Key events
Chart: FTSE 100 over the last 20 years
The ‘Footsie’ is continuing to hit new highs this morning!
It’s now up almost 1% at 8952 points, up 85 points today. Miners such as Anglo American (+4.6%), Glencore (+3.5%) and Antofagasta (+2.8%) are driving it higher.
WPP appoints Microsoft exec to lead fightback
Boardroom news: Advertising giant WPP has turned to Microsoft executive Cindy Rose to lead its turnaround.
WPP, which disappointed the City with a profit warning yesterday, says Rose will succeed outgoing chief executive Mark Read on 1 September. She is currently MS’s chief operating officer for Global Enterprise.
Shares in WPP have risen 2.5% as investors welcome Rose’s appointment, helping to push the FTSE 100 to a record high this morning.
WPP, which is under pressure from AI-generated campaigns, is touting Rose’s artificial intelligence nous. She’s also sat on the WPP board as a non-executive director since 2019.
Philip Jansen, chair of WPP, says:
“Cindy is an outstanding and inspirational business leader with extensive experience at some of the world’s most recognised companies and a track record of growing large-scale businesses. She has led multi-billion-dollar operations across the UK, EMEA and globally, built enduring client relationships and delivered growth in both enterprise and consumer environments.
“Cindy has supported the digital transformation of large enterprises around the world – including embracing AI to create new customer experiences, business models and revenue streams. Her expertise in this landscape will be hugely valuable to WPP as the industry navigates fundamental changes and macroeconomic uncertainty. Cindy’s appointment follows a thorough selection process that considered both internal and external candidates. As an existing Board member she understands our business and the needs of our clients, and we look forward to working with her in her new role as CEO.
FTSE 100 hits record high as trade war fears ease
Newsflash: Britain’s blue-chip stock index has hit a new alltime high, as investors shrug off the threat of Donald Trump’s trade wars.
Update: The FTSE 100 index has risen by as much as 80 points, or 0.9%, to a fresh record peak of 8947.84 points, over the previous record of 8908.82 set in March.
Mining stocks are leading the rally today, signalling that traders are not worried that Trump’s blizzard of tariffs will cause a global recession, despite new tariffs such as the 50% imposed on US copper imports and on imports from Brazil.
Chris Beauchamp, chief market analyst at IG, says investors are in an “ebullient summer mood”, adding:
Perhaps most notable is the market’s apparent indifference to escalating trade tensions. Trump’s 50 percent tariff on copper imports and threats toward Brazil triggered little reaction. Many now view such announcements as political posturing, summed up by TACO: Trump Always Chickens Out.
So far this year, the FTSE 100 index has surged by over 9%. It has benefitted from a range of factors this year, including the rotation out of US assets as investors have feared that Donald Trump’s trade war would hurt America’s economy.
Relief that the UK struck an early trade deal with the US has also helped make the London market attractive.
Precious metals producer Fresnillo has been the top-performing FTSE 100 stock so far this year; it has more than doubled (+140% since 1 January), as the prices of both gold and silver have risen.
British defence companies Babcock (+117% year-to-date)and BAE Systems (+63% ytd) have also both risen sharply this year, helped by expectations of a surge in defence spending as the Russia-Ukraine war has continued.
Engineering firm Rolls-Royce (+73% ytd) has also had a strong 2025.
UK drops plans for zonal energy pricing
From post to energy…. and the UK government has confirmed it will not introduce “zonal pricing”, under which southern electricity users would have been charged more than those in Scotland.
The government says it has decided to retain a single national wholesale price (as the Guardian reported earlier this week) and also reform the existing national pricing system rather than split the country into different zones.
Energy Secretary Ed Miliband said:
“Building clean power at pace and scale is the only way to get Britain off the rollercoaster of fossil fuel markets and protect families and businesses for good.
“As we embark on this new era of clean electricity, a reformed system of national pricing is the best way to deliver an electricity system that is fairer, more affordable, and more secure, at less risk to vital investment in clean energy than other alternatives.
“Our package of reforms will protect consumers and secure investment as we drive to deliver our clean power mission through our Plan for Change.”
Zonal pricing has split the energy industry – advocates argued it would encourage heavy energy users to relocate to areas where power is generated, cutting billions of pound off the cost of renewing and updating the electricity grid.
Critics, though, said it would create a ‘postcode lottery’ for energy prices.
Royal Mail: It’s good news for customers
Royal Mail has welcomed Ofcom’s decision to relax the universal service obligation (perhaps unsurprising, at it could save the company £425m!).
Martin Seidenberg, group chief executive officer at International Distribution Services, says:
“It is good news for customers across the UK as it supports the delivery of a reliable, efficient and financially sustainable Universal Service.
“It follows extensive consultation with thousands of people and businesses to ensure that the postal service better reflects their needs and the realities of how customers send and receive mail today.”
Citizens Advice: Ofcom has missed a major opportunity
Ofcom needs to hold Royal Mail to account to improve postal deliveries, says Tom MacInnes, director of policy at Citizens Advice.
MacInnes explains:
“Royal Mail has a woeful track record of failing to meet delivery targets, all the while ramping up postage costs. Today, Ofcom missed a major opportunity to bring about meaningful change.
“Pushing ahead with plans to slash services and relax delivery targets in the name of savings won’t automatically make letter deliveries more reliable or improve standards.
“While Ofcom says it recognises the importance of affordability and reliability for consumers, we need to see those words backed by action, forcing Royal Mail to do what it should’ve been doing all along – giving paying customers a service that delivers.”
Ofcom to review stamp prices
Ofcom has also launched a review of pricing and affordability of the postal service.
This will look at concerns over stamp prices, which have been steadily climbing.
Natalie Black, Ofcom’s Group Director for Networks and Communications, explains:
“As part of this process, we’ve been listening to concerns about increases in stamp prices. So we’ve launched a review of affordability and plan to publicly consult on this next year.”
Back in April, Royal Mail increased the cost of first- and second-class stamps for the sixth time in just over three years. That raised the price of a first-class stamp by 5p, or 3%, to £1.70. The cost of the second-class service rose by 2p, or 2.4%, to 87p.
This graphic shows how the changes to second-class letter post will affect deliveries across the UK:
Introduction: Royal Mail cleared to scrap second-class post on Saturdays
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Britain’s postal operator is being relieved of the obligation to deliver second-class letters six days a week, as part of reforms to the service that will also relax its delivery targets.
Regulator Ofcom has announced that from 28 July, it will allow Royal Mail to deliver Second Class letters on alternate weekdays, but no longer on Saturdays – but still within three working days of collection.
Ofcom says it is making the change to allow the UK’s universal postal service – guaranteeing delivery to anywhere in the country at a fixed price – “to survive”.
It points out that, since 2011, Royal Mail has been required under the universal service obligation to deliver First and Second Class letters six days a week. But the number of letters sent each year has more than halved over that time.
Natalie Black, Ofcom’s Group Director for Networks and Communications, said:
“These changes are in the best interests of consumers and businesses, as urgent reform of the postal service is necessary to give it the best chance of survival.
“But changing Royal Mail’s obligations alone won’t guarantee a better service – the company now has to play its part and implement this effectively. We’ll be making sure Royal Mail is clear with its customers about what’s happening, and passes the benefits of these changes on to them.
Royal Mail is now owned by Czech billionaire Daniel Křetínský, who took over its parent company International Distribution Services (IDS) last December.
Ofcom estimates that changing second-class delivery days could create annual net cost savings of between £250m and £425m, allowing Royal Mail to “invest more in improving its delivery performance.”
It will still be required to deliver First Class letters the next working day, Monday to Saturday, and there will continue to be a cap on the price of a Second Class stamp.
In another fillip for Royal Mail, though, Ofcom is making its delivery targets less demanding. It will now only have to deliver 90% of First Class mail on the next day, down from 93%.
The Second Class mail target is being weakened too, from 98.5% to 95% of letters delivered within three days. Removing Saturday from the roster of delivery days means some letters will take longer to arrive.
Ofcom inists these new targets are high by international standards, pointing out that Germany’s three-day target is 95%, Spain’s is 93%, and Norway’s and Poland’s are 85%.
The old targets have certainly proved tricky for Royal Mail – it has been repeatedly fined for missing them, with almost a quarter of first-class mail arriving late in the year to March.