UK vets could face price cap on medicines and ban on incentives linked to treatments
British vets could face price caps on medicines and prescription fees and a ban on bonuses linked to certain treatments, as the regulator looks into concerns that pet owners are being ripped off.
The Competition and Markets Authority (CMA) is looking into the veterinary industry, after a flood of 56,000 people raised concerns about the £2bn sector. The CMA said it has concerns that competition is not functioning properly in the market, which is increasingly dominated by a handful of firms.
In a working paper published on Thursday, the CMA set out possible remedies including breaking the link between treatment choice and bonuses for vets.
The CMA said it was looking at:
banning any practices, including the structuring of practice management systems or use of targets or financial incentives, which limit vets’ clinical freedom to provide a choice of treatments suited to the pet owner and animal’s requirements. […]
abolishing or imposing price caps on prescription and dispensing fees […]
the possible benefits and risks of implementing a short-term, temporary ‘stabilising’ freeze or cap on medicine prices while the competition benefits of the broader package of measures come into effect.
Vets could also be forced to display clearly online a set of prices for medicines, surgeries, treatments and out-of-hours help, while the mark-up they can charge on cremations – sold to customers “at a vulnerable moment” – could also be capped.
Key events
Oil prices fall more than 2% as Saudi Arabia expected to maintain production
The oil market is one that is moving: crude oil prices have dropped by 2.6% on signs that oil producers may be producing more than needed by the global economy.
The price of Brent crude oil was last at $59.44, the lowest since the depths of Donald Trump’s “liberation day” tariffs turmoil last month, when prices briefly fell to $58.40. Take another dollar off the oil price, and it would be the lowest since February 2021, just as the global economy was emerging from the first shock of the coronavirus pandemic.
The price of futures for West Texas Intermediate, the North American benchmark, fell 2.5%.
Oil prices were hit last month by Donald Trump’s trade war, with tariffs on most of the world expected to slow global economic growth. But the latest moves are thought to be caused by more traditional sources of oil price volatility: wrangling between members of the Organisation of Petroleum Exporting Countries (Opec), the oil cartel led by Saudi Arabia.
Bloomberg explained:
That’s down to signs from the Saudi Arabia-led OPEC+ group that it could be entering a prolonged period of higher supply.
Saudi Arabia is thought to be content to keep the supply of oil high, despite the hit to prices, in an effort to force other Opec members to stop cheating their carefully controlled quotas.
Lower prices could also help the Saudis in talks with Donald Trump, who favours a lower oil price so that American gas prices stay low.
It is a pretty quiet trading day so far today. The pound and euro are basically flat against the US dollar, and the FTSE 100 is flat as well.
The lull might be explained by the fact that most of Europe is on holiday for May Day – which is also international workers’ day.
Most major mainland stock markets are closed in Europe, and workers are parading through various cities.
It is not all celebration. ArcelorMittal’s French trade union General Confederation of Labour (CGT) called for a major demonstration in Dunkirk on 1 May, to protest against the steelmaker’s plan to cut around 600 jobs in northern and eastern France:
And marchers gathered in Turkey:
And Indonesia:
Lloyds Banking Group’s £309m bad debt buffer included a new £35m net charge to prepare for the possible impact on the economic outlook from the US president’s tariffs.
Lloyds has now set aside £309m on its balance sheet to account for possible bad debts, compared with previous guidance of £274m.
You can read the full report here:
It was not just Microsoft that set a positive tone for Wall Street’s open later: Facebook owner Meta also impressed with results last night.
Meta posted $42.32bn in revenue in the first quarter of 2025, beating both its own quarterly revenue goals of $41.8bn at the higher end and Wall Street expectations of $41.38bn.
The company, run by founder Mark Zuckerberg, also said it could make capital expenditures of between $64bn and $72bn this year on costs including building out AI infrastructure – up from previous guidance of $65bn.
And you can read the full report on Microsoft’s bumper earnings here:
There is some time yet until US stock markets open (and Donald Trump still has to wake up) but so far it looks like a positive day ahead for Wall Street. Stock market futures prices are up by 1%.
One of the big drivers is Microsoft, which forecast stronger-than-expected growth for its cloud computing division, Azure. Its share price is up 8% in pre-market trading. Via Reuters:
Microsoft said revenue at its Azure cloud division rose 33% in the third quarter ended 31 March, exceeding estimates of 29.7%, according to Visible Alpha. AI contributed 16 percentage points to the growth, up from 13 points in the previous quarter.
Ben Barringer, a global technology analyst at Quilter Cheviot, a wealth manager, said:
Microsoft has delivered another impressive quarter, with revenue up 13% and profits climbing 19%, comfortably beating expectations by around 6% at the profit level. The real standout continues to be Azure, its cloud business, which posted 35% growth with AI services accounting for 16% of that increase. Demand for AI remains strong and persistent, and this is clearly filtering through into new business wins, with overall bookings up 18%.
Azure remains exceptionally resilient, and the outlook points to continued momentum, with Microsoft guiding for 13–15% revenue growth next quarter and Azure growth of 34–35% – around 2.5% ahead of consensus expectations.
UK mortgage borrowing hit four-year high before stamp duty hike
British mortgage borrowing rose to the highest in four years in March as buyers rushed to complete purchases before a tax break expired.
Buyers faced a cliff edge on 31 March as changes to stamp duty came in that meant significantly higher taxes.
The Bank of England’s data on Thursday showed that net borrowing of mortgage debt by individuals increased sharply by £9.7bn to £13bn in March. Overall lending at £39.9 billion in March was the largest since June 2021, the end of another stamp duty holiday during the coronavirus pandemic and the “race for space”.
The March changes cut the nil-rate stamp duty threshold from £250,000 to £125,000, and the tax-free threshold for first-time buyers dropped from £425,000 to £300,000, while the maximum property value eligible for relief will drop from £625,000 to £500,000.
The number of mortgage approvals for purchases reduced slightly to 64,309 mortgages, down from 65,093 in February. That was marginally below consensus expectations of 64,800 approvals.
Fhaheen Khan, senior economist at Make UK, a lobby group for British manufacturing, said:
UK manufacturers are caught in the eye of a perfect storm, with rising costs and international trade uncertainty undermining growth prospects. While actual changes in trade have been limited, the unpredictability, particularly around US tariff policy, is doing significant damage and paralysing decision makers. Many firms are delaying major investment decisions until greater clarity emerges, while being forced in the meantime to cut costs through redundancies while pushing through price increases.
This has left manufacturing experiencing its most severe slowdown in years, with the UK at a competitive disadvantage compared to our European peers who are weathering current challenges relatively better. As a result, it is now vital that government delivers on its promise to bring forward a bold, ambitious and fully funded industrial strategy. This will be critical for businesses seeking an end to crippling uncertainty.
It is pretty clear that Donald Trump’s tariffs have caused the slowdown in UK factory export orders.
S&P Global said anecdotal evidence “indicated that weak client confidence, trade uncertainty (including prospective US tariffs) and generally quiet global markets had all weighed on export demand”.
UK manufacturing business optimism fell to a 29-month low, with less than half of the panel of companies surveyed expecting output to rise in the next 12 months.
Rob Dobson, director at S&P Global Market Intelligence, said:
The start of the second quarter saw UK manufacturing buffeted by adverse global market conditions, rising cost pressures, deteriorating supply chains and increased trade uncertainty. April saw further contractions in output, new orders and exports, as well as a slump in business confidence to its lowest ebb since November 2022.
Although domestic demand remains soft, overseas demand is especially weak. New export business fell at the quickest pace for nearly five years, with demand from clients in the US, Europe and mainland China all declining. Surveyed manufacturers noted that US tariff announcements were having a noticeable impact on global markets as trading partners adapt to increased trade volatility.
British factories’ export orders fall at fastest in five years on Trump tariffs
The downturn in British manufacturing continued for a seventh month in April as new export orders fell at the fastest pace in five years amid global uncertainty over Donald Trump’s tariffs, according to a closely followed survey.
The UK’s manufacturing purchasing managers’ index (PMI) edged up to 45.4 in April, but remained well below the 50 mark that connotes growth, according to data company S&P Global.
That was slightly up from the 44.9 reading in March, and the 44 preliminary reading for April, but signs for the future were negative:
Panellists reported that rising economic and trade uncertainties (including prospective US tariffs) had drained confidence from both consumer and business-to-business clients, resulting in an increased reluctance to commit to new contracts.
The outlook for exporters was, perhaps unsurprisingly, very weak, as companies try to assess what will happen to US trade policy. S&P Global said:
New export orders fell at the quickest pace in almost five years, with demand from the US, Europe and mainland China all lower.
Rolls-Royce says it can ‘offset’ Trump tariffs despite industry ‘uncertainty’
The share price of jet engine maker Rolls-Royce has risen by 2.7% after it said that it could “offset the impact of announced tariffs” imposed by Donald Trump.
Rolls-Royce shares plunged as low as £5.62 last month after Trump’s “liberation day” turned into something more like devastation day, as shocked investors rushed to absorb the possible impact of tariffs on the global economy.
However, the price has recovered to £7.74 on Thursday, leaving it near its all-time high of £8.18 hit in mid-March.
Rolls-Royce’s share price gain has been extraordinary under the leadership of Tufan Erginbilgic. The former BP boss took over at an opportune moment, just as the long-haul air travel was recovering from the pandemic. Yet investors have also lapped up his strategy of negotiating better deals with customers.
On Thursday, ahead of Rolls-Royce’s annual investor meeting, Erginbilgic suggested that customers may be covering the impact of US tariffs, which are 10% on imports from the UK, and up to 25% on some steel and aluminium products:
The recently announced global tariff increases have created a degree of uncertainty for the industry. We expect to offset the impact of announced tariffs on our business through the mitigating actions we are taking. We are closely monitoring the potential indirect impact on economic growth and inflation, and will continue to take the necessary actions.
He also said the company had “confidence in our guidance for 2025”, with underlying operating profit of between £2.7bn-£2.9bn and the same amount of cash generated.
Lauren Almeida
Lloyds Banking Group has reported a 7% drop in pre-tax profit to £1.5bn in its first quarter, and is bracing for the ripple effect from Trump’s tariffs on its balance sheet.
The high street bank said that it has set aside £309m to account for possible bad debts, compared with previous guidance of £274m, as it added a £35m net charge to prepare for the possible impact on the economic outlook from President Trump’s tariffs.
Overall it was a mixed bag for the bank in the first quarter. Net income increased 4% year-on-year to £4.39bn, but profits still slipped mainly due to higher costs and impairment charges. Loans increased by £7.1bn £466.2bn, which included growth of £4.8bn in UK mortgages. The bank expects that national house prices will grow by 2.9% this year.
Lloyds shares slipped 1.3% in early trading.
‘No harm’ in China engaging with White House trade approach, says Chinese state media
China would be open to talks on tariffs with the US after the White House approached it, according to Chinese state media on social media.
Yuyuan Tantian, an account affiliated to CCTV, a state broadcaster, said there was “no harm” to China engaging with the US, according to a post on Chinese social network Weibo. It cited anonymous sources, saying:
The US has proactively reached out to China through multiple channels, hoping to hold discussions on the tariff issue.
Some caution over the report may be warranted. Reuters explains:
Yuyuan Tantian is not among China’s most authoritative state media outlets. The Global Times, which is owned by the newspaper of the governing Communist Party, People’s Daily, has often been first to report China’s next steps in trade disagreements over the past few years.
Guo Jiakun, a spokesperson for China’s foreign ministry, on Wednesday said: “as far as I know, there have been no consultations or negotiations between China and the U.S. on tariffs”.
What is clear, however, is that Donald Trump wants talks. His strategy, such as it is, appears to have been hitting countries with huge tariffs in order to force them into a rushed negotiation. Trump said yesterday there was a “very good chance” of a deal with China.
National Grid, the FTSE 100 company that owns the UK’s electricity network, has appointed Shell oil executive Zoë Yujnovich as chief executive after the retirement of John Pettigrew.
Yujnovich was until recently working at FTSE 100 oil company Shell, where she was director of integrated gas and upstream (oil production) and a member of the executive committee. She previously led the Iron Ore company of Canada, part of Rio Tinto.
Pettigrew intends to retire after serving as chief executive for nearly a decade.
Spain and Portugal’s huge power blackout on Monday have thrust public attention on something that the energy industry has been warning for a long time: electricity grids need huge investment to make them ready for the transition away from fossil fuels.
Yujnovich said:
I firmly believe in the vital function energy companies play in driving change and creating value. On both sides of the Atlantic National Grid has an essential role to play in making energy secure, affordable and reliable for our customers and communities. I’m excited about leading National Grid as it delivers on the growth opportunities ahead.
Bet365 owners consider £9bn sale of gambling empire
The billionaire Coates family behind Bet365 are weighing up a sale of their online gambling empire that could value the business at £9bn, the Guardian has learned.
The company, headed by Denise Coates, has held talks with Wall Street banks and US advisers in recent weeks about a full or partial sale, sources familiar with the matter said.
Informal discussions explored options for a potential sale, including a medium-term plan to float the business on a US stock exchange.
One option on the table includes a partial sale to a private equity investor, with the Coates family retaining a stake before an eventual listing. It could also see a spin-off of part of the business, rather than a full listing of the Stoke-on-Trent-based firm.
A second source said they were also aware of discussions with private equity groups about taking a pre-float stake.
One person with knowledge of the talks said Bet365 had reached the “beauty parade” stage, where companies sound out banks they think could help them extract maximum value from any deal.
Bet365 did not return requests for comment.
You can read the full story here:
The FTSE 100 has fallen by a mild 0.2% to 8,479 points in the opening trades on Thursday.
Tesla chair denies Musk successor search; Bank of Japan cuts forecasts on tariff shock
Good morning, and welcome to our live coverage of business, economics and financial markets.
Tesla’s chair has denied that the electric car company is looking for a replacement for Elon Musk, after the billionaire spent several months focusing on serving Donald Trump even as the carmaker’s profits slumped.
The US manufacturer posted a statement on X, the social network owned by Musk, from chair Robyn Denholm saying the company was “highly confident in his ability to continue executing on the exciting growth plan ahead”, and claiming a report on possible successors was “erroneous”.
It came after a report by the Wall Street Journal that said that “Board members reached out to several executive search firms to work on a formal process for finding Tesla’s next chief executive, according to people familiar with the discussions.” The report said that the board members contacted the search firms a month ago, amid turmoil in Washington.
After Tesla reported a 9% drop in sales in the first quarter of 2025, Musk announced that he would reduce his time leading the so-called Department of Government Efficiency to focus on the carmaker.
Note a small but important discrepancy between Denholm’s denial and the WSJ report: Denholm said that it was “absolutely false” that the “Tesla board had contacted recruitment firms”. The WSJ report suggested that “board members” made the contacts.
Bank of Japan cuts growth forecasts on Trump tariffs
Donald Trump’s tariff chaos will cut economic growth in Japan, the world’s fourth-largest economy, according to new forecasts from its central bank.
The Bank of Japan cut its economic growth forecast for the fiscal year ending March 2026 to 0.5%, down from 1.1% projected three months ago. It also slashed its growth forecast to a 0.7% expansion for the following fiscal year from 1.0% in January, according to Reuters. The Bank said:
Japan’s economic growth is likely to moderate as trade and other policies in each jurisdiction slow overseas growth and weigh on corporate profits. Thereafter, Japan’s economy will see growth accelerate as overseas economies resume a moderate growth path.
The bank’s inflation forecast suggested that consumer prices would hit its target of 2% annual growth towards the end of 2026, down from 3.6% in March 2025.
The agenda
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9:30am BST: UK consumer credit borrowing (March; previous: £1.36bn; consensus: £1.2bn)
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9:30am BST: UK mortgage approvals (March; prev.: 65,481; cons.: 64,800)
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9:30am BST: US initial jobless claims (March; prev.: 222,000; cons.: 224,000)
