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<\/p>\nWall Street stock indices have opened higher after inflation data kept alive hopes that the US Federal Reserve will cut interest rates next month.<\/p>\n
The S&P 500, Nasdaq and the Dow Jones industrial average are opened up about 0.5 per cent higher.<\/p>\n
Two-year Treasury yields dipped 1 basis point to 3.75 per cent on bets that US interest rates will be cut next month. The dollar weakened against a basket of currencies, helping the pound strengthen to $1.3467.<\/p>\n
When Wall Street opened, the FTSE 100 had lost early gains to trade up 11 points, or 0.1 per cent, at 9,140.15.<\/p>\n
Treasury \u2018will pay \u00a3115bn to cover Bank\u2019s QE\u2019 <\/p>\n
The Treasury had earlier made a QE profit<\/p>\n
ALAMY<\/p>\n
The Bank of England has lowered to \u00a3115 billion its estimate of the net loss that the Treasury will have to pay to cover the central bank\u2019s bond-buying programme.<\/p>\n
When the Bank began quantitative easing in 2009 to boost the economy after the global financial crisis, the Treasury agreed to cover any losses and take any profits.<\/p>\n
The Treasury made a \u00a3124 billion profit from the programme in the years up to 2022, the Bank now faces heavy losses from quantitative tightening. The \u00a3115 billion estimate of the net loss is down from a previous estimate in May of a \u00a3120 billion loss.<\/p>\n
Gilt purchases ran until late 2021 before the Bank put the \u00a3875 billion programme into reverse in February 2022. It is currently running down the stockpile at a pace of \u00a3100 billion a year. The shortfall reflects the fact that Bank\u2019s interest rates are now higher than the average yield of the bonds it bought.<\/p>\n
Dollar slides after US inflation data<\/p>\n
US stock index futures rose after inflation data came in below expectations, keeping bets of a Federal Reserve interest rate cut in September on track.<\/p>\n
July US CPI annual inflation was unchanged at 2.7 per cent. Economists had expected a reading of 2.8 per cent. Month-on-month CPI rose 0.2 per cent, in line with expectations.<\/p>\n
The 3.1 per cent annual increase in the core CPI takes that measure back to the highest since February. This was put down to tariffs increasing the price of goods for consumers, and creates an issue for the Fed policymakers considering a cut.<\/p>\n
The S&P 500, Nasdaq and the Dow Jones industrial average are all expected to open about 0.5 per cent higher.<\/p>\n
Two-year Treasury yields slid 4 basis points to 3.73 per cent on bets that US interest rates will be cut next month. The dollar weakened against a basket of currencies.<\/p>\n
Government appoints adviser to prepare for Thames Water collapse![\"Thames](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/08\/\/7925f2eb-9315-43f4-9504-f73c007a2e19.jpg\")
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Thames Water may have to be nationalised<\/p>\n
ALAMY<\/p>\n
The government has appointed FTI Consulting to advise on contingency plans for Thames Water to be placed into a \u201cspecial administration\u201d should the heavily indebted utility collapse.<\/p>\n
The UK\u2019s largest water business is battling to avoid nationalisation by securing \u00a35 billion of finance from bondholders. Thames Water needs a reset of regulations for the deal to go through. In July it said it had enough funds to continue operating for 12 months.<\/p>\n
A government spokesman said Thames \u201cremains financially stable, but we have stepped up preparations and stand ready for all eventualities, including applying for a special administration regime if that were to become necessary\u201d.<\/p>\n
A special administration regime is an insolvency procedure for an organisation providing an essential public service.<\/p>\n
Opec raises forecast for global oil demand<\/p>\n
The oil cartel has raised its forecast for global oil demand next year and trimmed its forecast for growth in supply from the United States and other producers outside the broader Opec+ group.<\/p>\n
World demand will rise by 1.38 million barrels per day (bpd) in 2026, the Organisation of the Petroleum Exporting Countries said in a monthly report, up 100,000 bpd from the previous forecast. This year\u2019s expectation was left unchanged.<\/p>\n
Oil supply from countries outside the cartel and its allies, such as Russia and Mexico, will rise by about 630,000 bpd in 2026, Opec said, down from last month\u2019s forecast of 730,000 bpd.<\/p>\n
The outlook for higher demand and a drop in supply growth among non-Opec+ producers would make it easier for Opec+ to proceed with its plan to produce more oil to regain market share after years of cuts aimed at supporting the market.<\/p>\n
Conservative economist to US head jobs data agency<\/p>\n
EJ Antoni, the chief economist of the conservative think tank Heritage Foundation, has been chosen by President Trump to lead the US Bureau of Labor Statistics (BLS) after he fired the head of the agency earlier this month.<\/p>\n
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Erika McEntarfer was dismissed hours after the BLS reported much weaker-than-expected job growth for July and issued a large revision to its employment figures for May and June.<\/p>\n
Antoni has been critical of the statistical agency and its data which has a real-time effect on stock, bond and currency markets around the world. The BLS has come under scrutiny for the eroding quality of the data it produces.<\/p>\n
Trump said on Truth Social: \u201cOur Economy is booming, and E.J. will ensure that the Numbers released are HONEST and ACCURATE.\u201d<\/p>\n
Useful quantum computers edge closer<\/p>\n
Quantum computing, which promises an exponential increase in computing power, always seems to be at least a decade away. However, predicted timelines for when a useful quantum computer might be available are growing more ambitious.<\/p>\n
Jay Gambetta, head of IBM\u2019s quantum initiative, has said the computing giant is confident it will be able to build a full-scale machine by the \u201cend of the decade\u201d. One of its key quantum rivals, Google, meanwhile, told the Financial Times<\/a> that the remaining \u201cengineering and scientific challenges are surmountable\u201d.<\/p>\n A normal computer relies on \u201cbits\u201d that are either a \u201c1\u201d or a \u201c0\u201d, \u201con\u201d or \u201coff\u201d, so is limited by binary options. Quantum computers use quantum bits, or qubits, that can be 0 or 1 as well as a \u201csuperposition\u201d of 0 and 1 \u2014 in other words, on and off at the same time, allowing them to mirror the complexity of the subatomic world in a way that classical computers cannot. Problems that need to be overcome include the instability of qubits and interference in the systems at scale which make it hard for them to perform useful tasks.<\/p>\n Useful quantum computers could transform industries including healthcare, sustainable energy and advanced materials, while also posing threats such as the ability to crack all current encryption systems, from banking to national security.<\/p>\n Traders wary of US inflation<\/p>\n The rise in London\u2019s leading share index has eased during morning trading as the focus turned from relief at the US-China trade truce to the impact of trade uncertainty on US inflation.<\/p>\n The FTSE 100 was trading up 14 points, or 0.16 per cent, at 9,143.88 after rising 24 points in early trading.<\/p>\n The US inflation report is expected to show prices increased moderately in July, but economists are anticipating a measure of underlying inflation to reflect its largest gain in six months. It comes after the unexpectedly weak jobs report earlier this month.<\/p>\n Traders are pricing an 88 per cent chance of a 25 basis points interest-rate cut when the Federal Reserve meets in September.<\/p>\n The data will come at a time when there are growing concerns about the quality of economic data, after President Trump fired the head of the Bureau of Labor Statistics following downward revisions to nonfarm payrolls.<\/p>\n The wage and jobs data in charts<\/p>\n The Office for National Statistics said that the latest labour market data pointed to a continued cooling of the labour market.<\/p>\n Real pay growth has fallen due to a rise in inflation.<\/p>\n Employees on payrolls have fallen in ten of the last 12 months, with the falls concentrated in hospitality and retail after increased labour taxes on businesses.<\/p>\n Job vacancies have continued to fall, also driven by fewer opportunities.<\/p>\n Government lines up Thames Water insolvency adviser The government looks to be preparing for the potential collapse of Thames Water by lining up insolvency practitioners.<\/p>\n Sky News reports<\/a> that Steve Reed, the environment secretary, has signed off the appointment of FTI Consulting to advise on contingency plans for Britain\u2019s largest water supplier.<\/p>\n Thames could be put into a special administration regime amid doubts about a rescue deal being advanced by Thames\u2019s senior creditors, driven by the hedge funds Elliott and Silver Point that own the water company\u2019s distressed debt.<\/p>\n Sky reports that the advisory role would establish FTI as the frontrunner to act as administrator if the rescue plan fails. A government spokesperson said: \u201cThe government will always act in the national interest on these issues.\u201d<\/p>\n Genuit shares drop on gloomy outlook<\/p>\n Genuit, the company formerly known as Polypipe, has delivered more than respectable half-year numbers: revenues up 9 per cent, profit up 3 per cent and an increased interim dividend to 4.2p.<\/p>\n Shares in the plumbing, ventilation and drainage group, however, have taken a hit this morning \u2013 down more than 6 per cent at one stage \u2013 as Genuit appears to have reinforced the narrative in the sector: flat volumes at best for the rest of the year; and rising labour and materials inflation but an inability to force through price rises which are impacting margins.<\/p>\n At 362\u00bdp, off 23\u00bdp on the session, the stock has fallen back to a four-month low after a spring rally.<\/p>\n EU-US trade deal hits German investor confidence<\/p>\n German investor morale fell more than expected in August as it took a hit from disappointment at the EU-US trade deal, according to the closely watched ZEW economic research institute\u2019s latest confidence index.<\/p>\n The economic sentiment index decreased to 34.7 points from 52.7 points in July. Analysts had forecast a reading of 39.8. It is the first fall in four months.<\/p>\n ZEW President Achim Wambach said the decline was also owing to the poor performance of the German economy in the second quarter of 2025, which contracted 0.1 per cent.<\/p>\n He added: \u201cThe outlook has worsened in particular for the chemical and pharmaceutical industries. The mechanical engineering and metal sectors as well as the automotive industry are also severely affected.\u201d<\/p>\n End of the road for AOL dial-up internet service Dial-up was a mainstay of internet access in the 90s but has since been replaced by broadband<\/p>\n SHUTTERSTOCK EDITORIAL<\/p>\n AOL is shutting down its dial-up internet service after more than 30 years.<\/p>\n Formerly America Online, AOL introduced many households to the world wide web for the first time when its dial-up service launched, rising to prominence in the 90s and early 2000s.<\/p>\n The service currently only exists in the US and Canada, and the latest government data showed it was used by about 300,000 people, compared to more than 300 million using broadband.<\/p>\n \u201cAOL routinely evaluates its products and services and has decided to discontinue dial-up internet,\u201d the company said in a notice to subscribers in the US and Canada. It said dial-up and associated software was \u201coptimised for older operating systems\u201d which will soon be unavailable on AOL.<\/p>\n The service ends on September 30.<\/p>\n Labour market data: what the economists say<\/p>\n Ashley Webb, Capital Economics: \u201cOverall, the continued, albeit slowing, loosening in the labour market should continue to bear down on wage growth further ahead. Indeed, we think it\u2019s only a matter of time before wage growth slows to rates consistent with the 2 per cent inflation target. So for now, we still think the Bank will cut interest rates once more this year in November, from 4 per cent now to 3.75 per cent.\u201d<\/p>\n Suren Thiru, ICAEW: \u201cThe UK jobs market is facing more pain in the coming months with higher labour costs likely to lift unemployment moderately higher, particularly given growing concerns over more tax rises in this autumn\u2019s budget. While these disheartening figures will reassure rate-setters that last week\u2019s policy loosening was the right call, the pace at which the labour market is currently cooling is unlikely to be sufficient to prompt another rate cut in September.\u201d<\/p>\n Elliott Jordan-Doak, Pantheon Macroeconomics: \u201cAll told, we think the jobs market will continue to improve gradually as growth holds firm and the MPC\u2019s interest rate cut feeds into activity.\u201d<\/p>\n Spirax helps lift FTSE 100<\/p>\n London\u2019s leading share index has opened higher, buoyed by corporate results and optimism after the extension to the US-China trade truce.<\/p>\n The FTSE 100 rose 24 points, or 0.25 per cent, to 9,153.71, with thermal energy and fluid engineer Spirax rising 18.5 per cent after it said it expected organic sales growth to accelerate in the second half of the year, following a 3 per cent rise in the first half.<\/p>\n Housebuilders were lifted by upbeat results from Bellway. Persimmon and Talyor Wimpey gained 1.5 per cent and 1.45 per cent respectively.<\/p>\n Technology stocks were lower despite the easing of restrictions on trade in chips. Sage Group fell 1.56 per cent, while tech investors Polar Capital Technology Trust and Scottish Mortgages Investment Trust were slightly lower.<\/p>\n The pound strengthened against the dollar to $1.3449.<\/p>\n PageGroup profits slump 99% The company said permanent recruitment was more subdued than temporary recruitment<\/p>\n CHRIS RATCLIFFE\/BLOOMBERG\/GETTY IMAGES<\/p>\n The UK recruiter PageGroup has reported a dive in first-half pre-tax profits to \u00a3200,000, compared with \u00a327.7 million in the same period last year.<\/p>\n PageGroup chief Nicholas Kirk said: \u201cWe experienced a slight deterioration in activity levels and trading in Continental Europe towards the end of the period, particularly in our two largest markets, France and Germany. Elsewhere, we saw some improvement in activity, trading and customer confidence in Asia and the US.\u201d<\/p>\n Revenue fell by 11 per cent to \u00a3798.4 million.<\/p>\n \u201cPermanent recruitment continued to be impacted more than temporary, as clients sought flexible options and permanent candidates remained reluctant to move jobs,\u201d the company said.<\/p>\n PageGroup plans to pay an interim dividend of 5.36p, the same as last year, and reiterated its full-year guidance. The shares slid 2p, or 0.75 per cent, to 266p.<\/p>\n Entain upgrades full-year profit guidance Euro 2024, in which England progressed to the final, provided a boost to Entain last year but the group said this year\u2019s performance was even better<\/p>\n INA FASSBENDER\/AFP\/GETTY IMAGES<\/p>\n The global sports betting and gaming group has upgraded its full-year profit guidance after reporting interim results for the six months to the end of June.<\/p>\n Group net gaming revenue, including a 50 per cent share of BetMGM, was up 7 per cent. There were better-than-expected performance at both Entain and BetMGM \u2014 its venture with MGM Resorts International, the Las Vegas casinos group.<\/p>\n Online net gaming revenue, excluding the US, was 5 per cent ahead of expectations, with strong volumes in sports and gaming. The company, which operates Ladbrokes and Sportingbet, said that the performance was \u201cparticularly pleasing as prior year second quarter comparators included [the] Euros tournament\u201d.<\/p>\n Entain expects full-year core profit to be between \u00a31.10 billion and \u00a31.15 billion, above market expectations of \u00a31.11 billion.<\/p>\n Bellway completions rise to 8,749 New Bellway homes under construction in Essex<\/p>\n CHRIS RATCLIFFE\/BLOOMBERG\/GETTY IMAGES<\/p>\n The housebuilder said housing completions increased by 14.3 per cent to 8,749 homes at an overall average selling price of about \u00a3316,000, both slightly ahead of previous guidance, in a trading update for the year to July 31.<\/p>\n \u201cCustomer demand was supported by good availability of mortgage finance and relative stability in mortgage interest rates during the year,\u201d the company said.<\/p>\n Housing revenue rose by 17 per cent to more than \u00a32.76 billion, and underlying operating margin is expected to approach 11 per cent, up from 10 per cent in 2024.<\/p>\n \u201cDespite the softer market conditions in recent months, we have entered the new financial year with a healthy order book,\u201d Bellway said. It expects to deliver about 9,200 homes in its 2026 fiscal year.<\/p>\n Musk: xAI will take immediate legal action<\/p>\n Elon Musk said his artificial intelligence startup xAI would take legal action against Apple, accusing the iPhone maker of breaching antitrust regulations in managing the App Store rankings.<\/p>\n Musk said on his social media platform X: \u201cApple is behaving in a manner that makes it impossible for any AI company besides OpenAI to reach #1 in the App Store, which is an unequivocal antitrust violation. xAI will take immediate legal action.\u201d<\/p>\n He did not provide evidence to support his claim.<\/p>\n ChatGPT currently holds the top spot in the App Store\u2019s \u201cTop Free Apps\u201d section for iPhones in the US, while xAI\u2019s Grok ranks fifth and Googles Gemini chatbot sits at 57th. ChatGPT also leads the rankings on the Google Play Store, according to Sensor Tower data.<\/p>\n OpenAI boss Sam Altman responded to Musk\u2019s claims, suggesting Musk manipulates the X network to serve his personal interests and stating that OpenAI will stay focused on making great products.<\/p>\n Wage growth cools as higher jobs taxes bite The unemployment rate remained at 4.7 per cent<\/p>\n DOMINIC LIPINSKI\/BLOOMBERG\/GETTY IMAGES<\/p>\n Wage growth and employment slowed in the three months to June, according to official data, showing more evidence of a cooling UK jobs market under pressure from higher payroll taxes.<\/p>\n Average weekly earnings, including bonuses, rose by 4.6 per cent in the second quarter of the year, lower than the 5 per cent recorded in the previous rolling three-month period, data from the Office for National Statistics showed.<\/p>\n Economists had expected earnings to expand by 4.7 per cent. Private sector earnings expanded by 4.8 per cent, below the 5.2 per cent forecast by the Bank of England.<\/p>\n Liz McKeowan, director of economics statistics at the ONS, said: \u201cHowever, real pay growth fell, due to rising inflation.\u201d<\/p>\n The unemployment rate remained at 4.7 per cent in the three months to June, compared with the three months to May.<\/p>\n Beijing \u2018tells Chinese firms not to use Nvidia chips\u2019 China appears suspicious of US-manufactured chips<\/p>\n EPA<\/p>\n China is reported to have urged local companies to avoid using Nvidia\u2019s H20 processors, particularly for government-related purposes, in a blow to President Trump\u2019s plans to charge Nvidia and AMD for chip sales to the country.<\/p>\n![\"Thames](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/08\/\/b5dcf214-a12d-4f2a-a78d-390ddc632814.jpg\")
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