Reeves: My work is beginning to bear fruit
Rachel Reeves is then left briefly speechless, after being asked what advice she might give to anyone in the future taking on the role as chancellor.
The chancellor then replies:
I’m not sure if anyone wants my advice.
But Reeves then rallies, insisting again that she is ‘really proud’ of her achievements as chancellor.
She tells the BCC’s annual conference:
My advice would be you’ve got a brilliant set of officials at the Treasury who will back to you if you’re clear about what you want to do.
I’ve been very clear about what I wanted to achieve as chancellor. I wanted to restore stability to the economy. I wanted to boost investment, both public and private, into the economy. And I wanted to change how the economy works, with a regulatory burden that is fairer and more efficient, with a planning system that actually allows things to get built in our country.
I’m really proud of my record, and I hope that whoever is Chancellor, in the future, whenever that future may be, sticks to what I’m doing because it is beginning to bear fruit. And we are seeing that investment return to the economy, that growth to come to the economy and crucially, that stability, so that businesses can plan and invest in.
Q: How would you like the history books to remember you?
Reeves reminds the BCC that in her first speech as chancellor, she said her time in office would be a success if ordinary children from working class backgrounds had more opportunities than when I became chancellor, and if women and girls felt that there should be no ceiling on their ambition.
She concludes:
It’ll be up to others to judge whether I’ve achieved my goals. But I’m very proud of what I’ve done and believe I have [hit those goals].
Key events
Ryanair to allow parents flying with young children to avoid seat fee, after CMA criticism
The UK’s competition watchdog appears to have scored a victory against Ryanair, over the airline’s policy of charging parents to sit with their children on flights.
Ryanair has announced a “minor policy tweak” means “free parent seats” will be available in the rear of its aircraft for future bookings,PA Media reports.
The move comes two weeks after the Competition and Markets Authority (CMA) announced it was investigating the £8 mandatory fee Ryanair charges a parent to sit with their children.
The CMA said the Irish carrier’s terms and conditions require at least one parent to sit with their children, including those with disabilities, and bills them about £8 a flight to book a seat. Its investigation would examine whether this was a breach of consumer law, if passengers weren’t being shown the total price of their flight upfront.
Ryanair had previously criticised the “bogus investigation”, saying it looked forward to disproving the CMA’s “false” claims”.
The airline said that “like all adults who select a reserved seat, adults travelling with children pay one reserved seat fee, but can select reserved seats beside them for up to four children on the same booking FREE OF CHARGE”.
Sarah Butler
Online card and gift seller Moonpig said its customers continued to trade up to bigger cards and add gifts despite a squeeze on household budgets from higher energy and food bills.
Its most popular personalised Father’s Day card involved super-imposing the paterfamilias on a full English breakfast with almost 5m people choosing to upload family photographs to add to various cards on the site for the event.
Father’s Day gifts included 37 tonnes of chocolate – equivalent to six African elephants – and 164,000 pints of beer at peak.
Catherine Faiers, the new chief executive of the London-based technology firm, said there was “real reassurance” about the UK consumer, despite inflation driven by the conflict in the Middle East, as when “things really matter in people’s lives” they were choosing to spend more.
The group’s revenue from gifts linked to cards rose 6.5%, including new ranges from Next and Boots, and shoppes also opted for more premium services such as fast-track delivery. However, revenue from standalone gifts and experiences fell, partly as Moonpig took a lower cut from new partners providing experiences.
Faiers said trading had been more volatile during the hot weather and football, but “we haven’t seen fundamental softness.”
Sales for the group rose 6.5% to £373m and underlying pre-tax profits increased by a better than expected 13% to £76.5m in the year to 30 April.
The strong performance on Asia-Pacific markets overnight hasn’t really been matched in Europe.
The pan-European Stoxx 600 is up by 0.64% so far today, as investors welcome drop in the oil price and signs that Middle East oil flows are moving towards more normal levels.
Strong financial results from chip firm Micron overnight have also lifted the mood, reports Raffi Boyadjian, lead market analyst at Trading Point:
Equities are rebounding on Thursday, lifted in part by the ongoing slide in oil prices, but crucially, concerns about AI valuations were allayed, at least for now, by stellar earnings from rising AI star, Micron Technology.
Having already skyrocketed by 700% over the past year, Micron’s stock surged by more than 15% in after-hours trading yesterday after the chipmaker reported much better-than-expected quarterly results. Micron beat both its revenue and earnings per share estimates, but investors were mostly impressed by its forecasts for the current quarter, when it expects revenue to hit $50 billion versus estimates of $43.6 billion.
The boom in AI has fuelled demand for memory chips, leading to shortages that may last well into next year, pointing to more gains for chipmakers.
Phillip Inman
Back at the British Chambers of Commerce annual conference, BCC chief Shevaun Havilland, has told Labour: “Back business and we will deliver growth.
But she warned:
“Extra taxes would be the road to ruin”.
Lisa O’Carroll
The UK government will halve the amount of tariff-free steel imports allowed in an attempt to counter a global oversupply of cheap Chinese metal and bolster its beleaguered local industry.
New “safeguards” will be introduced on 1 July and will coincide with similar new limits being introduced by the EU for the same purposes.
At the same time tariffs on steel imports above the duty-free quotas will be doubled to 50% of the product’s value.
The quotas replace existing pre-Brexit rules that set import levels across the EU. The UK had retained the rules after leaving the bloc.
Under the new rules, the existing quota of tariff-free steel allowed into the UK will be reduced by 51%, less than the 60% reduction proposed in March. That means only 3.2m tonnes can be imported duty-free into Britain in future.
UK bicycle market recovering, reports Halfords
Sarah Butler
Halfords has increased its hopes for profits this year after warm spring weather spurred strong sales of bicycles, camping gear and air-conditioning kit for vehicles.
Henry Birch, the chief executive of the retailer and garage operator said it was lifting profit expectations by 7% to £49m after “a strong performance across all parts of the business” in April, May and June as the “early hot weather helped”.
He said tweaks to prices and improvements in Halfords’ website and retail operations as well as a recovering bicycle market had also lifted sales, adding:
“This is not just a result of the hot weather, it is a strong performance week after week.”
The upgrade to expectations came after Halfords returned to the black with a better than expected profit before tax of £43.6m in the year to 3 April after a loss of £30m a year before. Sales rose 4.8% to £1.8bn.
The company said that it had “not yet seen any changes to customer behaviour from the recent conflict in the Middle East, but we remain sensitive to its potential impact on consumer sentiment and spending power and would expect any impact to take effect from the second half of 2026.”
UK retail downturn deepened in June
UK retail sales fell below average levels in June, with retailers blaming low consumer confidence and rising cost pressures.
The CBI’s latest healthcheck on the sector has found that retail sales volumes were judged to be below seasonal norms in June, with retailers predicting disappointing sales volumes for the time of year in July.
Martin Sartorius, lead economist at the CBI, says:
“Retailers reported a gloomy start to the summer, with sales disappointing relative to seasonal norms to the greatest extent in over two years amid depressed consumer sentiment and rising cost pressures. A sharp fall in year-on-year retail sales was mirrored across the broader distribution sector, with wholesalers and motor traders seeing firm sales declines.
“Businesses need clarity and stability at a time when confidence remains fragile. As government transitions to a new Prime Minister, the focus must remain on creating the conditions for growth by tackling the cost of doing business. For retailers and wholesalers, this includes delivering meaningful business rates reform, ensuring the Employment Rights Act avoids diminishing labour market flexibility, and taking further steps to address uncompetitive energy costs.”
Short-term UK mortgage rates have dipped a little today, as the drop in the oil price helped to push down borrowing costs.
Moneyfacts reports:
The average 2-year fixed residential mortgage rate today is 5.55%. This is down from 5.56% the previous working day.
The average 5-year fixed residential mortgage rate today is 5.54%. This is unchanged from the previous working day.
Castlelake have told the City that they note easyJet’s announcement this morning, adding:
Castlelake welcomes the easyJet Board’s constructive engagement and the nine-day extension to the “Put-up or Shut-up” deadline to no later than 5.00 pm (London time) on Sunday, 5 July 2026 in accordance with Rule 2.6(c) of the [UK takeover] Code.
57 ships sailed through Hormuz since June 23 under UN evacuation scheme
Some 57 ships carrying an estimated 1,100 seafarers have transited the strait of Hormuz since June 23 under a United Nations evacuation plan launched this week, data from the U.N.’s shipping agency showed today, Reuters reports.
These are the first numbers to be released by the UN’s International Maritime Organization for the initiative, which will enable hundreds of ships with some 11,000 seafarers to leave the strait.
According to current IMO data, 12 ships sailed through during the morning of June 25, 32 during June 24 and 13 during June 23.
EasyJet opens talks with Castlelake after rejecting £4.9bn takeover offer
Over in the City, shares in easyJet have jumped by 8% after agreeing to open its books to US investment firm Castlelake.
EasyJet has rejected a fourth takeover offer from Castlelake worth £4.9bn, but also agreed to provide access to limited commercial information in the hope of receiving a higher bid.
The airline said:
“The board believes that giving Castlelake access to limited commercial information, as Castlelake sought in the letter which contained the fourth proposal, might produce a more attractive proposal that better reflects the value of easyJet and its prospects and the interests of shareholders thereto.”
It added:
“The board continues to be concerned about the ownership structure and deliverability of any offer from Castlelake, and the time it will take.”
EasyJet’s shares are up 8% at 582.80p, which lifts its value to around £4.42bn.
Goldman Sachs: Brexit’s economic cost was worse than we thought
Like many recent chancellors (and there’ve been a few!), Rachel Reeves’s tenure at the Treasury has been overshadowed by the economic cost of the UK leaving the European Union.
Ten years after that fateful referendum, Goldman Sachs has revised its estimate for lost growth a little higher. It’s updated “Doppelgänger” analysis suggests real UK GDP is around 6% below its counterfactual path, more than the previous 5% estimate two years ago.
Goldman economists James Moberly and Sven Jari Stehn say their estimates show that Brexit has materially weighed on Britain’s economic performance relative to other advanced economies, taking it from a growth profile closer to the US to one closer to the Euro area.
They write:
Analysis of the channels through which Brexit could have affected output also points to a significant drag.
Goods trade volumes have underperformed by 10-15% since the referendum. Services trade has held up better, but recent studies nonetheless find a meaningful Brexit-related hit. Lower trade intensity has likely reduced productivity, lowering GDP by 2-4%. Business investment has also been weak since 2016—with business surveys suggesting this is partly due to Brexit—likely lowering output by 2%.
The impact on labour supply through migration has been more mixed, with lower EU immigration but higher non-EU inflows. That said, shifting migration patterns have probably contributed to labour shortages in some sectors.
However, such estimates aren’t universally accepted. My colleague Larry Elliott wrote this week:
The Office for Budget Responsibility has estimated that the economy will be 4% smaller in the 15 years after the referendum than it would have been had the UK remained in the single market – but this finding should be treated with some scepticism.
As Jeremy Hunt, who campaigned for remain, told the BBC last week, for the economy to be 4% bigger today it would have had to have grown as fast as the US – something the former chancellor finds implausible.
Reeves: My work is beginning to bear fruit
Rachel Reeves is then left briefly speechless, after being asked what advice she might give to anyone in the future taking on the role as chancellor.
The chancellor then replies:
I’m not sure if anyone wants my advice.
But Reeves then rallies, insisting again that she is ‘really proud’ of her achievements as chancellor.
She tells the BCC’s annual conference:
My advice would be you’ve got a brilliant set of officials at the Treasury who will back to you if you’re clear about what you want to do.
I’ve been very clear about what I wanted to achieve as chancellor. I wanted to restore stability to the economy. I wanted to boost investment, both public and private, into the economy. And I wanted to change how the economy works, with a regulatory burden that is fairer and more efficient, with a planning system that actually allows things to get built in our country.
I’m really proud of my record, and I hope that whoever is Chancellor, in the future, whenever that future may be, sticks to what I’m doing because it is beginning to bear fruit. And we are seeing that investment return to the economy, that growth to come to the economy and crucially, that stability, so that businesses can plan and invest in.
Q: How would you like the history books to remember you?
Reeves reminds the BCC that in her first speech as chancellor, she said her time in office would be a success if ordinary children from working class backgrounds had more opportunities than when I became chancellor, and if women and girls felt that there should be no ceiling on their ambition.
She concludes:
It’ll be up to others to judge whether I’ve achieved my goals. But I’m very proud of what I’ve done and believe I have [hit those goals].
The recent local council elections, and those in Scotland and Wales, shows that Labour needs to do more to to connect to the country, to tell a better story of what we’ve done in government, and set out a vision for the future, Rachel Reeves concedes.
Conceding that she might be moving on from the Treasury soon, Reeves says:
That is what Andy [Burnham] will be able to provide as our next Prime Minister. He is a great communicator. He’s got a great track record in delivering in Manchester, and I have no doubt that he will bring that to the position of prime minister.
And and I look forward to working with him in whatever capacity.
Reeves: Middle East conflict will hit growth this year
Rachel Reeves then warns that British Chambers of Commerce’s annual conference that the UK will slow this year, after a robust start.
The chancellor reminds the BCC that the economy grew by 0.6% in the first quarter of this year.
If that continued through the year, we’d have 2.4% growth, which Reeves says would be an exemplary level of growth for a G7 economy.
But, she warns, the Middle East crisis means growth through the rest of 2026 will be slowed.
Reeves says:
Are we going to maintain that? No, because of the conflict in the Middle East.
It’s not a conflict that we started. It’s not a conflict we entered.
I think I’ve been pretty clear on and off the record about my views of that, conflict.
It has implications here and at home, which is why I set that target of the fastest growing economy in the G7 as a relative target, because all countries are exposed to shocks.
[Reeves has certainly been clear; she shook up the IMF’s spring meeting in April that Donald Trump’s war on Iran was a “mistake”]
And a reminder: The economy did shrink slightly in April, by 0.1%.
