A £25m post-Brexit border control post in Portsmouth may have to be demolished if the UK government’s deal with the EU removes the need for health and veterinary checks on food imports, according to the port’s director. Mike Sellers had already spoken out last year about how more than half of the site would never be used because planned checks on EU food and plant products had been pared back since it was designed, leading to the building being called a “white elephant”. The hi-tech facility at the UK’s second busiest cross-Channel terminal was one of more than 100 border control posts (BCPs) around the country built to government specifications to handle post-Brexit checks on imports subject to sanitary and phytosanitary checks, such as meat, fish, dairy products, fruit and vegetables. On the trade front, US chip exports controls have been a “failure”, the head of Nvidia, Jensen Huang, told a tech forum on Wednesday, as the Chinese government separately slammed US warnings to other countries against using Chinese tech. Successive US administrations have imposed restrictions on the sale of hi-tech AI chips to China, in an effort to curb China’s military advancement and protect US dominance of the AI industry. But Huang told the Computex tech forum in Taipei that the controls had instead spurred on Chinese developers. The local companies are very, very talented and very determined, and the export control gave them the spirit, the energy and the government support to accelerate their development. I think, all in all, the export control was a failure. China has a vibrant technology ecosystem, and it’s very important to realise that China has 50% of the world’s AI researchers, and China is incredibly good at software. Oasis fans are expected to splash out more than £1bn on the reunion tour including tickets, accommodation, food, drink, outfits and merchandise, according to research that found a quarter of ticket holders would have been happy to spend even more. The band’s comeback concerts after a 15-year hiatus are expected to be the most popular, and profitable, run of gigs in British history. Research by Wonderwallets, part of the Barclays Consumer Spend report, estimates £1.06bn will be spent by the 1.4 million fans attending the 17 UK tour dates – more than £757 a person. However, the excitement around once again being able to see the Mancunian band live has been marred by a scandal over “dynamic” ticket pricing, which led to some fans paying more than £350 for tickets with a face value of £150, and has prompted an investigation by the UK competition watchdog. Electrical goods retailer Currys has reported higher profits and a jump in sales, and said it is benefiting from lower interest rates. The company said in a trading update to the stock market that it expects to report pre-tax profit of around £162m for the year to 3 May, higher than its previous £160m guidance, and 37% higher than a year earlier. Currys said improving finances reinforced the board’s decision to resume dividends to shareholders. The retailer – which struck a more gloomy tone in January, when it said it was entering a period of “depressed hiring” – said like-for-like sales growth had accelerated to 4% in the past 17 weeks since the key Christmas trading period. It said it was helped in part by lower interest costs. Alex Baldock, Currys chief executive, said: We finished another year of strengthening performance on a high note with encouraging momentum and accelerating sales growth in both the UK and Ireland and the Nordics. In both, we’ve grown profits by delivering sales growth, market share gains and gross margin increases. The company is due to report its full-year results in early July. Marks & Spencer has warned that its recent cyber-attack will disrupt its online business into July, and calculated a £300m hit to profits this year. The number was revealed as M&S said pre-tax profits rose by a better-than-expected 22% to £876m in the year to 30 March, shortly before the attack, as sales rose 6% to £13.9bn. The company said it had more than £400m of net funds in the bank so that it had been “in the best financial health we’ve been in 30 years” before the hackers hit and the expected financial impact would be significantly mitigated by insurance, cost reductions and other actions. Analysts said they expected to cut profit forecasts for this year by at least 10% but the City is expecting at least £100m of the profits hit to be pulled back from insurance and other measures. As water bills including sewerage rise across the country – the most since at least 1988 –two of Britain’s biggest water companies, Thames Water and Anglian Water, face more than 50 criminal investigations between them as part of a crackdown on sewage dumping, according to the government . The utilities were subject to the bulk of a record 81 investigations into water companies between last July’s general election and March 2025, according to new data. New powers to claw back the costs of the Environment Agency investigations will be used, meaning the “polluter will pay”, sources told the Guardian. This could prove very costly for Thames, the heavily indebted supplier that topped the charts of active investigations at 31 and will probably have to fund the majority of them. Britain’s biggest water company, which recently came within five weeks of running out of funds, attempted to persuade the water regulator to let it off hundreds of millions of pounds of fines. Significant further costs could risk tipping it into a special administration, a form of nationalisation. Thames Water is rushing to find a buyer willing to inject cash as it teeters on the brink of temporary nationalisation. The company, which has 16 million customers and 8,000 employees, is labouring under £20bn of debt. The UK inflation numbers aren’t as bad as they look, said ING’s developed markets economists James Smith. Services inflation, which rose much further than expected, was driven by a big change in road tax and the timing of Easter. It should fall back from April’s 5.4% figure to the 4.5% area this summer, keeping the Bank of England on track for quarterly rate cuts through this year and into 2026. Services is the part of the inflation basket that the Bank of England cares most about, and this was a much larger pick-up than economists or the Bank had expected. But, that jump doesn’t look as problematic as at first glance once you drill into it. Smith calculates that half of that change was solely down to the rise in road tax. That will stick around for the next 12 months, then drop out of the annual comparison. The Bank of England will almost certainly ignore this, as it does with changes in other taxes like VAT, he said. Aside from road tax, the remainder of the increase in services inflation can be almost entirely accounted for by air fares and package holidays, both of which were affected by the timing of Easter. Away from road tax and travel, several other key areas saw further disinflation in April. Restaurants/cafes, medical care services and rents all saw their respective rates of annual inflation fall. More generally, surveys show that pricing power is ebbing away. We expect services inflation to fall back to the 4.5% area this summer and lower still in 2026, when things like road tax drop out of the annual comparison. That’s still too high for many of the Bank of England’s rate-setters, which is why we have long argued policymakers are unlikely to speed up the pace of easing this year. But we think an August cut is still highly likely, and the quarterly pace of rate cuts can continue through this year and into 2026. Core inflation, which strips out volatile food and energy costs, rose more than expected to 3.8% on a yearly basis, from 3.4% in March. Services inflation jumped to 5.4% from 4.7%. Monica George Michail, associate economist at the National Institute of Economic and Social Research, a think tank, said inflation is likely to stay higher in the coming months. She expects just one further interest rate cut this year. The Joseph Rowntree Foundation has described the jump in inflation as “alarming” that have “really hit home” for struggling households, with more people already relying on food banks. JRF economist Maudie Johnson Hunter said: Alarming bill rises in April, such as water, energy and council tax, have really hit home for families already struggling to make ends meet. The Bank of England central projection is for the inflation rate to stay over 3% for the rest of 2025, meaning many of these core bill increases will remain baked into higher household outgoings, as incomes continue to fall short of essential costs. Figures out today from Trussell also show that 2.9m emergency food parcels were provided across the UK between April 2024 and March 2025 to people in hardship, up by just over 50% in the last five years. The government needs to take action to ensure their commitment to improving living standards moves from rhetoric into reality for households. Our research shows real incomes are currently projected to be lower in 2029 than they are today, which would be a damning legacy for a government who came to power promising to end the need for food banks. Food has also become more expensive, with prices up by 3.4% year on year in April, up from 3% in March. The UK statistics office said the upward effects came from meat, mineral water, bread and cereals, and sugar and jam. The downward effects came from vegetables, and from milk, cheese and eggs. Meanwhile, clothes prices fell by 0.4% in the 12 months to April, compared with a rise of 1.1% in March. This was mainly because of lower prices for women’s clothes and shoes and garments for infants, as many more items were on sale than usual. The statistics office said it is possible that the larger proportion of items on sale was a consequence of index day coinciding with the Easter holidays in April this year, while occurring after the Easter holidays last year. Luke Bartholomew, deputy chief conomist at the fund manager Aberdeen, echoed those comments, saying: Inflation was always going to jump higher today given movements in energy and other administered prices, but the reported increase is bigger than expected. In particular, services inflation looks especially strong, which may suggest the various cost shocks such as the increases in national insurance and the living wage are hitting firms and starting to be passed on into final Prices. Certainly, this will reinforce the concerns voiced by Bank of England chief economist Huw Pill that underlying inflation pressures are sticky and so there is less room for the Bank to cut rates. Nonetheless, we think a quarterly profile of rate cuts remains appropriate, but the chance of the easing cycle speeding up any time soon has fallen. Pill said yesterday that the quarterly pace of rate cuts had been “too rapid”. The “Awful April” inflation surge has cast doubt on an interest rate cut in the summer, according to Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales. This inflation surge highlights the brutal hit to household and business finances from April’s multitude of eyewatering bill rises and tax hikes, with higher energy costs in particular driving an uncomfortably large increase in the headline rate. Rising services and core inflation suggest that the double blow for businesses from the rising National Insurance and National Living Wage has further fuelled underlying price pressures, more than offsetting the downward squeeze from a wilting labour market. While the aftershocks from ‘awful April’ should keep inflation above 3% for a while, it could start drifting downwards as lower energy bills kick in, assisted by July’s expected fall in Ofgem’s energy price cap. These figures probably rule out a June rate cut and while policymakers should view April’s spike as a temporary blip, the size of the increase means an August policy loosening is far from a done deal. Markets see the probability of a rate cut in June at just 6% and a cut is not fully priced in for the August meeting either. Traders are still expecting interest rates to fall to 4% by September, from 4.25% at the moment. The chancellor of the exchequer, Rachel Reeves, said: I am disappointed with these figures because I know cost of living pressures are still weighing down on working people. We are long way from the double digit inflation we saw under the previous administration, but I’m determined that we go further and faster to put more money in people’s pockets. That’s why we have increased the minimum wage for millions of working people, frozen fuel duty to protect commuters and struck three trade deals in the past two weeks that will go towards cutting bills. Here’s our full story on inflation: Inflation jumped in April by more than expected to 3.5% after dramatic increases in water bills, energy costs and council tax, according to official figures. A rise in employer national insurance contributions and a boost to the national minimum wage also put pressure on companies to raise prices last month by more than City analysts had forecast. Calls for deeper interest rate cuts are likely to be rebuffed by the Bank of England after the growth in prices proved to be stronger than financial markets expected. Officials at the Bank cut interest rates by a quarter point to 4.25% at their last meeting on 8 May but the vote by the nine-member monetary policy committee was split three ways, with two members voting to keep rates on hold while another two supported a half-point reduction. Transport costs rose by 3.3% year on year in April, up from 1.2% in March, following a rise in vehicle excise duty – it now applies to old and new electric cars plus some of the rates paid by new petrol and diesel cars doubled. Airfares rose by 27.5% on the month, up from 6.5% a year ago. This is the second-highest monthly rise for an April since records began. Flights departing in the Easter holidays tend to be more expensive. Index day occurred during the Easter holidays this year, which made every flight more expensive, while last year, index day occurred after the Easter holidays. There was a downward effect from motor fuels, which fell by 9.3% year on year in April, compared with a 5.3% annual drop in March. The average price of petrol fell by 3.0 pence per litre between March and April to 134.5 pence per litre, down from 148.1p in April. Diesel prices fell by 3.1p per litre to 141.7p, down from 157.1p a year earlier. UK inflation jumped back above 3% in April, pushed up by higher energy and transport costs. The consumer prices index increased by 3.5% in the 12 months to April, up from 2.6% in March, according to the Office for National Statistics. That’s towards the top end of economists’ forecasts. The ONS pointed to higher prices for housing and household services, transport, and recreation and culture, while the biggest downward contribution came from clothing and footwear. The main culprit was rising energy prices. The regulator Ofgem estimated that for an average household paying by direct debit for dual fuel, the increases equate to £1,849, a rise of £111 over the course of a year. Prices of electricity, gas and other fuels rose by 6.7% in the year to April. Gas prices rose by 7.5% on the month, compared with a fall of 15.8% a year ago. Electricity prices rose by 2.9%, compared with a fall of 10.2% a year ago. Prices of water and sewerage rose by 26.1% last month, against a rise of 8.1% a year ago. This is the largest rise since at least February 1988. The US dollar has fallen, extending a two-day slide against other major currencies, as Donald Trump pressured Republicans to back his sweeping tax bill. The US president visited the Capitol to persuade lawmakers to support what is known as the One Big Beautiful Bill Act. Traders are also cautious ahead of the Group of Seven finance minister talks in Canada, where US officials could angle for a weaker dollar. The greenback is down by 0.5% against a basket of major peers. Goldman Sachs economist James Moberly is predicting a rise in UK headline inflation to 3.5%. He explained: We expect services inflation to rise to 5.1% (from 4.7% in March), with the increase driven by firms passing through additional costs from the hike in employer national insurance contributions (NICs), a significant Easter effect on airfares, and larger price resets for sewerage bills, vehicle excise duty, and some telecoms services. Our forecast is 10bp above the Bank of England’s projection. A significant increase in water prices is likely to raise core goods inflation to 1.53% (from 1.11% in March). This implies that core inflation will rise to 3.79% (from 3.38% in March), broadly in line with the level implied by the BoE’s forecasts. We also see strength in non-core components; food retailers are particularly exposed to the impact of the employer NICs change, while energy inflation is set to rise given a 6.4% increase in the Ofgem price cap and strong base effects. What does this mean for interest rates? Moberly said: A firm services and headline CPI print would further raise the likelihood that the monetary policy committee pauses in June. But with the increase in inflation largely driven by temporary factors, a stronger print would not necessarily be an indication of greater services pressures ahead; in fact, we see services inflation falling back below the BoE’s projections later in the year. Given the restrictive policy stance, notable labour market loosening, a likely deceleration in pay growth, and a softer near-term demand outlook, we therefore continue to expect the Bank to accelerate the pace of cuts in the second half. Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Inflation in the UK is expected to have risen back above 3% last month, reflecting higher household bills. The consumer prices index is forecast to have risen by 3.3% in the 12 months to April, up from 2.6% in March, according to economists polled by Reuters. The figures from the Office for National Statistics are due at 7am BST. There is an unusually wide range of forecasts, from 2.7% to 3.6%. The core rate of inflation, which strips out volatile energy and food costs, is predicted to have risen to 3.6% from 3.4%. Many household bills go up in April every year, from council tax to energy and water, but this year the picture is complicated by the impact of higher national insurance contributions for employers, and by the late timing of Easter. This year, people talked about “Awful April”. Julien Lafargue, chief market strategist at Barclays Private Bank, said: April is likely to show UK headline inflation jump back up above 3%. This is driven by a number of one-off adjustments including the new National Insurance contributions and the increased National Living Wage. There is also the impact of Easter, which fell squarely in April in 2025 but was in March in 2024, as well as the lovely weather that the UK has experienced in recent weeks. All this will make for a relatively noisy report at a time when the Bank of England is eagerly trying to figure what to do next. However, beyond the short-term distortions, we believe the overall direction of travel for UK inflation is lower. This should provide the central bank with room to consider at least a couple more interest rate cuts this year, supporting favourable economic conditions going forward. As Rachel Reeves travels to Banff in Canada for a two-day summit of the G7 finance ministers and central bank governors, she said: This government is laser-focused on delivering for the British people. That’s why in the past two weeks we have struck three major deals with the US, EU and India that will kickstart economic growth and put more money in people’s pockets as part of our plan for change. The world is changing, but we have shown in recent weeks that Britain is a strong economy that can navigate that change and we are once again a nation that is open for business. The UK government has been boosted by three trade deals struck within the last fortnight – with the US, the European Union and India. The chancellor is expected to meet with the US treasury secretary, Scott Bessent, for the first time since the US-UK trade deal (which, unlike the free trade agreement with India, is not a full trade deal). The UK treasury said it paves the way for further negotiations on tariffs to secure benefits across our economy – such as a future technology partnership between the two countries. Reeves is also due to meet Canada’s finance minister, François-Philippe Champagne, for the first time since the Canadian election, with the chancellor welcoming Canada’s leadership during its G7 presidency in areas like tackling financial crime and supporting the strong ties between the UK and Canada on trade and economic security. The Agenda 7am BST: UK inflation for April G7 two-day meeting of finance ministers and central bank governors in Canada
Author: Julia Kollewe