Key events<\/p>\n
Closing post<\/p>\n
Time to wrap up.<\/p>\n
It\u2019s been a busy day for markets, starting off with reaction to news of progress on a US-Iran peace deal, \u2060with officials from the two countries having agreed to a roadmap towards\u2060 a final agreement within 60 days<\/p>\n
The update helped bring down Brent crude oil prices below $80 per barrel, and lifted stocks in Asia.<\/p>\n
But that news was quickly overshadowed as Keir Starmer confirmed he would be resigning as UK prime minister, opening the floor to a leadership race that would bring a new face into Number 10 Downing Street by September.<\/p>\n
Financial markets took the news in stride, having broadly priced in his departure.<\/p>\n
Despite ongoing handwringing over how investors would react, the pound pared its losses to trade flat on the day, alongside the domestically focused-FTSE 250.<\/p>\n
The FTSE 100 meanwhile bounced into positive territory to trade 0.5% higher.<\/p>\n
UK gilt prices also benefited, with yields dropping in response to the resignation as well as the prospect of an easing of international geopolitical tensions and inflation.<\/p>\n
News later emerged that Alan Greenspan, the longtime former head of the US Federal Reserve, had died at 100.<\/p>\n
Here are today\u2019s other main stories:<\/p>\n
We\u2019ll be back tomorrow.<\/p>\n
Share<\/a><\/p>\n Updated at\u00a010.08 EDT<\/p>\n US stock markets are open for trading but are relatively muted as investors digest the weekend\u2019s news, including the implications of reported progress in US-Iran peace talks. <\/p>\n The Dow Jones Industrial Average fell 9.5 points, or 0.02%, at the open to 51,555.19<\/p>\n The S&P 500 fell 0.1 points, or 0.00%, to 7,500.44\u200b<\/p>\n The Nasdaq Composite dropped 34.6 points, or 0.13%, to 26,483.31<\/p>\n Share<\/a><\/p>\n Lloyds Banking Group is considering a bid for specialist lender Aldermore, according to Sky News, in what analysts say could amount to a \u00a31.3bn takeover.<\/p>\n Lloyds is said to be examining a takeover of the South African-owned bank Aldermore because of its small business lending and project finance capabilities, according to City sources cited by Sky<\/a>.<\/p>\n Signage on a branch of Lloyds bank in London RBC banks analyst Benjamin Toms has said that Aldermore could come with a \u00a31.35bn price tag, but said:<\/p>\n double quotation markIt is difficult to see the longer-term strategic attractiveness for LLOY vs alternative opportunities in the wealth space.<\/p>\n Toms added:<\/p>\n double quotation markAldermore would represent an enhancement of scale rather than capability, in our view. The bank would generate synergies largely driven by lower funding costs, as Aldermore currently does not have current accounts.<\/p>\n However, the acquisition would not help LLOY diversify its revenue away from net interest income.<\/p>\n We would prefer to see LLOY carry out M&A in the wealth space, given how under-penetrated the bank is in this area.<\/p>\n The South African group FirstRand, announced it would be selling its UK operations \u2013 trading as Aldermore and motor lender MotoNovo \u2013 in April amid frustration over the FCA\u2019s motor finance scandal compensation scheme, which it said was \u201cdeeply flawed\u201d.<\/p>\n Aldermore, which employs 1,500 staff across offices in London, Reading, Manchester and Cardiff, said at the time that while \u201cthe group has done everything in its power to protect shareholders from a redress scheme that it considers deeply flawed,\u201d it would now be looking to \u201cfacilitate an orderly ownership transition\u201d of its Aldermore business.<\/p>\n Share<\/a><\/p>\n The domestically-focused FTSE 250 mid-cap index has also pared its losses, having been trading down by 0.47% at around 9:30am this morning.<\/p>\n Now, the FTSE 250 is now flat, trading down just 0.01% at 23,196 points.<\/p>\n Share<\/a><\/p>\n UK stocks are faring relatively well, with the FTSE 100 having rebounded from a dip of 0.1% after Starmer\u2019s resignation, to trade higher by 0.55%.<\/p>\n The FTSE 100 is trading higher. Illustration: Refinitiv<\/p>\n UK banks are making some of the biggest gains, in what could be a minor relief rally linked not only to the lessening of political certainty in Downing Street, but also the prospect of a US-Iran peace deal following this weekend\u2019s negotiations.<\/p>\n NatWest is up 3.36%, while Lloyds is up 3%, and Barclays is up 2.5%.<\/p>\n Babcock, one of the UK\u2019s biggest defence contractors, is the biggest faller by a long-shot, down 6.3%.<\/p>\n It comes after Babcock announced a 19% fall in full-year underlying operating profits, blaming Brexit and Covid among a catalogue of problems to beset an important contract for the Royal Navy<\/a>. It took a \u00a3140m charge on that contract, which involved building five Type 31 frigates.<\/p>\n Share<\/a><\/p>\n For a lighter history, Reuters is running interesting list of seven facts about the late Alan Greenspan:<\/p>\n Greenspan grew up a Benny Goodman fan and before taking up economics he studied clarinet for two years at New York\u2019s Juilliard School and played saxophone with a touring jazz band.<\/p>\n Greenspan and NBC News correspondent Andrea Mitchell dated for 12 years before marrying in 1997.<\/p>\n Greenspan was notorious for speaking cryptically and once said, \u201cI guess I should warn you, if I turn out to be particularly clear, you\u2019ve probably misunderstood what I said.\u201d<\/p>\n His first wife introduced Greenspan to Ayn Rand, the \u201cAtlas Shrugged\u201d novelist known for her philosophy of individualism, and they became close friends.<\/p>\n The bathtub served as Greenspan\u2019s auxiliary office. He said it was during his daily morning baths, which sometimes lasted two hours, that he had his best ideas, using the tub time to read reports and write speeches. \u201cImmersed in my bath, I\u2019m as happy as Archimedes as I contemplate the world,\u201d he wrote in his memoir.<\/p>\n After he retired from the Federal Reserve, Penguin Press paid $8.5m for his memoir, which at the time was the second-largest advance paid for a non-fiction book.<\/p>\n In his last year at the Fed, Greenspan had a salary of about $180,000.<\/p>\n Share<\/a><\/p>\n Updated at\u00a008.18 EDT<\/p>\n Alan Greenspan was a towering figure in global economics, having overseen the second-longest economic expansion in US history, between March 1991 to March 2001, Reuters reports. <\/p>\n His judgement that productivity would keep inflation contained \u2013 and shrugging off pressure to hike rates \u2013 earned him rock star status among successors including Jerome Powell, who said Greenspan showed that judgement can outperform technical models of the economy.<\/p>\n However, Greenspan\u2019s reputation was thrown into question by critics who said it fuelled a series of asset price bubbles and created the conditions that led to the 2007-2009 financial crisis.<\/p>\n Share<\/a>Breaking: Former Fed chair Alan Greenspan dies at 100<\/p>\n Alan Greenspan, the influential economist who served five terms as chairman of the US Federal Reserve under four American presidents, has died at 100.<\/p>\n Former Fed chairman Alan Greenspan. Photograph: Bloomberg\/Getty Images<\/p>\n Greenspan\u2019s wife, NBC News correspondent Andrea Mitchell, said he died from complications of Parkinson\u2019s disease.<\/p>\n Greenspan chaired the Federal Reserve<\/a> from 1987 to 2006, serving under the presidencies of Ronald Reagan, George HW Bush, Bill Clinton and George W Bush.<\/p>\n More to come here:<\/p>\n Share<\/a><\/p>\n The Confederation of British Industry (CBI) lobby group says businesses need reassurance that that there won\u2019t be further \u201cdrift or delay\u201d to key government projects, including defence spending and closer ties with the EU.<\/p>\n CBI CEO Rain Newton-Smith says:<\/p>\n double quotation markThere are big decisions that need to be taken, whether that\u2019s on the Defence Investment Plan, infrastructure projects, energy price caps or the UK-EU reset.<\/p>\n These are long\u2011term commitments and businesses need to know that there is not going to be further drift or delay. Business will want their voice to be heard and for the needs of our economy, the ability to invest and create jobs throughout the UK, to be at the forefront of any decisions.<\/p>\n It\u2019s a competitive game to capture global investment and one in which the UK needs to stay ahead.<\/p>\n Share<\/a><\/p>\n Business reaction is starting to trickle in, with Make UK, which represents the manufacturing industry, getting in early with demands for the next prime minister.<\/p>\n The lobby group\u2019s CEO Stephen Phipson said:<\/p>\n double quotation markWith yet another change of prime minister the last thing business will want is a protracted summer of political infighting and internal navel gazing when we are at such a critical time for the economy and, there are so many big ticket issues to address.<\/p>\n It\u2019s a long list involving: cutting the cost of industrial energy, opening up the North Sea, providing incentives for renewables, cutting the welfare bill, committing to a \u201cfully funded\u201d defence investment plan.<\/p>\n Phipson added:<\/p>\n double quotation markThe new prime minister must also seriously rethink the additional employment burdens and costs which have been imposed on business and led to the shameful number of young people not in education, employment and training.<\/p>\n At the very least, some of these more onerous measures should be pushed back.<\/p>\n Manufacturers stand ready to work with the new administration to bring the positive growth to the economy we urgently need to see.<\/p>\n Share<\/a>UK 10-year gilt yield edges lower as Wes Streeting backs Burnham for prime minister<\/p>\n Markets are reacting positively t the prospect of an unopposed leadership contest, after Wes Streeting said he was backing Andy Burnham as the next Labour leaders and prime minister.<\/p>\n The yield on the benchmark 10-year gilt is down 0.02% at 4.82%<\/p>\n The pound has also edged into positive territory, up 0.06% to \u00a31.324.<\/p>\n Wes Streeting’s statement backing Andy Burnham as Labour leader. Photograph: Wes Streeting<\/p>\n In a letter posted on X, Wes Streeting said he has \u201cspoken at length with Andy in recent days\u201d and was convinced there was a place for a raft of ideas he has to \u201cchange our country\u201d, having listed out plans for energy security, a special relationship with Europe.<\/p>\n Streeting added:<\/p>\n double quotation markWe could spend the summer exaggerating small differences, or we can roll up our sleeves and help him deliver the change our party and our country needs. that is the choice that I am making and I hope that everyone else will back Andy too.<\/p>\n Share<\/a>Markets shrug off news of Starmer’s long-anticipated resignation<\/p>\n While markets have largely shrugged off the news of Starmer\u2019s widely expected resignation, ths may not last if there is a more expansive fiscal policy by the next Labour prime minister.<\/p>\n This is why the next leader\u2019s choice of chancellor is key, according Capital Economics deputy chief UK economist Ruth Gregory.<\/p>\n Gregory says:<\/p>\n double quotation markThose on the \u201csoft left\u201d of the Labour Party (Miliband, Haigh) may be more inclined to raise spending and borrowing than those on the \u201csoft right\u201d, who would probably offset any spending rises with spending cuts elsewhere or tax hikes (Streeting, Mahmood, Cooper, McFadden).<\/p>\n Meanwhile, we doubt a new top team would be successful at boosting medium-term economic growth. Other things equal, looser fiscal policy could have a near-term positive effect on GDP.<\/p>\n But that boost is unlikely to be big if it is partly driven by higher defence spending (a lot of the UK\u2019s defence spending goes on imports) and could be partly or wholly offset should higher taxes decrease confidence and\/or raise gilt yields.<\/p>\n The fiscal constraint will be the same, making it hard to boost GDP growth in the medium term.<\/p>\n
Photograph: Tom Nicholson\/Reuters<\/p>\n