Graeme Wearden

Global food commodity prices rose to a three-and-a-half-year high in July, with the FAO index reaching 131.1 points. Heatwaves, drought, wildfires and El Niño-related weather risks are damaging wheat and other crops, while intensified Russia-Ukraine fighting has disrupted Black Sea exports and conflict affecting Iran has raised fertiliser costs. Cereal, sugar and vegetable-oil prices increased, although meat and dairy prices declined. Higher commodity costs are expected to reach consumers, while the World Food Programme warns that as many as 50 million people could be pushed into acute hunger by the end of next year, especially in Central and South America, the Caribbean and southern Africa.

Oil prices and energy-company profits have surged following the US-Israeli war with Iran and disruption around the Strait of Hormuz. BP reported quarterly profits of $5.73bn, while ExxonMobil and Chevron also drew criticism from Donald Trump over windfall earnings. Oil prices later fell below $80 on expectations that US-Iran negotiations could reopen the strait, although Saudi Aramco warned that inventories are severely depleted and refineries are operating near capacity. The live coverage also reports record highs for the FTSE 250 and S&P 500, strong results from HSBC, Metro Bank and Caterpillar, Spotify’s weaker profit outlook despite reaching 300 million premium subscribers, and the approval of Gatwick’s second runway after a failed legal challenge.

EY warns that the UK economy could contract by 0.2% in 2027 if the Strait of Hormuz remains closed into early or mid-2027, while reopening by the end of the third quarter would support growth of 0.9% in 2026 and 1.2% in 2027. Oil prices fell after Donald Trump cancelled planned strikes on Iran and suggested renewed negotiations, though petrol and diesel prices in the UK continued rising. UK manufacturing expanded for a ninth consecutive month but momentum slowed, graduate vacancies reached their lowest seasonal level since 2020, and markets rallied as energy-price fears eased. AstraZeneca shares fell amid reports of possible merger talks with Bristol Myers Squibb, Shell agreed to sell European renewable assets to TotalEnergies, EasyJet extended a takeover deadline, and Clarkson's reported record half-year profits from shipping disruption.

The yen rose to ¥155 against the US dollar, its strongest level in three months, after Japan and the United States confirmed a rare coordinated intervention involving yen purchases. The action followed a plunge to nearly ¥164 per dollar and was supported by Donald Trump and Treasury Secretary Scott Bessent, who said Washington could participate in further interventions while urging the Bank of Japan to raise interest rates. Japan reportedly spent up to $36.58bn supporting the currency. Analysts said the intervention could deter speculative short-yen positions, but Oxford Economics warned it was unlikely to reverse the broader trend of yen weakness, which has been driven by low Japanese borrowing costs, carry trades and concerns about Prime Minister Sanae Takaichi's economic policies.

A sharp sell-off in AI-linked stocks followed China’s dramatic CXMT market debut and reports that it had developed deep-ultraviolet lithography tools, raising fears about the dominance of Western chipmakers. Analysts argue that CXMT’s memory chips are complementary to Nvidia’s GPUs and that Chinese lithography remains years from matching ASML’s reliability and scale. Nevertheless, China’s progress—driven partly by US export controls—could eventually intensify price competition. Investor anxiety was compounded by Nvidia’s possible $250bn backstop for an OpenAI data-centre project, reinforcing concerns that an opaque, circular AI economy depends too heavily on Nvidia.

The Greater Manchester mayoral by-election count continues after turnout fell to a record low of 25.14%, with Labour candidate Bev Craig expected to lead but likely to require second-preference votes under the supplementary voting system. Andy Burnham has outlined plans to give mayors greater control over income tax and business-rate revenue and backed faster approval for locally funded transport projects. He also indicated opposition to restricting jury trials, citing his experience campaigning over Hillsborough and concerns about court reforms. Other developments include Chancellor John Healey setting the autumn budget for 28 October amid economic and geopolitical uncertainty, government plans for tighter funeral-sector regulation after Robert Bush was jailed for 20 years, record-high UK petrol prices, and criticism of FIFA president Gianni Infantino over proposals to sell a stake in the World Cup. Diane Abbott has been readmitted to the Labour Party with a formal warning, prompting criticism from the Board of Deputies of British Jews.

BP has begun a formal process to sell its UK North Sea oil and gas business, potentially ending six decades of production in the basin. New chief executive Meg O’Neill said the move would allow BP to focus capital on higher-value opportunities and reduce debt, while retaining other UK operations. The sale comes amid debate over the future of North Sea drilling, with energy secretary Miatta Fahnbulleh pledging to protect workers and local communities and Andy Burnham calling for a pragmatic approach to domestic energy resources. Greenpeace UK criticized BP’s exit as a sign of the basin’s decline. BP has already reduced its UK exposure by seeking to sell stakes in carbon-capture projects; substantial reserves and contingent resources remain, subject to regulatory approval and commercial viability.

Apple briefly surpassed a $5tn market valuation, becoming the second company to reach the milestone, as investors moved away from AI and semiconductor stocks amid concerns about borrowing, data-centre spending and competition from cheaper Chinese technology. Apple has benefited from strong demand, stable iPhone pricing and its decision to avoid the sector’s expensive AI infrastructure race, though it remains reliant on Google technology for some AI services. The company also launched a US leasing programme through Klarna, while analysts expect more than 15% year-on-year revenue growth in its upcoming quarterly results.

South Korea’s Kospi index fell 11.5% to a three-month low as Samsung Electronics and SK Hynix lost more than 10% amid intensifying concerns about excessive AI investment, heavy borrowing for datacentre expansion and competition from China. US chip stocks also declined, while the Nasdaq 100 briefly entered correction territory. China’s progress in domestic chip-making equipment and the 466% debut surge of memory-chip maker CXMT reinforced fears that Chinese companies could erode the market position of US and global semiconductor leaders. Investors were also unsettled by reports that Nvidia might provide $250bn in financing for an OpenAI datacentre project, raising concerns about circular funding within the AI industry. Apple briefly surpassed a $5tn valuation as investors sought a safer technology stock, while UK and European markets rose.

GSK plans to invest £400m in UK life sciences, moving more than 1,000 scientists from Stevenage to a new Cambridge R&D centre by 2029 while upgrading its Ware site. The investment forms part of a £1.9bn annual cost-cutting programme that will also involve job reductions, as GSK seeks to accelerate drug development and reach its £40bn sales target by 2031. Barclays reported a 17% rise in first-half pre-tax profit, prompting renewed calls from the TUC for higher bank taxes, while Unilever warned that commodity costs could drive further price increases. Ofcom proposed blocking Openreach’s discounted broadband offer over competition concerns, and the Financial Reporting Council fined EY over audit failures linked to Made.com’s collapse. Markets were unsettled by a global sell-off in AI and semiconductor stocks, with South Korean chipmakers suffering particularly heavy losses.

UK service sector activity declined in June, contributing to a broader economic contraction as the FTSE 100 nevertheless closed at a four‑month high. Falling oil prices driven by hopes for a US‑Iran peace deal and weaker US job data supported markets. Protests over cost‑cutting at Mercedes‑Benz, a sales drop at Jaguar Land Rover linked to war disruption and supply issues, and increased Gulf oil exports shaped sector developments. UK political uncertainty and global conflict pressures continued to weigh on business sentiment, while electric vehicle sales in the UK rose sharply and Brazil’s services sector saw a temporary World Cup boost.

US job creation slowed sharply in June, with only 57,000 positions added and earlier months revised downward, even as the unemployment rate dipped to 4.2% due to a fall in labor force participation. Weak hiring in hospitality offset gains in healthcare and business services, with elevated fuel prices and subdued consumer activity cited as contributing factors. Markets reacted positively as the figures reduced expectations of further Federal Reserve rate hikes. The dollar weakened, and analysts noted declining real wages. In the UK, the motor finance compensation scheme was partially suspended due to legal challenges, while credit card defaults rose, mortgage rates eased, and diesel prices recorded a historic monthly drop.

The UK culture secretary signaled a likely intervention in Paramount’s proposed $110bn takeover of Warner Bros Discovery, citing concerns over media plurality and indicating potential reviews by Ofcom and the Competition and Markets Authority. The merger would combine major television, streaming, and film assets, prompting UK scrutiny despite approval by US regulators. Paramount expressed confidence that the deal poses no UK media-freedom issues. Additional developments included falling UK household disposable incomes, Axel Springer completing its Telegraph takeover, a major class-action suit against UK housebuilders, and fresh Bank of England warnings on AI-related financial stability risks.

UK bond yields and the pound edged higher after Andy Burnham’s economic speech, which emphasised fiscal discipline, regional devolution and investment-led growth. Investors and economists broadly welcomed his commitment to existing fiscal rules, though many noted a lack of detail on funding, Treasury leadership and implementation. Business groups, private capital bodies and progressive think tanks reacted positively to plans for business rates reform, public intervention in infrastructure and a long-term strategy to support regions. Markets remained cautious, with analysts warning that clarity on fiscal policy and borrowing will be essential. Additional developments included Comcast’s plan to split its business, a sharp drop in UK mortgage approvals, warnings from the Bank of England on post-Brexit inflation risks and signs of weakening graduate job prospects.

Chipmakers’ share prices surged in early 2026 as demand for AI hardware drove major gains for semiconductor and memory manufacturers, particularly in South Korea and the US. Samsung and SK Hynix fuelled South Korea’s market rally, while Sandisk and other US firms saw extraordinary increases. Rising chip prices contributed to higher Apple product costs, and Microsoft shares fell as investors shifted from software to hardware stocks. Although signs emerged of a recent pullback, global markets generally saw strong performance, with forecasts suggesting continued growth driven by AI investment and resilient economic conditions.

Major landlords for retailer TG Jones have backed a restructuring plan that could close up to 150 stores, though many creditors oppose the proposal ahead of High Court approval. Oil prices fell to a four‑month low as market expectations shifted with developments in the Middle East. US goods trade data showed a sharp rise in the deficit, while consumer confidence improved with easing fuel prices. UK pubs saw higher spending during the heatwave, contrasting with weaker restaurant activity in London. Global tech stocks continued to slide, while broader markets weakened across Europe and the US.

Ryanair has introduced free seating for parents and children following scrutiny from the Competition and Markets Authority, which will continue its investigation into past charges. Global markets climbed, with the Dow Jones and Stoxx 600 hitting records as oil prices fell below pre‑Iran war levels before rising again on reports Tehran may seek Hormuz passage tolls. UK political speeches focused on economic policy, welfare cuts and business taxation. Inflation in the US reached a three‑year high, raising expectations of potential Federal Reserve rate increases. Corporate developments included Apple raising prices due to chip costs, JP Morgan elevating senior executives, and UK firms urging faster progress on EU relations.

Oil prices fell to pre‑Iran war levels as tanker traffic through the strait of Hormuz increased and short‑term supply rose. Analysts cited restored vessel transparency, inventory releases, weakened Chinese demand and quiet tanker departures as contributing factors. Falling oil prices eased inflation concerns and boosted European and US stock markets. UK officials welcomed reduced geopolitical tensions, and the RAC predicted lower petrol and diesel prices. Despite a new shipping route helping tankers exit the Gulf, tensions persisted due to disputes over a US–Iran interim accord and renewed Israeli airstrikes in Lebanon. Analysts expect oil prices to fluctuate between $60 and $80 as geopolitical risks, Chinese demand shifts and strategic reserve replenishment continue to influence the market.

Elon Musk’s net worth fell below one trillion dollars after a sharp pullback in SpaceX shares following their initial surge post‑IPO, compounded by declines in Tesla stock. Market movements were driven by bond sale concerns at SpaceX, falling oil prices due to increased shipping through the Strait of Hormuz, and strengthening of the US dollar. Global markets saw mixed reactions, with the FTSE 100 closing higher and Wall Street rebounding. Currency pressures intensified as political uncertainty in the UK and diverging central‑bank outlooks weighed on sterling and the euro. Additional economic developments included falling gold prices, improved shipping flows from the Gulf under a new UN‑related scheme, and commentary on regulatory burdens affecting UK housebuilding.

UK government bond yields rose as investors reacted to higher-than-expected borrowing in May, mounting political uncertainty following Andy Burnham’s byelection win, and the prospect of a Labour leadership challenge. Analysts warned that a Burnham-led shift toward higher spending or a snap election could raise borrowing costs further. International tensions, including the cancellation of US-Iran talks, added upward pressure on yields. Economic data showed rising personal insolvencies and an ONS statistical error affecting labour force data. Asda reported a major loss linked to price cuts and IT separation costs, while Ryanair extended Michael O’Leary’s CEO contract. The Bank of England outlined a stress test exploring the vulnerability of private credit and equity markets to severe shocks. Market movements reflected investor sensitivity to political developments and ongoing fiscal constraints.

US and Iran have signed an agreement aimed at ending the Middle East war, prompting Washington to lift its blockade of the strait of Hormuz. Donald Trump said the US expects a complete ceasefire across Lebanon, Israel and Hezbollah, while JD Vance confirmed a 60‑day window to finalize the deal. Israeli strikes in southern Lebanon continued despite the agreement, and Hezbollah reported ongoing clashes. Iran’s leadership endorsed the deal with assurances that national interests would be protected. Diplomatic tensions rose as Israel severed ties with EU foreign policy chief Kaja Kallas over alleged remarks, while EU leaders prepared to express concern over conditions in Gaza and the West Bank. US officials emphasized the need for all parties, including Israel, to respect the peace process as further technical negotiations are expected to begin in Switzerland.

UK interest rates were held at 3.75% after a 7–2 Bank of England vote, with policymakers citing volatile energy markets driven by Middle East instability as the main inflation risk. The Bank lowered its inflation forecast for the rest of the year and warned of lingering cost pressures despite falling oil prices. Labour market data showed a drop in unemployment and vacancies, while economists from major banks suggested rates are likely to remain unchanged for the remainder of 2026 unless geopolitical conditions deteriorate. The pound weakened following the decision, and financial-sector groups offered cautious responses to proposed regulatory reforms.

Brent crude dropped below 80 dollars a barrel to its lowest level in more than three months as Iranian tankers resumed shipping following a US–Iran agreement to lift the naval blockade and begin nuclear negotiations. Market confidence in the deal eased oil and gas prices, while aluminium prices fell on expectations of renewed Middle Eastern supply. Japan’s central bank raised interest rates to their highest level in 31 years, and UK bond yields declined amid reduced fiscal pressure. SpaceX overtook Amazon in market value and announced a 60‑billion‑dollar acquisition of coding startup Cursor. Yum Brands agreed to sell Pizza Hut for 2.7 billion dollars as it restructures its portfolio. US housing starts slumped to their lowest level since 2020, and the EU Parliament approved a new tariff deal with the United States.

Japan’s central bank raised its short‑term interest rate to 1 percent, the highest level in 31 years, to counter inflation pressures linked to the Iran conflict and rising oil costs. Governor Shinichi Uchida noted reduced economic downside risks but warned that broadening price increases could push inflation above target. Tokyo markets hit record highs following the move. The rate hike follows similar tightening by the European Central Bank, while the US Federal Reserve and Bank of England are expected to hold rates steady.

Global oil prices dropped to a three‑month low and stock markets in the US and Europe hit record highs following confirmation of a US‑Iran peace deal expected to reopen the Strait of Hormuz. Investors reduced geopolitical risk pricing, pushing the Dow Jones and Russell 2000 to new peaks, while energy company shares fell due to weaker oil prices. Analysts warned that a full return to normal oil and gas flows could take months, with Israel’s absence from the agreement and ongoing regional tensions adding uncertainty. The IMF noted the global economy remains resilient but is still vulnerable to the conflict’s effects. Rolls‑Royce secured major nuclear reactor deals, Fox shares tumbled after its acquisition of Roku, and European gas prices fell amid hopes of improved Middle Eastern supply.

SpaceX’s record-setting IPO propelled its valuation above $2tn, making Elon Musk the world’s first trillionaire after shares surged on their first trading day. The flotation tied significant portions of American retirement savings to the company while intensifying scrutiny of Musk’s influence and the broader concentration of wealth driven by the AI boom. Democratic politicians and activists criticized Musk’s rising fortune as evidence of systemic inequality and called for wealth taxation. Economists warned that extreme wealth accumulation poses risks to democratic governance. Protests accompanied the debut, while SpaceX continued operations with a Falcon 9 launch and supporters celebrated the company’s ambition to expand humanity’s presence in space.

SpaceX is preparing for a record $1.78tn IPO that is heavily oversubscribed, potentially making Elon Musk the world’s first trillionaire, despite analysts warning that the company’s valuation is excessively high. Morningstar argues that the anticipated share price far exceeds fundamental value and advises investors to wait. The company reported a significant loss in 2025 and relies on ambitious, largely untested technologies across its space, satellite, and AI divisions. Elizabeth Warren has urged the SEC to delay the IPO over concerns about valuation and governance. Index providers differ on whether to fast‑track SpaceX into major indices, which could influence investor demand.

The European Central Bank raised eurozone interest rates for the first time since 2023, citing inflation pressures driven by the Middle East war and rising energy costs. The ECB increased its deposit rate to 2.25% and warned that continued disruption from the conflict could weaken growth and push prices higher. Economists signalled the likelihood of further rate hikes, while the World Bank projected global growth slowing to its weakest level since the pandemic due to inflation and elevated borrowing costs. Denmark’s central bank matched the ECB’s rate increase, and analysts highlighted ongoing uncertainty around inflation dynamics and future monetary policy decisions.

US forces launched multiple waves of strikes on Iran following the crash of a US Apache helicopter near the strait of Hormuz, which officials said collided with an Iranian drone. Iran responded with drone and missile attacks targeting US assets in Bahrain, Kuwait and Jordan, prompting air raid alerts across the region. Both sides described their actions as defensive while ceasefire negotiations remained fragile. Reports from US media indicated that President Trump initially hesitated but approved strikes after military briefings. Escalating tensions affected global markets, pushing oil prices higher. Despite the exchanges, US officials signaled that negotiations on reopening the strait of Hormuz and addressing Iran’s nuclear program remain ongoing.

Chip stocks in the US and South Korea rebounded following steep declines, boosting the S&P 500 and Nasdaq as investors moved back into AI-related equities. The UK’s Competition and Markets Authority opened a Phase 1 investigation into Paramount’s $110bn takeover of Warner Bros Discovery, raising concerns about competition and potential job losses. BP announced a major restructuring that shifts its renewables into a technology division. US trade data showed a narrower deficit driven by rising petroleum exports linked to Middle East disruptions, while small business confidence weakened amid higher fuel costs. Investors accumulated cash ahead of major IPOs including those expected from OpenAI and SpaceX, and regulators issued warnings over AI-driven scams and unauthorized investment advice.