Factory production in the eurozone ended its best quarter in nearly four years last month with easing cost pressures as the US and Iran negotiated a ceasefire, even though sluggish export demand is still weighing on activity, according to a closely-watched survey.<\/p>\n
The monthly purchasing managers\u2019 index from S&P Global \u2013 a measure of the overall health of the eurozone manufacturing sector \u2013 slipped to 51.4 in June from May\u2019s 51.6 but remained above the 50 mark that separates growth from contraction. This final reading was a tad above the flash estimate of 51.3.<\/p>\n
The output sub-index rose to 51.7 from May\u2019s 51.3, marking a two-month high. After stagnating in May, the latest survey data signalled a rise in new orders received by eurozone manufacturers. The increase was only marginal, however. Export demand remained a drag, falling for the second month in a row.<\/p>\n
Chris Williamson, chief business economist at S&P Global Market Intelligence, said:<\/p>\n
double quotation markA further rise in manufacturing output in June adds to signs of encouraging resilience in the eurozone economy. June\u2019s expansion in fact rounds off the strongest calendar quarter for euro area manufacturing production since the opening months of 2022, and will offset the recent decline that\u2019s been recorded in the services economy.<\/p>\n
This sustained growth was accompanied by a welcome cooling of cost pressures, largely reflecting the sharp drop in oil prices seen during the month, alongside an easing of supply worries.<\/p>\n
However, whether the better news out of the Middle East leads to a further improvement in the near-term performance of the manufacturing economy is not clear cut.<\/p>\n
On one hand, lower energy prices and improved supply conditions are very positive, not only reducing firms costs and alleviating potential supply disruptions but also helping boost consumer demand via lower inflation. On the other hand, producers have benefited in recent months from precautionary stockpiling, which is already starting to fade and could start to act as a drag on growth in the coming months.<\/p>\n
Share<\/a>Yen hits 40-year low against dollar<\/p>\n The yen has hit a 40-year low against the dollar, as a sharp rise in US government bond yields boosted the US currency ahead of key jobs data that could bolster the case for a Federal Reserve rate hike this month.<\/p>\n The dollar rose as high as 162.84 yen, well above levels that prompted Japanese authorities to intervene a few weeks ago to support the struggling currency, and later settled at 162.71 yen, up 0.1% on the day.<\/p>\n Referring to the likelihood of another intervention, Chidu Narayanan, head of macro strategy for APAC at Wells Fargo, said:<\/p>\n double quotation markWe believe we are close to potential action.<\/p>\n We \u2060are at crucial levels, not necessarily in terms of a target spot level, but levels where the Ministry of Finance might need to intervene \u200bto retain its credibility.<\/p>\n Traders see Friday\u2019s US public holiday \u200cas a potential window for Tokyo to \u200cstep in to buy yen, with thinner liquidity likely to amplify the impact of any intervention.<\/p>\n Japan\u2019s top currency diplomat said the authorities\u2019 intervention two months ago to \u200csupport the yen had been effective, and that some US officials had been \u201csupportive\u201d of the move, according to Bloomberg News.<\/p>\n However, Joey Chew, head of Asia FX at HSBC, said Japan\u2019s ministry of finance appeared more tolerant of yen weakness than in the past.<\/p>\n The dollar has strengthened against other major currencies and oil prices have fallen sharply to $72.74 a barrel for Brent crude amid US-Iran peace talks, which have eased pressure on the Bank of Japan to curb inflation.<\/p>\n The euro dipped 0.1% to $1.1404, while sterling eased 0.1% to $1.3245. Against a basket of currencies, the dollar was up 0.1%.<\/p>\n A selloff in US Treasuries (as government bonds are known) on Tuesday pushed the benchmark 10-year yield up as much as 9 basis points before easing back. By Wednesday, yields were rising again, up 4 bps at 4.465%, a bigger move than in eurozone bond yields.<\/p>\n Ahead of Thursday\u2019s non-farm payrolls \u200breport, data overnight showed US job openings rose \u200bto a two-year high in May, though sluggish \u200bhiring weighed on consumers\u2019 perceptions of the labour market.<\/p>\n Traders now see a 67% chance of a Fed rate \u200bhike in September, up from \u200c20.5% a month ago, \u200baccording to the CME FedWatch tool.<\/p>\n This afternoon, Fed chair Kevin Warsh and other central bank chiefs including the Bank of England governor Andrew Bailey and European Central Bank president Christine Lagarde will be speaking at a panel discussion at the ECB\u2019s forum on central banking in Sintra in Portugal.<\/p>\n Share<\/a>UK government bond yields rise amid fears over US-Iran peace talks<\/p>\n In financial markets, yields on UK government bonds are rising after oil prices edged up, on concerns that peace talks between the US and Iran to end the four-month war have stalled.<\/p>\n The yield, or interest rate, on 10-year gilts rose as much as 6 basis points to 4.818%. The 30-year gilt also clilmbed 6bps to 5.539%. Both are at their highest levels since 22 June.<\/p>\n Investors see an 85% chance of a quarter-point rate hike from the Bank of England by the end of the year.<\/p>\n Brent crude, the global oil benchmark, rose slightly to $73.53 a barrel earlier, and is now trading at $72.77 a barrel, down 0.25% on the day.<\/p>\n Share<\/a><\/p>\n Shares in some of Britain\u2019s biggest housebuilders are down again for a second day, after analysts at Kepler Cheuvreux downgraded some target prices, and a class action lawsuit against seven companies over alleged price collusion was filed on Tuesday.<\/p>\n On the FTSE 100 index, Barratt Redrow has fallen 1.5% while on the FTSE 250, Berkeley Group dropped 1.9%.<\/p>\n UK house price growth stalled for a second consecutive month<\/a> in June, according to Nationwide Building Society, as rising mortgage rates triggered by the war in Iran deterred home buyers and estate agents warned of a summer slump.<\/p>\n Amy Reynolds, the head of sales at the London estate agency Antony Roberts, said:<\/p>\n double quotation markThere is the familiar pre-summer push from families wanting to be settled before the new school year, but the mood is steady and selective rather than booming or stalling. We expect a quieter, price-sensitive summer, with activity firming again in the autumn once buyers have more clarity on rates and the geopolitical noise has died down.<\/p>\n Share<\/a>‘Housing market remains weak, but falling mortgage rates pave way for recovery’<\/p>\n Ashley Webb, senior UK economist at Capital Economics, noted that the three-month growth rate eased from 1.3% in May to 0.7% in June. Prices were flat in June versus the month before but he reckons they will rise again in the coming months as mortgage rates ease \u2013 with large house price falls \u201cnot on the cards\u201d.<\/p>\n double quotation markThe stagnation in the Nationwide measure of house prices in June shows that the rise in mortgage rates triggered by the Iran war continues to weigh on the housing market. But if the recent fall back in swap rates, and therefore mortgage rates, is sustained, we expect house price growth to pick up again later this year.<\/p>\n We suspect house prices will do little more than flatline over the next few months, or perhaps even fall a bit, as the drag on housing demand from the previous jump in mortgage rates triggered by the Iran war continues to be felt.<\/p>\n But house prices will probably start to rise again later this year as mortgage rates continue to fall back. The two-year quoted mortgage rate fell from 5.1% in April to 4.9% in May and the recent decline in the 2-year swap rate suggests it will fall to around 4.5% in June.<\/p>\n The risk, though, is that the improvement in prices we expect doesn\u2019t happen in time to meet our forecast that prices will rise by 1.5% in the year to the fourth quarter of 2026. Indeed, May\u2019s slump in mortgage approvals is consistent with the annual growth rate of house prices slowing to just above 1.0% in six months\u2019 time. Either way, the coming falls in mortgage rates make us more confident in our view that big outright falls in nominal house prices are not on the cards.<\/p>\n Share<\/a><\/p>\n Back to house prices. Jonathan Hopper, chief executive of Garrington Property Finders, said:<\/p>\n double quotation markThe dust is settling but that doesn\u2019t mean it\u2019s back to business as usual. Nationwide\u2019s data shows that at a national level, prices flatlined between May and June.<\/p>\n The regional data reveals which areas have got back into their stride and which have not.<\/p>\n Northern England, Scotland and Wales all saw their annual pace of growth improve during the last three months. The West Midlands saw the biggest turnaround in fortunes between the first and second quarters of the year, with annual price growth leaping from zero to 3.2%.<\/p>\n The North-South divide continues to grow and could be turbocharged by a prime minister Burnham. A huge injection of government spending into the north could create a Burnham bounce that accelerates northern price growth further.<\/p>\n Meanwhile Nationwide\u2019s data offers some modest good news for central London, where the prolonged slide in average prices is over. Nevertheless the capital\u2019s malaise has now spread to outer boroughs and the south-east commuter belt, where a glut of supply is holding down prices and allowing buyers to be choosy.<\/p>\n As a result, even in highly desirable areas buyers are often able to demand \u2013 and get \u2013 significant price reductions; while those who are not convinced that a home is 100% right for them won\u2019t hesitate to walk away.<\/p>\n This is due to three factors \u2013 elevated interest rates, buyer caution and buyers\u2019 sense that they have time and choice on their side.<\/p>\n While house price growth in the north is faster than in London and the south, property values in absolute terms are still much higher in the capital and southern England. At nearly \u00a3541,000, the average price in London is more than double those in the north west (\u00a3231,415) and the north (\u00a3173,756).<\/p>\n In the south west, the average house price is \u00a3310,429 and in the south east, \u00a3341,175.<\/p>\n Turning to mortgage rates, Hopper said:<\/p>\n double quotation markWhile mortgage interest rates have eased in recent weeks, and there are encouraging signs that they may tick down further in coming months, the extra cost of borrowing is still a barrier for mortgage-dependent buyers.<\/p>\n The abundance of choice and lower purchase prices is finally tempting cautious buyers back to the market, but the road back to normality will be long and the prospect of major property tax changes under Britain\u2019s latest prime minister is a dark cloud for a market still craving clarity and confidence.<\/p>\n Share<\/a><\/p>\n Updated at\u00a003.41 EDT<\/p>\n Call to suspend new EU border system in peak holiday period as planes leave half full Airlines and airports have called for the new EU biometric border check system to be suspended during the peak summer holiday period, warning that some flights are leaving half full and passengers are struggling in queues of up to five hours.<\/p>\n In a letter to Ursula von der Leyen, the president of the European Commission, airlines and airports asked for an option to suspend checks under the system over fears the situation will get much worse during the busy summer.<\/p>\n The summer will bring a \u201csignificant worsening of an already very difficult situation for passengers,\u201d said industry groups ACI Europe, which represents airports, and Airlines 4 Europe and IATA, which represents airlines. The letter said:<\/p>\n double quotation markPassengers have already been forced to queue for extended periods outside terminal buildings and on exposed aprons because border control facilities cannot process arrivals quickly enough. Airlines face half-empty planes at gate closing time, while passengers are stuck in border control queues.\u201d<\/p>\n Some planes have had to delay take off while waiting for passengers, while others have had to leave passengers behind<\/a>.<\/p>\n The groups called on the EC to allow airports to \u201ccompletely suspend\u201d checks \u201cwhenever passenger volumes exceed the operational capacity of border control facilities\u201d during July and August.<\/p>\n A passenger airplane, operated by British Airways, comes in to land at London Heathrow Airport in London in 2025. Photograph: Bloomberg\/Getty ImagesShare<\/a><\/p>\n \u201cThe UK housing market is proving to be a study in resilience rather than exuberance,\u201d said Anthony Codling, housing analyst at RBC Capital Markets. The average price of a home dipped \u00a3540 in June from May but rose almost \u00a36,000 year on year.<\/p>\n double quotation markThe average UK home now costs \u00a3277,484, a market that is moving sideways more than it is marching forward. The headline number tells one story, but the regional picture tells a more interesting one: Northern Ireland is doing its own thing entirely, running nearly four times hotter than the national average, while much of southern England is essentially flatlining.<\/p>\n Mortgage rates remain the stubborn gatekeeper to a more meaningful recovery, with affordability still stretched by historical standards, and the Bank of England\u2019s cautious approach to rate cuts keeping buyers in a holding pattern.<\/p>\n The good news is that all 13 regions are now in positive annual growth territory, which is no small feat. The bad news is that for housebuilders hoping for a demand surge to justify a bullish volume outlook, this is a market that remains more tortoise than hare.<\/p>\n Share<\/a>Introduction: UK house prices flat in June, says Nationwide; higher energy bills cap kicks in<\/p>\n Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.<\/p>\n House prices in the UK were flat last month, as the market weakened amid the Iran war which sapped people\u2019s confidence.<\/p>\n The average price of a home was little changed at \u00a3277,484 in June, versus \u00a3278,024 in May, according to Nationwide Building Society\u2019s monthly survey. The zero change reading, which had been expected by economists, came after May\u2019s 0.6% monthly dip.<\/p>\n Compared with June last year, property values were 2.2% higher, up from 1.7% in May.<\/p>\n Robert Gardner, Nationwide\u2019s chief economist, said:<\/p>\n double quotation markIt is not surprising that the market has softened a little in recent months, given the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices and market interest rates. Indeed, consumer confidence and measures of housing sentiment have weakened, and mortgage approvals fell noticeably in May.<\/p>\n Nationwide also published regional figures for the second quarter.<\/p>\n House prices rose fastest in Northern Ireland between April and June, although the annual rate slipped to 8.6% from 9.5%, taking the average price to \u00a3226,699. The annual pace was 3.9% in north west and northern England, and 3.5% in Scotland and Wales.<\/p>\n In London, prices rose at an annual rate of 1.6%, down from May\u2019s 1.7%, to an average property value of \u00a3540,903.<\/p>\n Gardner said the mortgage payment on a typical first-time buyer property in Northern Ireland is now equivalent to 31% of an average earner\u2019s take home pay, up from 24% in the second quarter of 2022 \u2013 although this is still lower than the UK average of 33%. Moreover, the price of a typical home in Northern Ireland is now roughly 80% of the average UK price, up from 70% in early 2024, but still well below the peak of 125% recorded in 2007.<\/p>\n Gardner added:<\/p>\n double quotation markWhile geopolitical tensions remain high, the signing of a memorandum of understanding between Iran and the US helped push oil prices back towards the levels prevailing before the conflict began.<\/p>\n If the energy shock continues to subside, the Bank of England may not need to raise interest rates, or at least by less than had previously been anticipated \u2013 a view reinforced by the fact that UK inflation has also been lower than expected in recent months.<\/p>\n In recent weeks a shift in market expectations for the future path of Bank Rate has helped to bring down the market interest rates which underpin fixed-rate mortgage pricing.<\/p>\n If maintained, these trends will help to restore household confidence and ease affordability constraints, paving the way for a recovery in housing market activity in the coming quarters, providing that domestic political uncertainty does not adversely impact sentiment.<\/p>\n The government\u2019s new energy price cap comes into effect today. There are warnings that millions of households in Great Britain will be pushed into fuel poverty after months of volatility on the global gas markets, as energy bills rise by more than \u00a3220 a year, writes our energy correspondent Jillian Ambrose.<\/p>\n As the cap on gas and electricity rates rises to the equivalent of \u00a31,862 a year, the number of households forced to spend more than 10% of their income on energy bills will increase to 13.5m from almost 11.3m in April, according to fuel poverty campaigners.<\/p>\n Using new calculations, which assume lower energy consumption, the regulator believes the average UK household will spend \u00a31,663 a year from July.<\/p>\n![\"Mark](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/07\/mark_sweney_140x140.jpg\")
Mark Sweney<\/p>\n