Latest news with #PMICompositeOutputIndex
Business Mayor
22-05-2025
- Business
- Business Mayor
UK private sector shrinking as firms cut jobs; pressure to raise taxes as government borrowing jumps
Britain's private sector is shrinking for the second month running as factory output falls at the fastest rate in a year and a half, a new survey shows. The latest poll of purchasing managers at UK companies found that private sector output is decreasing in May, although at a slower rate than in April. Manufacturing production fell at the fastest rate since October 2023, although this was moderated by a 'fractional rise' in service sector output. UK firms reported that clients were cautious this month, due to business uncertainty, leading to a drop in new orders. However, worries about US tariffs have dropped this month, after Donald Trump delayed tariffs on America's trading partners and agreed a trade deal with the UK. Export orders fell this month, which manufacturers blamed on the new US 10% tariff on UK imports, and on wider uncertainty about global trade condititions. Worryingly, manufacturers reported that they cut jobs at the fastest pace in five years, through redundancies, restructurings, hiring freezes, and the non-replacement of departing staff. This was blamed on subdued demand, and higher payroll costs – following the increase in national insurance contributions at the start of April. Overall, the UK PMI composite index rose to 49.4, up from April's 48.5, but still below the 50-point mark that separates expansion from contraction. More evidence that the strong GDP growth reported in Q1 was a flash in the pan… UK PMI Composite Output Index recovered a bit in May, to 49.4, but still consistent with falling activity in the private sector. source: — Julian Jessop (@julianHjessop) May 22, 2025 Share Updated at 10.49 CEST Key events Show key events only Please turn on JavaScript to use this feature Bank of Canada Governor Tiff Macklem, Bank of Japan Governor Kazuo Ueda, Japanese Minister of Finance Katsunobu Kato and Canadian Finance Minister Francois-Philippe Champagne with Royal Canadian Mounted Police officers during the G7 finance ministers and central bank governors meeting in Banff, Alberta, Canada, this week. Photograph: Todd Korol/Reuters Finance ministers and central bank governors from the Group of Seven nations pledged to address 'excessive imbalances' in the global economy, according to a draft communique seen by Bloomberg News. G7 finance ministers and central bank chiefs have been meeting in Alberta, Canada, in the last few days, with the meeting to wrap up later today. According to Bloomberg, the draft communique – which summarises three days of meetings between the US, UK, Canada, France, Germany, Italy and Japan – says a common understanding of how 'non-market policies and practices' undermine international economic security is needed. Today at the G7 Summit in Banff, I enjoyed my first meeting with Chancellor and Minister of Finance @larsklingbeil of Germany, during which I was pleased to hear his insights on the new German government's economic priorities. — Treasury Secretary Scott Bessent (@SecScottBessent) May 21, 2025 The draft calls for an analysis of 'market concentration and international supply chain resilience,' and that officials agreed 'on the importance of a level playing field and taking a broadly coordinated approach to address the harm caused by those who do not abide by the same rules and lack transparency.' More here. Share We have confirmation today that Mexico avoided falling into recession earlier this year. Mexico's statistics body has reported this morning that Mexican GDP rose by 0.2% in the first quarter of this year, in line with its initial estimate. That follows a 0.6% contraction in October-December 2024. MEXICO Q1 GDP +0.2% QTR/QTR -STATS AGENCY MEXICO Q1 GDP +0.8% YR/YR -STATS AGENCY — PiQ (@PiQSuite) May 22, 2025 Share The takeover of regional news publisher National World by marketing business Media Concierge has been approved by a High Court judge. Media Concierge, which owns a number of Irish publications, already has 27.8% of National World's shares, and made its buyout proposal last November. London-listed National World acquired the parent company of the Scotsman, Yorkshire Post and more than 100 titles, including the Sunderland Echo and Sheffield Star, for just £10m in 2020. Share America's jobs market continues to shrug off the uncertainty caused by Donald Trump's trade wars. The number of Americans filing new claims for unemployment support fell last week, by 2,000 people, new data shows. That pulled the weekly total of initial claims down to 227,000, suggesting US companies are still holding onto workers despite concerns that tariffs will demand and economic growth. Share Manchester United shares down 6.46% in pre-market trade after the club's loss to Tottenham Hotspur in the Europa League final. — Vincent Lee (@Rover829) May 22, 2025 Share Back in the bond markets, Britain's long-term borrowing costs have hit their highest level in six weeks. The yield, or interest rate, on 30-year UK gilts has risen by 6 basis points to 5.56%, its highest level since 10 April. Neil Wilson, UK Investor Strategist at Saxo Markets, reports: Investors are pushing back against the tax and spending plans by the US administration – the bond vigilantes are only ever sleeping lightly. This is not just a US problem – we have seen incredibly weak bond auctions in Japan this week too. And in the UK we have the same problem – figures today show borrowing was £20.2bn, up £1bn from April last year and the fourth-highest April borrowing figure since monthly records began in 1993. Gilt yields ticked up. Financing domestic bliss and neverending entitlements cannot be sustained forever… Share Co-chairman of Manchester United Avram Glazer (left), Sir Jim Ratcliffe (middle) and Sir Alex Ferguson at last night's UEFA Europa League Final football match Photograph: Jean Catuffe/DPPI/Shutterstock Shares in Manchester United have fallen in pre-market trading, after the club were defeated by Tottenham Hotspur last night in the Europa League final in Bilbao. Manchester United's stock is on track to fall around 5.5% when trading begins, having yesterday (before the game) hit its highest level in eleven weeks. 🚨Manchester United shares dropped by 7% in pre-market trading on the New York Stock Exchange following the club's loss in the final of Europe's second-tier tournament — a fresh setback for owners the Glazers and Sir Jim Ratcliffe (@FT) — The Stretford Source (@StretfordSource) May 22, 2025 Last night's game (high on tension, but not a classic) has been dubbed the £100m showdown, and shareholders will be disappointed that Manchester United have missed out on the lucrative place in next seaason's Champions League. Participation in the Champions League leads to earnings from tickets, broadcast money, and sponsor bonuses. Instead, Manchester United won't play in European competition at all next season, which will damage the club's revenues and profits for 2025-2026 as a rebuild gets underway…. Share Ooof. British factories have reported a sharp fall in orders and output this month, underlining how the economy appears to be stumbling. The CBI's latest Industrial Trends report, just released, shows that manufacturing output volumes fell in the three months to May, at the joint-steepest pace since August 2020. Factory bosses are pessimistic about the short-term outlook too, with output expected to fall further over the three months to August. The CBI explains: Total order books weakened marginally in May, relative to April, while export order books improved from a sharply negative reading last month. But both total and export order books remain well below their long-run averages. Manufacturing firms reported that stock adequacy for finished goods was largely unchanged from last month, with the balance standing close to the long-run average. The latest CBI Industrial Trends Survey found that manufacturing output volumes fell in the three months to May, at the joint-steepest pace since August 2020. Looking ahead, manufacturers expect output to decline over the next three months — CBI Economics (@CBI_Economics) May 22, 2025 The CBI suggests that rising domestic business costs and US tariff uncertainty are hitting confidence. Total order books were reported as below 'normal' in May, with the balance weakening marginally relative to last month. Export order books were also below 'normal' but improved relative to April. Both total and export order books remain below their long-run averages — CBI Economics (@CBI_Economics) May 22, 2025 Expectations for selling price inflation in May were broadly similar to last month. Selling price growth expectations remain above the long-run average — CBI Economics (@CBI_Economics) May 22, 2025 Stocks of finished goods were reported as more than 'adequate' in May, with the balance standing close to the long-run average — CBI Economics (@CBI_Economics) May 22, 2025 Share Updated at 12.08 CEST UK property firm British Land has declared that the 'return to the office is in full swing'. In its latest financial results, British Land reports that mid-week occupancy at its offices is back to pre-pandemic levels, and that 'value and multi-channel retailers are competing aggressively for space on our retail parks'. British Land's CEO, Simon Carter, has told the FT that demand for high-end London offices is starting to 'trickle down' to older buildings because of sky-high rents, fewer people working from home and a shortage of new properties. Share Updated at 13.23 CEST A chart showing UK government borrowing Share The jump in UK government borrowing last month (see opening post) is prompting predictions that the government will increase taxes in the autumn budget. Thomas Pugh, economist at leading audit, tax and consulting firm RSM UK, explains: Public sector net borrowing excluding Banks was £20.2bn in April, £1bn higher than in April last year. The good news was that borrowing in the 24/25 fiscal year was revised down to £148.3bn, meaning the overshoot compared to the OBR forecast was £11bn. With the public finances in a pretty dire state going into what is likely to be a much tougher Q2 and second half of the year for the economy, some fiscal consolidation in October, probably in the form of higher taxes, looks likely. 'On the details, total government receipts rose by £5.1bn compared to April 2024 with the increase in NICs meant that compulsory social payments rose by £1.7bn. At the same time, expenditure rose by £4.2bn as inflation and pay rises raised pressure on government spending. 'Looking ahead to the budget in October, the persistent over borrowing and under performance of the economy means some sort of fiscal consolidation is starting to look inevitable. Given the recent indications that there will be some sort of a U-turn on the cuts to winter fuel payments and the difficulty the government has had in getting even tiny reductions in welfare spending through parliament, it feels like any fiscal consolidation will come from higher taxes rather lower spending. Indeed, we expect a combination of higher taxes and slightly higher borrowing at the next budget. 'The good news is that with interest rates likely to be around 4% at the time of the budget there is plenty of scope for the Bank of England to cut rates to offset the impact of any fiscal consolidation on the economy.' Share Britain's private sector is shrinking for the second month running as factory output falls at the fastest rate in a year and a half, a new survey shows. The latest poll of purchasing managers at UK companies found that private sector output is decreasing in May, although at a slower rate than in April. Manufacturing production fell at the fastest rate since October 2023, although this was moderated by a 'fractional rise' in service sector output. UK firms reported that clients were cautious this month, due to business uncertainty, leading to a drop in new orders. However, worries about US tariffs have dropped this month, after Donald Trump delayed tariffs on America's trading partners and agreed a trade deal with the UK. Export orders fell this month, which manufacturers blamed on the new US 10% tariff on UK imports, and on wider uncertainty about global trade condititions. Worryingly, manufacturers reported that they cut jobs at the fastest pace in five years, through redundancies, restructurings, hiring freezes, and the non-replacement of departing staff. This was blamed on subdued demand, and higher payroll costs – following the increase in national insurance contributions at the start of April. Overall, the UK PMI composite index rose to 49.4, up from April's 48.5, but still below the 50-point mark that separates expansion from contraction. More evidence that the strong GDP growth reported in Q1 was a flash in the pan… UK PMI Composite Output Index recovered a bit in May, to 49.4, but still consistent with falling activity in the private sector. source: — Julian Jessop (@julianHjessop) May 22, 2025 Share Updated at 10.49 CEST Ouch. Private sector output across the eurozone has fallen for the first time in five months, as the sector slides into contraction. The latest poll of purchasing managers across the euro area shows that new orders continued to decrease, led by a slump in output in the services sector. Output in Germany, meaning Europe's largest economy joined France in contraction territory. The rest of the euro area continued to outperform the largest two economies, although there was a slowdown here. Data firm S&P Global also reports that business confidence in the eurozone fell to a 19-month low. Its HCOB Flash Eurozone Composite PMI output index, which tracks activity, has fallen to a six-month low of 49.5 this month, down from 50.4 in April. 🚨 NEW MACRO DATA: 🇪🇺 May 22 04:00• HCOB Eurozone Manufacturing PMI (May): 48.4 (vs 49.2; prev: 49.0)• HCOB Eurozone Composite PMI (May): 49.5 (vs 50.7; prev: 50.4) • HCOB Eurozone Services PMI (May): 48.9 (vs 50.4; prev: 50.1) — MTS Insights (@MTSInsights) May 22, 2025 Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said: 'The eurozone economy just cannot seem to find its footing. Since January, the overall PMI has shown only the slightest hint of growth and in May, the private sector actually slipped into contraction. Do not blame US tariffs for this one. In fact, efforts to get ahead of those tariffs might partly explain why manufacturing has held up a bit better lately. Manufacturers have now increased production for the third straight month, and for the first time since April 2022, new orders did not decline. On the flip side, service providers, who are generally less exposed to US trade policy, except in areas like international logistics, are seeing business activity shrink for the first time since November 2024. While foreign demand for services is softening, it is the sluggish domestic demand that seems to be dragging the sector down. Share Jasper Jolly The share price of the FTSE 250's Johnson Matthey has soared by 30% after it announced the £1.8bn sale of part of its business making catalysts for the chemical industry. Johnson Matthey announced the all-cash deal with US conglomerate Honeywell this morning. The UK company, which has been under pressure to increase cash generation from American activist investor Standard Investments, said it will return most of the money to shareholders, after costs of £200m for the transaction. The share price rose as high as £18.66 on Thursday morning, its highest in more than a year and well above the £13.89 closing price on Wednesday. However, it remains far short of the price above £32 in 2021 before it abandoned an effort to make electric car batteries. The British manufacturer has one of the most venerable histories on the London Stock Exchange, stretching back to a business testing precious metals in 1817, and spending years as a member of the FTSE 100 index of blue-chip companies. However, it has struggled in recent years as investors questioned what would replace its reliable earnings from catalytic converters on petrol and diesel cars after the electric vehicle transition. Liam Condon, Johnson Matthey's chief executive, said that the Honeywell deal would realise 80% of the British company's market value in return for only 20% of the company. 'It's quite an exceptional valuation.' Johnson Matthey will be left as a company selling catalytic converters to the car industry, and refining and recovering platinum group metals, plus a longer-term bet – yet to reach profitability – on growth in demand for green hydrogen made with renewable electricity. Condon insisted that the company was not abandoning its history of chemicals innovation, and said it would benefit from the transition away from fossil fuels because of demand for platinum group metals in hydrogen fuel cells, plus industries such as defence and pharmaceuticals. Condon also argued that investors had overestimated the pace of the transition away from petrol and diesel cars. Catalytic converters, which cause reactions that prevent harmful pollutants from being emitted into the air, will be 'around for a long, long time', Condon said. 'The long-term outlook has improved versus three years ago because the electrification outlook has changed dramatically.' On hydrogen, Condon said that the technology was 'taking longer than anybody thought' to become mainstream, and that there was 'definitely an overhype' on its introduction. However, said that he expected the hydrogen bet to take off after five to 10 years. In the meantime, catalytic converter sales would continue to generate cash. 'We can afford to wait now for the market to grow. We have a very big cash machine, with a free growth optionality on top.' Share The oil price has fallen by 1% this morning, on reports that the Opec+ group could lift crude output sharply again this summer. According to Bloomberg, Opec+ are considing increasing output by 411,000 barrels per day in July. That's triple the amount initially planned, and would match previous increases agreed for in May and June. This has knocked Brent crude down to $64.25 per barrel, its lowest level in nearly a week. OPEC+ members are discussing whether to agree on another large production increase at their meeting on June 1, Bloomberg News An output hike of 411,000 barrels a day for July is among the options under discussion, although no final agreement has yet been reached BRENT: -1,6% — Evgen Istrebin 🇺🇦 (@evgen1232007) May 22, 2025 Share Lauren Almeida Shares in Bloomsbury, the book publisher behind the Harry Potter series, have dropped by about 15% this morning after a sharp fall in its pre-tax profit. The publisher's pre-tax profit fell 22%, from £41.5m to £32.5m, in its latest financial year, which ended in February. Organic revenue, which strips out the contribution from its recent acquisition of academic publisher Rowman & Littlefield, was broadly flat at £341.2m. The company, which also publishes the fantasy A Court of Thorn and Roses series by Sarah J. Maas, said it remained 'cognisant of the uncertain macroeconomic backdrop', although noted that books remain exempt from US trade tariffs. The drop in Bloomsbury's share price has put it at the bottom of the FTSE 250 today. However, it follows a strong few weeks for the stock, which had risen by about a tenth from the start of April up until yesterday. Share Market strategist Bill Blain of Wind Shift Capital is 'increasingly convinced' a debt crisis is approaching. Writing after last night's weak auction of US debt, Blain says: Global markets are increasingly nervous on the US debt-quantum – while it seeks to increase the fiscal deficit as rates rise, the dollar is no longer directing the proceeds of global trade into Treasuries, and confidence in American politics declines. Doh! It feels like we're approaching the end game of this cycle – decades of financialisation, rising inequality (its apparently fine the bottom 10% of Americans will lose out to give the top 10% of Americans bigger tax breaks – and no one blinks), and the debilitating cold treacle of political meh. As that happens, markets are become less global and more insular – it will be Japanese investors that fund Japanese debt, meaning they aren't going to fund the US. All of which spells crisis as the USA will be looking for investors to fund the deficit as a time when Trump has managed to offend about everyone. It means higher and higher US yields – precipitating the debt crisis. More here: 'There are gale warnings in Dover, Wight, Portland, Plymouth. Westerly 8-10. Very Rough. Rain. Poor.' When the rest of the world is increasingly concerned about the sustainability of US debt – of course it makes sense to increase the deficit through a… — Bill Blain (@Bill_Blain) May 22, 2025 Share READ SOURCE businessmayor May 22, 2025
The Star
06-05-2025
- Business
- The Star
Britain's services sector contracts in April, ending 17-month growth streak
LONDON, May 6 (Xinhua) -- The United Kingdom's (UK) services sector contracted in April, marking the end of a 17-month expansion streak amid mounting global economic uncertainty. The S&P Global UK Services Purchasing Managers Business Activity Index fell to 49 in April, down from 52.5 in March, according to data released Tuesday by S&P Global. The decline follows modest growth in the first quarter of 2025. While many firms continued to cite weak domestic demand, the survey highlighted a notable drop in new work from overseas markets. Export activity was particularly subdued, with new business from abroad falling at the steepest rate since February 2021. "Survey respondents often commented on the impact of global financial market turbulence in the wake of U.S. tariff announcements," said Tim Moore, economics director at S&P Global Market Intelligence. Business expectations for the year ahead deteriorated sharply, as service providers braced for a prolonged period of global economic volatility and increased recession risks, Moore added. The data also showed that the S&P Global UK PMI Composite Output Index fell to 48.5 in April from 51.5 in March, slipping below the neutral 50 threshold for the first time in 18 months.
Business Mayor
06-05-2025
- Automotive
- Business Mayor
UK business activity falls for the first time since October 2023 as trade tensions hurt economy, and car sales slide
Newsflash: Business activity across the UK has fallen for the first time in 18 months, as trade war fears batter the British economy. The latest poll of purchasing managers at UK service sector companies has found that business activity declined in April, ending a 17-month run of growth, and pulling the wider private sector into a contraction. New order books at services companies shrank last month, driven by the fastest decline in exports since February 2021, when the Covid-19 pandemic was hitting activity. Data provider S&P Global says that 'survey respondents widely commented on risk aversion and delayed spending decisions among clients in response to rising global economic uncertainty.' This dragged the S&P Global UK Services PMI Business Activity Index down to 49.0 in April, down from 52.5 in March, which is the lowest reading since January 2023. Any reading below 50 signals a contraction. The PMI report says: While many firms continued to report unfavourable domestic demand conditions, the latest survey indicated a particularly marked decline in new work from overseas markets. The rate of contraction was the steepest for just over four years and mostly linked by survey respondents to the impact of rising global trade tensions. S&P Global also reports that the wider UK private sector also contracted last month. Its UK PMI Composite Output Index, which also tracks the manufacturing industry, fell to 48.5 in April, down from 51.5 in March and below the 50.0 no-change value for the first time in one-and-a-half years. Share Updated at 10.42 CEST Key events Show key events only Please turn on JavaScript to use this feature Photograph: Daniele Mascolo/Reuters Luxury car maker Ferrari has joined the pack of auto companies warning that the US trade war could hurt its earnings. Ferrari reported a 13% rise in revenues in the first three months of this year, with operating profit up 23%. 'Another year is off to a great start' said Benedetto Vigna, CEO of Ferrari, explaining: 'In the first quarter of 2025, with very few incremental shipments year on year, all key metrics recorded double-digit growth, underscoring a strong profitability driven by our product mix and continued demand for personalizations. Vigna added that Ferrari is 'very excited about what lies ahead.' But that roadmap includes the threat of tariffs – and Ferrari warns that the introduction of import tariffs on EU cars into the USA could knock 50 basis points (half a percentage point) off its profitability percentage margins this year. Share Ian Plummer, commercial director of online vehicle marketplace Auto Trader, said 'short-term turbulence' is most likely to blame for April's drop in new car sales (see earlier post for details). He added: 'We're seeing new car visits on Auto Trader up 8% on 2024 and we're confident this will convert to sales in the coming months.' Dan Caesar, chief executive of lobby group Electric Vehicles UK, said: 'Month after month at least one in five new car buyers are now going battery electric. 'As the industry demonstrates that battery electric vehicles are the cheaper and better option, more and more end-users will opt for all-electric vehicles.' Share Sales of new light commercial vehicles (LCVs) also fell last month in the UK. Van registrations dropped by -14.9% in April, with 20,332 vans, 4x4s and pick-ups sold, according to the latest figures published today by the Society of Motor Manufacturers and Traders (SMMT). Share Updated at 14.12 CEST Shares in Ford are set to fall when trading begins in New York in just under two hour's time. Ford's stock is down almost 2.5% in premarket trading, after it withdrew its financial guidance last night and indicated tariffs could wipe $1.5bn off its profits this year. Share Lisa O'Carroll The EU has launched a market surveillance of Chinese imports into the bloc amid fears that the trade war with the US is diverting goods to Europe, my colleague Lisa O'Carroll reports. It comes amid reports that discount online retailers Shein and Temu have upped their marketing spend in Europe after Donald Trump's tariffs were introduced on all packages up to $800 in value on Saturday. Trade commissioner Maros Sefcovic has again warned that the existing tariffs on the automotive and steel sectors along with the threat of tariffs in six other areas is 'unacceptable'. Speaking at the European parliament on Tuesday he again urged the US to cut a deal describing the EU as 'by far the most important economic partner of the US'. He said if Trump carries through his various threats of tariffs in addition to existing import duties on cars and steel, its import taxes would jump from €7bn in 2024 to €100bn. He said: 'This situation is not acceptable and we cannot afford to stay idle.' If the US doesn't cut a deal, Europe is prepared for retaliatory tariffs and litigation, he warned. In the meantime the EU has started monitoring potential diversion of trade from China to the US to Europe with the first results of the survey anticipated in mid-May. 'The aim is to protect the EU market from possible surges of imports from other countries that are also hit by US tariffs and which seek alternative markets. The first results of this work are anticipated in mid-May,' he said. Share Updated at 13.22 CEST The decline in the UK private sector last month adds to the pressure on the Bank of England to ease monetary policy. The BoE is widely expected to cut interest rates at its next meeting, on Thursday. The money markets indicate there's a 92% chance of a quarter-point cut to Bank rate, to 4.25%, and an 8% possibility of a larger, half-point cut to 4%. Daniela Sabin Hathorn, senior market analyst at sets the scene: The Bank of England (BoE) is widely expected to deliver a rate cut at its upcoming meeting, as policymakers balance weak domestic growth with the inflationary risks stemming from global trade tensions. At its March meeting, the Monetary Policy Committee (MPC) voted 8-1 to keep the Bank Rate at 4.5%, with only external member Swati Dhingra advocating for a 25-basis-point cut. At that time, persistently high inflation was a key factor in maintaining the current rate. Headline CPI had climbed back to 3% in January, and the BoE projects it could rise further to 3.75% by summer. Geopolitical uncertainty and renewed U.S. tariff threats have also prompted a cautious stance, even as domestic data shows lacklustre growth and hiring plans, while wage pressures in services remain elevated. Governor Andrew Bailey reiterated the need for prudence, noting that while easing is on the table, it must be guided by 'accumulating evidence that price pressures are easing,' and emphasizing that there is 'no presumption about cuts at the next few meetings. Thursday's rate decision will be released at 12.02pm, incidentally, rather than bang on noon, due to the two-minute silence to mark VE Day. Share Moody's Ratings has cut its global growth forecast to 1.9% in 2025 and 2.3% in 2026, driven by tariff uncertainty and trade tensions. Moody's updated forecasts now predict: Reduced UK real GDP growth of 0.8% in 2025 and 1.3% in 2026. US real GDP growth to fall to 1% in 2025 and 1.5% in 2026, with inflation to hit 3% this year. China's real GDP growth to slow to 3.8% in 2025 and 3.9% in 2026. In the Eurozone – Germany's real GDP growth is expected to be 0% in 2025 and 1.4% in 2026, with slowdowns in France (0.5% in 2025 and 1.2% in 2026) and Italy (0.5% in 2025 and 0.6% in 2026). Share Back in the City, the early stock market gains have vanished. The FTSE 100 index is now down 17 points, or 0.2%, at 8597, threatening to end its record-breaking run of 15 daily rises in a row. The slide comes as European markets drop, led by Germany's DAX which has fallen by 1.9% today. Frankfurt traders are alarmed that Friedrich Merz has failed to get enough votes to become chancellor in the first vote today in the Bundestag. That's quite a shock, as Merz had been expected to be rubber-stamped to succeed Olaf Sholz today. His CDU/CSU/SPD coalition nominally has 328 votes in the Bundestag – but he got only 310, six short of the majority required to confirm him as the next chancellor. It has prompted the far-right Alternative für Deutschland party calls for fresh elections in Germany. Share Sales of Tesla cars tumbled by over 60% last month, amid a wider backlash against Elon Musk. Just 512 new Tesla models were registered in April, the latest sales data from trade body the SMMT shows, down from 1,352 in April 2024. Tesla's market share shrank to 0.43% in April, down from 1% a year ago, as sales of battery electric vehicles (BEV) increased 8.1%. Tesla's sales have also been dropping across Europe this year, with some customer shunning the brand following Musk's tilt to the political right. But last month's sales drop may also be due to model changes at Tesla. Deliveries of its latest Model Y, codenamed 'Juniper', were expected to begin in May, so customers may have been waiting for it to arrive. In February, Tesla's Model 3 and Model Y cars were the second and third most popular in the UK after the Mini Cooper. But both failed to make the top 10 in April, with Kia's Sportage topping the list: A table showing the best selling cars in the UK in April Illustration: SMMT Share Updated at 11.25 CEST Worryingly, UK business expectations for the year ahead fell sharply last month. This morning's PMI report shows that service sector firms are bracing for an extended period of global economic turbulence and heightened recession risks. Some 22% of the survey panel predict an outright decline in business activity during the next 12 months, up from 14% in March and well above the post-election low of 6% in July 2024. Tim Moore, Economics Director at S&P Global Market Intelligence, says: 'UK service sector output slipped into contraction for the first time in one-and-a-half years as heightened business uncertainty weighed on order books during April. Export conditions were particularly weak, with new business from abroad falling to the greatest extent since February 2021. Survey respondents often commented on the impact of global financial market turbulence in the wake of US tariff announcements. Businesses in the technology and financial service sectors noted rising risk aversion and delayed spending decisions among clients, especially in relation to major investment plans. Consumer service providers meanwhile cited subdued domestic economic conditions and challenges with passing on rising payroll costs, especially those in the hospitality and leisure sectors. Share Updated at 11.26 CEST Newsflash: Business activity across the UK has fallen for the first time in 18 months, as trade war fears batter the British economy. The latest poll of purchasing managers at UK service sector companies has found that business activity declined in April, ending a 17-month run of growth, and pulling the wider private sector into a contraction. New order books at services companies shrank last month, driven by the fastest decline in exports since February 2021, when the Covid-19 pandemic was hitting activity. Data provider S&P Global says that 'survey respondents widely commented on risk aversion and delayed spending decisions among clients in response to rising global economic uncertainty.' This dragged the S&P Global UK Services PMI Business Activity Index down to 49.0 in April, down from 52.5 in March, which is the lowest reading since January 2023. Any reading below 50 signals a contraction. The PMI report says: While many firms continued to report unfavourable domestic demand conditions, the latest survey indicated a particularly marked decline in new work from overseas markets. The rate of contraction was the steepest for just over four years and mostly linked by survey respondents to the impact of rising global trade tensions. S&P Global also reports that the wider UK private sector also contracted last month. Its UK PMI Composite Output Index, which also tracks the manufacturing industry, fell to 48.5 in April, down from 51.5 in March and below the 50.0 no-change value for the first time in one-and-a-half years. Share Updated at 10.42 CEST READ SOURCE
