2 as would be generated in a year by around 29 gas-fired power stations.
The main reason was increased energy use from data centre consumption and its supply chain, the report said, as well as artificial intelligence (AI).
AI – which uses a lot of computing power and in turn electricity – is pushing up the firm's energy use and will make cutting emissions 'challenging', the company said.
The increase in emissions came even though Google has been increasing its use of solar and wind generated clean energy, which don't belch out emissions like fossil fuels (such as coal and gas).
'In spite of the progress we're making, we face significant challenges that we're actively working through,' chief sustainability officer Kate Brandt and senior vice president Benedict Gomes said in the report.
'As we further integrate AI into our products, reducing emissions may be challenging due to increasing energy demands from the greater intensity of AI compute, and the emissions associated with the expected increases in our technical infrastructure investment.'
In January, Google committed to investing $1 billion dollars (£788 million) in the UK to build a new data centre in response to demands around AI.
Google is not the only tech firm facing the challenge of feeding power-hungry AI data centers, while trying to curb creation of climate-changing greenhouse gas.
Microsoft said in its recent sustainability report that its greenhouse gas emissions last year were up 29 percent from 2020 as it continues 'to invest in the infrastructure needed to advance new technologies.'
Microsoft and Google have been front runners in an AI race since OpenAI released ChatGPT in late 2022.
AI has been a theme for the rivals in blockbuster earnings performances quarter after quarter.
Meanwhile, Google and Microsoft have each pledged to be carbon neutral by the end of this decade.
Microsoft has an added goal of being carbon-negative, taking climate-harming gas out of the air, by 2050.
Amazon, also an AI contender with its AWS cloud computing division, has said it is aiming to be carbon neutral by 2040.
Google confirms the date for its next unveiling event where it could reveal a new AI-powered smartphone - and it's much earlier than we expected
Google usually reveals a new Pixel smartphone in the autumn - but this year it seems to be wasting no time to get ahead of the curve.
The tech giant has confirmed that its annual 'Made by Google' unveiling event will take place on August 13, where it will showcase new devices and software.
It's expected to announce the latest smartphone in its Pixel line, the Pixel 9, which could be packed with a range of new AI features to rival Apple.
