Charlie Conchie

Vodafone and Airtel Africa led a FTSE 100 rally after investors looked past early losses linked to a sharp bond-market sell-off. UK two-year gilt yields rose above 4.5%, increasing borrowing costs and raising concerns about inflation and economic stability. Analysts warned that a prolonged Iran conflict, renewed Middle East hostilities and elevated oil prices could push UK inflation above 3%, or above 4% in a worst-case scenario, potentially prompting the Bank of England to raise interest rates. Signals from the US Federal Reserve that rate hikes may be forthcoming also drove global yields higher.

Istanbul Airport overtook Heathrow in July as Europe’s busiest airport, recording 8.15 million passengers compared with Heathrow’s 7.9 million. Heathrow is using the result to strengthen its case for a privately funded third runway, arguing that expansion is needed to preserve the UK’s competitiveness and generate economic growth. The project remains subject to government consultation and regulatory conditions, while Heathrow is also challenging the Civil Aviation Authority over potential limits on spending and rival involvement. Passenger numbers were affected by disruption in the Middle East, and Heathrow’s chief executive warned that rising aviation taxes could lead to higher fares.

DCC, the Dublin-based FTSE 100 energy group, has agreed to a £5.75bn cash takeover by KKR and Energy Capital Partners, including £65 per share and a final dividend of 147p. The offer represents a 24% premium to DCC’s undisturbed share price, but major investors including Aviva and Fidelity International, as well as founder Jim Flavin, argue that it undervalues the company’s long-term prospects. Shareholders will vote on the deal in September. The transaction is one of a growing wave of private equity-led takeovers of London-listed companies, with deals already in progress potentially exceeding £69bn.

Environment secretary Emma Reynolds rejected a proposed rescue package for Thames Water without meeting the investors behind it, leaving departmental officials to engage with the creditor consortium. The London & Valley plan would provide £3.4 billion in equity, up to £6.5 billion in debt financing, a partial debt write-off and repayment of existing pollution fines, while avoiding government funding and nationalisation. Reynolds has questioned whether the proposal adequately protects consumers and the environment, while creditors argue it is the fastest route to stabilising the utility. Thames Water, which serves 17 million customers, remains threatened with special administration amid roughly £20 billion of debt, pollution liabilities and continuing political debate over public control of utilities.

Entrepreneurs are urging Andy Burnham and Labour to rule out a proposed exit tax on business owners who permanently leave the UK, warning that uncertainty is already prompting founders to consider moving abroad. Cleo founder Barney Hussey-Yeo and Helm chief executive Andreas Adamides say the measure could damage the UK economy and add burdens to startups. Burnham’s spokesperson declined to comment on speculation or rule out future tax policies, while Tax Policy Associates founder Dan Neidle said previous exit-tax rumours had already contributed to some entrepreneurs leaving the country.

The FTSE 100 opened slightly higher as strong trading updates lifted Standard Chartered, AstraZeneca, NatWest and International Airlines Group. Standard Chartered gained around 6% after exceeding profit expectations, while AstraZeneca, NatWest and IAG also rose on upbeat results. Gains were limited by stronger-than-expected US economic growth, which increased expectations that the Federal Reserve may continue raising interest rates. NatWest chair Howard Davies said he does not intend to resign amid the controversy involving Nigel Farage’s bank accounts.

Liontrust has extended its deadline for shareholders to accept its proposed £96 million takeover of Swiss fund manager GAM until 4 August. The extension is intended to allow further discussions with shareholders, including NewGAMe, a group backed by French investor Xavier Niel that argues Liontrust's offer undervalues GAM and objects to conditions concerning its fund management services business. Liontrust has waived the disputed exit condition and says its offer reflects extensive due diligence and GAM's lack of viability as a standalone company, while NewGAMe has made a partial counteroffer and urged regulators to address what it calls misleading information about its proposal.

CMC Markets reported that trading and investing activity fell 15–20% year on year in its first quarter as quiet market conditions reduced client activity, with the weakness continuing into the second quarter. The London-listed trading platform maintained its full-year guidance because higher interest income offset the decline. The company’s shares have fallen more than 70% from their April 2021 peak, while profits in its latest full-year results dropped 40% as pandemic-era retail trading and meme-stock activity faded. CMC plans to expand its institutional offering with cash equities, OTC options and listed futures across its platforms.

Jupiter reported a 2% rise in assets to £51.4bn and a 56% increase in first-half profits to £46.4m, while moving from £3.6bn of net outflows to small positive net flows, helped by £1.7bn from institutional clients. Chief executive Matthew Beesley attributed muted retail demand to volatile markets but said the firm's strategy was supporting a return to sustained growth. Rival Schroders saw managed assets fall and its shares drop 2% amid inflation and higher interest rates. St James's Place attracted £3.4bn of net inflows and increased funds under management by 6% to a record £157.5bn, despite lower pre-tax profits and challenging conditions for UK savers.

Schroders reported a rise in first-half operating profit to £341.4m and £5.7bn in net new business, despite assets under management falling to £726.1bn from £773.4bn a year earlier amid market volatility. Its asset-management division saw operating profits drop to £265.5m, while wealth management, private assets and solutions generated £11.8bn in combined net new business. The firm is pursuing a strategic rebalancing toward higher-growth, more stable areas and maintained its interim dividend at 6.5 pence per share.