Author: Fiona Craig

Shares in British banks fell Friday after a leading centre-left think tank suggested the government introduce a new levy on commercial lenders, citing billions in interest payments from the Bank of England (BoE) that could otherwise fund public services.

The FTSE 350 Banks index was down 2.3% as of 08:00 GMT. Lloyds Banking Group (LSE:LLOY) led the decline, sliding 3.8%, followed by Barclays (LSE:BARC) with a 3.6% drop. Metro Bank (LSE:MTRO) fell 2.6%, NatWest Group (LSE:NWG) 1.5%, Standard Chartered PLC (LSE:STAN) 1.4%, and HSBC (LSE:HSBA) 1.2%.

The Institute for Public Policy Research (IPPR) estimated that roughly £22 billion ($29.7 billion) annually flows to banks via the BoE’s quantitative easing programme. Originally designed to stabilise the economy during the financial crisis, the programme now provides substantial interest income for lenders amid higher rates.

“What started as a programme to boost the economy is now a massive drain on taxpayer money,” said Carsten Jung, associate director for economic policy at the IPPR. “Public money is flowing straight into commercial banks’ coffers because of a flawed policy design.”

The think tank argued that taxing these payments would give finance minister Rachel Reeves additional fiscal room, as she faces pressure to tighten government finances. Reeves is expected to announce further tax measures in the autumn budget, following last year’s employer levy increases, amid concerns her fiscal targets may slip.

British banks hold significant deposits at the BoE, much of which was created through the central bank’s bond-buying programmes. The BoE pays its policy rate on these balances, generating windfalls for banks under the current higher interest rate environment. Any losses to the central bank are ultimately covered by the Treasury, and thus by taxpayers.

Governor Andrew Bailey has defended the policy, arguing it is crucial to ensure official rate changes pass through to households and businesses. In June, he dismissed renewed criticism of the BoE’s bond activities, which politicians such as Reform UK’s Nigel Farage have labelled excessively costly.

Earlier this year, Bailey and Reeves discussed a possible revised system for reserve provision, which could allow the BoE to earn income and offset some QE-related losses. The IPPR’s proposal echoes previous suggestions, including 2022 comments from former deputy governor Paul Tucker, who recommended that ministers reassess the policy of paying interest on bank reserves.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Frasers Group Plc (LSE:FRAS) announced on Friday that David Daly will step down as chair after serving on the board for eight years. He will be succeeded by Sir Jon Thompson, effective September 1.

The company confirmed that Daly will officially leave the board at the annual general meeting on September 24, 2025.

Sir Jon Thompson joined Frasers Group in June 2024 as a non-executive director. The company highlighted his extensive experience in corporate governance and managing large-scale projects.

Frasers also indicated plans to appoint Andy Lyon as a non-executive director, with a second non-executive appointment expected to be announced later. These changes will replace Daly, Ger Wright, and Helen Wright, all of whom are not standing for re-election at the AGM.

Lyon, formerly a senior audit partner at PwC, previously oversaw audits for Next and its credit operations. Frasers noted that his expertise in finance and governance will be instrumental in supporting the growth of Frasers Plus.

During his 24-year tenure at PwC, Lyon focused on the retail and consumer sectors, leading audits for several major global retailers, including department stores and fashion brands. He also served as senior partner for PwC’s East Midlands office, was a member of the Midlands leadership team, and contributed to PwC’s retail and consumer leadership team with responsibility for regional operations.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

European equity markets edged lower on Friday as investors processed recent consumer price figures from major regional economies, ahead of the U.S. Federal Reserve’s preferred inflation indicator.

At 08:10 GMT, Germany’s DAX fell 0.6%, France’s CAC 40 slipped 0.7%, and the U.K.’s FTSE 100 declined 0.4%.

Inflation in Europe and the U.S. Takes Center Stage

Earlier Friday, data showed that French consumer prices rose slightly less than expected in August, with the harmonized inflation rate registering +0.8% year-on-year, down from +0.9% in July. Spain’s EU-harmonized 12-month inflation held steady at 2.7% in August. Germany’s inflation figures are due later in the session, ahead of the eurozone’s flash August reading next Tuesday.

The European Central Bank maintained its key interest rate at 2% during the July meeting, and subsequent data has indicated that the eurozone economy remains resilient while inflation hovers near the ECB’s 2% target. Policymakers are widely expected to keep rates unchanged again in September, although July meeting minutes revealed differing views on the likely trajectory of inflation.

Later in the day, attention turns to the U.S. personal consumption expenditures (PCE) report, the Fed’s preferred inflation gauge, which could provide insight into the impact of recent U.S. tariffs on consumer prices.

Corporate Updates

In Europe, Rémy Cointreau (EU:RCO) raised the lower bound of its annual guidance after the U.S. and EU agreed to halve planned tariffs on European wines and spirits, relieving pressure on the French cognac producer. The updated trade deal, effective August 1, cut tariffs to 15% from the initially proposed 30%.

Norwegian builder Af Gruppen (TG:AF8) reported a strong jump in second-quarter profits for 2025, while Swedish property firm Sagax (TG:A2876m) acquired a 10.8% stake in Belgium-based Retail Estates (EU:RET).

Oil Prices Slip but Set for Weekly Gains

Oil futures eased slightly but remain poised for weekly gains, as traders weigh uncertainty over Russian supply alongside the approach of the U.S. summer driving season’s end.

At 04:10 ET, Brent crude fell 0.5% to $67.66 a barrel, and West Texas Intermediate (WTI) futures declined 0.5% to $64.30 a barrel. Both contracts are on track for weekly gains of just under 1%, following disruptions from Ukrainian attacks on Russian export terminals and ongoing uncertainty over peace negotiations between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky.

However, the approaching Labor Day holiday and the end of peak U.S. summer driving demand have pressured prices. On a monthly basis, both Brent and WTI remain down over 6%, weighed by steady production increases from OPEC members.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

John Wood Group PLC (LSE:WG.) has agreed to sell its North American Transmission and Distribution (T&D) operations to Qualus for $110 million, the company announced on Friday.

The engineering and consulting firm stated that the funds generated from the sale will be used to lower its net debt and will also support general corporate needs.

This divestment represents another step in Wood Group’s ongoing strategy to optimize its portfolio and strengthen its financial position.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Gold prices edged slightly lower on Friday but remain on track for strong August gains, supported by growing expectations of an interest rate cut by the Federal Reserve in September.

Investor attention is now focused on the upcoming U.S. personal consumption expenditures (PCE) price index, the Fed’s preferred measure of inflation, for further guidance on the central bank’s policy path.

The dollar retreated ahead of the PCE release and is positioned for losses in August, benefiting gold and other metals. Spot gold fell 0.2% to $3,409.89 per ounce, while October gold futures dipped 0.1% to $3,469.92/oz as of 01:48 ET (05:48 GMT).

Gold Set for Monthly Gains on Rate Cut Bets

Spot gold is up 3.7% for August and is now less than $100 shy of its April record high. Gains have been driven primarily by rising bets on a Fed rate reduction, amid signs of cooling in the U.S. labor market.

Fed Chair Jerome Powell acknowledged the labor market slowdown and indicated a potential 25-basis-point cut in September, though he remained cautious about further easing due to inflationary risks from President Donald Trump’s tariffs.

Market expectations for a September rate cut have grown, with CME FedWatch assigning an 82.9% probability of a 25-basis-point reduction next month. The softer dollar and rising rate cut bets have supported broader metal prices, which are also trending higher for August. The dollar index is down nearly 2% for the month.

Platinum and silver are outperforming gold, rising 5% and 5.9% respectively, as investors take advantage of their relatively discounted prices. Copper futures also climbed, with London Metal Exchange copper up 0.6% at $9,889.50 a ton and COMEX copper rising 0.6% to $4.5730 a pound, putting both contracts on track for August gains of 2.7–4.5%.

Eyes on PCE for Rate Guidance

All eyes are on the PCE report later Friday, particularly core PCE, which is closely monitored by the Fed. Headline PCE inflation is expected to remain stable, while core PCE may show a slight increase in July, staying well above the Fed’s 2% target.

Investors are watching closely for any indications of persistent inflation, which could affect the Fed’s rate cut plans. August’s data will also shed light on the inflationary impact of Trump’s trade tariffs, many of which came into effect during the month.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Oil prices dipped in Asian trading on Friday following gains in the previous session, as investors weighed the fading prospects of a Russia-Ukraine peace deal and considered the effects of additional U.S. tariffs on Indian imports.

As of 21:52 ET (01:52 GMT), October Brent crude futures fell 0.8% to $68.10 per barrel, while West Texas Intermediate (WTI) futures dropped 0.7% to $64.14 per barrel.

Thursday had seen both contracts close nearly 1% higher, shrugging off early declines after U.S. data showed crude stockpiles fell less than expected. Despite short-term gains, both Brent and WTI are on track for monthly losses exceeding 6%, pressured by continued production increases from OPEC.

Peace Talks Between Russia and Ukraine Lose Momentum

Optimism over peace negotiations has waned following U.S. President Donald Trump’s recent call for Ukrainian President Volodymyr Zelenskyy and Russian President Vladimir Putin to hold direct talks before any trilateral summit in Washington.

Although Trump offered U.S. security guarantees without deploying troops, no date or venue for discussions has been established, and analysts see little likelihood of near-term progress. Meanwhile, Russia conducted new attacks on Kyiv, hitting buildings that house the EU mission and the British Council.

“The lack of progress towards a peace deal means risks of sanctions and secondary tariffs continue to hang over the oil market,” ING analysts said in a note.

U.S. Tariffs on Indian Imports Stir Caution

In response to India’s continued purchases of Russian crude, the U.S. implemented an additional 25% tariff on Indian imports on Wednesday, bringing the total duty to 50% from August 27. The move is part of broader efforts to limit India-Russia trade amid the Ukraine conflict.

Indian refiners briefly paused Russian oil purchases after the secondary tariffs were introduced but have since resumed imports, highlighting the limited effect of the measure on flows. Analysts expect the market to monitor Russian oil shipments to India closely to assess any ongoing impact.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

U.S. stock futures edged slightly lower on Friday as investors awaited the release of the Federal Reserve’s key inflation gauge. At the same time, inflation updates from Europe are coming into focus, and the Trump administration has officially ended the “de minimis” exemption.

Key U.S. Inflation Data Ahead

Market attention is on the U.S. personal consumption expenditures (PCE) price index, the Fed’s preferred inflation measure, which is expected to provide guidance on interest rate decisions for the remainder of the year. Analysts anticipate core PCE to remain at 0.3% month-on-month, keeping the annual rate at 2.9%.

However, there is a risk that the data could reveal the impact of President Donald Trump’s tariffs filtering through to consumer prices, following a recent surprise rise in producer inflation.

Last year, the Fed lowered its policy rate by a full percentage point, but it has held rates steady this year amid concerns that higher tariffs could reignite inflation above its 2% target. Many expect this stance to change in September with a potential 25-basis-point cut, although the path beyond that remains uncertain.

Fed Governor Christopher Waller said on Thursday he wants to start cutting rates next month and “fully expects” more rate cuts to follow to bring the Fed’s policy rate closer to a neutral setting. Waller and Fed Governor Michelle Bowman both dissented from the Fed’s decision to keep short-term borrowing costs unchanged in July. Both were appointed by Trump and are said to be under consideration as possible successors to Fed Chair Jerome Powell, amid market concerns of the politicisation of the central bank.

Trump earlier this week announced he was firing Fed Governor Lisa Cook over what he said was possible mortgage fraud, a move Cook says is illegal and is suing to stop.

U.S. Futures Edge Lower

U.S. stock futures dipped slightly but remained on track for solid monthly gains. At 03:20 ET, S&P 500 futures were down 5 points, or 0.1%; Nasdaq 100 futures fell 35 points, or 0.1%; and Dow futures lost 80 points, or 0.2%.

On Thursday, the major indices posted gains, with the S&P 500 closing 0.3% higher at a record level, the Nasdaq Composite up 0.5%, and the Dow Jones Industrial Average rising 0.2% to a new high. All three are set for healthy monthly gains: the Dow up 3.4% in August, the S&P 500 up 2.6%, and the Nasdaq 2.8%.

Investors will also be digesting earnings from Ulta Beauty (NASDAQ:ULTA), Ambarella (NASDAQ:AMBA), and Affirm Holdings (NASDAQ:AFRM).

Trump Administration Ends “De Minimis” Exemption

On Friday, the U.S. ended duty-free treatment for packages valued under $800, ending the “de minimis” exemption that had boosted shipments from international sellers. President Donald Trump announced the repeal on July 30, citing concerns that the exemption allowed traffickers to send parcels containing fentanyl into the country.

The de minimis exemption had previously driven cross-border ecommerce, with 1.36 billion packages worth $64.6 billion entering the U.S. in fiscal 2024. About 73% of these shipments came from China. Consumers in the U.S. may now face higher prices, unless overseas retailers absorb the new tariffs.

European Inflation Data in Focus

Europe is also set to release key inflation figures, with preliminary consumer price data from France, Spain, and Germany in focus. The European Central Bank left its key rate at 2% in July, confirming that eurozone inflation hovered around its target. ECB policymakers are expected to hold rates steady in September, though minutes from the July meeting revealed divisions on the outlook for inflation, a debate likely to intensify in the months ahead.

A major source of uncertainty is the impact of U.S. tariffs on European economies. The ECB noted that this “would remain a key feature of the global and euro area economic outlook for some time to come,” though officials disagreed on the magnitude of its potential effect.

Crude Oil: Weekly Gain, Monthly Loss

Oil prices fell slightly, yet remain on track for a weekly gain. At 03:20 ET, Brent futures dropped 0.7% to $67.54 a barrel, and West Texas Intermediate fell 0.7% to $64.12 a barrel. Weekly gains have been supported by concerns over Russian supply after attacks on oil export terminals in Ukraine and stalled negotiations between Presidents Putin and Zelensky.

However, the end of the U.S. summer driving season and Labor Day weekend pressures capped prices. Both Brent and WTI are on track for monthly losses exceeding 6%, pressured by ongoing production increases from OPEC.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Carclo plc (LSE:CAR) has published its audited results for the year ending 31 March 2025, reporting notable improvements in operational and financial performance. While revenue declined by 8.6% due to strategic exits from selected product lines, the company achieved a 48.5% increase in underlying operating profit and substantially reduced net debt.

The restructuring of US operations and integration of multiple divisions have reinforced Carclo’s market position. A continued focus on sustainability and operational efficiency has also bolstered the company’s resilience against geopolitical uncertainties. Carclo is well-positioned for growth in the life sciences and aerospace sectors, supported by robust cash flow and a new financing arrangement.

Despite these strengths, the company faces challenges, including high leverage and declining revenues. Positive corporate developments and technical indicators provide some momentum, but valuation concerns and financial instability limit immediate investment appeal. Strategic execution and ongoing corporate initiatives remain key to long-term success.

About Carclo plc

Carclo plc is a London-listed company specializing in high-precision components and comprehensive manufacturing solutions. Its operations serve critical growth sectors such as life sciences, aerospace, and optics, providing tailored precision products.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Avacta Group plc (LSE:AVCT) has successfully raised £3.25 million through an equity fundraising and announced amendments to its Convertible Bond. The funds are earmarked for an upcoming bond repayment, while the bond adjustments include deferred repayment schedules and a revised conversion price.

These actions support Avacta’s ongoing progress in its oncology platform and strengthen its financial position, with the potential to enhance both market perception and stakeholder confidence.

Despite these positive steps, the company’s outlook remains influenced by financial challenges, including ongoing losses and the need for additional funding. Some technical indicators provide limited short-term optimism, while strategic advancements in its oncology pipeline offer potential longer-term upside.

About Avacta Group plc

Avacta Therapeutics is a clinical-stage life sciences company focused on targeted oncology therapies. Its proprietary pre|CISION® platform is designed to deliver potent cancer treatments directly to tumor sites, reducing impact on healthy tissues. The company’s pipeline includes peptide drug conjugates and Affimer® drug conjugates, offering potential advantages over traditional antibody drug conjugates.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Metals One PLC (LSE:MET1) has made a strategic investment of C$750,000 in Lions Bay Capital Inc., acquiring a 19.1% stake in the company. This investment is designed to strengthen Metals One’s position in the gold market, leveraging Lions Bay’s plans to refurbish a South African gold processing plant. The move is expected to generate near-term cash flow and create opportunities for future gold acquisitions in the Barberton region.

About Metals One PLC

Metals One PLC is a minerals exploration and development company with projects in uranium and gold. The company focuses on critical and precious metals in low-risk jurisdictions, aiming to meet global demand for responsibly sourced raw materials and capitalize on favourable gold market conditions. Metals One is listed on the AIM Market of the London Stock Exchange.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.