Share<\/a><\/p>\n Key events<\/p>\n Kathleen Brooks, of the broker XTB, notes that there will be plenty of new economic data in Burnham\u2019s in-tray this week.<\/p>\n double quotation markOn Tuesday, the unemployment rate is expected to rise to 5%, which is further evidence that job growth in the UK has been hindered by Reeves\u2019 s \u00a325bn hike in employers national insurance.<\/p>\n \u2026We will also get the latest public sector borrowing data, and analysts expect a continued rise in monthly public net sector borrowing. This would follow May\u2019s much higher-than-expected borrowing rate. Surging welfare payments and elevated gilt yields, mean that the UK is likely to continue to be mired in high debt levels for years to come.<\/p>\n On Wednesday, the CPI data is expected to show an encouraging moderation in the headline and core CPI rate. However, Burnham won\u2019t be able to bask in the glory for long, as price growth is still above the BOE\u2019s target rate, and financial markets continue to price in one rate hike from the BOE this year.<\/p>\n \u2026Overall, this week\u2019s data could show a worrying economic backdrop.<\/p>\n She adds that the market\u2019s judgement of Burnham will be reflected in government bonds.<\/p>\n double quotation markThe 10-year gilt yield is hovering close to 5% and has risen by 1% since Labour took office in 2024. This is a tipping point for the UK economy, and he must focus on reversing this rise.<\/p>\n A 5% yield weighs on economic growth, depresses investment and increases the government\u2019s debt interest bill. He cannot risk anything that pushes yields up further. Drawing a line under inflation busting public sector pay rises, and welfare spend restraint will be the fastest way for Burnham to ease upward pressure on bond yields in the first months of his premiership.<\/p>\n We should know who Burnham\u2019s chancellor is by this afternoon, Burnham is also expected to lay out his 10-year plan for the UK at Downing Street before 1330. Realistically, he only has 2.5 years as leader in the current parliament, so much of what he says could be meaningless, unless he lays out a timeline for a new election, which we don\u2019t think that he will do.<\/p>\n Share<\/a><\/p>\n Investors will be watching the bond market carefully today as Andy Burnham <\/a>is set to become the prime minister<\/a> and prepares to pick his cabinet.<\/p>\n Russ Mould, an investment director at the broker AJ Bell, said bond markets reacted positively on reports last week that current home secretary Shabana Mahmood is frontrunner for chancellor.<\/p>\n double quotation markGilt yields eased back last week on speculation that Mahmood would get the job, which is the biggest clue that markets are accepting the governmental change in a calm manner.<\/p>\n That\u2019s good for now, but it\u2019s what comes next that really matters. Bond investors are looking for any clues on public spending intentions, how they will be funded, and any policies that deviate from the path pursued under the Starmer-Reeves regime. Burnham\u2019s big speech later today might offer a glimpse at what he wants to achieve but is unlikely to give the full picture.<\/p>\n Share<\/a><\/p>\n Updated at\u00a005.04 EDT<\/p>\n Jeff Bezos and UK government invest in \u00a32bn British startup CuspAI Amazon\u2019s founder, Jeff<\/a> <\/a>Bezos<\/a>, and the UK government have invested in a \u00a32bn British artificial intelligence startup that is aiming to become the \u201csearch engine for rare materials\u201d that accelerates the next wave of technological breakthroughs.<\/p>\n The Cambridge-based CuspAI has raised $450m (\u00a3330m) in funding<\/a> from investors including Bezos and the government\u2019s sovereign AI fund, valuing the two-year old business at $2.6bn.<\/p>\n The company has launched the AI Materials Foundry, a coalition of more than 48 tech companies, industrial firms and research facilities, with the aim of building software underpinned by artificial intelligence to discover and develop new materials for chipmakers and other industries.<\/p>\n CuspAI hopes to significantly cut research times and reduce or eliminate the use of rare metals \u2013 including iridium and ruthenium \u2013 in chipmakers\u2019 supply chains.<\/p>\n Share<\/a>Segro hits out at rival’s \u00a313.5bn takeover bid as ‘opportunistic’<\/p>\n Warehouse company Segro has said a \u00a313.5bn takeover offer from its US rival <\/a>Prologis<\/a> is \u201copportunistic\u201d and timed to\u201d capitalise on a dislocated share price\u201d, as tensions rise between the two businesses.<\/p>\n The company has said in a statement:<\/p>\n double quotation markThe Board of Segro carefully reviewed the further revised proposal, together with its advisers, and concluded that Segro\u2019s compelling growth strategy and standalone prospects underpin superior value creation versus the further revised proposal. Accordingly, the Board unanimously rejected the further revised proposal.<\/p>\n Despite this rejection, Segro engaged and met with Prologis management yesterday to understand Prologis\u2019 ability to improve its financial terms to a level that could be capable of being recommended by the Board of Segro. Prologis provided no new information in this meeting and made no improvement to the further revised proposal.<\/p>\n It added:<\/p>\n double quotation markPrologis\u2019s proposals have been opportunistically timed to capitalise on a dislocated share price and just as Segro\u2019s markets are inflecting and momentum is accelerating. The effect would be to transfer the benefits of Segro\u2019s considerable embedded value and this significant progress to Prologis shareholders before they are fully reflected in Segro\u2019s earnings and valuation.<\/p>\n Share<\/a>Oil falls back below $90 as Iran reports diplomatic exchanges with US<\/p>\n Oil has fallen back below $90 a barrel, paring back some of its earlier gains after reports of diplomatic exchange between the US and Iran.<\/p>\n Iran has said that diplomatic exchanges with the United States via mediators were ongoing, despite US military strikes on the country.<\/p>\n AFP reports that the foreign ministry spokesman Esmaeil Baghaei said at a press conference in Tehran:<\/p>\n double quotation markWe have been informed by mediators, we have received messages \u2013 without going into details \u2013 but the main point is that the diplomatic apparatus has been active in recent days and ideas have been conveyed to us by certain mediators.<\/p>\n Brent crude, the international benchmark for oil, has now pared back some of its earlier gains \u2013 but is still up 1% to $89.07 a barrel.<\/p>\n The Stoxx Europe 600, which tracks the biggest companies on the continent, is now up slightly by 0.1%, though the UK\u2019s FTSE<\/a> 100 is still down 0.3%.<\/p>\n Share<\/a><\/p>\n Europe is \u201cparticularly vulnerable\u201d to a squeeze on finished fuel supply, according to PVM Oil<\/a> Associates, an energy and commodities broker.<\/p>\n John Evans, an analyst at the firm, said:<\/p>\n double quotation markThe European continent is at present particularly vulnerable to the lack of finished fuels as demand has severely increased due to the ongoing, unforgiving heatwave reflected in the demand on the electricity grid. The Gasoil\/Brent crack rallied nearly $10\/barrel last week and is up nearly $25\/barrel since the world thought Hormuz was cured in the middle of June.<\/p>\n \u2026One could argue that the recent scrutiny received by AI and technology companies, and stock market falls, are due to the increased awareness of both overstretched valuations and investment, and now, in AI buildouts, overcapacity.<\/p>\n Yet it cannot be denied on how this current flare-up in and around the pinch of Hormuz, and its inflationary influence, causes nervousness for investors as they consider their portfolio exposure to companies which might feel a heavy load if indeed the notions of \u2018higher for longer\u2019 interest rates play out.<\/p>\n As for oil prices, with Brent knocking on the door of $90\/barrel and only one errant bombing or incident away from pushing on to $100\/barrel once again, and supply of gasoline and diesel getting ever shorter, time is running out for the US President to assuage the current anxiety building within the oil fraternity.\u201d<\/p>\n Share<\/a>European stock markets fall amid rising Middle East tensions<\/p>\n It is a shaky start for European stock markets this morning: the Euro Stoxx 600, which tracks the biggest companies on the continent, is down 0.2%.<\/p>\n The UK\u2019s blue chip FTSE<\/a> 100 index is down 0.6%, led by losses in the real estate sector, which is own 1.2%. Energy companies BP and Shell are however rising on the elevated oil price, with shares up 1.5% and 0.7% respectively.<\/p>\n Over in the bond market, oil prices are feeding a rise in gilt yields. The 10-year yield is up by about 4 basis points. Meanwhile the pound is up slightly against the dollar by 0.05% to $1.34.<\/p>\n Share<\/a><\/p>\n Updated at\u00a003.20 EDT<\/p>\n Segro rejects sweetened \u00a313.5bn takeover bid<\/p>\n \u2060The UK warehouse landlord Segro has rejected the latest takeover bid from its US rival Prologis, which valued the FTSE<\/a> 100 company at \u00a313.5bn.<\/p>\n Segro has repeatedly rejected Prologis\u2019 takeover attempts, including a \u00a312.6bn all-share proposal in June<\/a>, saying it was \u201copportunistically timed\u201d and significantly short of \u2060fair value.<\/p>\n Today Prologis said Segro\u2019s board had \u2060unanimously rejected its third \u200bproposal made on 16 July, which included a partial cash alternative of up to \u00a32.7bn and 0.0890 new Prologies share for each Segro share.<\/p>\n It represented an almost 10% premium to Segro\u2019s net asset value, and a 34% premium to its share price before Prologis revealed its takeover interest, according to the US company\u2019s statement this morning. Segro rejected the offer a day after it was made.<\/p>\n The takeover attempt by Prologis \u2013 which called on investors today to back the deal \u2013 is the latest in a series of endeavours by overseas buyers targeting FTSE 100 companies.<\/a><\/p>\n Segro is best known for building cavernous sheds<\/a>, with a multi-billion pound portfolio that includes warehouses, data centres and industrial property, mostly in the south-east of England.<\/p>\n Shares in Segro are down 1.4% this morning, but are up by about 19% since the first Prologis offer was made in June.<\/p>\n Share<\/a><\/p>\n Updated at\u00a003.54 EDT<\/p>\n Diesel supply squeeze could hit Europe, Morgan Stanley warns<\/p>\n Europe faces a squeeze on its diesel supply this year, according to analysts at the bank Morgan Stanley, with stockpiles expected to decline over the coming months.<\/p>\n Analysts including Martijn Rats wrote in a note yesterday:<\/p>\n double quotation markThe picture is genuinely tight. Our supply\/demand modeling points toward European diesel inventories falling to multi-year lows toward year-end.<\/p>\n \u2026The real bottleneck in the oil system right now is refining, more so than crude\u2026The epicenter of all this is the diesel market, and Europe in particular.<\/p>\n It comes as global energy markets grapple with the impact of renewed conflict in the Middle East.<\/p>\n Morgan Stanley now expects that European stockpiles will fall steadily from August, reaching a low of about 299m barrels in November. That would be the lowest level for that time of year since at least 2015, according to their analysis, which was first reported by Bloomberg.<\/p>\n Share<\/a><\/p>\n Jim Reid of Deutsche Bank says the rapid rise in the oil price and fresh waves of strikes underscores \u201chow quickly the situation is deteriorating\u201d.<\/p>\n double quotation markThree US service members were killed in separate incidents in Jordan and Iraq, while US strikes hit targets including Qeshm Island and multiple locations in southern Iran. At the same time, Iran broadened its retaliation beyond military sites, targeting critical infrastructure across the Gulf, including power and desalination facilities in Kuwait, as well as launching drone and missile attacks towards US bases and regional allies. And prospects for any diplomatic breakthrough remained dim, with Iran\u2019s Foreign Minister Araghchi suggesting that some nuclear issues may \u2018remain unresolvable\u2019.<\/p>\n Tensions also escalated further in the strait of Hormuz, with Iran signalling a far more assertive stance over shipping flows and claiming to have intercepted vessels attempting to transit the waterway.<\/p>\n Share<\/a>Introduction: Oil rises above $90 as Middle East conflict escalates<\/p>\n![\"Mark](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/07\/mark_sweney_140x140.jpg\")
Mark Sweney<\/p>\n