Business news live: FTSE 100 falls, NatWest shareholders’ £1.5bn boost

It might be a little down today, just 0.24 per cent, but the FTSE 100 is up more than 11 per cent for this year as a whole, outperforming the French index and the two main US indices, the S&P 500 and the Nasdaq.

So why has the FTSE 100 been on a tear this year?

Dan Coatsworth, investment analyst at AJ Bell, says it’s down to a few reasons including the type of companies, the dividends paid out and the political landscape.

“It’s been a wonderful time to invest in UK shares. The FTSE 100 recently went through the 9,000 level for the first time and has hit a new record high on multiple occasions this year,” he said.

“Year-to-date, investors would have made a 14.3% total return including dividends from a FTSE 100 tracker fund, excluding charges. That’s an attractive return and we’re only a little over halfway through the year.

“The FTSE 100 is full of the type of stocks that appeal to investors when there is uncertainty in the world. Investors seek companies with defensive qualities and the UK market has them in spades.”

European carmaker VW says tariffs imposed by Donald Trump have cost it 1.3bn euros in the first half of this year – about £1.1bn.

While the company said it was “on the right track” overall, it added that going forward, tariffs would continue to hamper sales and it would have to cut costs to account for that.

Net profit fell more than 38 per cent from the same period last year as lower-margin EV sales and restructuring costs also impacted the bottom line.

Shares of the company on the Frankfurt Xetra exchange were up 3.3 per cent this morning.

The chief executive of Wizz Air, Jozsef Varadi, received a pay packet of £3.3m last year. This year, 28 per cent of shareholders voted against his salary and he says there’s an anti-CEO agenda in this nation.

“There is a kind of an anti-executive pay sentiment in the UK, whether we like it or not,” he said.

“Some people take a different view on social paradigms. But we cannot ignore the fact that executive pay is a matter of retention, and you have to retain your talents in the company.

“As far as I’m concerned we have a very fair and equitable system for addressing performance and realities, and the need to retain top talents.”

Julia Hoggett, the chief executive of the London Stock Exchange, previously said Britain was being held back by reluctance to offer high pay to CEOs and that a “constructive discussion” was needed on the matter.

June’s heatwave helped retail sales to bounce back last month as the record hot weather boosted sales of food and drink, according to official figures.

The Office for National Statistics (ONS) said the total volume of retail sales rose by 0.9% in June, having fallen by a downwardly revised 2.8% in May.

The ONS said demand jumped for non-alcoholic and alcoholic drinks in the searing temperatures, while motor fuel sales also leapt by the biggest amount for over a year as Britons “ventured out”.

But the retail sales rebound was not as pronounced as the 1.1% jump pencilled in by most economists and means that overall, retail sales volumes rose by 0.2% quarter-on quarter in the three months to the end of June.

This is down from 1.3% quarterly growth at the start of the year.

Hannah Finselbach, senior statistician at the ONS, said: “Following a poor May, it was an improved month for retail sales with growth across all main sectors.

“The warm weather in June helped to brighten sales, with supermarket retailers reporting stronger trading and an increase in drink purchases.

“It was also a good month for fuel sales as consumers ventured out and about in the sunshine.

“Looking at broader trends, retail sales are up slightly across the latest quarter, but are down when compared with pre-pandemic levels.”

European steelmakers are not set to benefit from the EU-US trade deal, with the 15 per cent base tariff not covering the industry.

Steel imports from Europe are subject to 50 per cent tariffs which the industry in Europe has said will wipe it out, with cheaper Chinese products and high energy bills.

British steel is at 25 per cent and will be reduced to zero under the terms of the UK-US deal – though that is dependent on solving talks related to the origins of some materials.

NatWest might be in the green, but they are one of just 22 companies with a positive return so far this morning in the FTSE 100.

Most are down a percent or two – probably more to do with some profit taking than anything dramatic in most cases, after a recent surge culminated in yesterday’s climb of almost one per cent for the index.

JD Sports is the biggest faller, down 1.96 per cent; Centrica has climbed highest, 1.74 per cent up this morning.

NatWest Group have this morning reported first half profits of more than £3.5bn, higher than expected, in their first financial report since the government sold the last of its holding from the financial crisis bailout.

The group announced returns to shareholders of more than £1.5bn, with a £750m share buyback announced as well as a 58 per cent increase to the interim dividend.

Shares are up close to 1.5 per cent this morning.

These funds aim for long-term growth by spreading risk across global markets, typically including equities (like shares in companies), bonds, property, and cash. On paper, it’s a sensible, low-effort option.

But dig deeper, and you may find your pension is funding sectors you’d rather avoid, such as fossil fuels, weapons, tobacco, and controversial mining firms.

A recent government report reveals 90 per cent of employees stick with their default fund.

That’s not necessarily because it’s the right fit, but because switching feels complex or isn’t front-of-mind.

Here’s what to do if that’s you.

While the Bank of England grapples with high inflation and stuttering interest rate cuts, the European Central Bank have gone from 4 per cent to 2 per cent in a year, with inflation also around 2 per cent.

Yesterday they opted to pause interest rate cuts, particularly with an EU-US trade deal close.

The right call? It might end up being the final call, according to one analyst.

“As effectively telegraphed by Lagarde, the ECB paused the easing cycle in July,” said Mark Wall, chief European economist at Deutsche Bank.

“The question is, will this be a short pause or a long pause? And could this be a pause that sees 2% policy rates eventually become the terminal rate in this easing cycle? Uncertainty remains high and the ECB rightly wants to keep its options open.

“But if trade uncertainty fades, the combination of a resilient economy and significant fiscal easing will eventually translate into upside risks to inflation. Markets are not far away from switching focus from the last cut to the first hike.”

High street firm River Island has approached creditors over a deal to save themselves from closure within weeks.

Reports yesterday suggested they could be out of cash by the end of August if stakeholders including those who rent shops to them didn’t agree to vast cuts.

River Island need to save £10m within a matter of weeks and an estimated £50m by the end of the year to plug a funding gap.

Dozens of stores will close if the deal is agreed to, with others seeing rents cut by up to 75 per cent in some cases and leased rent-free in others.