Wednesday 11/06/25

2020s on course to be weakest decade for global economy since 1960s, says World Bank (The Guardian, Heather Stewart) is the rather gloomy headline from today’s Guardian and cites the World Bank’s forecast downgrades for GDP growth from its twice-yearly Global Economics Prospects report. It cut its forecast for global GDP growth this year from 2.7% down to 2.3% and urged governments to end trade tensions and for emerging market and developing economies to rebuild their public finances. It is interesting to note that the Bank’s predictions are based on the “liberation day” tariff 90-day pause not being reimposed – so if they are, brace yourselves for more downgrades!

Meanwhile, Los Angeles mayor puts parts of city under curfew in push to quell protests (Financial Times, Guy Chazan, Christopher Grimes and Lauren Fedor) highlights the latest developments in the LA protests – that mayor Karen Bass imposed a curfew for the downtown area “to stop the vandalism, to stop the looting”. The Trump-Newsom fight continued with California governor Newsom remarking that “What we’re witnessing is not law enforcement, it’s authoritarianism” whereas Trump described it as “a full-blown assault on peace, on public order and on national sovereignty, carried out by rioters bearing foreign flags”.

In trade news, US and China agree to framework deal to restore trade war truce (Financial Times, Peter Foster, Demetri Sevastopulo and Joe Leahy) shows that the two superpowers have apparently agreed to some kind of framework that they can both work with in order to move forward with the trade truce. It is just talks, though, so let’s just see how this pans out.

In oil news, US oil output set for first annual drop since pandemic (Financial Times, Kristina Shevory and Jamie Smyth) cites forecasts from the Energy Information Administration which thinks that US oil production will weaken next year, shedding an uncertain light on Trump’s desire for “energy dominance”. It said that this would be a result of falling oil prices because there’s less incentive for drillers to drill when the oil price isn’t very attractive. The US oil benchmark, West Texas Intermediate (aka “WTI”), fell below $65 a barrel yesterday – that’s a full 17% fall since its highest point this year – and is below the price that shale drillers need just to break even.

There was some really interesting news from the UK yesterday! Rolls-Royce to build UK’s first small nuclear power stations (The Times, Robert Lea) shows that Rolls-Royce was finally

selected by the government yesterday to build three new Small Modular Reactors (SMRs) to power three million homes. * SO WHAT? * This has been a long time coming and Rolls-Royce says that this will result in thousands of jobs. Its SMR design has already been selected by the Czech Republic and it’s also in the mix in other international markets to ply its tech. Onwards!

Meanwhile, Reeves places £39bn affordable homes plan at centre of spending review (Financial Times, George Parker, Sam Fleming and Josephine Cumbo) highlights government plans to make a £39bn affordable housing plan at the centre of her UK spending review, due to be announced today. * SO WHAT? * The review will be a key moment for this Labour government as negotiations have been going on behind the scenes between government ministers that will now set the scene for the next few years. Speculation is rife, though, about Reeves having to finance all this by raising taxes in the autumn because she will be promising £113bn of extra spending over the course of this parliament that will be of particular benefit to “towns and cities outside London and the south-east”. Mind you, Reeves’s decision last year to relax her borrowing rules to allow for extra infrastructure investment may provide her with some latitude. Full details of the capital spending plan will be laid out next week.

Then in UK to launch trials of driverless taxi services next spring (Financial Times, Tim Bradshaw, Jim Pickard and Kana Inagaki) we see that UK transport secretary Heidi Alexander announced plans to bring a small number of driverless taxis to the UK in an effort to catch up with advances in the US and China. Commercial trials of fully driverless taxi services will start next spring, which is a year earlier than expected. Supposedly the autonomous vehicle industry could generate 38,000 new jobs and boost the UK economy by £42bn by 2035 (although I’m assuming that none of those jobs will be for drivers!). US ride-hailer Uber and London-based Wayve are going to work together to operate one of the first fully driverless taxi services in London next year! * SO WHAT? * I’d argue that if driverless works in London, it’ll work anywhere. I think that success will depend not only on superior tech – it will also rely on price. I think it’ll have to be a lot cheaper than alternatives to really catch on because after perhaps the initial novelty, people might just think they’d rather a human at the wheel anyway. I think that there are still issues of trust, safety and liability to hammer out…

In consumer trends news, Britons ‘hoarding cash amid economic uncertainty and fear of outages’ (The Guardian, Phillip Inman) highlights comments made by the Bank of England’s chief cashier, Victoria Cleland, yesterday at a speech at the Cash in the UK conference that we’re hoarding physical cash in response to economic uncertainty and as a buffer for potential banking system outages. * SO WHAT? * This type of behaviour was common during Covid and the cost-of-living crises. Interestingly, the number of banknotes in circulation has boomed by 23% since before the pandemic despite the ongoing fall in cash usage. Recent cyberattacks affecting UK retailers including M&S have shaken consumer confidence in electronic transactions and it is also worth noting that that consumers in Spain and Portugal turned to cash during the recent power outages.

Meanwhile, Share of high loan-to-value mortgages rises to highest since 2008 (The Times, Jack Barnett) cites Bank of England data which shows that home loans worth over 90% of a property’s value account for 6.7% of all mortgages in the UK in Q1 of the year, a rise from the previous 6.3% over the previous quarter. Somewhat worryingly, the last time such high loan-to-value (LTV) loans reached similar levels was in Q2 of 2008 at the height of the global financial crisis! Some of this rise may be attributed to the recent relaxation of affordability tests by the

major lenders. Another interesting data release, this time from financial industry lobby group UK Finance, showed that the number of mortgages given to borrowers over the age of 55 increased by a chunky 33.5%! * SO WHAT? * We are currently in quite finely balanced economic circumstances so it feels like if there are any major shocks there could be quite extreme knee-jerk reactions. Having said that, we’ve seen so many extreme macroeconomic events recently, that perhaps investors will be more inured to such shocks!

In employment news, Britain losing jobs at fastest rate since Covid (Daily Telegraph, Eir Nolsoe) cites the latest data from the ONS which shows that the number of people in employment between April and May has fallen at its sharpest rate since the pandemic thanks to the sudden introduction of higher NICs and minimum wage. The unemployment rate hit 4.6% in the three months to April, up from 4.4%. On the plus side, the number of jobs in the public sector reached their highest level in 14 years! Reeves will hope weaker wage growth enables more interest rate cuts (The Guardian, Heather Stewart) shows that this might have implications on interest rates as the governor of the Bank of England recently said that the state of the labour market and wage growth will be major factors affecting any further interest rate cuts.

In a quick scoot around some of today’s other interesting stories, Meta plans to invest $15bn in Scale AI in bid to catch up to rivals (Financial Times, George Hammond, Cristina Criddle and Melissa Heikkila) highlights Meta’s plans to invest about $15bn in the data-labelling start-up Scale AI and hire most of their staff in a huge deal! Meta would give Meta a 49% stake in the company and value Scale AI at about $28bn. Scale AI manually labels data that’s used to train advanced AI models to ensure its accuracy. * SO WHAT? * This is a bid to make up ground lost to rivals but it sounds quite naughty to me because it looks like a takeover in all but name! Doing it this way means it doesn’t have to disrupt business or jump through a ton of regulatory hoops. It reminds me a lot of when Google hired the founders and a lot of staff from chatbot maker CharacterAI and Microsoft’s “investment” in Inflection and Amazon’s in Adept. Are we going to continue to see this kind of dodgy arrangement? Or are regulators going to clamp down on it??

Snap to launch ‘Specs’ smart glasses to revive challenge to Meta and Apple (Financial Times, Tim Bradshaw) highlights the latest attempt by the social media platform to launch some proprietary hardware as it’s having yet another go at launching smart eyewear. By doing so, it’s throwing its hat in the ring with Meta (and its partnership with Ray-Ban maker Essilor-Luxottica), OpenAI (via its recent acquisition of John Ive’s hardware start-up) and Apple (via its Vision Pro tech) to create the next big must-have wearables. The new device is called “Specs” and combines AI image recognition and the ability to display high-def 3D images. The company did not, however, release many details – including price! It did say, however, that the device will be able to operate as a stand-alone device that does not need to be tethered to anything else. It’ll be interesting to see how this device turns out…

In Peter Thiel-backed crypto group Bullish files for Wall Street IPO (Financial Times, Antoine Gara, Oliver Barnes and George Steer) we see that crypto exchange Bullish moved closer to a flotation by submitting paperwork with the SEC as it clearly wants to lean into Trump’s crypto-friendly administration. Bullish had previously tried to do an IPO via a SPAC deal in 2021 but it

fell through. * SO WHAT? * Given bitcoin’s storming through the $100,000 threshold, last week’s stunningly successful IPO of Circle Internet and Trump’s increasing personal exposure to crypto assets you would have thought the timing is pretty good for a successful flotation! I would expect many other crypto players to pile in as well and try their own flotations.

Back home, UK FCA gives green light to Pisces share trading scheme (Financial Times, Ellesheva Kissin) highlights a very interesting development – that the FCA has given the go-ahead for trading in private companies later this year. Just in case you were wondering, Pisces has nothing to do with fish but everything to do with the Private Intermittent Securities and Capital Exchange System, which is designed to be the missing link between public and private markets and provide a source of funding for fast-growing companies that aren’t yet IPO-ready. * SO WHAT? * They’ve had this over in the US since 2013 in the form of the NASDAQ Private Market which has enabled investors and employees alike to trade company shares. VCs and Private Equity have criticised it because it encroaches on their turf may not attract decent-quality businesses and could cannibalise public markets. This sounds pretty decent in theory but we’ll need to see how it would work in practice.

Then in M&S resumes online orders six weeks after cyber-attack (The Guardian, Sarah Butler and Julia Kollewe) we see that the high street stalwart has made progress since being hacked six weeks ago and says on its website that customers “can now place online orders with standard delivery to England, Scotland and Wales” with deliveries to Northern Ireland to resume in the next few weeks. Click and collect, next-day and nominated-day delivery and international ordering will also be returning over the next few weeks. * SO WHAT? * This is going to be welcome news for all concerned, particularly the retailer itself given that it has been losing about £25m per week in online clothing and homewares sales since the cyberattack. It’ll be interesting to see how quickly M&S will bounce back and whether it’ll benefit from any “revenge spending”!

I saw this – and it really made me think ! You should watch it as it could well save your life…

And on something else completely, please look out for my little video today on LinkedIn and Instagram about how to improve your commercial awareness. I don’t think I’ve ever seen anyone recommend this – but it’s something I used to do all the time when I started my career as a stockbroker in the City…