Allegra Stratton: Can Rachel Reeves Escape the Doom Loop?
After a well-received Mansion House speech last night, Reeves was probably wanting a bit of positive momentum to put some of the difficulties of the past few months behind her. Instead, inflation is up to 3.6%, higher than expectations.
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Yahoo
an hour ago
- Yahoo
Amid increased momentum for defense, the NATO Innovation Fund refreshes its investment team
Two years after securing $1 billion in commitments from over 20 countries, the NATO Innovation Fund (NIF) is entering a new chapter, marked by the arrival of two new partners and the departure of its penultimate founding team partner. In a context of increased military spending across NATO members, investment in dual-use technology has skyrocketed since the initiative was first announced in 2021. Once a no-go-zone for institutional investors, defense and resilience tech last reached an all-time high of 10% of all VC funding in Europe, where nearly all NIF's backers are located. This booming interest should have given NIF a first-mover advantage, but the fund was hampered by management challenges and a series of high-profile departures. After the 2025 NATO Summit in The Hague reaffirmed its importance last June, NIF is now emerging with an almost entirely new investment team. It is composed of three partners. While NIF originally had four partners and one managing partner, a person familiar with NIF said that this flat, three-partner model will be the structure in place for the foreseeable future, suggesting that no new hires are to be expected. These two appointments had previously been rumored, but the identities of the new partners had not been confirmed. Two of the partners are new hires: Ulrich Quay and Sander Verbrugge, who will be based in Amsterdam. Quay, a German national, was most recently in charge of corporate investments as a vice president at BMW, where he previously founded and led corporate venture fund BMW i Ventures. Verbrugge, a Dutch PhD in molecular biophysics, was previously a partner at deep tech VC fund Innovation Industries, which he joined after working at semiconductor design and manufacturing company NXP. The third partner is London-based VC Patrick Schneider-Sikorsky, now the last remaining member of the original investment team. Alongside the new hires, the fund announced the departure of founding team partner Kelly Chen, who confirmed to TechCrunch that it was her decision and that she will be stepping away to build a new venture. Chris O'Connor, another founding team partner, departed earlier this year with similar plans. Chen currently sits on the board of several startups backed by NIF, but will transition her board responsibilities once her employment at the NIF has wrapped up, TechCrunch learned from its chief communications and marketing officer, Amalia Kontesi. While some observers wish the fund had deployed capital faster, she said NIF 'is on track to meet [its] investing goals for the year.' Since its inception, NIF has made 19 investments: seven into funds such as OTB Ventures, and 12 into startups including Space Forge and Tekever, which makes dual-use drones. Still, adding new partners with industrial and scientific backgrounds, no matter how impressive, may not satisfy those who wish that the fund could invest in Ukraine or pure defense, as opposed to dual use, in response to Russia's war economy. But it is also in line with NIF's broader thesis to 'empower deep tech founders to address challenges in defence, security, and resilience.' However, NIF has also ramped up its efforts on the defense side. Its team was heavily involved in the development of NATO's Rapid Adoption Action Plan, aimed at accelerating the adoption and integration of new technological products for defense. NIF has also been building up its Mission Platform Group with strategic hires including John Ridge, who was hired as chief adoption officer in 2024 to help portfolio startups navigate military procurement. As for its new partners, they were once again hired through a process previously described by VC Michael Jackson as akin to 'building a boy band' — identified by NIF's board of directors and approved by LPs, rather than having teamed up based on shared history or chemistry. This may be inevitable for an organization that now counts 24 countries as limited partners, but was often pointed as one reason the previous team didn't gel. This time, all three partners got to meet throughout the recruitment process and spend time together since then to 'ensure a smooth transition and to position the team for long term success,' Kontesi said. In a statement shared exclusively with TechCrunch, NIF's vice chair, professor Fiona Murray, compared the organization to a startup. 'We are proud of what we accomplished but like any effective team we are learning, experimenting, improving: speeding up our processes, expanding our platform support for startups, doubling down on ecosystem building and more broadly recognizing the need to build the sector and the capital stack.' Murray expressed pride in having brought together a qualified team that can collaborate effectively, creatively and quickly. 'They will enable us to move even more rapidly and decisively to drive the Alliance's technological agenda and support the best founders across European ecosystems,' she previously wrote in a joint statement with NIF's chair, Klaus Hommels. Hommels' other activities as an investor have prompted questions about possible conflicts of interest, but no change appears to have been made to his role during NIF's recent LP meeting in Venice. Rather than dwelling further on its reorganization, NIF seems set on helping NATO become more resilient. 'In this next phase,' NIF's vice chair said, 'you'll see us refocus on DSR opportunities and emphasize building companies that can drive industrial scale and really support ecosystems across Europe.'
Yahoo
an hour ago
- Yahoo
The UK's weak economic growth and Brexit: Is the worst over?
Nine years after the vote on Brexit, the latest UK economic indicators send a strong message about an ailing economy that is yet to emerge from the shadows of the 'leave' vote. According to experts, some of the negative impacts of Brexit will endure. GDP has been contracting for two consecutive months, coupled with rising inflation and unemployment, and accompanied by a highly uncertain geopolitical environment and trade wars. UK GDP grew by 0.7% quarter-on-quarter in the first three months of 2025, but monthly data shows that the output contracted 0.1% in May after a 0.3% decline in April. According to S&P Global Ratings, these figures put the economy on course for 0.1% GDP growth in the second quarter, if there is no growth in June. Inflation increased to 3.6% in June — up from 3.4% in May and slightly ahead of expectations. This ties the hands of the Bank of England, which is aiming for a 2% inflation target before it lowers the benchmark rate, currently sitting at 4.25%. These weak datasets indicate that the UK has 'little spare capacity to grow,' Marion Amiot, Chief UK Economist at S&P Global Ratings, told Euronews Business. Some hope that the UK will be able to boost its GDP through exports, supported by trade agreements, including the latest with the US. However, exports alone might not be enough to fix a fundamental problem: the UK is contending with cripplingly low productivity. According to Amiot, productivity woes partially stem from Brexit. 'It has contributed to reducing the UK's labour supply and pulled the brakes on investment on the back of uncertainty in the years following the referendum,' she said. She added that sluggishness in the key financial services sector has also been playing a role: 'Productivity growth in the UK has been particularly weak since the Great Financial Crisis, especially in the financial sector.' UK labour statistics are also signalling a difficult path ahead for the economy. The number of job vacancies has been falling since April 2022. Unemployment in the country has been on the rise since August 2024, and sat at 4.7% in May, the highest level in four years. Related What would a UK-EU thaw mean for financial services? Brexit impact keeps getting worse, economists warn As poor productivity limits wage growth, this is expected to slow inflation. 'Wage growth has slowed, and unemployment has risen again. For the Bank of England, this is a sign of growing slack in the labour market, which is likely to ease inflationary pressures, and means it can cut rates sooner rather than later,' said Sarah Coles, head of personal finance at Hargreaves Lansdown. Job vacancies have also been falling due to higher costs, partially attributed to the UK government's decision to increase national insurance contributions, a cost that employers pay for every person on the payroll. What Brexit really cost the UK Nine years after the referendum, the Office for Budget Responsibility (OBR) assessed the economic impact of Brexit. Researchers came to the conclusion that — since 2020 — withdrawal from the EU has led to reduced productivity, lowering GDP by 4%, and trade by about 15%, in both goods and services, compared to a 'remain scenario'. Brexit has also had a sizeable impact on shrinking investments. According to John Springford, an associate fellow at the London-based think-tank Centre for European Reform, Brexit has cost the state £40 billion (€46.1bn) since 2019. 'The 2019-2024 parliament raised taxes by around £100 billion, and if we take the OBR's 4% loss of productivity to be the true figure, £40 billion of those tax rises were needed because of EU withdrawal,' he wrote in a recent study. Is the worst over? 'Brexit is going to have a long-term impact on UK growth beyond the initial fallout seen in trade,' said Amiot, adding that 'with a smaller pool of workers and weaker competition leading to lower productivity, the capacity of the UK to grow will remain durably lower'. She clarified: 'That being said, most of the large impacts are likely behind us.' The years following Brexit came with an increased uncertainty for businesses, and left a sizeable impact on investment, which stagnated for five years, before it returned to growth. Investment is now rising again and has surpassed its pre-Brexit referendum levels. According to the Office for National Statistics (ONS), gross fixed capital formation (GFCF) and business investment both increased to record levels in the first quarter of 2025. Trade with the EU also struggled, but that could have been partially attributed to a range of other factors, including the impacts of the COVID-19 pandemic and the global slowdown of trade in goods. 'Although much of the initial economic disruption has likely faded as firms adjusted, Brexit still appears to be weighing on export levels and GDP,' Andrew Hunter, Associate Director at Moody's Analytics, told Euronews Business. He added that goods exports to the EU are still 16% lower in real terms, compared to the end of 2019 (before the pandemic and before the UK began leaving the EU). 'And goods exports to non-EU countries have actually performed even worse,' Hunter said. He added that the UK has significantly lagged behind other advanced economies in this respect, due to a 'broader hit to the export sector from Brexit-related trade barriers (with many firms choosing to stop exporting altogether due to the added costs and paperwork).' Many hope the recent trade deal with the US will improve the economy by attracting investment into the country. And the US-UK trade deal provides relief for certain industries in particular. While the EU is finalising its potential countermeasures, including a tariff on US aircraft imports, almost certain to attract a retaliation, the UK has secured free trade for its aerospace sector. Yet, experts are sceptical about the overall contribution of the trade deal to the UK economy. S&P Global Ratings estimates 'that US tariffs are going to represent a direct drag on UK GDP of around 0.1 percentage point this year and next,' partly due to weaker global demand. And other trade deals are also unlikely to boost exports too much. 'The UK government's recent 'reset' deal with the EU has eased some trade barriers, particularly for food and agriculture, but further progress is expected to be slow,' said Hunter, adding that he doesn't expect a strong export rebound in light of global trade uncertainty. According to Springford, Free Trade Agreements (FTAs) signed since Brexit have had a very limited impact. 'The macroeconomic benefit of the new FTAs the UK has signed is very small, only offsetting the 4% loss from Brexit by about 0.2%. Even if a full FTA were signed with the US, that would rise to about 0.35%.' Related UK decision to leave EU a 'disaster' costing thousands of jobs - Lord Mayor A clouded UK economic outlook In the short term, the currently ailing economic output has been fuelling expectations that the government will have to make up for the missing tax revenue by hiking tax rates in the second half of the year, further constricting GDP growth. In the long run, experts agree that the UK's growth will be slower than if it had stayed in the EU. This is due to the fact that the structural changes associated with losing access to the EU market have meant that the UK is missing out on workers, investment and trade opportunities. Looking ahead, the primary source of uncertainty and risk remains productivity, according to the Chief UK Economist at S&P Global Ratings. 'While most forecasts anticipate a rebound in productivity that could support stronger growth, the outlook is clouded by uncertainty around the implementation of government growth policies and the pace at which AI technologies will be adopted,' Amiot said. Error in retrieving data Sign in to access your portfolio Error in retrieving data
Bloomberg
an hour ago
- Bloomberg
Rome's Next Big Tourist Draw Risks Going Bust Before It Opens
By and Flavia Rotondi Save The Aquarium of Rome wanted to open this year to show the millions of pilgrims and tourists flocking to the Italian capital that there's more on offer than ancient history and old churches. Instead, it's become a study in just how hard it is to deliver landmark building projects in modern times. Italian banks Intesa Sanpaolo SpA and UniCredit SpA still have a nominal interest in the struggling enterprise after being forced to write off 95% of their loan exposure to its owner in a previous restructuring. But talks to raise fresh cash from investors, including London-based distressed specialist Zetland Capital, have dragged on for years without conclusion, according to company filings seen by Bloomberg. That casts further doubt over the site's future.
